SHENZHEN TELLUS HOLDING CO., LTD
Annual Report 2019
April 2020
Section I. Important Notice, Contents and Interpretation
Board of Directors, Supervisory Committee, all directors, supervisors and seniorexecutives of Shenzhen Tellus Holding Co., Ltd. (hereinafter referred to as theCompany) hereby confirm that there are no any fictitious statements, misleadingstatements, or important omissions carried in this report, and shall take allresponsibilities, individual and/or joint, for the reality, accuracy and completionof the whole contents.Fu Chunlong, Principal of the Company, Lou Hong, person in charge ofaccounting works and Liu Yuhong, person in charge of accounting organ(accounting principal) hereby confirm that the Financial Report of AnnualReport 2019 is authentic, accurate and complete.All directors are attended the Board Meeting for report deliberation.Securities Times, Hong Kong Commercial Daily and Juchao Website(www.cninfo.com.cn) are the media for information disclosure appointed by theCompany, all information under the name of the Company disclosed on theabove said media shall prevail. Concerning the forward-looking statements withfuture planning involved in the Report, they do not constitute a substantialcommitment for investors, and investors are advised to exercise caution ofinvestment risks.The profit distribution pre-plan deliberated and approved by the Board was:
distributed 0.42 Yuan (tax included) for every 10 shares held by wholeshareholders of the Company based on 431,058,320 shares in total, 0 share bonus(tax included), and no public reserve transfer into share capital.
Content
Section I Important Notice, Contents and Interpretation ...... 2
Section II Company Profile and Main Financial Indexes ...... 5
Section III Summary of Company Business ...... 10
Section IV Discussion and Analysis of Operation ...... 15
Section V Important Events ...... 40
Section VI Changes in shares and particular about shareholders ...... 57
Section VII Preferred Stock…………………………………………………… ...... 64
Section VIII Convertible Bond…………………………………………… ...... 65
Section IX Particulars about Directors, Supervisors,Senior Executives and Employees ...... 66
Section X Corporate Governance ...... 75
Section XI Corporate Bond ...... 85
Section XII Financial Report ...... 86Section XIII Documents available for reference ...............................................................................
Interpretation
Items | Refers to | Contents |
CSRC | Refers to | China Securities Regulatory Commission |
SZ Exchange | Refers to | Shenzhen Stock Exchange |
Shenzhen Branch of SD&C | Refers to | Shenzhen Branch of China Securities Depository & Clearing Corporation Limited |
Company, the Company, our Company, Tellus Group | Refers to | Shenzhen Tellus Holding Co., Ltd. |
Reporting period, this reporting period, the year | Refers to | Year of 2019 |
Auto Industry and Trade Company | Refers to | Shenzhen Auto Industry and Trade Corporation |
Zhongtian Company | Refers to | Shenzhen Zhongtian Industrial Co,. Ltd. |
GAC | Refers to | Gems & Jewelry Trade Association of China |
Huari Company | Refers to | Shenzhen Huari Toyota Auto Sales Co., Ltd, Shenzhen SDG Huari Auto Enterprise Co., Ltd. |
Zung Fu Tellus | Refers to | Shenzhen Zung Fu Tellus Auto Service Co., Ltd. |
Tellus Starlight | Refers to | Anhui Tellus Starlight Jewelry Investment Co., Ltd. |
Tellus Starlight Jinzun | Refers to | Anhui Tellus Starlight Jinzun Jewelry Co., Ltd. |
Sichuan Channel Platform Company, Sichuan Jewelry Company | Refers to | Sichuan Tellus Jewelry Tech. Co., Ltd. |
Xinglong Company | Refers to | Shenzhen Xinglong Machinery Mould Co., Ltd. |
Tellus Property | Refers to | Shenzhen SDG Tellus Property Management Co., Ltd. |
SDG | Refers to | Shenzhen Special Development Group Co., Ltd. |
Xinyongtong Tech. Company | Refers to | Shenzhen Xinyongtong Technology Co., Ltd. |
Dongxiao Inspection Company | Refers to | Shenzhen Xinyongtong Dongxiao Auto. Inspection Co., Ltd. |
Tellus Treasure Company | Refers to | Shenzhen Tellus Treasure Supply Chain Tech. Co., Ltd. |
Dongfeng Company | Refers to | Shenzhen Dongfeng Motor Co., Ltd. |
Section II Company Profile and Main Financial IndexesI. Company information
Short form of the stock | Tellus-A, Tellus-B | Stock code | 000025, 200025 |
Stock exchange for listing | Shenzhen Stock Exchange | ||
Name of the Company (in Chinese) | 深圳市特力(集团)股份有限公司 | ||
Short form of the Company (in Chinese) | 特力A | ||
Foreign name of the Company (if applicable) | Shenzhen Tellus Holding Co.,Ltd | ||
Legal representative | Fu Chunlong | ||
Registrations add. | 3/F, Tellus Building, Shui Bei Er Road, Luohu District, Shenzhen | ||
Code for registrations add | 518020 | ||
Offices add. | 3/F-4/F, Tellus Builsing, Shui Bei Er Road, Luohu District, Shenzhen | ||
Codes for office add. | 518020 | ||
Company’s Internet Web Site | www.tellus.cn | ||
ir@tellus.cn |
II. Person/Way to contact
Secretary of the Board | Rep. of security affairs | |
Name | Qi Peng | Sun Bolun |
Contact add. | 3/F, Tellus Building, Shui Bei Er Road, Luohu District, Shenzhen | 3/F, Tellus Building, Shui Bei Er Road, Luohu District, Shenzhen |
Tel. | (0755) 83989378 | (0755) 83989339 |
Fax. | (0755) 83989386 | (0755) 83989386 |
ir@tellus.cn | sunbl@tellus.cn |
III. Information disclosure and preparation place
Newspaper appointed for information disclosure | Securities Times (Shenzhen) and Hong Kong Commercial Daily(H.K.) |
Website for annual report publish appointed by CSRC | http://www.cninfo.com.cn |
Preparation place for annual report | Secretariat of the BOD of Shenzhen Tellus Holding Co., Ltd. |
IV. Registration changes of the Company
Organization code | 91440300192192210U |
Changes of main business since listing (if applicable) | No changes during the period |
Previous changes for controlling shareholders (if applicable) | 1. On 31 March 1997, the 159,588,000 state shares held by Shenzhen Investment Management Co., Ltd., the only non-circulation shareholder, were transfer to SDG; total share capital of the Company was 220,281,600 shares while 159,588,000 state shares held by SDG, a 72.45% in total share capital. 2. On 4 January 2006, the 13,717,440 shares, as the consideration of share merger reform, were transfer to account of A-shareholders from SDG. After share merger reform, SDG holds 66.22% of the total share capital of the Company. 3. On March 27, 2015, the Company has completed the non-public offering of A shares of 77,000,000, of which 6,000,000 shares are issued to the controlling shareholder - SDG, and SDG holds 51.09% of the Company's total shares after the issuance. 4. In 2016, SDG reduced part of the company’s unrestricted outstanding shares by means of centralized bidding, the accumulatively reduced shareholdings accounted for 2% of the company’s total share capital. As of the end of the reporting period, SDG holds 49.09% of the Company’s total shares, and is still the controlling shareholder of the Company. |
V. Other relevant information
CPA engaged by the Company
Name of CPA | Pan-China Certified Public Accountants (LLP) |
Offices add. for CPA | 6/F, No.128 Xixi Rd., Xihu District, Hangzhou, Zhejiang Province |
Signing Accountants | Wang Huansen , Qin Changming |
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□Applicable √Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexesWhether it has retroactive adjustment or re-statement on previous accounting data or not
□ Yes √ No
2019 | 2018 | Changes over last year | 2017 | |
Operating income (RMB) | 571,072,893.90 | 414,238,778.96 | 37.86% | 347,237,289.80 |
Net profit attributable to shareholders of the listed Company(RMB) | 219,669,708.47 | 86,924,058.72 | 152.71% | 66,862,772.68 |
Net profit attributable to shareholders of the listed Company after deducting non-recurring gains and losses(RMB) | 53,738,507.05 | 83,286,083.84 | -35.48% | 54,431,067.47 |
Net cash flow arising from operating activities(RMB) | 78,911,353.03 | -6,574,979.97 | -2,093,068.05 | |
Basic earnings per share (RMB/Share) | 0.5096 | 0.2017 | 152.65% | 0.2249 |
Diluted earnings per share (RMB/Share) | 0.5096 | 0.2017 | 152.65% | 0.2249 |
Weighted average ROE | 18.92% | 8.63% | 10.29% | 7.20% |
Year-end of 2019 | Year-end of 2018 | Changes over end of last year | Year-end of 2017 | |
Total assets (RMB) | 1,645,782,144.03 | 1,658,295,531.00 | -0.75% | 1,403,314,594.42 |
Net assets attributable to shareholder of listed Company (RMB) | 1,270,965,296.02 | 1,050,209,537.35 | 21.02% | 963,259,056.63 |
Total share capital of the Company as of the previous trading day before disclosure:
Total share capital of the Company as of the previous trading day before disclosure(Share) | 431,058,320 |
Fully diluted earnings per share based on new share capital
Preferred stock dividend paid | 0 |
Fully diluted earnings per share calculated based on new share capital(RMB/Share) | 0.5096 |
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
3. Reasons for differences in accounting data under domestic and foreign accounting standards
□ Applicable √ Not applicable
VIII. Quarterly main financial index
In RMB
Q 1 | Q 2 | Q 3 | Q 4 | |
Operating income | 119,469,426.49 | 158,799,312.84 | 147,368,783.52 | 145,435,371.05 |
Net profit attributable to shareholders of the listed Company | 18,017,619.19 | 26,762,329.41 | 19,261,241.23 | 155,628,518.64 |
Net profit attributable to shareholders of the listed Company after deducting non-recurring gains and losses | 15,885,705.01 | 24,707,654.71 | 17,897,653.01 | -4,752,505.68 |
Net cash flow arising from operating activities | 2,986,868.23 | 24,447,191.07 | 30,534,366.60 | 20,942,927.13 |
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financialindex disclosed in the Company’s quarterly report and semi-annual report
□ Yes √ No
IX. Items and amounts of non-recurring profit (gain)/loss
√Applicable □ Not applicable
Item | 2019 | 2018 | 2017 | Note |
Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | 210,897,055.76 | -4,424,801.74 | 5,523,267.93 | Income from disposal of Xinglong Equity |
Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) | 276,907.09 | 3,482.07 | 25,753.22 | An Industry support funds received by Sichuan Jewelry Company |
Fund possession cost reckoned into current gains/losses charged from non-financial business | 47,083.32 | 76,041.64 | 76,041.64 | |
Gains/losses from entrust investment or assets management | 9,611,577.38 | 6,606,218.86 | ||
Gains/losses from contingency without routine business concerned | -2,225,468.76 |
Except for effective hedge business relevant to normal operation of the Company, gains and losses arising from fair value change of tradable financial assets, derivative financial liabilities, tradable financial liability and derivative financial liability and investment income from disposal of tradable financial assets, derivative financial liabilities, tradable financial liability, derivative financial liability and other debt investment | 10,684,691.16 | Financial income | ||
Restoring of receivable a and contractual assets impairment provision that tested individually | 935,476.72 | 15,000.00 | ||
Other non-operating income and expenditure except for the aforementioned items | -744,465.10 | 485,180.13 | 690,397.76 | |
Other gain/loss that meet the definition of non-recurring gain/loss | 9,378.94 | Taxes refund | ||
Less: Impact on income tax | 55,755,620.55 | -161,206.61 | 59,964.10 | |
Impact on minority shareholders’ equity (post-tax) | 419,305.92 | 49,242.45 | 445,010.10 | |
Total | 165,931,201.42 | 3,637,974.88 | 12,431,705.21 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
Section III. Summary of Company BusinessI. Main businesses of the Company in the reporting periodThe main business of the Company during the reporting period was auto sales, auto testing, maintenance andaccessories sales; resource assets management and jewelry service business.
1. Auto sales, auto testing, maintenance and accessories sales: During the reporting period, the company madepersonnel structural reforms to Huari Company, a holding subsidiary of the company, through refinedmanagement, which alleviated corporate burdens significantly reduced the cost of human resources, and laid agood foundation for future development. At the same time, through a series of measures such as comprehensivelystrengthening market expansion, insurance-linked drainage, reconstruction of intelligent exhibition halls andcustomer rest areas, and other infrastructures, the company’s performance was actively improved. In terms of carsales, Huari Company launched two new mid-to-high end models this year, i.e. Avalon and Vellfire, whichincreased sales and achieved car sales revenue of 168.55 million yuan, an increase of 37.89% over the sameperiod last year.
2. Resource assets management: In 2019, due to the slowdown of domestic and foreign economic developmentand the complex economic situation, the rental prices in overall market of Shenzhen were facing greaterdownward pressure, especially the commercial and plant rental prices were showing a downward trend. At thesame time, due to the continued downturn in the market, the willingness of the jewelry industry operators to opennew stores decreased significantly. In addition, a large number of newly developed properties in the Shuibei areahave been put into use, the company’s investment in properties held in this area faced severe challenges. Facingthe unfavorable situation, on the one hand, the company strengthened its management, adopted more meticulousand proactive business methods, strengthened its service efforts, maintained the large customers, and performedlease renewal work in advance to ensure stable rental rates. During the reporting period, the first phase of theTellus Shuibei Jewelry Building was put into operation, and the investment rate of towers and podiums reachedmore than 90%, merchants with large influence in the industry were introduced to settle in to ensure highinvestment quality. On the other hand, the company re-planed the packaging and reconstructed some oldproperties, enhanced the image and value of old properties, made full use of the advantages of industry clusters,explored the company’s business layout, and improved the level of resource assets management. Property leasingand service income reached 161.19 million yuan, an increase of 72.17% over the same period last year.
3. Jewelry service business: In 2019, China’s GDP growth slowed down, and the downward pressure on economyincreased. Jewelry, as an optional consumer product, has been greatly affected by the economic downturn, theupstream jewelry merchants had a decrease in benefits due to the reduced customer purchases and the slowedcapital flow, while in the middle and lower reaches of jewelry, the terminal operators’ willingness to open newstores decreased significantly, and stop-loss measures such as closing stores accelerated, and the industrycontinued to make in-depth adjustments. During the reporting period, the company’s jewelry regional channelplatform project Sichuan Jewelry Company continued to optimize and improve its existing business model
through in-depth exploration of retailer customers, fully promoted the construction of IT platforms, completed thetesting, deployment and trial operation of optimized versions of supply chain systems, retail systems, andwholesale systems, and completed the development of the main body of the operation management system. At thesame time, the company strengthened the construction of the big data center’s basic work and the data collectionand analysis, and continuously improved the company’s risk control capabilities through data analysis, andconducted business under the premise of controllable risks. In the context of the overall decline of the jewelryindustry, in order to reduce business risks, Sichuan Jewelry Company proactively adopted various measures toensure stable operation, it achieved jewelry business revenue of 193.38 million yuan throughout the year, anincrease of 27.88% over the same period last year.
II. Major changes in main assets
1. Major changes in main assets
Major assets | Note of major changes |
Equity assets | Book value of long-term equity investment as of 31 December 2019 amounting to 162,178,500 Yuan, decreased 62,466,200 Yuan over that of period beginning with 27.81% down, mainly due to the profit bonus from shareholding enterprise. |
Fixed assets | No major change |
Intangible assets | Book value of intangible assets as of 31 December 2019 amounting to 50,561,200 Yuan, decreased 451,100 Yuan over that of period beginning with 0.88% down, mainly due to the declined from land use right (Phase I of Tellus Shuibei Jewelry Building) transfer to investment real estate and the increase of land premium for Tellus Jinzhuan Trading Building (Phase II of Tellus Shuibei Jewelry Building). |
Construction in progress | Book value of the construction in progress as of 31 December 2019 amounting to 47,654,400 Yuan, an increase of 34,810,800 Yuan over that of period-begin with 271.04% up. Mainly due to the input for the preliminary project of Tellus Jinzhuan Trading Building (Phase II of Shuibei Jewelry Building). |
Monetary fund | Book value of the monetary fund as of 31 December 2019 amounting to 428,851,600 Yuan, an increase of 259,339,300 Yuan over that of period-begin with 152.99% up. Mainly due to the redemption of financial products and collection of equity transfer of Xinglong Company. |
Tradable financial assets | Book value of the tradable financial assets as of 31 December 2019 amounting to 60,486,600 Yuan, an increase of 60,486,600 Yuan over that of period-begin with 100.00% up. Mainly due to the adjustment for accounting item of financial products based on new financial instrument standards. |
Account receivable | Book value of account receivable as of 31 December 2019 amounting to 112,613,200 Yuan, an increase of 26,508,600 Yuan over that of period-begin with 30.79% up, mainly because the wholesale credit for jewelry from Sichuan Jewelry Company increased in the period |
Advance payment | Book value of advance payment as of 31 December 2019 amounting to 12,683,600 Yuan, an increase of 3,571,100 Yuan over that of period-begin with 39.19% up, mainly due to the vehicle and accessories procurement paid in advance to FAW-Toyota from Huari Toyota increased. |
Other account receivable | Book value of other account receivable as of 31 December 2019 amounting to 44,908,500 Yuan, increased 30,425,300 Yuan over that of period beginning with 210.07% up, mainly due to the profit bonus from shareholding enterprise Dongfeng Company and Zung Fu Company |
Inventory | Book value of inventory as of 31 December 2019 amounting to 21,389,600 Yuan, increased 9,046,700 Yuan over that of period beginning with 73.30% up, mainly due to the stock vehicle of Huari Company increased. |
Assets held-for-sale | There are no assets held-for-sale as of 31 December 2019, decreased 85,017,300 Yuan over that of period beginning with 100.00% down, mainly due to the declined from 43% equity of Xinglong Company transfer completed. |
Other current assets | Book value of other current assets as of 31 December 2019 amounting to 3,404,000 Yuan, decreased 329,028,500 Yuan over that of period beginning with 98.98% down, mainly due to the redemption of financial products at period-end and decline by the adjustment for accounting item of financial products based on new financial instrument standards |
Long-term deferred expenses | Book value of long-term deferred expenses as of 31 December 2019 amounting to 13,606,800 Yuan, increased 7,302,200 Yuan over that of period beginning with 115.82% up, mainly due to the transfer-in from decoration of Innovation & Entrepreneurship Base |
Deferred income tax assets | Book value of deferred income tax assets as of 31 December 2019 amounting to 8,659,000 Yuan, decreased 15,696,100 Yuan over that of period beginning with 64.45% down, mainly resulting by the reversal of deductible temporary differences as previous equity investment differences and impairment provision. |
Other non-current assets | Book value of other non-current assets as of 31 December 2019 amounting to 6,889,200 Yuan, increased 3,532,200 Yuan over that of period beginning with 105.22% up, mainly due to the account paid in advance for decoration of Tellus Building |
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
1.Owns rich property resources, provides stable business income and cash flowThe output value of Shenzhen jewelry accounts for more than 70% of the national jewelry industry, and
Shuibei-Buxin area is the core gathering area of jewelry industry in Shenzhen, its output value accounts for morethan 70% of the jewelry industry in Shenzhen.We has formed the largest cluster of gold jewelry enterprises in thecountry, covering the entire industry chain including raw material procurement, production and processing, andwholesale sales, and the economic and strategic position and the core aggregation effects of this area in jewelryindustry have remained stable for many years.
According to the “13
th
Five-Year” plan for urban renewal in Luohu District, Shenzhen, Shuibei-Buxin area will bebuilt into the jewellery fashion industrial zone of Luohu District, Shuibei area is the international jewellery artcenter and Buxin area is the jewellery intelligent high-end manufacturing center so as to form the Shuibei-Buxininternational jewellery eco-creative area. The company is the largest owner of the Tellus Gman Gold JewelleryIndustrial Park in Shuibei area, Tellus Shuibei Jewellery Building phase I has been put into use, and phase IIconstruction project has also been fully started. At the same time, as the largest owner of land parcels 04 & 05 inthe urban renewal unit planning project of Buxin industrial zone, the company will plan and construct aninnovative industrial project in line with the city, district and the Company’s overall strategic layout in Buxin areathrough the renovation method. The company will maintain the status of the largest owner of Shuibei and Buxinareas, and master the physical platform resource advantages of the core area of the jewelry industry.
At the same time, the Company has a lot of property resources in various areas of Shenzhen, on the basis ofmaintaining the stability of the original leasing business, the company will actively promote the improvement ofproperty quality and transform its old properties from the traditional method of simple lease to the direction ofproperty asset operation so as to fully enhance and tap the added value of the property brand, bring stable businessincome and cash flow to the company, and provide a solid foundation for the company’s long-term development.
2. Make use of the advantages of status, build industrial platforms, and promote the development of the industryIn 2019, the release of the “Opinions of the State Council on Supporting Shenzhen to Build a Pioneering SocialistDemonstration Zone with Chinese Characteristics” and the approval of the “Pilot Implementation Plan forShenzhen Regional State-owned Enterprises’ Comprehensive Reform” have created an unprecedented opportunityfor Shenzhen. As a state-owned holding enterprise group in Shenzhen, Tellus Group has outstanding resourceadvantages.
In recent years, due to the economic environment and other unfavorable factors, the growth of the jewelryindustry has continued to slow down, and the industry has continued to show a trend of bottom shocks andundergo deep integration and shuffle. Under such circumstances, the company’s identity advantages as astate-owned enterprise and a listed company are highlighted, it has good credit qualifications and creditendorsement ability and also has good relations with government departments and effective communicationchannels so that it can play the role of a platform enterprise in the jewelry industry, aggregate the upstream anddownstream of the jewelry industry chain, act as a bridge and bond among the government and the private jewelryenterprises, the overseas and the domestic suppliers, and the distributors, integrate industry needs, solve industrypain points, and strive for various policy supports such as taxation, trade, and approval for industry enterprises,
improve traditional model of the industry, provide more comprehensive innovative services, promote the healthydevelopment of the industry and achieve a win-win situation for all parties while achieving its own socialresponsibility and rewarding the company’s shareholders.
Section IV Discussion and Analysis of the OperationI. Introduction
During the reporting period, under the correct leadership of the party committee and the board of directors, andwith the concerted efforts of management personnel and the joint efforts of all Tellus people, Tellus Group upheldthe spirit of “fair, diligent, struggling, and honest” striver, optimized resource allocation, intensively developedexisting businesses, quickly advanced the implementation of various projects, and ensured the smoothimplementation of the strategy. Significant results have been achieved in various tasks, the total operating incomeand profit of the whole year increased significantly on a year-on-year basis, reaching a new high of nearly tenyears.
① The first phase of Tellus Jewelry Building had a grand opening, the investment rate of the towers and podiumsexceeded 90%. The introduction of jewelers with greater influence in the industry has increased the company’spopularity in the industry and significantly increased the company’s operating income.
② Tellus Gold and Diamond Trading Building, namely the second phase project of Tellus Jewelry Building, wassuccessfully put into construction. During the process of advancement, the policy was reasonably controlled andthe capacity area was improved. At present, the construction of the foundation pit and the main engineering pileshas been completed.
③ Sichuan Jewelry Company thoroughly explored retail customers, continuously optimized and improvedexisting business models, established and improved risk control systems, strengthened data analysis capabilities,used data to control risks, and stabilized business income.
④ In order to reduce operating risks, the retail platform project Tellus Xingguang Jinzun Company shut down.
⑤ The dual creative base project has landed, and 46 companies, entrepreneurial teams and individuals havesettled. Currently, it is still looking for innovative projects and will continue to provide value-added services andcultivate high-quality innovative projects.
⑥ Deeply explored the extension of third-party integrated services for jewelry, explored innovative businessmodels in practice, and completed the investment approval of the Tellus Treasury supply chain project. Theproject will create a third-party value-added service platform of jewelry industry that integrates precious metalstorage, gold and diamond supply chain services, and third-party safe deposit boxes, and carries out gold supplychain, diamond supply chain, safe deposit box and other businesses.
⑦ The company strengthened the management of the participating companies, urged some of the participatingcompanies to realize the undistributed profit dividends to recover cash, and took an appropriate opportunity towithdraw from the participating company Xinglong Company and received the entire equity transfer payment ofXinglong Company, which laid a solid foundation for the company’s key projects.
During the reporting period, the company realized operating income of 571.07 million yuan, increased by 156.83
million yuan compared with 414.24 million yuan in the same period of the previous year, an increase of 37.86%.The main changes in revenue were ① The first phase of the Jewelry Building was comprehensively put intooperation this year, and the revenue increased by 67.56 million yuan on a year-on-year basis, an increase of
72.17%. ②Huari Company launched two new mid-to-high end models Avalon and Vellfire this year, the salesvolume increased, and the car sales revenue increased by 46.31 million yuan on a year-on-year basis, an increaseof 37.89%.③ The scale of jewelry wholesale and retail business expanded this year, and revenue increased by
42.16 million yuan on a year-on-year basis, an increase of 27.88%. The total profit realized was 302.60 millionyuan, an increase of 212.04 million yuan compared with 90.55 million yuan in the same period last year, and thenet profit attributable to the parent company was 219.67 million yuan, an increase of 132.75 million yuan from
86.92 million yuan in the same period of the previous year, mainly due to the year-on-year increase in equitytransfer income. During the reporting period, the company’s car sales income, property leasing and serviceincome, and jewelry service income all hit new highs in recent years, and financing costs hit a record low.II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of the Operation”
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
2019 | 2018 | y-o-y changes (+,-) | |||
Amount | Ratio in operation revenue | Amount | Ratio in operation revenue | ||
Total operation revenue | 571,072,893.90 | 100% | 414,238,778.96 | 100% | 37.86% |
According to industries | |||||
Auto sales | 168,551,160.58 | 29.51% | 122,236,609.61 | 29.51% | 37.89% |
Auto inspection and maintenance and accessories sales | 47,952,488.50 | 8.40% | 47,153,619.46 | 11.38% | 1.69% |
Property rental and service | 161,185,484.32 | 28.23% | 93,621,443.04 | 22.60% | 72.17% |
Jewelry wholesale and retails | 193,383,760.50 | 33.86% | 151,227,106.85 | 36.51% | 27.88% |
According to products | |||||
Auto sales | 168,551,160.58 | 29.51% | 122,236,609.61 | 29.51% | 37.89% |
Auto inspection and maintenance and accessories sales | 47,952,488.50 | 8.40% | 47,153,619.46 | 11.38% | 1.69% |
Property rental and service | 161,185,484.32 | 28.23% | 93,621,443.04 | 22.60% | 72.17% |
Jewelry wholesale and retails | 193,383,760.50 | 33.86% | 151,227,106.85 | 36.51% | 27.88% |
According to region | |||||
Shenzhen | 377,689,133.40 | 66.14% | 263,011,672.11 | 63.49% | 43.60% |
Anhui | 4,521,763.87 | 0.79% | 12,849,125.20 | 3.10% | -64.81% |
Sichuan | 188,861,996.63 | 33.07% | 138,377,981.65 | 33.41% | 36.48% |
(2) About the industries, products, or regions accounting for over 10% of the Company’s operating incomeor operating profit
√Applicable □ Not applicable
In RMB
Operating revenue | Operating cost | Gross profit ratio | Increase/decrease of operating revenue y-o-y | Increase/decrease of operating cost y-o-y | Increase/decrease of gross profit ratio y-o-y | |
According to industries | ||||||
Auto sales | 168,551,160.58 | 156,655,616.45 | 7.06% | 37.89% | 34.32% | 2.47% |
Auto inspection and maintenance and accessories sales | 46,766,020.98 | 39,663,299.92 | 15.19% | -0.82% | 9.60% | -8.06% |
Property rental and service | 153,247,354.66 | 50,778,065.89 | 66.87% | 78.71% | 36.28% | 10.81% |
Jewelry wholesale and retails | 193,383,760.50 | 181,699,948.40 | 6.04% | 27.88% | 30.23% | -1.70% |
According to products | ||||||
Auto sales | 168,551,160.58 | 156,655,616.45 | 7.06% | 37.89% | 34.32% | 2.47% |
Auto inspection and maintenance and accessories sales | 46,766,020.98 | 39,663,299.92 | 15.19% | -0.82% | 9.60% | -8.06% |
Property rental and service | 153,247,354.66 | 50,778,065.89 | 66.87% | 78.71% | 36.28% | 10.81% |
Jewelry wholesale and retails | 193,383,760.50 | 181,699,948.40 | 6.04% | 27.88% | 30.23% | -1.70% |
According to region | ||||||
Shenzhen | 368,564,536.22 | 246,591,834.40 | 33.09% | 44.46% | 33.05% | 11.20% |
Anhui | 4,521,763.87 | 4,858,397.11 | -7.44% | -64.81% | -66.69% | 6.07% |
Sichuan | 188,861,996.63 | 177,346,699.15 | 6.10% | 36.48% | 36.75% | -0.18% |
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest one year’s scope of period-end
□ Applicable √ Not applicable
(3) Income from physical sales larger than income from labors
√ Yes □ No
Industries | Item | Unit | 2019 | 2018 | Y-o-y changes (+,-) |
Auto sales | Sales volume | Set | 1042 | 745 | 39.87% |
Storage | Set | 108 | 64 | 68.75% |
Reasons for y-o-y relevant data with over 30% changes
√Applicable □Not applicable
Sales volume increased mainly because in 2019, Huari Company launched two new medium and high-end modelsas Avalon and Vellfire, which have a better response in the market with sales increased.Storage increase mainly because a large number of people buy cars and register vehicles for the early coming ofSpring Festival of 2019, there were many vehicles are not picked up at end of the year for the slow businessprocessing.
(4) Fulfillment of the Company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
(5) Constitute of operation cost
Classification of industries
In RMB
Industries | Item | 2019 | 2018 | Y-o-y changes (+,-) | ||
Amount | Ratio in operation cost | Amount | Ratio in operation cost | |||
Auto sales | Automobile | 156,655,616.45 | 36.35% | 116,630,283.37 | 35.09% | 34.32% |
Auto inspection and maintenance and accessories sales | Accessory, maintenance and detection | 40,564,299.92 | 9.40% | 36,190,699.86 | 10.89% | 12.08% |
Property rental and service | Lease, property management and other | 52,101,447.87 | 12.09% | 40,006,456.97 | 12.04% | 30.23% |
Jewelry operation | Retail and wholesale of jewelry | 181,699,948.40 | 42.16% | 139,519,914.92 | 41.98% | 30.23% |
Total | 431,021,312.64 | 100.00% | 332,347,355.12 | 100.00% | 29.69% |
Classification of products
In RMB
Products | Item | 2019 | 2018 | Y-o-y changes (+,-) | ||
Amount | Ratio in operation cost | Amount | Ratio in operation cost | |||
Auto sales | Automobile | 156,655,616.45 | 36.35% | 116,630,283.37 | 35.09% | 34.32% |
Auto inspection and maintenance and accessories sales | Accessory, maintenance and detection | 40,564,299.92 | 9.40% | 36,190,699.86 | 10.89% | 12.08% |
Property rental and service | Lease, property management and other | 52,101,447.87 | 12.09% | 40,006,456.97 | 12.04% | 30.23% |
Jewelry operation | Retail and wholesale of jewelry | 181,699,948.40 | 42.16% | 139,519,914.92 | 41.98% | 30.23% |
Total | 431,021,312.64 | 100.00% | 332,347,355.12 | 100.00% | 29.69% |
(6) Whether the changes in the scope of consolidation in Reporting Period
√Yes □ No
Totally 16 enterprises included in consolidate statement for year of 2019, found more in the VI. Change of Consolidate Scope carryin the annotation of financial statement in Auditing Report 2019 released on Juchao Website on the same date. One enterpriseincrease in the consolidate statement by comparing with last year.
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period
□ Applicable √ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) | 35,362,529.90 |
Proportion in total annual sales volume for top five clients | 6.19% |
Ratio of the sales from related parties in total annual sales among the top five clients | 0.00% |
Information of top five clients of the Company
Serial | Name | Sales (RMB) | Proportion in total annual sales |
1 | Client 1 | 7,987,838.74 | 1.40% |
2 | Client 2 | 7,287,047.67 | 1.28% |
3 | Client 3 | 7,073,415.00 | 1.24% |
4 | Client 4 | 6,585,916.21 | 1.15% |
5 | Client 5 | 6,428,312.28 | 1.13% |
Total | -- | 35,362,529.90 | 6.19% |
Other situation of main clients
□ Applicable √ Not applicable
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) | 403,709,283.18 |
Proportion in total annual purchase amount for top five suppliers | 93.66% |
Ratio of the purchase from related parties in total annual purchase among the top five suppliers | 0.00% |
Information of top five suppliers of the Company
Serial | Suppliers | Procurement (RMB) | Proportion in total annual procurement |
1 | Supplier 1 | 195,008,700.18 | 45.24% |
2 | Supplier 2 | 108,172,358.00 | 25.10% |
3 | Supplier 3 | 79,030,857.00 | 18.34% |
4 | Supplier 4 | 16,488,592.00 | 3.83% |
5 | Supplier 5 | 5,008,776.00 | 1.16% |
Total | -- | 403,709,283.18 | 93.66% |
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
3. Expenses
In RMB
2019 | 2018 | Increase/decrease y-o-y | Note of major changes | |
Sales expense | 23,956,102.30 | 19,987,406.50 | 19.86% | The costs of remuneration increased for the implementation of market-oriented recruitment from Huari Company |
Management expense | 43,668,263.92 | 44,231,376.56 | -1.27% | The costs of remuneration declined from a year earlier due to the implementation of market-oriented recruitment of 2018 from the Group |
Financial expense | 4,982,765.55 | 6,508,114.19 | -23.44% | Repayment of working capital loans by the Company and the interest expenses declined from a year earlier due to the project loans repaid by Zhongtian Company |
4. R&D investment
□ Applicable √ Not applicable
5. Cash flow
In RMB
Item | 2019 | 2018 | Y-o-y changes (+,-) |
Subtotal of cash in-flow from operation activity | 668,606,354.87 | 446,554,238.53 | 49.73% |
Subtotal of cash out-flow from operation activity | 589,695,001.84 | 453,129,218.50 | 30.14% |
Net cash flow arising from operating activities | 78,911,353.03 | -6,574,979.97 | |
Subtotal of cash in-flow from investment activity | 2,235,119,053.77 | 1,283,663,305.04 | 74.12% |
Subtotal of cash out-flow from investment activity | 1,883,237,512.37 | 1,261,960,622.90 | 49.23% |
Net cash flow arising from investment activity | 351,881,541.40 | 21,702,682.14 | 1521.37% |
Subtotal of cash in-flow from financing activity | 178,020,000.00 | 163,082,000.00 | 9.16% |
Subtotal of cash out-flow from financing activity | 350,992,854.04 | 177,155,081.66 | 98.13% |
Net cash flow arising from financing activity | -172,972,854.04 | -14,073,081.66 | |
Net increased amount of cash and cash equivalent | 257,820,137.12 | 1,054,902.13 | 24340.19% |
Main reasons for y-o-y major changes in aspect of relevant data
□Applicable √ Not applicable
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
√Applicable □Not applicable
Item | 2019 | 2018 | Y-o-y changes (+,-) | Note |
Net cash flow arising from operating activities | 78,911,353.03 | -6,574,979.97 | The first phase of the Jewelry Building was comprehensively put into operation this year | |
Subtotal of cash in-flow from investment activity | 2,235,119,053.77 | 1,283,663,305.04 | 74.12% | The redemption of financial products increased in the period, and received the equity transfer amount of Xinglong Company and interest |
Subtotal of cash out-flow from investment activity | 1,883,237,512.37 | 1,261,960,622.90 | 49.23% | Investment for financial products increased and investment for Tellus Jinzhuan Trading Building (Phase II of Tellus Shuibei Jewelry Building). increased |
Net cash flow arising from investment activity | 351,881,541.40 | 21,702,682.14 | 1521.37% | Receiving the equity transfer amount of Xinglong Company and interest |
Subtotal of cash in-flow from financing activity | 178,020,000.00 | 163,082,000.00 | 9.16% | New loans increased year-on-year and minority shareholder’s investment from Sichuan Jewelry Company increased |
Subtotal of cash out-flow from financing activity | 350,992,854.04 | 177,155,081.66 | 98.13% | Loan repayments increased, repayment of bank liquidity and fixed loan principal and interest and loans |
Net cash flow arising from | -172,972,854.04 | -14,073,081.66 | bank loan and loan repayment |
financing activity | amount increases year on year. |
III. Analysis of the non-main business
√Applicable □ Not applicable
In RMB
Amount | Ratio in total profit | Note | Whether be sustainable | |
Investment income | 240,569,654.98 | 79.50% | The 43% equity of Xinglong Company was transferred completed in the year, 210.68 million yuan was recognized as income. | N |
Gain/loss of fair value changes | 477,394.67 | 0.16% | Change of the fair value for un-matured financial products | N |
Assets impairment | -608,190.07 | 0.20% |
N | ||||
Non-operation revenue | 304,620.63 | 0.10% | Gains from retirement of non-current assets and overdue fine etc. | N |
Non-operation expenditure | 1,049,085.73 | 0.35% | Losses from retirement of non-current assets and the lease liquidated damages recognized for off-lease in advance of Tellus Starlight Jinzun Company | N |
IV. Assets and liability
1. Major changes of assets composition
In RMB
Year-end of 2019 | Year-begin of 2019 | Ratio changes | Notes of major changes | |||
Amount | Ratio in total assets | Amount | Ratio in total assets |
Monetary fund | 428,851,606.04 | 26.06% | 170,235,668.19 | 10.26% | 15.80% | |
Account receivable | 112,613,224.27 | 6.84% | 86,104,660.51 | 5.19% | 1.65% | |
Inventory | 21,389,602.83 | 1.30% | 12,342,854.40 | 0.74% | 0.56% | |
Investment real estate | 554,599,503.55 | 33.70% | 503,922,413.70 | 30.37% | 3.33% | |
Long-term equity investment | 162,178,544.05 | 9.85% | 224,644,766.21 | 13.54% | -3.69% | |
Fix assets | 107,119,796.59 | 6.51% | 112,674,017.53 | 6.79% | -0.28% | |
Construction in process | 47,654,393.55 | 2.90% | 12,843,571.97 | 0.77% | 2.13% | |
Short-term loans | 143,232,810.41 | 8.63% | -8.63% | |||
Long-term loans | 34,934,887.55 | 2.11% | -2.11% | |||
Assets held for sale | 85,017,251.77 | 5.13% | -5.13% | |||
Other current assets | 60,486,575.34 | 3.68% | 331,523,546.74 | 19.98% | -16.3% | |
Taxes payable | 71,425,267.61 | 4.34% | 9,377,393.57 | 0.57% | 3.77% | |
Other account payable | 101,266,802.49 | 6.15% | 250,198,878.69 | 15.08% | -8.93% |
2. Assets and liability measured by fair value
√Applicable □Not applicable
In RMB
Items | Period-beginning | Gains/losses of change of fair value in the period | Accumulative changes of fair value reckoned into equity | Impairment accrual in the period | Amount of purchase in the period | Amount of sale in the period | Other changes | Period-end |
Financial assets | ||||||||
1. Tradable financial assets (excluding derivative financial assets) | 60,486,575.34 | 60,486,575.34 | ||||||
2. Derivative financial assets |
3. Other creditor's rights investment | ||||||||
4. Other equity instruments Investment | 10,176,617.20 | 10,176,617.20 | ||||||
Subtotal of financial assets | ||||||||
Investment Real Estate | ||||||||
Productive biological assets | ||||||||
Other | ||||||||
Above total | 70,663,192.54 | 70,663,192.54 | ||||||
Financial liabilities |
Whether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes √No
Explanation of major changes on measurement attributes for main asset and its impacts on operation results and financial status
3. Right of the assets restrained till end of the Period
Not applicablefound more in the V. (IV) An asset whose ownership or use is restricted carry in the annotation of financial statement in AuditingReport 2019 released on Juchao Website on the same date.V. Investment
1. Overall situation
√Applicable □Not applicable
Investment amount in the period (RMB) | Investment amount at same period of last year (RMB) | Changes |
169,530,000.00 | 168,971,900.00 | 0.33% |
2. The major equity investment obtained in the reporting period
√Applicable □Not applicable
In RMB
Name of invested company | Principal business | Method of investment | Amount of investment | Shareholding | Capital sources | Partners | Term of investment | Type of products | Status as of the balance sheet date | Expected return | Current investment profit and loss | Whether litigation | Date of disclosure (if applicable ) | Index of disclosure (if applicable ) |
Shenzhen Tellus Treasure Supply Chain Tech. Co., Ltd. | Purchase, sales and leasing of gold jewelry and precious metal products, coffer lease and warehousing services | New established | 50,000,000.00 | 100.00% | Own funds | N/A | No fixed deadline | Purchase, sales and leasing of gold jewelry and precious metal products, coffer lease and warehousing services | Registration completed | 0.00 | -113,396.51 | N | 2019-08-30 | Found more in Notice (No.: 2019-031) released on Securities Times, Hong Kong Commercial Daily and Juchao Website |
Shenzhen Tellus Chuangying Tech. Co., Ltd. | Jewelry innovation & entrepreneurship | Capital Increased | 12,000,000.00 | 100.00% | Own funds | N/A | To 30 June 2021 | Jewelry innovation & entrepreneurship | Completed the changes | -870,000.00 | -1,070,390.23 | N | 2018-12-28 | Found more in Notice (No.: 2018-068) released on Securities Times, Hong Kong Commercial Daily and Juchao Website |
Total | -- | -- | 62,000,000.00 | -- | -- | -- | -- | -- | -- | -870,000.00 | -1,183,786.74 | -- | -- | -- |
3. The major non-equity investment doing in the reporting period
√Applicable □Not applicable
In RMB
Project Name | Investment Method | Invested with fixed assets (Y/N) | Industry involved in Investment Projects | Investment Amount in this Reporting Period | Actual Investment Amount up to the End of Reporting Period | Capital Source | Project Schedule | Anticipated Income | Realized Income up to the End of Reporting Period | Reasons for not Reaching the Planned Schedule and Anticipated Income | Date of disclosure (if applicable ) | Index of disclosure (if applicable ) |
Phase II of Tellus Shuibei Jewelry Building | Self-built | Y | Urban renewal pilot project - upgrading of the gold jewelry industry park | 93,530,000 | 106,090,000 | Raised fund by the Company | 20.58% | 0.00 | 0.00 | Not applicable | 2019-05-28 | Found more in Notice (No.: 2019-022) released on Securities Times, Hong Kong Commercial Daily and Juchao Website |
Transformation & upgrading project of the 421 workshop in Bagualing | Self-built | Y | Redecoration, renovation and upgrading of the workshop | 14,000,000 | 14,000,000 | Raised fund by the Company | 46.67% | 0.00 | 0.00 | Not applicable | 2019-03-26 | Found more in Notice (No.: 2019-006) released on Securities Times, Hong Kong Commercial Daily and Juchao Website |
Total | -- | -- | -- | 107,530,000 | 120,090,000 | -- | -- | 0.00 | 0.00 | -- | -- | -- |
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company had no securities investment in the reporting period.
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivatives investment in the Period
5. Application of raised proceeds
□ Applicable √ Not applicable
The Company has no application of raised proceeds in the Period
VI. Sales of major assets and equity
1. Sales of major assets
□Applicable √Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
√Applicable □Not applicable
Counterpart | Equity sold | Sales day | Trading price (10 thousand Yuan) | Net profit contributed by the sold equity from period-begin to date for sales (in 10 thousand Yuan) | Impact on the Company | Ratio of the net profit from equity sales in total net profit of the Company | Pricing principal | Whether it was a related transaction (Y/N) | Relationship with the counter party | Ownership transferred completely or not (Y/N) | Implemented on schedule (Y/N), explained the reasons and countermeasure for not completed on schedule | Disclosure day | Disclosure index |
Shenzhen RunheUniteInvestmentDevelopmentCo.,Ltd.
43%equityofShenzhenXinglongMachineryMouldCo.,Ltd.
15 June2018
28,667
Theimpacton totalprofit oftheCompanyapproximatelyamounted as
210.54
millionYuan
72.16%
Inaccordance withtheAssetsAppraisalReport(GuozonglianPingBao Zi920170No.3-0083issuedbyGuozhonglianLandRealEstateAssetsAppraisal Co.,Ltd.- theenterprise withqualification ofexercisingsecurities andfuturesbusiness, theassessment isadoptedasset-based
N
N/A
Y
Onschedule
11 Oct.2019
Notice(No.:
2019-037)releasedonSecuritiesTimes,HongKongCommercialDailyandJuchaoWebsite(www.cninfo.com.cn).
VII. Analysis of main holding Company and stock-jointly companies
√Applicable □Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company name | Type | Main business | Register capital | Total assets | Net Assets | Operating revenue | Operating profit | Net profit |
Shenzhen Auto Industry and Trade Corporation | Subsidiary | Sales of auto and accessories | RMB 58.96 million | 371,059,129.53 | 332,301,527.18 | 20,661,635.23 | 8,693,513.91 | 3,013,767.96 |
Shenzhen SDG Huari Auto Enterprise Co., Ltd. | Subsidiary | Auto maintenance and production and sales of accessories | USD 5 million | 72,573,962.20 | 24,404,833.16 | 38,745,157.90 | -881,988.55 | -3,089,360.18 |
Shenzhen Zhongtian Industrial Co,. Ltd. | Subsidiary | Property rental | RMB 366.2219 million | 609,604,697.52 | 397,315,112.55 | 75,637,032.12 | 35,439,489.79 | 29,623,234.62 |
Shenzhen Huari Toyota Automobile Sales Co. Ltd | Subsidiary | Auto sales | RMB 2 million | 70,989,191.36 | 4,195,966.42 | 219,302,518.27 | 2,710,262.43 | 2,099,623.78 |
Shenzhen Xinyongtong Auto Vehicle Inspection Equipment Co., Ltd. | Subsidiary | Manufacture of inspection equipment for motor vehicle | RMB 19.61 million | 12,631,733.23 | 7,854,433.73 | 5,372,879.71 | 2,225,022.79 | 2,135,660.42 |
Shenzhen Tellus Xinyongtong Automobile Development Co. Ltd | Subsidiary | Inspection and repair of motor vehicle | RMB 32.90 million | 82,373,581.53 | 62,510,074.57 | 13,469,910.73 | 8,031,527.80 | 6,029,940.85 |
Anhui Tellus Starlight Jewelry Investment Co., Ltd. | Subsidiary | Jewelry sales | RMB 9.8 million | 1,050,070.80 | -1,305,792.00 | 4,521,763.87 | -5,164,928.76 | -5,998,228.76 |
Shenzhen Tellus Chuangying Tech. Co., Ltd. | Subsidiary | Property rental | RMB 14 million | 17,227,988.23 | 13,373,224.13 | 775,506.85 | -1,070,265.27 | -1,070,390.23 |
Sichuan Tellus Jewelry Tech. Co., Ltd. | Subsidiary | Jewelry sales | RMB 150 million | 165,221,011.49 | 163,519,977.52 | 188,861,996.63 | 10,692,798.70 | 7,948,058.00 |
Shenzhen Zung Fu Tellus Auto Service Co., Ltd. | Joint stock Company | Car sales and maintenance | RMB 30 million | 270,537,114.00 | 90,241,093.00 | 1,146,987,875.00 | 39,768,334.00 | 30,667,317.00 |
Shenzhen Dongfeng Motor Co., Ltd. | Joint stock Company | Manufacture and maintenance of automobile | RMB 100 million | 694,315,515.45 | 167,760,810.29 | 502,282,870.47 | 20,239,872.88 | 18,741,639.29 |
Shenzhen Tellus Gman Investment Co., Ltd. | Joint stock Company | Investment in industry, property management and leasing | RMB 123.70496 million | 419,980,893.69 | 140,310,766.95 | 91,769,888.39 | 21,705,785.59 | 16,232,739.76 |
Particular about subsidiaries obtained or disposed in report period
√Applicable □Not applicable
Name | Way to obtained and dispose in the Period | Impact on overall operation and performance |
Shenzhen Tellus Treasure Supply Chain Tech. Co., Ltd. | Newly established |
Notes of holding and shareholding companiesDuring the reporting period, the company did not disclose the information of important holding companies.VIII. Structured vehicle controlled by the CompanyNot applicable
IX. Future development prospects(i) Industry pattern & development trendIn 2019, the economic situation at home and abroad was complex, affected by factors such as the rise of tradeprotectionism and increasing geopolitical uncertainty, the global economic growth has continued to slow down,and growth in major world economic entities has been sluggish. In the domestic economy, the downward pressureon the economy increased due to factors such as Sino-US trade friction, financial deleveraging, and industrialupgrading and transformation. China’s GDP increased by 6.1% over the previous year, which was in line withexpectations, but its economic growth slowed. At the beginning of 2020, the novel coronavirus pneumoniaepidemic spread rapidly across the country, the country has adopted preventive measures such as home isolationand prolonged resumption of labor and production, which caused a significant impact on economic developmentin the short term, in the long run, China’s economy will continue to maintain a stable and good trend.
The gold jewelry industry experienced years of bottom shocks, and the rise of consumption in 2017 broughtstructural recovery in the industry. After entering 2019, due to the combined effects of the industry cycle and theeconomic cycle, gold consumption fell on a year-on-year basis, the decline in benefits was obvious, and domesticgold consumption was generally weak. According to the “Operation of the Gold Industry in 2019” announced bythe Ministry of Industry and Information Technology, the national gold consumption in 2019 was 1002.8 tons, ayear-on-year decrease of 12.9%, of which, the consumption of gold jewelry was 676.2 tons, a year-on-yeardecrease of 8.2%, the consumption of gold bars and gold coins was 225.8 tons, a year-on-year decrease of 27%,the consumption in industry and other fields was 100.8 tons, a year-on-year decrease of 4.9%. In the beginning of2020, the outbreak of novel coronavirus pneumonia epidemic made a frontal attack on the Chinese jewelry retailmarket, the Spring Festival and Valentine’s Day were supposed to be the peak sales season of the year, but thesudden outbreak of epidemic caused the jewelry industry to be cold, as an optional consumer product, the jewelrywas greatly affected by the economic downturn. However, in the long run, due to the increase in per capitadisposable income of urban residents, the growing size of young millennial consumers and emerging middle classgroups, and the growth of risk aversion, the gold jewelry industry has entered a recovery phase.
(ii) Development strategySince formulated the strategic plan for transforming into a third-party integrated operation service provider in thejewelry industry in 2014, Tellus has been steadily pushing forward its strategy in accordance with the establishedstrategy. In order to make the company bigger and stronger, Tellus actively explored new industry fields whiledeepening the jewelry’s third-party operation and service strategy. Based on its own resource endowmentconditions and capabilities, Tellus chose to comply with the strategic development direction of the country and theleading demonstration area, developed relatively mature and stable industries that can make use of their owncharacteristics and shareholders’ resources, and implemented a diversified development strategy.
1. The third party operation service of jewelry
(1) Industry park services
Shuibei Jewelry Industrial Park Project: The physical platform is the core foundation of the company’s overallstrategy. As of the end of the reporting period, the company’s projects located at the Tellus Gmen Gold JewelryIndustrial Park included: the phase I project of Tellus Shuibei Jewellery Building built by the company’swholly-owned subsidiary and Shuibei Jinzuo Building project constructed by the joint venture are put intooperation; the phase II project of Tellus Shuibei Jewellery Building is under construction. Relying on theabove-mentioned physical platforms, the company will give full play to its resource advantages, make overallplanning for the business format, and innovate the operation and management model, provide basic propertyservices, business butler services, marketing promotion services, talent services, financial services, testing,packaging, catering, innovation and entrepreneurship, design creativity, incubators, warehousing, gold leasing,supplying chain and other industries and services supporting value-added contents by grafting “Jinteli ICON”jewelry business butler services, innovation and entrepreneurship platforms, Tellus treasury supplier chaincompany projects, create a jewelry industry innovation ecosystem, and energize the transformation anddevelopment of the jewelry industry.
In the structural reform strategy and plan of the jewelry industry supply side in the Shuibei-Buxin area planned bythe Shenzhen Municipal Government and the Luohu District Government, Buxin area is planned to be the jewelryintelligent manufacturing base of Luohu District. The company has a number of properties in the Buxin industrialzone, and is the largest owner of the 04 and 05 subunits of the Buxin urban renewal unit planning project. Thecompany will actively promote the implementation of the reform project, improve the quality of the company’sassets and lay a solid foundation for the company’s strategic transformation under the established planningscheme of Luohu District.
(2) Supplying chain services
①Sichuan Tellus Jewelry Tech. Co., Ltd.
The company co-invested and established Sichuan Tellus Jewelry Tech. Co., Ltd. by cooperating with strongdistributors in Sichuan. After two years of operation, Sichuan Jewelry Company has perfected and formed a set ofoperating procedures and business process systems in line with the industry conditions in the business practice,the supply chain settlement supporting service system and the jewelry industry ERP system are operating, the
company will continue to improve supply chain service management capabilities, and conduct supply chainservice business under the premise of controllable risks.
②Shenzhen Tellus Treasure Supply Chain Tech. Co., Ltd.
During the reporting period, the company completed the investment approval of the Tellus Treasury supply chainproject, and it would conduct jewelry supply chain services through Shenzhen Tellus Treasure Supply Chain Tech.Co., Ltd., a wholly-owned subsidiary of Tellus, which provides overall supply chain solutions and services for thejewelry industry, activates jewelry assets, and injects vitality into upstream and downstream jewelry transactionsbased on the real purchase and sales behavior of the jewelry industry chain, and with the help of business data andinformation resources of professional service platforms, and based on data collection and analysis. By providingsupply chain services, the company can get business revenue and industry data, and expand influence.
(3) Innovative and entrepreneurial service
The innovation and entrepreneurship platform is based on the Tellus Jewelry Industrial Park, integrates designers,metalworkers, equipment manufacturers, raw materials suppliers, appraisers and trainers in the industrial chain,innovates flexible production and processing methods, builds a design and entrepreneurship platform, andestablish new industry structure to realize the upgrading of the jewelry industry. To this end, Tellus Group hasinvested in the creation of the “Jewelry Industry Innovation and Entrepreneurship Base”, which is the first batchof only licensed jewelry industry innovation and entrepreneurship base in Shenzhen.
The innovative and entrepreneurial base will take “jewelers”, “Jinchuang Tellus makers service”, “new technologyand new materials R&D platform”, “Xinggongchang designer platform” and “jewelry business incubationplatform” as five sub-platforms for construction, accelerate the space renovation and upgrading,“Xinggongchang” innovative and entrepreneurial space, jewelry industry financial incubation system, newtechnology and new materials laboratory, jewelry testing platform and other key projects, build the entire processincubation acceleration system for the small and micro enterprises from makers’ training to entrepreneurship,entrepreneurial support, product marketization to the development and listing of small and micro enterprises,which provides a rooted entrepreneurial platform for the makers so as to enhance the entrepreneurial success rateof the jewelry industry and energize the industry innovation.
(4) Big data basic services
Sichuan Jewelry Company fully promoted the construction of IT platform, completed the testing, deployment andtrial operation of optimized versions of the supply chain system, retail system, and wholesale system, andcompleted the development of the main body of the operation management system. At the same time, itstrengthened the construction of big data center basic work and the data collection and analysis, continuouslyimproves data analysis capabilities, and lays the foundation for big data basic services.
As a state-owned enterprise and a listed company, the company has the public credibility and the ability to
effectively communicate and cooperate with government departments, and can play the role of a third-partyplatform enterprise in the jewelry industry, it can rely on the free circulation concept of goods in the pilotdemonstration zone and the Greater Bay Area, as a bridge and bond among the government and the privatejewelry enterprises, the overseas and the domestic suppliers, and the distributors, it serves domestic and overseassuppliers, aggregates the upstream and downstream of the jewelry industry chain, integrates industry needs, solvesindustry pain points, provides bonded, exhibition, warehousing, trading and other basic services for industry andenterprise, and coordinates government agencies to strive for various industry preferential policies to empower theindustry. At the same time, transaction data is accumulated through business operations, with the help of thecompany’s IT platform operation management and data analysis capabilities, it can provide a basis for thecompany to develop big data services.
2. Exploration of new industry fields
Tellus will make use of its own resource advantages, adhere to a diversified development pattern, and seek tocreate a “sustainable development ecosystem”. According to its own resources and management capabilities, seekand absorb industries that are in line with the strategic development direction of the country, the Guangdong-HongKong-Macao Greater Bay Area and the leading demonstration areas, whose industry development is relativelymature and stable and has a good industrial foundation, and can make use of the platform of state-owned listedcompanies, so as to form an interaction with Tellus’ original resources or sectors to create new industrial growthpoints for listed companies. New industries include but are not limited to ICT, big data, emerging informationindustries, new energy, high-end equipment manufacturing, big health, biological industries, energy conservationand environmental protection and other industries. At present, due to the complex economic situation and slowingeconomic growth, Tellus will seize the market opportunities brought by the economic cycle, give play to its ownresources, management capabilities and capital advantages, cultivate and absorb high-quality assets in relatedfields through the combination of multiple methods such as directly investing in mergers and acquisitions,initiating or participating in industrial funds and capital operations, merge flows, expand scale, achieve qualitativechange, and further strengthen the sustainable profitability of listed companies.
(iii) The company’s 2020 annual business plan2020 is the ending of the “13
thFive-Year” strategic planning and the year to start drawing the blueprint of the“14thFive-Year” strategic planning. Affected by the novel coronavirus pneumonia epidemic, 2020 will be a moredifficult year. In order to cope with the epidemic, the company has actively responded to the call of the ShenzhenMunicipal Government and the State-owned Assets Supervision and Administration Commission, courageouslyshouldered the social responsibility of state-owned enterprises, shared the difficulties with customers, and madecontributions to stable operations in Shuibei area, and it has already waived rents exceeding 25 million yuan in thefirst quarter, which will have a corresponding impact on net profit in 2020. Facing the complicated situation, thecompany will face the difficulties, strictly follow the work plan of the board of directors, conscientiouslyimplement the “Double Hundred Actions”, ensure the successful completion of the “13
thFive-Year Plan”, andwork hard to advance various tasks.
1. in automobile business: on maintaining the scale of auto sales and service business, actively exploit theincremental new business model for Huari Company
2. Resource assets business: improve the quality of old properties, scientifically design the layout of the business,transform and upgrade the original properties, and improve asset quality and income levels.
3. Jewellery business:
(1) Continue to optimize and improve the business model of Sichuan Tellus Company, clarify the path ofinformatization construction, face the systemic risks of the industry brought by the complex economic situation,and take risk control as the guide to strengthen risk control on the one hand and strengthen the supports on highquality customers on the other hand to enable them to continue to survive and develop under difficultcircumstances, and contribute to the stability of the industry.
(2) The first phase of the Tellus Shuibei Jewelry Building, a key project on the physical platform, has been opened.It strives to maintain a stable and healthy daily operating status as a whole, leverages various resource advantages,and actively explores innovative business models that rely on physical platforms to carry out multiple value-addedservices so as to improve the comprehensive income of the project.
(3) Actively promote Tellus Gold and Diamond Trading Building, namely, the second phase of Shuibei JewelryBuilding, and proceed steadily in accordance with the construction plan to ensure the progress of the project.
(4) Complete the overall construction of the Tellus Treasury supply chain project and pass the acceptance. Thesafe deposit box business as a whole will be put into operation, and the gold lease and jewelry supply chainbusiness will be developed at an appropriate time.
(5) Combine the formulation of the “14
th
Five-Year Plan”, make use of its own resource advantages, rely on theindustrial core regional advantages of Tellus Jewellery Building and Gold and Diamond Building, and explore theinnovative platform project to offer bonded, exhibition, warehousing, and trading functions based on the customs’innovative bonded policies to empower the industry.
(6) For the urban renewal and transformation of the Buxin industrial zone, strive for a clear industrial planningopinion and submits the plan.
4. Management:
(1) Minimize the impact of the epidemic on operations, firstly, continue to implement various epidemicprevention and control work, “epidemic is the order, prevention and control is the responsibility”, and put theepidemic prevention and control work in the first place; secondly, plan ahead, reverse the timetable and strive toregain the progress of the work that has been affected by the epidemic situation; thirdly, study the anti-epidemicpolicies issued by the relevant units, strive for subsidy support, and reduce the impact of the epidemic on businessoperations; fourthly, strictly control general expenses, develop a program to control expenditures, increase incomeand reduce expenditure.
(2) Actively promote the formulation of the “14th Five-Year Plan”, establish a strategic management and controlmechanism, clarify the path of special transformation, thoroughly demonstrate strategic transformation projects,and optimize capital allocation through various methods such as the introduction of strategic investment, theintroduction of funds, and refinancing.
(3) In terms of subordinate enterprise management, continue to improve the management level, optimize andadjust the corporate structure, maximize the value of participating companies, exit loss-making enterprises, cleanup zombie enterprises, and improve corporate vitality.
(4) Establish and improve the talent training system, increase the intensity of talent introduction, deepen themarket-based exit mechanism, and optimize the salary and performance management mechanism.
(5) Implement various tasks of informatization construction, and complete the project construction of Sichuan ITsystem phase III, group operation decision analysis platform phase I, and Gold Tellus information system inaccordance with the company’s overall business plan.
(6) Strengthen the construction of corporate culture, further build the cultural orientation of “fair, diligent,struggling, and honest” striver, and promote the healthy development of enterprises.
(7) Improve the quality of risk control work, and promote the further normalization, institutionalization andstandardization of company management.
(8) Thoroughly study and implement the spirit of the Nineteenth National Congress of the Communist Party ofChina, continue to carry out the “two studies, one action” and anti-corruption work in a deep-going way, andstrengthen the building of grassroots group organizations.
(9) Pay close attention to production safety, implement the safety management responsibility system, eliminatehidden safety hazards, and ensure safety without accidents.
(iv) Possible risks and countermeasures
In the process of strategic transformation and project operation, we will objectively and clearly recognize thepossible risks and take active and effective measures to prevent them:
1. Risks caused by fluctuations in the macroeconomic situation
Affected by Sino-U.S. trade friction, financial deleveraging and other factors, China’s economy has entered aperiod of speed-shifting, the domestic economic growth has slowed down, and the pressure on industrialrestructuring has increased; at the beginning of 2020, the epidemic of novel coronavirus pneumonia quicklyspread to the whole country, prevention and control measures such as home isolation and prolonged resumption ofwork and production have been adopted, which have had a significant impact on economic development. Theoverall economic environment has brought an uncertain impact on the company’s operations.
In response to this risk, the company will actively take various preventive measures. The first is to continue tostrengthen management, work hard, improve efficiency through scientific management, tap potential and increaserevenue, and comprehensively improve the profitability of the original business; the second is to firmly promotethe pace of strategic transformation of the company, promote the transformation of the project through innovativebusiness models, expand the incremental market, expand the scale of business, look for new profit growth points,and provide a good foundation for the company’s long-term stable development.
2. Risks brought about by transforming into new areas
In recent year, the Company has made full efforts to promote the strategic goal of transformation, severaltransformation projects have been implemented successively, however, in the process of deeply ploughing into thejewelry industry, the company has become more and more aware of the difficulties and risks that may be faced inthe transformation to a new business area. The new field means a new business model, technical characteristics,supply and demand relationship, customer needs, risk factors, human resources requirements, and how to identifytechnological development capabilities, how to meet the ever-changing individualized diversified needs ofemerging consumer groups, and how to take the path of innovation and development in the more competitiveindustry environment in the market segment are new challenges that the company needs to solve urgently and putforward higher requirements for the company’s resource integration capabilities, project management capabilitiesand professional talent reserves in the layout of business transformation.
In response to this risk, on the one hand, the company will continue to strengthen the transformation conviction,make full demonstration, prudently make decisions, elaborate management, and carry out market-orientedoperation in accordance with the established overall development strategy and business strategy so as to ensurethat the transformation projects achieve good investment returns, and actively respond to market competition; onthe other hand, the company will steadily promote reform and innovation, and take the opportunity of completingthe “Double Hundred Actions” to explore and improve the company’s long-term incentive mechanism, mobilizethe enthusiasm of all employees, improve the management level and operational efficiency of enterprises, andeffectively enhance the core competitiveness of enterprises.X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
□ Applicable √Not applicable
No reception of research, communication and interview in the Period
Section V. Important EventsI. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy duringthe Reporting Period
√Applicable □Not applicable
The company attaches great importance to the reasonable returns for investors; the Articles of Association clearlydefines the standards and proportions of cash dividends, the decision-making procedures and mechanisms, and theform of profit distribution. The company strictly complies with the Articles of Association and the resolutions ofthe shareholders' general meeting, the dividends standards and proportions are clear, relevant decision-makingprocedures and mechanisms are complete, the independent directors are responsible and give play to their duties,the medium and small shareholders have the opportunities to express their opinions and demands, and thelegitimate rights and interests of medium and small shareholders are fully maintained.
Special description on cash dividend policy | |
Whether it meets the requirements of the Article of Association or the Resolution of the General Meeting (Y/N): | Y |
Whether the bonus standards and proportion is clear and well-defined (Y/N): | Y |
Whether has a completed relevant decision-making procedures and mechanism (Y/N): | Y |
Whether independent directors fulfill duties and play a due role (Y/N): | Y |
Minority shareholders whether has opportunity of full expression and appeals, the legal interest of the minority are being protected totally (Y/N): | Y |
As for the adjustment and change of cash bonus policy, the condition and procedures whether meets regulations and transparent (Y/N): | Y |
Distribution plan (pre-plan) for common stock dividends, capitalization scheme of capital reserve (pre-plan) in latest three years(including this period)
As of December 31, 2017, the undistributed profit of the company’s consolidated statements was 97,798,595.80yuan, and the undistributed profit of the parent company was -1,372,862.05 yuan. The only subsidiary that had animpact on the company’s consolidated undistributed net profit of more than 10% was Shenzhen Auto Industry andTrade Corporation, the main reason why the company had no dividend was because the company’s workingcapital was tight and there was no enough cash to pay dividends. According to Article 7.6.7 of the “Guidelines forStandardized the Operation of Listed Companies on Main Board of Shenzhen Stock Exchange (2015 Revised),
when a listed company formulates a profit distribution plan, it should be based on the profit available fordistribution in the parent company’s statements. At the same time, in order to avoid the situation of over-allocation,the company should determine the specific profit distribution ratio based on the lower profit available fordistribution either in the consolidated statement or in the parent company’s statement. Because the undistributedprofit of the parent company was negative, the company did not distribute profits in 2017, nor increased the publicreserve fund.Profit distribution plan for year of 2018 are: carry out 4.5 additional shares for each 10 shares held byshareholders are being converted by the capital reserve, based on total share capital 297,281,600 shares on 31
st
December 2018. Totally 133,776,720 shares are converted and the share capital of the Company increased to431,058,320 after this conversionProfit distribution plan for year of 2019 are: Distributed 0.42 yuan cash bonus (including tax) for every 10 sharesheld by whole shareholders of the Company based on total share capital 431,058,320 shares on 31
st
December2019, total 18,104,449.44 yuan are distributed in cash, no bonus shares and no public reserve transfer into sharecapital.
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Year for bonus shares | Amount for cash bonus (tax included) | Net profit attributable to common stock shareholders of listed company in consolidation statement for bonus year | Ratio of the cash bonus in net profit attributable to common stock shareholders of listed company contained in consolidation statement | Proportion for cash bonus by other ways(i.e. share buy-backs) | Ratio of the cash bonus by other ways in net profit attributable to common stock shareholders of listed company contained in consolidation statement | Total cash bonus (including other ways) | Ratio of the total cash bonus (other ways included) in net profit attributable to common stock shareholders of listed company contained in consolidation statement |
2019年 | 18,104,449.44 | 219,669,708.47 | 8.24% | 0.00 | 0.00% | 18,104,449.44 | 8.24% |
2018 | 0.00 | 86,924,058.72 | 0.00% | 0.00 | 0.00% | 0.00 | 0.00% |
2017 | 0.00 | 66,862,772.68 | 0.00% | 0.00 | 0.00% | 0.00 | 0.00% |
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent Company ispositive but no plan of cash dividend proposed of common stock
□Applicable √Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√Applicable □Not applicable
Bonus shares for every 10-share (Share) | 0 |
Dividends for every 10-share (RMB) (Tax included) | 0.42 |
Shares transferred from every 10 shares (Share) | 0 |
Equity base of distribution plan (Share) | 431,058,320 |
Cash bonus distribution (RMB) (Tax included) | 18,104,449.44 |
Cash bonus distribution in other ways (i.e. share buy-backs) (RMB) | 0.00 |
Total cash bonus (including other ways) (RMB) | 18,104,449.44 |
Distributable profits (RMB) | 179,916,021.60 |
Ratio of total cash dividend (other ways included) in total profit distribution | 100% |
Cash dividend | |
Explanation on profit distribution or capitalizing of capital reserves | |
Profit distribution plan for year of 2019 are: Distributed 0.42 yuan cash bonus (including tax) for every 10 shares held by whole shareholders of the Company based on total share capital 431,058,320 shares on 31st December 2019, total 18,104,449.44yuan are distributed in cash, no bonus shares and no public reserve transfer into share capital. |
III. Implementation of commitment
1. Commitments that the actual controller, shareholders, related party, buyers and the Company havefulfilled during the reporting period and have not yet fulfilled by the end of reporting period
√Applicable □Not applicable
Commitments | Commitment party | Type of commitments | Content of commitments | Commitment date | Commitment term | Implementation |
Commitments for share merger reform | ||||||
Commitments in report of acquisition or equity change | ||||||
Commitments in assets reorganization | ||||||
Commitments make in initial public offering or | Shenzhen Tellus Holding Co., Ltd. | Other | The commitments to the fulfillment of information disclosure about the Company business development are as follows: except for the information has been | 2014-10-17 | Long-term | Implementing |
re-financing | disclosed publicly, the Company has not had the disclosed information about asset acquisition and business development that has not been disclosed within one year. In the future, the Company shall timely, accurately and adequately disclose the relevant information according to the progress of new business and the related requirements. | |||||
Equity incentive commitment | ||||||
Other commitments for medium and small shareholders | Shenzhen Special Development Group Co., Ltd. (SDG) | Horizontal Competition | In order to avoid the horizontal competition, the Company’s controlling shareholder, Shenzhen SDG has issued the “commitment letter about the avoidance of horizontal competition” on May 26, 2014. The full commitment letter is as follows: 1. The Company and other enterprises controlled by the Company except Tellus Group haven’t occupied in any business that could substantially compete with the main businesses of Tellus Group, and have no horizontal competition relationship with Tellus Group. | 2014-05-26 | Long-term | Implementing |
Shenzhen Tellus Holding Co., Ltd. | Dividend commitment | From 2017 to 2019, the Company’s profits will first be used to cover the losses of previous years; after making up for losses of previous years, in the premise that the Company’s profits and cash flow can meet the Company's normal operations and long-term development, reward shareholders, the Company will implement positive profit distribution approaches to reward the shareholders, details are as follows: 1. The Company’s profit distribution can adopt cash, stock or the combination of cash and stock or other methods permitted by law. The foreign currency conversion rates of domestically listed foreign shares dividend are calculated according to the standard price of HK dollar against RMB announced by People's Bank of China on the first working day after the resolution date of the shareholders' meeting. The Company prefers to adopt the cash dividends to distribute profits. In order to maintain the adaptability between capital expansion and performance growth, in the premise of ensuring the full cash dividend distributions and the rationality of equity scale and equity structure, the Company can adopt the stock dividend methods to distribute profits. 2. According to the "Company Law" and other relevant laws and the provisions of the Company’s "Articles of | 2017-05-04 | 2019-12-31 | Implementing |
arrangements, when distributing profits, the minimum proportion of cash dividends in this profit distribution should be 20%; when the Company's development stage is not easy to be differed but there are significant capital expenditure arrangements, please handle according to the preceding provisions. 4. On the condition of meeting the cash dividend distribution, if the Company's operation revenue and net profit grow fast, and the board of directors considers that the Company’s equity scale and equity structure are reasonable, the Company can propose and implement the dividend distribution plans except proposing the cash dividend distribution plans. When allocating stock dividend every time, the stock dividend per 10 shares should be no less than 1 share. Stock allocation can be implemented individually or in combination of cash dividends. When confirming the exact amount of profit distribution by stock, the Company should fully consider if the general capital after profit distribution by stock matches with the Company’s current operation scale and profit growth rate and consider the impact on future financing so as to make sure the allocation plans meet the overall interests of all shareholders. | |||
Completed on time(Y/N) | Y | ||
As for the commitment out of the commitment time, explain the specific reasons and further plans | Not applicable |
2. Concerning assets or project of the Company, which has profit forecast, and reporting period still inforecasting period, explain reasons of reaching the original profit forecast
□Applicable √Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors(if applicable) for “Qualified Opinion” that issued by CPA
□Applicable √Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculationmethod compared with the financial report of last year
√Applicable □Not applicable
Since January 1, 2019, the Company has implemented the revised Accounting Standards for Business EnterprisesNo.22 - Recognition and Measurement of Financial Instruments, Accounting Standards for Business EnterprisesNo.23 - Transfer of Financial Assets, and Accounting Standards for Business Enterprises No.24 - Hedging andAccounting Standards for Business Enterprises No.37 - Presentation of Financial Instruments of the Ministry ofFinance, adjusted the depreciation period of buildings and electronic equipment since April 1, 2019, implementedthe revised Accounting Standards for Business Enterprises No.7 - Non-Monetary Assets Exchange since June 10,2019, and implemented the revised Accounting Standards for Business Enterprises No. 12 - Debt Restructuringsince June 17, 2019, for details, please refer to the Company’s “2019 Annual Audit Report” disclosed onwww.cninfo.com.cn on the same day, Note III to the Financial Statements “Major Accounting Policies andAccounting Estimates” (28) “Changes in Important Accounting Policies and Accounting Estimates”VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.VIII. Compare with last year’s financial report; explain changes in consolidation statement’sscopeTotally 16 enterprises included in consolidate statement for year of 2019, found more in the VI. Change of consolidation scope in theannotation of financial statement in Auditing Report 2019 released on Juchao Website on the same date. One enterprise increase inthe consolidate statement by comparing with last year.IX. Appointment and non-reappointment (dismissal) of CPAAccounting firm appointed
Name of domestic accounting firm | Pan-China Certified Public Accountants (LLP) |
Remuneration for domestic accounting firm (in 10 thousand Yuan) | 72 |
Continuous life of auditing service for domestic accounting firm | 0 |
Name of domestic CPA | Wang Huansen ,Qin changming |
Continuous life of auditing service for domestic accounting firm | 0 |
Re-appointed accounting firms in this period
√ Yes □ No
Whether to change the accounting firm during the audit period
□ Yes √ No
Whether the change of accounting firm meets the approval procedure
√ Yes □ No
Detailed description of the re-appointed, change of accounting firmThe company’s original auditing firm Ruihua Certified Public Accountants (LLP) (hereinafter referred to as“Ruihua CPA”) adhered to the principle of independent auditing in its practice, fairly and independently issuedaudit opinions, objectively, fairly and accurately reflected the company’s financial situations and internal controls,and effectively fulfilled the responsibilities of the audit institution.In view of the fact that Ruihua CPA has provided audit services to the company for many years, the companyintends to no longer hire Ruihua CPA as the company’s financial audit institution for 2019, and has communicatedwith Ruihua CPA in advance regarding termination and related matters. The company expresses its sinceregratitude to Ruihua CPA and its team for their diligence, conscientiousness and good service during the provisionof audit services.According to the company’s business development and future audit needs, after careful consideration, thecompany intends to hire Pan-China Certified Public Accountants (LLP) as the company’s financial audit andinternal control audit institution for 2019, with a term of one year and the financial audit fee of 500,000 yuan andthe internal control audit cost of 220,000 yuan, a total of 720,000 yuan.
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
The Conpany appointed Pan-China Certified Public Accountants (LLP) as the internal control audit accountingfirm of the Company in 2019, with internal control audit of 220,000 yuan.X. Particular about suspension and termination of listing after annual report disclosed
□Applicable √Not applicable
XI. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting periodXII. Significant lawsuits and arbitration of the Company
√Applicable □Not applicable
found more in the XI. Commitments and contingencies in the annotation of financial statement in Auditing Report 2019 released onJuchao Website on the same date.
XIII. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.XIV. Integrity of the Company and its controlling shareholders and actual controllers
√Applicable □ Not applicable
During the reporting period, the Company and the controlling shareholders and the actual controllers have hadgood reputation, and there is no large amount due un-liquidated debt sentenced by the court.XV. Implementation of the Company’s stock incentive plan, employee stock ownership planor other employee incentives
□ Applicable √ Not applicable
During the reporting period, the Company has no stock incentive plan, employee stock ownership plan or other employee incentivesthat have not been implemented.XVI. Major related transaction
1. Related transaction with routine operation concerned
√Applicable □Not applicable
Related party | Relationship | Type of related transaction | Content of related transaction | Pricing principle | Related transaction price | Related transaction amount (in 10 thousand Yuan) | Proportion in similar transactions | Trading limit approved (in 10 thousand Yuan) | Whether over the approved limited or not (Y/N) | Clearing form for related transaction | Available similar market price | Date of disclosure | Index of disclosure |
Shenzhen Zungfu Tellus Auto Service Co., Ltd | Director, supervisor and senior executives of the Company serves director of the enterprise | Routine related transaction | Offering property renal | Reference market pricing | 504.76 | 504.76 | 3.11% | 530 | N | Agreed by contract or agreement | 504.76 | 2019-04-02 | Notice No.: 2019-011 on Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) |
Shenzhen SDG Tellus Property Management Co., Ltd. | Subsidiary of the controlling shareholder | Routine related transaction | Accept property management services | Reference market pricing | 5.66 | 5.66 | 0.03% | 10 | N | Agreed by contract or agreement | 5.66 | ||
Shenzhen SDG Petty Loan Co., Ltd. | Subsidiary of the controlling shareholder | Routine related transaction | Offering property renal and management service | Reference market pricing | 157.05 | 157.05 | 0.97% | 140 | Y | Agreed by contract or agreement | 157.05 | ||
Jewelry Park Branch of Shenzhen SDG Service Co., Ltd. | Sub-subsidiary of controlling shareholder | Routine related transaction | Offering property renal | Reference market pricing | 101.45 | 101.45 | 0.62% | 117 | N | Agreed by contract or agreement | 101.45 | ||
Shenzhen SDG Engineering Management Co., Ltd | Subsidiary of the controlling shareholder | Routine related transaction | Accept engineering supervision service | Reference market pricing | 35.47 | 35.47 | 0.67% | 43 | N | Agreed by contract or agreement | 35.47 |
Jewelry Park Branch of Shenzhen SDG Service Co., Ltd. | Sub-subsidiary of controlling shareholder | Routine related transaction | Accept services such as clean greening and transformation | Reference market pricing | 33.60 | 33.60 | 0.63% | 36 | N | 33.60 | |||
Shenzhen SDG Tellus Property Management Co., Ltd. | Subsidiary of the controlling shareholder | Routine related transaction | Accept property management services | Reference market pricing | 1,360.96 | 1,360.96 | 25.68% | 1,370 | N | Agreed by contract or agreement | 1,360.96 | ||
Total | -- | -- | 2198.95 | -- | 2,220.52 | -- | -- | -- | -- | -- | |||
Detail of sales return with major amount involved | N/A | ||||||||||||
Report the actual implementation of the daily related transactions which were projected about their total amount by types during the reporting period (if applicable) | Performing normally | ||||||||||||
Reasons for major differences between trading price and market reference price | Not applicable |
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
3. Main related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
√Applicable □Not applicable
Whether the Company had non-operating contact of related credit and debt
√ Yes □ No
Debts payable to related party
Related party | Relationship | Causes | Balance at period-begin (10 thousand Yuan) | Current newly added (10 thousand Yuan) | Current recovery (10 thousand Yuan) | Interest rate | Current interest (10 thousand Yuan) | Balance at period-end (10 thousand Yuan) |
Shenzhen Special Development Group Co., Ltd. (SDG) | Controlling shareholders | Loan principal for Hurari Company | 1,719 | 19 | 19 | 1738 | ||
Shenzhen Special Development Group Co., Ltd. (SDG) | Controlling shareholders | Loan principal for Hurari Company | 589 | 289 | 300 | |||
Impact on operation results and financial status | Total profit decreased 190,000 Yuan due to the interest expenses increased in the Year |
5. Other major related transactions
□Applicable √Not applicable
No other major related transaction in Period
XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□Applicable √Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable √ Not applicable
No leasing for the Company in reporting period
2. Major guarantees
√Applicable □Not applicable
(1) Guarantees
In 10 thousand Yuan
Particulars about the external guarantee of the Company and its subsidiary (Barring the guarantee for subsidiaries) | ||||||||
Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) |
Shenzhen Zungfu Tellus Auto Service Co., Ltd | 2014-09-30 | 3,500 | 2007-04-17 | 3,500 | Pledged | To the expire date of joint venture contract | N | Y |
Total approving external guarantee in report period (A1) | 0 | Total actual occurred external guarantee in report period (A2) | 3,500 | |||||
Total approved external guarantee at the end of report period ( A3) | 3,500 | Total actual balance of external guarantee at the end of report period (A4) | 3,500 | |||||
Guarantee of the Company for subsidiaries | ||||||||
Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) |
Total amount of approving guarantee for subsidiaries in report period (B1) | 0 | Total amount of actual occurred guarantee for subsidiaries in report period (B2) | 0 | |||||
Total amount of approved guarantee for subsidiaries at the end of reporting period (B3) | 0 | Total balance of actual guarantee for subsidiaries at the end of reporting period (B4) | 0 | |||||
Guarantee of the subsidiaries for subsidiaries | ||||||||
Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) |
Total amount of approving guarantee for subsidiaries in report period (C1) | 0 | Total amount of actual occurred guarantee for subsidiaries in report period (C2) | 0 |
Total amount of approved guarantee for subsidiaries at the end of reporting period (C3) | 0 | Total balance of actual guarantee for subsidiaries at the end of reporting period (C4) | 0 |
Total amount of guarantee of the Company (total of three above mentioned guarantee) | |||
Total amount of approving guarantee in report period (A1+B1+C1) | 0 | Total amount of actual occurred guarantee in report period (A2+B2+C2) | 3,500 |
Total amount of approved guarantee at the end of report period (A3+B3+C3) | 3,500 | Total balance of actual guarantee at the end of report period (A4+B4+C4) | 3,500 |
Including: | |||
Amount of guarantee for shareholders, actual controller and its related parties (D) | 0 | ||
The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly (E) | 0 | ||
Proportion of total amount of guarantee in net assets of the Company exceed 50% (F) | 0 | ||
Total amount of the aforesaid three guarantees (D+E+F) | 0 | ||
Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (if applicable) | N/A | ||
Explanations on external guarantee against regulated procedures (if applicable) | N/A |
Explanation on guarantee with composite way
(2) Guarantee outside against the regulation
□Applicable √Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
√Applicable □Not applicable
Trust financing in the reporting period
In 10 thousand Yuan
Type | Capital resources | Amount for entrust | Balance un-expired | Overdue amount |
Bank financing product | Own funds | 36,488.27 | 6,000 | 0 |
Details of the single major amount, or high-risk trust investment with low security, poor fluidity and non-guaranteed
□Applicable √Not applicable
Entrust financial expected to be unable to recover the principal or impairment might be occurred
□Applicable √Not applicable
(2) Entrusted loans
□ Applicable √ Not applicable
The Company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period
XVIII. Social responsibility
1. Fulfill social responsibility
The Company has always taken the shareholders’ return, employees’ achievements, and social feedback as its ownduty. We adheres to the principle of fairness and actively safeguards the legitimate rights and interests ofshareholders; actively advocates achieving the self-worth while realizing the enterprise value, and creates aworking environment that the enterprise cares for employees and employees love the enterprise so as to have aharmonious development together; actively returns to the society and the public, and commits itself to achieve theharmonious and sustainable development of the Company and society.
2. Performance of taking targeted measures in poverty alleviation
(1) Targeted measures in poverty alleviation
During the period, the Company participates in the targeted measures in poverty alleviation for Libai Village,Shangguang Town, Dongyuan County, Heyuan City, Guangdong Province.
(2) Annual poverty alleviation in the Year
The Company is concerned about the mountainous areas, takes the initiative to assume social responsibilities forpoverty alleviation. According to the arrangement, the Company is responsible for the hard bottoming andwidening of village roads and the hard bottoming of roads for transporting of Li Bai village. The project has begunon December 29, 2017, currently, the project has completed. After the project is completed, it will greatly facilitatethe production and transportation of Li Bai villagers, and the “difficulties in roads” that have plagued the villagersfor many years will be thoroughly resolved.
(3) Follow-up of targeted poverty alleviation
Expansion and repair the road in Li Bai village
3. Environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection departmentNoXIX. Explanation on other significant events
□ Applicable √ Not applicable
The Company had no explanation on other significant events in the reporting period.XX. Significant event of subsidiary of the Company
□Applicable √Not applicable
Section VI. Changes in Shares and Particulars about ShareholderI. Changes in Share Capital
1. Changes in Share Capital
In Share
Before change | Increase/decrease in this time (+ , - ) | After change | |||||||
Amount | Ratio | New shares issued | Bonus share | Capitalization of public reserve | Other | Subtotal | Amount | Ratio | |
I. Restricted shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
1. State holding | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
2. State-owned corporation shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
3. Other domestic shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
Including: domestic legal person’s shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
Domestic natural person’s shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
4. Foreigner’s shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
Including: foreign corporation shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
Foreign natural person’s shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
II. Un-restricted shares | 297,281,600 | 100.00% | 0 | 0 | 133,776,720 | 0 | 133,776,720 | 431,058,320 | 100.00% |
1. RMB ordinary shares | 270,881,600 | 91.12% | 0 | 0 | 121,896,720 | 0 | 121,896,720 | 392,778,320 | 91.12% |
2. Domestically listed foreign shares | 26,400,000 | 8.88% | 0 | 0 | 11,880,000 | 0 | 11,880,000 | 38,280,000 | 8.88% |
2. Foreign shares listed aboard | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
3. Other | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
III. Total shares | 297,281,600 | 100.00% | 0 | 0 | 133,776,720 | 0 | 133,776,720 | 431,058,320 | 100.00% |
Reasons for share changed
√Applicable □Not applicable
Profit distribution plan for year of 2018 are: carry out 4.5 additional shares for each 10 shares held by shareholders are being
converted by the capital reserve, based on total share capital 297,281,600 shares on 31
stDecember 2018. Totally 133,776,720 sharesare converted and the share capital of the Company increased to 431,058,320 after this conversion. The profit distribution plan wasimplemented on 17 May 2019.Approval of share changed
√Applicable □Not applicable
On 1 April 2019, the Profit Distribution Plan for year of 2018 was deliberated and approved by 2
nd
session of 9
th
BOD and 4
thsessionof 9thSupervisory Committee, that is carry out 4.5 additional shares for each 10 shares held by shareholders are being converted bythe capital reserve, based on total share capital 297,281,600 shares on 31
st
December 2018. totally 133,776,720 shares are convertedand the share capital of the Company increased to 431,058,320 after this conversion. The above mentioned Plan has deliberated andapproved by Shareholders General Meeting of 2018 and implemented on 17 May 2019.Ownership transfer of share changed
√Applicable □Not applicable
Total 133,776,720 shares are converted from public reserves, including 121,896,720 A-share which has reckoned into the securityaccount of A-share of shareholders directly on 15 May 2019; and 11,880,000 B-share which has reckoned into the security account ofB-share of shareholders directly on 17 May 2019.Progress of shares buy-back
□Applicable √Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
√Applicable □Not applicable
Influence on the financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□Applicable √Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets andliability structure
□Applicable √Not applicable
3. Current internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
Total common stock shareholders in reporting period-end | 52,691 | Total common stock shareholders at end of last month before annual report disclosed | 48,656 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (found in note 8) | 0 | Total preference shareholders with voting rights recovered at end of last month before annual report disclosed (if applicable) (found in note 8) | 0 | ||||||
Particulars about shares held above 5% by shareholders or top ten shareholders | |||||||||||||
Full name of Shareholders | Nature of shareholder | Proportion of shares held | Total shareholders at the end of report period | Changes in report period | Amount of restricted shares held | Amount of un-restricted shares held | Number of share pledged/frozen | ||||||
State of share | Amount | ||||||||||||
Shenzhen Special Development Group Co., Ltd. (SDG) | State-owned corporation | 49.09% | 211,591,621 | 0 | 0 | 211,591,621 | 0 | ||||||
Shenzhen Capital Fortune Jewelry Industry Investment Enterprise (LP) | Domestic non state-owned corporate | 17.89% | 77,096,871 | -17,155,449 | 0 | 77,096,871 | 0 | ||||||
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED | Foreign corporation | 0.41% | 1,746,091 | 10,000 | 0 | 1,746,091 | 0 | ||||||
China CITIC Bank Corporation Limited -Jianxin Securities 500 Index Enhanced Investment Fund | Other | 0.26% | 1,119,075 | 922,020 | 0 | 1,119,075 | 0 |
Agricultural Bank of China Ltd. – CSI 500 ETF | Other | 0.23% | 1,007,224 | -122,095 | 0 | 1,007,224 | 0 | |
Hong Kong Securities Clearing Company Ltd. | Foreign corporation | 0.19% | 803,348 | 702,406 | 0 | 803,348 | 0 | |
Zuo Min | Domestic nature person | 0.13% | 551,500 | 551,500 | 0 | 551,500 | 0 | |
Li Guangxin | Domestic nature person | 0.11% | 487,181 | -616,502 | 0 | 487,181 | 0 | |
Huang Xinchang | Domestic nature person | 0.11% | 463,565 | 463,565 | 0 | 463,565 | 0 | |
He Xing | Domestic nature person | 0.10% | 444,135 | 8,990 | 0 | 444,135 | 0 | |
Strategy investors or general corporation comes top 10 shareholders due to rights issue (if applicable) (see note 3) | Not applicable | |||||||
Explanation on associated relationship among the top ten shareholders or consistent action | Among the top ten shareholders, there exists no associated relationship between the state-owned legal person’s shareholders SDG, Ltd and other shareholders, and they do not belong to the persons acting in concert regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Companies. For the other shareholders of circulation share, the Company is unknown whether they belong to the persons acting in concert. | |||||||
Particular about top ten shareholders with un-restrict shares held | ||||||||
Shareholders’ name | Amount of un-restrict shares held at Period-end | Type of shares | ||||||
Type | Amount | |||||||
Shenzhen Special Development Group Co., Ltd. | 211,591,621 | RMB ordinary shares | 211,591,621 | |||||
Shenzhen Capital Fortune Jewelry Industry Investment Enterprise (LP) | 77,096,871 | RMB ordinary shares | 77,096,871 | |||||
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED | 1,746,091 | Domestically listed foreign shares | 1,746,091 | |||||
China CITIC Bank Corporation Limited -Jianxin Securities 500 Index Enhanced Investment Fund | 1,119,075 | RMB ordinary shares | 1,119,075 |
Agricultural Bank of China Ltd. – CSI 500 ETF | 1,007,224 | RMB ordinary shares | 1,007,224 |
Hong Kong Securities Clearing Company Ltd. | 803,348 | RMB ordinary shares | 803,348 |
Zuo Min | 551,500 | RMB ordinary shares | 551,500 |
Li Guangxin | 487,181 | Domestically listed foreign shares | 487,181 |
Huang Xinchang | 463,565 | RMB ordinary shares | 463,565 |
He Xing | 444,135 | Domestically listed foreign shares | 444,135 |
Expiation on associated relationship or consistent actors within the top 10 un-restrict shareholders and between top 10 un-restrict shareholders and top 10 shareholders | Among the top ten shareholders, there exists no associated relationship between the state-owned legal person’s shareholders SDG, Ltd and other shareholders, and they do not belong to the persons acting in concert regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Companies. For the other shareholders of circulation share, the Company is unknown whether they belong to the persons acting in concert. | ||
Explanation on shareholders involving margin business about top ten common shareholders with un-restrict shares held(if applicable) (see note 4) | Shareholder Zuo Min holds 551,500 shares of the Company through security account for credit transactions, and holds 0 share of the Company via common security account, 551,500 shares are held in total by Huang. Shareholder Huang Xinchang holds 463,565 shares of the Company through security account for credit transactions, and holds 0 share of the Company via common security account, 463,565 shares are held in total by Huang. |
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-backagreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have nobuy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: local state-owned holdingType of controlling shareholders: legal person
Majority shareholder | Legal person/person in charge of the unit | Date of foundation | Organization code | Main operation business |
Shenzhen Special Development Group Co., Ltd. | Zhang Junlin | 1982-06-20 | 91440300192194195C | Investment in industry (specific item should be declaration); investment in tourism industry; development and operation of the real estate; domestic business, material supply and marketing industry (excluding monopolized commodity and commodity under special government control); economic information(excluding restricted projects); import & export business |
Equity of listed Company in and out of China control and hold by the majority shareholder in the Period | Except the shares of the Company held by SDG, SDG still holds 253,935,290 shares of Shenzhen SDG Information Co., Ltd. (Stock name: SDGI, Stock code: 000070), a 40.5% takes; holds 7,985,809 shares of Sichuan Jinlu Group Co., Ltd. (Stock name: Jinlu Group, Stock code: 000510), a 1.31% takes; and 9,135,174 shares of Huatai Securities Co., Ltd. (Stock name: Huatai Securities, Stock code: 601688) with 0.13% takes;through Shenzhen Capital Fortune Electronic Information Investment Enterprise (limited partnership), holds 184 million shares of Shenzhen Microgate Technology Co., Ltd. (Stock name: Microgate Technology, securities code: 300319), with 26.44% takes. |
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Actual controller of the Company and persons acting in concert
Nature of actual controller: local state-owned assets managementType of actual controller: legal person
Actual controlling shareholders | Legal person/person in charge of the unit | Date of foundation | Organization code | Main operation business |
Shenzhen Municipal People’s Government State-owned Assets Supervision and Administration Commission | Yu Gang | 2003-07-20 | 11440300K317280672 | Not applicable |
Equity of domestic/oversea listed Company control by actual controller in report period | Not applicable |
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controllers for the Company in reporting period.Property right and controlling relationship between the actual controller and the Company is as follow:
Actual controller controlling the Company by entrust or other assets management
□Applicable √Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
√Applicable □Not applicable
Corporate shareholders | Legal rep./person in charge of unit | Date of foundation | Register capital | Main business or management activity |
Shenzhen Capital Fortune Jewelry Industry Investment Enterprise (LP) | Cheng Houbo | 2014-04-18 | 620 million Yuan | Equity investment |
5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,restructuring side and other commitment subjects
□Applicable √Not applicable
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
Section VIII. Convertible Bonds
□ Applicable √ Not applicable
The Company had no convertible bonds in the Period.
Section IX. Particulars about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Name | Title | Working status | Sex | Age | Start dated of office term | End date of office term | Shares held at period-begin (Share) | Amount of shares increased in this period (Share) | Amount of shares decreased in this period (Share) | Other changes (share) | Shares held at period-end (Share) |
Fu Chunlong | Chairman | Currently in office | M | 47 | 2018-09-07 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Yu Lei | Director | Currently in office | F | 52 | 2012-06-06 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Zhang Quanxun | Director | Currently in office | M | 47 | 2015-05-20 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Gu Zhiming | Director | Currently in office | M | 49 | 2018-09-07 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Lv Hang | Director,GM | Currently in office | M | 59 | 2018-09-07 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Lou Hong | Director | Currently in office | F | 52 | 2018-02-09 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Lou Hong | CFO | Currently in office | F | 52 | 2018-01-04 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Hu Yuming | Independent director | Currently in office | M | 55 | 2018-09-07 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Jiang Dinghang | Independent director | Currently in office | M | 57 | 2018-09-07 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Zhang Dong | Independent director | Currently in office | M | 46 | 2018-09-07 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Guo Xiaodong | Chairman of the Supervisory Committee | Currently in office | M | 56 | 2018-09-07 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Chen Yangsheng | Supervisor | Currently in office | M | 57 | 2017-05-04 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Yang Jianping | Supervisor | Currently in office | F | 48 | 2018-09-07 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Liu Haicheng | Supervisor | Currently in office | F | 51 | 2018-09-07 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Zhang Zheng | Supervisor | Currently in office | M | 36 | 2018-09-07 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Tan Zhong | Deputy Party secretary | Currently in office | M | 52 | 2018-09-07 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Feng Yu | Deputy GM | Currently in office | M | 53 | 2006-06-17 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Xie Jing | Deputy GM | Currently in office | M | 55 | 2018-10-25 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Qi Peng | Secretary of the Board | Currently in office | M | 47 | 2015-12-28 | 2021-09-06 | 0 | 0 | 0 | 0 | 0 |
Total | -- | -- | -- | -- | -- | -- | 0 | 0 | 0 | 0 | 0 |
II. Changes of directors, supervisors and senior executives
□Applicable √Not applicable
III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors, supervisors andsenior executive
Name | Main work experience and holding the post |
Fu Chunlong | Born in 1973, Master degree, senior human resources manager. He ever took the Deputy Team Leader in Work Team of Shenzhen SDG Huatong Packaging Co., Ltd., Business Deputy General Manager /GM and deputy director/director of HR Department of Shenzhen SDG Co., Ltd., and supervisor of the Company. Now, he is Deputy GM of Shenzhen SDG Co., Ltd- controlling shareholder of the Company and Supervisor of Shenzhen State-Owned Dutyfree Commodity (Group) Co., Ltd and Chairman of the Company |
Yu Lei | Born in 1968, Master degree, a certified real estate appraiser and real estate economist. She successively served as secretary of the international project cooperation department of Beijing Chaoyan Vocation Education Training Center, deputy chief, chief and deputy director of Luohu Branch, the Bureau of Planning and Land of Shenzhen Municipality, the deputy director and director of State-owned Assets Supervision and Administration Commission of the People’s Government of Shenzhen Municipality. Now she serves as deputy GM of the controlling shareholder of the Company- SDG and Director of the Company |
Zhang Quanxun | Born in 1973, Master degree, he successively served as auditor and project manager in auditing department of Shenzhen Zhixing CPA Office; the GM assistant of Xiamen Xingdao Feilu Investment Co., Ltd., secretary of the Board, GM assistant and staff director of Fujian Logistics Investment Financing Co., Ltd.; deputy director of Xiamen Productivity Promotion Center; director of the plastic business department and strategy development department of Shenzhen Tongchan Package Group and the director of strategy research and merger department of SZ Capital. Now he serves as deputy president and member of the investment committee of Shenzhen Capital Fortune Investment Management Co., Ltd. and Director of the Company |
Gu Zhiming | Born in 1971, senior gold investment analyst, once served as an employee of the business department of Guilin Wanya Jewellery Co., Ltd., business director of Shenzhen Chenzhixin Jewellery Co., Ltd., business director of the domestic division of Lukfook Group (International) Co., Ltd., general manager of Shenzhen Jinglon Jewellery Co., Ltd., and Chief Operating Officer of Shenzhen Xingguangda Jewellery Co., Ltd., and currently serves as the deputy general manager of Shenzhen Yuepeng Gold Jewellery & Gold Co., Ltd. and a director of the Company. |
Lv Hang | Born in 1961, Master degree, a senior political division. He successively served as lecturer and secretary of the principal of Shenzhen University; the business manager, deputy director and director of the office of the Party Dept. of Shenzhen SDG; chairman and GM of Shenzhen SDG Xiaomeisha Tourism Center; Director and GM of Shenzhen Tellus Holding Co., Ltd; GM of Shenzhen SDG Property Management Co., Ltd and chairman of the Company etc. |
Lou Hong | Born in 1968, a Bachelor degree and senior account. Used to worked as staff of the financial dept. in Suzhou Silk Industry Company and in Shenzhen Southeast Silk Co., Ltd.; staff of the accounting & financial dept. of Shenzhen Special Economic Zone Development (Group) Company and worked in accounting management office; also worked as deputy GM of Shenzhen SDG Liancheng Real Estate Development Co., Ltd.; manager of the financial dept. of Shenzhen SDG Investment Co., Ltd.; the business manager and deputy director in accounting & financial dept. of Shenzhen SDG Group Co., Ltd.; CFO of the Shenzhen SDG Real Estate Co., Ltd. and the deputy director of the planning financial dept. Of Shenzhen SDG and Director and CFO of the Shenzhen SDG Xiaomeisha Investment Development Co., Ltd. Currently works as the Director and CFO of the Company. |
Hu Yuming | Born in 1965, a doctoral candidate and accounting professor. He successively served as a teaching assistant, lecturer and vice professor of Xiamen University, associate professor of the school of management, vice director and director of accounting department of Jinan University, the deputy dean of the school of international institute and school of management of the Jinan University. Now he serves as the professor and doctoral supervisor of school of management of the Jinan University and Independent director of the Company |
Jiang Dinghang | Born in 1963, a master degree and a lawyer. He successively served as the minister of legal consultation department of Shenzhen Social Security Bureau, deputy director of Shenzhen Labor Bureau Office, director of general office of Shenzhen SDG, GM of the Shenzhen SDG Songli Company, GM of the Shenzhen Communications Industry Co., Ltd and apprentice lawyer of Guangdong Zhong An Laws Firm. Now he serves as senior partner of Shanghai ALLBRIGHT (Shenzhen) Law Office and Independent director of the Company. |
Zhang Dong | Born in 1974, a doctoral candidate, postdoctoral economics and senior gold investment analyst. He successively served as Deputy GM of Shenzhen Qiang Zhuang Computer Tech. Co., Ltd, Deputy GM of Shenzhen Brain Age Economic and Cultural Co., Ltd, the assistant president of Hong Kong Leader Culture Media Co., Ltd, GM of |
Shenzhen Zhong Shi Advertising Co., Ltd, GM of Heilongjiang Luk Kwai Fook Jewelry Limited and President of Luk Kwai Fook Jewelry Group. No he serves as executive director of Shenzhen Yongtian Shengdao Investment Development Co., Ltd and Independent director of the Company. | |
Guo Xiaodong | Born in 1964, a bachelor degree and senior economist. He successively served as assistant engineer of Shuangliao Agricultural Machinery Bureau in Jilin Province, engineer of Fourth Research Laboratory of Jilin Institute of Agricultural Machinery, manager of Gaodao industrial (Shenzhen) Co., Ltd., minister of the engineering dept., deputy GM and GM of Shenzhen SDG Development Center Property Management Company, deputy GM of Shenzhen SDG Development Center Construction Supervision Company, Director and GM of Shenzhen SDG Development Center Property Management Company, deputy GM of Shenzhen SDG Property Co., Ltd., Chairman of the Supervisory Committee of Shenzhen SD Real Estate Co., Ltd and Chairman of the Supervisory Committee of Shenzhen SD Xiaomeisha Tourism Development Co., Ltd. Now he serves as Chairman of Supervisory Committee of the Company |
Chen Yangsheng | Born in 1963, a postgraduate and senior accountant. He ever served as deputy director/director of the financial dept. in Shenzhen Industrial Products Trade Group Company; deputy director/director/CFO of the financial dept. in Shenzhen Aokangde Group Company; director and CFO of Shenzhen State-owned Duty-Free Commodity (Group) Company; director and CFO of Shenzhen Agricultural Products Co., Ltd. and supervisor of Shenzhen Tagen Group Co., Ltd.; now he serves as director and CFO of Shenzhen SDG Co., Ltd-controlling shareholder of the Company, and Supervisor of the Company. |
Yang Jianping | Born in 1972, a postgraduate and certified public accountant. He ever served as Business manager of accounting and finance department of SDGI, financial manager of Taike Branch, financial manager of Guanglan Branch, deputy manager and manager of the accounting & finance dept; Director and CFO of Shenzhen Tellus Holding Co., Ltd. Now he serves as director of the accounting & finance dept of SDG-controlling shareholder of the Company and Supervisor of the Company |
Liu Haicheng | Born in 1969, a postgraduate and certified public accountant. She ever served as staff of design dept. of Dongfeng Auto Wheel Co., Ltd., staff of technical dept. of Shenzhen Dongfeng Motor Co., Ltd., staff of the secretariat of Shenzhen Automobile Association, operations dept. staff of the automobile division of the Company, staff of enterprise management dept. and deputy manager of the Company. Now she serves as manager of the enterprise management dept. and supervisor of the Company |
Zhang Zheng | Born in 1984, a Bachelor degree. He successively served as senior auditor of Shenzhen Branch of Shenzhen Zhongqin Wanxin Accountant Affairs, the financing commissioner of planning & finance dept. of SDG, deputy manager of the planning & finance dept. of the Company. Now he serves as deputy manager of the audit supervision department and supervisor of the Company |
Tan Zhong | Born in 1968, has a bachelor’s degree and is qualified as a lawyer and a corporate legal consultant, formerly served as legal counsel and deputy manager of the Enterprise Management Department of Shenzhen Automobile Industry and Trade Corporation, deputy director of the board secretary, legal affairs representative, and manager of the enterprise management department of the Company, general manager and general Party branch secretary of Shenzhen SD Huari Automobile Enterprise Co., Ltd., and currently serves as the full-time deputy secretary of the Party Committee of the Company. |
Feng Yu | Born in 1967, bachelor’s degree. He ever took the deputy director of Haicheng Foreign Economic and Trade Commission of Liaoning Province, director of liaison department of Youth President Committee of State-owned Assets Administration, Deputy GM of Shenzhen Xianke Real-estate Co., Ltd., Manager of Investment Department of China Sports Group Industry Co., Ltd.; Deputy director and Director to the Office of General Manger of Shenzhen SDG Co., Ltd; and Supervisor of the Company. Now, he acts as Deputy General Manager of the Company |
Xie Jing | Born in 1965, a citizenship of Canadian, bachelor’s degree, and a senior engineer, national registered supervision engineer. He successively served as structural engineer of Hunan Light Industry Design Institute, engineer of the Hunan Branch of Bank of China, assistant GM of the real estate dept. and GM of Engineering department of SDG, deputy GM of Shenzhen Jincheng Real Estate Group Co., Ltd., the executive president of Shenzhen Jiaanda Group and GM etc. of the land reserve center of Weiye Holding. Currently he serves as Deputy GM of the Company. |
Qi Peng | Born in 1973, master's degree, economist, he has obtained the qualification certificate of secretary of the board from Shenzhen Stock Exchange. He successively served as secretary to the president and director in information center of Shenzhen Special Economic Zone Development (Group) Co., Ltd.; deputy director in secretariat of the board, and deputy manager in enterprise development department, and manager in automobile business department and management department of Shenzhen Tellus(Group) Co., Ltd.; general manager of Shenzhen Tellus Automobile Service Chain Co., Ltd.; general manager of Shenzhen Tellus New Yongtong Automobile Development Co., Ltd.; director secretariat of the board of Shenzhen Tellus(Group) Co., Ltd.; and serves as secretary of the board of the Company |
Post-holding in shareholder’s unit
√Applicable □Not applicable
Name | Name of shareholder’s unit | Position in shareholder’s unit n | Start dated of office term | End date of office term | Received remuneration from shareholder’s unit (Y/N) |
Fu Chunlong | Shenzhen Special Development Group Co., Ltd. | Deputy GM | 2017-12-01 | Y | |
Yu Lei | Shenzhen Special Development Group Co., Ltd. | Deputy GM | 2011-08-01 | Y | |
Chen Yangsheng | Shenzhen Special Development Group Co., Ltd. | CFO | 2016-12-01 | Y | |
Yang Jianping | Shenzhen Special Development Group Co., Ltd. | Director of planning & finance dept. | 2018-01-01 | Y | |
Post-holding in shareholder’s unit | N/A |
Post-holding in other unit
√Applicable □Not applicable
Name | Name of other units | Position in other unit n | Start dated of office term | End date of office term | Received remuneration from other unit (Y/N) |
Zhang Quanxun | Shenzhen Capital Fortune Investment Management Co., Ltd. | Deputy President | 2013-02-01 | Y | |
Gu Zhiming | Shenzhen Yue Peng Jin Jewelry Co., Ltd | Deputy GM | 2011-05-01 | Y |
Hu Yuming | Jinan University | professor of school of management and doctoral supervisor | 2003-06-01 | Y | |
Jiang Dinghang | Shanghai ALLBRIGHT (Shenzhen) Law Office | Senior partner | 2005-04-01 | Y | |
Zhang Dong | Shenzhen Yongtian Shengdao Investment Development Co., Ltd. | Executive Director | 2014-04-01 | Y | |
Post-holding in other unit | N/A |
Punishment of securities regulatory authority in recent three years to the Company’s current and outgoing directors, supervisors andsenior management during the reporting period
□Applicable √Not applicable
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
The Company executes in strict accordance with the "Salary Management System for Headquarters of ShenzhenTellus(Group) Co., Ltd. ", "Staff Performance Management System for Headquarters of Shenzhen Tellus (Group)Co., Ltd.", "Implementing Rules of Remuneration and Appraisal Committee of the Board of ShenzhenTellus(Group) Co., Ltd.", "Annual Performance Management Approaches for Leading Group Members ofShenzhen Tellus(Group) Co., Ltd." and other relevant system regulations, strictly implements the performanceappraisal, and pay the remuneration in accordance with the assessment results.
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Name | Title | Sex | Age | Post-holding status | Total remuneration obtained from the Company (before taxes) | Whether remuneration obtained from related party of the Company |
Fu Chunlong | Chairman | M | 47 | Currently in office | 0 | Y |
Yu Lei | Director | F | 52 | Currently in office | 0 | Y |
Zhang Quanxun | Director | M | 47 | Currently in office | 0 | N |
Gu Zhiming | Director | M | 49 | Currently in office | 0 | N |
Lv Hang | Director, GM | M | 59 | Currently in office | 94.74 | N |
Lou Hong | Director, CFO | F | 52 | Currently in office | 80.58 | N |
Hu Yuming | Independent director | M | 55 | Currently in office | 8 | N |
Jiang Dinghang | Independent director | M | 57 | Currently in office | 8 | N |
Zhang Dong | Independent director | M | 46 | Currently in office | 8 | N |
Guo Xiaodong | Chairman of the Supervisory Committee | M | 56 | Currently in office | 74.88 | N |
Chen Yangsheng | Supervisor | M | 57 | Currently in office | 0 | Y |
Yang Jianping | Supervisor | F | 48 | Currently in office | 0 | Y |
Liu Haicheng | Supervisor | F | 51 | Currently in office | 37.08 | N |
Zhang Zheng | Supervisor | M | 36 | Currently in office | 29.65 | N |
Tan Zhong | Deputy Party secretary | M | 52 | Currently in office | 58.46 | N |
Feng Yu | Deputy GM | M | 52 | Currently in office | 101.79 | N |
Xie Jing | Deputy GM | M | 55 | Currently in office | 102.11 | N |
Qi Peng | Secretary of the Board | M | 47 | Currently in office | 55.07 | N |
Total | -- | -- | -- | -- | 658.36 | -- |
Delegated equity incentive for directors and senior executives in reporting period
□Applicable √Not applicable
V. Particulars of workforce
1. Number of Employees, Professional composition, Education background
Employee in-post of the parent Company (people) | 55 |
Employee in-post of main Subsidiaries (people) | 270 |
The total number of current employees (people) | 325 |
The total number of current employees to receive pay (people) | 325 |
Retired employee’ s expenses borne by the parent Company and main Subsidiaries (people) | 0 |
Professional composition | |
Category of professional composition | Numbers of professional composition (people) |
Production personnel | 41 |
Sales personnel | 89 |
Technician | 66 |
Financial staff | 25 |
Administration staff | 104 |
Total | 325 |
Education background | |
Type of education background | Numbers (people) |
Master | 25 |
Bachelor degree | 86 |
Junior college | 75 |
Other | 139 |
Total | 325 |
2. Remuneration Policy
The Company executes in strict accordance with the "Salary Management System for Headquarters of ShenzhenTellus Holding Co., Ltd. ", "Staff Performance Management System for Headquarters of Shenzhen Tellus HoldingCo., Ltd. " and other relevant system regulations strictly implement.
3. Training programs
In 2020, the “One Four Five” plan has been implemented, focusing on “one center, four focuses, and fiveimprovements”, that is, “taking corporate transformation and development as the center, taking management skillsimprovement of managers, new employee induction training, fresh graduate training and internal trainer as thefocuses, improving the effectiveness of training implementation, improving the quality of grass-roots employees,improving the skills of professionals, improving the capabilities of middle managers, and improving the horizonsof senior managers” as the guiding ideology to formulate the 2020 annual human resources training plan,determine the main training items, improve the training process, strengthen the training management, fullymobilize the enthusiasm of all employees to actively participate in learning, and carry out the training work in anorderly manner.
4. Labor outsourcing
√Applicable □Not applicable
Total hours of labor outsourcing (hours) | 2,000 |
Total remuneration paid for labor outsourcing (RMB) | 109,310.59 |
Section X. Corporate GovernanceI. Corporate governance of the Company
During the reporting period, the Company has been observing the laws and regulations as Company Law,Securities Law, Governance Criteria of the Listed Companies, Guidelines for Standardized Operation of ListedCompanies on the Main Board of Shenzhen Stock Exchange and relevant rules issued by the CSRC, for thepurpose of improving its legal person governance structure, setting up and improving the internal control system,and standardizing its operation level. According to the Articles of Association, Procedure Rules of ShareholdersGeneral Meeting, Procedure Rules of Board of Directors, Procedure Rules of Supervisory Committee, WorkingRules of Independent Directors, Working Rules of General Manager, working rules of every committee of theBoard and a series of rules and regulations, the Company maintained formal procedures, clearly duties andobligations of its general meeting, board of directors, supervisory committee, each specialized committee of theboard and senior manager. Each of its directors, supervisors and senior managers can perform their dutiesearnestly.In 2019, the Company have convened 4 shareholders general meetings, 8 meetings of the Board, 4 meeting of theSupervisory Committee, 3 meetings of Auditing Committee of the Board, 3 meetings of Strategy Committee ofthe Board and 2 meetings of Remuneration and Appraisal Committee of the Board; relevant governancedocuments as Articles of Association, Procedure Rules of Shareholders General Meeting, Procedure Rules ofBoard of Directors, Working Rules of General Manager and Investment Management Regulations etc. are beingrevised; in accordance with the principles of professionalization, professionalism, and marketization, the companycompleted the election of the board of directors, the board of supervisors, and the senior management. In order toestablish and improve the company’s standardized operation mechanism and improve the company’s internalcontrol system, the company promoted the revision, promulgation and abolition of the system in accordance withthe established system construction work plan, and revised a number of rules and regulations throughout the year.As of the end of the reporting period, the actual situation of corporate governance was in line with therequirements of the regulatory documents issued by the China Securities Regulatory Commission on thegovernance of listed companies.Is there any difference between the actual condition of corporate governance and relevant regulations aboutcorporate governance for listed Company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations aboutcorporate governance for listed Company from CSRC.
II. Independent of the Company relative to controlling shareholders’ in aspect of businesses,personnel, assets, organization and finance
The Company has been independent from the controlling shareholders in terms of business, personnel, asset,institution and finance. The Company has independent and complete business and is able to operateindependently.(i) Business: the Company belongs to independent legal person entity. Being completely independent fromcontrolling shareholders, it has independent and complete business system and is able to operate independently.The Company has independent production, sales and service systems and its major business. There is nointer-competition between the Company and its controlling shareholders and related parties.(ii) Personnel: the Company establishes complete labor, human resources and salary management systems. Seniorexecutive as GM, Deputy GM, CFO and Secretary of the Board etc. are receives remuneration from the Companysince they are employed by the Company, and no one takes position in the enterprises owned by shareholders.(iii) Assets: The Company independently and completely owns the business system and underlying assets relatedto the operation, and independently registers, establishes accounts, adjusts accounts and manages the assets, andthe assets are independent of the controlling shareholders and other enterprises controlled by them.(iv) Finance: the Company has independent financial accounting department which set independent accountingcalculation system and finance management system. No controlling shareholder intervenes in the capitalapplication of the Company. The Company opens separate bank accounts. No capital is saved in the financialCompany or settlement center account controlled by substantial shareholder or other related parties; the Companydoes not share bank account with controlling shareholders and other enterprise under their control. And TheCompany pays taxes by law independently.(v) Institution: the board, the supervisory committee and other internal institutions of the Company operateindependently. All the institutions of the Company are set according to the standards requirements applicable tolisted Company and actual business natures of the Company. It has independent office location.
III. Horizontal competition
□Applicable √Not applicable
IV. In the report period, the Company held annual shareholders’ general meeting andextraordinary shareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report period
Session of meeting | Type | Ratio of investor participation | Meeting Date | Date of disclosure | Index of disclosure |
First Extraordinary General Meeting of 2019 | Extraordinary General Meeting | 70.99% | 2019-01-14 | 2019-01-15 | ”Resolution Notice of First Extraordinary General Meeting of 2019” (No.: 2019-001) published on Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn |
Annual General Meeting of 2018 | Annual General Meeting | 69.99% | 2019-04-23 | 2019-04-24 | “Resolution Notice of Annual General Meeting of 2018” (No.: 2019-018) published on Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) |
Second Extraordinary General Meeting of 2019 | Extraordinary General Meeting | 68.02% | 2019-09-17 | 2019-09-18 | ”Resolution Notice of Second Extraordinary General Meeting of 2019” (No.: 2019-034) published on Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn |
Third Extraordinary General Meeting of 2019 | Extraordinary General Meeting | 67.43% | 2019-11-18 | 2019-11-19 | ”Resolution Notice of Third Extraordinary General Meeting of 2019” (No.: 2019-044) published on Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□Applicable √Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
The attending of independent directors to Board Meeting and shareholders general meeting | |||||||
Name of independent director | Times of Board meeting supposed to attend in the report period | Times of Presence | Times of attending by communication | Times of entrusted presence | Times of Absence | Absent the Meeting for the second time in a row (Y/N) | Times of attending shareholders’ meeting |
Hu Yuming | 8 | 1 | 7 | 0 | 0 | N | 2 |
Jiang Dinghang | 8 | 1 | 7 | 0 | 0 | N | 2 |
Zhang Dong | 8 | 1 | 7 | 0 | 0 | N | 3 |
Explanation of absent the Board Meeting for the second time in a row
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□Yes √No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directors
In accordance with the provisions of the Company Law, the Securities Law, the Stock Listing Rules, theIndependent Director System and other relevant laws and regulations, the company’s independent directors paidattention to the normalization of the company’s operations, performed their duties independently, diligently andconscientiously did their duties, the independent directors issued independent, objective and fair opinions on thefunds occupation and external guarantees of related parties of the company, profit distribution matters,self-evaluation of the company’s internal control, daily related transactions in 2019, deposit and use of raisedfunds in 2018, the use of surplus raised funds to permanently supplement working capital, the use of idleself-owned funds to purchase bank wealth management products, changes in accounting estimates and accountingpolicies, changing audit institutions for 2019, purchase of listed company directors and supervisors high liabilityinsurance, and other matters requiring independent opinions from independent directors during the reportingperiod, which played an active role in improving the company’s supervision mechanism and helping the board ofdirectors make scientific and objective decisions, and played an important role in safeguarding the legitimaterights and interests of the company and all shareholders.VI. Duty performance of the special committees under the board during the reporting periodBoard of Director of the Company have three special committees as strategic committee, auditing committee andremuneration and appraisal committee, and formulated implementation rules for the special committeesindependently. During the reporting period, all committees had clear responsibilities and the overall operationswere good, which ensured efficient operation and scientific decision-making of the board of directors, and therewere no other important opinions and suggestions.
1. Duty performance of the strategic committee
The strategic committee of the board is specially set-up according to the regulation of Governance Criteria of theListed Companies, responsible for study on the long term development strategy and material investment decisionsand raising its recommendations. The committee comprised of 5 directors, and the committee is chaired bychairman of the Company. During the reporting period, the committee actively performed its duties, and carry outworks strictly in accordance with relevant rules of the CSRC, Shenzhen Stock Exchange and Working Rules ofStrategic Committee, with each of its members doing their best to perform the respective duties, provides strategicsupports for the sustained and steady development of the Company.Three meeting was held by strategic committee in 2019, which including:
The first meeting of the board’s strategic committee in 2019 was held on March 25, 2019, it reviewed the Proposalon Investing in the Transformation and Upgrade Project of the Plant 421 in Bagualing; on May 21, 2019, thesecond meeting of the board’s strategic committee in 2019 was held on May 21, 2019, the meeting reviewed theProposal on Investing in the Phase II Project of Tellus Shuibei Jewelry Building; on August 26, 2019, the thirdmeeting of the board’s strategic committee in 2019 was held to consider the Proposal on Investing in TellusTreasury Supply Chain Project; each committee member made research on the investment project and offeredproposals, which played an important role in strengthening the scientificity of investment decision and improvingthe benefits and quality of investment decision..
2. Duty performance of the audit committee
The audit committee of the board of directors is a specialized work organization set up by the board of directors inaccordance with the Guidelines for the Governance of Listed Companies, and is mainly responsible for thecommunication, supervision and verification of internal and external audits of the company. The committeecomprised of 5 directors, including 3 independent directors, and the committee is chaired by independent directorof the Company. During the reporting period, the committee actively performed its duties, and carry out worksstrictly in accordance with relevant rules of the CSRC, Shenzhen Stock Exchange and Working Rules of AuditCommittee. Pay close attention to the company’s management, financing and implementation of internal controlstandards; strengthen the communication and contact with the company’s relevant responsible departments,review the validity assessment of the company’s internal control and enterprise risk management throughcommunication, inspection, reporting, etc., and check whether the company’s operations, financing andaccounting policies comply with laws and regulations, and provide management and audit opinions.Three meetings were held by audit committee in 2019, which including:
(1) During the annual audit, the audit committee took active attitude in relevant works. Prior to the officialinvolvement of Ruihua Certified Public Accountants (LLP) (hereinafter referred to as Ruihua) in the annual audit,on 24 January 2019, the audit committee held meeting and determined the working arrangement for annual reportafter negotiation with Ruihua, reviewed the financial statements prepared by the Company, the committee agreedto submit the financial statements and related information to Ruihua for audit.
(2) The audit committee held the second meeting of 2019 on 20 March 2019 to re-review the financial statements,and formed written opinions and resolutions in respect of the annual financial statements, audit work summaryreport.
(3)The The audit committee held the third meeting of 2019 on 24 October 2019 to review the proposal ofchanging the annual auditing institution, and agreed to submit for deliberation on the Board.
3. Duty performance of the remuneration and appraisal committee
The remuneration and appraisal committee of the board of directors is a specialized working organization set upby the board of directors in accordance with the Guidelines for the Governance of Listed Companies, it is mainlyresponsible for formulating the assessment criteria for the company’s directors and senior management personneland making the assessment, responsible for formulating and reviewing the pay policy and programs of thecompany’s directors and senior management personnel, and responsible for the board of directors. The committeecomprised of 5 directors, including 3 independent directors, and the committee is chaired by independent directorof the Company. During the reporting period, the committee actively performed its duties, and carry out worksstrictly in accordance with relevant rules of the CSRC, Shenzhen Stock Exchange and Working Rules of AuditCommittee. The committee comprised of 5 directors, including 3 independent directors, and the committee ischaired by independent director of the Company. During the reporting period, the committee actively performedits duties, and carry out works strictly in accordance with relevant rules of the CSRC, Shenzhen Stock Exchangeand Working Rules of Audit Committee.Two meetings were held by remuneration and appraisal committee in 2019, which including:
The remuneration of the Board held the First meeting of 2019 on 28 April 2019 to review the proposal onManagement Methods on Team Member’s Remuneration and Performance. On 30 July 2019, the remunerationand appraisal committee of the board of directors held the second meeting of 2019 and reviewed the annualperformance appraisal indicators and remuneration of the company’s directors, supervisors and seniormanagement personnel. After review, all members of the remuneration and appraisal committee considered thatthe remuneration payment during the reporting period was in line with the company’s performance appraisalsystem, the remuneration of directors, supervisors and senior executives were determined by the company’srelevant system.VII. Works from Supervisory CommitteeThe Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting periodVIII. Examination and incentives of senior managementIn the reporting period, the annual performance of senior executives of the Company have been evaluated by theBoard according to the Management Methods on Team Member’s Remuneration and Performance, remunerationshall be pay in line with the results.
IX. Internal Control (IC)
1. Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
2. Appraisal Report of Internal Control
Disclosure date of full internal control evaluation report | 2020-04-03 | |
Disclosure index of full internal control evaluation report | Juchao website for information disclosure appointed by Shenzhen Stock Exchange: http://www.cninfo.com.cn | |
Defects Evaluation Standards | ||
Category | Financial Reports | Non-financial Reports |
Qualitative criteria | Significant defects: Individual defects or together with other defects causing the material misstatements in financial reports cannot be timely prevented or found or corrected. It is recognized as a significant defect if following cases happen. ① Fraud of management leading to material misstatements of financial results or false | 1. Major deficiencies: ① Great decisions violate the Company’s established procedure, resulting in significant losses to the Company; ② Serious violation of laws and regulations results in significant losses to the Company; ③Important businesses are lack of system control or |
financial reports, which mislead users of financial statements and result in decision-making mistakes and litigation; ② Ineffective control environment;③ Major internal control deficiencies found and reported to the management but haven’t been corrected after a reasonable time; ④ The decision-making of the Company’s major matters has not fulfilled the corresponding decision-making process, resulting in significant losses of the Company; ⑤ Important businesses involving the Company’s production and management are lack of effective control; ⑥ Other defects that seriously mislead the correct judgments made by the users of the statements, resulting in the company’s major compensation. 1. Important defects: Individual defects or together with other defects causing the misstatements in financial reports cannot be timely prevented or found or corrected, though the misstatements don’t reach and exceed the importance level, they should still cause the management’s attention. It is recognized as an important defect if following cases happen. ① The selection and application of accounting policies do not follow the generally accepted accounting principles; ② Anti-fraud programs and control measures have been not established; ③Corresponding control mechanism for accounts handling of unconventional or special transactions has not been established or implemented and has no there is no appropriate compensatory controls; ④ The controls to the period-end financial reporting process have one or more defects and cannot reasonably ensure that the financial statements prepared are true and accurate. 3. General deficiencies refer to the deficiencies except for major and significant deficiencies. | system control fails; ④ Serious brain drain of core management or core technical staff; ⑤Significant deficiencies in the internal evaluation results have not been corrected. ⑥ The failure of internal control to information disclosure causes the company to be publicly condemned by the regulatory authorities. 2. Significant deficiencies: ① The Company violates the enterprise internal regulations and causes significant losses; ②Serious brain drain of business personnel in the Company’s key positions; ③ The Company’s significant business systems have deficiencies; ④ The significant deficiencies in the internal control of the Company have not been corrected. 3. General deficiencies refer to deficiencies except for major and significant deficiencies. | |
Quantitative standard | 1. Major deficiencies: misstatement | 1. Major deficiencies: loss amount > |
amount > 10% of total profit, and absolute amount > 2 million Yuan; 2. Significant deficiencies: 5% of total profit < misstatement amount ≤10% of total profit, and absolute amount > 1 million Yuan; or 1 million Yuan < absolute amount ≤ 2 million Yuan, and misstatement amount > 5% of total profit. 3. General deficiencies: misstatement amount ≤ 5% of total profit, or absolute amount ≤ 1 million Yuan | 1.5% of owner's equity attributable to parent Company, and absolute amount > 5 million Yuan; 2. Significant deficiencies: 0.5% of owner's equity attributable to parent Company < loss amount ≤ 1.5% of owner's equity attributable to parent Company, or 1 million Yuan < absolute amount ≤ 5 million Yuan; 3. General deficiencies: loss amount ≤ 0.5% of owner's equity attributable to parent Company, or absolute amount ≤ 1 million Yuan | |
Amount of significant defects in financial reports | 0 | |
Amount of significant defects in non-financial reports | 0 | |
Amount of important defects in financial reports | 0 | |
Amount of important defects in non-financial reports | 0 |
X. Auditing report of internal control
√Applicable □Not applicable
Deliberations in Internal Control Audit Report | |
We consider that: in all major aspects, Shenzhen Tellus Holding Co., Ltd. has efficiency in financial report of internal control dated 31 December 2019 according to Basic Standards of Internal Control for Enterprise and relevant regulations. | |
Disclosure details of audit report of internal control | Disclosure |
Disclosure date of audit report of internal control (full-text) | 2020-04-03 |
Index of audit report of internal control (full-text) | Juchao website for information disclosure appointed by Shenzhen Stock Exchange: http://www.cninfo.com.cn |
Opinion type of auditing report of IC | Standard without reserved reports |
whether the non-financial report had major defects | No |
Carried out modified opinion for internal control audit report from CPA
□Yes √ No
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
√ Yes □ No
Section XI. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date whenannual report approved for released or fail to cash in full on dueNo
Section XII. Financial Report
一、Auditor’s Report
Type of audit opinion | Standard unqualified opinion |
Date of signing of audit report | April 2, 2020 |
Name of audit institution | Pan-China Certified Public Accountants LLP |
Number of audit report | PCCPAAR [2020] No. 7-155 |
Chinese Certified Public Accountant | Wang Huansen , Qin Changming |
Main body of audit report
To the Shareholders of Shenzhen Tellus Holding Co., Ltd.:
I. Audit OpinionWe have audited the accompanying financial statements of Shenzhen Tellus HoldingCo., Ltd. (the “Company”), which comprise the consolidated and parent companybalance sheets as at December 31, 2019, the consolidated and parent company incomestatements, the consolidated and parent company cash flow statements, and theconsolidated and parent company statements of changes in equity for the year thenended, as well as notes to financial statements.In our opinion, the attached financial statements present fairly, in all material respects,the financial position of the Company as at December 31, 2019, and of its financialperformance and its cash flows for the year then ended in accordance with ChinaAccounting Standards for Business Enterprises.II. Basis for Audit Opinion
We conducted our audit in accordance with China Standards on Auditing. Ourresponsibilities under those standards are further described in the Auditor’sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the China Code of Ethics forCertified Public Accountants, and we have fulfilled other ethical responsibilities. We
believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as awhole, and in forming our opinion thereon, and we do not express a separate opinionon these matters.(I) Revenue recognition
1. Key audit matters
Please refer to section V(II)1 and XIII of the notes to the financial statements fordetails.The Company is mainly engaged in Car sales and repairs, jewelry wholesale and retail,real estate leasing and services. In 2019, the operating revenue amounts to571,072,893.90 yuan, an increase of 37.86% over the same period last year.As sales revenue is one of the key performance indicators of the Company, whichwould probably have inherent risks of being recognized inappropriately to achievespecific target or expectation, and revenue recognition involves complicatedinformation system and significant judgment of the Company’s management (the“Management”), we have identified revenue recognition as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for revenue recognition are as follows:
(1) We obtained understandings of key internal controls related to revenue recognition,assessed the design of these controls, determined whether they have been executed,and tested the effectiveness of the operation;
(2) We checked major sale contracts, identified clauses on the transfer of major risksand rewards related to the ownership of goods and assessed whether the revenuerecognition policy complied with China Accounting Standards for BusinessEnterprises;
(3) We performed substantive analysis procedure on operating revenue and grossmargin by month, product, client, etc., so as to identify whether there are significantor abnormal fluctuations and find out the reason of fluctuations;
(4) For revenue from domestic sales, we checked supporting documents related torevenue recognition by sampling method, including sales contracts, Real estate leasecontracts, orders, invoices, outbound orders, client acceptance receipts, etc.
(5) We performed confirmation procedures on current sales amount by samplingmethod in combination with confirmation procedure of accounts receivable;
(6) We checked whether information related to operating revenue had been presentedappropriately in the financial statements.(II) Investment income from equity transfer
1. Key audit matters
Please refer to section V(II)7 of the notes to the financial statements for details.As of December 31, 2019, the book balance of investment income to 240,569,654.98yuan, which was mainly derived from the investment income from the disposal oflong-term equity investments. The company transferred 43% of the equity ofShenzhen Xinglong Machinery Mould Co., Ltd. to Shenzhen Runhe UnitedInvestment Development Co., Ltd. at a disposal price of 286,670,000.00 yuan, andrecognized an investment income of 210,680,848.23 from the disposal of long-termequity investment. As the amount of investment income from equity transfer issignificant involves significant judgment of the Management, we have identifiedinvestment income from equity transfer as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for investment income from equity transfer are as follows:
(1) We check the resolutions of shareholders' meetings and asset evaluation reportsrelated to the disposal of equity, and judge whether the relevant decision-makingprocedures are appropriate;
(2) We checked equity transfer contracts, identified key clauses affecting theaccounting treatment such as payment of equity transfer payments, and equitytransfers, and checked them with the resolutions of the shareholders meeting and therelevant information of the asset evaluation report;
(3) We check the relevant documents such as the receipt certificate of the equitytransfer price, the equity transfer procedures, etc., judge the time when the equitytransfer is realized, and evaluate whether the long-term equity investment disposalincome is recognized in an appropriate period;
(4) We checked whether information related to investment income from equitytransfer had been presented appropriately in the financial statements.
IV. Other Information
The Company’s management (the “Management”) is responsible for the otherinformation. The other information comprises the information included in theCompany’s annual report, but does not include the financial statements and ourauditor’s report thereon.Our opinion on the financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to readthe other information and, in doing so, consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is a materialmisstatement of this other information, we are required to report that fact. We havenothing to report in this regard.
V. Responsibilities of the Management and Those Chargedwith Governance for the Financial StatementsThe Management is responsible for preparing and presenting fairly the financialstatements in accordance with China Accounting Standards for Business Enterprises,as well as designing, implementing and maintaining internal control relevant to thepreparation of financial statements that are free from material misstatement, whetherdue to fraud or error.
In preparing the financial statements, the Management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, mattersrelated to going concern and use the going concern basis of accounting unless theManagement either intend to liquidate the Company or to cease operations, or have norealistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’sfinancial reporting process.VI. Certified Public Accountants’ Responsibility for the Audit of the FinancialStatementsOur objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud orerror, and to issue an auditor’s report that includes our opinion. Reasonable assuranceis a high level of assurance, but is not a guarantee that an audit conducted inaccordance with China Standards on Auditing will always detect a materialmisstatement when it exists. Misstatement can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesefinancial statements.We exercise professional judgment and maintain professional skepticism throughoutthe audit performed in accordance with China Standards on Auditing. We also:
(I) Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.(II) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in circumstances.(III) Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the Management.(IV) Conclude on the appropriateness of the Management’s use of the going concern
basis of accounting and, based on the audit evidence obtained, whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up tothe date of our auditor’s report. However, future events or conditions may cause theCompany to cease to continue as a going concern.(V) Evaluate the overall presentation, structure and content of the financial statements,including the disclosures, and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.(VI) Obtain sufficient and appropriate audit evidence regarding the financialinformation of the entities or business activities within the Company to express anopinion on the financial statements. We are responsible for the direction, supervisionand performance of the group audit. We remain sole responsibility for our auditopinion.We communicate with those charged with governance regarding the planned auditscope, time schedule and significant audit findings, including any deficiencies ininternal control of concern that we identify during our audit.We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence, and tocommunicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.From the matters communicated with those charged with governance, we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these mattersin our auditor’s report unless law or regulation precludes public disclosure about thematter or when, in extremely rare circumstances, we determine that a matter shouldnot be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Shenzhen Tellus Holding Co., Ltd.Consolidated balance sheet as at December 31, 2019(Expressed in Renminbi Yuan)
Assets | Note No. | Closing balance | Opening balance |
Current assets: | |||
Cash and bank balances | 1 | 428,851,606.04 | 169,512,260.69 |
Settlement funds | |||
Loans to other banks | |||
Held-for-trading financial assets | 2 | 60,486,575.34 | |
Financial assets at fair value through profit or loss | |||
Derivative financial assets | |||
Notes receivable | |||
Accounts receivable | 3 | 112,613,224.27 | 86,104,660.51 |
Receivables financing | |||
Advances paid | 4 | 12,683,603.89 | 9,112,473.27 |
Premiums receivable | |||
Reinsurance accounts receivable | |||
Reinsurance reserve receivable | |||
Other receivables | 5 | 44,908,546.40 | 14,483,208.41 |
Financial assets under reverse repo | |||
Inventories | 6 | 21,389,602.83 | 12,342,854.40 |
Contract assets | |||
Assets classified as held for sale | 7 | 85,017,251.77 | |
Non-current assets due within one year | |||
Other current assets | 8 | 3,403,969.23 | 332,432,494.44 |
Total current assets | 684,337,128.00 | 709,005,203.49 | |
Non-current assets: | |||
Loans and advances paid | |||
Debt investments | |||
Available-for-sale financial assets | 10,176,617.20 | ||
Other debt investments | |||
Held-to-maturity investments | |||
Long-term receivable | 9 | ||
Long-term equity investments | 10 | 162,178,544.05 | 224,644,766.21 |
Other equity instrument investments | 11 | 10,176,617.20 | |
Other non-current financial assets | |||
Investment property | 12 | 554,599,503.55 | 503,922,413.70 |
Fixed assets | 13 | 107,119,796.59 | 112,674,017.53 |
Construction in progress | 14 | 47,654,393.55 | 12,843,571.97 |
Productive biological assets | |||
Oil & gas assets | |||
Right-of-use assets | |||
Intangible assets | 15 | 50,561,225.67 | 51,012,282.25 |
Development expenditures | |||
Goodwill | |||
Long-term prepayments | 16 | 13,606,805.49 | 6,304,607.22 |
Deferred tax assets | 17 | 8,658,962.39 | 24,355,086.71 |
Other non-current assets | 18 | 6,889,167.54 | 3,356,964.72 |
Total non-current assets | 961,445,016.03 | 949,290,327.51 | |
Total assets | 1,645,782,144.03 | 1,658,295,531.00 |
Shenzhen Tellus Holding Co., Ltd.Consolidated balance sheet as at December 31, 2019 (continued)(Expressed in Renminbi Yuan)
Liabilities & Equity | Note No. | Closing balance | Opening balance |
Current liabilities: | |||
Short-term borrowings | 19 | 143,000,000.00 | |
Central bank loans | |||
Loans from other banks | |||
Held-for-trading financial liabilities | |||
Financial liabilities at fair value through profit or loss | |||
Derivative financial liabilities | |||
Notes payable | |||
Accounts payable | 20 | 69,087,430.42 | 73,365,876.09 |
Advances received | 21 | 27,299,822.71 | 15,897,763.97 |
Contract liabilities | |||
Financial liabilities under repo | |||
Absorbing deposit and interbank deposit | |||
Deposit for agency security transaction | |||
Deposit for agency security underwriting | |||
Employee benefits payable | 22 | 31,204,794.89 | 25,802,670.36 |
Taxes and rates payable | 23 | 71,425,267.61 | 9,377,393.57 |
Other payables | 24 | 101,266,802.49 | 250,489,094.47 |
Handling fee and commission payable | |||
Reinsurance accounts payable | |||
Liabilities classified as held for sale | |||
Non-current liabilities due within one year | |||
Other current liabilities | |||
Total current liabilities | 300,284,118.12 | 517,932,798.46 | |
Non-current liabilities: | |||
Insurance policy reserve | |||
Long-term borrowings | 25 | 34,934,887.55 | |
Bonds payable | |||
Including: Preferred shares | |||
Perpetual bonds | |||
Lease liabilities | |||
Long-term payables | 26 | 3,920,160.36 | 3,920,160.36 |
Long-term employee benefits payable | |||
Provisions | 27 | 2,225,468.76 | 2,225,468.76 |
Deferred income | 28 | 139,400.00 | |
Deferred tax liabilities | |||
Other non-current liabilities | |||
Total non-current liabilities | 6,285,029.12 | 41,080,516.67 | |
Total liabilities | 306,569,147.24 | 559,013,315.13 | |
Equity: | |||
Share capital/Paid-in capital | 29 | 431,058,320.00 | 297,281,600.00 |
Other equity instruments | |||
Including: Preferred shares |
Perpetual bonds | |||
Capital reserve | 30 | 431,449,554.51 | 565,226,274.51 |
Less: Treasury shares | |||
Other comprehensive income | 31 | 26,422.00 | 26,422.00 |
Special reserve | |||
Surplus reserve | 32 | 21,007,488.73 | 3,139,918.14 |
General risk reserve | |||
Undistributed profit | 33 | 387,423,510.78 | 184,535,322.70 |
Total equity attributable to the parent company | 1,270,965,296.02 | 1,050,209,537.35 | |
Non-controlling interest | 68,247,700.77 | 49,072,678.52 | |
Total equity | 1,339,212,996.79 | 1,099,282,215.87 | |
Total liabilities & equity | 1,645,782,144.03 | 1,658,295,531.00 |
Shenzhen Tellus Holding Co., Ltd.Parent company balance sheet as at December 31, 2019
(Expressed in Renminbi Yuan)
Assets | Note No. | Closing balance | Opening balance |
Current assets: | |||
Cash and bank balances | 201,885,691.27 | 88,836,626.14 | |
Held-for-trading financial assets | 40,324,383.56 | ||
Financial assets at fair value through profit or loss | |||
Derivative financial assets | |||
Notes receivable | |||
Accounts receivable | 1 | 206,710.76 | 38,274.00 |
Receivables financing | |||
Advances paid | 100,000.00 | 604,800.00 | |
Other receivables | 2 | 116,037,773.09 | 115,782,944.37 |
Inventories | |||
Contract assets | |||
Assets classified as held for sale | 85,017,251.77 | ||
Non-current assets due within one year | |||
Other current assets | 1,419,760.18 | 195,506,958.35 | |
Total current assets | 359,974,318.86 | 485,786,854.63 | |
Non-current assets: | |||
Debt investments | |||
Available-for-sale financial assets | 10,176,617.20 | ||
Other debt investments | |||
Held-to-maturity investments | |||
Long-term receivable | |||
Long-term equity investments | 3 | 859,355,040.60 | 836,283,491.38 |
Other equity instrument investments | 10,176,617.20 | ||
Other non-current financial assets | |||
Investment property | 39,616,602.02 | 44,820,151.69 | |
Fixed assets | 14,012,830.64 | 14,824,845.14 | |
Construction in progress | 35,321,704.26 | 12,843,571.97 | |
Productive biological assets | |||
Oil & gas assets | |||
Right-of-use assets | |||
Intangible assets | 48,953,266.56 | 249,731.94 | |
Development expenditures | |||
Goodwill | |||
Long-term prepayments | 2,639,122.63 | 2,958,817.65 | |
Deferred tax assets | 3,557,849.04 | 13,830,369.64 | |
Other non-current assets | 6,789,167.54 | ||
Total non-current assets | 1,020,422,200.49 | 935,987,596.61 |
Total assets | 1,380,396,519.35 | 1,421,774,451.24 |
Shenzhen Tellus Holding Co., Ltd.Parent company balance sheet as at December 31, 2019 (continued)(Expressed in Renminbi Yuan)
Liabilities & Equity | Note No. | Closing balance | Opening balance |
Current liabilities: | |||
Short-term borrowings | 143,000,000.00 | ||
Held-for-trading financial liabilities | |||
Financial liabilities at fair value through profit or loss | |||
Derivative financial liabilities | |||
Notes payable | |||
Accounts payable | 14,000.00 | 19,800.00 | |
Advances received | 4,742.51 | ||
Contract liabilities | |||
Employee benefits payable | 8,199,278.01 | 4,858,788.51 | |
Taxes and rates payable | 54,684,929.01 | 331,909.65 | |
Other payables | 257,260,350.77 | 392,558,990.89 | |
Liabilities classified as held for sale | |||
Non-current liabilities due within one year | |||
Other current liabilities | |||
Total current liabilities | 320,158,557.79 | 540,774,231.56 | |
Non-current liabilities: | |||
Long-term borrowings | |||
Bonds payable | |||
Including: Preferred shares | |||
Perpetual bonds | |||
Lease liabilities | |||
Long-term payables | |||
Long-term employee benefits payable | |||
Provisions | |||
Deferred income | |||
Deferred tax liabilities | |||
Other non-current liabilities | |||
Total non-current liabilities | |||
Total liabilities | 320,158,557.79 | 540,774,231.56 | |
Equity: | |||
Share capital/Paid-in capital | 431,058,320.00 | 297,281,600.00 | |
Other equity instruments | |||
Including: Preferred shares | |||
Perpetual bonds | |||
Capital reserve | 428,256,131.23 | 562,032,851.23 | |
Less: treasury shares | |||
Other comprehensive income | |||
Special reserve |
Surplus reserve | 21,007,488.73 | 3,139,918.14 | |
Undistributed profit | 179,916,021.60 | 18,545,850.31 | |
Total equity | 1,060,237,961.56 | 881,000,219.68 |
Total liabilities & equity | 1,380,396,519.35 | 1,421,774,451.24 |
Shenzhen Tellus Holding Co., Ltd.Consolidated income statement for the year ended December 31, 2019(Expressed in Renminbi Yuan)
Items | Note No. | Current period cumulative | Preceding period comparative |
I. Total operating revenue | 571,072,893.90 | 414,238,778.96 | |
Including: Operating revenue | 1 | 571,072,893.90 | 414,238,778.96 |
Interest income | |||
Premium earned | |||
Revenue from handling charges and commission | |||
II. Total operating cost | 509,897,504.26 | 409,350,865.02 | |
Including: Operating cost | 1 | 431,021,312.64 | 332,347,355.12 |
Interest expenses | |||
Handling charges and commission expenditures | |||
Surrender value | |||
Net payment of insurance claims | |||
Net provision of insurance policy reserve | |||
Premium bonus expenditures | |||
Reinsurance expenses | |||
Taxes and surcharges | 2 | 6,269,059.85 | 6,276,612.65 |
Selling expenses | 3 | 23,956,102.30 | 19,987,406.50 |
Administrative expenses | 4 | 43,668,263.92 | 44,231,376.56 |
R&D expenses | |||
Financial expenses | 5 | 4,982,765.55 | 6,508,114.19 |
Including: Interest expenses | 7,000,636.08 | 8,909,350.20 | |
Interest income | 2,317,143.23 | 2,755,755.76 | |
Add: Other income | 6 | 292,897.32 | 3,482.07 |
Investment income (or less: losses) | 7 | 240,569,654.98 | 88,785,468.69 |
Including: Investment income from associates and joint ventures | 19,134,325.91 | 83,051,508.70 | |
Gains from derecognition of financial assets at amortized cost | |||
Gains on foreign exchange (or less: losses) | |||
Gains on net exposure to hedging risk (or less: losses) | |||
Gains on changes in fair value (or less: losses) | 8 | 477,394.67 | |
Credit impairment loss | 9 | 1,270,480.08 | |
Assets impairment loss | 10 | -662,290.01 | -1,384,716.26 |
Gains on asset disposal (or less: losses) | 11 | 216,207.53 | |
III. Operating profit (or less: losses) | 303,339,734.21 | 92,292,148.44 | |
Add: Non-operating revenue | 12 | 304,620.63 | 1,739,055.65 |
Less: Non-operating expenditures | 13 | 1,049,085.73 | 3,479,344.28 |
IV. Profit before tax (or less: total loss) | 302,595,269.11 | 90,551,859.81 | |
Less: Income tax | 14 | 83,788,034.93 | 4,411,880.45 |
V. Net profit (or less: net loss) | 218,807,234.18 | 86,139,979.36 | |
(I) Categorized by the continuity of operations | |||
1. Net profit from continuing operations (or less: net loss) | 218,807,234.18 | 86,139,979.36 | |
2. Net profit from discontinued operations (or less: net loss) | |||
(II) Categorized by the portion of equity ownership | |||
1. Net profit attributable to owners of parent company (or less: net loss) | 219,669,708.47 | 86,924,058.72 | |
2. Net profit attributable to non-controlling shareholders (or less: net loss) | -862,474.29 | -784,079.36 | |
VI. Other comprehensive income after tax | 26,422.00 | ||
Items attributable to the owners of the parent company | 26,422.00 | ||
(I) Not to be reclassified subsequently to profit or loss | |||
1.Changes in remeasurement on the net defined benefit plan | |||
2. Items under equity method that will not be reclassified to profit or loss | |||
3. Changes in fair value of other equity instrument investments |
4. Changes in fair value of own credit risk | |||
5. Others | |||
(II) To be reclassified subsequently to profit or loss | 26,422.00 | ||
1. Items under equity method that may be reclassified to profit or loss | 26,422.00 | ||
2. Changes in fair value of other debt investments | |||
3. Profit or loss from changes in fair value of available-for-sale financial assets | |||
4. Profit or loss from reclassification of financial assets into other comprehensive income | |||
5. Profit or loss from reclassification of held-to-maturity investments as available-for-sale financial assets | |||
6. Provision for credit impairment of other debt investments | |||
7.Cash flow hedging reserve (profit or loss on cash flow hedging) | |||
8. Translation reserve | |||
9. Others | |||
Items attributable to non-controlling shareholders | |||
VII. Total comprehensive income | 218,807,234.18 | 86,166,401.36 | |
Items attributable to the owners of the parent company | 219,669,708.47 | 86,950,480.72 | |
Items attributable to non-controlling shareholders | -862,474.29 | -784,079.36 | |
VIII. Earnings per share (EPS): | |||
(I) Basic EPS (yuan per share) | 0.51 | 0.20 | |
(II) Diluted EPS (yuan per share) | 0.51 | 0.20 |
Shenzhen Tellus Holding Co., Ltd.
Parent company income statement for the year ended December 31, 2019
(Expressed in Renminbi Yuan)
Items | Note No. | Current period cumulative | Preceding period comparative |
I. Operating revenue | 1 | 38,042,399.39 | 42,607,127.11 |
Less: Operating cost | 1 | 3,772,642.43 | 12,747,839.01 |
Taxes and surcharges | 1,721,718.43 | 1,683,760.67 | |
Selling expenses |
Administrative expenses | 23,285,817.13 | 20,609,716.66 | |
R&D expenses | |||
Financial expenses | 4,032,853.71 | 4,850,337.92 | |
Including: Interest expenses | 5,767,035.04 | 6,902,903.32 | |
Interest income | 1,804,555.52 | 2,179,149.78 | |
Add: Other income | |||
Investment income (or less: losses) | 2 | 236,551,009.68 | 16,298,388.00 |
Including: Investment income from associates and joint ventures | 19,318,549.22 | 14,998,084.49 | |
Gains from derecognition of financial assets at amortized cost |
Gains on net exposure to hedging risk (or less: losses) | |||
Gains on changes in fair value (or less: losses) | 324,383.56 | ||
Gains on asset disposal (or less: losses) | |||
Credit impairment loss | 1,057,870.24 | ||
Assets impairment loss | -117,864.17 | ||
Gains on foreign exchange (or less: losses) | |||
II. Operating profit (or less: losses) | 243,162,631.17 | 18,895,996.68 |
Add: Non-operating revenue | 33,995.79 | 1,253,151.18 | |
Less: Non-operating expenditures | 4,161.48 | ||
III. Profit before tax (or less: total loss) | 243,196,626.96 | 20,144,986.38 | |
Less: Income tax | 64,583,369.44 | 38,942.20 | |
IV. Net profit (or less: net loss) | 178,613,257.52 | 20,106,044.18 | |
(I) Net profit from continuing operations (or less: net loss) | 178,613,257.52 | 20,106,044.18 | |
(II) Net profit from discontinued operations (or less: net loss) | |||
V. Other comprehensive income after tax | |||
(I) Not to be reclassified subsequently to profit or loss |
1.Changes in remeasurement on the net defined benefit plan | |||
2. Items under equity method that will not be reclassified to profit or loss | |||
3. Changes in fair value of other equity instrument investments | |||
4. Changes in fair value of own credit risk | |||
5. Others | |||
(II) To be reclassified subsequently to profit or loss | |||
1. Items under equity method that may be reclassified to profit or loss |
2. Changes in fair value of other debt investments | |||
3. Profit or loss from changes in fair value of available-for-sale financial assets | |||
4. Profit or loss from reclassification of financial assets into other comprehensive income | |||
5. Profit or loss from reclassification of held-to-maturity investments as available-for-sale financial assets | |||
6. Provision for credit impairment of other debt investments | |||
7. Cash flow hedging reserve (profit or loss on cash flow hedging) |
8. Translation reserve |
9. Others | |||
VI. Total comprehensive income | 178,613,257.52 | 20,106,044.18 | |
VII. Earnings per share (EPS): | |||
(I) Basic EPS (yuan per share) | |||
(II) Diluted EPS (yuan per share) |
Shenzhen Tellus Holding Co., Ltd.Consolidated cash flow statement for the year ended December 31, 2019(Expressed in Renminbi Yuan)
Items | Note No. | Current period cumulative | Preceding period comparative |
I. Cash flows from operating activities: | |||
Cash receipts from sale of goods or rendering of services | 620,842,167.97 | 426,869,708.10 | |
Net increase of client deposit and interbank deposit | |||
Net increase of central bank loans | |||
Net increase of loans from other financial institutions | |||
Cash receipts from original insurance contract premium | |||
Net cash receipts from reinsurance |
Net increase of policy-holder deposit and investment | |||
Cash receipts from interest, handling charges and commission | |||
Net increase of loans from others | |||
Net increase of repurchase | |||
Net cash receipts from agency security transaction | |||
Receipts of tax refund | 3,181.09 | ||
Other cash receipts related to operating activities | 1 | 47,761,005.81 | 19,684,530.43 |
Subtotal of cash inflows from operating activities | 668,606,354.87 | 446,554,238.53 | |
Cash payments for goods purchased and services received | 452,350,872.20 | 335,367,549.57 | |
Net increase of loans and advances to clients | |||
Net increase of central bank deposit and interbank deposit | |||
Cash payments for insurance indemnities of original insurance contracts | |||
Net increase of loans to others | |||
Cash payments for interest, handling charges and commission | |||
Cash payments for policy bonus |
Cash paid to and on behalf of employees | 62,812,595.93 | 52,732,468.64 | |
Cash payments for taxes and rates | 23,492,145.22 | 23,689,718.46 | |
Other cash payments related to operating activities | 2 | 51,039,388.49 | 41,339,481.83 |
Subtotal of cash outflows from operating activities | 589,695,001.84 | 453,129,218.50 | |
Net cash flows from operating activities | 78,911,353.03 | -6,574,979.97 | |
II. Cash flows from investing activities: | |||
Cash receipts from withdrawal of investments | 2,177,147,001.00 | 1,106,320,000.00 | |
Cash receipts from investment income | 54,752,103.23 | 68,064,559.78 | |
Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 834,100.00 | 263,520.00 | |
Net cash receipts from the disposal of subsidiaries & other business units | 1,504,125.26 | ||
Other cash receipts related to investing activities | 3 | 2,385,849.54 | 107,511,100.00 |
Subtotal of cash inflows from investing activities | 2,235,119,053.77 | 1,283,663,305.04 | |
Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 124,672,512.37 | 31,343,082.90 | |
Cash payments for investments | 1,758,560,000.00 | 1,224,884,140.00 |
Net increase of pledged borrowings | |||
Net cash payments for the acquisition of subsidiaries & other business units | |||
Other cash payments related to investing activities | 4 | 5,000.00 | 5,733,400.00 |
Subtotal of cash outflows from investing activities | 1,883,237,512.37 | 1,261,960,622.90 | |
Net cash flows from investing activities | 351,881,541.40 | 21,702,682.14 | |
III. Cash flows from financing activities: | |||
Cash receipts from absorbing investments | 20,000,000.00 | 15,000,000.00 |
Items | Note No. | Current period cumulative | Preceding period comparative |
Including: Cash received by subsidiaries from non-controlling shareholders as investments | 20,000,000.00 | 15,000,000.00 | |
Cash receipts from borrowings | 143,000,000.00 | 148,082,000.00 | |
Other cash receipts related to financing activities | 5 | 15,020,000.00 | |
Subtotal of cash inflows from financing activities | 178,020,000.00 | 163,082,000.00 | |
Cash payments for the repayment of borrowings | 320,934,887.55 | 145,943,235.58 | |
Cash payments for distribution of dividends or profits and for interest expenses | 7,095,966.49 | 15,066,890.08 | |
Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit | |||
Other cash payments related to financing activities | 6 | 22,962,000.00 | 16,144,956.00 |
Subtotal of cash outflows from financing activities | 350,992,854.04 | 177,155,081.66 |
Net cash flows from financing activities | -172,972,854.04 | -14,073,081.66 | |
IV. Effect of foreign exchange rate changes on cash & cash equivalents | 96.73 | 281.62 | |
V. Net increase in cash and cash equivalents | 257,820,137.12 | 1,054,902.13 | |
Add: Opening balance of cash and cash equivalents | 142,848,120.69 | 141,793,218.56 | |
VI. Closing balance of cash and cash equivalents | 400,668,257.81 | 142,848,120.69 |
Shenzhen Tellus Holding Co., Ltd.
Parent company cash flow statement for the year ended December 31, 2019
(Expressed in Renminbi Yuan)
Items | Note No. | Current period cumulative | Preceding period comparative |
I. Cash flows from operating activities: | |||
Cash receipts from sale of goods and rendering of services | 39,784,268.51 | 42,987,480.31 | |
Receipts of tax refund | |||
Other cash receipts related to operating activities | 28,770,832.18 | 26,178,276.09 | |
Subtotal of cash inflows from operating activities | 68,555,100.69 | 69,165,756.40 | |
Cash payments for goods purchased and services received | |||
Cash paid to and on behalf of employees | 18,387,927.35 | 18,738,644.84 | |
Cash payments for taxes and rates | 3,527,628.11 | 4,065,009.38 | |
Other cash payments related to operating activities | 19,992,731.75 | 38,903,678.52 | |
Subtotal of cash outflows from operating activities | 41,908,287.21 | 61,707,332.74 | |
Net cash flows from operating activities | 26,646,813.48 | 7,458,423.66 | |
II. Cash flows from investing activities: | |||
Cash receipts from withdrawal of investments | 1,260,187,000.00 | 733,500,000.00 | |
Cash receipts from investment income | 24,870,415.22 | 59,901,381.01 | |
Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets |
Net cash receipts from the disposal of subsidiaries & other business units | |||
Other cash receipts related to investing activities | 2,385,849.54 | 107,511,100.00 | |
Subtotal of cash inflows from investing activities | 1,287,443,264.76 | 900,912,481.01 |
Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 75,307,375.89 | 10,556,123.04 | |
Cash payments for investments | 978,253,000.00 | 900,636,040.00 |
Net cash payments for the acquisition of subsidiaries & other business units | |||
Other cash payments related to investing activities | 5,733,400.00 | ||
Subtotal of cash outflows from investing activities | 1,053,560,375.89 | 916,925,563.04 | |
Net cash flows from investing activities | 233,882,888.87 | -16,013,082.03 | |
III. Cash flows from financing activities: | |||
Cash receipts from absorbing investments | |||
Cash receipts from borrowings | 143,000,000.00 | 143,000,000.00 | |
Other cash receipts related to financing activities | |||
Subtotal of cash inflows from financing activities | 143,000,000.00 | 143,000,000.00 | |
Cash payments for the repayment of borrowings | 286,000,000.00 | 137,278,123.13 | |
Cash payments for distribution of dividends or profits and for interest expenses | 5,999,845.45 | 12,986,470.41 | |
Other cash payments related to financing activities | |||
Subtotal of cash outflows from financing activities | 291,999,845.45 | 150,264,593.54 | |
Net cash flows from financing activities | -148,999,845.45 | -7,264,593.54 | |
IV. Effect of foreign exchange rate changes on cash and cash equivalents |
Items | Note No. | Current period cumulative | Preceding period comparative |
V. Net increase in cash and cash equivalents | 111,529,856.90 | -15,819,251.91 | |
Add: Opening balance of cash and cash equivalents | 62,172,486.14 | 77,991,738.05 | |
VI. Closing balance of cash and cash equivalents | 173,702,343.04 | 62,172,486.14 |
Shenzhen Tellus Holding Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2019
(Expressed in Renminbi Yuan)
Items | Current period cumulative | ||||||||||||
Equity attributable to parent company | Non-controlling interest | Total equity | |||||||||||
Share capital/ Paid-in capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | ||||||
Other equity instruments | |||||||||||||
Preferred shares | Perpetual bonds | Others |
I. Balance at the end of prior year | 297,281,600.00 | 565,226,274.51 | 26,422.00 | 3,139,918.14 | 184,535,322.70 | 49,072,678.52 | 1,099,282,215.87 | ||||||
Add: Cumulative changes of accounting policies | 6,244.84 | 1,079,805.36 | 37,496.54 | 1,123,546.74 |
Error correction of prior period |
Business combination under common control | |||||||||||||
Others |
II. Balance at the beginning of current year | 297,281,600.00 | 565,226,274.51 | 26,422.00 | 3,146,162.98 | 185,615,128.06 | 49,110,175.06 | 1,100,405,762.61 |
III. Current period increase (or less: decrease) | 133,776,720.00 | -133,776,720.00 | 17,861,325.75 | 201,808,382.72 | 19,137,525.71 | 238,807,234.18 | |||||||
(I) Total comprehensive income | 219,669,708.47 | -862,474.29 | 218,807,234.18 |
(II) Capital contributed or withdrawn by owners | 20,000,000.00 | 20,000,000.00 |
1. Ordinary shares contributed by owners | 20,000,000.00 | 20,000,000.00 | |||||||||||
2. Capital contributed by holders of other equity instruments | |||||||||||||
3. Amount of share-based payment included in equity |
4. Others | |||||||||||||
(III) Profit distribution | 17,861,325.75 | -17,861,325.75 |
1. Appropriation of surplus reserve | 17,861,325.75 | -17,861,325.75 |
2. Appropriation of general risk reserve | |||||||||||||
3. Appropriation of profit to owners |
4. Others | |||||||||||||
(IV) Internal carry-over within equity | 133,776,720.00 | -133,776,720.00 |
1. Transfer of capital reserve to capital | 133,776,720.00 | 133,776,720.00 |
2. Transfer of surplus reserve to capital | |||||||||||||
3. Surplus reserve to cover losses |
4. Changes in defined benefit plan carried over to retained earnings |
Items | Current period cumulative | ||||||||||||
Equity attributable to parent company | Non-controlling interest | Total equity | |||||||||||
Share capital/ Paid-in capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred shares | Perpetual bonds | Others | |||||||||||
5. Other comprehensive income carried over to retained earnings |
6. Others |
(V) Special reserve | |||||||||||||
1. Appropriation of current period |
2. Application of current period | |||||||||||||
(VI) Others |
IV. Balance at the end of current period | 431,058,320.00 | 431,449,554.51 | 26,422.00 | 21,007,488.73 | 387,423,510.78 | 68,247,700.77 | 1,339,212,996.79 |
Shenzhen Tellus Holding Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2019 (continued)(Expressed in Renminbi Yuan)
Items | Preceding period comparative | ||||||||||||
Equity attributable to parent company | |||||||||||||
Non-controlling interest | Total equity | ||||||||||||
Share capital/ Paid-in capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred shares | Perpetual bonds | Others | |||||||||||
I. Balance at the end of prior year | 297,281,600.00 | 565,226,274.51 | 2,952,586.32 | 97,798,595.80 | 34,764,517.26 | 998,023,573.89 |
Add: Cumulative changes of accounting policies |
Error correction of prior period | |||||||||||||
Business combination under common control |
Others |
II. Balance at the beginning of current year | 297,281,600.00 | 565,226,274.51 | 2,952,586.32 | 97,798,595.80 | 34,764,517.26 | 998,023,573.89 | |||||||
III. Current period increase (or less: decrease) | 26,422.00 | 187,331.82 | 86,736,726.90 | 14,308,161.26 | 101,258,641.98 |
(I) Total comprehensive income | 26,422.00 | 86,924,058.72 | -784,079.36 | 86,166,401.36 | |||||||||
(II) Capital contributed or withdrawn by owners | 15,092,240.62 | 15,092,240.62 |
1. Ordinary shares contributed by owners | 15,000,000.00 | 15,000,000.00 | |||||||||||
2. Capital contributed by holders of other equity instruments |
3. Amount of share-based payment included in equity | |||||||||||||
4. Others | 92,240.62 | 92,240.62 |
(III) Profit distribution | 187,331.82 | -187,331.82 | |||||||||||
1. Appropriation of surplus reserve | 187,331.82 | -187,331.82 |
2. Appropriation of general risk reserve |
3. Appropriation of profit to owners | |||||||||||||
4. Others |
(IV) Internal carry-over within equity |
1. Transfer of capital reserve to capital | |||||||||||||
2. Transfer of surplus reserve to capital |
3. Surplus reserve to cover losses | |||||||||||||
4. Changes in defined benefit plan carried over to retained earnings |
Items | Preceding period comparative | ||||||||||||
Equity attributable to parent company | Non-controlling interest | Total equity | |||||||||||
Share capital/ Paid-in capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred shares | Perpetual bonds | Others | |||||||||||
5. Other comprehensive income carried over to retained earnings |
6. Others |
(V) Special reserve | |||||||||||||
1. Appropriation of current period |
2. Application of current period | |||||||||||||
(VI) Others |
IV. Balance at the end of current period | 297,281,600.00 | 565,226,274.51 | 26,422.00 | 3,139,918.14 | 184,535,322.70 | 49,072,678.52 | 1,099,282,215.87 |
Shenzhen Tellus Holding Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2019
(Expressed in Renminbi Yuan)
Items | Current period cumulative | ||||||||||
Share capital/ Paid-in capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Total equity | |||
Preferred shares | Perpetual bonds | Others | |||||||||
I. Balance at the end of prior year | 297,281,600.00 | 562,032,851.23 | 3,139,918.14 | 18,545,850.31 | 881,000,219.68 |
Add: Cumulative changes of accounting policies | 6,244.84 | 618,239.52 | 624,484.36 |
Error correction of prior period | |||||||||||
Others |
II. Balance at the beginning of current year | 297,281,600.00 | 562,032,851.23 | 3,146,162.98 | 19,164,089.83 | 881,624,704.04 |
III. Current period increase (or less: decrease) | 133,776,720.00 | -133,776,720.00 | 17,861,325.75 | 160,751,931.77 | 178,613,257.52 | ||||||
(I) Total comprehensive income | 178,613,257.52 | 178,613,257.52 |
(II) Capital contributed or withdrawn by owners | |||||||||||
1. Ordinary shares contributed by owners |
2. Capital contributed by holders of other equity instruments |
3. Amount of share-based payment included in equity | |||||||||||
4. Others |
(III) Profit distribution | 17,861,325.75 | -17,861,325.75 |
1. Appropriation of surplus reserve | 17,861,325.75 | -17,861,325.75 | |||||||||
2. Appropriation of profit to owners |
3. Others |
(IV) Internal carry-over within equity | 133,776,720.00 | -133,776,720.00 | |||||||||
1.Transfer of capital reserve to capital | 133,776,720.00 | -133,776,720.00 |
2.Transfer of surplus reserve to capital | |||||||||||
3.Surplus reserve to cover losses |
4. Changes in defined benefit plan carried over to retained earnings | |||||||||||
5. Other comprehensive income carried over to retained earnings |
6. Others | |||||||||||
(V) Special reserve |
1. Appropriation of current period | |||||||||||
2. Application of current period |
(VI) Others |
IV. Balance at the end of current period | 431,058,320.00 | 428,256,131.23 | 21,007,488.73 | 179,916,021.60 | 1,060,237,961.56 |
Shenzhen Tellus Holding Co., Ltd.Parent company statement of changes in equity for the year ended December 31, 2019 (continued)(Expressed in Renminbi Yuan)
Items | Preceding period comparative | ||||||||||
Share capital/ Paid-in capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Total equity | |||
Preferred shares | Perpetual bonds | Others | |||||||||
I. Balance at the end of prior year | 297,281,600.00 | 562,032,851.23 | 2,952,586.32 | -1,372,862.05 | 860,894,175.50 |
Add: Cumulative changes of accounting policies |
Error correction of prior period | |||||||||||
Others |
II. Balance at the beginning of current year | 297,281,600.00 | 562,032,851.23 | 2,952,586.32 | -1,372,862.05 | 860,894,175.50 |
III. Current period increase (or less: decrease) | 187,331.82 | 19,918,712.36 | 20,106,044.18 | ||||||||
(I) Total comprehensive income | 20,106,044.18 | 20,106,044.18 |
(II) Capital contributed or withdrawn by owners | |||||||||||
1. Ordinary shares contributed by owners |
2. Capital contributed by holders of other equity instruments | |||||||||||
3. Amount of share-based payment included in equity |
4. Others |
(III) Profit distribution | 187,331.82 | -187,331.82 | |||||||||
1. Appropriation of surplus reserve | 187,331.82 | -187,331.82 |
2. Appropriation of profit to owners |
3. Others | |||||||||||
(IV) Internal carry-over within equity |
1.Transfer of capital reserve to capital | |||||||||||
2.Transfer of surplus reserve to capital |
3.Surplus reserve to cover losses | |||||||||||
4. Changes in defined benefit plan carried over to retained earnings |
5. Other comprehensive income carried over to retained earnings | |||||||||||
6. Others |
(V) Special reserve |
1. Appropriation of current period | |||||||||||
2. Application of current period |
(VI) Others |
IV. Balance at the end of current period | 297,281,600.00 | 562,032,851.23 | 3,139,918.14 | 18,545,850.31 | 881,000,219.68 |
Fu chunlong [Legal representative] | Lou hong [Officer in charge of accounting] | Liu yuhong [Head of accounting department] | ||
Shenzhen Tellus Holding Co., Ltd.
Notes to Financial StatementsFor the year ended December 31, 2019
Monetary unit: RMB Yuan
I. Company profile
Shenzhen Tellus Holding Co., Ltd. (by shares) (the “Company”) is established by Shenzhen Tellus Machinery Co.,Ltd. under the approval from the General Office of Shenzhen Municipal People's Government on thereorganization of Shenzhen Tellus Machinery Co., Ltd., into Shenzhen Tellus Holding Company Limited (Shen fuban fu [1991] No. 1012). The Company registered at Shenzhen Administration for Industry and Commerce/MarketSupervision and Administration Bureau on November 10, 1986 and obtained a (corporate) business license/socialcredit code numbered 91440300192192210U, with registered capital of 431,058,320.00 yuan, total share of431,058,320 shares (each with par value of one yuan), of which, 0 shares and 0 shares are restricted outstanding Ashares and B shares, and 392,778,320 shares and 38,280,000 shares are unrestricted outstanding A shares and Bshares. The Company’s shares were listed at Shenzhen Stock Exchange respectively on 21 June 1993.The Company belongs to wholesale industry and is mainly engaged in automobile sales, automobile maintenanceand testing, jewelry sales, property leasing and services, and so on.The financial statements were approved and authorized for issue by the 6th meeting of the 9th session of the Boardof Directors dated April 2
nd, 2020.The Company has brought 11 subsidiaries including Shenzhen Zhongtian Industrial Co., Ltd., Sichuan TellusJewelry Technology Co., Ltd., Shenzhen Huari Toyota Auto Sales Co., Ltd, into the consolidation scope. Pleaserefer to section VI and VII of notes to financial statements for details.II. Preparation basis of the financial statements(I) Preparation basisThe financial statements have been prepared on the basis of going concern.(II) Assessment of the ability to continue as a going concernThe Company has no events or conditions that may cast significant doubts upon the Company’s ability to continueas a going concern within the 12 months after the balance sheet date.III. Significant accounting policies and estimatesImportant note:
The Company has set up accounting policies and estimates on transactions or events such as impairment offinancial instruments, depreciation of fixed assets, depreciation of right-of-use assets, amortization of intangibleassets, and revenue recognition, etc. based on the Company’s actual production and operation features.(I) Statement of compliance
The financial statements have been prepared in accordance with the requirements of China Accounting Standardsfor Business Enterprises (CASBEs), and present truly and completely the financial position, results of operationsand cash flows of the Company.(II) Accounting periodThe accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.(III) Operating cycleThe Company has a relatively short operating cycle for its business, an asset or a liability is classified as current ifit is expected to be realized or due within 12 months.(IV) Functional currencyThe Company’s functional currency is Renminbi (RMB) Yuan.(V) Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined partyincluded in the consolidated financial statements of the ultimate controlling party at the combination date.Difference between carrying amount of the equity of the combined party included in the consolidated financialstatements of the ultimate controlling party and that of the combination consideration or total par value of sharesissued is adjusted to capital reserve, if the balance of capital reserve is insufficient to offset, any excess is adjustedto retained earnings.
2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at theacquisition date, the excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities andcontingent liabilities, and the measurement of the combination cost are reviewed, then the difference is recognizedin profit or loss.(VI) Compilation method of consolidated financial statementsThe parent company brings all its controlled subsidiaries into its consolidation scope. Theconsolidated financial statements are compiled by the parent company according to “CASBE 33 -Consolidated Financial Statements”, based on relevant information and the financial statements ofthe parent company and its subsidiaries.(VII) Classification of joint arrangements and accounting treatment of joint operations
1. Joint arrangements include joint operations and joint ventures.
2. When the Company is a joint operator of a joint operation, it recognizes in relation to its interestin a joint operation:
(1) its assets, including its share of any assets held jointly;
(2) its liabilities, including its share of any liabilities incurred jointly;
(3) its revenue from the sale of its share of the output arising from the joint operation;
(4) its share of the revenue from the sales of the output by the joint operation; and
(5) its expenses, including its share of any expenses incurred jointly.
(VIII) Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand forpayment. Cash equivalents refer to short-term, highly liquid investments that can be readilyconverted to cash and that are subject to an insignificant risk of changes in value.(IX) Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the spot exchangerate at the transaction date at initial recognition. At the balance sheet date, monetary itemsdenominated in foreign currency are translated at the spot exchange rate at the balance sheet datewith difference, except for those arising from the principal and interest of exclusive borrowingseligible for capitalization, included in profit or loss; non-cash items carried at historical costs aretranslated at the spot exchange rate at the transaction date, with its RMB amount unchanged;non-cash items carried at fair value in foreign currency are translated at the spot exchange rate atthe date when the fair value was determined, with difference included in profit or loss or othercomprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at thebalance sheet date; the equity items, other than undistributed profit, are translated at the spot rateat the transaction date; the revenues and expenses in the income statement are translated into RMBat the spot exchange rate at the transaction date. The difference arising from foreign currencytranslation is included in other comprehensive income.(X) Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: (1)financial assets at amortized cost; (2) financial assets at fair value through other comprehensiveincome; (3) financial assets at fair value through profit or loss.Financial liabilities are classified into the following four categories when initially recognized: (1)financial liabilities at fair value through profit or loss; (2) financial liabilities that arise when atransfer of a financial asset does not qualify for derecognition or when the continuing involvementapproach applies; (3) financial guarantee contracts not fall within the above categories (1) and (2),and commitments to provide a loan at a below-market interest rate, which do not fall within theabove category (1) ; (4) financial liabilities at amortized cost.
2. Recognition criteria, measurement method and derecognition condition of financial assets and financialliabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial assetor financial liability. The financial assets and financial liabilities initially recognized by theCompany are measured at fair value; for the financial assets and liabilities at fair value throughprofit or loss, the transaction expenses thereof are directly included in profit or loss; for othercategories of financial assets and financial liabilities, the transaction expenses thereof are includedinto the initially recognized amount. However, at initial recognition, for accounts receivable thatdo not contain a significant financing component or contracts in which the financing componentswith associated period less than one year are not considered, the Company measures at theirtransaction price in accordance with “CASBE14 – Revenues”.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
The Company measures its financial assets at the amortized costs using effective interest method.Gains or losses on financial assets that are measured at amortized cost and are not part of hedgingrelationships shall be included into profit or loss when the financial assets are derecognized,reclassified, through the amortization process or in order to recognize impairment gains or losses.
2) Debt instrument investments at fair value through other comprehensive incomeThe Company measures its debt instrument investments at fair value. Interests, impairment gainsor losses, and gains and losses on foreign exchange that calculated using effective interest methodshall be included into profit or loss, while other gains or losses are included into othercomprehensive income. Accumulated gains or losses that initially recognized as othercomprehensive income should be transferred out into profit or loss when the financial assets arederecognized.
3) Equity instrument investments at fair value through other comprehensive incomeThe Company measures its equity instrument investments at fair value. Dividends obtained (otherthan those as part of investment cost recovery) shall be included into profit or loss, while othergains or losses are included into other comprehensive income. Accumulated gains or losses thatinitially recognized as other comprehensive income should be transferred out into retainedearnings when the financial assets are derecognized.
4) Financial assets at fair value through profit or loss
The Company measures its financial assets at fair value. Gains or losses arising from changes infair value (including interests and dividends) shall be included into profit or loss, except forfinancial assets that are part of hedging relationships.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities(including derivatives that are liabilities) and financial liabilities designated as at fair value
through profit or loss. The Company measures such kind of liabilities at fair value. The amount ofchanges in the fair value of the financial liabilities that are attributable to changes in theCompany’s own credit risk shall be included into other comprehensive income, unless suchtreatment would create or enlarge accounting mismatches in profit or loss. Other gains or losseson those financial liabilities (including interests, changes in fair value that are attributable toreasons other than changes in the Company’s own credit risk) shall be included into profit or loss,except for financial liabilities that are part of hedging relationships. Accumulated gains or lossesthat originally recognized as other comprehensive income should be transferred out into retainedearnings when the financial liabilities are derecognized.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify forderecognition or when the continuing involvement approach appliesThe Company measures its financial liabilities in accordance with “CASBE23 – Transfer ofFinancial Assets”.
3) Financial guarantee contracts not fall within the above categories 1) and 2), and commitmentsto provide a loan at a below-market interest rate, which do not fall within the above category 1)The Company measures its financial liabilities at the higher of: a. the amount of loss allowances inaccording to impairment requirements of financial instruments; b. the amount initially recognizedless the amount of accumulated amortization recognized in accordance with “CASBE14 –Revenues”.
4) Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method.Gains or losses on financial liabilities that are measured at amortized cost and are not part ofhedging relationships shall be included into profit or loss when the financial liabilities arederecognized and through the amortization process.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; ob. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with“CASBE23 – Transfer of Financial Assets”.
2) Only when the underlying present obligations of a financial liability are relieved totally or partly may thefinancial liability be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to theownership of the financial asset, it derecognizes the financial asset, and any right or liabilityarising from such transfer is recognized independently as an asset or a liability. If it retainedsubstantially all of the risks and rewards related to the ownership of the financial asset, it
continues recognizing the financial asset. Where the Company does not transfer or retainsubstantially all of the risks and rewards related to the ownership of a financial asset, it is dealtwith according to the circumstances as follows respectively: (1) if the Company does not retain itscontrol over the financial asset, it derecognizes the financial asset, and any right or liability arisingfrom such transfer is recognized independently as an asset or a liability; (2) if the Company retainsits control over the financial asset, according to the extent of its continuing involvement in thetransferred financial asset, it recognizes the related financial asset and recognizes the relevantliability accordingly.If the transfer of an entire financial asset satisfies the conditions for derecognition, the differencebetween the amounts of the following two items are included in profit or loss: (1) the carryingamount of the transferred financial asset as of the date of derecognition; (2) the sum ofconsideration received from the transfer of the financial asset, and the accumulative amount of thechanges of the fair value originally included in other comprehensive income proportionate to thetransferred financial asset (financial assets transferred refer to debt instrument investments at fairvalue through other comprehensive income). If the transfer of financial asset partially satisfies theconditions to derecognition, the entire carry amount of the transferred financial asset is, betweenthe portion which is derecognized and the portion which is not, apportioned according to theirrespective relative fair value, and the difference between the amounts of the following two itemsare included into profit or loss: (1) the carrying amount of the portion which is derecognized; (2)the sum of consideration of the portion which is derecognized, and the portion of the accumulativeamount of the changes in the fair value originally included in other comprehensive income whichis corresponding to the portion which is derecognized (financial assets transferred refer to debtinstrument investments at fair value through other comprehensive income).
4. Fair value determination method of financial assets and liabilities
(1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that theCompany can access at the measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset orliability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in activemarkets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other thanquoted prices that are observable for the asset or liability, for example, interest rates and yield curves observable atcommonly quoted intervals; market-corroborated inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is notobservable and cannot be corroborated by observable market data at commonly quoted intervals, historicalvolatility, future cash flows to be paid to fulfill the disposal obligation assumed in business combination, andfinancial forecast developed using the Company’s own data, etc.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at amortized cost,
debt instrument investments, contract assets or lease receivable at fair value through other comprehensive income,loan commitments other than financial liabilities at fair value through profit or loss, financial guarantee contractsnot belong to financial liabilities at fair value through profit or loss or financial liabilities that arise when a transferof a financial asset does not qualify for derecognition or when the continuing involvement approach applies.Expected credit losses refer to the weighted average of credit losses with the respective risks of a default occurringas the weights. Credit loss refers to the difference between all contractual cash flows that are due to the Companyin accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls),discounted at the original effective interest rate. Purchased or originated credit-impaired financial assets arediscounted at the credit-adjusted effective interest rate.On the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expectedcredit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financialassets.For accounts receivable do not contain a significant financing component or contracts in which the financingcomponents with associated period less than one year are not considered, which result from transactions asregulated in “CASBE14 - Revenues”, the Company chooses simplified approach to measure the loss allowance atan amount equal to lifetime expected credit losses.For lease receivables, accounts receivable and contract assets that result from transactions as regulated in“CASBE14 - Revenues” and contain a significant financing component, the Company chooses simplified approachto measure the loss allowance at an amount equal to lifetime expected credit losses.For financial assets other than the above, on each balance sheet date, the Company shall assess whether the creditrisk on the financial instrument has increased significantly since initial recognition. The Company shall measurethe loss allowance for the financial instrument at an amount equal to the lifetime expected credit losses if the creditrisk on that financial instrument has increased significantly since initial recognition; otherwise, the Company shallmeasure the loss allowance for that financial instrument at an amount equal to 12-month expected credit loss.Considering reasonable and supportable forward-looking information, the Company compares the risk of a defaultoccurring on the financial instrument as at the balance sheet date with the risk of a default occurring on thefinancial instrument as at the date of initial recognition, so as to assess whether the credit risk on the financialinstrument has increased significantly since initial recognition.The Company may assume that the credit risk on a financial instrument has not increased significantly since initialrecognition if the financial instrument is determined to have low credit risk on the balance sheet date.The Company shall estimate expected credit risk and measure expected credit losses on an individual or acollective basis. When the Company adopts the collective basis, financial instruments are grouped with similarcredit risk features.The Company shall remeasure expected credit loss on each balance sheet date, and increased or reversed amountsof loss allowance arising therefrom shall be included into profit or loss as impairment losses or gains. For afinancial asset measured at amortized cost, the loss allowance reduce the carrying amount of such financial assetpresented in the balance sheet; for a debt investment measured at fair value through other comprehensive income,the loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying amount ofsuch financial asset.
(2) Financial instruments with expected credit risk assessed and expected credit losses measured on a collective
basis
Items | Basis for determination of portfolio | Method for measuring expected credit loss |
Other receivables –Portfolio grouped with related transactions within consolidation scope | Nature of receivables | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, calculate expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate. |
Other receivables – Portfolio grouped with dividend receivables | ||
Other receivables – Portfolio grouped with aging receivables | Aging |
(3) Accounts receivable and contract assets with expected credit losses measured on a collective basis
1) Specific portfolios and method for measuring expected credit loss
Items | Basis for determination of portfolio | Method for measuring expected credit loss |
Accounts receivable – Portfolio aging | Aging | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, prepare the comparison table of ages and lifetime expected credit loss rate of accounts receivable, so as to calculate expected credit loss. |
Accounts receivable – Portfolio selling jewelry | Accounts receivable about selling jewelry | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, calculate expected credit loss through exposure at default and lifetime expected credit loss rate. |
2) Accounts receivable – comparison table of ages and lifetime expected credit loss rate of XX portfolio
Ages | Expected credit loss rate (%) |
Within 1 year (inclusive, the same hereinafter) | 1 |
1-2 years | 5 |
2-3 years | 20 |
Over 3 years | 50 |
6. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset. However,the Company offsets a financial asset and a financial liability and presents the net amount in the balance sheetwhen, and only when, the Company: (a) currently has a legally enforceable right to set off the recognized amounts;and (b) intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.In accounting for a transfer of a financial asset that does not qualify for derecognition, the Company does notoffset the transferred asset and the associated liability.(XI) Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business, work in process in theprocess of production, and materials or suppliers etc. to be consumed in the production process or in the renderingof services.
2. Accounting method for dispatching inventories:
Inventories dispatched from storage are accounted for with FIFO method、specific identification method.
3. Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost or net realizable value; provisions forinventory write-down are made on the excess of its cost over the net realizable value. The net realizable value ofinventories held for sale is determined based on the amount of the estimated selling price less the estimated sellingexpenses and relevant taxes and surcharges in the ordinary course of business; the net realizable value of materialsto be processed is determined based on the amount of the estimated selling price less the estimated costs ofcompletion, selling expenses and relevant taxes and surcharges in the ordinary course of business; at the balancesheet date, when only part of the same item of inventories have agreed price, their net realizable value isdetermined separately and is compared with their costs to set the provision for inventory write-down to be made orreversed.
4. Inventory system
Perpetual inventory method is adopted.
5. Amortization method of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized with usage times.
(2) Packages
Packages are amortized with usage times.(XII) Non-current assets or disposal groups classified as held for sale
1. Classification of non-current assets or disposal groups as held for sale
Non-current assets or disposal groups are accounted for as held for sale when the following conditions are all met:
a. the asset must be available for immediate sale in its present condition subject to terms that are usual andcustomary for sales of such assets or disposal groups; b. its sales must be highly probable, i.e., the Company hasmade a decision on the sale plan and has obtained a firm purchase commitment, and the sale is expected to becompleted within one year.When the Company acquires a non-current asset or disposal group with a view to resale, it shall classify thenon-current asset or disposal group as held for sale at the acquisition date only if the requirement of “expected tobe completed within one year” is met at that date and it is highly probable that other criteria for held for sale willbe met within a short period (usually within three months).An asset or a disposal group is still accounted for as held for sale when the Company remains committed to itsplan to sell the asset or disposal group in the circumstance that non-related party transactions fail to be completedwithin one year due to one of the following reasons: a. a buyer or others unexpectedly set conditions that willextend the sale period, while the Company has taken timely actions to respond to the conditions and expects afavorable resolution of the delaying factors within one year since the setting; (2) a non-current asset or disposalgroup classified as held for sale fails to be sold within one year due to rare cases, and the Company has takenaction necessary to respond to the circumstances during the initial one-year period and the criteria for held for sale
are met.
2. Measurement of non-current assets or disposal groups as held for sale
(1) Initial measurement and remeasurement
For initial measurement and remeasurement as at the balance sheet date of a non-current asset or disposal group asheld for sale, where the carrying amount is higher than the fair value less costs to sell, the carrying amount iswritten down to the fair value less costs to sell, and the write-down is recognized in profit or loss as assetsimpairment loss, meanwhile, provision for impairment of assets as held for sale shall be made.For a non-current asset or disposal group classified as held for sale at the acquisition date, the asset or disposalgroup is measured on initial recognition at the lower of its initial measurement amount had it not been so classifiedand fair value less costs to sell. Apart from the non-current asset or disposal group acquired through businesscombination, the difference arising from the initial recognition of a non-current asset or disposal group at the fairvalue less costs to sell shall be included into profit or loss.The assets impairment loss recognized for a disposal group as held for sale shall reduce the carrying amount ofgoodwill in the disposal group first, and then reduce its carrying amount based on the proportion of eachnon-current asset’s carrying amount in the disposal group.No provision for depreciation or amortization shall be made on non-current assets as held for sale or non-currentassets in disposal groups as held for sale, while interest and other expenses attributable to the liabilities of adisposal group as held for sale shall continue to be recognized.
(2) Reversal of assets impairment loss
When there is a subsequent increase in fair value less costs to sell of a non-current asset as held for sale at thebalance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the impairment lossthat has been recognized after the non-current asset was classified as held for sale. The reversal shall be includedinto profit or loss. Assets impairment loss that has been recognized before the classification is not reserved.When there is a subsequent increase in fair value less costs to sell of a disposal group as held for sale at thebalance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the non-current assetsimpairment loss that has been recognized after the disposal group was classified as held for sale. The reversal shallbe included into profit or loss. The reduced carrying amount of goodwill and non-current assets impairment lossthat has been recognized before the classification is not reserved.The subsequent reversal of the impairment loss that has been recognized in a disposal group as held for sale, thecarrying amount is increased based on the proportion of carrying amount of each non-current assets (excludinggoodwill) in the disposal group.
(3) Non-current asset or disposal group that is no longer classified as held for sale and derecognizedA non-current asset or disposal group that does not met criteria for held for sale and no longer classified as held forsale, or a non-current asset that removed from a disposal group as held for sale shall be measured at the lower of: a.its carrying amount before it was classified as held for sale, adjusted for any depreciation. Amortization orimpairment that would have been recognized had it not been classified as held for sale; and b. its recoverableamount.When a non-current asset or disposal group classified as held for sale is derecognized, unrecognized gains orlosses shall be included into profit or loss.
(XIII) Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisionsabout the relevant activities require the unanimous consent of the parties sharing control. Significant influence isthe power to participate in the financial and operating policy decisions of the investee but is not control or jointcontrol of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party is that it makespayment in cash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date ofcombination, it regards the share of the carrying amount of the equity of the combined party included theconsolidated financial statements of the ultimate controlling party as the initial cost of the investment. Thedifference between the initial cost of the long-term equity investments and the carrying value of the combinationconsideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve isinsufficient to offset, any excess is adjusted to retained earnings.When long-term equity investments are obtained through business combination under common control achieved instages, the Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as awhole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, investmentcost is initially recognized at the share of the carrying amount of net assets of the combined party included theconsolidated financial statements of the ultimate controlling party. The difference between the acquisition-dateinvestment cost of long-term equity investments and the carrying amount of the previously held long-term equityinvestments plus the carrying amount of the consideration paid for the newly acquired equity is adjusted to capitalreserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
(2) For business combination not under common control, investment cost is initially recognized at theacquisition-date fair value of considerations paid.When long-term equity investments are obtained through business combination not under common controlachieved in stages, the Company determined whether they are stand-alone financial statements or consolidatedfinancial statements in accounting treatment:
1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount ofthe previously held long-term equity investments plus the carrying amount of the consideration paid for the newlyacquired equity.
2) In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”.If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it isnot a “bundled transaction”, the carrying value of the acquirer’s previously held equity interest in the acquire isre-measured at the acquisition-date fair value, and the difference between the fair value and the carrying amount isrecognized in investment income; when the acquirer’s previously held equity interest in the acquire involves othercomprehensive income under equity method, the related other comprehensive income is reclassified as income forthe acquisition period, excluding other comprehensive income arising from changes in net liabilities or assets fromremeasurement of defined benefit plan of the acquiree.
(3) Long-term equity investments obtained through ways other than business combination: the initial cost of along-term equity investment obtained by making payment in cash is the purchase cost which is actually paid; thatobtained on the basis of issuing equity securities is the fair value of the equity securities issued; that obtained
through debt restructuring is determined according to “CASBE12 - Debt Restructuring”; and that obtained throughnon-cash assets exchange is determined according to “CASBE7 - Non-cash Assets Exchange”.
3. Subsequent measurement and recognition method of gain or loss
For long-term equity investments with control relationship, it is accounted for with cost method; for long-termequity investments with joint control or significant influence relationship, it is accounted for with equity method.
4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
(1) Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtained thereof isrecognized in profit or loss. If the disposal does not result in the Company’s loss of significant influence or jointcontrol, the remained equity is accounted for with equity method; however, if the disposal results in theCompany’s loss of control, joint control, or significant influence, the remained equity is accounted for according to“CASBE 22 - Financial Instruments: Recognition and Measurement”.
(2) Consolidated financial statements
1) Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss ofcontrolBefore the Company’s loss of control, the difference between the disposal consideration and the proportionateshare of net assets in the disposed subsidiary from acquisition date or combination date to the disposal date isadjusted to capital reserve (capital premium), if the balance of capital reserve is insufficient to offset, any excess isadjusted to retained earnings.When the Company loses control, the remained equity is re-measured at the loss-of-control-date fair value. Theaggregated value of disposal consideration and the fair value of the remained equity, less the share of net assets inthe disposed subsidiary held before the disposal from the acquisition date or combination date to the disposal dateis recognized in investment income in the period when the Company loses control over such subsidiary, andmeanwhile goodwill is offset correspondingly. Other comprehensive income related to equity investments informer subsidiary is reclassified as investment income upon the Company’s loss of control.
2) Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss of controlIn case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of control inaccounting treatment. Before the Company loses control, the difference between the disposal consideration at eachstage and the proportionate share of net assets in the disposed subsidiary is recognized as other comprehensiveincome at the consolidated financial statements and reclassified as profit or loss in the period when the Companyloses control over such subsidiary.(XIV) Investment property
1. Investment property includes land use right of rent-out property and of property held for capital appreciation andbuildings that have been leased out.
2. The initial measurement of investment property is based on its cost, and subsequent measurement is made usingthe cost model, the depreciation or amortization method is the same as that of fixed assets and intangible assets.(XV) Fixed assets
1. Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production or supply of goods or services, for rental to others, orfor administrative purposes, and expected to be used during more than one accounting year. Fixed assets are
recognized if, and only if, it is probable that future economic benefits associated with the assets will flow to theCompany and the cost of the assets can be measured reliably.
2. Depreciation method of different categories of fixed assets
Categories | Depreciation method | Useful life (years) | Estimated residual value proportion (%) | Annual depreciation rate (%) |
Buildings and structures | Straight-line method | 35-40 | 3 | 2.77-2.43 |
General equipment | Straight-line method | 12 | 3 | 8.08 |
Transport facilities | Straight-line method | 7 | 3 | 13.86 |
Electronic equipment | Straight-line method | 5-7 | 3 | 33.33-13.86 |
Office and other equipment | Straight-line method | 7 | 3 | 13.86 |
Owner's renovation fee | Straight-line method | 10 | 0 | 10.00 |
(XVI) Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic benefits associatedwith the item will flow to the Company, and the cost of the item can be measured reliably. Construction in progressis measured at the actual cost incurred to reach its designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches its designed usableconditions. When the construction completion cost reaches final estimating and auditing of the construction inprogress was not finished while it reaching the designed usable conditions, it is transferred to fixed assets usingestimated value first, and then adjusted accordingly when the actual cost is settled, but the accumulateddepreciation is not to be adjusted retrospectively.(XVII) Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisitionand construction or production of assets eligible for capitalization, it is capitalized and included inthe costs of relevant assets; other borrowing costs are recognized as expenses on the basis of theactual amount incurred, and are included in profit or loss.
2. Borrowing costs capitalization period
(1) The borrowing costs are not capitalized unless they following requirements are all met: 1) theasset disbursements have already incurred; 2) the borrowing costs have already incurred; and 3)the acquisition and construction or production activities which are necessary to prepare the assetfor its intended use or sale have already started.
(2) Suspension of capitalization: where the acquisition and construction or production of aqualified asset is interrupted abnormally and the interruption period lasts for more than 3 months,the capitalization of the borrowing costs is suspended; the borrowing costs incurred during suchperiod are recognized as expenses, and are included in profit or loss, till the acquisition and
construction or production of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction orproduction is ready for the intended use or sale, the capitalization of the borrowing costs is ceased.
3. Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible forcapitalization, the to-be-capitalized amount of interests is determined in light of the actual interestexpenses incurred (including amortization of premium or discount based on effective interestmethod) of the special borrowings at the present period minus the income of interests earned onthe unused borrowings as a deposit in the bank or as a temporary investment; where a generalborrowing is used for the acquisition and construction or production of assets eligible forcapitalization, the Company calculates and determines the to-be-capitalized amount of interests onthe general borrowing by multiplying the weighted average asset disbursement of the part of theaccumulative asset disbursements minus the general borrowing by the capitalization rate of thegeneral borrowing used.
(XVIII) Intangible assets
1. Intangible asset includes land use right, trademarks and software. The initial measurement of intangible asset isbased its cost.
2. For intangible assets with finite useful lives, its amortization amount is amortized within its useful livessystematically and reasonably, if it is unable to determine the expected realization pattern reliably, intangible assetsare amortized by the straight-line method with details as follows:
Items | Amortization period (years) |
Land use right | 50 |
Trademarks | 10 |
Software | 5 |
3. Expenditures on the research phase of an internal project are recognized as profit or loss when it is incurred. Anintangible asset arising from the development phase of an internal project is recognized if the Company candemonstrate all of the following: (1) the technical feasibility of completing the intangible asset so that it will beavailable for use or sale; (2) its intention to complete the intangible asset and use or sell it; (3) how the intangibleasset will generate probable future economic benefits. Among other things, the Company can demonstrate theexistence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be usedinternally, the usefulness of the intangible asset; (4) the availability of adequate technical, financial and otherresources to complete the development and to use or sell the intangible asset; and (5) its ability to measure reliablythe expenditure attributable to the intangible asset during its development.(XIX) Impairment of part of non-current assetsFor non-current assets such as long-term equity investments, investment property at cost model,fixed assets, construction in progress, intangible assets with finite useful life, etc., if at the balancesheet date there is in dication of impairment, the recoverable amount is estimated. For goodwill
recognized in business combination and intangible assets with indefinite useful life, no matterwhether there is indication of impairment, impairment test is performed annually. Impairment teston goodwill is performed on related group of assets or a portfolio of groups of assets.
When the recoverable amount of such non-current assets is lower than their carrying amount, the difference isrecognized as assets impairment loss through profit or loss.(XX) Long-term prepaymentsLong-term prepayments are expenses that have been recognized but with amortization period over one year(excluding one year). They are recorded with actual cost, and evenly amortized within its beneficiary period orstipulated period. If items of long-term prepayments fail to be beneficial to the following accounting periods,residual values of such items are included in profit or loss.(XXI) Employee benefits
1. Employee benefits include short-term employee benefits, post-employment benefits, termination benefits andother long-term employee benefits.
2. Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employeebenefits actually incurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.
3. Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined benefitplans.
(1) The Company recognizes in the accounting period in which an employee provides service the contributionpayable to a defined contribution plan as a liability, with a corresponding charge to profit or loss or the cost of arelevant asset.
(2) Accounting treatment by the Company for defined benefit plan usually involves the following steps:
1) In accordance with the projected unit credit method, using unbiased and mutually compatible actuarialassumptions to estimate related demographic variables and financial variables, measure the obligations under thedefined benefit plan, and determine the periods to which the obligations are attributed. The Company discountsobligations under the defined benefit plan using the discount rate to determine the present value of the definedbenefit plan obligations and the current service cost;
2) When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the presentvalue of the defined benefit plan obligation from the fair value of defined benefit plan assets as a net definedbenefit plan liability or net defined benefit plan asset. When a defined benefit plan has a surplus, the Companymeasures the net defined benefit plan asset at the lower of the surplus in the defined benefit plan and the assetceiling;
3) At the end of reporting period, the Company recognizes the following components of employee benefits costarising from defined benefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset); andc. Changes as a result of remeasurement of the net defined benefit liability (asset). Item a and item b arerecognized in profit or loss or the cost of a relevant asset. Item c is recognized in other comprehensive income andis not to be reclassified subsequently to profit or loss. However, the Company may transfer those amountsrecognized in other comprehensive income within equity.
4. Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability for terminationbenefits, with a corresponding charge to profit or loss at the earlier of the following dates: a. when the Companycannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or acurtailment proposal; or b. when the Company recognizes cost or expenses related to a restructuring that involvesthe payment of termination benefits.
5. Other long-term employee benefits
When other long-term employee benefits provided by the Company to the employees satisfied the conditions forclassifying as a defined contribution plan, those benefits are accounted for in accordance with the requirementsrelating to defined contribution plan. The Company recognizes and measures the net liability or net asset of otherlong-term employee benefits in accordance with the requirements relation to defined benefit plan. At the end of thereporting period, the Company recognizes the components of cost of employee benefits arising from otherlong-term employee benefits as the followings: a. service cost; b. net interest on the net liability or net assets ofother long-term employee benefits; and c. changes as a result of remeasurement of the net liability or net assets ofother long-term employee benefits. As a practical expedient, the net total of the aforesaid amounts are recognizedin profit or loss or included in the cost of a relevant asset.(XXII) Provisions
1. Provisions are recognized when fulfilling the present obligations arising from contingenciessuch as providing guarantee for other parties, litigation, products quality guarantee, onerouscontract, etc., may cause the outflow of the economic benefit and such obligations can be reliablymeasured.
2. The initial measurement of provisions is based on the best estimated expenditures required infulfilling the present obligations, and its carrying amount is reviewed at the balance sheet date.(XXIII) Revenue
1. Revenue recognition principles
(1) Sales of goods
For the sale of goods, the realization of sales income shall be recognized under the followingconditions: 1) the main risks and rewards in the ownership of the goods are transferred to thebuyer; 2) the Company will no longer retain the continuous management rights normallyassociated with ownership and effectively control the sold development products; 3) the amount ofincome can be measured reliably; 4) relevant economic benefits are likely to flow in; 5) therelevant costs that have occurred or will occur can be measured reliably.
(2) Providing labor services
If the provision of labor services can be reliably estimated (all the following conditions are met:
The amount of income can be measured reliably; The relevant economic benefits are likely toinflow to the Company; The progress of the transaction can be reliably determined; The costincurred and to be incurred in the transaction can be measured reliably), it shall recognize therevenue from providing services employing the percentage-of-completion method, and confirm
the completion of labor service according to the costs incurred as a percentage of the totalestimated costs. If the Company can’t, on the date of the balance sheet, reliably estimate theoutcome of a transaction concerning the labor services it provides, it shall be handled under thefollowing conditions: If the cost of labor services incurred is expected to be compensated, therevenue from the providing of labor services shall be recognized in accordance with the amount ofthe cost of labor services incurred, and the cost of labor services shall be carried forward at thesame amount; If the cost of labor services incurred is not expected to compensate, the costincurred should be included in the current profits and losses, and no revenue from the providing oflabor services may be recognized.
(3) Transferring the Right to Use Assets
The revenue of transferring the right to use assets may not be recognized unless the followingconditions are both met: the relevant economic benefits are likely to inflow to the Company; andthe revenue can be reliably measured. The interest income shall be recognized according to thetime and actual interest rate in which other people use the Company’s monetary funds. Royaltyrevenue shall be recognized according to the chargeable time and method stipulated in relatedcontracts and agreements.
2. Revenue recognition method
(1) Car sales revenue
The company sells cars, and recognizes the sales revenue after delivering the cars to customers inaccordance with the agreement, collecting the cars or obtaining the right to collect the cars.
(2) Jewelry sales revenue
The company's jewelry sales revenue is divided into retail revenue and wholesale revenueaccording to the sales method. Retail revenue is recognized when the physical goods have beendelivered to consumers and payment has been received. Wholesale income is confirmed when thephysical goods have been delivered to the customer, and the customer confirms the receipt andcollects the payment or obtains the voucher for the payment.
(3) Property lease income
The company's property rental income is recognized on an accrual basis, and sales income isrecognized when the leased assets are delivered to the lessee and the rent has been received.(XXIV) Government grants
1. Government grants shall be recognized if, and only if, the following conditions are all met: (1) the Companywill comply with the conditions attaching to the grants; (2) the grants will be received. Monetary governmentgrants are measured at the amount received or receivable. Non-monetary government grants are measured at fairvalue, and can be measured at nominal amount in the circumstance that fair value can’t be assessed.
2. Judgment basis and accounting treatment of Government grants related to assetsGovernment grants related to assets are government grants with which the Company construct or otherwise
acquire long-term assets under requirements of government. In the circumstances that there is no specificgovernment requirement, the Company shall determine based on the primary condition to acquire the grants andgovernment grants related to assets are government grants whose primary condition is to construct or otherwiseacquire long-term assets. They offset carrying amount of relevant assets or recognized as deferred income. Ifrecognized as deferred income, they are included in profit or loss on a systematic basis over the useful lives of therelevant assets. Those measured at notional amount is directly included into profit or loss. For assets sold,transferred, disposed or damaged within the useful lives, balance of unamortized deferred income is transferredinto profit or loss of the year in which the disposal occurred.
3. Judgment basis and accounting treatment of Government grants related to incomeGovernment grants related to income are government grants other than those related to assets. For governmentgrants that contain both parts related to assets and parts related to income, in which those two parts are blurred andthus collectively classified as government grants related to income. For government grants related to income usedfor compensating the related future cost, expenses or losses of the Company are recognized as deferred income andare included in profit or loss or offset relevant cost during the period in which the relevant cost, expenses or lossesare recognized; for government grants related to income used for compensating the related cost, expenses or lossesincurred to the Company, they are directly included in profit or loss or directly offset relevant cost.
4. Government grants related to the ordinary course of business shall be included into otherincome or offset relevant cost based on business nature, while those not related to the ordinarycourse of business shall be included into non-operating revenue or expenditures.(XXV) Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on thedifference between the carrying amount and tax base of assets and liabilities (and the difference ofthe carrying amount and tax base of items not recognized as assets and liabilities but with their taxbase being able to be determined according to tax laws) and in accordance with the tax rateapplicable to the period during which the assets are expected to be recovered or the liabilities areexpected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income, which it ismost likely to obtain and which can be deducted from the deductible temporary difference. At thebalance sheet date, if there is any exact evidence that it is probable that future taxable profits willbe available against which deductible temporary differences can be utilized, the deferred tax assetsunrecognized in prior periods are recognized.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carryingamount of a deferred tax asset is reduced to the extent that it is no longer probable that sufficienttaxable profits will be available to allow the benefit of the deferred tax asset to be utilized. Suchreduction is subsequently reversed to the extent that it becomes probable that sufficient taxableincome will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or incomethrough profit or loss, excluding those arising from the following circumstances: (a) business
combination; and (b) the transactions or items directly recognized in equity.(XXVI) LeasesAccounting Treatment of Operating LeasAs a Lessee, the Company shall record the rent into relevant assets cost or recognize it as thecurrent profit or loss on a straight-line basis over the lease term. The initial direct costs incurredshall be recognized as the current profit or loss; Contingent rents shall be charged into the currentprofit or loss when they are incurred.As a lessor, the Company shall recognize the rent as the current profit or loss on a straight-linebasis over the lease term. Initial direct costs incurred by the lessor shall be directly recognized asthe current profit or loss except that costs with larger amounts shall be capitalized and recordedinto the current profit and loss by stages; Contingent rents shall be charged into the current profitor loss when they are incurred.(XXVII) Segment reportingReportable segments are identified based on operating segments which are determined based on the structure ofthe Company’s internal organization, management requirements and internal reporting system. An operatingsegment is a component of the Company that:
(1) engages in business activities from which it may earn revenues and incur expenses;
(2) whose financial performance are regularly reviewed by Management to make decisions about resource to beallocated to the segment and assess its performance; and
(3) for which financial information regarding financial position, financial performance and cash flows is available.(XXVIII) Significant changes in accounting policies and estimates
1. Significant changes in accounting policies
(1) Changes in accounting policies arising from changes in CASBEs
1) The Company prepared the financial statements for the year ended December 31, 2019 in accordance with“Notice of the Ministry of Finance on Revising and Issuing Financial Statement Templates for GeneralEnterprises” (numbered Cai Kuai [2019] 6), “Notice on Revising and Issuing the Format of Consolidated FinancialStatements (2019 Edition)” (Cai Kuai [2019] 16), and CASBEs, and changes in accounting policies are applicableto retrospective application method. Items of financial statement for the year ended December 31, 2018significantly affected and their amounts are as follows:
Original financial statement items and amounts | Revised financial statement items and amounts | ||
Notes receivable and accounts receivable | 86,104,660.51 | Notes receivable | |
Accounts receivable | 86,104,660.51 | ||
Notes payable and accounts payable | 73,365,876.09 | Notes payable | |
Accounts payable | 73,365,876.09 |
2) The Company has adopted “CASBE 23 - Transfer of Financial Assets”, “CASBE 24 - Hedging and AccountingStandards for Business Enterprises” and “CASBE 37 - Presentation of Financial Instruments” (hereinafter referred
to the new standards governing financial instruments) revised by Ministry of Finance of PRC since January 1,2019. Pursuant to regulations on convergence between old and new standards, no adjustment shall be made oncomparable information, and the difference arising from adoption on the adopting date shall be retrospectivelyadjusted into retained earnings and other related financial statement items at the beginning of the reporting period.The new standards governing financial instruments changed the classification and measurement of financial assets,and identified three main measurement categories: amortized cost; measured at fair value and its changes includedin other comprehensive income; measured at fair value and its changes included in the current period profit andloss. The company classifies financial assets based on its own business model and the contractual cash flowcharacteristics of financial assets. Equity investments need to be measured at fair value and their changes includedin the current profit and loss, but at the time of initial recognition, they can be measured at fair value and theirchanges included in other comprehensive income. (Included in the current profit and loss), and the choice isirrevocable.The new standards governing financial instruments requires that the measurement of impairment of financial assetsbe changed from the "incurred loss model" to the "expected credit loss model". It applies to financial assetsmeasured at amortized cost, measured at fair value and whose changes are included in other comprehensiveincome. Financial assets, lease receivables.A. Main effects on the financial statements for the year ended December 31, 2019 due to adoption of financialinstruments standard are as follows:
Items | Balance sheet | ||
Dec. 31, 2018 | Effect due to revised lease standard | Jan. 1, 2019 | |
Available-for-sale financial assets | 10,176,617.20 | -10,176,617.20 | |
Investments in other equity instruments | 10,176,617.20 | 10,176,617.20 | |
Other current assets | 332,432,494.44 | -330,400,000.00 | 2,032,494.44 |
Held-for-trading financial assets | 331,523,546.74 | 331,523,546.74 | |
Retained earnings | 184,535,322.70 | 1,079,805.36 | 185,615,128.06 |
Surplus reserves | 3,139,918.14 | 6,244.84 | 3,146,162.98 |
Non-controlling interests | 49,072,678.52 | 37,496.54 | 49,110,175.06 |
B. Reconciliation of financial assets and financial liabilities of the Company classified and measured respectivelyaccording to the new standards governing financial instruments at January 1, 2019:
Item | Original standards | New standards | ||
Measurement category | Carrying value | Measurement category | Carrying value | |
Monetary asset | Loans and accounts receivable | 169,512,260.69 | Financial assets at amortized cost | 170,235,668.19 |
Accounts receivable | Loans and accounts receivable | 86,104,660.51 | Financial assets at amortized cost | 86,104,660.51 |
Item | Original standards | New standards | ||
Measurement category | Carrying value | Measurement category | Carrying value | |
Other receivables | Loans and accounts receivable | 14,483,208.41 | Financial assets at amortized cost | 13,759,800.91 |
Financial product | Available-for-sale financial assets | 330,400,000.00 | Measured at fair value through current profit and loss | 331,523,546.74 |
Non-trading equity instrument investment | Available-for-sale financial assets | 10,176,617.20 | Measured at fair value through other comprehensive income | 10,176,617.20 |
Short-term borrowings | Financial liabilities | 143,000,000.00 | Financial liabilities at amortized cost | 143,232,810.41 |
Accounts payable | Other financial liabilities | 73,365,876.09 | Financial liabilities at amortized cost | 73,365,876.09 |
Other payables | Other financial liabilities | 250,489,094.47 | Financial liabilities at amortized cost | 250,198,878.69 |
Long-term borrowings | Other financial liabilities | 34,934,887.55 | Financial liabilities at amortized cost | 34,992,292.92 |
Long-term payables | Other financial liabilities | 3,920,160.36 | Financial liabilities at amortized cost | 3,920,160.36 |
C. The reconciliation statement of carrying value of original financial assets and financial liabilities of theCompany reclassified and remeasured according to the new standards governing financial instruments on 1January 2019
Item | Carrying value listed according to original standards (31 December 2018) | Reclassified | Remeasured | Carrying value listed according to new standards (1 January 2019) |
A. Financial assets | ||||
a. Amortized cost | ||||
Monetary assets | ||||
Balance by original CAS22 and balance by new CAS22 | 169,512,260.69 | 723,407.50 | 170,235,668.19 | |
Accounts receivable |
Item | Carrying value listed according to original standards (31 December 2018) | Reclassified | Remeasured | Carrying value listed according to new standards (1 January 2019) |
Balance by original CAS22 and balance by new CAS22 | 86,104,660.51 | 86,104,660.51 | ||
Other receivables | ||||
Balance by original CAS22 and balance by new CAS22 | 14,483,208.41 | -723,407.50 | 13,759,800.91 | |
Total financial assets at amortized cost | 270,100,129.61 | 270,100,129.61 | ||
b. Measured at fair value through current profit and loss | ||||
Other current assets- bank wealth management products | ||||
Balance as shown in original CAS22 | 330,400,000.00 | |||
Less: Transfer to fair value measurement and its changes are included in the current profit and loss (new CAS22) | -330,400,000.00 | |||
Balance as shown in new CAS22 | ||||
Held-for-trading financial assets | ||||
Balance as shown in original CAS22 | ||||
Balance as shown in new CAS22 | 330,400,000.00 | 1,123,546.74 | ||
Total financial assets at fair value through profit or loss | 331,523,546.74 | |||
330,400,000.00 | 1,123,546.74 | 331,523,546.74 | ||
c. Measured at fair value through other comprehensive income |
Item | Carrying value listed according to original standards (31 December 2018) | Reclassified | Remeasured | Carrying value listed according to new standards (1 January 2019) |
Available-for-sale financial assets | ||||
Balance as shown in original CAS22 | 10,176,617.20 | |||
Less: Transfer to fair value measurement and its changes are included in other comprehensive income (new CAS22) | -10,176,617.20 | |||
Balance as shown in new CAS22 | ||||
Investments in other equity instruments | ||||
Balance as shown in original CAS22 | ||||
Plus: Transfer from Available-for-sale financial assets (formerly CAS22) | 10,176,617.20 | |||
Balance as shown in new CAS22 | 10,176,617.20 | |||
Total financial assets at fair value through other comprehensive income | 10,176,617.20 | 10,176,617.20 | ||
B. Financial liabilities | ||||
a. Amortized cost | ||||
Short-term borrowings | ||||
Balance by original CAS22 and balance by new CAS22 | 143,000,000.00 | 232,810.41 | 143,232,810.41 | |
Accounts payable |
Item | Carrying value listed according to original standards (31 December 2018) | Reclassified | Remeasured | Carrying value listed according to new standards (1 January 2019) |
Balance by original CAS22 and balance by new CAS22 | 73,365,876.09 | 73,365,876.09 | ||
Other payables | ||||
Balance by original CAS22 and balance by new CAS22 | 250,489,094.47 | -290,215.78 | 250,198,878.69 | |
Long-term borrowings | ||||
Balance by original CAS22 and balance by new CAS22 | 34,934,887.55 | 57,405.37 | 34,992,292.92 | |
Long-term payables | ||||
Balance by original CAS22 and balance by new CAS22 | 3,920,160.36 | 3,920,160.36 | ||
Total financial liabilities at amortized cost | 505,710,018.47 | 505,710,018.47 |
D. The company's original financial asset impairment reserve period end amount adjustments are adjusted to thenew loss provisions classified and measured in accordance with the new financial instrument standards on January1, 2019;
Items | Provision for loss in accordance with the original financial instrument standards (December 31, 2018) | Rearrange | Remeasure | Provision for loss according to the new financial instrument standard (January 1, 2019) |
Accounts receivable | 49,991,339.01 | 49,991,339.01 | ||
Other receivable | 53,897,224.40 | 53,897,224.40 |
3) The Company has adopted “CASBE 7 – Non-cash Assets Exchange” since June 10, 2019, and “CASBE 12 –Debt Restructuring” since June 17, 2019, and changes in accounting policies are applicable to prospectiveapplication method.
2. Significant changes in accounting estimates
(1) Contents and reasons for changes in accounting estimates
Contents and reasons | Approval process | Effective date | Remarks |
①Reason for change With the completion of the first phase of the company's Shuibei Jewelry Building, the company's houses and buildings have undergone great changes; the company's paperless office has been fully implemented, and electronic equipment has been upgraded at a faster pace. The situation more accurately reflects the period during which fixed assets provide economic benefits to the enterprise and the actual asset consumption in each period. Therefore, the estimated useful lives of fixed assets such as buildings, buildings and electronic equipment are changed. ②Contents for change The estimated useful life of the buildings before the change is 35 years, the expected useful life of the electronic equipment is 7 years, the estimated useful life of the buildings after the change is 35-40 years, and the expected useful life of the electronic equipment is 5-7 years. | This change in accounting estimates was reviewed and approved at the 2nd meeting of the 9th board of directors of the company. | The change in accounting estimates will be implemented from April 1, 2019, the date of approval by the board of directors. |
(2) Financial statement items and amounts significantly affected
Financial items significantly affected | Amounts affected | Remarks |
Items of balance sheet as of December 31, 2019 | ||
Fixed assets | 1,085,653.06 | |
Total equity attributable to the parent company | 818,735.29 | |
Items of income statement of 2019 | ||
Operating cost | 1,085,653.06 |
Financial items significantly affected | Amounts affected | Remarks |
Profit before tax | 1,085,653.06 | |
Net profit | -810,912.72 | |
Net profit attributable to owners of parent company | 818,735.29 |
IV. Taxes
(I) Main taxes and tax rates
Taxes | Tax bases | Tax rates |
Value-added tax (VAT) | The taxable revenue from sales of goods or rendering of services | 16%,13%,11%,9%,5%,6%,3% |
Housing property tax | For housing property levied on the basis of price, housing property tax is levied at the rate of 1.2% of the balance after deducting 30% of the cost; for housing property levied on the basis of rent, housing property tax is levied at the rate of 12% of rent revenue. | 1.2%、12% |
Urban maintenance and construction tax | Turnover tax payable | 7% |
Education surcharge | Turnover tax payable | 3% |
Local education surcharge | Turnover tax payable | 2% |
Enterprise income tax | Taxable income | 20%、25% |
Different enterprise income tax rates applicable to different taxpayers:
Taxpayers | Income tax rate |
Shenzhen Xinyongtong Auto Vehicle Inspection Equipment Co., Ltd. | 20% |
Taxpayers other than the above-mentioned | 25% |
(II) Tax preferential policiesAccording to the State Administration of Taxation Notice on the Implementation of Inclusive TaxRelief Policy for Small and Micro Enterprises (Fiscal [2019] No.13), Shenzhen Xinyongtong AutoVehicle Inspection Equipment Co., Ltd. enjoys preferential tax policies for small and microenterprises, and pays corporate income tax at a rate of 20%.V. Notes to items of consolidated financial statementsRemarks: “Opening balance” in this report refers to balances as at January 1, 2019.(I) Notes to items of the consolidated balance sheet
1. Cash and bank balances
(1) Details
Items | Closing balance | Opening balance |
Cash on hand | 120,351.17 | 84,099.49 |
Cash in bank | 428,731,254.87 | 170,151,568.70 |
Total | 428,851,606.04 | 170,235,668.19 |
[Note]: For the difference between the opening number and the year-end number of the previousyear (December 31, 2018), please refer to Note III (XXVIII) 1 (1) 2) of this financial statement fordetails.
(2) Other remarks
As of December 31, 2019, the company's currency funds with restricted use rights were RMB26,664,140.00, which was the company's supervision funds for the development of the TellusJimeng Gold Jewellery Industrial Park Upgrade and Renovation Project 03 plot project.
2. Held-for-trading financial assets
Items | Closing balance | Opening balance |
Financial assets classified as at fair value through profit or loss | 60,486,575.34 | 331,523,546.74 |
Including: Debt instrument investments | 60,486,575.34 | 331,523,546.74 |
Total | 60,486,575.34 | 331,523,546.74 |
[Note]: For the difference between the opening number and the year-end number of the previousyear (December 31, 2018), please refer to Note III (XXVIII) 1 (1) 2) of this financial statement fordetails.
3. Accounts receivable
(1) Details
1) Details on categories
Categories | Closing balance | ||||
Book balance | Provision for bad debts | Carrying amount | |||
Amount | % to total | Amount | Provision proportion (%) | ||
Receivables with provision made on an individual basis | 49,125,862.29 | 30.16 | 49,125,862.29 | 100.00 | |
Receivables with provision made on a collective basis | 113,750,731.59 | 69.84 | 1,137,507.32 | 1.00 | 112,613,224.27 |
Total | 162,876,593.88 | 100.00 | 50,263,369.61 | 30.86 | 112,613,224.27 |
(Continued)
Categories | Opening balance | ||
Book balance | Provision for bad debts | Carrying amount |
Amount | % to total | Amount | Provision proportion (%) | ||
Receivables with provision made on an individual basis | 135,673,534.32 | 99.69 | 49,991,339.01 | 36.85 | 85,682,195.31 |
Receivables with provision made on a collective basis | 422,465.20 | 0.31 | 422,465.20 | ||
Total | 136,095,999.52 | 100.00 | 49,991,339.01 | 36.73 | 86,104,660.51 |
2) Accounts receivable with provision made on an individual basis
Debtors | Book balance | Provision for bad debts | Provision proportion (%) | Reasons |
Shenzhen Jinlu Trading Co.,Ltd. | 9,846,607.00 | 9,846,607.00 | 100.00 | The aging is too long to collect |
Guangdong Zhanjiang Sanxing Automobile Co.,Ltd | 4,060,329.44 | 4,060,329.44 | 100.00 | The aging is too long to collect |
Changlong WANG | 2,370,760.40 | 2,370,760.40 | 100.00 | The aging is too long to collect |
Huizhou Jiandacheng Co.,Ltd. | 2,021,657.70 | 2,021,657.70 | 100.00 | The aging is too long to collect |
Jiangling Automobile Factory | 1,191,059.98 | 1,191,059.98 | 100.00 | The aging is too long to collect |
Yangjiang Automobile Trading Co.,Ltd. | 1,150,000.00 | 1,150,000.00 | 100.00 | The aging is too long to collect |
Guangdong Province Commodity Group | 1,862,000.00 | 1,862,000.00 | 100.00 | The aging is too long to collect |
Others | 26,623,447.77 | 26,623,447.77 | 100.00 | The aging is too long to collect |
Subtotal | 49,125,862.29 | 49,125,862.29 | 100.00 |
3) Accounts receivable with provision for bad debts made on a collective basis
Items | Closing balance | ||
Book balance | Provision for bad debts | Provision proportion (%) | |
Aging portfolio | 12,352,039.14 | 123,520.40 | 1.00 |
Jewellery Sales Portfolio | 101,398,692.45 | 1,013,986.92 | 1.00 |
Subtotal | 113,750,731.59 | 1,137,507.32 | 1.00 |
4) Account receivables based on aging portfolio for bad debt provision
Ages | Closing balance | ||
Book balance | Provision for bad debts | Provision proportion (%) | |
Within 1 year | 12,352,039.14 | 123,520.40 | 1.00 |
Subtotal | 12,352,039.14 | 123,520.40 | 1.00 |
(2) Aging situation
Items | Ending balance |
Within 1 year | 113,750,731.59 |
Over 3 years | 49,125,862.29 |
Total | 162,876,593.88 |
(3) Changes in provision for bad debts
Items | Opening balance | Increase | Decrease | Closing balance | ||||
Accrual | Recovery | Others | Reversal | Written off | Others | |||
Receivables with provision made on an individual basis | 49,991,339.01 | 865,476.72 | 49,125,862.29 | |||||
Receivables with provision made on a collective basis | 1,137,507.32 | 1,137,507.32 | ||||||
Subtotal | 49,991,339.01 | 1,137,507.32 | 865,476.72 | 50,263,369.61 |
(4) Details of the top 5 debtors with largest balances
Debtors | Book balance | Proportion to the total balance of accounts receivable (%) | Provision for bad debts |
Shenzhen Jinlu Trading Co.,Ltd. | 9,846,607.00 | 6.05 | 9,846,607.00 |
Guangdong Zhanjiang Sanxing Antomobile Co.,Ltd. | 4,060,329.44 | 2.49 | 4,060,329.44 |
Hongcheng Zhang | 3,204,215.14 | 1.97 | 32,042.15 |
Zhenci Ye | 3,202,999.50 | 1.97 | 32,030.00 |
Shihui Zhou | 3,201,911.47 | 1.97 | 32,019.11 |
Subtotal | 23,516,062.55 | 14.45 | 14,003,027.70 |
4. Advances paid
(1) Age analysis
Ages | Closing balance | Opening balance | ||||||
Book balance | % to total | Provision for impairment | Carrying amount | Book balance | % to total | Provision for impairment | Carrying amount | |
Within 1 year | 12,671,077.95 | 99.90 | 12,671,077.95 | 9,092,219.33 | 99.78 | 9,092,219.33 | ||
1-2 years | 632.00 | 0.01 | 632.00 | |||||
Over 3 years | 11,893.94 | 0.09 | 11,893.94 | 20,253.94 | 0.22 | 20,253.94 | ||
Total | 12,683,603.89 | 100.00 | 12,683,603.89 | 9,112,473.27 | 100.00 | 9,112,473.27 |
(2) Details of the top 5 debtors with largest balances
Debtors | Book balance | Proportion to the total balance of advances paid (%) |
FAW Toyota Motor Sales Co., Ltd. | 11,390,694.14 | 89.81 |
Toyota Motor (China) Investment Co., Ltd. | 1,114,252.00 | 8.78 |
Xiaopeng Automobile Sales Co., Ltd. | 39,022.00 | 0.31 |
Aolaite Automotive Technology Co., Ltd. | 11,260.00 | 0.09 |
Meidisi Elevator Co., Ltd. | 10,290.00 | 0.08 |
Subtotal | 12,565,518.14 | 99.07 |
5. Other receivables
(1) Details
1) Details on categories
Categories | Closing balance | ||||
Book balance | Provision for bad debts | Carrying amount | |||
Amount | % to total | Amount | Provision proportion (%) | ||
Receivables with provision made on an individual basis | 49,838,895.16 | 51.24 | 49,838,895.16 | 100.00 | |
Including: Interest receivable | |||||
Dividend receivable | |||||
Other receivables | 49,838,895.16 | 51.24 | 49,838,895.16 | 100.00 | |
Receivables with provision made on a collective basis | 47,424,364.96 | 48.76 | 2,515,818.56 | 5.30 | 44,908,546.40 |
Including: Interest receivable |
Categories | Closing balance | ||||
Book balance | Provision for bad debts | Carrying amount | |||
Amount | % to total | Amount | Provision proportion (%) | ||
Dividend receivable | 39,647,732.42 | 40.76 | 39,647,732.42 | ||
Other receivables | 7,776,632.54 | 8.00 | 2,515,818.56 | 32.35 | 5,260,813.98 |
Total | 97,263,260.12 | 100.00 | 52,354,713.72 | 53.83 | 44,908,546.40 |
(Continued)
Categories | Opening balance[Note] | ||||
Book balance | Provision for bad debts | Carrying amount | |||
Amount | % to total | Amount | Provision proportion (%) | ||
Receivables with provision made on an individual basis | 49,895,767.67 | 73.75 | 49,895,767.67 | 100.00 | |
Including: Interest receivable | |||||
Dividend receivable | |||||
Other receivables | 49,895,767.67 | 73.75 | 49,895,767.67 | 100.00 | |
Receivables with provision made on a collective basis | 17,761,257.64 | 26.25 | 4,001,456.73 | 22.53 | 13,759,800.91 |
Including: Interest receivable | |||||
Dividend receivable | 232,683.74 | 0.34 | 232,683.74 | ||
Other receivables | 17,528,573.90 | 25.91 | 4,001,456.73 | 22.83 | 13,527,117.17 |
Total | 67,657,025.31 | 100.00 | 53,897,224.40 | 79.66 | 13,759,800.91 |
[Note]: For details of the difference between the beginning of the year and the end of the previous year(December 31, 2018), please refer to Note III (VVXIII) 1 (1) 2) of this financial statement.
2) Other receivables with provision made on an individual basis
Debtors | Book balance | Provision for bad debts | Provision proportion (%) | Reasons for provision made |
Other receivables | ||||
Zhongqi Huanan Automobile Sales Co.,Ltd. | 9,832,956.37 | 9,832,956.37 | 100.00 | It is too long to collect |
Shenzhen Nanfang Industry and Trade Co.,Ltd. | 7,359,060.75 | 7,359,060.75 | 100.00 | It is too long to collect |
Shenzhen Zhonghao (Group) Co.,Ltd. | 5,000,000.00 | 5,000,000.00 | 100.00 | It is too long to collect |
Debtors | Book balance | Provision for bad debts | Provision proportion (%) | Reasons for provision made |
Jinbeili Household Company | 2,706,983.51 | 2,706,983.51 | 100.00 | It is too long to collect |
Shenzhen Xinxingtai Trading Co.,Ltd. | 2,418,512.90 | 2,418,512.90 | 100.00 | It is too long to collect |
Shenzhen Petrochemical Group | 1,920,153.29 | 1,920,153.29 | 100.00 | It is too long to collect |
Shenzhen Tefa Huatong Casing Co.,Ltd. | 1,212,373.79 | 1,212,373.79 | 100.00 | It is too long to collect |
Shenzhen Jinhe Mould Co.,Ltd. | 1,023,560.00 | 1,023,560.00 | 100.00 | It is too long to collect |
Others | 18,365,294.55 | 18,365,294.55 | 100.00 | It is too long to collect |
Subtotal | 49,838,895.16 | 49,838,895.16 | 100.00 |
3) Other receivables with provision made on a collective basis
Portfolios | Closing balance | ||
Book balance | Provision for bad debts | Provision proportion (%) | |
Other receivables-ageing portfolio | 7,776,632.54 | 2,515,818.56 | 32.35 |
Including: within 1 year | 2,120,412.24 | 21,204.12 | 1.00 |
1-2 years | 663,633.11 | 33,181.65 | 5.00 |
2-3 years | 116,202.70 | 23,240.54 | 20.00 |
over 3 years | 4,876,384.49 | 2,438,192.25 | 50.00 |
Other receivables-portfolio of dividend receivables | 39,647,732.42 | ||
Subtotal | 47,424,364.96 | 2,515,818.56 | 5.30 |
Remarks on the determination basis of portfolio:
(2) Age analysis
Items | Closing book balance |
Within 1 year | 41,768,144.66 |
1-2 years | 663,633.11 |
2-3 years | 116,202.70 |
Over 3 years | 54,715,279.65 |
Subtotal | 97,263,260.12 |
(3) Changes in provision for bad debts
1) Details
Items | Phase I | Phase II | Phase III | Total |
12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
Opening balance | 4,001,456.73 | 49,895,767.67 | 53,897,224.40 | |
Opening balance in the current period | 4,001,456.73 | 49,895,767.67 | 53,897,224.40 | |
--Transferred to phase II | ||||
--Transferred to phase III | ||||
--Reversed to phase II | ||||
--Reversed to phase I | ||||
Provision made in the current period | -1,485,638.17 | 13,127.49 | -1,472,510.68 | |
Provision recovered in current period | 70,000.00 | 70,000.00 | ||
Provision reversed in current period | ||||
Provision written-off in current period | ||||
Other changes | ||||
Closing balance | 2,515,818.56 | 49,838,895.16 | 52,354,713.72 |
(4) Other receivables categorized by nature
Nature of receivables | Closing balance | Opening balance |
Dividends receivable | 39,647,732.42 | 232,683.74 |
Security deposit | 35,477.21 | 39,535.50 |
Reserve | 43,385.72 | 63,146.12 |
Receivable temporary payments | 57,536,664.77 | 67,321,659.95 |
Total | 97,263,260.12 | 67,657,025.31 |
(5) Details on dividend receivable
Items | Closing balance | Opening balance |
China Pufa Machinery Industrial Co.,Ltd. | 547,184.35 | |
Shenzhen SDG Tellus Property Management Co., Ltd. | 232,683.74 | |
Shenzhen Dongfeng Motor Co., Ltd. | 39,100,548.07 | |
Total | 39,647,732.42 | 232,683.74 |
(6) Details of the top 5 debtors with largest balances
Debtors | Nature of receivables | Book balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts |
Zhongqi Huanan Automobile Sales Co., Ltd | Current account | 9,832,956.37 | Over 3 years | 10.11 | 9,832,956.37 |
Shenzhen Nanfang Industry and Trade Co., Ltd | Current account | 7,359,060.75 | Over 3 years | 7.57 | 7,359,060.75 |
Shenzhen Zhonghao (Group) Co., Ltd. | Current account | 5,000,000.00 | Over 3 years | 5.14 | 5,000,000.00 |
Shenzhen Kaifeng Special Automobile Industry Co., Ltd. | Current account | 4,413,728.50 | Over 3 years | 4.54 | 4,413,728.50 |
Jinbeili electronics co., Ltd. | Current account | 2,706,983.51 | Over 3 years | 2.78 | 2,706,983.51 |
Subtotal | 29,312,729.13 | 30.14 | 29,312,729.13 |
6. Inventories
(1) Details
Items | Closing balance | Opening balance | ||||
Book balance | Provision for write-down | Carrying amount | Book balance | Provision for write-down | Carrying amount | |
Raw materials | 15,079,409.32 | 14,772,382.17 | 307,027.15 | 15,047,710.72 | 14,772,382.17 | 275,328.55 |
Goods on hand | 35,204,057.35 | 14,121,481.67 | 21,082,575.68 | 26,169,979.13 | 14,102,453.28 | 12,067,525.85 |
Total | 50,283,466.67 | 28,893,863.84 | 21,389,602.83 | 41,217,689.85 | 28,874,835.45 | 12,342,854.40 |
(2) Provision for inventory write-down
Items | Opening balance | Increase | Decrease | Closing balance | ||
Provision | Others | Reversal or written-off | Others | |||
Raw materials | 14,772,382.17 | 14,772,382.17 |
Items | Opening balance | Increase | Decrease | Closing balance | ||
Provision | Others | Reversal or written-off | Others | |||
Goods on hand | 14,102,453.28 | 19,028.39 | 14,121,481.67 | |||
Subtotal | 28,874,835.45 | 19,028.39 | 28,893,863.84 |
7. Assets as held for sale
Items | Closing balance | Opening balance | ||||
Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
Long-term equity investment | 85,017,251.77 | 85,017,251.77 | ||||
Total | 85,017,251.77 | 85,017,251.77 |
[Note]: The company has completed the sale of 43% equity of Shenzhen Xinglong Machinery Mould Co., Ltd. inthis year. For details, please refer to Note V (II) 7 of this financial statement.
8. Other current assets
(1) Details
Items | Closing balance | Opening balance[Note] |
Deducted input VAT | 3,403,969.23 | 2,032,494.44 |
Total | 3,403,969.23 | 2,032,494.44 |
[Note]: For the difference between the opening number and the year-end number of the previous year (December31, 2018), please refer to Note III (XXVIII) 1 (1) 2) of this financial statement for details.
9. Long-term receivables
(1) Details
Items | Closing balance | Opening balance | Discount rate range | ||||
Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | ||
Related transactions | 2,179,203.68 | 2,179,203.68 | 2,179,203.68 | 2,179,203.68 | |||
Total | 2,179,203.68 | 2,179,203.68 | 2,179,203.68 | 2,179,203.68 |
(2) Changes in provision for bad debts
Items | Opening balance | Increase | Decrease | Closing balance | ||||
Accrual | Recovery | Others | Reversed | Written off | Others | |||
Provision made on an individual basis | 2,179,203.68 | 2,179,203.68 | ||||||
Subtotal | 2,179,203.68 | 2,179,203.68 |
10. Long-term equity investments
(1) Categories
Items | Closing balance | Opening balance | ||||
Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
Investments in associates | 94,822,114.42 | 14,644,406.04 | 80,177,708.38 | 165,996,577.00 | 14,644,406.04 | 151,352,170.96 |
Investments in joint ventures | 82,000,835.67 | 82,000,835.67 | 73,292,595.25 | 73,292,595.25 | ||
Other equity investments | 8,656,000.00 | 8,656,000.00 | 8,656,000.00 | 8,656,000.00 | ||
Total | 185,478,950.09 | 23,300,406.04 | 162,178,544.05 | 247,945,172.25 | 23,300,406.04 | 224,644,766.21 |
(2) Details
Investees | Opening balance | Increase/Decrease | |||
Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | ||
Joint ventures | |||||
Shenzhen Tellus Jimeng Investment Co., Ltd. | 62,039,013.62 | 8,116,369.88 | |||
Shenzhen Tellus Xing Investment Co., Ltd. | 11,253,581.63 | 591,870.54 | |||
Subtotal | 73,292,595.25 | 8,708,240.42 | |||
Associates | |||||
Shenzhen Ren fu Tellus Automobiles Services Co., Ltd. | 40,203,423.40 | 10,610,308.80 | |||
Shenzhen Automobile Industrial Import and Export Co., Ltd. | 7,482,170.28 | -5,455,762.30 | |||
Shenzhen Dongfeng Automobile Co., Ltd. | 103,666,577.28 | 5,271,538.99 | |||
Shenzhen Xinyongtong Pump and Environmental Protection Co., Ltd. | |||||
Shenzhen Xinyongtong Consulting Service Co.,Ltd. | |||||
Shenzhen Tellus Automobile Services Chain Co., Ltd. [Note 3] | |||||
Shenzhen Xinyongtong Automobile Services Co., Ltd. [Note 3] | |||||
Shenzhen Xinyongtong Dongxiao Automobile Parts Sales Co., Ltd. [Note 3] | |||||
Shenzhen Yongtong Xinda Inspection Eqiupment Co., Ltd [Note 3] | |||||
Hunan Changyang Industrial Co., Ltd. [Note 1] | |||||
Shenzhen Jiecheng Electronic Co., Ltd. [Note 1] | |||||
Shenzhen Xiandao Chemical Materials Co., Ltd[Note 1] |
Investees | Opening balance | Increase/Decrease | |||
Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | ||
China Automobile Shenzhen Trading Co., Ltd. [Note 1] | |||||
Shenzhen General Standard Co., Ltd. [Note 1] | |||||
Zhongqi South China Automobile Sales Co., Ltd. [Note 1] | |||||
Shenzhen Bailiyuan Power Co., Ltd. [Note 1] | |||||
Shenzhen Yimin Automobile Trading Co., Ltd. [Note 1] | |||||
Shenzhen Torch Spark Plug Industrial Co., Ltd. [Note 1] | |||||
Subtotal | 151,352,170.96 | 10,426,085.49 | |||
Shenzhen Hanli Hi-technology Ceramics Co., Ltd. [Note 1] | |||||
Nanfang Automobile Repairing Center [Note 1] | |||||
Subtotal | |||||
Total | 224,644,766.21 | 19,134,325.91 |
(Continued)
Investees | Increase/Decrease | Closing balance | Closing balance of provision for impairment | |||
Changes in other equity | Cash dividend/profit declared for distribution | Provision for impairment | Others | |||
Joint ventures | ||||||
Shenzhen Tellus Jimeng Investment Co., Ltd. | 70,155,383.50 | |||||
Shenzhen Tellus Xing Investment Co., Ltd. | 11,845,452.17 | |||||
Subtotal | 82,000,835.67 | |||||
Associates | ||||||
Shenzhen Ren fu Tellus Automobiles Services Co., Ltd. | 17,500,000.00 | 33,313,732.20 | ||||
Shenzhen Automobile Industrial | 2,026,407.98 |
Investees | Increase/Decrease | Closing balance | Closing balance of provision for impairment | |||
Changes in other equity | Cash dividend/profit declared for distribution | Provision for impairment | Others | |||
Import and Export Co., Ltd. | ||||||
Shenzhen Dongfeng Automobile Co., Ltd. | 64,100,548.07 | 44,837,568.20 | ||||
Shenzhen Xinyongtong Pump and Environmental Protection Co., Ltd. | 127,836.59 | |||||
Shenzhen Xinyongtong Consulting Service Co.,Ltd. | 41,556.83 | |||||
Shenzhen Tellus Automobile Services Chain Co., Ltd. [Note 3] | ||||||
Shenzhen Xinyongtong Automobile Services Co., Ltd. [Note 3] | ||||||
Shenzhen Xinyongtong Dongxiao Automobile Parts Sales Co., Ltd. [Note 3] | ||||||
Shenzhen Yongtong Xinda Inspection Eqiupment Co., Ltd [Note 3] | ||||||
Hunan Changyang Industrial Co., Ltd. [Note 1] | 1,810,540.70 | |||||
Shenzhen Jiecheng Electronic Co., Ltd. [Note 1] | 3,225,000.00 | |||||
Shenzhen Xiandao Chemical Materials Co., Ltd[Note 1] | 4,751,621.62 | |||||
China Automobile Shenzhen Trading Co., Ltd. [Note 1] | 400,000.00 | |||||
Shenzhen General Standard Co., Ltd. [Note 1] | 500,000.00 | |||||
Zhongqi South China Automobile Sales Co., Ltd. [Note 1] | 2,250,000.00 | |||||
Shenzhen Bailiyuan Power Co., Ltd. [Note 1] | 1,320,000.00 | |||||
Shenzhen Yimin Automobile Trading Co., Ltd. [Note 1] | 200,001.10 | |||||
Shenzhen Torch Spark Plug Industrial Co., Ltd. [Note 1] | 17,849.20 | |||||
Subtotal | 81,600,548.07 | 80,177,708.38 | 14,644,406.04 |
Investees | Increase/Decrease | Closing balance | Closing balance of provision for impairment | |||
Changes in other equity | Cash dividend/profit declared for distribution | Provision for impairment | Others | |||
Shenzhen Hanli Hi-technology Ceramics Co., Ltd. [Note 1] | 1,956,000.00 | |||||
Nanfang Automobile Repairing Center [Note 1] | 6,700,000.00 | |||||
Subtotal | 8,656,000.00 | |||||
Total | 81,600,548.07 | 162,178,544.05 | 23,300,406.04 |
[Note 1]: Companies have been withdrawn, so we have recognized 100% provision for the bad-debt.[Note 2]: The operating period of Shenzhen Hanli Hi-technology Ceramics Co., Ltd. starts from September 21,1993 to September 21, 1998. The operating period of Nanfang Automobile Repairing Center starts from July 12,1994 to July 11, 2002 As of now, these companies have ceased operating activities for many years and have beenrevoked for industrial and commercial registration because they did not participate in the annual industrial andcommercial inspection. The Company has been unable to exercise effective control over these companies. Thesecompanies have not been included in the consolidated scope of the Company's consolidated financial statements.The book value of the Company's investment in these companies is zero.[Note 3]: The number of these companies' long-term equity investments is adjusted to RMB 0 through therecognition of profit and loss adjustments in accordance with the equity method.
11. Other equity instrument investments
(1) Details
Items | Closing balance | Opening balance | Dividend income | Accumulated amount of gains or losses transferred from other comprehensive income to retained earnings | |
Amount | Reasons | ||||
Shenzhen Ren fu Tellus Automobiles Services Co., Ltd. | 10,176,617.20 | 10,176,617.20 | 547,184.35 | ||
Subtotal | 10,176,617.20 | 10,176,617.20 | 547,184.35 |
[Note]: Refer to Note III (XXVIII) 1 (1) 2) of the financial statements for the difference between beginningbalance and ending balance of prior period (31 December 2018) for details.
(2) Reasons for equity instrument investments designated as at fair value through other comprehensive incomeThe company's equity investment in China Pufa Machinery Industry Co., Ltd. is a non-trading equity instrumentinvestment, so the company designated it as an equity instrument investment measured at fair value and whosechanges are included in other comprehensive income.
12. Investment property
(1) Details
Items | Buildings and structures | Land use right | Total |
Cost | |||
Opening balance | 602,025,611.05 | 602,025,611.05 | |
Increase | 21,761,479.25 | 49,079,520.00 | 70,840,999.25 |
1) Transferred in from construction in progress | 21,761,479.25 | 21,761,479.25 | |
2) Transferred in from land use right | 49,079,520.00 | 49,079,520.00 | |
Decrease | 9,546,631.74 | 9,546,631.74 | |
1) Disposal | 9,546,631.74 | 9,546,631.74 | |
Closing balance | 614,240,458.56 | 49,079,520.00 | 663,319,978.56 |
Accumulated depreciation and amortization | |||
Opening balance | 98,103,197.35 | 98,103,197.35 | |
Increase | 16,816,270.10 | 1,115,443.68 | 17,931,713.78 |
1) Accrual | 16,816,270.10 | 1,115,443.68 | 17,931,713.78 |
Decrease | 7,314,436.12 | 7,314,436.12 | |
1) Disposal | 7,314,436.12 | 7,314,436.12 | |
Closing balance | 107,605,031.33 | 1,115,443.68 | 108,720,475.01 |
Provision for impairment | |||
Carrying amount | |||
Closing balance | 506,635,427.23 | 47,964,076.32 | 554,599,503.55 |
Opening balance | 503,922,413.70 | 503,922,413.70 |
(2) Investment property with certificate of titles being unsettled
Items | Carrying amount | Reasons for unsettlement |
Shuibei Jewelry Building (Houses and buildings) | 443,354,678.36 | Without settlemen |
Building 12, Shaogang | 17,493.17 | Reason left over by history |
Twelfth Shop in Shaogang | 54,669.99 | Reason left over by history |
Subtotal | 443,426,841.52 |
13. Fixed assets
(1) Fixed assets
1) Details
Items | Buildings and structures | General equipment | Transport facilities | Electronic equipment | Office and other equipment | Owner's renovation fee | Subtotal/ Total |
Cost | |||||||
Opening balance | 266,262,162.27 | 11,674,073.65 | 5,086,600.26 | 9,657,434.32 | 2,852,584.72 | 2,697,711.99 | 298,230,567.21 |
Increase | 476,108.84 | 1,356,142.21 | 1,297,282.55 | 485,737.96 | 3,615,271.56 | ||
1) Acquisition | 476,108.84 | 1,356,142.21 | 1,297,282.55 | 485,737.96 | 3,615,271.56 | ||
Decrease | 780,181.00 | 1,254,807.13 | 1,222,374.88 | 308,074.28 | 3,565,437.29 | ||
1) Disposal/scrap | 780,181.00 | 1,254,807.13 | 1,222,374.88 | 308,074.28 | 3,565,437.29 | ||
Closing balance | 266,262,162.27 | 11,370,001.49 | 5,187,935.34 | 9,732,341.99 | 3,030,248.40 | 2,697,711.99 | 298,280,401.48 |
Accumulated depreciation | |||||||
Opening balance | 156,944,286.41 | 8,711,585.77 | 3,707,548.67 | 7,355,334.20 | 2,176,012.31 | 2,416,329.26 | 181,311,096.62 |
Increase | 7,115,184.69 | 348,329.48 | 368,787.41 | 614,690.01 | 88,846.99 | 8,535,838.58 | |
1) Accrual | 7,115,184.69 | 348,329.48 | 368,787.41 | 614,690.01 | 88,846.99 | 8,535,838.58 | |
Decrease | 695,169.15 | 874,550.34 | 1,096,673.00 | 265,390.88 | 2,931,783.37 | ||
1) Disposal/scrap | 695,169.15 | 874,550.34 | 1,096,673.00 | 265,390.88 | 2,931,783.37 | ||
Closing balance | 164,059,471.10 | 8,364,746.10 | 3,201,785.74 | 6,873,351.21 | 1,999,468.42 | 2,416,329.26 | 186,915,151.83 |
Provision for impairment |
Items | Buildings and structures | General equipment | Transport facilities | Electronic equipment | Office and other equipment | Owner's renovation fee | Subtotal/ Total |
Opening balance | 3,555,385.70 | 319,675.11 | 6,165.00 | 17,984.71 | 64,859.81 | 281,382.73 | 4,245,453.06 |
Increase | |||||||
1) Provision made | |||||||
Decrease | |||||||
1) Disposal/scrap | |||||||
Closing balance | 3,555,385.70 | 319,675.11 | 6,165.00 | 17,984.71 | 64,859.81 | 281,382.73 | 4,245,453.06 |
Carrying amount | |||||||
Closing balance | 98,647,305.47 | 2,685,580.28 | 1,979,984.60 | 2,841,006.07 | 965,920.17 | 107,119,796.59 | |
Opening balance | 105,762,490.16 | 2,642,812.77 | 1,372,886.59 | 2,284,115.41 | 611,712.60 | 112,674,017.53 |
2) Fixed assets rented-out under operating leases
Items | Carrying amount |
Buildings and structures | 70,985,071.68 |
Subtotal | 70,985,071.68 |
3) Fixed assets with certificate of titles being unsettled
Items | Carrying amount | Reasons for unsettlement |
Yongtong building | 33,889,931.83 | Reason left over by history |
Automobile building | 16,494,771.49 | Reason left over by history |
Tellus building underground park | 9,504,850.52 | Unable to handle real estate license |
Zhonghe building | 4,875,483.21 | Reason left over by history |
The 1st, 2nd, 3rd factory building, 3 to 5 layers | 3,778,515.76 | Reason left over by history |
Tellus building conversion layer | 1,650,422.60 | Unable to handle real estate license |
The 16th apartment house, Taohua Yuan | 1,497,225.36 | Reason left over by history |
Shuibei Zhongtian building | 979,977.78 | Reason left over by history |
Floor 1 of business housing, Baoan | 953,535.81 | Reason left over by history |
Warehouse | 883,364.77 | Reason left over by history |
Warehouse of trading department | 78,463.81 | Reason left over by history |
Songquan apartment(Mix) | 15,864.02 | Reason left over by history |
Hostel at North Remin Road | 5,902.41 | Reason left over by history |
Subtotal | 74,608,309.37 | Reason left over by history |
14. Construction in progress
(1) Construction in progress
1) Details
Projects | Closing balance | Opening balance | ||||
Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
Tellus shuibei Jewelry Building | 35,321,704.26 | 35,321,704.26 | 12,843,571.97 | 12,843,571.97 | ||
421 plant decoration | 8,593,316.07 | 8,593,316.07 | ||||
Phase I and Phase II underground connection project | 3,710,247.00 | 3,710,247.00 | ||||
Baoku project | 29,126.22 | 29,126.22 | ||||
Total | 47,654,393.55 | 47,654,393.55 | 12,843,571.97 | 12,843,571.97 |
2) Changes in significant projects
Projects | Budgets | Opening balance | Increase | Transferred to fixed assets | Other decrease | Closing balance |
Tellus shuibei Jewelry Building | 515,460,000.00 | 12,843,571.97 | 22,478,132.29 | 35,321,704.26 | ||
421 plant decoration | 29,910,000.00 | 8,593,316.07 | 8,593,316.07 | |||
Subtotal |
(Continued)
Projects | Accumulated investment to budget | Completion percentage (%) | Accumulated amount of borrowing cost capitalization | Amount of borrowing cost capitalization in current period | Annual capitalization rate (%) | Fund source |
Tellus shuibei Jewelry Building | 6.85 | 6.85 | private capital | |||
421 plant decoration | 28.73 | 28.73 | private capital | |||
Subtotal |
15. Intangible assets
(1) Details
Items | Land use right | Trademarks | Software | Total |
Cost | ||||
Opening balance | 56,252,774.80 | 128,500.00 | 1,093,185.00 | 57,474,459.80 |
Increase | 48,693,599.00 | 488,960.00 | 49,182,559.00 | |
1) Acquisition | 48,693,599.00 | 488,960.00 | 49,182,559.00 | |
Decrease | 54,284,923.80 | 54,284,923.80 | ||
1) Transfer to investment real estate | 54,284,923.80 | 54,284,923.80 | ||
Closing balance | 50,661,450.00 | 128,500.00 | 1,582,145.00 | 52,372,095.00 |
Accumulated amortization | ||||
Opening balance | 5,490,224.49 | 82,674.35 | 889,278.71 | 6,462,177.55 |
Increase | 428,195.15 | 6,948.33 | 118,952.10 | 554,095.58 |
1) Accrual | 428,195.15 | 6,948.33 | 118,952.10 | 554,095.58 |
Decrease | 5,205,403.80 | 5,205,403.80 | ||
1) Transfer to investment real estate | 5,205,403.80 | 5,205,403.80 | ||
Closing balance | 713,015.84 | 89,622.68 | 1,008,230.81 | 1,810,869.33 |
Provision for impairment | ||||
Carrying amount | ||||
Closing balance | 49,948,434.16 | 38,877.32 | 573,914.19 | 50,561,225.67 |
Opening balance | 50,762,550.31 | 45,825.65 | 203,906.29 | 51,012,282.25 |
16. Long-term prepayments
(1) Details
Items | Opening balance | Increase | Amortization | Other decreases | Closing balance |
Renovation costs | 6,304,607.22 | 10,200,338.82 | 2,898,140.55 | 13,606,805.49 | |
Total | 6,304,607.22 | 10,200,338.82 | 2,898,140.55 | 13,606,805.49 |
17. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
Items | Closing balance | Opening balance | ||
Deductible temporary difference | Deferred tax asset | Deductible temporary difference | Deferred tax asset | |
Provision for impairment of assets | 34,635,849.55 | 8,658,962.39 | 78,513,371.56 | 19,628,342.90 |
Equity investment difference | 14,844,139.31 | 3,711,034.83 | ||
Unrealized profit from internal transactions | 4,062,835.94 | 1,015,708.98 | ||
Total | 34,635,849.55 | 8,658,962.39 | 97,420,346.81 | 24,355,086.71 |
(2) Details of unrecognized deferred tax assets
Items | Closing balance | Opening balance |
Deductible temporary difference | 127,244,422.02 | 92,121,330.08 |
Deductible losses | 19,619,056.75 | 44,070,344.23 |
Subtotal | 146,863,478.77 | 136,191,674.31 |
(3) Maturity years of deductible losses of unrecognized deferred tax assets
Maturity years | Closing balance | Opening balance | Remarks |
Year 2019 | 14,499,089.58 | ||
Year 2020 | 505,851.30 | 505,851.30 | |
Year 2021 | 1,484,364.61 | 2,121,146.48 | |
Year 2022 | 4,702,701.91 | 7,146,101.41 | |
Year 2023 | 5,499,309.62 | 19,798,155.46 | |
Year 2024 | 7,426,829.31 | ||
Subtotal | 19,619,056.75 | 44,070,344.23 |
18. Other non-current assets
Items | Closing balance | Opening balance |
Prepayment for engineering equipment | 6,789,167.54 | 3,256,964.72 |
Others | 100,000.00 | 100,000.00 |
Items | Closing balance | Opening balance |
Total | 6,889,167.54 | 3,356,964.72 |
19. Short-term borrowings
Items | Closing balance | Opening balance[Note] |
Unsecured borrowings | 143,232,810.41 | |
Total | 143,232,810.41 |
[Note]: For details of the difference between the beginning of the year and the end of the previous year (December 31, 2018), pleaserefer to Note III (XXVIII) 1 (1) 2) of this financial statement.
20. Accounts payable
(1) Details
Items | Closing balance | Opening balance |
Goods and services purchases | 5,671,144.03 | 6,658,229.85 |
Engineering equipment | 63,416,286.39 | 66,707,646.24 |
Total | 69,087,430.42 | 73,365,876.09 |
(2) Significant accounts payable with age over one year
Items | Closing balance | Reasons for unsettlement |
Shenzhen Yinglong Jian'an (Group) Co., Ltd. | 31,005,631.14 | Unsettled |
Shenzhen Tefa Real Estate Co., Ltd. | 6,054,855.46 | Not repaid by related company |
Shenzhen Yinuo Construction Engineering Co., Ltd. | 4,274,022.22 | Unsettled |
Subtotal | 41,334,508.82 |
21. Advances received
Items | Closing balance | Opening balance |
Rent | 491,560.38 | 861,528.49 |
Loan | 26,808,262.33 | 15,036,235.48 |
Total | 27,299,822.71 | 15,897,763.97 |
22. Employee benefits payable
(1) Details
Items | Opening balance | Increase | Decrease | Closing balance |
Short-term employee benefits | 24,800,605.87 | 60,896,075.10 | 55,193,502.81 | 30,503,178.16 |
Post-employment benefits - defined contribution plan | 1,002,064.49 | 4,804,069.08 | 5,104,516.84 | 701,616.73 |
Termination benefits | 4,466,316.47 | 4,466,316.47 |
Items | Opening balance | Increase | Decrease | Closing balance |
Total | 25,802,670.36 | 70,166,460.65 | 64,764,336.12 | 31,204,794.89 |
(2) Details of short-term employee benefits
Items | Opening balance | Increase | Decrease | Closing balance |
Wage, bonus, allowance and subsidy | 22,536,844.79 | 53,619,959.57 | 47,978,308.38 | 28,178,495.98 |
Employee welfare fund | 757,922.60 | 757,922.60 | ||
Social insurance premium | 6,433.95 | 2,048,816.51 | 2,046,891.87 | 8,358.59 |
Including: Medicare premium | 5,247.87 | 1,795,929.80 | 1,794,005.05 | 7,172.62 |
Occupational injuries premium | 513.72 | 38,805.48 | 38,805.48 | 513.72 |
Maternity premium | 672.36 | 155,852.91 | 155,853.02 | 672.25 |
Other commercial insurance | 58,228.32 | 58,228.32 | ||
Housing provident fund | 2,031,964.30 | 3,233,399.36 | 3,223,715.32 | 2,041,648.34 |
Trade union fund and employee education fund | 225,362.83 | 1,235,977.06 | 1,186,664.64 | 274,675.25 |
Subtotal | 24,800,605.87 | 60,896,075.10 | 55,193,502.81 | 30,503,178.16 |
(3) Details of defined contribution plan
Items | Opening balance | Increase | Decrease | Closing balance |
Basic endowment insurance premium | 130,114.53 | 4,734,047.03 | 4,721,742.71 | 142,418.85 |
Unemployment insurance premium | 1,263.01 | 47,927.15 | 47,838.13 | 1,352.03 |
Company annuity payment | 870,686.95 | 22,094.90 | 334,936.00 | 557,845.85 |
Subtotal | 1,002,064.49 | 4,804,069.08 | 5,104,516.84 | 701,616.73 |
23. Taxes and rates payable
Items | Closing balance | Opening balance |
VAT | 551,626.76 | 1,372,624.04 |
Enterprise income tax | 64,461,051.35 | 1,914,409.61 |
Individual income tax withheld for tax authorities | 342,986.08 | 261,135.13 |
Urban maintenance and construction tax | 134,816.64 | 151,417.42 |
Land appreciation tax | 5,362,682.64 | 5,362,682.64 |
Housing property tax | 266.04 | 266.04 |
Land use tax | 26,459.98 | 26,459.98 |
Education surcharge | 82,529.27 | 89,643.88 |
Local education surcharge | 55,019.51 | 59,762.58 |
stamp duty tax | 407,829.34 | 93,010.71 |
Items | Closing balance | Opening balance |
Others | 45,981.54 | |
Total | 71,425,267.61 | 9,377,393.57 |
24. Other payables
(1) Details
Items | Closing balance | Opening balance[Note] |
Interest payable | ||
Other payables | 101,266,802.49 | 250,198,878.69 |
Total | 101,266,802.49 | 250,198,878.69 |
[Note]: For details of the difference between the beginning of the year and the end of the previous year (December 31, 2018), pleaserefer to Note III (XXVIII) 1 (1) 2) of this financial statement.
(2) Other payables
Items | Closing balance | Opening balance |
Deposits | 29,630,854.41 | 22,124,264.01 |
Related accounts | 28,310,337.10 | 37,253,591.77 |
Withholding payments | 14,218,478.78 | 18,263,001.39 |
Payables due | 29,107,132.20 | 172,558,021.52 |
Total | 101,266,802.49 | 250,198,878.69 |
25. Long-term borrowings
Items | Closing balance | Opening balance[Note] |
Mortgaged borrowings | 34,992,292.92 | |
Total | 34,992,292.92 |
[Note]: For details of the difference between the beginning of the year and the end of the previous year (December 31, 2018), pleaserefer to Note III (XXVIII) 1 (1) 2) of this financial statement.
26. Long-term payables
Items | Closing balance | Opening balance [Note] |
Employee housing deposit | 3,908,848.40 | 3,908,848.40 |
Technical innovation | 11,311.96 | 11,311.96 |
Total | 3,920,160.36 | 3,920,160.36 |
27. Provisions
Items | Closing balance | Opening balance | Reasons for balance |
Pending lawsuit | 2,225,468.76 | 2,225,468.76 |
Items | Closing balance | Opening balance | Reasons for balance |
Total | 2,225,468.76 | 2,225,468.76 |
[Note]: For details, please refer to the note XI (I) 1 (2) in this financial statement.
28. Deferred income
(1) Details
Items | Opening balance | Increase | Decrease | Closing balance | Reasons for balance |
Government grants | 139,400.00 | 139,400.00 | |||
Total | 139,400.00 | 139,400.00 |
(2) Details of government grants
Items | Opening balance | Increase | Grants included into profit or loss/offsetting relevant cost [Note] | Closing balance | Related to assets/income |
Futian District Old Elevator Renovation Working Group Elevator Renewal Subsidy Fund | 139,400.00 | 139,400.00 | Asset-related | ||
Subtotal | 139,400.00 | 139,400.00 |
[Note]: Please refer to section V (IV) 3 of notes to financial statements for details on grants included into profit or loss/offsettingrelevant cost.
29. Share capital
(1) Details
Items | Opening balance | Movements | Closing balance | ||||
Issue of new shares | Bonus shares | Reserve transferred to shares | Others | Subtotal | |||
Total | 297,281,600.00 | 133,776,720.00 | 133,776,720.00 | 431,058,320.00 |
(2) Other remarks
According to the resolution of the 2nd meeting of the 9th board of directors of the company on April 1, 2019, the companytransferred 4.5 shares for every 10 shares to all shareholders with capital reserves, a total of 133,776,720 shares.
30. Capital reserve
(1) Details
Items | Opening balance | Increase | Decrease | Closing balance |
Capital premium | 559,544,773.35 | 133,776,720.00 | 425,768,053.35 | |
Other capital reserve | 5,681,501.16 | 5,681,501.16 | ||
Total | 565,226,274.51 | 133,776,720.00 | 431,449,554.51 |
(2) Other remarks
For details of changes in capital reserve, please refer to Note V (I) 29 of these financial statements.
31. Other comprehensive income (OCI)
Items | Opening balance | Current period cumulative | Closing balance | ||||
Current period cumulative before income tax | Less: OCI carried forward transferred to profit or loss | Less: income tax | Attributable to parent company | Attributable to non-controlling shareholders | |||
Items to be reclassified subsequently to profit or loss | 26,422.00 | 26,422.00 | |||||
Including: Other comprehensive income to be transferred to profit or loss under equity method | 26,422.00 | 26,422.00 | |||||
Total | 26,422.00 | 26,422.00 |
32. Surplus reserve
(1) Details
Items | Opening balance [Note] | Increase | Decrease | Closing balance |
Statutory surplus reserve | 3,146,162.98 | 17,861,325.75 | 21,007,488.73 | |
Total | 3,146,162.98 | 17,861,325.75 | 21,007,488.73 |
[Note]: Please refer to section III (XXXVIII) 1 (1) 2) for details on the difference between the opening balance and the closingbalance of the preceding period (i.e. December 31, 2018).
(2) Other remarks
The increase of the surplus reserves was due to the statutory surplus reserves withdrawn 10% of net profits.
33. Undistributed profit
(1) Details
Items | Current period cumulative | Preceding period comparative |
Balance before adjustment at the end of preceding period | 184,535,322.70 | 97,798,595.80 |
Add: Increase due to adjustment (or less: decrease) | 1,079,805.36 | |
Opening balance after adjustment | 185,615,128.06 | 97,798,595.80 |
Add: Net profit attributable to owners of the parent company | 219,669,708.47 | 86,924,058.72 |
Less: Appropriation of statutory surplus reserve | 17,861,325.75 | 187,331.82 |
Closing balance | 387,423,510.78 | 184,535,322.70 |
(2) Details of increase or decrease due to adjustment
Pursuant to related requirements stipulated in the CASBEs, adjustments of 1,079,805.36 yuan are.
(II) Notes to items of the consolidated income statement
1. Operating revenue/Operating cost
Items | Current period cumulative | Preceding period comparative | ||
Revenue | Cost | Revenue | Cost | |
Main operations | 561,948,296.72 | 428,796,930.66 | 406,367,890.86 | 329,601,886.66 |
Other operations | 9,124,597.18 | 2,224,381.98 | 7,870,888.10 | 2,745,468.46 |
Total | 571,072,893.90 | 431,021,312.64 | 414,238,778.96 | 332,347,355.12 |
2. Taxes and surcharges
Items | Current period cumulative | Preceding period comparative |
Urban maintenance and construction tax | 830,132.08 | 656,864.88 |
Education surcharge | 355,770.92 | 380,476.03 |
Local education surtax | 237,180.61 | 253,650.68 |
Stamp duty | 764,026.93 | 338,855.21 |
Housing property tax | 3,364,402.93 | 3,631,029.91 |
Land use tax | 484,217.61 | 465,573.05 |
Vehicle and vessel use tax | 5,244.16 | 4,938.18 |
Consumption tax | 228,084.61 | 545,224.71 |
Total | 6,269,059.85 | 6,276,612.65 |
3. Selling expenses
Items | Current period cumulative | Preceding period comparative |
Employee’s remuneration | 14,630,038.53 | 13,414,059.17 |
Advertisement | 1,703,759.37 | 1,764,907.46 |
Depreciation | 2,943,208.89 | 1,174,246.34 |
Utility bill | 1,056,542.05 | 668,104.46 |
Material consumption | 852,678.19 | 35,736.84 |
Office expenses | 617,180.27 | 673,424.89 |
Entertainment expenses | 441,467.35 | 418,282.09 |
Others | 1,711,227.65 | 1,838,645.25 |
Total | 23,956,102.30 | 19,987,406.50 |
4. Administrative expenses
Items | Current period cumulative | Preceding period comparative |
Employee’s remuneration | 32,664,417.76 | 33,404,269.03 |
Items | Current period cumulative | Preceding period comparative |
Consultation and service fee | 3,880,477.15 | 3,957,788.47 |
Depreciation | 2,022,219.63 | 1,798,242.55 |
Office expenses | 1,536,671.33 | 1,340,677.75 |
Entertainment expenses | 492,374.20 | 724,055.97 |
Advertising expenses | 490,165.08 | 817,181.78 |
Travel expenses | 353,362.25 | 600,746.40 |
Others | 2,228,576.52 | 1,588,414.61 |
Total | 43,668,263.92 | 44,231,376.56 |
5. Financial expenses
Items | Current period cumulative | Preceding period comparative |
Interest expenses | 7,000,636.08 | 8,909,350.20 |
Less: Interest income | 2,317,143.23 | 2,755,755.76 |
Exchange difference | 59,540.03 | 106,434.89 |
Others | 239,732.67 | 248,084.86 |
Total | 4,982,765.55 | 6,508,114.19 |
6. Other income
Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
Government grants related to income [Note] | 276,907.09 | 3,482.07 | 283,518.38 |
Refund of handling fees for withholding individual income tax | 9,378.94 | 9,378.94 | |
Additional deduction of VAT | 6,611.29 | ||
Total | 292,897.32 | 3,482.07 | 292,897.32 |
[Note]: Please refer to notes to government grants for details on grants included into other income.
7. Investment income
Items | Current period cumulative | Preceding period comparative |
Investment income from long-term equity investments under equity method | 19,134,325.91 | 83,051,508.70 |
Investment income from long-term equity investments under cost method[note] | 210,680,848.23 | -4,424,801.74 |
Items | Current period cumulative | Preceding period comparative |
Investment income from financial instruments | 10,207,296.49 | |
Including: Financial assets classified as at fair value through profit or loss | 10,207,296.49 | |
Financial liabilities designated as at fair value through profit or loss | 547,184.35 | |
Investment income of available-for-sale financial assets during holding period | 10,158,761.73 | |
Total | 240,569,654.98 | 88,785,468.69 |
[Note]: On December 28, 2017, the company's extraordinary shareholders meeting resolved to pass a proposal to sell 43% equity ofShenzhen Xinglong Machinery Mould Co., Ltd. On June 15, 2018, the company signed a equity transfer contract with ShenzhenRunhe United Investment Development Co., Ltd., and the company transferred 43% equity of Shenzhen Xinglong Machinery MouldCo., Ltd. to Shenzhen Runhe United Investment Development Co., Ltd. The transfer price was 286.67 million yuan. As of August 13,2019, the company has received all equity transfers of 268.67 million yuan and deferred payment of interest on equity transfers. OnOctober 8, 2019, the equity transfer was processed for equity transfer. After the company carried forward the book value of assetsheld for sale in 2015 to RMB 85,017,251.77, it recognized the investment income of RMB 210,680,848.23 for this equity transfer.
8. Gains on changes in fair value
Items | Current period cumulative | Preceding period comparative |
Held-for-trading financial assets | 477,394.67 | |
Including:Gains on changes in fair value arising from financial assets designated as at fair value through profit or loss | 477,394.67 | |
Total | 477,394.67 |
9. Credit impairment loss
Items | Current period cumulative |
Bad debts | 1,270,480.08 |
Total | 1,270,480.08 |
10. Assets impairment loss
Items | Current period cumulative | Preceding period comparative |
Bad debts | -1,379,068.62 | |
Inventory write-down loss | -19,028.39 | -5,647.64 |
Impairment losses on other assets | -643,261.62 | |
Total | -662,290.01 | -1,384,716.26 |
11. Gains on asset disposal
Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
Gains on disposal of fixed assets | 216,207.53 | 216,207.53 |
Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
Total | 216,207.53 | 216,207.53 |
12. Non-operating revenue
Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
Gains on damage or retirement of non-current assets | 109,998.46 | 109,998.46 | |
Accounts unpayable | 180,000.00 | ||
Other | 194,622.17 | 1,559,055.65 | 194,622.17 |
Total | 304,620.63 | 1,739,055.65 | 304,620.63 |
13. Non-operating expenditures
Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
Losses on damage or retirement of non-current assets | 214,918.34 | 1,114,134.90 | 214,918.34 |
Estimated pending litigation losses | 2,225,468.76 | ||
Fines and liquidated damages | 834,167.39 | 447.93 | 834,167.39 |
Other | 139,292.69 | ||
Total | 1,049,085.73 | 3,479,344.28 | 1,049,085.73 |
14. Income tax expenses
(1) Details
Items | Current period cumulative | Preceding period comparative |
Current period income tax expenses | 68,071,018.71 | 4,182,336.77 |
Deferred income tax expenses | 15,696,124.32 | 38,942.20 |
Previous income tax adjustment | 20,891.90 | 190,601.48 |
Total | 83,788,034.93 | 4,411,880.45 |
(2) Reconciliation of accounting profit to income tax expenses
Items | Current period cumulative | Preceding period comparative |
Profit before tax | 302,595,269.11 | 90,551,859.81 |
Income tax expenses based on tax rate applicable to the parent company | 75,894,191.34 | 22,637,964.95 |
Effect of different tax rate applicable to subsidiaries | -116,827.10 | |
Effect of prior income tax reconciliation | 20,891.90 | 190,601.48 |
Investment income recognised for associates and joint ventures | -4,920,377.57 | -20,899,673.26 |
Effect of non-deductible costs, expenses and losses | 187,968.31 | 155,355.07 |
Items | Current period cumulative | Preceding period comparative |
Utilization of deductible losses not previously recognized | -1,432,355.39 | -5,937,697.16 |
Effect of deducible temporary differences or deductible losses not recognized | 14,154,543.44 | 8,265,329.37 |
Income tax expenses | 83,788,034.93 | 4,411,880.45 |
15. Other comprehensive income, net of income tax
Please refer to section V (I) 57 of notes to financial statements for details.(III) Notes to items of the consolidated cash flow statement
1. Other cash receipts related to operating activities
Items | Current period cumulative | Preceding period comparative |
Security deposit | 28,834,845.75 | 6,028,298.06 |
Interest income | 1,521,342.50 | 2,253,581.14 |
Accounts and others | 17,404,817.56 | 11,402,651.23 |
Total | 47,761,005.81 | 19,684,530.43 |
2. Other cash payments related to operating activities
Items | Current period cumulative | Preceding period comparative |
Cash payment | 15,604,214.08 | 26,950,280.43 |
Security deposit | 20,695,465.01 | 1,337,997.56 |
Penalty fine | 834,167.39 | 447.93 |
Accounts and others | 13,905,542.01 | 13,050,755.91 |
Total | 51,039,388.49 | 41,339,481.83 |
3. Other cash receipts related to investing activities
Items | Current period cumulative | Preceding period comparative |
Receipt of equity transfer deposit | 107,511,100.00 | |
Related loans | 2,385,849.54 | |
Total | 2,385,849.54 | 107,511,100.00 |
4. Other cash payments related to investing activities
Items | Current period cumulative | Preceding period comparative |
Cash paid to Equity Transfer Transaction Service Fee | 5,000.00 | 5,733,400.00 |
Total | 5,000.00 | 5,733,400.00 |
5. Other cash receipts related to financing activities
Items | Current period cumulative | Preceding period comparative |
Non-financial institution borrowing | 15,020,000.00 | |
Total | 15,020,000.00 |
6. Other cash payments related to financing activities
Items | Current period cumulative | Preceding period comparative |
Repayment of loans from non-financial institutions | 22,962,000.00 | |
Return advance rent in advance | 16,144,956.00 | |
Total | 22,962,000.00 | 16,144,956.00 |
7. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Supplement information | Current period cumulative | Preceding period comparative |
(1) Reconciliation of net profit to cash flow from operating activities: | ||
Net profit | 218,807,234.18 | 86,139,979.36 |
Add: Provision for assets impairment loss | -608,190.07 | 1,384,716.26 |
Depreciation of fixed assets, oil and gas assets, productive biological assets | 26,429,872.30 | 18,356,950.61 |
Amortization of intangible assets | 229,471.59 | 649,475.55 |
Amortization of long-term prepayments | 2,898,140.55 | 793,975.37 |
Loss on disposal of fixed assets, intangible assets and other non-current assets (Less: gains) | -216,207.53 | |
Fixed assets retirement loss (Less: gains) | 104,919.88 | 1,114,134.90 |
Losses on changes in fair value (Less: gains) | -477,394.67 | |
Financial expenses (Less: gains) | 7,060,176.11 | 9,015,785.09 |
Investments losses (Less: gains) | -240,569,654.98 | -88,785,468.69 |
Decrease of deferred tax assets (Less: increase) | 15,696,124.32 | 38,942.20 |
Increase of deferred tax liabilities (Less: decrease) | ||
Decrease in inventories (Less: increase) | -9,065,776.82 | 297,725.18 |
Decrease in operating receivables (Less: increase) | -24,176,109.62 | -45,530,744.97 |
Increase of operating payables (Less: decrease) | 82,798,747.79 | 9,949,549.17 |
Others | ||
Net cash flow from operating activities | 78,911,353.03 | -6,574,979.97 |
(2) Significant investing and financing activities not related to cash receipts and payments: | ||
Conversion of debt into share capital |
Supplement information | Current period cumulative | Preceding period comparative |
Convertible bonds due within one year | ||
Fixed assets rented in under finance leases | ||
(3) Net changes in cash and cash equivalents: | ||
Cash at the end of the period | 400,668,257.81 | 142,848,120.69 |
Less: Cash at the beginning of the period | 142,848,120.69 | 141,793,218.56 |
Add: Cash equivalents at the end of the period | ||
Less: Cash equivalents at the beginning of the period | ||
Net increase of cash and cash equivalents | 257,820,137.12 | 1,054,902.13 |
(2) Cash and cash equivalents
Items | Closing balance | Opening balance |
1) Cash | 400,668,257.81 | 142,848,120.69 |
Including: Cash on hand | 120,351.17 | 84,099.49 |
Cash in bank on demand for payment | 400,547,906.64 | 142,764,021.20 |
2) Cash equivalents | ||
Including: Bond investments maturing within three months | ||
3) Cash and cash equivalents at the end of the period | 400,668,257.81 | 142,848,120.69 |
Including: Cash and cash equivalents of parent company or subsidiaries with use restrictions |
(IV) Others
1. Assets with title or use right restrictions
Items | Closing carrying amount | Reasons for restrictions |
Cash and bank balances | 28,183,348.23 | refer to section V (I) 1 of notes |
Total | 28,183,348.23 |
2. Monetary items in foreign currencies
Items | Closing balance in foreign currencies | Exchange rate | RMB equivalent |
Cash and bank balances | |||
Including: USD | 856.00 | 6.9762 | 5,971.63 |
3. Government grants
(1) Details
1) Government grants related to assets
① Gross method
Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
Elevator Renewal Subsidy Fund,Futian | 139,400.00 | 139,400.00 | ||||
Subtotal | 139,400.00 | 139,400.00 |
2) Government grants related to income and used to compensate incurred relevant costs, expenses or losses
Items | Amounts | Presented under | Remarks |
2018 Industrial Support Fund | 268,700.00 | Other income | |
Stable post subsidy | 8,207.09 | Other income | |
Subtotal | 276,907.09 |
VI. Changes in the consolidation scopeEntities brought into the consolidation scope
Entities | Equity acquisition method | Equity acquisition date | Capital contribution | Capital contribution proportion (%) |
Shenzhen Tellus Baoku Supply Chain Technology Co., Ltd. | Establish | September 16, 2019 | 9,253,000.00 | 100.00% |
VII. Interest in other entities(I) Interest in significant subsidiaries
(1) Basis information
Subsidiaries | Main operating place | Place of registration | Business nature | Holding proportion (%) | Acquisition method | |
Direct | Indirect | |||||
Shenzhen Tellus Xinyongtong Automobile Development Co.,Ltd. | Shenzhen | Shenzhen | Business | 100.00 | Establish | |
Shenzhen Dongchang Yongtong Automobile Inspection Co.,Ltd. | Shenzhen | Shenzhen | Business | 95.00 | Establish | |
Shenzhen Baoan Shiquan Industrial Co.,Ltd. | Shenzhen | Shenzhen | Business | 100.00 | Establish | |
Shenzhen Tefa Tellus Real Estate Co.,Ltd. | Shenzhen | Shenzhen | Manufacture | 100.00 | Establish | |
Shenzhen Tellus Chuangying Technology Co., Ltd. | Shenzhen | Shenzhen | Business | 100.00 | Establish | |
Shenzhen Xinyongtong Automobile Inspection Equipment Co., Ltd | Shenzhen | Shenzhen | Business | 51.00 | Establish | |
Shenzhen Automobile Industry and Trading | Shenzhen | Shenzhen | Business | 100.00 | Establish |
Subsidiaries | Main operating place | Place of registration | Business nature | Holding proportion (%) | Acquisition method | |
Direct | Indirect | |||||
Co., Ltd. | ||||||
Shenzhen Automobile Industry supply and marketing Co., Ltd. | Shenzhen | Shenzhen | Business | 100.00 | Establish | |
Shenzhen Tefa Huari Automobile Enterprise Co.,Ltd. | Shenzhen | Shenzhen | Business | 60.00 | Establish | |
Shenzhen Huari Anxin Automobile Inspection Equipment Co., Ltd. | Shenzhen | Shenzhen | Business | 100.00 | Establish | |
Shenzhen Zhongtian Industrial Co.,Ltd. | Shenzhen | Shenzhen | Business | 100.00 | Establish | |
Shenzhen Huari Toyota Automobile sales and services Co., Ltd. | Shenzhen | Shenzhen | Business | 60.00 | Establish | |
Anhui Tellus Star Jewelry Investment Co., Ltd | Hefei | Hefei | Business | 51.00 | Establish | |
Anhui Tellus Xingguang Jinzun Jewelry Co., Ltd | Hefei | Hefei | Business | 60.00 | Establish | |
Sichuan Anhui Tellus Xingguang Jinzun Jewelry Co., LTD Tellus Jewelry Technology Co., Ltd | Chengdu | Chengdu | Business | 66.67 | Establish | |
Shenzhen Tellus Baoku Supply Chain Technology Co., Ltd. | Shenzhen | Shenzhen | Business | 100.00 | Establish |
2. Significant not wholly-owned subsidiaries
(1) Details
Subsidiaries | Holding proportion of non-controlling shareholders | Non-controlling shareholders’ profit or loss | Dividend declared to non-controlling shareholders | Closing balance of non-controlling shareholders’ profit or loss |
Shenzhen Huari Toyota Automobile sales and services Co., Ltd. | 40.00% | 839,849.51 | 1,678,386.57 | |
Shenzhen Tefa Huari Automobile Enterprise Co., Ltd. | 40.00% | -1,235,744.08 | 9,701,933.26 | |
Sichuan Tellus Jewelry Technology Co., Ltd | 33.33% | 2,686,851.85 | 54,506,661.82 |
3. Main financial information of significant not wholly-owned subsidiaries
(1) Assets and liabilities
Subsidiaries | Closing balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities |
Subsidiaries | Closing balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Shenzhen Huari Toyota Automobile sales and services Co., Ltd. | 66,208,279.12 | 4,780,912.24 | 70,989,191.36 | 66,793,224.94 | 66,793,224.94 | |
Shenzhen Tefa Huari Automobile Enterprise Co., Ltd. | 48,495,244.11 | 24,078,718.09 | 72,573,962.20 | 48,169,129.04 | 48,169,129.04 | |
Sichuan Tellus Jewelry Technology Co., Ltd | 164,965,162.17 | 255,849.32 | 165,221,011.49 | 1,701,033.97 | 1,701,033.97 |
(Continued)
Subsidiaries | Opening balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Shenzhen Huari Toyota Automobile sales and services Co., Ltd. | 50,501,290.59 | 3,303,588.99 | 53,804,879.58 | 51,708,536.94 | 51,708,536.94 | |
Shenzhen Tefa Huari Automobile Enterprise Co., Ltd. | 42,821,429.72 | 27,874,888.18 | 70,696,317.90 | 43,352,124.56 | 43,352,124.56 | |
Sichuan Tellus Jewelry Technology Co., Ltd | 136,225,693.11 | 296,185.87 | 136,521,878.98 | 949,959.46 | 949,959.46 |
(2) Profit or loss and cash flows
Subsidiaries | Current period cumulative | |||
Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
Shenzhen Huari Toyota Automobile sales and services Co., | 219,302,518.27 | 2,099,623.78 | 2,099,623.78 | -1,555,308.78 |
Subsidiaries | Current period cumulative | |||
Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
Ltd. | ||||
Shenzhen Tefa Huari Automobile Enterprise Co., Ltd. | 38,745,157.90 | -3,089,360.18 | -3,089,360.18 | 5,401,481.18 |
Sichuan Tellus Jewelry Technology Co., Ltd | 188,861,996.63 | 7,948,058.00 | 7,948,058.00 | -7,638,670.68 |
(Continued)
Subsidiaries | Preceding period comparative | |||
Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
Shenzhen Huari Toyota Automobile sales and services Co., Ltd. | 171,904,862.83 | 3,501,822.26 | 3,501,822.26 | -377,065.57 |
Shenzhen Tefa Huari Automobile Enterprise Co., Ltd. | 35,692,198.19 | -1,539,161.44 | -1,539,161.44 | 5,447,723.52 |
Sichuan Tellus Jewelry Technology Co., Ltd | 138,377,981.65 | 4,734,191.66 | 4,734,191.66 | -38,067,491.93 |
(II) Interest in joint venture or associates
1. Significant joint ventures or associates
Joint ventures or associates | Main operating place | Place of registration | Business nature | Holding proportion (%) | Accounting treatment | |
Direct | Indirect | |||||
Shenzhen Tellus Jimeng investment Co., Ltd. | Shenzhen | Shenzhen | Industrial investment、property management、leasing | 50% | Equity method | |
Shenzhen Ren Fu-Tellus Automotive Service Co., Ltd. | Shenzhen | Shenzhen | Mercedes-Benz sales、repairment | 35% | Equity method | |
Shenzhen Dongfeng Automobile Co., Ltd. | Shenzhen | Shenzhen | Automobile productio、repairment | 25% | Equity method |
2. Main financial information of significant joint ventures
Items | Closing balance/current period cumulative | Opening balance/preceding period comparative |
Shenzhen Tellus Jimeng investment Co., Ltd. | Shenzhen Tellus Jimeng investment Co., Ltd. |
Items | Closing balance/current period cumulative | Opening balance/preceding period comparative |
Shenzhen Tellus Jimeng investment Co., Ltd. | Shenzhen Tellus Jimeng investment Co., Ltd. | |
Current assets | 56,022,041.04 | 30,578,378.74 |
Including: Cash and cash equivalents | 9,770,310.11 | 9,055,687.59 |
Non-current assets | 363,958,852.65 | 362,263,866.80 |
Total assets | 419,980,893.69 | 392,842,245.54 |
Current liabilities | 34,420,126.74 | 12,764,218.35 |
Non-current liabilities | 245,250,000.00 | 256,000,000.00 |
Total liabilities | 279,670,126.74 | 268,764,218.35 |
Non-controlling interest | ||
Equity attributable to owners of parent company | 140,310,766.95 | 124,078,027.19 |
Proportionate share in net assets | 70,155,383.48 | 62,039,013.62 |
Adjustments | ||
Goodwill | ||
Unrealized profit in internal trading | ||
Carrying amount of investments in joint ventures | 70,155,383.48 | 62,039,013.62 |
Fair value of equity investments in joint ventures in association with quoted price | ||
Operating revenue | 91,769,888.39 | 77,472,993.92 |
Financial expenses | 14,266,181.96 | 17,263,494.71 |
Income tax expenses | 5,473,045.83 | 1,549,682.33 |
Net profit | 16,232,739.76 | 11,589,473.55 |
Net profit of discontinued operations | ||
Other comprehensive income | ||
Total comprehensive income | 16,232,739.76 | 11,589,473.55 |
Dividend from joint ventures received in current period |
3. Main financial information of significant associates
Items | Closing balance/current period cumulative | Opening balance/preceding period comparative |
Shenzhen Ren Fu-Tellus Automotive Service Co., Ltd. | Shenzhen Dongfeng Automobile Co., Ltd. | Shenzhen Ren Fu-Tellus Automotive Service Co., Ltd. | Shenzhen Dongfeng Automobile Co., Ltd. | |
Current assets | 229,415,509.00 | 479,352,285.14 | 257,589,051.00 | 617,799,827.49 |
Non-current assets | 22,735,996.00 | 214,963,230.31 | 22,136,628.00 | 228,248,688.85 |
Total assets | 252,151,505.00 | 694,315,515.45 | 279,725,679.00 | 846,048,516.34 |
Current liabilities | 156,969,413.00 | 459,613,457.00 | 164,858,755.00 | 370,192,355.97 |
Non-current liabilities | 66,941,248.16 | 70,203,098.25 | ||
Total liabilities | 156,969,413.00 | 526,554,705.16 | 164,858,755.00 | 440,395,454.22 |
Non-controlling interest | -11,589,462.52 | -9,013,246.97 | ||
Equity attributable to owners of parent company | 95,182,092.00 | 179,350,272.81 | 114,866,924.00 | 414,666,309.09 |
Proportionate share in net assets | 33,313,732.20 | 44,837,568.20 | 40,203,423.40 | 103,666,577.28 |
Adjustments | ||||
Goodwill | ||||
Unrealized profit in internal trading | ||||
Carrying amount of investments in associates | 33,313,732.20 | 44,837,568.20 | 40,203,423.40 | 103,666,577.28 |
Fair value of equity investments in associates in association with quoted price | ||||
Operating revenue | 1,146,987,875.00 | 502,282,870.47 | 1,212,159,355.00 | 494,413,981.09 |
Net profit | 30,315,168.00 | 18,741,639.29 | 24,539,734.00 | 274,312,241.81 |
Net profit of discontinued operations | ||||
Other comprehensive income | ||||
Total comprehensive income | 30,315,168.00 | 18,741,639.29 | 24,539,734.00 | 274,312,241.81 |
Dividend from associates received in current period | 17,500,000.00 | 52,500,000.00 | 5,000,000.00 |
4. Aggregated financial information of insignificant joint ventures and associates
Items | Closing balance/current period cumulative | Opening balance/preceding period comparative |
Joint ventures | ||
Total carrying amount of investments | 11,845,452.17 | 11,253,581.63 |
Proportionate shares in the following items | ||
Net profit | 855,101.45 | 390,187.87 |
Other comprehensive income |
Items | Closing balance/current period cumulative | Opening balance/preceding period comparative |
Total comprehensive income | 855,101.45 | 390,187.87 |
Associates | ||
Total carrying amount of investments | 2,026,407.98 | 7,482,170.28 |
Proportionate shares in the following items | ||
Net profit | -15,260,873.57 | -658,303.56 |
Other comprehensive income | ||
Total comprehensive income | -15,260,873.57 | -658,303.56 |
5. Excess losses incurred by joint ventures or associates
Joint ventures or associates | Accumulated unrecognized prior period losses | Unrecognized current period losses (net profit shared in current period) | Unrecognized losses at the balance sheet date |
Shenzhen Tellus Automobile Services Chains Co., Ltd. | 98,921.14 | -55.88 | 98,865.26 |
Shenzhen Yongtong Xinda Inspection Equipment Co., Ltd. | 783,412.71 | 133,524.54 | 916,937.25 |
VIII. Risks related to financial instrumentsThe Company aims to seek the appropriate balance between the risks and benefits from its use of financial instruments and tomitigate the adverse effects that the risks of financial instruments have on the Company’s financial performance. Based on suchobjectives, the Company’s risk management policies are established to identify and analyze the risks faced by the Company, to setappropriate risk limits and controls, and to monitor risks and adherence to limits.The Company has exposure to the following risks from its use of financial instruments, which mainly include: credit risk, liquidityrisk, and market risk. Management have deliberated and approved policies concerning such risks, and details are:
(I) Credit riskCredit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge anobligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each reporting date, the Company assesses whether the credit risk on a financial instrument has increased significantly since initialrecognition. When assessing whether the credit risk has increased significantly since initial recognition, the Company takes intoaccount reasonable and supportable information, which is available without undue cost or effort, including qualitative andquantitative analysis based on historical data, external credit risk rating, and forward-looking information. The Company determinesthe changes in default risk of financial instruments during the estimated lifetime through comparison of the default risk at the balancesheet date and the initial recognition date, on an individual basis or a collective basis.
The Company considers the credit risk on a financial instrument has increased significantly when one or more of the followingqualitative and quantitative standards are met:
1) Quantitative standard mainly relates to the scenario in which, on the balance sheet date, the probability of default in the remaininglifetime has risen by more than a certain percentage compared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial position, present orexpected changes in technology, market, economy or legal environment that will have significant adverse impact on the debtor’srepayment ability;
3) Payment (including principal and interest) has been overdue for over 90 days.
(2) Definition of default and credit-impaired asset
A financial asset is credit-impaired when one or more following events have occurred:
1) significant financial difficulty of the debtor;
2) a breach of binding clause of contract;
3) it is very likely that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted to thedebtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default, loss rate of default, and exposure todefault risk. The Company develops a model of the probability of default, loss rate of default, and exposure to default risk on thebasis of quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, payment method,etc.) and forward-looking information.
3. Please refer to section V (I) 3, 5, and 9 for details on the reconciliation table of opening balance and closing balance of provisionfor losses of financial instrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, theCompany has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutions with relatively high credit levels,hence, its credit risk is relatively low.
(2) Receivables
The Company performs credit assessment on customers who uses credit settlement on a regular/continuous basis. The Companyselects credible and well-reputed customers based on credit assessment result, and conducts ongoing monitoring on receivables, toavoid significant risks in bad debts.As the Company’s credit risks fall into several business partners and customers, as of December 31 2019, 14.45% (December 31, 2018:
18.52%) of the total accounts receivable was due from the five largest customers of the Company. The Company has no significantcentral credit risk.The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial asset on the balance sheet.
(II) Liquidity riskLiquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash or otherfinancial assets settlement, which is possibly attributable to failure in selling financial assets at fair value on a timely basis, or failurein collecting liabilities from counterparts of contracts, or early redemption of debts, or failure in achieving estimated cash flows.In order to control such risk, the Company utilized financing tools such as notes settlement, bank borrowings, etc. and adopts longand short financing methods to optimizing financing structures, and finally maintains a balance between financing sustainability andflexibility. The Company has obtained credit limit from several commercial banks to meet working capital requirements andexpenditures.Financial instruments classified based on remaining time period till maturity
Items | Closing balance | ||||
Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
Accounts payable | 69,087,430.42 | 69,087,430.42 | 69,087,430.42 | ||
Other payables | 101,266,802.49 | 101,266,802.49 | 101,266,802.49 | ||
Long-term payables | 3,920,160.36 | 3,920,160.36 | 3,920,160.36 | ||
Subtotal | 174,274,393.27 | 174,274,393.27 | 174,274,393.27 |
(Continued)
Items | Opening balance | ||||
Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
Bank borrowings | 178,225,103.33 | 180,977,669.61 | 180,977,669.61 | ||
Accounts payable | 73,365,876.09 | 73,365,876.09 | 73,365,876.09 | ||
Other payables | 250,198,878.69 | 250,198,878.69 | 250,198,878.69 | ||
Long-term payables | 3,920,160.36 | 3,920,160.36 | 3,920,160.36 | ||
Subtotal | 505,710,018.47 | 508,752,800.53 | 508,752,800.53 |
(III) Market riskMarket risk is the risk that the Company may encounter fluctuation in fair value of financial instruments or futurecash flows due to changes in market price.
1. Interest risk
Interest risk is the risk that an enterprise may encounter fluctuation in fair value of financial instruments or future cash flows due tochanges in market interest. The Company’s fair value interest risks arise from fixed-rate financial instruments, while the cash flowinterest risks arise from floating interest financial instruments. The Company determines the proportion of fixed-rate financialinstruments and floating interest rate financial instruments based on the market environment, and maintains a proper financialinstruments portfolio through regular review and monitoring. The Company’s interest risk relates mainly to bank borrowings withfloating interest rate.As of December 31, 2019, balance of borrowings with interest accrued at floating interest rate totaled 0 yuan (December 31, 2018:
143,000,000.00 yuan). If interest rates had been 50 basis points higher/lower and all other variables were held constant, theCompany’s gross profit and equity will not be significantly affected.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial instrument resulted from changesin exchange rate. The Company’s foreign currency risk relates mainly to foreign currency monetary assets and liabilities.Please refer to section V (IV) 2 of notes to financial statements for details in foreign currency financial assets and liabilities at the endof the period.IX. Fair value disclosure(I) Details of fair value of assets and liabilities at fair value at the balance sheet date
Items | Fair value as of the balance sheet date | |||
Level 1 | Level 2 | Level 3 | Total | |
Recurring fair value measurement | ||||
1. Held-for-trading financial assets and other non-current financial assets | 60,486,575.34 | 60,486,575.34 | ||
(1) Financial assets classified as at fair value through profit or loss | 60,486,575.34 | 60,486,575.34 | ||
2. Other equity instrument investments | 10,176,617.20 | 10,176,617.20 | ||
Total liabilities at non-recurring fair value measurement | 70,663,192.54 | 70,663,192.54 |
(2) Ongoing and non-continuous third-level fair value measurement items, qualitative and quantitativeinformation on valuation techniques and important parameters usedFinancial assets that are classified as measured at fair value and whose changes are included in the current profitand loss are wealth management products. Future cash flows are predicted using expected returns. Unobservableestimates are expected returns.For other equity instrument investments, the operating environment, operating conditions, and financial status ofthe invested company China Pufa Machinery Industry Co., Ltd. have not changed significantly, so the companymeasures the investment cost as a reasonable estimate of fair value.X. Related party relationships and transactions(I) Related party relationships
1. Parent company
Parent company | Place of registration | Business nature | Registered capital | Holding proportion over the Company (%) | Voting right proportion over the Company (%) |
Shenzhen Tefa Group Co., Ltd. | Shenzhen | development and management, domestic commerce | 3,582,820,000.00 | 49.09 | 49.09 |
Remarks on the parent companyShenzhen Tefa Group Co., Ltd. was invested by the State-owned Assets Supervision and Administration Commission of ShenzhenMunicipal People's Government and was established on August 1, 1981. The company now holds a business license with a unifiedsocial credit code of 91440300192194195C and a registered capital of RMB 3,582,820,000.00 yuan.
(2) The Company’s ultimate controlling party is the State-owned Assets Supervision and Administration Commission of Shenzhen
Municipal People's Government.
2. Please refer to section VII of notes to financial statements for details on the Company’s subsidiaries.
3. Joint ventures and associates of the Company
Please refer to section VII of notes to financial statements for details on the Company’s significant joint ventures and associates.Details of other joint ventures or associates carrying out related party transactions with the Company in current period or in precedingperiod but with balance in current period are as follows:
Joint ventures or associates | Relationships with the Company |
Shenzhen Xinyongtong Automobile Development Co., Ltd. | Associated Enterprises |
Shenzhen Xing Long Mechanical Models Co., Ltd. | Associated Enterprises(From January to September 2019) |
Shenzhen Tellus Xinyongtong Automobile Development Co., Ltd. | Associated Enterprises |
Shenzhen Xinyongtong Dongxiao Automobile Parts Sales Co., Ltd. | Associated Enterprises |
Shenzhen Tellus Automobile Services Chain Co., Ltd. | Associated Enterprises |
Shenzhen Yongtong Xinda Inspection Equipment Co.,Ltd. | Associated Enterprises |
Shenzhen Xiandao Chemical Materials Co., Ltd. | Associated Enterprises |
Shenzhen Tellus Xing Investment Co., Ltd. | Joint venture |
4. Other related parties of the Company
(1) Details
Related parties | Relationships with the Company |
Shenzhen Special Microfinance Co., Ltd. | Subject to the same party controls |
Shenzhen Tefa Swan Enterprise Co.,Ltd. | Subject to the same party controls |
Shenzhen Mechanical Equipment Import and Export Co.,Ltd. | Subject to the same party controls |
Shenzhen Tefa Real Estate Co.,Ltd. | Subject to the same party controls |
Hongkong Yujia Investment Co., Ltd. | Subject to the same party controls |
Shenzhen Tefa Engineering Management Co., Ltd. | Subject to the same party controls |
Shenzhen Tellus Yang Chun Real Estate Co.,Ltd.. | Subject to the same party controls |
Shenzhen Tellus Real Estate(Long Gang) Co.,Ltd. | Subject to the same party controls |
Shenzhen Tefa Tellus Property Management Co., Ltd. | Subject to the same party controls |
Shenzhen Tefa Service Co., Ltd. Jewelry Park Branch | Subject to the same party controls |
Starlight Jewellery Co., Ltd. | The shareholder of the subsidiary |
Anhui Jinzun Jewellery Co., Ltd | The shareholder of the subsidiary |
(II) Related party transactions
1. Purchase and sale of goods, rendering and receiving services
(1) Purchase of goods and receiving of services
Related parties | Content of transaction | Current period cumulative | Preceding period comparative |
Shenzhen Special Development Project Management Co., Ltd. | Accept labor | 354,705.66 | 1,488,380.80 |
Shenzhen Tefa Tellus Property Management Co., Ltd. | Accept labor | 13,609,599.18 | 7,511,817.17 |
Shenzhen Tefa Service Co., Ltd. Jewelry Park Branch | Accept labor | 336,006.14 | |
Subotal | 14,300,310.98 | 9,000,197.97 |
(2) Sale of goods and rendering of services
Related parties | Content of transaction | Current period cumulative | Preceding period comparative |
Shenzhen Special Microfinance Co., Ltd. | Providing services | 161,205.24 | 33,801.10 |
Shenzhen Tefa Tellus Property Management Co., Ltd. | Providing services | 4,784.39 | |
Subotal | 165,989.63 | 33,801.10 |
2. Related party leases
The Company as the lessor
Lessees | Types of asset leased | Lease income for current period | Lease income for the preceding period |
Shenzhen Ren Fu-Tellus Automotive Service Co.,Ltd. | Houses leasing | 5,047,619.20 | 5,047,619.20 |
Shenzhen Xinyongtong Automobile Service Co.,Ltd. | Houses leasing | 713,410.48 | 565,588.54 |
Shenzhen Xinyongtong Dongxiao Automobile Service Co., Ltd | Houses leasing | 523,285.74 | 414,857.19 |
Shenzhen Special Microfinance Co., Ltd. | Houses leasing | 1,409,263.84 | 48,997.16 |
Shenzhen Tefa Tellus Property Management Co., Ltd. | Houses leasing | 56,586.66 | 95,633.36 |
Shenzhen Tefa Service Co., Ltd. Jewelry Park Branch | Houses leasing | 1,014,501.78 | |
Total | 8,764,667.70 | 6,172,695.45 |
3. Call loans between related parties
Related parties | Borrowing amount | Repayment / recovery amount | Interest amount | Commencement date | Maturity date | Remarks |
Disassemble |
Starlight Jewellery Co., Ltd. | 15,020,000.00 | 15,020,000.00 | 270,833.34 | 2019-01-08 | 2019-3-31 | |
Anhui Tellus Xingguang Jinzun Jewelry Co., LTD | 4,200,000.00 | 227,534.00 | 2019-01-01 | 2019-7-18 | ||
Starlight Jewellery Co., Ltd. | 882,000.00 | 49,783.26 | 2019-01-01 | 2019-7-18 | ||
Take out | ||||||
Shenzhen Xing Long Mechanical Models Co., Ltd. | 2,385,849.54 | 47,083.32 | 2019-01-01 | 2019-8-13 | ||
Shenzhen Tellus Xing Investment Co., Ltd. | 512,921.04 | 457,796.00 | 2019-01-01 | 2019-12-31 |
4. Key management’s emoluments
Items | Current period cumulative | Preceding period comparative |
Key management’s emoluments | 6,583,600.00 | 6,977,100.00 |
(III) Balance due to or from related parties
1. Balance due from related parties
Items | Related parties | Closing balance | Opening balance | ||
Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
Accounts receivable | Shenzhen Xinyongtong Automobile Service Co., Ltd. | 927,602.00 | 927,602.00 | 927,602.00 | 927,602.00 |
Shenzhen Xinyongtong Dongxiao Automobile Parts Sales Co.,Ltd. | 680,400.00 | 680,400.00 | 680,400.00 | 680,400.00 | |
Shenzhen Special Microfinance Co., Ltd. | 283,583.81 | 2,835.84 | |||
Subtotal | 1,891,585.81 | 1,610,837.84 | 1,608,002.00 | 1,608,002.00 | |
Dividends receivable | Shenzhen Tefa Tellus Property Management Co., Ltd. | 232,683.74 | |||
Subtotal | 232,683.74 | ||||
Other receivables | Shenzhen Tellus Automobile Services Chains Development Co.,Ltd. | 1,359,297.00 | 1,359,297.00 | 1,359,297.00 | 1,359,297.00 |
Items | Related parties | Closing balance | Opening balance | ||
Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
Shenzhen Yongtong Xinda Inspection Equipment Co.,Ltd | 531,882.24 | 531,882.24 | 531,882.24 | 531,882.24 | |
Shenzhen Xiandao New Chemical Materials Co.,Ltd. | 660,790.09 | 660,790.09 | 660,790.09 | 660,790.09 | |
Shenzhen Xing Long Mechanical Models Co.,Ltd. | 2,338,766.22 | 1,074,239.56 | |||
Shenzhen Tellus Xinyongtong Automobile Service Co., Ltd. | 114,776.33 | 114,776.33 | 114,776.33 | 114,776.33 | |
Shenzhen Tellus Xing Investment Co., Ltd. | 55,125.04 | 551.25 | |||
Subtotal | 2,721,870.70 | 2,667,296.91 | 5,005,511.88 | 3,740,985.22 | |
Long-term receivables | Shenzhen Tellus Automobile Services Chain Co., Ltd. | 2,179,203.68 | 2,179,203.68 | 2,179,203.68 | 2,179,203.68 |
Subtotal | 2,179,203.68 | 2,179,203.68 | 2,179,203.68 | 2,179,203.68 |
2. Balance due to related parties
Items | Related parties | Closing balance | Opening balance |
Accounts payable | Shenzhen Tefa Real Estate Co., Ltd. | 6,054,855.46 | 6,054,855.46 |
Shenzhen Mechanical Equipment Import and Export Co.,Ltd. | 45,300.00 | 45,300.00 | |
Shenzhen Tellus Jimeng investment Co.,Ltd. | 200,000.00 | 200,000.00 | |
Shenzhen Tefa Service Co., Ltd. Jewelry Park Branch | 42,205.66 | ||
Shenzhen Tefa Service Co., Ltd. Jewelry Park Branch | 36,103.11 | ||
Subtotal | 6,378,464.23 | 6,300,155.46 | |
Other payables | Shenzhen Tefa Real Estate Co., Ltd. | 335,701.34 | |
Hongkong Yujia Investment Co., Ltd. | 2,172,091.54 | 2,116,056.82 | |
Shenzhen Tefa Swan Enterprise | 20,703.25 | 20,703.25 |
Items | Related parties | Closing balance | Opening balance |
Co.,Ltd. | |||
Shenzhen Mechanical Equipment Import and Export Co.,Ltd. | 1,554,196.80 | 1,554,196.80 | |
Shenzhen Tefa Group Co.,Ltd. | 20,378,046.74 | 23,079,380.77 | |
Shenzhen Tellus Real Estate(Long Gang) Co.,Ltd. | 1,095,742.50 | 1,095,742.50 | |
Shenzhen Tellus Yang Chun Real Estate Co.,Ltd. | 476,217.49 | 476,217.49 | |
Shenzhen Tellus Xing Investment Co.,Ltd. | 192,129.00 | ||
Shenzhen Yongtong Xinda Inspection Equipment Co.,Ltd. | 29,940.00 | 28,340.00 | |
Anhui Jinzun Jewellery Co., Ltd. | 1,330,000.00 | 5,530,000.00 | |
Shenzhen Tefa Tellus Property Management Co., Ltd. | 192,227.98 | 1,763,953.00 | |
Shenzhen Ren Fu-Tellus Automotive Service Co.,Ltd | 833,334.00 | 833,334.00 | |
Shenzhen Special Microfinance Co., Ltd. | 227,836.80 | 227,836.80 | |
Subtotal | 28,310,337.10 | 37,253,591.77 |
XI. Commitments and contingencies(II) Contingencies
1. Contingent liabilities incurred by pending lawsuit/arbitration and the financial effect
(1) In October of 2005, a lawsuit was brought before Shenzhen Luo Hu District People‘s Court by the Company, which was therecognizor of Jintian Industrial (Group) Co., Ltd. (―Jintian‖) to require Jintian to redress RMB 4,081,830 (principal: RMB3,000,000, interest: RMB 1,051,380, legal fare: RMB 25,160 and executive fare: RMB 5,290, which were all dealt as a loss in lastreport term.) It was the amount money that was distrained forcibly. The Fu Tian District People‘s Court had adjudged that theCompany won the lawsuit and the forcible execution had been applied by the Company. The company has not yet received themoney at the date of the approval of the financial report.In April 2006 Shenzhen Development Bank brought an accusation against Jintian‘s overdueing loan two million U.S. dollars and thecompany who guaranteed for this case. The company took on the principal and all interest. After that, the company appealed toShenzhen Luohu District People's Court, asking Jintian to repay 2,960,490 U.S. dollars and interest. In 2008, it reached Shen LuoNo.937 Civil Reconciliation Agreement (2008) after the mediating action taken by the Shenzhen Luohu District People's Court. Theagreement is as follows: If Jintian repay 2,960,490 U.S. dollars before October 31, 2008, the company will exempt all the interest. IfJintian can not settle the amount on time, it will pay the penalty in accordance with the People's Bank of China RMB benchmarklending rate over the same period. The company has made a progress in the property execution. The attorney from the company isconsulting Jintian about the liquidation scheme. Jintian is in the process of bankruptcy reorganization.On January 29th 2018, Shenzhen Intermediate People's Court has ruled that process of bankruptcy reorganization was completed.
Further distribution of money is still in progress. The company has not yet received the money from Jintian at the date of theapproval of the financial report.The company failed to communicate with Jintian for many times about the cash and equity allocated to us after the bankruptcy andreorganization of Jintian Company, the company filed a lawsuit in the People's Court of Qianhai Cooperation Zone on August 15,2018, requesting the court to order Jintian Company and its shareholders to pay 325,000 yuan in cash to our company and 427,604shares in A shares and 163,886 shares in B shares in Jintian Company. The case has been filed but has not yet opened a court session.
(2) In 2014, the subsidiary, Shenzhen Automobile Industry and Trading Co., Ltd.,(bellow short for Automobile Industry and Trading)received the court summons from Shenzhen Futian District People‘s Court. China Huarong Asset Management CorporationShenzhen Branch (bellow short for CHAMC) sued Automobile Industry and Trading to take joint liability due to the claims anddisputes of Shenzhen Guangming Watch Co., Ltd. and its creditor. Automobile Industry and Trading needs to pay the principal of thedebt of 350,000.00 yuan and the debt interest during the delayed performance period of 946,697.54 yuan. Automobile Industry andTrading calculates the estimated principal loss of 2,225,468.76 for the outstanding principal and corresponding interest based on thebank's borrowing rate for the same period.XII. Events after the balance sheet date(I) Profit distribution after the balance sheet date
Profit or dividend planned to be distributed | According to the 2019 profit distribution plan reviewed and approved by the company’s the 6th meeting of the 9th session of the Board of Directors dated 2 April 2020, the proposal of the Company for 2019 annual profit distribution is as follows: Based on the total 431,058,320 shares of the Company as at 31 December 2019, a cash dividend of RMB 0.42 (tax included) will be distributed to all its shareholders for every 10 shares they hold, with the total cash dividends to be distributed amounting to RMB 18,104,449.44. And the retained profits will be carried over for distribution in the future. The company does not send bonus sharesfor 2019 .No capital reserves will be turned into share capital for 2019. The above profit distribution plan is yet to be reviewed and approved by the company's shareholders meeting. |
(II) Other remarks
1.Impact of the COVID-19
The pneumonia outbreak of new coronavirus infection (hereinafter referred to as COVID-19) broke out in January 2020 across thecountry. To prevent and control the new crown epidemic, governments across the country have introduced the COVID-19 preventionand control measures. The COVID-19 situation and corresponding prevention and control measures have affected the company'snormal production and operation to a certain extent. The specific situation is as follows:
Specific conditions affected | Impact on financial position and operating results |
The Shenzhen Municipal Party Committee and Municipal Government issued "Several Measures to Support Enterprises in Overcoming Difficulties in the Response to Pneumonia of New Coronavirus Infection in Shenzhen City" on | It is estimated that the total rent reduction and exemption in the first quarter of 2020 will not exceed 25 million yuan (excluding tax). |
The company will continue to pay close attention to the development of the COVID-19 and actively respond to its adverse impact onthe company's financial position and operating results.XIII. Other significant events(I) Segment information
1. Identification basis for reportable segments
Reportable segments are identified based on operating segments which are determined based on the structure of the Company’sinternal organization, management requirements and internal reporting system.The Company identified reportable segments based on industry. Assets and liabilities shared by different segments are allocatedbetween segments proportionate to their respective size.The Company identified reportable segments based on geographic information, revenue from main operations and costs of mainoperations are allocated between segments based on locations where sales realized, and assets and liabilities are allocated based onlocations of operating entities.
2. Financial information of reportable segments
Industry segment
February 7. The company actively responded to the call of the ShenzhenMunicipal Party Committee and Municipal Government and the State-ownedAssets Supervision and Administration Commission and formulated supportmeasures such as exemption of some property rents.Exemption period: 2 months, that is, from February 1, 2020 to March 31,2020 (the rent-free period of some podium merchants in the first phase ofShuibei Jewellery Building is from January 16, 2020 to March 31 2020).
Items
Items | Car sales | Vehicle inspection &Components sales | Leasing and | Jewelry sales | Inter-segment offsetting | Total |
Revenue from main operations | 168,551,160.58 | 80,752,870.79 | 153,578,411.65 | 193,383,760.50 | -34,317,906.80 | 561,948,296.72 |
Cost of main operations | 156,655,616.45 | 73,650,149.73 | 50,961,694.31 | 181,699,948.40 | -34,170,478.23 | 428,796,930.66 |
Total assets | 41,165,079.11 | 101,356,707.29 | 2,664,709,204.95 | 10,222,033.78 | -1,171,670,881.10 | 1,645,782,144.03 |
Total liabilities | 47,044,903.59 | 67,300,035.81 | 618,040,346.50 | 2,388,222.29 | -428,204,360.95 | 306,569,147.24 |
XV. Notes to items of parent company financial statements(I) Notes to items of parent company balance sheet
1. Accounts receivable
(1) Details
1) Details on categories
Categories | Closing balance | ||
Book balance | Provision for bad debts | Carrying amount |
Amount | % to total | Amount | Provision proportion (%) | ||
Receivables with provision made on an individual basis | 484,803.08 | 69.90 | 484,803.08 | 100.00 | |
Receivables with provision made on a collective basis | 208,798.75 | 30.10 | 2,087.99 | 1.00 | 206,710.76 |
Total | 693,601.83 | 100.00 | 486,891.07 | 70.20 | 206,710.76 |
(Continued)
Categories | Opening balance | ||||
Book balance | Provision for bad debts | Carrying amount | |||
Amount | % to total | Amount | Provision proportion (%) | ||
Receivables with provision made on an individual basis | 484,803.08 | 92.68 | 484,803.08 | 100.00 | |
Receivables with provision made on a collective basis | 38,274.00 | 7.32 | 38,274.00 | ||
Total | 523,077.08 | 100.00 | 484,803.08 | 92.68 | 38,274.00 |
2) Accounts receivable with provision made on an individual basis
Debtors | Book balance | Provision for bad debts | Provision proportion (%) | Reasons for provision made |
Shenzhen Bijiashan Entertainment Company | 172,000.00 | 172,000.00 | 100.00 | Long aging and expected to be uncollectible |
Yanqing Gong | 97,806.64 | 97,806.64 | 100.00 | Long aging and expected to be uncollectible |
Guangzhou Lemin Computer Center | 86,940.00 | 86,940.00 | 100.00 | Long aging and expected to be uncollectible |
Others | 128,056.44 | 128,056.44 | 100.00 | Long aging and expected to be uncollectible |
Subtotal | 484,803.08 | 484,803.08 | 100.00 |
3) Accounts receivable with provision for bad debts made on a collective basis
Items | Closing balance | ||
Book balance | Provision for bad debts | Provision proportion (%) | |
Ages | 208,798.75 | 2,087.99 | 1.00 |
Subtotal | 208,798.75 | 2,087.99 | 1.00 |
(2) Age analysis
Ages | Book balance |
Within 1 year | 208,798.75 |
Over 3 years | 484,803.08 |
Total | 693,601.83 |
(3) Changes in provision for bad debts
Items | Opening balance | Increase | Decrease | Closing balance | ||||
Accrual | Recovery | Others | Reversal | Written off | Others | |||
Receivables with provision made on an individual basis | 484,803.08 | 484,803.08 | ||||||
Receivables with provision made on a collective basis | 2,087.99 | 2,087.99 | ||||||
Subtotal | 484,803.08 | 2,087.99 | 486,891.07 |
(4) Details of the top 5 debtors with largest balances
Debtors | Book balance | Proportion to the total balance of accounts receivable (%) | Provision for bad debts |
Shenzhen Bijiashan Entertainment Company | 172,000.00 | 24.80 | 172,000.00 |
Shenzhen Jincheng Yinyu Jewelry Co., Ltd. | 103,272.00 | 14.89 | 1,032.72 |
Yanqing Gong | 97,806.64 | 14.10 | 97,806.64 |
Guangzhou Lemin Computer Center | 86,940.00 | 12.53 | 86,940.00 |
Lanzhou Dachuan Electronics Co., Ltd. | 37,308.00 | 5.38 | 37,308.00 |
Subtotal | 497,326.64 | 71.70 | 395,087.36 |
2. Other receivables
(1) Details
1) Details on categories
Categories | Closing balance | ||||
Book balance | Provision for bad debts | Carrying amount | |||
Amount | % to total | Amount | Provision proportion (%) | ||
Receivables with provision made on an individual basis | 14,125,653.26 | 10.84 | 14,125,653.26 | 100.00 | |
Including: Interest receivable | |||||
Dividend receivable | |||||
Other receivables | 14,125,653.26 | 10.84 | 14,125,653.26 | 100.00 |
Categories | Closing balance | ||||
Book balance | Provision for bad debts | Carrying amount | |||
Amount | % to total | Amount | Provision proportion (%) | ||
Receivables with provision made on a collective basis | 116,143,516.00 | 89.16 | 105,742.91 | 0.09 | 116,037,773.09 |
Including: Interest receivable | |||||
Dividend receivable | 547,184.35 | 0.42 | 547,184.35 | ||
Other receivables | 115,596,331.65 | 88.74 | 105,742.91 | 0.09 | 115,490,588.74 |
Total | 130,269,169.26 | 100.00 | 14,231,396.17 | 10.92 | 116,037,773.09 |
(Continued)
Categories | Opening balance | ||||
Book balance | Provision for bad debts | Carrying amount | |||
Amount | % to total | Amount | Provision proportion (%) | ||
Receivables with provision made on an individual basis | 14,112,525.77 | 10.83 | 14,112,525.77 | 100.00 | |
Including: Interest receivable | |||||
Dividend receivable | |||||
Other receivables | 14,112,525.77 | 10.83 | 14,112,525.77 | 100.00 | |
Receivables with provision made on a collective basis | 116,238,365.50 | 89.17 | 1,178,828.63 | 1.01 | 115,059,536.87 |
Including: Interest receivable | |||||
Dividend receivable | 232,683.74 | 0.18 | 232,683.74 | ||
Other receivables | 116,005,681.76 | 88.99 | 1,178,828.63 | 1.02 | 114,826,853.13 |
Total | 130,350,891.27 | 100.00 | 15,291,354.40 | 11.67 | 115,059,536.87 |
2) Other receivables with provision made on an individual basis
Debtors | Book balance | Provision for bad debts | Provision proportion (%) | Reasons for provision made |
Shenzhen ZhongHao (Group) Co.,Ltd. | 5,000,000.00 | 5,000,000.00 | 100.00 | Won the lawsuit, no assets recoverable |
Jinbeili electrical appliances Co.,Ltd. | 2,706,983.51 | 2,706,983.51 | 100.00 | Aging long, not expected to withdraw |
Shenzhen Petrochemical Industry (Group) Co., Ltd. | 1,920,153.29 | 1,920,153.29 | 100.00 | Aging long, not expected to withdraw |
Huatong casing Co.,Ltd. | 1,212,373.79 | 1,212,373.79 | 100.00 | Aging long, not expected to withdraw |
Shenzhen Pilot New Chemical Materials Co.,Ltd. | 660,790.09 | 660,790.09 | 100.00 | Aging long, not expected to withdraw |
Debtors | Book balance | Provision for bad debts | Provision proportion (%) | Reasons for provision made |
Others | 2,625,352.58 | 2,625,352.58 | 100.00 | |
Subtotal | 14,125,653.26 | 14,125,653.26 | 100.00 |
3) Other receivables with provision made on a collective basis
Portfolios | Closing balance | ||
Book balance | Provision for bad debts | Provision proportion (%) | |
Portfolio grouped with dividend receivables | 547,184.35 | ||
Portfolio grouped with related transactions within consolidation scope | 115,271,769.06 | ||
Portfolio grouped with ages | 324,562.59 | 105,742.91 | 32.58 |
Subtotal | 116,143,516.00 | 105,742.91 | 0.09 |
(2) Ages
Items | Closing carrying amount |
Within 1 year | 115,934,337.87 |
Over 3 years | 14,334,831.39 |
Subtotal | 130,269,169.26 |
(3) Changes in provision for bad debts
Items | Phase I | Phase II | Phase III | Total |
12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
Opening balance | 1,178,828.63 | 14,112,525.77 | 15,291,354.40 | |
Opening balance in current period | 1,178,828.63 | 14,112,525.77 | 15,291,354.40 | |
--Transferred to phase II | ||||
--Transferred to phase III | ||||
--Reversed to phase II | ||||
--Reversed to phase I | ||||
Provision made in current period | -1,073,085.72 | 13,127.49 | -1,059,958.23 | |
Provision recovered in current period | ||||
Provision reversed in current period | ||||
Provision written-off in current period | ||||
Other changes |
Items | Phase I | Phase II | Phase III | Total |
12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
Closing balance | 105,742.91 | 14,125,653.26 | 14,231,396.17 |
(4) Other receivables categorized by nature
Nature of receivables | Closing balance | Opening balance |
Dividend receivable | 547,184.35 | 232,683.74 |
Deposit as security | 115,271,769.06 | 113,272,049.06 |
Call loans | 43,346.12 | 57,346.12 |
Temporary advance payment receivable | 14,406,869.73 | 16,788,812.35 |
Total | 130,269,169.26 | 130,350,891.27 |
(5) Details on dividend receivable
Items | Closing balance | Opening balance |
China Pufa Machinery Industrial Co., Ltd | 547,184.35 | |
Shenzhen Tefa Tellus Property Management Co., Ltd. | 232,683.74 | |
Total | 547,184.35 | 232,683.74 |
(6) Details of the top 5 debtors with largest balances
Debtors | Nature of receivables | Book balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts |
Shenzhen Zhongtian Industrial Co.,Ltd. | account | 115,223,773.26 | Within 1 year | 88.82 | |
Shenzhen ZhongHao (Group) Co.,Ltd. | account | 5,000,000.00 | Over 3 years | 3.85 | 5,000,000.00 |
Jinbeili Electrical Appliances Co.,Ltd. | account | 2,706,983.51 | Over 3 years | 2.09 | 2,706,983.51 |
Shenzhen Petrochemical Industry (Group) Co., Ltd. | account | 1,920,153.29 | Over 3 years | 1.48 | 1,920,153.29 |
Huatong Casing Co.,Ltd. | account | 1,212,373.79 | Over 3 years | 0.93 | 1,212,373.79 |
Subtotal | 126,063,283.85 | 97.17 | 10,839,510.59 |
3. Long-term equity investments
(1) Categories
Items | Closing balance | Opening balance | ||||
Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount |
Items | Closing balance | Opening balance | ||||
Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
Investments in subsidiaries | 745,996,472.73 | 1,956,000.00 | 744,040,472.73 | 724,743,472.73 | 1,956,000.00 | 722,787,472.73 |
Investments in associates and joint ventures | 125,101,730.19 | 9,787,162.32 | 115,314,567.87 | 123,283,180.97 | 9,787,162.32 | 113,496,018.65 |
Total | 871,098,202.92 | 11,743,162.32 | 859,355,040.60 | 848,026,653.70 | 11,743,162.32 | 836,283,491.38 |
(2) Investments in subsidiaries
Investees | Opening balance | Increase | Decrease | Closing balance | Provision for impairment made in current period | Closing balance of provision for impairment |
Shenzhen Tefa Tellus Real Estate Co., Ltd. | 31,152,888.87 | 31,152,888.87 | ||||
Shenzhen Tellus chuangying Co., Ltd. | 2,000,000.00 | 12,000,000.00 | 14,000,000.00 | |||
Shenzhen Tellus Xinyongtong Automobile Development Co., Ltd. | 57,672,885.22 | 57,672,885.22 | ||||
Shenzhen Zhongtian Industrial Co., Ltd | 369,680,522.90 | 369,680,522.90 | ||||
Shenzhen Automobile Industry and Trading Co., Ltd. | 126,251,071.57 | 126,251,071.57 | ||||
Shenzhen Tefa Huari Automobile Enterprise Co., Ltd. | 19,224,692.65 | 19,224,692.65 | ||||
Shenzhen Huari Toyota Automobile Co., Ltd. | 1,807,411.52 | 1,807,411.52 | ||||
Shenzhen Xinyongtong Automobile Inspection Equipment Co., Ltd. | 10,000,000.00 | 10,000,000.00 | ||||
Anhui Tellus Star Jewelry Investment Co., Ltd | 4,998,000.00 | 4,998,000.00 | ||||
SichuanTellus Jewelry Technology co., Ltd | 100,000,000.00 | 100,000,000.00 | ||||
9,253,000.00 | 9,253,000.00 | |||||
Shenzhen Hanli Hi-technology Ceramics Co., Ltd. | 1,956,000.00 | |||||
Subtotal | 722,787,472.73 | 21,253,000.00 | 744,040,472.73 | 1,956,000.00 |
(3) Investments in associates and joint ventures
Investees | Opening balance | Increase/Decrease | |||
Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | ||
Joint ventures | |||||
Shenzhen Tellus Jimeng | 62,039,013.62 | 8,116,369.88 |
Investees | Opening balance | Increase/Decrease | |||
Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | ||
Investment Co., Ltd. | |||||
Shenzhen Tellus Xing Investment Co.,Ltd. | 11,253,581.63 | 591,870.54 | |||
Subtotal | 73,292,595.25 | 8,708,240.42 | |||
Associates | |||||
Shenzhen Ren Fu-Tellus Automotive Service Co.,Ltd. | 40,203,423.40 | 10,610,308.80 | |||
Hunan Changyang Industrial Co.,Ltd. | |||||
Shenzhen Jiecheng Electronic Co.,Ltd. | |||||
Shenzhen Pilot New Chemical Materials Co.,Ltd. | |||||
Subtotal | 40,203,423.40 | 10,610,308.80 | |||
Total | 113,496,018.65 | 19,318,549.22 |
(Continued)
Investees | Increase/Decrease | Closing balance | Closing balance of provision for impairment | |||
Changes in other equity | Cash dividend/profit declared for distribution | Provision for impairment | Others | |||
Joint ventures | ||||||
Shenzhen Tellus Jimeng Investment Co.,Ltd. | 70,155,383.50 | |||||
Shenzhen Tellus Xing Investment Co.,Ltd. | 11,845,452.17 | |||||
Subtotal | 82,000,835.67 | |||||
Associates | ||||||
Shenzhen Ren Fu-Tellus Automotive Service Co.,Ltd. | 17,500,000.00 | 33,313,732.20 | ||||
Hunan Changyang Industrial Co.,Ltd. | 1,810,540.70 | |||||
Shenzhen Jiecheng | 3,225,000.00 |
Investees | Increase/Decrease | Closing balance | Closing balance of provision for impairment | |||
Changes in other equity | Cash dividend/profit declared for distribution | Provision for impairment | Others | |||
Electronic Co.,Ltd. | ||||||
Shenzhen Pilot New Chemical Materials Co.,Ltd. | 4,751,621.62 | |||||
Subtotal | 17,500,000.00 | 33,313,732.20 | 9,787,162.32 | |||
Total | 17,500,000.00 | 115,314,567.87 | 9,787,162.32 |
(II) Notes to items of the parent company income statement
1. Operating revenue/cost
Items | Current period cumulative | Preceding period comparative | ||
Revenue | Cost | Revenue | Cost | |
Main operations | 38,042,399.39 | 3,772,642.43 | 42,607,127.11 | 12,747,839.01 |
Total | 38,042,399.39 | 3,772,642.43 | 42,607,127.11 | 12,747,839.01 |
2. Investment income
Items | Current period cumulative | Preceding period comparative |
Investment income from long-term equity investments under equity method | 19,318,549.22 | 14,998,084.49 |
Gains on disposal of long-term equity investments | 210,680,848.23 | -5,733,400.00 |
Investment income from financial instruments | 6,004,427.88 | |
Including: Financial assets classified as at fair value through profit or loss | 6,004,427.88 | |
Other equity instrument investments | 547,184.35 | |
Investment income from available-for-sale financial assets | 7,033,703.51 | |
Total | 236,551,009.68 | 16,298,388.00 |
XVI. Other supplementary information(I) Non-recurring profit or loss
1. Schedule of non-recurring profit or loss of current period
(1) Details
Items | Amount | Remarks |
Items | Amount | Remarks |
Gains on disposal of non-current assets, including written-off of provision for impairment | 210,897,055.76 | |
Tax refund, credit or exemption approved beyond the power of authorities, without formal documents, or with occasionality | ||
Government grant included in profit or loss (excluding those closely related to operating activities, or regular government grants) | 276,907.09 | |
Fund possession charge from non-financial entities and included in profit or loss | 47,083.32 | |
Gains on acquisition of subsidiaries, joint ventures and associates due to the surplus of acquisition-date fair value of net identifiable assets in acquiree over the acquisition cost | ||
Gains on non-cash assets exchange | ||
Gains on assets consigned to the third party for investment or management | ||
Assets impairment loss incurred due to force majeure such as natural disasters | ||
Gains on debt restructuring | ||
Entity restructuring expenses, such as staffing and integrating expenses | ||
Gains on transactions with unfair value | ||
Net profit gains on subsidiaries acquired through business combination under common control from the beginning of the period to the combination date | ||
Contingent gains on non-operating activities | ||
Gains on changes in fair value of held-for-trading financial assets and liabilities and investment income from disposal of held-for-trading financial assets and liabilities, and available-for-sale financial assets, excluding those arising from hedging business related to operating activities | 10,684,691.16 | |
The reversed provision for impairment of receivables based on impairment testing on an individual basis | 935,476.72 | |
Gains on designated loans | ||
Gains on changes in fair value of investment properties with subsequent measurement at the fair value mode | ||
Gains on reconciliation of current period profit or loss following legal and regulative requirements | ||
Management charges for consigned operations | ||
Other non-operating revenue or expenditures | -744,465.10 | |
Other profit or loss satisfying the definition of non-recurring profit or loss | 9,378.94 | |
Subtotal | 222,106,127.89 | |
Less: enterprise income tax affected | 55,755,620.55 | |
Non-controlling interest affected (after tax) | 419,305.92 | |
Net non-recurring profit or loss attributable to shareholders of the parent company | 165,931,201.42 |
(2) Significant non-recurring profit or loss
Gains on disposal of long-term equity investments 210,680,848.23yuan. Refer to section V (II) 7 for the details.
(II) RONA and EPS
1. Details
Profit of the reporting period | Weighted average RONA (%) | EPS (yuan/share) | |
Basic EPS | Diluted EPS | ||
Net profit attributable to shareholders of ordinary shares | 18.92 | 0.51 | 0.51 |
Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | 4.63 | 0.12 | 0.12 |
2. Calculation process of weighted average RONA
Items | Symbols | Current period cumulative | |
Net profit attributable to shareholders of ordinary shares | A | 219,669,708.47 | |
Non-recurring profit or loss | B | 165,931,201.42 | |
Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | C=A-B | 53,738,507.05 | |
Opening balance of net assets attributable to shareholders of ordinary shares | D | 1,051,295,587.55 | |
Net assets attributable to shareholders of ordinary shares increased due to offering of new shares or conversion of debts into shares | E | ||
Number of months counting from the next month when the net assets were increased to the end of the reporting period | F | ||
Net assets attributable to shareholders of ordinary shares decreased due to share repurchase or cash dividends appropriation | G | ||
Number of months counting from the next month when the net assets were decreased to the end of the reporting period | H | ||
Others | [specify it] | I1 | |
Number of months counting from the next month when other net assets were increased or decreased to the end of the reporting period | J1 | ||
[specify it] | I2 | ||
Number of months counting from the next month when other net assets were increased or decreased to the end of the reporting period | J2 | ||
Number of months in the reporting period | K | ||
Weighted average net assets | L= D+A×1/2+ E×F/K-G×H/K±I×J/K | 1,161,130,441.79 | |
Weighted average RONA | M=A/L | 18.92% | |
Weighted average RONA after deducting non-recurring profit or loss | N=C/L | 4.63% |
3. Calculation process of basic EPS and diluted EPS
(1) Calculation process of basic EPS
Items | Symbols | Current period cumulative |
Net profit attributable to shareholders of ordinary shares | A | 219,669,708.47 |
Items | Symbols | Current period cumulative |
Non-recurring profit or loss | B | 165,931,201.42 |
Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | C=A-B | 53,738,507.05 |
Opening balance of total shares | D | 297,281,600.00 |
Number of shares increased due to conversion of reserve to share capital or share dividend appropriation | E | 133,776,720.00 |
Number of shares increased due to offering of new shares or conversion of debts into shares | F | |
Number of months counting from the next month when the share was increased to the end of the reporting period | G | |
Number of shares decreased due to share repurchase | H | |
Number of months counting from the next month when the share was decreased to the end of the reporting period | I | |
Number of shares decreased in the reporting period | J | |
Number of months in the reporting period | K | |
Weighted average of outstanding ordinary shares | L=D+E+F×G/K-H×I/K-J | 431,058,320.00 |
Basic EPS | M=A/L | 0.51 |
Basic EPS after deducting non-recurring profit or loss | N=C/L | 0.12 |
(2) Calculation process of diluted EPS
Calculation process of diluted EPS is the same as Calculation process of basic EPS.
Section XIII. Documents Available for ReferenceThe Company reserved completed integrated documents for CSRC, SZSE, relevant departments and publicinvestor for reference, including:
1. Original Accounting Statement of 2019 carrying the signatures and seals of the legal representative, CFO andmanager of Financial Department;
2. Original Auditors’ Report (Chinese and English Version) carrying the seals of accounting firms, and signaturesand seals of the CPA;
3. All original documents and notifications of the Company disclosed in newspapers that designated by CSRC inreport period;
4. Annual report disclosed in other securities market (Summary).