Shenzhen Tellus Holding Co., Ltd.
2022 Annual Report
April 2023
2022 Annual Report
Section I Important Notice, Contents and DefinitionThe Board of Directors and Board of Supervisors, as well as directors,supervisors and senior executives of the Company guarantee that the presentannual report is true, accurate and complete without false record, misleadingstatement or major omission, and undertake the joint and several legalliabilities arising therefrom.
Fu Chunlong, head of the Company, Lou Hong, person in charge ofaccounting, and Yu Taiping, person in charge of accounting firm (accountantin charge) declare to guarantee the truthfulness, accuracy and completeness ofthe financial report in this annual report.
All directors of the Company have attended the board meeting to reviewthe report.
The forward-looking statements such as plans for the future anddevelopment strategies involved in this annual report do not constitute asubstantial commitment of the Company to investors. Investors andstakeholders shall be aware of risks therein and understand the differencesamong plans, forecasts and commitments. Investors shall pay attention toinvestment risks.
The Company's profit distribution plan adopted by the Board of Directors
is: based on the total share capital of 431,058,320 as of December 31, 2022, theCompany plans to pay RMB 0.28 (tax inclusive) in cash as dividends for every10 shares to the Company’s all shareholders, send 0 bonus (tax inclusive) andcapital reserve will not be transferred to equity.
Contents
Section I Important Notice, Contents and Definition ...... 2
Section II Company Profile and Major Financial Indicators ...... 3
Section III Management Discussion and Analysis ...... 8
Section IV Corporate Governance ...... 38
Section V Environmental and Social Responsibility ...... 58
Section VI Important Matters ...... 60
Section VII Changes in Shares and Shareholders ...... 75
Section VIII Preferred Shares ...... 82
Section IX Bonds ...... 83
Section X Financial Report ...... 84
Documents for Inspection
(I) Financial statements signed and sealed by the head of the Company, person in charge of accounting andperson in charge of accounting firm (accountant in charge).(II) The original copy of Auditor’s Report sealed by accounting firm and sealed and signed by certified publicaccountants.(III) Originals of all company documents and announcements that have been publicly disclosed during thereporting period.
Interpretations
Term
| Term | refers to | Interpretation |
| CSRC | refers to | China Securities Regulatory Commission |
| SZSE | refers to | Shenzhen Stock Exchange |
CSDC Shenzhen Branch refers to
Depository and Clearing Corporation Limited
| Shenzhen Branch of China Securities | ||
| Company, the Company and Tellus |
Holding
refer to Shenzhen Tellus Holding Co., Ltd.
period and the year
refer to Year 2022Shenzhen SASAC refers to
| Reporting period, the reporting | ||
| State-owned Assets Supervision and |
Management Commission of ShenzhenMunicipal People's Government
shareholder
refer to
| SDG, SDG Group and controlling | Shenzhen Special Economic Zone |
Development Group Co., Ltd.
| SIHC | refers to | Shenzhen Investment Holdings Co., Ltd. |
| Shenzhen Jewelry Company | refers to | Shenzhen Jewelry Industry Service Co., Ltd. |
| Guorun and Guorun Gold | refer to | Guorun Gold Shenzhen Co., Ltd. |
| Treasury Supply Chain Company and |
Tellus Treasury
refer to
Co., Ltd.
| Shenzhen Tellus Treasury Supply Chain Tech | ||
| Shanghai Fanyue and Fanyue | refer to | Shanghai Fanyue Diamond Co., Ltd. |
| Zhongtian Company | refers to | Shenzhen Zhongtian Industry Co., Ltd. |
| Automobile Industry and Trade |
Company
refers to
Co., Ltd.SDG Huari refers to
| Shenzhen Automobile Industry and Trade |
| Shenzhen SDG Huari Automobile Enterprise |
Co., Ltd.Huari Toyota refers to
Ltd.Renfu Tellus refers to
| Shenzhen Huari Toyota Sales & Service Co., |
| Shenzhen Renfu Tellus Automobiles Service |
Co., Ltd.
| Sichuan Company | refers to | Sichuan Tellus Jewelry Technology Co., Ltd. |
| GAC | refers to | Gems |
＆
| Jewelry Trade Association of China | ||
| Tellus Jewelry Building, Jewelry |
Building
refer to Tellus Shui Bei Jewelry Building
Building
refer to Tellus Jinzuan Trading Building
Section II Company Profile and Major Financial Indicators
I. Company InformationStock abbreviationTellus A and Tellus BStock code000025 and 200025Stock abbreviation before change(if any)
N/AStock exchange on which theshares are listed
Shenzhen Stock ExchangeChinese name of the Company Shenzhen Tellus Holding Co., Ltd.Chinese abbreviation Tellus AEnglish name of the Company (ifany)
ShenZhen Tellus Holding Co., Ltd.English abbreviation (if any) N/ALegal representative of theCompany
Fu ChunlongRegistered address 3F, Tellus Building, No. 56, 2nd Shuibei Road, Luohu District, ShenzhenPostal code of the registeredaddress
518020Office address3F and 4F, Tellus Building, No. 56, 2nd Shuibei Road, Luohu District, ShenzhenPostal code of the office address 518020Website of the Companywww.tellus.cnE-mail ir@tellus.cnII. Contact Person and Contact Information
Secretary of the Board of Directors Securities RepresentativeName Qi Peng Liu MengleiAddress
3F, Tellus Building, No. 56, 2nd ShuibeiRoad, Luohu District, Shenzhen
| 3F, Tellus Building, No. 56, 2nd Shuibei Road, Luohu District, Shenzhen | 3F, Tellus Building, No. 56, 2nd Shuibei Road, Luohu District, Shenzhen |
Tel.（0755）83989390 （0755）88394183Fax （0755）83989386 （0755）83989386E-mailir@tellus.cn liuml@tellus.cn
III. Information Disclosure and Designated Location
Website designated by the Stock Exchange for publishing theannual report
Shenzhen Stock Exchange (www.szse.cn)Newspapers selected by the Company for informationdisclosure
Securities Times and CNINFO (www.cninfo.com.cn)Place for inspection of annual reports of the Company
Secretariat of the Board of Directors of Shenzhen Tellus
IV. Changes of Registration
Unified social credit code 91440300192192210UChange of main businessafter listing (if any)
No change during the reporting period.
Previous changes ofcontrolling shareholder (ifany)
1. On March 31, 1997, the former Shenzhen Investment Management Co., Ltd., the sole non-
tradable shareholder of the Company, transferred 159.588 million state shares held by it to ShenzhenSpecial Economic Zone Development Group Co., Ltd. (“SDG”). Then, 159.588 million shares wereheld by the SDG Group, accounting for 72.45% of the total share capital (namely, 220.2816 millionshares), and these shares were state shares.
2. Later, as the controlling shareholder of the Company, after a split-share structure reform, the
Company's non-public offering of A-shares, and the reduction of some of the Company's tradableshares without trading restrictions, a total of 211,591,621 shares of the Company were held by theSDG Group by the end of the reporting period, accounting for 49.09% of the Company's total sharecapital; among them, 204,798,621 shares held by the SDG Group were voting shares, accounting for
47.51% of the Company's total share capital, and 6,793,000 shares held by the SDG Group were in
the state of refinancing and lending, accounting for 1.58% of the Company's total share capital. TheSDG Group was the controlling shareholder of the Company.
3. On December 28, 2022, by signing the Voting Rights Entrustment Agreement with its wholly-
owned subsidiary Shenzhen Investment Holdings Co., Ltd. ("SIHC"), Shenzhen SASAC entrusted
38.97% of the shareholders' voting rights of the SDG Group held by it to SIHC, so that SIHC
indirectly owned the Company's rights and interests through the SDG Group. The implementation ofthe Voting Rights Entrustment Agreement did not result in the change of the direct controllingshareholder of the Company, while the indirect controlling shareholder was changed from Shenzhen
| SASAC to its wholly-owned subsidiary SIHC. |
V. Other Related InformationAccounting firm engaged by the CompanyName of accounting firm RSM China (Special General Partnership)Business address of the accounting firm
No. 22 Fuchengmenwai Street, Xicheng District, Beijing,
| China |
Names of signing accountants Chen Lianwu, Qin ChangmingSponsor institution engaged by the Company for continuous supervision during the reporting period
□ Applicable ? Not applicable
Financial consultant engaged by the Company for continuous supervision during the reporting period
□ Applicable ? Not applicable
VI. Major Accounting Data and Financial Indicators
Whether the Company needs to retrospectively adjust or restate the accounting data for the previous years
□Yes ?No
Year 2022 Year 2021
Change over the
previous year
Year 2020Operating revenue (RMB) 837,656,274.51 508,520,026.18 64.72% 424,419,203.34Net profit attributable toshareholders of the listedcompany (RMB)
83,496,135.61 131,020,764.38 -36.27% 57,663,828.89
63,268,802.52 71,731,038.87 -11.80% 47,719,889.72
shareholders of the listed
company after deductingnon-recurring profit orloss (RMB)Net cash flows fromoperating activities (RMB)
-51,967,764.29 126,611,734.90 -141.04% 109,105,302.88Basic earnings per share(RMB/share)
0.1937 0.3040 -36.28% 0.1338Diluted earnings per share(RMB/share)
0.1937 0.3040 -36.28% 0.1338Weighted average returnon net assets
5.69% 9.56% -3.87% 4.48%End of 2022 End of 2021
Change over the endof the previous year
End of 2020Total assets (RMB) 2,232,028,554.57 1,859,645,205.43 20.02% 1,708,442,301.15Net assets attributable toshareholders of the listedcompany (RMB)
1,505,638,863.31 1,432,924,273.45 5.07% 1,310,524,675.47The lower of the Company's net profits before and after deducting non-recurring profit and loss in the last three accounting years isnegative, and the auditor’s report of the last year shows that there is uncertainty about the Company's going concern.
□Yes ?No
The lower of net profit before and after deducting the non-recurring profit and loss is negative.
□Yes ?No
VII. Discrepancy of Accounting Data under the Accounting Standard both at Home andAbroad
1. Discrepancy of net profit and net assets in the financial report disclosed simultaneously according to
the international accounting standards and Chinese accounting standards
□ Applicable ? Not applicable
During the reporting period of the Company, there is no discrepancy of net profit and net assets in the financial report disclosedsimultaneously according to the international accounting standards and Chinese accounting standards.
2. Discrepancy of net profit and net assets in the financial report disclosed simultaneously according to
foreign accounting standards and Chinese accounting standards
□ Applicable ? Not applicable
During the reporting period of the Company, there is no discrepancy of net profit and net assets in the financial report disclosedsimultaneously according to foreign accounting standards and Chinese accounting standards.VIII. Quarterly Major Financial Indicators
Unit: RMBQ1 Q2 Q3 Q4
Operating revenue 140,069,923.14 109,945,229.09 422,203,386.69 165,437,735.59Net profit attributable to
shareholders of the listedshareholders of the listed
33,807,359.53 9,672,876.66 18,637,364.28 21,378,535.14
company
Net profit attributable toshareholders of the listedcompany after deducting non-recurring profit or loss
24,480,787.78 6,542,368.58 13,393,195.88 18,852,450.28Net cash flows from operatingactivities
-15,687,977.31 4,369,681.90 -72,148,582.96 31,499,114.08Is there any great discrepancy between the above indicators or their sum and relevant indicators disclosed in the quarterly or semi-annual report
□Yes ?No
IX. Non-recurring Profit or Loss Items and Amounts
?Applicable □ Not applicable
Unit: RMBItem Amount for 2022 Amount for 2021 Amount for 2020
Description
Profit or loss from disposal of non-current assets(including the offset part of provisions for impairmentof assets)
8,826,176.39 66,654,129.65 1.00
company
Income
s fromequitydisposal ofshareholdingenterprises,
| etc. |
Government subsidies included in the current profit orloss (excluding those closely related to the normalbusiness of the Company and granted under thenational policies and continuously enjoyed accordingto a certain quota of amount or volume)
6,575,043.88 2,923,779.58 1,522,079.42
esunderthegovernment'spreferentialpolicies forenterpr
| ises |
Payment for the use of state funds included in thecurrent profit and loss and collected from non-financial business
629,671.75 435,887.15Except for the effective hedging activities related tothe Company’s ordinary activities, profit or lossarising from changes in fair value of trading financialassets and trading financial liabilities, and investmentincome from disposal of trading financial assets andtrading financial liabilities and available-for-salefinancial assets
10,762,831.81 10,073,533.17 8,812,468.26
mentincomefromfinancialproduct
| s |
Reversed impairment provision in value of receivablesunder independent impairment test
493,295.33
| Other non-operating revenues and expenses other than | 3,718,192.18 | 730,552.50 | 3,196,406.42 | Liquid |
the above
| the above | ated |
damages,confiscationdeposit
Other profit or loss conforming to the definition ofnon-recurring profit or loss
49,829.40 46,275.77 44,839.26
| s, etc. |
| Return |
ofhandlingchargesofindividualincome
Less: effect on income tax 6,628,391.02 19,790,228.25 3,123,780.55
Effect on minority interests (after-tax)3,076,349.55 1,977,988.66 1,437,257.12Total 20,227,333.09 59,289,725.51 9,943,939.17 --Specific conditions of other profit or loss conforming to the definition of non-recurring profit or loss:
□ Applicable ? Not applicable
The Company has no other profit or loss conforming to the definition of non-recurring profit or loss.Explanation on defining the non-recurring profits and losses set out in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering Securities to the Public - Non-Recurring Profit or Loss as recurring profits and losses
□ Applicable ? Not applicable
The Company does not define any non-recurring profit or loss as defined or listed in the Explanatory Announcement No. 1 onInformation Disclosure for Companies Offering Securities to the Public - Non-Recurring Profit or Loss as a recurring one duringthe reporting period.
Section III Management Discussion and AnalysisI. Industry Development during the Reporting PeriodThe Company shall abide by the disclosure requirements of the Guidelines of Shenzhen Stock Exchange for Self-RegulatorySupervision of Listed Companies No. 3-Industry Information Disclosure for "Jewelry-related Industry"
(I) Macroeconomic SituationIn 2022, due to insufficient momentum of international trade and cross-border investment, globaleconomic growth remained weak. International trade protectionism and unilateralism continued to be majorconstraints on the development of the global economy. With the continuation of international geopoliticalconflicts, major American and European advanced economies adopted a series of policies for interest rate hikesunder inflationary pressure, which resulted in the sharp fluctuation of international commodity prices, continuedturbulence in financial markets and strikes on the development of emerging economies. While being affected bythe complex international situation, the domestic economy also suffered from obstacles from travel restrictions,weakening expectations and other causes during operation, which manifested as mismatched supply anddemand as well as shrunk demand. Under the impact of complex factors at home and abroad and the nationalmacro-control, the domestic economic development in 2022 showed a downward – recovery –stabilization trend.As domestic travel restrictions were lifted, an improved socio-economic cycle emerged, along withrecovered economic activities and enhanced market vitality. From January to February 2023, the national indexof service production increased by 5.5% year-on-year, indicating a significant recovery in the service sector;meanwhile, social demand gradually picked up, and from January to February, the total retail sales of consumergoods reached RMB 7706.7 billion, up 3.5% year-on-year, of which the retail sales of gold, silver and jewelrygoods of units above designated size increased by 5.9%.(II) Gold Jewelry IndustryAs for the industry chain links of the gold jewelry industry, the upstream is gold jewelry raw oreprospecting and mining, the midstream is ore smelting or design and processing, and the downstream iswholesale and retail.
1. Market scale and product structure of the gold jewelry industry
According to the comprehensive statistics of the Gems＆Jewelry Trade Association of China ("GAC") on
the whole category of the jewelry industry, the market scale of China's germ and jewelry industry in 2022 wasabout RMB 719 billion, which was basically the same as that of the previous year. Among this market scale,gold products took about RMB 410 billion, diamond products took about RMB 82 billion, jade products tookabout RMB 147 billion, colored gemstone products took about RMB 28 billion, pearl products took about RMB24 billion, platinum and silver products took about RMB 9 billion, and popular accessories and other categoriesof products totaled about RMB 19 billion. Gold jewelry has a large consumer market capacity and abundantcategories, whose main consumption scenarios include traditional weddings, fashionable wear, collection andpreservation. In the gold jewelry industry chain, the consumer terminal is a high-value-added link due todifferentiation in product design concepts and marketing strategies.
2. Jewelry ornaments market
Jewelry ornaments refer to jewelry and ornaments made of jewelry jade by embedding precious metalssuch as gold and silver. Based on different generation conditions, jewelry jade can be divided into naturaljewelry jade and artificial jewelry jade. At present, China is the most important producer and consumer ofjewelry ornaments in the world. Under the background of the continuous improvement of per capita incomelevel in China, the fashion attribute of jewelry ornaments has made them one kind of consumer goods to meetpeople's needs for a better life.
With the gradual upgrading of young consumers' demands, the young generation's jewelry consumptionhabits tend to be routinized, which can improve the re-purchase rate of jewelry products in a variety ofscenarios, providing a broader space for the development of the jewelry industry.
3. Gold ornaments market
According to the material, gold ornaments can be divided into pure gold, K gold, platinum, etc. Accordingto the statistics of China Gold Association, from 2012 to 2022, China's actual gold consumption fluctuatedaround the median of 950 – 1,050 tons. The gold consumption in China from 2012 to 2022 is as follows:
Unit: ton
China's gold jewelry consumption recovered rapidly in the past two years after a demand bottom-out in2020. In 2022, the actual gold consumption in China was 1,001.74 tons, which decreased by 10.63% comparedwith 2021 due to the inhibition of the continued high gold price but still indicated a high level of consumption.The scale of gold consumption accounted for 57.02% of China's gold jewelry consumption market, suggesting adominant position.
On one hand, the demand for gold ornaments consumption has recovered mainly due to the complexeconomic situation at home and abroad, where the hedging function of gold ornaments regained attention; onthe other hand, thanks to the improved design and upgraded technology of gold ornaments and the enhancedcultural confidence and aesthetic appreciation of consumer groups, the aesthetic feeling of gold has beenfavored and recognized by the majority of consumer groups, and both the color and the design, which arecharacterized by Chinese style and full of new Chinese fashionable elements, are especially favored by theyoung consumer groups.
4. Competitive pattern of the gold jewelry industry
In terms of the gold and jewelry consumption market, in 2022, the total retail sales of gold, silver andjewelry of units above the designated size reached RMB 301.4 billion, down 1.1% year-on-year, but the totalretail sales still remained at a high level of over RMB 300 billion, indicating that the consumption of goldjewelry was active. With the elimination of external factors hindering economic activities, the expansion ofonline e-commerce channels and offline channels of major gold and jewelry enterprises has accelerated, and the
competition in the consumer market of the gold and jewelry industry has become increasingly fierce.Since the main consumers in the current market showed a trend of getting younger, the consumptiondemand for gold jewelry ornaments is developing towards individuation and diversification. Gold jewelry brandenterprises pay more attention to sales channel construction, design concepts and design aesthetics, and activelycarry out consumer profiling, redefine the consumer market, and explore consumption preferences andsubdivisions. At the same time, the prospecting and mining enterprises located upstream of the gold and jewelryindustry are accelerating the forward integration process to seize the retail market share in the consumption field.In general, the competition in the gold jewelry industry is fierce, the tail clearing is accelerating, and the leadingbrands are occupying the market, striving to expand from the channels, brands, product differentiation and otheraspects.In the fierce market competition, the Company relies on its own advantages and takes the industry demandas the starting point to serve the industry while forming differentiated competitive advantages, building a third-party service platform in the jewelry industry, and actively exploring and opening up blue ocean markets.(III) Commercial Real Estate Leasing IndustryIn 2022, affected by objective factors such as macroeconomic disturbances and restrictions on offlineconsumption scenarios, small and micro enterprises were under significant pressure and faced difficulties inoperation, and the vacancy rate of office buildings increased. To assist small and micro enterprises inovercoming difficulties, many local governments have introduced preferential policies of "rent reduction andwaving", however, the commercial real estate leasing industry was hit by this. On the one hand, the delivery ofsome commercial projects was delayed. According to the data of JLL, the new supply area of prime retailthroughout the year decreased by 32.5% year-on-year. On the other hand, the rent of commercial real estate fell.According to the statistics of JLL, the average rent of the first floor of shopping centers in major cities in Chinadecreased by 2.9% year-on-year in 2022.
(IV) Automobile Service IndustryIn 2022, China's macro-control, which continued to expand the domestic demand, enabled both productionand marketing to thrive in the automobile industry. According to the data of the China Association ofAutomobile Manufacturers, in 2022, China's automobile production and sales volumes reached 27.021 millionand 26.864 million respectively, with a year-on-year increase of 3.4% and 2.1%. And the new energy vehiclessector presented steady growth in terms of production and sales volumes. In 2022, the production and salesvolume of new energy vehicles in China reached 7.058 million and 6.887 million respectively, with a year-on-
year increase of 96.9% and 93.4%, and the annual penetration rate of new energy vehicles reached 25.6%.Following the prosperity of the automobile market, automobile ownership, which is deemed to have astrong positive correlation with the demand in the automobile maintenance and inspection market, increasedrapidly. According to the statistics of the Ministry of Public Security, national motor vehicle ownership reached417 million in 2022, including 319 million automobiles. Among them, national new energy vehicle ownershipreached 13.1 million, accounting for 4.10% of the total automobile ownership.II. Main Business during the Reporting PeriodThe Company shall abide by the disclosure requirements of the Guidelines of Shenzhen Stock Exchange for Self-RegulatorySupervision of Listed Companies No. 3-Industry Information Disclosure for "Jewelry-related Industry"
(I) The main business of the Company during the reporting period included jewelry service business,commercial operation management, and sales, inspection, maintenance and spare parts sales of automobiles.
1. Jewelry service business: During the reporting period, based on developing the business model for the
jewelry industry sector and improving the service quality, the bonded platform Company operated by ShenzhenJewelry Company held 16 exhibitions throughout the year, and bonded inbound and outbound goods valuereached RMB 2.1 billion; at the same time, the Company continuously improved the service system to implementnew service categories. In June 2022, the holding subsidiary Guorun Gold was established, which furthercompletes the Company's layout in the gold jewelry industry by taking the gold circulation business as the coreand aiming to promote the digitalization, standardization and normalization of gold spot transactions. Besides, theCompany expanded the application scenarios of safe boxes of Tellus Treasury inside and outside the industry,actively explored the business model related to diamond categories, and opened up the closed-loop service fromthe exhibition and trading to general trade import for diamond business.
2. Commercial operation management: During the reporting period, the Company continuously improved the
management and operation level of property assets, strengthened the awareness of initiative service andstandardized operation, and increased the occupancy rate of island counters in Tellus Jewelry Building to 95%through various measures. The overall quality of island counter tenants was improved, and the image andpopularity of the basement 1 stores of the podium building were significantly improved; during the construction ofthe Tellus Jinzuan Building project, numerous difficulties were resolved to ensure that the construction period waspromoted as planned, and investment attraction and operation plans were made in advance to make adequatepreparations for the opening and operation of the building; and through the significant improvement of theoperation quality of Tellus Home Experience Store as well as optimization of the business structure of tenants, theannual rent increased dramatically compared with last year.
3. Sales, inspection, maintenance and spare parts sales of automobiles: In terms of automobile sales, with the
optimization of the internal and external promotion policies for new vehicle sales value chain products, 1,057vehicles were sold throughout the year; in terms of maintenance services, attention was paid to customerexperience and customer stickiness was improved.
(II) Description of main business models of jewelry business
1. Sales mode
At present, the Company adopts wholesale as the main sales mode of gold and jewelry, and also providescertain supporting services including customs declaration, gold purification/exchange, safe deposit box leasing,etc. The sales revenue composition of the jewelry business in 2022 is as follows:
Sales mode Amount of operating
revenue (RMB 10,000)
Amount of operating cost(RMB 10,000)
Gross margin in2022Wholesale
40,887.36 40,462.52 1.04%Otherservices
1,260.56 928.80 26.32%Total42,147.92 41,391.33 1.80%
2. Production mode
At present, the Company mainly adopts the entrusted processing mode for gold and its products, whilediamonds and colored gemstones do not involve processing. The production mode composition in 2022 is asfollows:
Production mode Amount (RMB 10,000) ProportionConsigned processing 39,937.20 100.00%
Total 39,937.20 100.00%
3. Purchase mode
Gold and its products: by purchasing gold raw materials from Shanghai Gold Exchange or qualified units,or by renting gold from banks;Diamonds: by purchasing finished diamonds from overseas diamond suppliers and importing them throughthe Shanghai Diamond Exchange;Other jewelry jade: by purchasing products from overseas jewelry jade suppliers, and going through theimport formalities of tax payment through Shenzhen Jewelry Company.The purchase model in 2022 is as follows:
Purchasemode
Rawmaterials
Purchase quantity
(kg)
Purchase amount (RMB 10,000)Spot trading Gold 1,345.47 51,737.34
Gold rentalbusiness
Gold 45.00 1,768.50Total 1,390.47 53,505.84
4. Operation of physical stores during the reporting period
As of the end of the reporting period, the Company had no physical stores.
5. Online sales during the reporting period
During the reporting period, the Company did not carry out online sales.
6. Inventory of jewelry business during the reporting period
As of December 31, 2022, the inventory balance of the Company's jewelry business was RMB95,675,616.72, of which the amount measured at fair value was RMB 79,191,876.11, corresponding to hedgeditems with commodity futures contracts and T+D contracts as hedging instruments. The fair value of thehedged items above was based on quotations in active markets, thus belonging to the first level of fair value.The source of hedging funds was self-owned funds. During the reporting period, the income from purchaseinvestment was RMB 251,100, and the fair value change was RMB 54,500.III. Core Competitiveness Analysis
1. Deepening of industrial distribution and continuous enhancement of third-party comprehensive jewelry
service capability
Relying on the physical platform resources in the Shuibei area known for its jewelry industry cluster, theCompany gave full play to the advantages of a state-owned listed company, solidly promoted the constructionof the third-party jewelry ecosystem, kept trying to innovate business models, deeply entered the jewelryindustry chain, and continuously improved the third-party comprehensive jewelry service capability. In 2019,Treasury Supply Chain Company was established to carry out the gold and jewelry supply chain business; in2020, Shenzhen Jewelry Company was established to provide bonded exhibition, bonded warehousing, customsdeclaration, logistics, settlement and other services, aiming to build a comprehensive factor trading serviceplatform with international influence integrating jewelry raw materials and finished products exhibition, spottrading, testing, identification, design, processing, e-commerce, financial services, insurance, etc.; in 2021,Shanghai Fanyue was established, completing the closed loop from bonded exhibitions and trading to generaltrade imports for diamond business; in 2022, Guorun Gold was established to build a comprehensive serviceplatform for gold circulation, so as to further consolidate the overall layout of the jewelry industry. The bondedplatform and gold circulation platform aimed to serve the industry and adhered to entrepreneurship-led
development. Their successful operation was highly recognized by relevant government departments andgreatly enhanced the Company's popularity and influence in the jewelry industry, gradually forming theCompany's competitive advantage.
2. High-quality development of the commercial operation sector, providing stable business income and
financial supportThe Company was the largest owner of Tellus-Gmond Gold Jewelry Industrial Park in the Shuibei area.The Tellus Jewelry Building was fully put into use in 2019 and maintained a high occupancy rate. Theconstruction of the Tellus Jinzuan Trading Building was promoted according to the working schedule and thescheduled official opening would be in 2023. At the same time, the Company planned to implement innovativeindustrial projects in the Buxin area in line with the overall strategic layout of the city, district and the Companyby means of renovation. In addition, the Company held a large number of property resources in Luohu, Futianand other areas of Shenzhen. On the basis of maintaining the stability of the original leasing business, theCompany would actively promote the improvement of property quality, and transform its old properties fromthe traditional way of simple leasing to the direction of commercial property operation, so as to fully enhanceand tap the added value of the property brand， bring stable business income and cash flow to the Companyand provide a solid foundation for the long-term development of the Company.
3. Continuous optimization of management, providing effective guarantee for the development of the
CompanyIn recent years, with the transformation and upgrading of the Company's business sectors, internalmanagement has also been greatly improved, becoming the driving force and guarantee for the Company'sdevelopment. In 2022, from the perspective of management promotion and operation, the Company establisheda "4S" management mainline system based on the management orientation and the actual situation of theCompany. From strategic planning and business plan to management statements and assessment and evaluation,scientific and closed-loop management concepts have been established and various management actions havebeen linked, which serve the Company's strategic implementation in a unified way. The Company leveragesvarious work with performance management as a "lever", and continuously evaluates and optimizes theorganizational structure to improve operational efficiency. Adhering to the cultural construction purpose ofrefining the corporate culture from business, the Company collects the conventions of strivers from thegrassroots to build a consensus among all employees.
IV. Analysis on Main Business
1. Overview
In 2022, in the face of complicated internal and external situations and extremely arduous risks andchallenges, under the correct leadership of the Party Committee and the Board of Directors of the Group, allTellus people united as one, achieving steady and excellent business performance in that year.
In 2022, the operating revenue of the Company reached RMB 837.66 million, suggesting an increase ofRMB 329.14 million or 64.72% compared with RMB 508.52 million in 2021. The main reasons for such anincome increase are as follows: first, the income of RMB 328.03 million from the newly added gold business;second, an increased income of RMB 47.63 million due to the improved occupancy rate of properties such as 421Home Experience Store of Tellus Jewelry Building and other factors. In 2022, the total profit of the Companyreached RMB 102.84 million, a decrease of RMB 73.28 million compared with RMB 176.12 million in 2021; thenet profit attributable to the parent company was RMB 83.50 million, a decrease of RMB 47.52 million comparedwith RMB 131.02 million in 2021. The main reasons for this change are as follows: first, the confirmedinvestment income of the transfer shareholding enterprises in 2021 was RMB 66.17 million, while the currentinvestment income of the transfer shareholding enterprises was only RMB 8.78 million; second, in order to copewith the economic difficulties with clients, the Company voluntarily reduced the rent of the merchants by RMB
46.52 million in 2022, resulting in a corresponding decrease in net profit; third, the improved occupancy rate of
properties such as the Tellus Jewelry Building and 421 Home Experience Store contributed to the increase inprofits, and the gradual decrease in period expenses might also play a role. The specific business situation is asfollows.
(1) The platform construction of Shenzhen Jewelry Company reached a new level. The comprehensive trade
platform has achieved landmark results, and the inbound and outbound business rebounded strongly. A total of 16exhibitions were held throughout the year. The leading position in the domestic seawater pearl trading market wasfurther consolidated, multi-sector linkage was achieved, and a sustainable profitable business model was built.
(2) The gold circulation platform took on a new look of development. The main entity of the project, Guorun
Gold, registered on June 28, immediately completed the establishment of the business process system and riskcontrol system, and gradually started its business. This platform born the industry mission of the pilot reform ofgold circulation.
(3) The commercial operation business reached a new level. As for the Jewelry Building, basic operation and
management were consolidated, strengthened the awareness of initiative service, and the occupancy rate of islandcounters was increased from 75% to 95% through various measures; the Jinzuan Building, positioning itself as anadvance planner and a Doer, by formulating investment attraction and operation plans in advance, introducedwell-known jewelry enterprises, built a jewelry headquarters base, and gathered industry traffic; as for the TellusHome, a series of benchmarking upgrading actions were taken, the operation quality was significantly improvedand the tenant business structure was optimized.
(4) The synergy of the officers' entrepreneurship was significantly enhanced. The strategic management kept
advancing, and a 4S management system with strategy as the core was formulated; talent training was effectivelyimplemented, and a total of 31 talents had been introduced throughout the year; the corporate culture wasdeepened and solidified, and discussions on the conventions of strivers were organized many times to furtherconsolidate the cultural foundation of strivers.
(5) Party building work had been strengthened and improved. All Party members and cadres were led to learn
the spirit of the 20th CPC National Congress and the spirit of General Secretary Xi Jinping's series of importantspeeches, and the education of Party members and cadres' ideals and beliefs was deepened; Discipline Educationand Learning Month activities were carried out, including 7 centralized studies, 13 lectures by leading cadres and28 integrity education; the responsibilities of state-owned enterprises were fulfilled by warming the hearts ofmerchants and reducing their rents, so as to get through the difficulties together.
2. Revenues and costs
(1) Composition of operating revenue
Unit: RMB
Year 2022 Year 2021 Year-on-
yearincrease/de
creaseAmount
Proportion inoperating revenue
Amount
Proportion inoperating revenueTotal operatingrevenue
837,656,274.51100%508,520,026.18100%
64.72%
By segment
Automobile sales
| Automobile sales | 196,357,649.27 | 23.44% | 194,373,092.47 | 38.22% | 1.02% |
| Automobile |
inspection,maintenance and
45,059,294.86 5.38% 49,668,740.60 9.77%-9.28%
| spare parts sales |
| Property lease and service |
174,756,009.80 20.86% 205,073,101.95 40.33%-14.78%
421,483,320.58 50.32% 59,405,091.16 11.68%
609.51%
By product
Wholesale andretail of jewelryAutomobile sales
| Automobile sales | 196,357,649.27 | 23.44% | 194,373,092.47 | 38.22% | 1.02% |
| Automobile | 45,059,294.86 | 5.38% | 49,668,740.60 | 9.77% | -9.28% |
inspection,
maintenance and
| spare parts sales |
| Property lease and service |
174,756,009.80 20.86% 205,073,101.95 40.33%-14.78%
421,483,320.58 50.32% 59,405,091.16 11.68%
609.51%
By region
Wholesale andretail of jewelryShenzhen
| Shenzhen | 837,656,274.51 | 100.00% | 508,520,026.18 | 100.00% | 64.72% |
By sales mode
| Direct sales | 837,656,274.51 | 100.00% | 508,520,026.18 | 100.00% | 64.72% |
(2) Situation of industries, products, regions and sales modes with an operating revenue or operating profit accounting for
more than 10% of that of the Company?Applicable □Not applicable
Unit: RMB
Operatingrevenue
Operating cost
Grossmargin
in operatingrevenue over the
same period of
| previous year | Increase/decrease |
in operating cost
over the sameperiod of
| previous year | Increase/decrease |
in gross marginover the same
period of
| previous year | ||
| By segment | ||
| Automobile sales | ||
196,357,649.27 189,054,253.07 3.72% 1.02% 2.46% -1.35%
inspection andmaintenanceand spare parts
| sales |
43,747,865.09 34,307,315.38 21.58% -9.92% -11.49% 1.39%
168,778,477.27 57,262,402.60 66.07% -14.12% -19.78% 2.39%
| Property lease and service |
| Wholesale and |
retail of
421,483,320.58 412,785,619.63 2.06% 609.52% 640.07% -4.04%
| jewelry | |
| By product | |
| Automobile sales | |
196,357,649.27 189,054,253.07 3.72% 1.02% 2.46% -1.35%
inspection andmaintenanceand spare parts
| sales |
43,747,865.09 34,307,315.38 21.58% -9.92% -11.49% 1.39%
168,778,477.27 57,262,402.60 66.07% -14.12% -19.78% 2.39%
| Property lease and service |
| Wholesale and |
retail of
421,483,320.58 412,785,619.63 2.06% 609.52% 640.07% -4.04%
| jewelry | ||||||
| By region | ||||||
| Shenzhen | 830,367,312.21 | 693,409,590.68 | 16.49% | 66.45% | 97.87% | -13.26% |
| By sales mode | ||||||
| Direct sales | 830,367,312.21 | 693,409,590.68 | 16.49% | 66.45% | 97.87% | -13.26% |
(3) Whether the Company's sales revenue of products is greater than the service revenue
?Yes □ NoIndustryItem Unit Year 2022 Year 2021Year-on-year
classification
| classification | increase/decrease |
Automobile sales
Sales volume Set 1,057 1,071 -1.31%Production - - - -InventorySet 83 110 -24.55%Explanation on the causes of over 30% changes of the related data
□ Applicable ?Not applicable
(4) Performance for major sales contracts and major procurement contracts signed by the Company as of the reporting
period
□ Applicable ?Not applicable
(5) Composition of operating cost
Industry and product classification
Unit: RMBIndustryclassification
Item
Year 2022 Year 2021Year-on-year
increase/d
ecreaseAmount
Proportion inoperating cost
Amount
Proportion inoperating cost
| Automobile sales | Automotive | 189,054,253.07 | 27.00% | 184,509,794.34 | 52.28% | 2.46% |
Automobileinspection andmaintenance and
Spare partsandmaintenance
35,790,213.87 5.11% 39,971,148.37 11.33% -10.46%Property leaseand service
| spare parts sales | |
| Leasing, |
propertymanagement
62,659,156.85 8.95% 72,672,237.22 20.59% -13.78%Wholesale andretail of jewelry
| and others |
| Retail and |
wholesale of
412,785,619.63 58.95% 55,776,535.88 15.80% 640.07%
Unit: RMBProductclassification
Item
Year 2022 Year 2021 Year-on-
year
increase/d
ecreaseAmount
Proportion inoperating cost
Amount
Proportion inoperating cost
jewelryAutomobile sales
| Automobile sales | Automotive | 189,054,253.07 | 27.00% | 184,509,794.34 | 52.28% | 2.46% |
| Automobile |
inspection andmaintenance and
Spare partsandmaintenance
35,790,213.87 5.11% 39,971,148.37 11.33% -10.46%Property leaseand service
| spare parts sales | |
| Leasing, |
propertymanagement
62,659,156.85 8.95% 72,672,237.22 20.59% -13.78%Wholesale andretail of jewelry
Retail andwholesale of
| and others |
| jewelry |
412,785,619.63 58.95% 55,776,535.88 15.80% 640.07%
(6) Whether the consolidation scope is changed during the reporting period
?Yes □ NoDuring the reporting period, Tellus Holding and its partners jointly invested to establish Guorun Gold Shenzhen Co., Ltd. GuorunGold, registered and established on June 28, 2022, was consolidated by Tellus Holding. Therefore, a new consolidated enterprisewas added to the consolidation scope during the reporting period.
(7) Major changes or adjustments for a business, product or service of the Company during reporting period
?Applicable □Not applicableGuorun Gold, registered and established on June 28, 2022, is a comprehensive service platform company forgold circulation established by Tellus Holding to further improve its layout in the gold and jewelry industry. It iscontrolled by Tellus Holding and jointly established with many leading brands and investment enterprises in theindustry, such as Chow Tai Fook, Chow Tai Seng, Caishikou, Shenzhen ZHL, Shenzhen HTI and ShenzhenJewelry Company. With the gold circulation business as the core, Guorun Gold is committed to promoting thedigitalization, standardization and normalization of gold spot transactions, promoting the compliance, legality andhealthy development of the gold industry, and providing open, transparent, standardized and safe gold circulationsolutions. Its main businesses include investment in gold bar sales, gold recovery and gold purification/exchangeservices. During the reporting period, Guorun Gold achieved an operating revenue of RMB 328 million, with a netprofit of RMB -558,800. The negative profit of Guorun Gold was mainly due to the fact that the company'sbusiness was still in the unfledged stage after a fairly recent establishment, unformed scale effect, plus theorganization costs to be borne, etc. The main risk control measures of Guorun Gold include the arrangement offull-time risk control departments and personnel, building of a customer credit rating management system, regularand irregular tracking assessment of the credit status and operation status of clients, establishment of an earlywarning mechanism, formulation of relevant systems such as the Measures for the Administration of HedgingTransactions against the risk of gold price fluctuation, and strict implementation of business approval and riskcontrol, etc.
(8) Information on main sales customers and main suppliers
Main sales customers of the CompanyTotal sales amount of the top 5 customers (RMB) 336,006,904.91Proportion of the total sales amount of the top 5 customers tototal annual sales amount
40.12%
Proportion of the sales amount of the related parties among thetop 5 customers to total annual sales amount
0.00%
Information on the top 5 customers of the Company
No. Name of customer Sales amount (RMB)
Proportion to total annualsales amount
1 Customer 1 152,160,931.28 18.17%
Customer 2 66,140,447.43 7.90%3 Customer 3 54,966,535.20 6.56%4 Customer 4 35,890,132.75 4.28%
Customer 5 26,848,858.25 3.21%Total -- 336,006,904.91 40.12%Explanation on other conditions of main customers
□ Applicable ?Not applicable
Main suppliers of the CompanyTotal purchase amount of the top 5 suppliers (RMB) 576,710,489.38Proportion of the total purchase amount of the top 5 suppliersto total annual purchase amount
70.84%
Proportion of the purchase amount of the related parties amongthe top 5 suppliers to total annual purchase amount
0.00%
Information on the top 5 suppliers of the Company
No. Supplier name Purchase amount (RMB)
Proportion to total annualpurchase amount1 Supplier 1 207,938,663.71 25.54%2 Supplier 2 169,710,255.27 20.85%3 Supplier 3 79,559,566.37 9.77%
Supplier 4 76,194,690.27 9.36%5 Supplier 5 43,307,313.76 5.32%Total --576,710,489.38 70.84%Explanation on other conditions of main suppliers
□ Applicable ?Not applicable
3. Expenses
Unit: RMB
Year 2022 Year 2021
Year-on-yearincrease/decrease
Explanation on majorchangesSelling expenses 22,034,712.48 27,178,175.03 -18.92%General andadministrativeexpenses
47,077,679.99 47,151,316.69 -0.16%Financial expenses -4,036,653.35 -4,270,881.74 5.48%R&D expenses 802,753.80 0.00 -
4. Investment in R&D
?Applicable □Not applicableName of major R&D
project
Project purpose
Projectprogress
Objectives to beachieved
Expected impact on thefuture development ofthe Company
Research and
| Research and | At present, most small-sized jewelry | Accepte | To optimize the | It will be able to |
Development of
Integrated ServiceSystem for JewelryIndustry
| Development of | enterprises in the market still adopt the |
traditional manual recording andmanagement mode in their ownexperience and commodity sales, whichis very inefficient and lacks unifiedmanagement of suppliers and clients,thus increasing the communication costwith clients and factories. In order tomeet the needs of upgrading thebusiness functions of the jewelryindustry integrated service system, it isurgent to develop a jewelry industryintegrated service system to strengthenthe business management of the jewelry
| industry. | d | membership |
management module;to meet the needs ofthe new businessmodel by adding R&Dand processingmodules; to facilitatethe customs's real-timesupervision of thebusiness developmentand bonded goodsinventory of theplatform, and reducethe number of offline
| on-site verifications. | improve the efficiency |
of system data use,provide system supportfor new businesses, andenhance the auxiliarysupervision function.
Research andDevelopment ofIntelligent SecuritySystem for Jewelryand Jade ExhibitionHall
the security during their exhibition orpreservation is particularly important,and each treasure will also be insuredfor a huge amount. Based on the needsof jewelry and jade protection, asoftware and hardware systemintegrating multiple functions, such asintelligent early warning, data analysisand remote data storage, is developedand built to realize the real-time linkagebetween the alarm system and themonitoring system and the personnelpositioning system, so as to solve thesecurity problem of jewelry and jade
| with an overall intelligent solution. |
Accepted
To realize real-timesupervision of platformwarehouses andexhibition halls toensure place safety,goods safety andpersonnel safety. Toenable real-time alarmin case of abnormality.
Through the integrationof human precautionsand technicalprevention, the securityof goods and placeswill be strengthened toensure the safety of thecompany's inventory.
R&D personnel of the Company
Year 2022 Year 2021 Change proportionNumber of R&D personnel(Headcount)
2 0Proportion of the number ofR&D personnel
0.63% 0.00%Educational level of R&D personnel
Junior college
| Junior college | 2 |
Age composition of R&D personnelBelow 30 1 0 030-40 years old 0 0 0Over 40 1 0 0R&D investment of the CompanyYear 2022 Year 2021 Change proportionR&D investment amount(RMB)
802,753.80 0.00 -Proportion of investment inR&D to operating revenue
0.10% 0.00% -Capitalized amount of R&Dinvestment (RMB)
0.00 0.00 -
Proportion of capitalizedR&D investment to R&Dinvestment
0.00% 0.00% -Causes and impact of major changes in the composition of the Company's R&D personnel
□ Applicable ?Not applicable
Causes for significant change in the proportion of the total R&D investment to operating revenue compared with that in theprevious year
□ Applicable ?Not applicable
Causes for and explanation on rationality of a significant change in capitalization rate of R&D investment
□ Applicable ?Not applicable
5. Cash Flow
Unit: RMBItem Year 2022 Year 2021
Year-on-yearincrease/decreaseSub-total of cash inflowsfrom operating activities
1,004,298,180.83 593,319,656.80 69.27%Sub-total of cash outflowsfrom operating activities
1,056,265,945.12 466,707,921.90 126.32%Net cash flows from operatingactivities
-51,967,764.29 126,611,734.90 -141.04%Sub-total of cash inflowsfrom investing activities
1,388,465,680.40 1,589,951,156.88 -12.67%Sub-total of cash outflowsfrom investing activities
1,338,619,900.38 1,720,644,122.34 -22.20%Net cash flows from investingactivities
49,845,780.02 -130,692,965.46 138.14%Sub-total of cash inflowsfrom financing activities
206,424,339.14 75,601,270.39 173.04%Sub-total of cash outflowsfrom financing activities
23,708,532.63 68,563,307.20 -65.42%Net cash flows from financingactivities
182,715,806.51 7,037,963.19 2,496.15%Net increase in cash and cashequivalents
179,751,243.50 3,192,929.23 5,529.67%Explanation on main influence factors for a year-on-year major change of related data?Applicable □Not applicable
Unit: RMBItem
Year
2022
Year
2021
Year-on-yearincrease/decrease
Description
| Year-on-year increase/decrease | ||
| Sub-total of cash inflows from operating activities |
1,004,298,180.83
| 593,319,656.80 | 69.27% | New gold business during the reporting period | ||
| Sub-total of cash outflows from operating activities |
1,056,265,945.12
| 466,707,921.90 | 126.32% | New gold business during the reporting period | ||
| Net cash flows from operating activities |
-51,967,764.29
| 126,611,734.90 |
-
| 141.04% | Mainly due to: first, rent reduction policy during the reporting period; secon |
d, gold notes receivable and
Net cash flows from investingactivities
49,845,780.02
| Net cash flows from investing activities |
-
| 130,692,965.46 | 138.14% | Mainly due to the year |
-on-year
| increase in the redemption of financial products at maturity | ||
| Sub-total of cash inflows from financing activities |
206,424,339.14
| 75,601,270.39 | 173.04% | Mainly due to capital injection by minority shareholders | ||
| Sub |
-total of cash outflows from
23,708,532.63
| financing activities | 68,563,307.20 |
-
| 65.42% | This is mainly due to the increase in cash outflows from financing activities during the same period when Sichuan Company canceled and returned the investment funds to minority shareholders | ||
| Net cash flows from financing activities |
182,715,806.51
| 7,037,963.19 | 2,496.15% | Mainly due to capital injection by minority shareholders | ||
| Net increase in cash and cash equivalents |
179,751,243.50
| 3,192,929.23 | 5,529.67% | Mainly due to capital injection by minority shareholders |
Explanation on the causes of the major differences between the net cash flow from operating activities during the reporting periodand the net profits of the Company in the year
□ Applicable ?Not applicable
V. Analysis on Non-main Business?Applicable □Not applicable
Unit: RMB
Amount
Proportion tototal profits
Explanation of formation reasons
Sustainable or notInvestment incomes 33,372,099.57 32.45%
management income and recognized equity-method
| investment income of joint-stock enterprises |
NoProfits or losses fromchanges in fair value
-1,592,750.24 -1.55% Changes in fair value of undue financial products NoImpairment of assets -3,474,846.19 -3.38%
Provision for impairment losses of inventories and
NoNon-operating revenue4,134,654.43 4.02%
| fixed assets |
| Gains from damage and scrapping of non-current assets, and gains from unpayable payments |
NoNon-operatingexpenses
416,462.25 0.40%
Non-current assets retirement losses and liquidateddamages expenses
No
VI. Analysis of Assets and Liabilities
1. Major changes in asset composition
Unit: RMB
End of 2022 Beginning of 2022
Proportionincrease/d
ecrease
Explanati
on onmajorchangesAmount
Proportion to
total assets
Amount
Proportion to
total assetsCash at bankand on hand
413,028,327.36 18.50% 240,582,057.16 12.94% 5.56%Accountsreceivable
41,752,179.56 1.87% 18,094,059.92 0.97% 0.90%Inventories116,069,675.39 5.20% 25,434,925.04 1.37% 3.83%
| Investment | 516,360,139.45 | 23.13% | 551,383,294.54 | 29.65% | -6.52% |
properties
Long-termequityinvestments
81,024,365.94 3.63% 88,310,867.47 4.75% -1.12%Fixed assets 102,689,546.42 4.60% 109,438,198.23 5.88% -1.28%Construction inprogress
409,933,559.27 18.37% 210,197,546.72 11.30% 7.07%Right-of-useassets
4,181,242.86 0.19% 7,336,915.83 0.39% -0.20%Short-termborrowings
20,000,000.00 0.90% 0.00 0.90%Contractliabilities
9,259,658.43 0.41% 21,059,311.18 1.13% -0.72%Long-termborrowings
144,820,511.42 6.49% 86,875,874.39 4.67% 1.82%Lease liabilities2,926,184.93 0.13% 4,474,543.09 0.24% -0.11%High proportion of overseas assets
□ Applicable ?Not applicable
2. Assets and liabilities at fair value
?Applicable □Not applicable
Unit: RMB
Down
Item
Beginning
amount
Profits orlosses fromchanges infair value
in thecurrentperiod
Accumulated change
in fairvalueincluded in
equity
Impairmentaccrued inthe currentperiod
Purchaseamount inthe current
period
Salesamount inthe current
period
Otherchanges
EndingamountFinancial assets
1. Trading
financialassets(excludingderivativefinancialassets)
412,712,84
3.84
-860,218.33
1,075,000,0
00.00
1,316,000,0
00.00
176,133,56
9.95
2. Other
equityinstrumentinvestments
10,176,617.
10,176,617.
Sub-total offinancialassets
422,889,46
1.04
-860,218.33
1,075,000,0
00.00
1,316,000,0
00.00
186,310,18
7.15
propertiesArbitraged
| Arbitraged | 543,878.09 | 439,524,26 | 344,401,71 | 79,191,876. |
items
| items | 9.03 | 2.52 | 11 |
Total of theabove
422,889,46
1.04
-316,340.24
0.00 0.00
1,514,524,2
69.03
1,660,401,7
12.52
0.00
265,502,06
3.26
Financialliabilities
0.00
-1,276,410.0
17,685,000.
100,634.91
19,062,044.
Contents of other changes: Other changes in trading financial liabilities are interest on gold leased.Whether major changes occur to the measurement attributes of main assets of the Company within the reporting period
□Yes ?No
3. Restriction on asset rights as at the end of the reporting period
Item
Book value as of December 31, 2022 Reasons for restriction
| Item | ||
| Cash at bank and on hand | 21,621,498.00 | See the description in this table |
| Intangible assets | 45,447,359.01 | Bank borrowing mortgage |
| Total | 67,068,857.01 | - |
Descriptions: RMB 10,665,656.00 in the bank deposits is the supervision fund for the Company's Tellus-Gmond GoldJewelry Industrial Park Upgrading and Reconstruction Project Plot 03; RMB 10,955,842.00 is the performance guarantee andfutures option account deposit. In addition, there is no other funds with limited use and potential recovery risk due to mortgage,pledge or freezing in the ending cash at bank and on hand.VII. Analysis of Investment
1. Overall conditions
?Applicable □Not applicableInvestment in the reporting period
(RMB)
Amount of investment in the same periodof the previous year (RMB)
Changes rate
| 281,736,012.6 | 141,744,792.01 | 98.76% |
2. Significant equity investment acquired in the reporting period
?Applicable □Not applicable
Unit: RMBNameofinvestee
Mainbusiness
Investmen
tmod
es
Investmentamoun
t
Shareholdin
gproportion
Sourceoffunds
Partner
Investmen
tterm
Product
type
Situationas atthebalancesheetdate
Expecte
dbenefits
Investmen
tprofit orlossduring theperio
d
Lawsu
itinvolvedornot
Disclosur
edate
(ifany)
Disclos
ureindex(if any)
runGol
| d | Investmen |
t in barsales, gold
| recycling, | Newl |
yestab
82,000,000.0
41%
| lishe | Sel |
f-ow
| ne | Cho |
wTai
Non-fixedterm
| Sen | Investmen |
t in barsales, gold
Completed
0.00
| recycling, | - |
558,856.
No
June15,2022
| 67 | For |
details,please
She
nzhenCo.,Ltd.
| She | gold |
purification/exchange services
| d | d |
fund
JewelryCo.,Ltd.,ShenzhenZHLIndustrialCo.,Ltd.,etc.
| g | gold |
purification/exchange services
AnnouncementonInvestment inGoldCirculationPlatformProjects(Announcement No.:
2022-027)disclosed byCNINF
| O. |
Total
-- --
82,000,000.0
-- -- -- -- -- --
0.00
558,856.
| 67 |
-- -- --
3. Significant non-equity investment ongoing in the reporting period
□ Applicable ?Not applicable
4. Financial assets investment
(1) Security investment
□ Applicable ?Not applicable
The Company has no securities investment during the reporting period.
(2) Derivative investment
?Applicable □Not applicable
1) Derivatives investment for hedging purposes during the reporting period
?Applicable □Not applicable
Unit: RMB 10,000Type of derivativeinvestment
Initialinvestment
amount
Profits orlosses fromchanges infair value
in thecurrentperiod
Accumulatedchange in fairvalue included
in equity
Purchased
amountduring thereporting
period
Soldamountduring thereporting
period
Endingamount
Proportion of the
investmentamount at the endof the period tothe net assets ofthe Company at
the end of the
reporting period
| reporting period | ||
| Futures-Everbright Account |
38.2 -30.73 0 1,559.5 1,018.32 546.42 0.33%
77.6 -18.2 0 3,407.37 3,057.91 349.17 0.21%Total 115.81 -48.94 0 4,966.87 4,076.23 895.58 0.54%Description of theaccounting policies andthe specific principlesof accounting forhedging businessduring the reportingperiod and whetherthere is any significantchange compared withthose in the previousreporting period
During the reporting period, the hedging business was handled according to hedging accounting standards,the fair value of gold inventory was designated as the hedged item, and the futures contract contractspurchased by Shanghai Gold Exchange were designated as hedging instruments. The hedging instrumentis included in the "derivative instrument at fair value through profit or loss". The gain or loss arising fromthe hedging instrument is included in the current profits and losses. The gain or loss of the hedged item-gold inventory due to gold price fluctuation is included in the current profits and losses, and the bookvalue of the hedged item is adjusted at the end of the period.Description of actualprofit and loss duringthe reporting period
The liquidation profit and loss of the futures account was RMB -6,300, the floating profit and loss wasRMB -489,400, and the annual trading expenses were RMB 19,800.
Description of thehedging effect
Futures-Ping AnAccount
During the reporting period, the value changes of futures varieties and contract quantities held by the
Company were roughly equivalent to those of spot positions; futures positions are in the opposite directionto spot positions; the time period in which the futures position is held corresponds to the time period inwhich the risk is borne by the spot market, there is an economic relationship between the hedginginstrument futures contract and the hedged item-gold inventory, and the changes in the fair value of goldspot can be mostly offset by changes in the fair value of the futures contract, which meets the hedgingeffectiveness requirements. The Company shall continuously evaluate whether the hedging relationship
| meets the hedging effectiveness requirements on and after the hedging commencement date. |
Source of derivativeinvestment fund
Invested capital of shareholders
Risk analysis andcontrol measures forderivative positions inthe reporting period(including but notlimited to market risk,liquidity risk, creditrisk, operational risk,legal risk, etc.)
contract quantity is roughly equivalent to that of spot positions; futures positions are in the oppositedirection to spot positions; and the time period in which the futures position is held corresponds to thetime period in which the risk is borne by the spot market. The main risks of gold futures positions include:
basis risk, forced liquidation risk and operational error risk. For basis risk, gold lease shall be used asinventory as much as possible when the basis is narrowed, and self-owned inventory shall be built less ornot; establish risk early warning for forced liquidation risks-when there is a risk of violent fluctuation ingold price, make a fund plan in advance to maintain the sufficient fund status of the margin account; ifthere is any emergency that triggers forced liquidation, it shall be reported to the management of theCompany as soon as possible, and the hedging position of forced liquidation shall be replenished at theright time; for the risk of operational errors, a trader training mechanism shall be established, operationsand reviews shall be carried out in strict accordance with the requirements of the system and workflow,and daily reports shall be performed. The Company has established a scientific and effective hedgingmanagement system, and the hedging management is implemented from four aspects: organizational
| structure design, planning system, management and evaluation, and dynamic risk monitoring. |
For changes in marketprice or product fairvalue during thereporting period ofinvested derivatives,analysis of the fairvalue of derivativesshall disclose thespecific measures usedand related hypothesesand parameter setting
During the reporting period, the fair value change of the futures contract hedging the holding position wasRMB -489,400. The Company adopted the closing price of the futures contract held in the Shanghai GoldExchange on the last trading day in December 2022 (December 30) as the fair value, and the floatingprofit and loss was the change in fair value.
Involvement inlitigation (if applicable)
N/A
2) Derivatives investment for speculative purposes during the reporting period
□ Applicable ?Not applicable
During the reporting period, the Company has no derivatives investment for speculative purposes.
5. Usage of raised funds
□ Applicable ?Not applicable
No raise funds are used within the reporting period of the Company.VIII. Sales of Major Assets and Equity
1. Sales of major assets
□ Applicable ?Not applicable
No major asset is sold during the reporting period of the Company.
2. Sales of major equity
?Applicable □Not applicable
Counterparty
Shares
sold
Date
ofsale
Transa
ctionprice(RMB10,000
)
Thisequityfrom
thebeginn
ing of
theperiodto the
date
ofsalesis the
netprofitcontributedby thelistedcompany (inRMB10,00
0)
Effect
s ofsaleon theComp
any
Proportionof netprofitwhichcontributesto thelistedcomp
anyby itsequitysale to
the
totalprofit
Prici
ngprincipleofequit
y
sale
Relate
dpartytransactionor not
Relate
drelationshipwithcounter
party
Whet
herthecover
edequity
isfullytransferredor not
Whethe
r it isimplem
ented
asschedul
ed; ifnot,pleaseindicat
e thereasonsand themeasur
esalready
takenby theCompa
ny
Disclosuredate
Disclosureindex
ZhouRen
35.75
%equityof
| Shenz |
December21,2021
933.46
658.9
Theimpact of
| the |
7.89%
permarket
| valu |
No N/A No N/A N/A
hen
AutomobileIndustryImportandExportCo.,Ltd.
| hen | Projec |
t ontheCompany'stotalprofitisaboutRMB8,785,
| 400. | e |
IX. Analysis of Main Holding Companies and Joint-stock Companies?Applicable □Not applicableMain subsidiaries and joint-stock companies affecting over 10% of the Company’s net profit
Unit: RMBCompanyname
Type ofcompany
Mainbusiness
Registeredcapital
Total assets Net assets
Operatingrevenue
Operatingprofit
Net profit
Automobile Industryand Trade
| Co., Ltd. |
Subsidiary
Sales ofautomobiles andaccessories
RMB 58.96million
256,081,65
7.97
216,304,08
9.65
32,593,302.
29,859,820.
26,715,050.
SDG HuariAutomobileEnterprise
| Co., Ltd. |
Subsidiary
Automobile repair andspare partsproductionand sales
USD 5million
75,107,596.
29,556,057.
35,733,198.
-2,829,121.4
-1,945,937.9
ZhongtianIndustry
| Co., Ltd. |
Subsidiary
Propertylease
RMB
366.2219
million
585,058,51
7.33
461,553,32
7.60
96,457,354.
51,254,477.
39,251,356.
HuariToyotaSales &Service
| Co., Ltd. |
Subsidiary
Automobile sales
RMB 2million
67,179,668.
10,951,828.
239,554,99
2.87
471,317.71
-232,597.36ShenzhenXinyongtong MotorVehicleInspectionEquipment
Subsidiary
Propertylease
RMB 19.61million
17,826,951.
12,477,329.
4,870,461.3
846,433.05
1,037,344.9
| Co., Ltd. |
| Shenzhen |
TellusXinyongtongAutomobile
Subsidiary
Propertylease
RMB 32.9million
96,647,880.
77,784,694.
8,709,877.4
4,715,518.6
4,163,355.6
nt Co., Ltd.
| nt Co., Ltd. |
| Shenzhen |
TellusChuangyingTechnolog
Subsidiary
Propertylease
RMB 14million
21,253,369.
17,499,089.
4,327,492.9
2,044,135.5
2,165,956.9
ShenzhenTellusTreasurySupplyChain TechCo., Ltd.
Subsidiary
| y Co., Ltd. | ||
| Purchase, |
sale andleasing ofgoldornamentsandpreciousmetalproducts,leasing ofsafe depositboxes andwarehousin
RMB 50million
49,317,581.
46,096,043.
77,044,112.
-746,141.46
-746,150.98
ShenzhenJewelryIndustryServiceCo., Ltd.
Subsidiary
Jewelry fairplanning,jewelryconsignment,exhibitionplanning,conferenceservices,marketing
| g services |
| planning |
RMB 100million
57,690,775.
31,100,550.
10,619,854.
-4,211,575.0
-4,211,575.0
GuorunGoldShenzhenCo., Ltd.
Subsidiary
in bar sales,goldrecycling,goldpurification/exchange
| services |
RMB 200million
311,984,19
6.33
199,441,14
3.33
328,034,40
4.58
-544,141.04
-558,856.67
RenfuTellusAutomobiles Service
| Co., Ltd. |
Joint stockcompany
Automobile sales andmaintenance
RMB 30million
238,115,44
1.04
56,227,853.
1,088,150,5
61.97
-24,438,889.
-18,782,486.
ShenzhenTellus-GmondInvestmentCo., Ltd.
Joint stockcompany
inindustrial,propertymanagement and
| leasing |
RMB
53.70496
million
391,071,88
1.35
94,287,440.
102,987,69
5.69
37,407,836.
29,305,958.
Acquisition and disposal of subsidiaries during the reporting period?Applicable □Not applicableCompany nameMethod for acquisition andImpacts on the overall production & operation and performance
disposal of subsidiaries during
the reporting periodGuorun GoldShenzhen Co.,Ltd.
New establishment
| disposal of subsidiaries during | |
| Guorun Gold is a comprehensive service platform company for gold circulation |
established by Tellus Holding to further improve its layout in the gold andjewelry industry. It is in the construction period in 2022, with a net profit of
X. Structured Entities Controlled by the Company
□ Applicable ?Not applicable
XI. Outlook of Future Development
1. Development strategy
Since the Company formulated the strategic plan for the transformation to a third-party comprehensiveservice provider in the jewelry industry in 2014, it has been unswervingly and steadily promoting the strategictransformation and project implementation in accordance with the established plan. After years of explorationand attempts, substantial results have been achieved. During the 14th Five-Year Plan period, based on the newdevelopment stage, the Company will continue to deepen the cultivation of third-party jewelry service platforms,deepen the expansion of third-party jewelry services, promote industrial upgrading, and improve productioncapacity and efficiency around the strategic idea of "adhering to the comprehensive value to cross the economiccycle, improving the value chain with services, seeking capital assignment, and deeply developing third-partyjewelry services", to strive to build the most influential third-party comprehensive service provider in thedomestic jewelry and jade industry. In 2023, the Company will closely focus on the decomposition andimplementation of the annual objectives of the "14th Five-Year Plan", make overall plans for various tasks fromthe four perspectives of long-term vision, implementation, operability and effectiveness, and lead high-qualityand healthy development with high-quality business plans.
2. 2023 Business Plan
The year 2023 is a key connecting year for Tellus Holding to implement the 14th Five-Year Plan. Theoverall requirements are: fully implement the spirit of the 20th National Congress of the Communist Party ofChina, firmly seize the policy opportunities and the opportunity of jewelry industry reform, take advantage ofthe trend, work hard, accelerate the third-party transformation of jewelry, and achieve high-quality development.The details are shown as follows:
(I) Led by Party building, the Company's high-quality development is led by high-quality Party building.Transform from Party building to jewelry industry and carry out the "Secretary Project" to provide services and
supports for jewelry and gold projects; strengthen the development of Party members, especially activelystimulate outstanding employees to move closer to the Party organization on the front line, and develop andexpand the Party member team; study, publicize and implement the spirit of the 20th National Congress of theCommunist Party of China according to the deployment of the superior; carry out integrity and self-disciplineeducation for all employees, and shape the integrity culture of all employees in a targeted manner incombination with the characteristics of the industry.
(II) Deepen cultivation and promote the efficient development of the jewelry industry. Comprehensivelystrengthen market development, continuously expand business channels, deepen customer stickiness anddiversify services; improve the service system, implement new service categories and business models, activelypromote the bonded viewing business of rough diamonds, and expand new categories such as jadeite and jade;increase the investment and innovation of safe box marketing resources, and expand the application scenarios ofsafe boxes inside and outside the industry; strengthen risk control innovation, effectively improve the qualityand efficiency of risk control, strengthen industry exchanges and research, continuously improve risk controlsystems and methods, explore digital risk control means, and promote the construction and implementation of acomprehensive risk control system; we will vigorously promote the construction of informatization, take theactual business needs as the guide, make efforts in product informatization standards, and create the core valueof the enterprise around digital innovation.
(III) Comprehensively improve the comprehensive ability of commercial operation business bybenchmarking against advanced standards. Focus on the investment promotion and opening of the JinzuanBuilding to ensure the opening of the building as scheduled and steadily improve the occupancy rate; introducecommercial complex operation consulting projects, carry out industry benchmarking, comprehensively optimizethe existing level, and improve service capabilities; continuously improve the operation capabilities of jewelrybuilding, Tellus home and traditional property, and build an efficient business management and operation team.
(IV) Optimize the organizational structure and continuously improve the strategic control capability.Adjust and optimize the organizational structure and functions to adapt to the Company's transformation anddevelopment tasks, integrate talents and release resources and energy; standardize the operation of the controlsystem, optimize the main line of 4S management, promote the implementation of strategies, and form aneffective closed-loop.
(V) Continuously improve the incentive mechanism and strengthen the construction of talent team. Adjustthe organizational structure and staffing of front-line business departments, and optimize the salary structure
and performance appraisal system of business personnel; establish a multi-channel, hierarchical and three-dimensional training system and carry out employee training in an orderly manner; expand talent introductionchannels, and explore industry recommendation, association recommendation, internal recommendation,headhunting recruitment and other means to introduce talents in the jewelry industry on the basis of existingchannels.
(VI) Build a solid foundation for safe development and answer the "required questions" for work safety.Further divide safety responsibilities and revise safety systems, and increase quarterly rewards and punishmentsfor work safety assessment; improve work safety capabilities with higher requirements, increase internal andexternal training and retraining, and establish a common growth mechanism; pay close attention to safetymanagement such as reinforcement and reconstruction of old properties; carry out evaluation activities of worksafety management system.
3. Possible Risks and Countermeasures
In the process of strategy implementation and project operation, we will objectively and clearly recognizethe possible risks and take active and effective measures to prevent them.
(1) Risk 1: risks caused by market fluctuations
Affected by the international situation and other factors, the domestic economic growth slowed down, thepressure on industrial restructuring increased, and the overall economic environment had an uncertain impact onthe Company's operation.
Countermeasures: In view of this risk, the Company will actively take various preventive measures. First,continuously strengthen risk management, establish and improve risk prevention and control mechanism toensure the Company's compliance operation and steady development; Second, firmly advance the Company'sstrategic transformation pace, promote the implementation of transformation projects through innovativebusiness models, explore incremental markets, expand business scale, seek new profit growth points, andcontinuously improve the Company's competitiveness to provide a good foundation for the Company's long-term stable development.
(2) Risk 2: insufficient talent team building
With the implementation of transformation projects and the rapid development of the Company, thedemand for various talents in the industry and management is increasing, and the existing talent team isgradually unable to meet the requirements of development.
Countermeasures: First, set "top-down" talent training objectives and establish talent training plans;Second, expand talent introduction channels and recruit talents through multiple channels; Third, adjust theorganizational structure and staffing of front-line business departments to improve organizational efficiency;Fourth, we will establish a diligent and hard-working style of work, and enhance cohesion and execution toensure the stability of enterprise transformation.
XII. Reception, Investigation, Communication, Interview and Other Activities during theReporting Period?Applicable □Not applicableReception time Reception place
Way ofreception
Classificationof receptionobject
Reception
object
Main pointstalked aboutand information
provided
Index ofgeneralinvestigationinformation
April 22, 2022
"Value Online"IR Platform(www.ir-online.cn)
Others Others
Investorsparticipating inthe Company's2021 onlineperformancebriefingthrough the"Value Online"IR platform
The Company'sstrategy, 2021annualperformance,main businessand operationmanagement.
For details,
please refer toInvestorRelations onthe interactiveplatform ofShenzhen StockExchange(http://irm.cninf
| o.com.cn) . |
January 7, 2022 Company On the phone Individual Investor
N/AJanuary 13,2022
Company On the phone Individual Investor
Fourth quarterperformance of
| Corporate operations |
| the Company |
N/AJanuary 19,2022
Company On the phone Individual Investor
Companydiscloses theperformance
| forecast |
N/A
Company On the phone Individual Investor
| February 14, 2022 | Corporate operations |
N/A
Company On the phone Individual Investor
| February 25, 2022 | Corporate operations |
N/AMarch 23, 2022 Company On the phone Individual Investor
Shareholdingreduction ofshareholders of
N/AMarch 31, 2022 Company On the phone Individual Investor
| the Company |
| Disclosure time |
point of theannual report of
N/AApril 9, 2022 Company On the phone Individual Investor
| the Company |
| Corporate operations |
N/AMay 8, 2022 Company On the phone Individual Investor
of main
| business sectors |
N/A
of the Company
May 9, 2022 Company On the phone Individual Investor
| of the Company |
| Number of |
shareholders of
N/AMay 23, 2022 Company On the phone Individual Investor
| the Company |
| Rent reduction of the Company |
N/AMay 27, 2022 Company On the phone Individual Investor
Corporate
N/AJune 1, 2022 Company On the phone Individual Investor
| operations |
| Stock price |
issues of the
N/AJune 6, 2022 Company On the phone Individual Investor
| Company |
| Stock price |
issues of the
N/AJune 17, 2022 Company On the phone Individual Investor
Operation ofthe Company'sautomotive
| Company |
| sector |
N/AJune 28, 2022 Company On the phone Individual Investor
performance of
| the Company |
N/A
July 1, 2022 Company On the phone Individual Investor
purchase ofdirectors,supervisors andseniormanagementliability
| insurance |
N/A
July 11, 2022 Company On the phone Individual Investor
performanceforecast of the
| Company |
N/AJuly 27, 2022 Company On the phone Individual Investor
issues of the
| Company |
N/AAugust 3, 2022 Company On the phone Individual Investor
The Company'sbusiness andstock price
N/AAugust 11,2022
Company On the phone Individual Investor
| issues |
| Relevant |
information of
N/A
| Huari Company | ||
| August 26, 2022 |
Company On the phone Individual Investor
N/AAugust 30,2022
Company On the phone Individual Investor
| Business situation |
| Purchasing of |
directors,supervisors andseniormanagementliability
N/ASeptember 1,
| insurance | ||
| 2022 |
Company On the phone Individual Investor
Business
N/AOctober 14,2022
Company On the phone Individual Investor
| situation |
| Completion of |
state-owned
N/A
reform
| reform | ||
| November 17, 2022 |
Company On the phone Individual Investor
N/ANovember 24,2022
Company On the phone Individual Investor
| Corporate operations |
| Whether the |
Company has
N/ADecember 21,2022
Company On the phone Individual Investor
Number ofshareholders of
| acquired |
| the Company |
N/ADecember 29,2022
Company On the phone Individual Investor
the Company in
| 2022 |
N/A
Section IV Corporate GovernanceI. Basic Information on Corporate GovernanceDuring the reporting period, the Company continuously improved the corporate governance structure andthe internal control system in strict accordance with the Company Law, the Securities Law, the Rules Governingthe Listing of Stocks on the Shenzhen Stock Exchange, the Guidelines for the Standardized Operation of ListedCompanies on the Shenzhen Stock Exchange and other relevant laws and regulations. During the reportingperiod, the Company has standardized operation, strong independence, standardized information disclosure, andthe actual situation of corporate governance meets the requirements of normative documents for listed corporategovernance. The main aspects of corporate governance are as follows:
1. Shareholders and the General Meeting of Shareholders
The convening and holding procedures, proposal review procedures and decision-making procedures of theGeneral Meeting of Shareholders of the Company comply with the relevant provisions and requirements of theCompany Law, the Articles of Association and the Rules of Procedure for General Meetings of Shareholders.The General Meetings of Shareholders was convened and held, and all shareholders, especially small andmedium-sized shareholders, were treated fairly, enjoying equal rights based on their shares. The Companystrictly implements the Detailed Rules for the Implementation of Online Voting at the General Meeting ofShareholders to ensure that all shareholders have the right to participate in and vote on the Company's decision-making matters and fully exercise their rights. All previous General Meetings of Shareholders were witnessedby lawyers to effectively maintain the legitimate rights and interests of the listed company and all theshareholders. The Company also communicated with small and medium-sized shareholders through the investorrelations column on the official website and telephone, ensuring the smooth and fair information exchange withsmall and medium-sized shareholders, and fully listening to the demands and suggestions of small and medium-sized shareholders. During the reporting period, the Board of Directors of the Company convened and held the2021 Annual General Meeting of Shareholders and 1 Extraordinary General Meeting of Shareholders, andexercised its functions and powers in accordance with laws and regulations, the Articles of Association and theRules of Procedure for General Meetings of Shareholders to form effective resolutions.
2. Directors and Board of Directors
During the reporting period, the Company has 9 members of the Board of Directors, including 3independent directors. The number and structure of the Board of Directors comply with the requirements ofrelevant laws and regulations and the Articles of Association. The Board of Directors has three specialcommittees, namely, the Strategy Committee, the Audit Committee and the Remuneration and AppraisalCommittee. Each special committee strictly abides by the relevant systems and regulations and performs its ownduties, which effectively strengthens the standardized operation of the work of the Board of Directors of theCompany and provides professional opinions and references for the decision-making of the Board of Directors.During the reporting period, the Company held 10 meetings of the Board of Directors and 9 meetings of specialcommittees of the Board of Directors in accordance with laws and regulations, the Articles of Association, theRules of Procedure for the Board of Directors and the rules of procedure for special committees. The conveningprocedures, proposal review procedures and decision-making procedures of the meeting all comply withrelevant regulations. The directors can attend the board meeting with a serious and responsible attitude, activelyparticipate in relevant training, be familiar with relevant laws and regulations, and understand the rights,obligations and responsibilities as directors. The members of the Board of Directors have a reasonable structureof expertise, are diligent and responsible in the performance of their duties, and safeguard the overall interestsof the Company. The independent directors have expressed prior approval opinions and independent opinionson relevant matters with a fair and diligent attitude, which has improved the scientific and fair decision-makingof the Board of Directors.
3. Supervisors and Board of Supervisors
During the reporting period, the Board of Supervisors of the Company consists of 5 supervisors, including2 employee representative supervisors. The number and personnel of the Board of Supervisors meet therequirements of laws, regulations and the Articles of Association. During the reporting period, the Companyheld 4 meetings of the Board of Supervisors in accordance with relevant laws and regulations, the Articles ofAssociation and the Rules of Procedure for the Board of Supervisors. The supervisors supervised theCompany's operation and financial status and the legality and compliance of the Company's directors and seniorexecutives in performing their duties, and safeguarded the legitimate rights and interests of the Company andshareholders.
4. Information Disclosure and Investor Relation Management
The Company shall, in strict accordance with the requirements of the Information Disclosure System,
designate the Secretary of the Board of Directors of the Company to be responsible for information disclosure,reception of shareholders' visits and consultation, and disclosure of relevant information in a true, accurate,complete and timely manner in strict accordance with relevant regulations, so as to ensure that all shareholdersof the Company can obtain information with equal opportunities.
5. Relationship between controlling shareholder and listed companies
The controlling shareholder exercises the rights of the contributor according to law through the GeneralMeeting of Shareholders, without directly or indirectly intervening in the Company's decision-making andbusiness activities in any other way, and without occupying the funds of the listed company; the Company andits controlling shareholder have achieved "five separations" in terms of assets, finance, personnel, institutionsand business; the Board of Directors, the Board of Supervisors and the internal management organization of theCompany can operate independently to ensure that major decisions of the Company are made in accordancewith standardized procedures.
6. Performance evaluation and incentive and restraint mechanism
The Company has gradually established and improved the open and transparent performance evaluationstandards and incentive and restraint mechanisms for directors, supervisors and senior executives. Theappointment of senior executives of the Company is open and transparent, which complies with the provisionsof laws and regulations.
7. About stakeholders
While pursuing economic benefits and protecting the interests of shareholders, the Company can fullyrespect and safeguard the legitimate rights and interests of stakeholders, and effectively communicate andcooperate with stakeholders. The Company pays attention to the protection of employees' rights and interestsand supports the congress of workers and staff and trade union organizations to exercise their functions andpowers according to law. During the reporting period, the Company cultivated talents, attached importance tosocial responsibility, paid attention to social welfare undertakings such as welfare, environmental protection andvoluntary service, and achieved good social benefits while achieving economic benefits. As of the end of thereporting period, the actual situation of corporate governance met the requirements of the normative documentson the governance of listed companies issued by CSRC.Whether there is any significant difference between the actual corporate governance of the Company and the provisions of laws,administrative regulations, or the rules of the CSRC governing the governance of listed companies
□Yes ?No
There is no significant difference between the actual corporate governance of the Company and the provisions of laws,
administrative regulations, or the rules of the CSRC governing the governance of listed companies.II. Independence of the Company from Controlling Shareholder and Actual Controller inthe Company's Assets, Personnel, Finance, Organization, Business, etc.The Company has been independent from business, personnel, assets, organizations, and finance, etc. ofthe controlling shareholder, and is provided with independent and complete businesses and self-operationcapabilities.
1. Business: The Company is an independent legal entity. It is completely independent of the controlling
shareholder in terms of business and has independent and complete business system and independent operationability. The Company has independent operation and service systems and its own leading industries. There is nohorizontal competition between the Company and the controlling shareholder and related parties.
2. Personnel: The Company operates completely independently in terms of labor, personnel and wage
management and has formulated an independent management system; the General Manager, Deputy GeneralManager, Chief Financial Officer, Secretary of the Board of Directors and other senior executives of theCompany all worked in the Company and received remuneration during their tenure in the Company, and didnot hold any positions in the shareholder unit.
3. Assets: The Company independently and completely owns the business system and related assets related
to the operation, and independently registers, establishes accounts, accounts and manages the assets. The assetsare independent of the controlling shareholder and other enterprises controlled by it.
4. Finance: The Company has set up an independent financial accounting department and established a
complete set of accounting system and financial management system; there is no case where the controllingshareholder interferes with the Company's capital operation; the Company has opened an independent bankaccount, and there is no deposit of funds into the account of a finance company or a settlement center controlledby a major shareholder or other related parties; the Company does not share bank accounts with the controllingshareholder and other enterprises controlled by it. The Company pays taxes independently according to law.
5. Organization: The Board of Directors, the Board of Supervisors and other internal organizations of the
Company operate independently. All organizations of the Company are set up according to the requirements ofthe specifications of listed companies and the actual business characteristics of the Company. The Company hasan independent office address.
III. Horizontal Competition
□ Applicable ?Not applicable
IV. Annual General Meeting and Extraordinary General Meetings (EGM) during theReporting Period
1. Situation of General Meeting of Shareholders during the reporting period
Session ofmeeting
Type ofmeeting
Attendanceproportion ofinvestors
Holding
date
Disclosuredate
Resolution
2021 AnnualGeneral Meeting
Annual GeneralMeeting
60.77%
April 29,2022
April 30,2022
For details, please refer to the Announcement
on Resolutions of 2021 Annual GeneralMeeting of Shareholders (Announcement No.:
2022-016) of Securities Times, Hong KongCommercial Daily and CNINFO
| (www.cninfo.com.cn). |
The FirstExtraordinaryGeneral Meetingin 2022
ExtraordinaryGeneralMeeting
59.79%
September15, 2022
September16, 2022
Announcementon Resolutions of the First ExtraordinaryGeneral Meeting of 2022 (Announcement No.:
2022-043) of Securities Times, Hong KongCommercial Daily and CNINFO
| (www.cninfo.com.cn). |
2. Preferred shareholders with resumed voting rights request to convene an EGM
□ Applicable ?Not applicable
V. Directors, Supervisors and Senior Executives
1. Basic information
Name Title
Servic
estatus
Gender
Ag
e
Date of
termcommence
ment
Date of
termexpirati
on
Number ofsharesheld at
thebeginning of
theperiod(share)
Number ofincrea
sedshares
incurren
tperiod(share
)
Number ofdecrea
sedshares
incurrentperiod(share)
Otherincrease/decrease (share)
Number ofshare
s attheendof theperio
d(shar
e)
Reasons for
theincrease ordecrease ofshares
Chunl
| ong |
Chairman
servic
| e |
Male 50
September7, 2018
ber 12,
| 2024 |
0 0 0 0 0 -HongWenya
Director
servic
| e |
Male 49
September13, 2021
ber 12,
| 2024 |
0 0 0 0 0 -WuRuikai
General
| Manager | In- |
servic
Male 52
September13, 2021
| e | Septem |
ber 12,
0 0 0 0 0 -
YangXi
Director
In-
servic
| e |
Male 42
April 29,2022
ber 12,
| 2024 |
0 0 0 0 0 -HuangLiang
Director
servic
| e |
Male 36
September15, 2022
ber 12,
| 2024 |
0 0 0 0 0 -LouHong
Director
servic
| e |
Female
February27, 2018
ber 12,
| 2024 |
0 0 0 0 0 -LouHong
ChiefFinancia
In-servic
| l Officer | e |
Female
January 4,2018
September 12,
0 0 0 0 0 -
| 2024 | ||
| Hu |
Yumin
| g | Indepen |
dent
| Director | In- |
servic
Male 58
January 4,2018
| e | Septem |
ber 12,
0 0 0 0 0 -
| 2024 | ||
| Jiang |
Dingh
| ang | Indepen |
dent
| Director | In- |
servic
Male 60
September7, 2018
| e | Septem |
ber 12,
0 0 0 0 0 -ZhangDong
Independent
| 2024 | ||
| Director |
In-servic
Male 49
September7, 2018
September 12,
| e | 2024 |
0 0 0 0 0 -GuoXiaodong
n ofBoard ofSupervis
| ors |
In-service
Male 59
September7, 2018
September 12,2024
0 0 0 0 0 -ZhangBaojun
Supervisor
servic
| e |
Male 53
September13, 2021
ber 12,
| 2024 |
0 0 0 0 0 -
Xingy
| u |
Supervisor
servic
| e |
Male 42
September13, 2021
ber 12,
| 2024 |
0 0 0 0 0 -
Haiche
| ng | Staff |
Supervis
| or | In- |
servic
Female
September7, 2018
| e | Septem |
ber 12,
0 0 0 0 0 -ZhangZheng
StaffSupervis
| 2024 | ||
| or |
In-servic
Male 39
September7, 2018
September 12,
| e | 2024 |
0 0 0 0 0 -TanZhong
Secretary ofPartyCommitt
| ee |
In-service
Male 55
September7, 2018
September 12,2024
0 0 0 0 0 -XieJing
General
| Manager | In- |
servic
Male 58
October25, 2018
| e | Septem |
ber 12,
0 0 0 0 0 -QiPeng
| 2024 | ||
| Deputy |
General
| Manager | In- |
servic
Male 50
September29, 2021
| e | Septem |
ber 12,
0 0 0 0 0 -QiPeng
Secretary of theBoard ofDirector
| 2024 | ||
| s |
In-service
Male 50
December28, 2015
September 12,2024
0 0 0 0 0 -
Director
| Yang Hongy | Resigned |
Male 45
| September 13, 2021 | March 28, |
0 0 0 0 0 -
u
| u | 2022 | |
| Gu |
Zhimi
Director
Resigned
Male 52
September7, 2018
| ng | May |
20,
0 0 0 0 0 -Total -- -- -- -- -- -- 0 0 0 0 0 --Whether there is any departure of Directors and Supervisors and dismissal of senior executives during the term of office during thereporting period?Yes □ NoMr. Yang Hongyu, the former director of the Company, resigned as a director of the 10th Board ofDirectors and a member of the Strategy Committee of the Board of Directors due to work arrangementapplication, and no longer held any position in the Company after resignation. The resignation report of Mr.Yang Hongyu shall take effect from the date of delivery to the Board of Directors of the Company. For details,please refer to the Announcement on the Resignation of Directors of the Company (Announcement No.: 2022-004) published by the Company on March 30, 2022 in Securities Times, Hong Kong Commercial Daily andCNINFO (www.cninfo.com.cn).
Mr. Gu Zhiming, the former director of the Company, resigned as a director of the 10th Board of Directorsand a member of the Strategy Committee of the Board of Directors due to work arrangement application, and nolonger held any position in the Company after resignation. The resignation report of Mr. Gu Zhiming shall takeeffect from the date of delivery to the Board of Directors of the Company. For details, please refer to theAnnouncement on the Resignation of Directors of the Company (Announcement No.: 2022-021) published bythe Company on May 21, 2022 in Securities Times, Hong Kong Commercial Daily and CNINFO(www.cninfo.com.cn).
Change of Directors, Supervisors and Senior Executives of the Company?Applicable □Not applicable
Name Position Type Date Reason
2022YangHongyu
Director Resigned March 28, 2022
| Yang Hongyu | Resign from the position of director of the Company due to work arrangement. |
Yang Xi Director Elected April 29, 2022
Company at the 2nd formal meeting of the 10th Board of Directors of the
| Company and the 2021 Annual General Meeting of Shareholders. |
Gu
Director Resigned May 20, 2022
Resign from the position of director of the Company due to work
| Zhiming | arrangement. |
HuangLiang
Director Elected September 15, 2022
Company at the 4th formal meeting of the 10th Board of Directors of theCompany and the 1st Extraordinary General Meeting of Shareholders in
| 2022. |
2. Employment
Professional background, the main work experience and the current main duties of the Company's in-service directors, supervisorsand senior executives
Name
| Name | Main Work Experience and Employment |
Fu Chunlong
-Owned Duty Free Commodity (Group) Co., Lt
| d., and the supervisor of the Company. He is currently the Secretary of the Party Committee and Chairman of the Board of Directors of the Company. |
Hong Wenya
-owned Assets Supervisi
| on and Administration Commission of Shenzhen Municipality, Deputy Director of the Finance Department (presiding over the work) and Director of the Compliance Risk Control Department of Shenzhen Kunpeng Capital Co., Ltd. He is currently a member of the Party Committee, director and CFO of Shenzhen Special Economic Zone Development Group Co., Ltd. and a director of the Company. |
Yang Xi
Wu Ruikai
| Born in 1981, he holds a master's degree and is an intermediate economist. He successively held the posts of Engineer of AVIC SCC, Business Manager of the Secretariat of the Board of Directors of Shenzhen SDG Information Co., Ltd., Senior Director of the Asset Management Department of Shenzhen Yantian Port Holdings Co., Ltd., Secretary of the Board of Directors of Shenzhen Unilumin Technology Co., Ltd., Capital Operation Manager of the Office of the Secretary of the Board of Directors, Capital Operation Manager of the Strategic Investment Department, and Deputy General Manager of the Strategic Investment Department (Secretary Office) (presiding over the work since July 2021) of Shenzhen Special Economic Zone Development Group Co., Ltd. He is currently the General Manager of the Strategic Investment Department of Shenzhen Special Economic Zone Development Group Co., Ltd. and the Director of the Company. |
| Born in 1971, he holds a master's degree and is an intermediate economist and senior human resource manager. He once served as Deputy Director of the Administrative Office, Director of the Secretariat of the Board of Directors and Manager of the Party |
-
Lou Hong
| Mass Personnel Department of Shenzhen Tellus Holding Co., Ltd., Deputy Director and Director of the Enterprise Department II, and General Manager of the Enterprise Management Department and the Legal Department of Shenzhen Special Economic Zone Development Group Co., Ltd. He currently serves as the Company's Director and General Manager. |
| Born in 1968, she holds a bachelor's degree and is a senior accountant. Worked as a staff member of the Finance Department of Suzhou Silk Industry Company and Shenzhen Southeast Silk Co., Ltd., a staff member of the Finance and Accounting Department and a business director of the Accounting Management Office of Shenzhen Special Economic Zone Construction & Development Group Co. Ltd., a deputy manager of the Finance Department of Shenzhen Tefa Liancheng Real Estate Development Co., Ltd., a manager of the Finance Department of Shenzhen Tefa Investment Co., Ltd., and a business manager and deputy director of the Finance and Accounting Department of Shenzhen Special Economic Zone Development Group Co., Ltd., Chief Financial Officer of Shenzhen SDG Real Estate Co., Ltd., and Director and Chief Financial Officer of Shenzhen Tefa Xiaomeisha Investment Development Co., Ltd. She currently serves as the Company's Director and Chief Financial Officer. |
Huang Liang
-manager and senior secretary-manager. He is current
| ly the deputy office director (in charge) of Shenzhen Special Economic Zone Development Group Co., Ltd. and a director of the Company. |
Hu Yuming
Jiang Dinghang
| Born in 1965, a doctoral candidate and a professor of accounting. He used to be a teaching assistant, lecturer and associate professor of the School of Economics of Xiamen University, an associate professor of the School of Management of Jinan University, deputy director of the Department of Accounting, dean of the Department of Accounting, deputy dean of the International School of Jinan University, and deputy dean of the School of Management of Jinan University. He is currently a professor and doctoral supervisor at the School of Management of Jinan University and an independent director of the Company. | |
| Born in 1963, he holds a master's degree and is a lawyer. He once served as director of the Regulation Consultation Department of Shenzhen Social Security Bureau, deputy director of the Office of Shenzhen Labor Bureau, Office Director of Shenzhen Special Economic Zone Development Group Co., Ltd., general manager of Shenzhen Tefa Songli Co., Ltd., general manager of Shenzhen Communication Industry Co., Ltd., and intern lawyer of Guangdong Zhong An Law Office. He is currently a senior partner of Shanghai Allbright (Shenzhen) Law Offices, an independent director of Gaoxin Modern Intelligent System Co., Ltd. and an independent director of the Company. | |
| Zhang Dong | Born in 1974, he is a doctoral candidate, a postdoctoral fellow in economics, a senior economist, a senior gold |
investment analyst, and a GIA research gemologist. He once served as deputy general manager of ShenzhenQiangzhuang Computer Technology Co., Ltd., deputy general manager of Shenzhen Brain Times Economy andCulture Co., Ltd., assistant to
| the President of Hong Kong Leader Culture Media Co., Ltd., general manager of Shenzhen Zhongshi Advertising Co., Ltd., general manager of Heilongjiang Liuguifu Jewelry Co., Ltd., and president of Liuguifu Jewelry Group Co., Ltd. He is currently the chairman of Yijixuan Jewelry (Chengdu) Co., Ltd. and the independent director of the Company. |
Guo Xiaodong
| Shenzhen Tefa Development Center Property Management Co., Ltd., deputy general manager of Shenzhen Tefa Development Center Construction Supervision Co., Ltd., director and general manager of Shenzhen Tefa Development Center Property Management Co., Ltd., deputy general manager of Shenzhen Tefa Property Co., Ltd., chairman of the Board of Supervisors of Shenzhen SDG Real Estate Co., Ltd. and chairman of the Board of Supervisors of Shenzhen Tefa Xiaomeisha Tourism Center. He currently serves as the Chairman of the Board of Supervisors of the Company. |
Liu Haicheng
manager of the Business Management Department of the Company. S
Born in 1969, she holds a master's degree and is a senior engineer. She once served as a staff member of the DesignDepartment of Dongfeng Motor Wheel Co., Ltd., a staff member of the Technical Department of ShenzhenDongfeng Motor Co., Ltd., a staff member of the Secretariat of Shenzhen Automobile Industry Association, a staffmember of the Business Department of the Automobile Business Division of the Company, and a staff member,deputy manager andhe is currently the deputygeneral manager and employee representative supervisor of the Jewelry Industry Management Division of theCompany.
Zhang Zheng
Tan Zhong
| Born in 1984, he holds a bachelor's degree and is an intermediate accountant and senior human resources manager. He once served as the senior auditor of the Shenzhen Branch of Peking Certified Public Accountants in Shenzhen city, the financing specialist of the Planning and Finance Department of Shenzhen Special Economic Zone Development Group Co., Ltd., and the deputy manager of the Planning and Finance Department of the Company. He is currently the manager of the Auditing & Risk Management Department and the employee representative supervisor of the Company. |
| Born in 1968, he holds a bachelor's degree and has a lawyer qualification certificate and enterprise legal counsel qualification certificate. He once served as the legal counsel and deputy manager of the Enterprise Management Department of Shenzhen Auto Motive Industry & Trade General Company, deputy director of the Secretariat of the Board of Directors, legal affairs representative and manager of the Enterprise Management Department of the Company, and general manager and Secretary of the Party General Branch of Shenzhen SDG Huari Automobile Enterprise Co., Ltd. He currently serves as the Company's Deputy Secretary of the Party Committee and Chairman of the Labor Union. |
Xie Jing
| of the Real Estate Department and manager of the Engineering Department of Shenzhen Special Economic Zone Development Group Co., Ltd., deputy general manager of Shenzhen Jincheng Real Estate Group Co., Ltd., executive president of Shenzhen Jiaanda Investment Group Co., Ltd., general manager of Land Reserve Center of Weiye Holdings Ltd., etc. He currently serves as the Deputy General Manager of the Company. |
Qi Peng
Position in the Shareholder's Entity?Applicable □Not applicableNameofofficer
Name of the shareholder's
entity
Position in the shareholder's
entity
Date of termcommencement
Date of
termexpirati
on
Whether there iscompensation orallowance in theshareholder'sentity or notHongWenya
Born in 1973, he holds a master's degree and is an economist. He has obtained the qualification certificate ofSecretary of the Board of Directors of Shenzhen Stock Exchange. He once served as the secretary of the chairmanand the head of the Information Center of Shenzhen Special Economic Zone Development Group Co., Ltd., thedeputy director of the Secretariat of the Board of Directors, the deputy manager of the Enterprise ManagementDepartment and the manager of the Business Department of the Automobile Business Division of Shenzhen TellusHolding Co., Ltd., the general manager of Shenzhen Tellus Automobile Service Chain Co., Ltd., the general managerof Shenzhen Tellus Xinyongtong Automobile Development Co., Ltd., director of the Secretariat of the Board ofDirectors of Shenzhen Tellus Holding Co., Ltd., etc. He currently serves as the Deputy General Manager and theSecretary of the Board of Directors of the Company.
Shenzhen Special Economic
Zone Development Group
| Co., Ltd. | Member of the Party |
Committee, Director and
June 15, 2021 - Yes
| Chief Financial Officer | |||||
| Yang | Shenzhen Special Economic | General Manager of Strategic | December 6, 2021 | - | Yes |
Xi
| Xi | Zone Development Group Co., Ltd. | Investment Department |
HuangLiang
Zone Development Group
| Co., Ltd. |
Deputy Office Director (incharge)
December 6, 2021 - YesConditions on service in other units?Applicable □Not applicable
Name ofofficer
Name of other units
Positionheld in otherunits
Date of termcommencement
Date of term
expiration
Whether there iscompensation orallowance in theother units or not
| Hong Wenya | Shenzhen SDG Information Co., Ltd. |
Director December 16, 2022 July 15, 2024 No
| Hong Wenya | Shenzhen SEZ Construction Group Co., Ltd. |
Supervisor December 23, 2021 - NoYang Xi
Director December 13, 2021 July 15, 2024 NoYang Xi
Shenzhen Zhishenggao Technology
| Shenzhen SDG Information Co., Ltd. |
| Development Co., Ltd. |
Director December 24, 2021 - NoLou Hong
| Shenzhen Renfu Tellus Automobiles Service Co., Ltd. | Vice Chairman |
March 28, 2019 - NoHuYuming
Jinan University
and DoctoralSupervisorof theSchool of
| Management |
June 1, 2003 - Yes
| Jiang Dinghang | Shanghai Allbright (Shenzhen) Law Offices | Senior Partner |
April 1, 2005 - YesJiang
Gaoxin Modern Intelligent System
| Dinghang | Co., Ltd. |
Independent
January 21, 2020 - Yes
| Director | ||
| Zhang Dong | Yijixuan Jewelry (Chengdu) Co., Ltd. |
Chairman September 3, 2021 - YesConditionson servicein otherunits
The positions of the Company's directors, supervisors and senior executives in other units are those of non-holdingsubsidiaries of the Company.Penalties imposed by securities regulatory institution in past three years on directors, supervisors and senior executives who are in-service and left their posts during the reporting period
□ Applicable ?Not applicable
3. Compensation of Directors, Supervisors and Senior Executives
The decision-making procedures, determination basis and actual payment of the remuneration of directors, supervisors and seniorexecutives shall be implemented in strict accordance with the Detailed Rules for the Implementation of the Remuneration andAppraisal Committee of the Board of Directors of Shenzhen Tellus Holding Co., Ltd., the Measures for the Management ofRemuneration and Performance of Members of the Management Team of Shenzhen Tellus Holding Co., Ltd., the RemunerationManagement System for Employees of Headquarters of Shenzhen Tellus Holding Co., Ltd., the Measures for the Management ofEmployee Performance of Headquarters of Shenzhen Tellus Holding Co., Ltd. and other relevant systems and regulations.
Compensation of the directors, supervisors and senior executives of the Company during the reporting period:
Unit: RMB 10,000
Name Title Gender Age Service status
Totalcompensationbefore taxreceived fromthe Company
Whether to
receivecompensationfrom relatedparties of theCompany
Fu Chunlong
| Fu Chunlong | Chairman | Male | 50 | In-service | 159.82 | No |
| Hong Wenya | Director | Male | 49 | In-service | 0 | Yes |
Wu Ruikai
General
| Manager |
Male 52 In-service 94.04 No
| Yang Xi | Director | Male | 42 | In-service | 0 | Yes |
| Huang Liang | Director | Male | 36 | In-service | 0 | Yes |
| Lou Hong | Director | Female | 55 | In-service | 125.36 | No |
Hu Yuming
Independent
Male 58 In-service 8 NoJiang Dinghang
| Director |
| Independent Director |
Male 60 In-service 8 NoZhang Dong
Male 49 In-service 8 NoGuo Xiaodong
| Independent Director |
| Chairman of |
Board of
Male 59 In-service 79.2 No
| Supervisors | ||||||
| Zhang Baojun | Supervisor | Male | 53 | In-service | 0 | Yes |
| Zeng Xingyu | Supervisor | Male | 42 | In-service | 0 | Yes |
Liu Haicheng
Female 54 In-service 67.06 NoZhang Zheng
Employee
| Employee Supervisor |
| Supervisor |
Male 39 In-service 55.27 NoTan Zhong
Secretary ofParty
| Committee |
Male 55 In-service 119.53 NoXie Jing
Male 58 In-service 156.71 NoQi Peng
| Deputy General Manager |
| Deputy General |
Manager,Secretary of theBoard of
Male 50 In-service 103.48 No
| Directors | ||||||
| Yang Hongyu | Director | Male | 45 | Resigned | 0 | Yes |
| Gu Zhiming | Director | Male | 52 | Resigned | 0 | No |
Total -- -- -- -- 984.47 --
VI. Duty Performance of Directors during the Reporting Period
1. Information of the Board of Directors during the reporting period
Session of meeting
Holdingdate
Disclosuredate
ResolutionThe Second FormalMeeting of the TenthBoard of Directors
April 7,2022
April 8,2022
For details, please refer to the Announcement on Resolutions of theSecond Formal Meeting of the Tenth Board of Directors (AnnouncementNo.: 2022-005) of Securities Times, Hong Kong Commercial Daily and
| CNINFO (www.cninfo.com.cn) | |||
| The Third Formal | April 28, | April 29, | For details, please refer to the Announcement on Resolutions of the |
Meeting of the Tenth
Board of Directors
| Meeting of the Tenth | 2022 | 2022 | Third Formal Meeting of the Tenth Board of Directors (Announcement |
No.: 2022-014) of Securities Times, Hong Kong Commercial Daily and
The Third ExtraordinaryMeeting of the TenthBoard of Directors
May 19,2022
May 20,2022
| CNINFO (www.cninfo.com.cn) |
| For details, please refer to the Announcement on Resolutions of the |
Third Extraordinary Meeting of the Tenth Board of Directors(Announcement No.: 2022-019) of Securities Times, Hong Kong
The Fourth ExtraordinaryMeeting of the TenthBoard of Directors
June 14,2022
June 15,2022
| Commercial Daily and CNINFO (www.cninfo.com.cn) |
| For details, please refer to the Announcement on Resolutions of the |
Fourth Extraordinary Meeting of the Tenth Board of Directors(Announcement No.: 2022-026) of Securities Times, Hong Kong
The Fourth FormalMeeting of the TenthBoard of Directors
August 24,2022
August 25,2022
For details, please refer to the Announcement on Resolutions of theFourth Formal Meeting of the Tenth Board of Directors (AnnouncementNo.: 2022-040) of Securities Times, Hong Kong Commercial Daily and
| Commercial Daily and CNINFO (www.cninfo.com.cn) |
| CNINFO (www.cninfo.com.cn) |
The Fifth ExtraordinaryMeeting of the TenthBoard of Directors
September29, 2022
September30, 2022
Extraordinary Meeting of the Tenth Board of Directors (AnnouncementNo.: 2022-047) of Securities Times, Hong Kong Commercial Daily and
| CNINFO (www.cninfo.com.cn) | ||
| The Fifth Formal |
Meeting of the Tenth
October 27,2022
Deliberation of a proposal for the third quarterly report of 2022The Sixth ExtraordinaryMeeting of the TenthBoard of Directors
November24, 2022
November
25, 2022
For details, please refer to the Announcement on Resolutions of theSixth Extraordinary Meeting of the Tenth Board of Directors(Announcement No.: 2022-051) of Securities Times, Hong Kong
| Board of Directors | ||
| Commercial Daily and CNINFO (www.cninfo.com.cn) |
The SeventhExtraordinary Meeting ofthe Tenth Board of
December23, 2022
December
27, 2022
For details, please refer to the Announcement on Resolutions of theSeventh Extraordinary Meeting of the Tenth Board of Directors(Announcement No.: 2022-055) of Securities Times, Hong Kong
| Directors | Commercial Daily and CNINFO (www.cninfo.com.cn) |
2. Attendance of directors at the Board Meeting and General Meeting of Shareholders
Attendance of directors at the Board Meeting and General Meeting of ShareholdersName ofDirector
Number ofattendancesto the BoardMeetingduring thereportingperiod
Attendancesat the BoardMeeting in
person
Attendances at
the BoardMeetingthroughcommunication
tools
Attendancesat the Board
Meetingthroughentrusting
others
Times of absence
at the Board
Meeting
Attending the
BoardMeeting not inperson for twoconsecutivetimes or not
Attendances
at theGeneralMeeting ofShareholdersFu
10 1 9 0 0 No 1
| Chunlong |
| Hong Wenya |
10 0 10 0 0 No 0
| Yang Xi | 7 | 0 | 7 | 0 | 0 | No | 0 |
| Wu Ruikai |
10 1 9 0 0 No 2
5 0 5 0 0 No 0
| Huang Liang | |||||||
| Lou Hong | 10 | 1 | 9 | 0 | 0 | No | 2 |
| Hu Yuming |
10 0 10 0 0 No 0
10 0 10 0 0 No 1
| Jiang Dinghang | |||||||
| Zhang | 10 | 0 | 10 | 0 | 0 | No | 1 |
Dong
| Dong |
| Gu Zhiming |
3 0 3 0 0 No 0Explanation on failure to attend the Board Meeting in person two consecutive times: During the reporting period, there were nocases where directors did not attend the Board Meeting in person twice.
3. Objection to related matters of the Company by directors
Whether the directors have any objection to the related issues of the Company or not
□Yes ?No
The directors have not raised any objection to related issues during the reporting period.
4. Other instructions to duty performance of the directors
Whether the suggestions related to the Company proposed by the directors are accepted or not?Yes □ NoDescription on acceptance or non-acceptance of relevant suggestions related to the Company proposed by the directors
During the reporting period, all directors of the Company carried out their work in strict accordance withthe Company Law, the Securities Law, the Guidelines for Self-discipline Regulation of Listed Companies ofShenzhen Stock Exchange No. 1 – Standard Operation of Listed Companies on the Main Board and other laws,regulations and normative documents, as well as the Articles of Association and the Rules of Procedure of theBoard of Directors, and were faithful to their duties, diligent and responsible. They all actively attended theBoard Meeting, understood the essence of the proposals under consideration and related business, carefullyreviewed and discussed various proposals, and put forward targeted suggestions for the Company's internalcontrol, operation management and strategic layout. In accordance with the relevant provisions of the Rules forIndependent Directors of Listed Companies, the independent directors of the Company give full play to theirown professional knowledge, make independent and impartial judgments, carry out limited supervision on thefinancial, production and operation activities and information disclosure of the Company, play a positive role inthe scientific decision-making and standardized operation of the Board of Directors, and effectively safeguardthe legitimate rights and interests of the Company and all shareholders. The Company listens carefully to thesuggestions put forward by the directors and actively adopts reasonable suggestions that meet the developmentneeds of the Company.
VII. Special Commission Set under the Board of Directors during the Reporting PeriodName ofCommittee
Members
Numberofmeetings
Held
Holding
date
Meeting content
Importantcomments
andsuggestions
Otherperformance
of duties
Details ofobjections
(if any)AuditCommittee
Lou Hong,Hu Yuming,JiangDinghang,
| Zhang Dong |
January13, 2022
Review of preliminaryarrangements for anaudit of the 2021annual financial report
Agreed - -AuditCommittee
Lou Hong,
| Hu Yuming, |
April 7,2022
financial position and
| operating results |
Agreed - -
Jiang
Dinghang,
| Zhang Dong |
AuditCommittee
Lou Hong,Hu Yuming,JiangDinghang,
| Zhang Dong |
September28, 2022
Deliberation on theProposal onReappointment ofAuditors in 2022
Agreed - -
Remunerationand AppraisalCommittee
Hong Wenya,Hu Yuming,JiangDinghang,
| Zhang Dong |
April 7,2022
Review of the 2022performance indicatorsof Tellus Holding andits management team
Agreed - -
Remunerationand AppraisalCommittee U
Fu Chunlong,Hong Wenya,Hu Yuming,JiangDinghang,Zhang Dong
August 22,2022
Review of the resultsof the 2021 annualperformance appraisaland the approval of the2021 annualperformance salary ofthe management team
Agreed - -
Remunerationand AppraisalCommittee U
| of Tellus Holding | ||
| Fu Chunlong, |
Hong Wenya,Hu Yuming,JiangDinghang,
September7, 2022
| Zhang Dong | Deliberation on the |
report on the results ofthe 2019-2021 tenureappraisal of themanagement team of
Agreed - -
Remunerationand AppraisalCommittee U
| Tellus Holding | ||
| Fu Chunlong, |
Hong Wenya,Hu Yuming,JiangDinghang,
October28, 2022
Deliberation on thereport on the 2019-2021 tenure incentivesof the managementteam of Tellus Holding
Agreed - -
StrategyCommittee
Fu Chunlong,Hong Wenya,Wu Ruikai,Yang Xi,
| Zhang Dong |
| Huang Liang |
April 7,2022
Deliberation on theDevelopment StrategyPlan for the "14thFive-Year Plan"
Agreed - -
StrategyCommittee
Hong Wenya,Wu Ruikai,Yang Xi,
| Huang Liang |
June 14,2022
proposal forinvestment in the goldcirculation platform
| project |
Agreed - -
VIII. Work of the Board of Supervisors
Whether the Board of Supervisors has found any risks in the Company’s supervision activities during the reporting period or not
□Yes ?No
The Board of Supervisors has not raised any objection to the supervision issues during the reporting period.
IX. Employees of the Company
1. Number of employees, professional composition and level of education
Number of existing employees in the parent company at theend of the reporting period (person)
Number of existing employees in the main subsidiaries at theend of the reporting period (person)
Total number of existing employees at the end of the reportingperiod (person)
Total number of employees payable in current period (person) 317Number of retired employees with expenses incurred by theparent company and main subsidiaries (person)
ProfessionsType of professions Number of professional persons (person)Production personnel 0Sales personnel 88Technician 75Financial personnel 28Administrative personnel
Total 317
Level of educationLevel of education Number of employees
Master's degree and above
| Master's degree and above | 31 |
| Bachelor's degree | 102 |
| Junior college | 67 |
| Others | 117 |
Total
2. Compensation policy
The Company strictly implements remuneration policy in accordance with the Remuneration ManagementSystem for Employees of Headquarters of Shenzhen Tellus Holding Co., Ltd. and the Performance AssessmentManagement System for Headquarters Employees of Shenzhen Tellus Holding Co., Ltd.
3. Training plan
The training focuses on the improvement of the management skills of middle management personnel andthe professional skills of reserve talents and core staff. In the actual training work, the Company shouldconstantly enrich the training content, expand the training form, optimize the training process, and clarify thetraining purpose, so as to improve the training effect. Specific measures: First, enrich, optimize and update thelearning database of new employees, and accelerate the integration of new employees into the Company;Second, strengthen professional training for grass-roots employees and improve their quality; Third, strengthenthe management of departmental training quotas and improve the efficiency of training funds; Fourth, optimizethe reward rules of the network college and continuously improve the learning atmosphere; Fifth, refinemanagement capability requirements and carry out targeted training for middle managers to improve
management capability; Sixth, focus on external training, and carry out strategic management ability training toenhance the vision of senior management.
4. Labor outsourcing
□ Applicable ?Not applicable
X. Profit Distribution and Capital Reserve Converted into Share Capital of the CompanyPreparation, implementation or adjustment of the profit distribution policy during the reporting period, especially the cashdividend policy?Applicable □Not applicableThe Company attaches great importance to the reasonable return to investors. The Articles of Association specifies the standardsand proportions of cash dividends, decision-making procedures and mechanisms, and the form of profit distribution. The Companystrictly implements the Articles of Association and the resolutions of the General Meeting of Shareholders. The standard andproportion of dividend distribution are clear and definite, the relevant decision-making procedures and mechanisms are complete,the independent directors fulfill their duties and perform their duties, the minority shareholders have the opportunity to fullyexpress their opinions and demands, and the legitimate rights and interests of minority shareholders are fully safeguarded.
Special explanation on cash dividend policyWhether it complies with the provisions of the Articles ofAssociation or the requirements of resolutions of the generalmeeting of shareholders:
YesWhether the dividend standards and proportions are definiteand clear:
YesWhether the relevant decision-making processes andmechanisms are complete:
YesWhether the independent directors perform their duties andplay their due role:
YesWhether the minority shareholders have the opportunity tofully express their opinions and demands and whether theirlegitimate rights and interests are adequately protected:
YesWhether the conditions and procedures for adjusting andchanging the cash dividend policy are compliant andtransparent:
YesDuring the reporting period, the Company had profits and the parent company had positive distributive profit for shareholders;however, the cash bonus distribution pre-plan was not proposed
□ Applicable ?Not applicable
Profit distribution and capital reserve converted into share capital during the reporting period?Applicable □Not applicableNumber of bonus shares per 10 shares (share) 0Number of dividends per 10 shares (RMB) (tax-inclusive)
0.28
Base of share capital in distribution pre-plan (share) 431,058,320Total cash dividends (RMB) (tax-inclusive)12,069,632.96Amount of cash dividends in other ways (for example sharerepurchase) (RMB)
0.00
Total amount of cash dividends (including other ways) (RMB) 12,069,632.96Distributable profit (RMB)57,543,443.57The proportion of total cash dividends (including other forms)to total profit distribution
100%Cash dividends for the current reporting period
Others
Description of details on pre-plan of profit distribution or transfer from capital reserve to share capital
Others
In order to actively return shareholders and enable investors to participate in and share the operating results of the Company's
development, according to the Articles of Association, the Shareholder Return Plan for the Next Three Years (2020-2022) of theCompany, the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange and other regulations on cash dividends, andtaking into account the Company's future strategic layout and other capital expenditure needs, Based on the total share capital of431,058,320 shares as of December 31, 2022, the Company plans to distribute a cash dividend of RMB 0.28 (including tax) forevery 10 shares to all shareholders, with a total cash dividend of RMB 12,069,632.96, without bonus shares or capital increase.
| This profit distribution plan shall be implemented after being reviewed and approved by the General Meeting of Shareholders. |
XI. Implementation of the Company's Equity Incentive Plan, Employee Stock OwnershipPlan or Other Employee Incentive Measures
□ Applicable ?Not applicable
During the reporting period, there is no equity incentive plan, employee stock ownership plan or other employee incentivemeasures and their implementation for the Company.
XII. Establishment and Implementation of Internal Control System during the Reportingperiod
1. Establishment and implementation of internal control
During the reporting period, the Company has established a systematic and effective internal controlsystem from the governance level to each work process level and will continuously improve it. The Board ofDirectors is responsible for the establishment, improvement and effective implementation of the internal controlsystem; The Audit Committee assists in the formulation and review of the Company's internal control system,and audits and supervises major related party transactions; The Auditing & Risk Management Department isresponsible for the specific organization and implementation of the Company's internal control system; Theperson in charge of the enterprise, department and office specifically undertakes the internal control work of theenterprise, department and office; The Board of Supervisors shall supervise the internal control systemestablished and implemented by the Board of Directors. The Company has established the above internalcontrol organizational structure according to the Basic Standard for Enterprise Internal Control and itssupporting guidelines, defined the work objectives, responsibilities and authorities of each post of the Company,and established corresponding checks and balances and supervision mechanisms to ensure that each postperforms its duties within the scope of authority.
Based on the identification results of material deficiencies in internal control over financial reports of theCompany, there are no material deficiencies in internal control over financial reports on the base date of theinternal control assessment report. The Company has maintained effective internal control over financialreporting in all material aspects in accordance with the requirements of the enterprise's internal control standardsystem and relevant regulations.
2. Details about material deficiency in internal controls during the reporting period
□Yes ?No
XIII. Management Control over the Subsidiaries during the Reporting Period
Company name Integration Plan
IntegrationProgress
ProblemsEncountered in
Integration
Solutions
Taken
Resolution
Progress
Follow-upResolution Plan
N/A
| N/A | N/A | N/A | N/A | N/A | N/A | N/A |
XIV. Internal Control Self-evaluation Report or Auditor's Report on Internal Control
1. Internal control self-evaluation report
Disclosure date of theinternal controlsevaluation report
April 27, 2023Disclosure index ofthe internal controlsevaluation report
For details, please refer to the 2022 Annual Internal Control Self-evaluation Report disclosed by the
Company on CNINFO (http://www.cninfo.com.cn)Proportion of totalunit assets included inthe evaluation scopeto total assets fromthe Company’sconsolidated financialstatements
100.00%
Proportion of unitrevenue included inthe evaluation scopeto operating revenuefrom the Company’sconsolidated financialstatements
100.00%
Deficiency identification standardsClass Financial reports Non-financial reportsQualitative standards
or in combination with other deficiencies, resulting in amaterial misstatement in a financial report that cannot beprevented or detected and corrected in a timely manner.
| The following situations shall be deemed as material | 1. Material deficiencies: |
① Major decisions violate the Company's
prescribed procedures, causing major lossesto the Company;②
deficiencies:
① Management fraud leads to material misstatement of
financial results or provision of false financial reports,misleading users of financial reports, resulting in decision-making errors and litigation;
② The control environment is invalid;
③ Major internal control deficiencies found and reported
to the management have not been corrected after areasonable period of time;
④ The Company fails to perform the corresponding
decision-making procedures for the decision-making ofmajor matters, resulting in significant losses to theCompany;
⑤ Lack of effective control over important businesses
involving the Company's production and operation;
⑥ Other deficiencies that seriously mislead the correct
judgment of the user of the statement and lead to majorcompensation of the Company.
2. Significant deficiencies: Deficiencies, either
individually or in combination with other deficiencies,resulting in the failure to prevent or detect and correctmisstatements in the financial report in a timely mannerthat do not meet or exceed the level of materiality but stilldeserve the attention of management. The followingsituations shall be deemed as significant deficiencies:
① Failure to select and apply accounting policies in
accordance with generally accepted accounting principles;
② Failure to establish anti-fraud procedures and control
measures;
③ There is no corresponding control mechanism
established or implemented for the accounting treatment ofunconventional or special transactions, and there is nocorresponding compensatory control;
④ There are one or more deficiencies in the control of the
financial reporting process at the end of the period, andthere is no reasonable assurance that the financialstatements prepared are true and accurate.
3. General deficiency refers to other deficiencies in control
other than the above-mentioned material deficiency and
| significant deficiency. | causing heavy losses to the Company; |
③ Lack of system control or failure of
system for important business;
④ Serious turnover of core management
personnel or core technical personnel;
⑤ The material deficiencies in the internal
control evaluation results have not beenrectified;
⑥ The internal control of information
disclosure fails, resulting in the Companybeing publicly condemned by regulatoryauthorities.
2. Significant deficiencies:
① The Company violates the internal rules
and regulations of the enterprise, resulting inrelatively large losses;
② Serious brain-drain in key positions of the
Company;
③ The Company's important business system
or system has defects;
④ The significant deficiencies in the
Company's internal control have not beenrectified.
3. General deficiencies: other control
deficiencies than the above-mentionedmaterial deficiencies and significantdeficiencies.
Quantitativestandards
1. Material deficiencies: misstatement > 10% of the total
profit, and the absolute amount > RMB 2 million;
2. Significant deficiencies: 5% of the total profit <
misstatement ≤ 10% of the total profit, and the absoluteamount > RMB 1 million; or RMB 1 million < absoluteamount ≤ RMB 2 million, and the misstatement amount >5% of the total profit;
3. General deficiencies: misstatement ≤ 5% of the total
profit, or absolute amount ≤ RMB 1 million.
1.5% of the owner's equity attributable to the
parent company, and the absolute amount is >RMB 5 million;
2. Significant deficiencies: 0.5% of the
owner's equity attributable to the parentcompany < loss amount ≤ 1.5% of theowner's equity attributable to the parentcompany, or RMB 1 million < absoluteamount ≤ RMB 5 million;
3. General deficiencies: the amount of loss ≤
0.5% of the owner's equity attributable to the
parent company, or the absolute amount ≤
| RMB 1 million. |
Number of materialdeficiencies in thefinancial report (Nr.)
Number of materialdeficiencies in thenon-financial report(Nr.)
Number of significantdeficiencies in thefinancial report (Nr.)
Number of significantdeficiencies in thenon-financial report(Nr.)
2. Auditor's report on internal control
?Applicable □Not applicable
Review opinion paragraph in auditor's report on internal control
In our opinion, Tellus maintained, in all material respects, effective internal control over financial reporting as at December 31,2022 in accordance with the Basic Norms of Enterprise Internal Control and relevant regulations.
Disclosure of auditor's report on internal control DisclosureDisclosure date of auditor's report on internal controlApril 27, 2023Disclosure index of auditor's report on internal control
In our opinion, Tellus maintained, in all material respects, effective internal control over financial reporting as at December 31,2022 in accordance with the Basic Norms of Enterprise Internal Control and relevant regulations.For details, please refer to the Internal Control Assurance
Report disclosed by the Company on CNINFO
| (http://www.cninfo.com.cn/) on April 27, 2023. |
Type of opinion in auditor's report on internal control Unqualified opinionWhether there are material deficiencies in the non-financialreport
NoDoes the accounting firm express a qualified opinion in auditor's report on internal control?
□Yes ?No
Is the auditor's report on internal control issued by the accounting firm consistent with the self-evaluation report of the Board ofDirectors?Yes □ NoXV. Rectification of Problems Identified in the Self-inspection over the Listed Company'sSpecial Governance Measures
N/A
Section V Environmental and Social ResponsibilityI. Major Environmental Protection IssuesWhether the listed company and its subsidiaries belong to the key pollutant discharging entities announced by the environmentalprotection authorities
□Yes ?No
Administrative penalties imposed for environmental problems during the reporting periodName of companyor subsidiary
Reason forPunishment
Violations Penalty
Impact on theProduction and
Operation ofListed Companies
RectificationMeasures of the
Company
N/A
| N/A | N/A | N/A | N/A | N/A | N/A |
Disclosure of other environmental information with reference to key pollutant discharging entitiesDuring the reporting period, the Company and its subsidiaries have not been subject to administrative punishment due toenvironmental problems.
Measures and effects to reduce carbon emissions during the reporting period
□ Applicable ?Not applicable
Reasons for not disclosing other environmental information: The Company and its subsidiaries are not key pollutant dischargeunits announced by the environmental protection department, and there was no punishment due to violations of laws andregulations during the reporting period.
II. Social ResponsibilitiesThe Company takes it as its duty to return shareholders, cultivate outstanding employees and give back tosociety. Based on the principle of fairness, the Company actively safeguards the legitimate rights and interestsof shareholders, advocates realizing self-value while realizing enterprise value, creates an enterprise atmosphereof common and harmonious development, actively repays society and the public, highlights the responsibility ofstate-owned enterprises, and gives full play to the strength of the Company's youth commando, Party memberpioneer team, volunteer service team, etc. A total of more than 60 people voluntarily participated in communityhealth and environment work and served the community more than 300 times; 63 people have been sent toparticipate in health services in Futian District and Luohu District, with an average service period of 10 days percapita.
During the reporting period, more than RMB 26 million was invested in work safety throughout the year;In terms of system specification and implementation, the Company further revised and improved the worksafety management system, carried out various safety inspections, completed the rectification of all hidden
dangers, organized 23 safety publicity, education and training sessions, and 3 emergency drills, and activelypromoted the special rectification of the safety of self-built houses.
III. Details on Consolidating and Expanding its Achievements in Poverty alleviation andRural RevitalizationIn response to the implementation of the rural revitalization strategy, the Company assigned specialpersonnel to Chengtian Town, Shantou City to carry out the assistance work, and address the agricultural andsideline products in the assistance areas by purchasing instead of donating, so as to promote poverty alleviationthrough consumption and open up the sales channels of agricultural products, and effectively promote the localpoverty alleviation and rural revitalization with practical actions.
Section VI Important MattersI. Performance of Commitments
1. Commitments that have been fulfilled during the reporting period and have not yet been fulfilled as at
the end of the reporting period by the Company, actual controller, shareholders, affiliates, purchasersand other commitment related parties?Applicable □Not applicableCommitment
causes
Committed
party
Commitmenttype
Commitment content
Commitmenttime
Commitmentperiod
Performance
Commitmentmade inacquisitionreport or reportof equity change
ShenzhenInvestmentHoldings Co.,Ltd.
Ensure theindependenceof listedcompanies
The Company will
maintain the independenceof the listed company, andmaintain personnelindependence, institutionalindependence, financialindependence and assetintegrity with the listedcompany. The listedcompany will still haveindependent operationability, independentprocurement, productionand sales system andindependent intellectualproperty rights.In case of violation of theabove commitments, theCompany will bearcorresponding legalresponsibilities, includingbut not limited tocompensation for alllosses caused to the listed
| company. |
December30, 2022
During theperiod of beingthe indirectcontrollingshareholder ofTellusHolding, alisted company
Inperformance
Commitmentmade inacquisitionreport or reportof equity change
ShenzhenInvestmentHoldings Co.,Ltd.
Avoidhorizontalcompetition
of this Letter ofCommitment, theCompany and otherenterprises controlled bythe Company have notengaged in businesses andactivities that are in directcompetition with or mayconstitute directcompetition with Tellus,and will not engage inbusinesses and activities
| that are in direct |
December30, 2022
During theperiod of beingthe indirectcontrollingshareholder ofTellusHolding, alisted company
Inperformance
competition with or may
constitute directcompetition with Tellus inthe future (except thosearranged based on theShenzhen SASAC orsimilar governmentagencies);
2. During the period of
being the controllingshareholder of Tellus andduring its listing onShenzhen StockExchange, the Companywill fully respect theindependent operationautonomy of allsubsidiaries controlled bythe Company and ensurethat the legitimate rightsand interests of Tellus andits minority shareholderswill not be infringed;
3. The Company promises
not to seek illegitimateinterests with the status ofcontrolling shareholder ofTellus, thus damaging therights and interests ofTellus and itsshareholders;
4. The Company promises
not to assist any party orthird party to engage inany business activities thatare in substantialcompetition or potentialcompetition with the mainbusiness of Tellus byusing the informationlearned or known fromTellus;
5. If the Company or other
enterprises controlled bythe Company violate theabove commitments andguarantees, the Companyshall bear the economiclosses caused to the listed
| company. |
Commitmentmade inacquisitionreport or reportof equity change
ShenzhenInvestmentHoldings Co.,Ltd.
Reduce andstandardizerelated partytransactions
companies, enterprises andeconomic organizationscontrolled or actuallycontrolled by theCompany (excludingenterprises controlled by
| listed companies, |
December30, 2022
period of beingthe indirectcontrollingshareholder ofTellusHolding, a
| listed company |
Inperformance
hereinafter collectively
referred to as "affiliatedcompanies") will exercisethe rights of shareholders,fulfill the obligations ofshareholders, and maintainthe independence of listedcompanies in terms ofassets, finance, personnel,business and institutions instrict accordance with theprovisions of laws,regulations and othernormative documents;
2. The Company promises
not to use its position as acontrolling shareholder tourge the General Meetingof Shareholders or theBoard of Directors of thelisted company to makeresolutions that infringeupon the legitimate rightsand interests of othershareholders of the listedcompany;
3. The Company or its
affiliated companies willtry to avoid related partytransactions with listedcompanies. If it isinevitable to have relatedparty transactions withlisted companies, theCompany or its affiliatedcompanies will urge thecontrolled entities to tradewith listed companies onan equal and voluntarybasis in accordance withfair, reasonable andnormal commercialtransaction conditions;
4. The Company or its
affiliated companies willperform the decision-making procedures ofrelated party transactionsand the correspondinginformation disclosureobligations in strictaccordance with theArticles of Association ofthe listed company andrelevant laws andregulations;
5. The Company or its
| affiliated companies will |
ensure that they will not
seek special interestsbeyond the aboveprovisions through relatedparty transactions with thelisted company, illegallytransfer the funds andprofits of the listedcompany through relatedparty transactions, andmaliciously damage thelegitimate rights andinterests of the listedcompany and itsshareholders throughrelated party transactions.In case of violation of theabove commitments, theCompany will bearcorresponding legalresponsibilities, includingbut not limited tocompensation for alllosses caused to the listed
| company. |
Commitmentmade during theinitial publicoffering orrefinancing
ShenzhenTellusHolding Co.,Ltd.
Others
performance ofinformation disclosurebusiness for theCompany's businessdevelopment matters is asfollows: In the future, theCompany will discloserelevant information in atimely, accurate and fullmanner according to theprogress of the newbusiness and relevant
| requirements. |
October 17,2014
Long-term
Inperformance
Othercommitmentsmade forminorityshareholders ofthe Company
ShenzhenSpecialEconomicZoneDevelopmentGroup Co.,Ltd.
Horizontalcompetition
horizontal competition,Shenzhen SpecialEconomic ZoneDevelopment Group Co.,Ltd., the controllingshareholder of theCompany, issued theLetter of Commitment toAvoiding HorizontalCompetition on May 26,2014. The full text of theCommitment is as follows:
1. The Company and other
enterprises controlled bythe Company other thanTellus Holding are notengaged in businesses that
| are in substantial |
May 26,2015
Long-term
Inperformance
competition with the main
business of TellusHolding, and there is nohorizontal competitionrelationship with TellusHolding;
2. The Company and other
enterprises controlled by itshall not directly orindirectly engage in orparticipate in any businessthat constitutes or mayconstitute competitionwith the main business ofTellus Holding in anyform;
3. If the Company and
other enterprisescontrolled by it can engagein or participate in anybusiness opportunity thatmay compete with themain business of TellusHolding, they shall notifyTellus Holding of theabove businessopportunity beforeimplementing or signingrelevant agreements. IfTellus Holding makes apositive reply within areasonable periodspecified in the notice thatit is willing to takeadvantage of the businessopportunity, the businessopportunity will be given
| priority to Tellus Holding. |
Othercommitmentsmade forminorityshareholders ofthe Company
ShenzhenTellusHolding Co.,Ltd.
Dividendcommitment
Company's profits will befirst used to cover thelosses of previous years;After making up for thelosses of previous years,on the premise that theCompany's profits andcash flow meet the normaloperation and long-termdevelopment of theCompany, the Companywill implement an activeprofit distribution methodto return it to shareholders.For details, please refer tothe Shareholder ReturnPlan for the Next ThreeYears (2020-2022)
| disclosed on CNINFO on |
April 3,2020
December 31,2022
Performancecompleted
April 3, 2020.
Whether thecommitmentsare dulyperformed
YesIf thecommitment isnot fulfilled afterthe time limit,the specificreasons for thefailure forfulfillment andthe next workplan shall bespecified
N/A
2. If the profit forecast can be carried out for the Company’s assets or projects and the reporting period
is within the period of profit forecast, the Company shall explain whether the assets and projects canrealize the original profit forecast and specify the reasons.
□ Applicable ?Not applicable
II. Controlling Shareholder and Other Related Parties’ Occupation of Non-operating Fundsof the Listed Company
□ Applicable ?Not applicable
Non-operating fund occupied by the controlling shareholder and other related parties towards the listed company is not identifiedwithin the reporting period of the Company.
III. Illegal Foreign Guarantee
□ Applicable ?Not applicable
During the reporting period, the Company has no illegal foreign guarantees.
IV. Description of the Board of Directors on the Latest “Non-Standard Auditor's Report”
□ Applicable ?Not applicable
V. Description of the Board of Directors, Board of Supervisors and Independent Directors(If Any) on the "Non-Standard Auditor’s Report" Issued by the Accounting Firm duringthe Reporting Period
□ Applicable ?Not applicable
VI. Description of the Changes in Accounting Policies and Accounting Estimates orCorrection of Major Accounting Errors as Compared with Those in the Financial Reportfor the Previous Year
?Applicable □Not applicable(I) On December 30, 2021, the Ministry of Finance issued the Interpretation No. 15 of the Accounting Standards for BusinessEnterprises (CK [2021] No. 35) (hereinafter referred to as "Interpretation No. 15"), in which the contents of "Accountingtreatment for external sales of products or by-products produced before the fixed assets reach the expected serviceable condition orduring the R&D process" and "judgment on onerous contracts" shall be implemented from January 1, 2022. Retroactiveadjustments should be made for trial sales that occurred between the beginning of the period in which the financial statementswere presented and January 1, 2022. This provision shall be implemented for contracts that have not fulfilled all obligations as ofJanuary 1, 2022. The cumulative effect shall be adjusted to the retained earnings and other relevant financial statement items at thebeginning of the year on the date of implementation, without adjustments to the comparative financial statement data of theprevious period.The Company will implement the above provisions from January 1, 2022, and the changes in accounting policies have noimpact on the Company's financial statements.(II) On November 30, 2022, the Ministry of Finance issued Interpretation No. 16 of the Accounting Standards for BusinessEnterprises (CK [2022] No. 31, hereinafter referred to as Interpretation No. 16), in which the contents of "Accounting treatment ofexemption from initial recognition is not applicable to deferred income tax related to assets and liabilities arising from individualtransactions" shall be implemented from January 1, 2023, and the contents of "Accounting treatment of income tax impact ondividends related to financial instruments classified as equity instruments by the issuer" and "Accounting treatment of changingcash-settled share-based payment to equity-settled share-based payment by enterprises" shall be implemented from the date ofpublication.For financial instruments classified as equity instruments, if the recognized dividends payable occurred between January 1,2022 and the implementation date of the provisions, involved the effect of income tax, and have not been handled in accordancewith the above provisions, they shall be adjusted in accordance with the above provisions. For financial instruments classified asequity instruments, if the recognized dividends payable occurred before January 1, 2022, the relevant financial instruments havenot been derecognized before January 1, 2022, the effect of income tax was involved and the treatment was not carried out inaccordance with the above provisions, retroactive adjustment shall be made. For the above transactions newly made betweenJanuary 1, 2022 and the implementation date of the provisions, enterprises shall adjust them in accordance with the provisions.
For the transaction of changing cash-settled share-based payment to equity-settled share-based payment before January 1,2022, if it was not handled in accordance with the above provisions, the enterprise shall make adjustments. The cumulative effectshall be adjusted to retained earnings and other related financial statement items as of January 1, 2022, without adjustments toinformation for comparable periods.
Since November 30, 2022, the Company has implemented the provisions of Interpretation No. 16 "accounting treatment forthe impacts of income tax on dividends related to financial instruments classified by the issuer as equity instruments" and"accounting treatment for the modification of the cash-settled share-based payment by an enterprise into equity-settled share-basedpayment". This change of accounting policy shall have no impact on the financial statements of the Company.
VII. Explanation on Change of Scope of Consolidated Financial Statements Compared withthe Financial Statement of the Previous Year?Applicable □Not applicable
No
.
Full name of subsidiary
| No | Abbreviation of subsidiary | Reporting period | Reason of incorporating into consolidation scope |
Guorun Gold Year 2022 Newly established
VIII. Employment and Dismissal of Accounting FirmsCurrent employed accounting firmName of domestic accounting firmRSM China (Special General Partnership)Salary of domestic accounting firm (RMB 10,000) 70.5Duration of audit service provided by domestic accounting firm 3Names of CPA of domestic accounting firmChen Lianwu, Qin ChangmingDuration of audit service provided by CPA with domesticaccounting firm
Chen Lianwu 1 year, Qin Changming 4 yearsWhether the employment of the accounting firm will be changed during the current period
□Yes ?No
Conditions on employing the accounting firm, financial consultant or sponsor for internal control audit?Applicable □Not applicable
The Company employed RSM China (Special General Partnership) as the Company's 2022 annual financial audit andinternal control auditor. The employment term was one year and the internal control audit fee was RMB 205,000.
IX. Delisting after Disclosure of Annual Report
□ Applicable ?Not applicable
X. Matters Relating to Bankruptcy Reorganization
□ Applicable ?Not applicable
Matters concerning bankruptcy reorganization are not identified within the reporting period of the Company.XI. Major Litigation and Arbitration Matters
□ Applicable ?Not applicable
The Company has no significant matters of litigation and arbitration during the reporting period.
XII. Punishment and Rectification
□ Applicable ?Not applicable
No punishment or rectification is identified within the reporting period of the Company.XIII. Integrity Situation of the Company and its Controlling Shareholder and ActualController
□ Applicable ?Not applicable
XIV. Major Related Party Transactions
1. Related party transactions concerning daily operations
?Applicable □Not applicable
Unit: RMB 10,000
Relatedtransactionsparties
Relationshipofrelatedparties
Typeofrelatedpartytransactions
Conten
t ofrelatedpartytransaction
Pricingprinciple ofrelate
dpartytransaction
Price
ofrelate
dpartytransaction
Amount ofrelatedpartytransactions
Proportion
totransactionamount ofthesamekind
Approvedtransactionamou
nt
Whet
herexceedingtheappro
ved
limit
Settlementmethods ofrelate
dpartytransaction
Mark
etprice
ofavaila
blesimila
rtransaction
Disclosuredate
Disclosure index
ShenzhenRenfuTellusAutomobilesServiceCo.,Ltd.
Havin
g adirector whoalsoservestheCompany as adirecto
| r |
Dailyrelatedpartytransactions
Providepropertyleasingservices
Referto themarketprice
545 545
2.97
%
545 No
Accordingto thecontractamount oragreement
April8,2022
Securities Times,HongKongCommercialDaily,and theAnnouncement onDailyRelatedPartyTransactions in2022 ontheCNINFOwebsite(AnnouncementNo.:
2022-009)
ShenzhenSDGTellusPropertyManagementCo.,
Subsidiary ofcontrollingshareholder
Dailyrelatedpartytransactions
Providepropertyleasingservices
Referto themarketprice
6.7 6.7
0.04
%
10 No
Accordingto thecontractamount oragreement
6.7
April8,2022
ShenzhenSDGMicrofinance
| Ltd. |
| Co., |
Subsidiary ofcontrollingshareh
Dailyrelatedpartytransactions
Providepropertyleasing
| older | and |
Referto themarketprice
100.2
100.2
0.55
%
150 No
Accordingto thecontract
100.2
April8,2022
Ltd.
| Ltd. | manag |
ementservice
| s | nt or |
agreement
enSDGServiceCo.,Ltd.and itsbranch
| es |
Subsidiary ofcontrollingshareholder
Dailyrelatedpartytransactions
Providepropertyleasingservices
Referto themarketprice
289.9
289.9
1.58
%255 Yes
dingto thecontractamount oragree
| ment |
289.9
April8,2022
enSpecialEconomicZoneDevelopmentGroupCo.,
| Ltd. |
Subsidiary ofcontrollingshareholder
Dailyrelatedpartytransactions
Providevehiclemaintenanceandtestingservices
Referto themarketprice
4.11 4.11
0.09
%
5 No
Accordingto thecontractamount oragreement
4.11
April8,2022
ShenzhenSDGTellusPropertyManagementCo.,
Subsidiary ofcontrollingshareholder
Dailyrelatedpartytransactions
Providevehiclemaintenanceandtestingservices
Referto themarketprice
0.66 0.66
0.01
%
5 No
Accordingto thecontractamount oragreement
0.66
April8,2022
| Ltd. |
| Shenzh |
enSDGEngineeringManagementCo.,
Subsidiary ofcontrollingshareholder
Dailyrelatedpartytransactions
Acceptengineeringsupervisionservices
Referto themarketprice
238.4
238.4
95.68
%
200 Yes
| Ltd. | Accor |
dingto thecontractamount oragree
238.4
April8,2022
| ment | ||
| Shenzh |
enSDGServiceCo.,Ltd.and itsbranch
Subsidiary ofcontrollingshareholder
Dailyrelatedpartytransactions
Acceptpropertymanagementservices
Referto themarketprice
1046.
1,046.
76.38
%
740 Yes
| es | Accor |
dingto thecontractamount oragree
1046.
April8,2022
| ment | ||
| Shenzh |
enSDGTellusPropert
| y | Subsid |
iary ofcontrollingshareh
Dailyrelatedpartytransactions
| older | Accept |
propertymanagement
Referto themarketprice
320.2
320.2
23.37
%
300 Yes
| service | Accor |
dingto thecontract
320.2
April8,2022
Manag
ementCo.,
| Ltd. | s | nt or |
agreementTotal -- --
--2,210-- -- -- -- --Details of large sales return N/AIf the total amount of daily relatedparty transactions occurring in thecurrent period is estimated bycategory, the actual performanceduring the reporting period (if any)
Normal settlementReasons for the great differencebetween the transaction price andmarket reference price (if applicable)
N/A
2. Related party transactions from acquisition and disposal of assets or equity
□ Applicable ?Not applicable
During the reporting period, the Company has no related party transaction involving the acquisition and sale of assets or equities.
3. Related party transaction of joint foreign investment
□ Applicable ?Not applicable
During the reporting period, the Company has no related party transaction of joint foreign investment.
4. Related credit and debt
?Applicable □Not applicableWhether there are dealings of non-operating related credits and debts
□Yes ?No
During the reporting period, the Company has no transaction related to credit and debt.
5. Transactions with correlated finance companies
□ Applicable ?Not applicable
There is no deposit, loan, credit or other financial business between the Company and related finance companies.
6. Transactions between finance companies controlled by the company and related parties
□ Applicable ?Not applicable
There is no deposit, loan, credit or other financial business between the finance companies controlled by the Company and relatedparties.
7. Other major related party transactions
□ Applicable ?Not applicable
During the reporting period, the Company has no other major related transactions.
XV. Major Contracts and Performance
1. Trusteeship, contracting and leasing events
(1) Trusteeship
□ Applicable ?Not applicable
During the reporting period, the Company has no trusteeship.
(2) Contracting
□ Applicable ?Not applicable
During the reporting period, the Company has no contracting.
(3) Lease
□ Applicable ?Not applicable
During the reporting period, the Company had no leases.
2. Significant guarantees
?Applicable □Not applicable
Unit: RMB 10,000Foreign guarantees of the Company and its subsidiaries (excluding the guarantees to subsidiaries)Name of theguaranteedobject
Disclosuredate of therelevantannouncement of theguarantee
amount
Guaran
teeamountActual dateofoccurrence
Actualguarantee
amount
Type ofguarantee
Collateral
(if any)
Counter-guarantee
(if any)
Guarante
eperiod
Whether it
isfullyfulfill
ed
Guaranteeprovided torelatedpartiesor notShenzhenRenfu TellusAutomobilesService Co.,
Ltd.
September30, 2014
3,500
April 17,2007
3,500
Pledge
To the dateof expiry ofthe JointVenture
| Ltd. | Contract |
No Yes No YesTotal foreign guarantee amountapproved in the reportingperiod (A1)
Total actualforeign guaranteeamount in thereporting period(A2)
3,500
Total foreign guarantee amountapproved at the end of thereporting period (A3)
3,500
Total foreignguarantee balanceat the end ofreporting period(A4)
3,500Guarantee to subsidiariesName of the
Disclosure
| guaranteed | date of the |
Guaran
Actual date
| tee | of |
Actual
Typ
| guarantee | e of |
Collateral
Counter-
Gu
| guarantee | ara |
Whet
Guaran
| her it | tee |
object
| object | relevant |
announceme
nt of theguarantee
amount
t
| amoun | occurrence | amount | gua |
rantee
| (if any) | (if any) | nte |
eperiod
fullyfulfill
ed
| is | provid |
ed torelatedpartiesor not
| - | - | - | - | - | - | - | - | - | - | - |
Total guarantee amount tosubsidiaries approved in thereporting period (B1)
Total actualguarantee amountto the subsidiariesin the reportingperiod (B2)
Total guarantee amount tosubsidiaries approved at theend of the reporting period(B3)
Total actualguarantee balanceto subsidiaries atthe end of thereporting period(B4)
Guarantee between subsidiariesName of theguaranteedobject
Disclosuredate of the
relevantannounceme
nt of the
guarantee
amount
Guaran
teeamoun
t
Actual date
ofoccurrence
Actualguarantee
amount
Type ofguarantee
Collateral
(if any)
Counter-guarantee
(if any)
Guarante
eperiod
Whether it
isfullyfulfill
ed
Guaran
teeprovided torelatedpartiesor not
| - | - | - | - | - | - | - | - | - | - | - |
Total guarantee amount tosubsidiaries approved in thereporting period (C1)
Total actualguarantee amountto the subsidiariesin the reportingperiod (C2)
Total guarantee amount tosubsidiaries approved at theend of the reporting period(C3)
Total actualguarantee balanceincurred tosubsidiaries at theend of thereporting period(C4)
Total amount of the Company’s guarantee (i.e. total of the first three items)Total guarantee amountapproved in the reportingperiod (A1 + B1 + C1)
Total actualguarantee amountin the reportingperiod (A2 + B2 +C2)
3,500Total guarantee amountapproved at the end of thereporting period (A3 + B3 +C3)
3,500
Total actualguarantee balanceat the end of thereporting period(A4 + B4 + C4)
3,500Proportion of total actual guarantee amount (i.e. A4 + B4+ C4) to the Company’s net assets
2.32%
Including:
| The guarantee balance provided for the shareholder, | 0 |
actual controller, and related parties (D)
The debt guarantee balance provided directly orindirectly for the guaranteed party whose asset-liabilityratio is more than 70% (E)
The total of guarantee amount which exceeds 50% of thenet assets (F)
Total of above three guarantee amounts (D+E+F)
Description of the guarantee liability occurred during thereporting period or the case where there is evidenceshowing that it is possible to bear the joint and severalliability for repayment for the unexpired guaranteecontract (if any)
N/ADescription of providing guarantees in violation ofprescribed procedures (if any)
N/ASpecific description of the composite guaranteeN/A
3. Management of cash assets by other entrusted parties
(1) Entrusted financial management
?Applicable □Not applicableOverview of entrusted financial management in the reporting period
Unit: RMB 10,000
Category
Capital source ofentrusted financial
management
Amount ofentrusted financialmanagement
Outstandingbalance
Overdueirrecoverable
amount
Impairmentprovision for
overdueunrecovered
wealthmanagement
products
actual controller, and related parties (D)Bank financialproducts
Self-owned fund 118,138 21,200 0 0Total 118,138 21,200 0 0Details of high-risk entrusted financial management with large individual amount or low security and poor liquidity
□ Applicable ?Not applicable
Principal unable to be recovered or other conditions causing impairment for entrusted financial management
□ Applicable ?Not applicable
(2) Entrusted loans
□ Applicable ?Not applicable
During the reporting period, the Company has no entrusted loans.
4. Other major contracts
□ Applicable ?Not applicable
During the reporting period, the Company has no major contracts.
XVI. Clarification on Other Material Events
□ Applicable ?Not applicable
The Company has no other major matters that need to be stated during the reporting period.
XVII. Major Matters of the Company’s Subsidiaries?Applicable □Not applicableAfter the expiration of the business term of the Company's holding subsidiary SDG Huari, the shareholderscould not reach an agreement, and the Company applied to the People's Court of Qianhai Cooperation Zone inShenzhen for the compulsory liquidation of SDG Huari. The court has ruled to accept the liquidationapplication for SDG Huari filed by the Company, and has designated Beijing King & Wood Mallesons(Shenzhen) as the liquidation team for SDG Huari. Subsequent work shall be carried out in accordance withlegal procedures. For details, please refer to the Company's Announcement on the Court's Acceptance of theApplication for Compulsory Liquidation of Holding Subsidiaries (Announcement No.: 2023-003),Announcement on the Progress of Compulsory Liquidation of Holding Subsidiaries (Announcement No.: 2023-010) and other relevant contents.
Section VII Changes in Shares and Shareholders
I. Change in Shares
1. Changes in shares
Unit: share
Before this change Increase (+)/decrease (-) in this change After this changeQuantity Percentage
Issuance
of newshares
Bonusshares
Conversionof thereserve fundsinto shares
Others Subtotal Quantity PercentageI. Restrictedshares
0 0.00% 0 0 0 0 0 0 0.00%
1. State
shareholding
0 0.00% 0 0 0 0 0 0 0.00%
2. State-
owned legalpersonshareholding
0 0.00% 0 0 0 0 0 0 0.00%
3. Other
domesticshareholding
0 0.00% 0 0 0 0 0 0 0.00%Including: Domesticlegal personshareholding
0 0.00% 0 0 0 0 0 0 0.00%Domesticnatural personshareholding
0 0.00% 0 0 0 0 0 0 0.00%
4. Foreign
shareholding
0 0.00% 0 0 0 0 0 0 0.00%Including: Foreign legalpersonshareholding
0 0.00% 0 0 0 0 0 0 0.00%Foreignnatural personshareholding
0 0.00% 0 0 0 0 0 0 0.00%II.Unrestrictedshares
431,058,320 100.00% 0 0 0 0 0 431,058,320 100.00%
1. RMB-
denominatedordinaryshares
392,778,320 91.12% 0 0 0 0 0 392,778,320 91.12%
2. Domestic
listed foreignshares
38,280,000 8.88% 0 0 0 0 0 38,280,000 8.88%
3. Foreign
listed foreignshares
0 0.00% 0 0 0 0 0 0 0.00%
4. Others 0 0.00% 0 0 0 0 0 0 0.00%III. Totalamount ofshares
431,058,320 100.00% 0 0 0 0 0 431,058,320 100.00%Reasons for changes in shares
□ Applicable ?Not applicable
Status of authorization for changes in shares
□ Applicable ?Not applicable
Status of transfer for changes in shares
□ Applicable ?Not applicable
Effect of changes in shares on the financial indicators including basic earnings per share and diluted earnings per share in the mostrecent year and in most recent period as well as net asset per share attributable to the ordinary shareholders of the Company
□ Applicable ?Not applicable
Other information that the company deems necessary or as required by securities regulators
□ Applicable ?Not applicable
2. Changes in restricted shares
□ Applicable ?Not applicable
II. Conditions on Securities Issuance and Listing
1. Conditions on issuance of securities in the reporting period (excluding preferred shares)
□ Applicable ?Not applicable
2. Description of total number of shares of the company, changes in shareholder structure and changes in
the company’s asset and liability structure
□ Applicable ?Not applicable
3. Shares of existing internal staff
□ Applicable ?Not applicable
III. Shareholders and Actual Controller
1. Total number of shareholders of the company and their shareholdings
Unit: share
Total number of ordinary
67,131
| Total number of ordinary | Total |
64,114
| Total | Total number of |
shareholders as of the end
of the reporting period
| shareholders as of the end | number of |
ordinaryshareholders as at theend of themonthbefore thedisclosuredate of theannualreport
preferredshareholders (if any)resumingvotingrights atthe end ofthereportingperiod (seeNote 8)
| number of | preferred |
shareholders (ifany) resumingvoting rights as atthe end of themonth before thedisclosure date ofthe annual report(see Note 8)
Shareholders holding more than 5% shares of the Company or shareholdings of top 10 shareholders
Name of shareholder
Nature ofshareholder
Shareholdingproportion
Number ofsharesheld at theend of thereporting
period
Increase
anddecreasechangesduring thereporting
period
Number
ofrestricted shares
held
Number ofunrestricte
d shares
held
Pledged, marked or
frozen sharesStatus ofshare
sQuantityShenzhen Special EconomicZone Development Group
State-owned
| Co., Ltd. | corporate |
47.51%
204,798,6
-6,793,000 0
204,798,62
- 0
Jewelry Industry InvestmentEnterprise (Limited
| Partnership) | Domestic |
non-state-owned
8.49%
36,612,93
-18,931,505
0 36,612,932 - 0Li Xiaoming
| corporate |
| Domestic |
natural
0.67% 2,891,700 2,891,700 0 2,891,700 - 0
| person | |
| GUOTAIJUNANSECURIT |
IES (HONGKONG)
Overseascorporate
0.40% 1,741,491 -115,055 0 1,741,491 - 0Li Bozhi
Domesticnatural
| LIMITED | |
| person |
0.29% 1,260,300 1,260,300 0 1,260,300 - 0
Port Area LingdingInvestment ManagementCo., Ltd.—Lingding ChuqiNo. 2 Private Securities
| Investment Fund |
Others 0.28% 1,200,000 1,200,000 0 1,200,000 - 0
Hengyuan Investment Co.,Ltd.—ShengquanHengyuan FlexibleConfiguration No. 8 Private
| Securities Investment Fund |
Others 0.25% 1,060,000 1,060,000 0 1,060,000 - 0
Hengyuan Investment Co.,Ltd.—ShengquanHengyuan QuantitativeArbitrage No. 17 Private
| Securities Investment Fund |
Others 0.24% 1,020,000 1,020,000 0 1,020,000 - 0China Merchants SecuritiesCo., Ltd.
State-
owned
0.21% 902,478 902,478 0 902,478 - 0
Industrial and Commercial
Bank of China Limited -Southern CSI All Index
| Real Estate ETF |
Others 0.19% 837,475 837,475 0 837,475 - 0Status of the strategic investor or generallegal person becoming one of top 10shareholders due to equity offering (ifany) (see Note 3)
N/AExplanations of relationships between orconcerted actions of the aforementionedshareholders
Among the top ten shareholders, Shenzhen Special Economic Zone Development Group
Co., Ltd. was not related to other shareholders and was not a person acting in concert as
stipulated in the Measures for the Administration of the Takeover of Listed Companies.
It was unknown whether other shareholders of tradable shares were persons acting in
Description of the above shareholders'involvement in proxy/entrusted votingrights and waiver of voting rights
N/ASpecial description of repurchase specialaccount among the top 10 shareholders(if any) (see Note 10)
N/AShareholding of top 10 unrestricted shareholdersName of shareholder
Number of shares not subject to trading restriction as at
the end of reporting period
Types of sharesTypes of
shares
QuantityShenzhen Special Economic ZoneDevelopment Group Co., Ltd.
204,798,621
concert.Ordinary
sharesdenominated
| in RMB |
204,798,6
Shenzhen Capital Fortune JewelryIndustry Investment Enterprise (LimitedPartnership)
36,612,932
sharesdenominated
| in RMB |
36,612,93
Li Xiaoming 2,891,700
sharesdenominated
| in RMB |
2,891,700GUOTAIJUNANSECURITIES(HONGKONG) LIMITED
1,741,491
Domesticlisted foreign
1,741,491Li Bozhi 1,260,300
| shares |
| Ordinary |
sharesdenominated
1,260,300
| in RMB | ||
| Ningbo Meishan Bonded Port Area |
Lingding Investment Management Co.,Ltd.—Lingding Chuqi No. 2 Private
1,200,000
| Securities Investment Fund | Ordinary |
sharesdenominated
1,200,000
| in RMB | ||
| Nanjing Shengquan Hengyuan |
Investment Co., Ltd.—ShengquanHengyuan Flexible Configuration No. 8
1,060,000
| Private Securities Investment Fund | Ordinary |
sharesdenominated
1,060,000Nanjing Shengquan HengyuanInvestment Co., Ltd.—ShengquanHengyuan Quantitative Arbitrage No. 17
| in RMB | ||
| Private Securities Investment Fund |
1,020,000
Ordinarysharesdenominated
1,020,000
| in RMB | |||
| China Merchants Securities Co., Ltd. | 902,478 | Ordinary | 902,478 |
shares
denominated
| in RMB |
Industrial and Commercial Bank ofChina Limited - Southern CSI All IndexReal Estate ETF
837,475
sharesdenominated
| in RMB |
837,475Description on the related relationship orconcerted action among top 10unrestricted tradable shareholders, andbetween top 10 unrestricted tradableshareholders and top 10 shareholders
Among the top ten shareholders, Shenzhen Special Economic Zone Development GroupCo., Ltd., a state-owned corporate shareholder, was not related to other shareholders andwas not a person acting in concert as stipulated in the Measures for the Administrationof the Takeover of Listed Companies. It was unknown whether other shareholders oftradable shares were persons acting in concert.
Description on conditions of top 10common shareholders participating in themargin financing (if any) (refer to Note4)
Development Group Co., Ltd. was engaged in refinancing business. The number ofshares held at the end of this reporting period decreased by 6,793,000 compared to theend of 2021. This decrease in the number of shares held was caused by the lending ofshares, and the ownership of the borrowed shares would not be transferred. 2. Theshareholder Nanjing Shengquan Hengyuan Investment Co., Ltd.—Shengquan HengyuanFlexible Configuration No. 8 Private Securities Investment Fund held 1,060,000 sharesof the Company through guaranteed credit accounts and 0 shares of the Companythrough ordinary securities accounts, holding a total of 1,060,000 shares. Theshareholder Nanjing Shengquan Hengyuan Investment Co., Ltd.—Shengquan HengyuanQuantitative Arbitrage No. 17 Private Securities Investment Fund held 1,020,000 sharesof the Company through guaranteed credit accounts and 0 shares of the Company
| through ordinary securities accounts, holding a total of 1,020,000 shares. |
Whether top 10 ordinary shareholders and top 10 ordinary shareholders without trading limited conditions have performed theagreed repurchase transactions during the reporting period
□Yes ?No
The top 10 ordinary shareholders and top 10 ordinary shareholders without trading limited conditions have not performed theagreed repurchase transactions during the reporting period.
2. Controlling shareholder of the Company
Property of controlling shareholder: local state-owned holdingType of controlling shareholder: legal person
Name ofcontrollingshareholder
Legalrepresentative/person
in charge
Date ofestablishment
Organization code Main businessShenzhenSpecialEconomicZoneDevelopmentGroup Co.,Ltd.
Zhang Junlin
June 20,1982
91440300192194195C
(specific projects will be declared separately);investment in the establishment of the tourismindustry; real estate development and operation;domestic trade and material supply and marketing(excluding monopoly, exclusive control andmonopolized commodities); economicinformation consultation (excluding restricted
| items); operation of import and export business. |
Equity ofotherdomestic andforeign listedcompaniescontrolled
At the end of the reporting period, in addition to the equity of the Company, the SDG Group also held equity of otherlisted companies as follows:
1. Holding 47.78% equity of Shenzhen SDG Service Co., Ltd. (stock abbreviation: SDG Service, stock code:
300917), and holding 0.98% equity of Shenzhen SDG Service Co., Ltd. through Shenzhen SDG Investment Co.,Ltd.;
2. Holding 37.32% equity of Shenzhen SDG Information Co., Ltd. (stock abbreviation: SDG Information, stock
| and equity | code: 000070), and controlling 1.17% equity of Shenzhen SDG Information Co., Ltd. through Hanseco Sanho Co., |
participation
by thecontrollingshareholderduring thereportingperiod
| participation | Ltd.; |
3. Holding 8.37% equity of Shenzhen Microgate Technology Co., Ltd. (stock abbreviation: MicrogateTech, stock
code: 300319), and controlling 16.16% equity of Shenzhen Microgate Technology Co., Ltd. through the Company'sholding subsidiary Shenzhen Capital Fortune Electronic Information Investment Enterprise (Limited Partnership).
Change in controlling shareholder in the reporting period
□ Applicable ?Not applicable
During the reporting period, the Company has no change in the controlling shareholder.
3. Actual controller and persons acting in concert of the company
Property of actual controller: local state-owned assets administrative authorityType of actual controller: legal personName of actual
controller
Legalrepresentative/person in
charge
Date of establishment Organization code Main businessState-owned AssetsSupervision andManagementCommission ofShenzhen MunicipalPeople's Government
Wang Yongjian July 1, 2004 K3172806-7
Performing theresponsibilities of theinvestor on behalf ofthe state, supervisingand managing the state-owned assets authorizedfor supervision
Equity of otherdomestic and foreignlisted companiescontrolled by the actualcontroller during thereporting period
N/AChange in actual controller during the reporting period
□ Applicable ?Not applicable
There is no change to the actual controller of the Company during the reporting period.Block diagram of property rights and control relationship between the Company and the actual controller
Actual controller controlling the Company by way of trust or other asset management methods
□ Applicable ?Not applicable
4. The company's controlling shareholder or the first majority shareholder and its concert parties
pledged a total of 80% of their shareholdings in the company
□ Applicable ?Not applicable
5. Other corporate shareholders with more than 10% shares held
□ Applicable ?Not applicable
6. Restriction in reduction of shares held by controlling shareholder, actual controller, restructuring
parties and other commitment units
□ Applicable ?Not applicable
IV. Specific Implementation of Share Repurchase During the Reporting PeriodProgress in the implementation of share repurchase
□ Applicable ?Not applicable
Progress in the implementation of share repurchase reduction through centralized bidding
□ Applicable ?Not applicable
Section VIII Preferred Shares
□ Applicable ?Not applicable
During the reporting period, the Company has no preferred shares.
Section IX Bonds
□ Applicable ?Not applicable
Section X Financial ReportI. Auditor's ReportOpinion typeUnqualified opinionSigned on April 25, 2023Audited by RSM China (Special General Partnership)Auditor’s Report No. RCSZ [2023] No. 518Z0408Name of certified public accountant Chen Lianwu, Qin Changming
Text of Auditor’s ReportAll shareholders of Shenzhen Tellus Holding Co., Ltd.:
I. OpinionWe have audited the attached financial statements of Shenzhen Tellus Holding Co., Ltd.(hereinafter referred to as “Tellus”), including Consolidated and Parent Company's BalanceSheets as of December 31, 2022, Consolidated and Parent Company's Income Statements,Consolidated and Parent Company's Cash Flow Statements, Consolidated and Parent Company'sStatements of Changes in Owners' Equity for the year then ended, and relevant Notes to FinancialStatements.In our opinion, the attached financial statements present fairly, in all material respects, theconsolidated and parent company’s financial positions of Tellus as of December 31, 2022, and itsconsolidated and parent company’s financial performance and cash flows for the year then endedin accordance with the Accounting Standards for Business Enterprises.
II. Basis for OpinionWe have conducted our audit in accordance with the Auditing Standards for Certified PublicAccountants of China. The section in the Auditor’s Report titled “CPAs’ Responsibilities for theAudit of the Financial Statements” further describes our responsibilities under these standards.We are independent of Tellus in accordance with the China Code of Ethics for Certified PublicAccountants and we have fulfilled our other ethical responsibilities. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for the auditor’sopinion.III. Key Audit MattersKey audit matters are those matters that are deemed most important to the audit of thefinancial statements for the current period based on our professional judgment. These matters areaddressed by auditing the financial statements integrally and forming the auditor’s opinion, so wedo not express the opinions for them separately.
? Recognition of operating revenue
1. Description
See Notes III. 26 and V. 41 of the financial statements for details of relevant informationdisclosure.The operating revenue of Tellus mainly comes from real estate leasing and services, gold andjewelry sales and services, automobile sales, automobile maintenance and testing. The operatingrevenue in 2022 was RMB 837,656,274.51, representing an increase of 64.72% over the sameperiod of last year. Operating revenue is one of the key performance indicators, and there is aninherent risk of revenue recognition. Therefore, we identify revenue recognition as a key auditmatter.
2. Audit response
The relevant procedures that we implement for the recognition of operating revenue mainlyinclude:
(1) Understanding the key internal controls related to revenue recognition, evaluating the
design of these controls, determining whether these controls are implemented, and testing theimplementation effectiveness of related internal controls;
(2) Checking the main real estate leasing contracts and commodity sales contracts, and
evaluating whether the revenue recognition policy conforms to the provisions of the AccountingStandards for Business Enterprises;
(3) Carrying out analytical review procedures on operating revenue and gross profit, and
determining the rationality of changes in operating revenue and gross profit rate in the currentperiod;
(4) Checking the supporting documents related to revenue recognition by sampling,
including real estate leasing contracts or commodity sales contracts, invoices, commodity salesorders, delivery orders and customer receipts;
(5) Confirming the current sales amount with major customers by sampling in combination
with the confirmation of accounts receivable;
(6) Checking the operating revenue recognized before and after the balance sheet date
against supporting documents such as invoices, commodity sales orders, delivery orders andcustomer receipts by sampling, and evaluating whether the operating revenue is recognized in anappropriate period;
(7) Checking whether the operating revenue has been properly presented in the financial
statements in accordance with the requirements of Accounting Standards for Business Enterprises.? Book value of investment properties, fixed assets and construction in progress
1. Description
See Notes III, 17, 18, 19 and 20 and Notes V, 12, 13 and 14 of the financial statements fordetails of relevant information disclosure.As of December 31, 2022, the book value of investment properties, fixed assets andconstruction in progress of Tellus was RMB 1,028,983,245.14, accounting for 46.10% of the totalassets.The book value of investment properties, fixed assets and construction in progress involvesignificant management judgment, including determining the scope and conditions of capitalizedexpenditure, deciding the time-point for transferring construction in progress to real estate andfixed assets after completion, and estimating the economic service life and residual value rate offixed assets. As the evaluation of the book value of investment properties, fixed assets and
construction in progress involves significant management judgment, and is vital to theconsolidated financial statements, we view determining the book value of investment real estate,fixed assets and construction in progress as a key audit matter.
2. Audit response
The implemented relevant procedures for the book value of investment properties, fixedassets and construction in progress mainly include:
(1) Understanding the key internal controls related to the identification of the existence,
integrity and accuracy of investment properties, fixed assets and construction in progress,evaluating the design of these internal controls, determining whether they have been implemented,and testing the operational effectiveness of relevant internal controls;
(2) Implementing supervision procedures, and conducting on-site inspections on the status of
investment properties, fixed assets and the progress of projects under construction;
(3) Sampling and verifying the project contract, settlement documents, progress payment
application, invoices, and payment vouchers, regarding the expenditure of construction inprogress in the current year, checking whether the recorded amount of construction in progress isaccurate, and determining whether the indirect costs included in the construction in progress meetthe capitalization conditions;
(4) Sampling and performing cut-off tests on the expenditure of construction in progress
before and after the balance sheet date to see whether the relevant construction expenditure isincluded in the correct accounting period;
(5) Inspecting the progress report or acceptance report related to the construction in progress,
understanding the design requirements or production requirements of the asset itemscorresponding to the construction in progress, and judging whether the construction in progressmeets the conditions for transferring to fixed assets after completion;
(6) Evaluating whether the judgment made by the management for assessing the service life
and net residual value of investment properties and fixed assets is reasonable;
(7) Checking whether the information related to investment properties, fixed assets and
construction in progress has been properly presented in the financial statements.IV. Other InformationThe management of Tellus (hereinafter referred to as the “Management”) is responsible forother information. Other information comprises the information included in the Annual Report ofYear 2022 of Tellus, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not include other information, and we neitherexpress any form of authentication opinion for other information.In connection with our audit on the financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit or otherwiseappears to be materially misstated.Based on the work that we have executed, we should report the fact in case of determiningthe material misstatement of other information. In this regard, we have nothing to report.
V. Responsibilities of the Management and the Governance for the FinancialStatements
The Management shall be responsible for preparing financial statements that present fairlythe data in accordance with the Accounting Standards for Business Enterprises, and for designing,implementing and maintaining the internal controls as the management deems necessary to enablethe preparation of financial statements free from material misstatement, whether due to fraud orerror.
In preparation of the financial statement, the management is responsible for assessingTellus’s sustainable operation ability, disclosing the sustainable operation related items (ifapplicable) and applying sustainable operation assumptions, unless otherwise the managementplans to liquidate Tellus, stop operation or it has no other practical choice.
The governance is responsible for supervising Tellus’s financial reporting process.
VI. Auditor's Responsibilities for the Audit of the Financial StatementsOur objective is to obtain reasonable assurance as to whether the financial statements as awhole are free from material misstatement caused by fraud or error, and to issue an Auditor’sReport containing our opinions. Reasonable assurance is a high level of assurance, but it does notguarantee that an audit conducted in accordance with auditing standards can always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in aggregate, they could reasonably be expected toinfluence the economic decisions users would take on the basis of these financial statements.
We exercise professional judgment and maintain professional skepticism in carrying out ouraudit in accordance with the Auditing Standards. At the same time, we also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk offailing to detect a material misstatement due to fraud is higher than that due to error, as fraud mayinvolve collusion, forgery, intentional omissions, misrepresentations, or overriding internalcontrols.
(2) Know the internal control relating to the audit in order to design appropriate audit
procedures.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Management.
(4) Conclude on the appropriateness of the Management’s use of the going-concern
assumption, and conclude, based on the audit evidence obtained, whether a material uncertaintyexists related to any events or conditions that cast significant doubt on the ability of Tellus tocontinue as a going concern. If we conclude that a material uncertainty exists, we are required todraw attention in our Auditor’s Report to the related disclosures in the financial statements or, ifsuch disclosures are inadequate, to modify our opinion. Our conclusions are based on informationavailable as of the date of the Auditor’s Report. However, future events or conditions may causeTellus to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and
whether the financial statements provide a fair representation of the underlying transactions andevents.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities in Tellus, to express an opinion on the financial statements. We areresponsible for guiding, supervising, and performing the group audit, and assume allresponsibilities for our opinion.
We communicate with the governance regarding, among other matters, the planned scopeand timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.We also provide the governance with a statement regarding compliance with ethicalrequirements related to independence and communicate with the governance about allrelationships and other matters that could reasonably be considered to affect our independence, aswell as related precautions (if applicable).From the matters communicated with the governance, we determine those matters that wereof most significance in the audit of the financial statements of the current period and are thereforethe key audit matters. We have described these matters in the auditor’s report, except that they areprohibited from being publicly disclosed as per the laws and regulations, or in the rare cases, if anegative result that may be caused by communicating some matter in the auditor’s report asreasonably expected exceeds the benefit generated by the public interest, we determine not tocommunicate such matter in the auditor’s report.II. Financial Statements
All amounts are in RMB
1. Consolidated Balance Sheet
Prepared by: Shenzhen Tellus Holding Co., Ltd.
December 31, 2022
Unit: RMBItem December 31, 2022 January 1, 2022Current assets:
Cash at bank and on hand 413,028,327.36 240,582,057.16Settlement reserves
Loans to banks and other financialinstitutions
Trading financial assets 176,133,569.95 412,712,843.84
Derivative financial assets
Notes receivable 87,812,500.00 0.00
Accounts receivable41,752,179.56 18,094,059.92
Receivables financing
Advances to suppliers 8,127,252.94 16,532,227.85
Premiums receivable
Reinsurance premium receivable
Reinsurance contract reservesreceivable
Other receivables 7,663,570.87 5,072,970.77Including: interest receivable
0.00 0.00Dividends receivable 1,852,766.21 547,184.35
Financial assets purchased underagreements to resell
Inventories116,069,675.39 25,434,925.04
Contract assets
Held-for-sale assets
0.00 530,520.33
Current portion of non-current assets
Other current assets 18,346,711.55 8,596,585.57Total current assets 868,933,787.62 727,556,190.48Non-current assets:
Disbursement of loans and advances tocustomers
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 81,024,365.94 88,310,867.47
Investment in other equity instruments10,176,617.20 10,176,617.20
Other non-current financial assets
Investment properties516,360,139.45 551,383,294.54
Fixed assets 102,689,546.42 109,438,198.23
Construction in progress 409,933,559.27 210,197,546.72
Productive biological assets
Oil and gas assets
Right-of-use assets4,181,242.86 7,336,915.83
Intangible assets 49,808,015.72 49,589,498.28
Development expenditures
Goodwill
Long-term deferred expenses 25,876,099.49 28,682,636.66Deferred tax assets8,518,233.77 8,499,551.03Other non-current assets 154,526,946.83 68,473,888.99Total non-current assets 1,363,094,766.95 1,132,089,014.95Total assets2,232,028,554.57 1,859,645,205.43Current liabilities:
Short-term borrowings20,000,000.00 0.00Borrowings from the central bankPlacements from banks and otherfinancial institutions
Trading financial liabilities 18,572,684.91 0.00Derivative financial liabilities 489,360.00 0.00Notes payable
Accounts payable 124,716,800.71 67,407,763.03Advances from customers6,119,377.90 1,827,827.28Contract liabilities 9,259,658.43 21,059,311.18Financial assets sold under agreementsto repurchase
Customer bank deposits and due tobanks and other financial institutions
Customer brokerage deposits
Securities underwriting brokeragedeposits
Employee compensation payable 38,550,181.70 38,893,597.75
Taxes payable 18,891,792.84 48,522,100.45
Other payables 105,180,279.00 112,617,963.65
Including: interest payable
Dividends payable
Handling charges and commissionpayable
Reinsurance premium payable
Held-for-sale liabilities
Current portion of non-currentliabilities
2,009,819.15 3,021,452.25
Other current liabilities68,361,007.70 2,367,994.70Total current liabilities 412,150,962.34 295,718,010.29Non-current liabilities:
Insurance contract reserves
Long-term borrowings 144,820,511.42 86,875,874.39
Bonds payable
Including: preferred shares
Perpetual bonds
Lease liabilities 2,926,184.93 4,474,543.09
Long-term payables3,920,160.36 3,920,160.36
Long-term employee compensationpayable
Estimated liabilities268,414.80 268,414.80
Deferred income 10,579,545.71 10,235,331.21
Deferred tax liabilities 1,135,031.11 963,045.49
Other non-current liabilities
Total non-current liabilities 163,649,848.33 106,737,369.34Total liabilities575,800,810.67 402,455,379.63
Owners' equity:
| Owners' equity: | ||
| Share capital | 431,058,320.00 | 431,058,320.00 |
| Other equity instruments | ||
| Including: preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 431,449,554.51 | 431,449,554.51 |
| Less: treasury shares | ||
| Other comprehensive income | 26,422.00 | 26,422.00 |
Special reserves
| Surplus reserve | 52,499,172.13 | 26,546,480.09 |
| General risk provision | ||
| Undistributed profit | 590,605,394.67 | 543,843,496.85 |
| Total owners' equity attributable to the parent company |
1,505,638,863.31 1,432,924,273.45
| Minority interests | 150,588,880.59 | 24,265,552.35 |
| Total owners' equity | 1,656,227,743.90 | 1,457,189,825.80 |
| Total liabilities and owners' equity | 2,232,028,554.57 | 1,859,645,205.43 |
Legal representative: Fu Chunlong Person in charge of accounting: Lou HongPerson in charge of the accounting firm:
2. Parent Company's Balance Sheet
Unit: RMBItem December 31, 2022 January 1, 2022Current assets:
Cash at bank and on hand 169,733,887.28 96,860,811.12Trading financial assets 176,133,569.95 346,485,780.83Derivative financial assets
Notes receivableAccounts receivable147,200.91 119,014.41Receivables financingAdvances to suppliers 249,559.50 180,505.50Other receivables4,966,987.96 90,401,592.58Including: interest receivable
Dividends receivable1,852,766.21 547,184.35InventoriesContract assetsHeld-for-sale assetsCurrent portion of non-current assets
Other current assets 137,126.11 0.00Total current assets351,368,331.71 534,047,704.44Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments865,313,838.67 781,100,340.20
Investment in other equity instruments 10,176,617.20 10,176,617.20
Other non-current financial assets
Investment properties 26,915,545.20 29,425,213.32
Fixed assets 16,433,526.75 17,792,917.53
Construction in progress419,793,938.49 210,072,702.40
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 48,413,279.08 48,214,014.93
Development expenditures
Goodwill
Long-term deferred expenses8,465,289.34 8,853,627.44
Deferred tax assets 3,415,402.97 3,398,437.68
Other non-current assets 73,340,576.28 32,375,515.49Total non-current assets 1,472,268,013.98 1,141,409,386.19Total assets 1,823,636,345.69 1,675,457,090.63Current liabilities:
Short-term borrowings
Trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable58,797,324.02 344,098.18
Advances from customers 962,064.00 60,656.39
Contract liabilities
Employee compensation payable 28,220,652.45 25,851,294.89
Taxes payable 3,317,946.24 1,873,430.60
Other payables 249,870,213.63 471,549,476.87
Including: interest payableDividends payable
Held-for-sale liabilities
Current portion of non-currentliabilities
Other current liabilitiesTotal current liabilities 341,168,200.34 499,678,956.93Non-current liabilities:
Long-term borrowings 144,820,511.42 86,875,874.39
Bonds payableIncluding: preferred shares
Perpetual bondsLease liabilitiesLong-term payables
Long-term employee compensationpayable
Estimated liabilities
Deferred income
Deferred tax liabilities
Other non-current liabilitiesTotal non-current liabilities 144,820,511.42 86,875,874.39Total liabilities485,988,711.76 586,554,831.32
Owners' equity:
| Owners' equity: | ||
| Share capital | 431,058,320.00 | 431,058,320.00 |
| Other equity instruments | ||
| Including: preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 428,256,131.23 | 428,256,131.23 |
| Less: treasury shares | ||
| Other comprehensive income |
Special reserves
| Surplus reserve | 52,499,172.13 | 26,546,480.09 |
| Undistributed profit | 425,834,010.57 | 203,041,327.99 |
| Total owners' equity | 1,337,647,633.93 | 1,088,902,259.31 |
| Total liabilities and owners' equity | 1,823,636,345.69 | 1,675,457,090.63 |
3. Consolidated Income Statement
Unit: RMBItem Year 2022 Year 2021I. Total operating revenue 837,656,274.51 508,520,026.18
Including: operating revenue 837,656,274.51 508,520,026.18
Interest income
Earned premiumsHandling charges andcommission income
II. Total operating cost 773,501,949.10 429,932,421.97
Including: operating cost 700,289,243.42 352,929,715.81Interest expensesHandling charges andcommission expenses
Surrender value
Net payments for insuranceclaims
Net provision for insurancecontract reserves
Policy dividend expensesReinsurance expenses
Taxes and surcharges 7,334,212.76 6,944,096.18Selling expenses 22,034,712.48 27,178,175.03General and administrativeexpenses
47,077,679.99 47,151,316.69R&D expenses 802,753.80 0.00Financial expenses-4,036,653.35 -4,270,881.74Including: interest expenses 338,730.75 2,253,915.94Interest income 5,472,748.37 6,538,484.64Add: other incomes 6,624,873.28 2,970,055.35
Investment income (loss to belisted with “-”)
33,372,099.57 93,780,306.77Including: income frominvestment in associates and jointventures
10,897,171.28 17,874,805.32Investment incomefrom derecognition of financial assets atamortized cost
Exchange earnings (losses to belisted with “-”)
Net exposure hedging income(loss to be listed with “-”)
Income from changes in fairvalue (loss to be listed with “-”)
-1,592,750.24 663,932.88
Credit impairment loss (loss to belisted with “-”)
-1,635,359.90 38,129.28
Asset impairment loss (loss to belisted with "-")
-1,839,486.29 -812,607.69
Income of assets disposal (loss tobe listed with “-”)
40,765.92 158,228.49III. Operating profit (loss to be listedwith "-")
99,124,467.75 175,385,649.29Add: non-operating revenue 4,134,654.43 768,055.65Less: non-operating expenses 416,462.25 37,503.15IV. Total profit (total loss to be listedwith "-")
102,842,659.93 176,116,201.79Less: income tax expenses21,523,196.08 44,063,670.71
V. Net profit (net loss to be listed with "-")
81,319,463.85 132,052,531.08
| V. Net profit (net loss to be listed with "-") | ||
| (I) Classified by going concern |
1. Net profit from continuing
81,319,463.85 132,052,531.08
| operations (net loss to be listed with “-”) |
| 2. Net profit from discontinued operations (net loss to be listed with "-") |
| (II) Classified by attribution of ownership |
| 1. Net profit attributable to the parent company's shareholders |
83,496,135.61 131,020,764.38
2. Minority interest
| 2. Minority interest | -2,176,671.76 | 1,031,766.70 |
| VI. Net of tax of other comprehensive income |
income attributable to the owner of the
| parent company |
(I) Other comprehensive incomethat cannot be reclassified through profit
| or loss |
| 1. Changes arising from re-measurement of the defined benefit plan |
that cannot be reclassified into profit or
| loss under the equity method |
3. Changes in fair value of other
| equity instrument investments |
| 4. Changes in fair value of the Company’s credit risk |
| 5. Others | ||
| (II) Other comprehensive income to be reclassified into profit or loss |
that can be reclassified into profit or loss
| under the equity method |
2. Changes in fair value of other
| creditor's rights investments |
| 3. Amount of financial assets |
reclassified into other comprehensive
| incomes |
| 4. Provision for impairment of credit in other debt investments |
| 5. Reserves for cash flow hedge |
6. Translation difference arising
from foreign currency financial
| statements | ||
| 7. Others | ||
| Net of tax of other comprehensive |
income attributable to minority
| shareholders | ||
| VII. Total comprehensive income | 81,319,463.85 | 132,052,531.08 |
Total comprehensive incomeattributable to the owners of the parent
83,496,135.61 131,020,764.38
| company |
| Total comprehensive income attributable to minority shareholders |
-2,176,671.76 1,031,766.70
| VIII. Earnings per share | ||
| (I) Basic earnings per share | 0.1937 | 0.3040 |
| (II) Diluted earnings per share | 0.1937 | 0.3040 |
In case of business merger under common control in current period, the net profit realized by the merged party before the mergeris RMB 0.00 and the net profit realized by the merged party in the previous period is RMB 0.00.Legal representative: Fu Chunlong Person in charge of accounting: Lou Hong Person in charge of the accounting firm:
Yu Taiping
4. Parent Company's Income Statement
Unit: RMB
Item Year 2022 Year 2021I. Operating revenue39,568,530.33 50,382,988.38Less: operating cost 10,680,130.69 15,225,250.76Taxes and surcharges 1,102,099.28 1,563,395.23Selling expenses
0.00 0.00General and administrativeexpenses
36,500,937.81 37,305,543.73R&D expenses
0.00 0.00Financial expenses -2,003,919.64 -2,644,425.65
Including: interest expenses 0.00 0.00
Interest income 2,226,376.85 2,593,770.67Add: other incomes 112,656.14 42,502.63
Investment income (loss to belisted with “-”)
267,169,944.69 28,187,188.70Including: income frominvestment in associates and jointventures
10,897,171.28 18,339,555.32Derecognition incomeof financial assets at amortized cost (lossto be listed with “-”)
Net exposure hedging income(loss to be listed with “-”)
Income from changes in fairvalue (loss to be listed with “-”)
-633,155.32 745,798.64
Credit impairment loss (loss to belisted with “-”)
-69,164.09 -2,107.49
Asset impairment loss (loss to belisted with "-")
Income of assets disposal (loss tobe listed with “-”)
II. Operating profit (loss to be listed with"-")
259,869,563.61 27,906,606.79Add: non-operating revenue 74,563.02 345,457.00Less: non-operating expenses 396,639.55 0.00III. Total profits (total losses to be listedwith “-” )
259,547,487.08 28,252,063.79Less: income tax expenses20,566.71 1,272,119.13
IV. Net profits (net losses to be listedwith “-” )
259,526,920.37 26,979,944.66
| IV. Net profits (net losses to be listed with “-” ) |
| (I) Net profit from continuing operations (net loss to be listed with "-") |
259,526,920.37 26,979,944.66
V. Net of tax of other comprehensive
| (II) Net profit from discontinued operations (net loss to be listed with "-") |
| income |
that cannot be reclassified through profit
| or loss |
| 1. Changes arising from re- |
measurement of the defined benefit plan
| measurement of the defined benefit plan |
| 2. Other comprehensive incomes |
that cannot be reclassified into profit or
| loss under the equity method |
| 3. Changes in fair value of other equity instrument investments |
4. Changes in fair value of the
| Company’s credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income to be reclassified into profit or loss |
1. Other comprehensive income
that can be reclassified into profit or loss
2. Changes in fair value of other
| under the equity method |
| creditor's rights investments |
reclassified into other comprehensive
| incomes |
| 4. Provision for impairment of credit in other debt investments | ||
| 5. Reserves for cash flow hedge |
6. Translation difference arising
from foreign currency financial
| statements | ||
| 7. Others | ||
| VI. Total comprehensive incomes | 259,526,920.37 | 26,979,944.66 |
| VII. Earnings per share | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | Year 2022 | Year 2021 |
| I. Cash flows from operating activities: | ||
| Cash received from sales of goods or rendering of services |
969,342,149.01 569,337,075.41Net increase in deposits fromcustomers and placements from banksand other financial institutions
Net increase in borrowings from thecentral bank
Cash received for receiving premiumof original insurance contract
Net cash received from reinsurancebusiness
Net increase in deposits of the insuredand investment
Net increase in placements from otherfinancial institutionsCash received from interest, handlingcharges and commission
| Cash received from interest, handling charges and commission |
| Net increase in placements from banks and other financial institutions |
Net increase in capital for repurchase
| Net increase in capital for repurchase |
Net cash received from securitiestrading agency services
Taxes and surcharges refunds11,635,764.89 0.00
Other cash received relating to
23,320,266.93 23,982,581.39
| operating activities |
| Sub-total of cash inflows from operating activities |
1,004,298,180.83 593,319,656.80
Cash paid for goods and services 895,794,039.65 353,121,840.30
Net increase in loans and advances tocustomers
Net increase in deposits in the centralbank and other financial institutions
Cash paid for claim settlements onoriginal insurance contract
| Net increase in placements with banks and other financial institutions |
| Cash paid for interest, handling charges and commission |
Cash paid for policy dividends
| Cash paid to and for employees | 66,872,318.98 | 59,390,161.24 |
| Taxes paid | 74,780,657.47 | 36,031,576.13 |
Other cash paid relating to operating
18,818,929.02 18,164,344.23
| activities |
| Sub-total of cash outflows from operating activities |
1,056,265,945.12 466,707,921.90
| Net cash flows from operating activities | -51,967,764.29 | 126,611,734.90 |
| II. Cash flows from investing activities: |
Cash received from investment
1,333,567,068.74 1,539,526,090.00
| recovery |
| Cash received from investment incomes |
31,135,993.24 47,997,386.49
fixed assets, intangible assets, and other
| long-term assets |
7,764,134.42 495,926.60
Other cash received relating to
| Net cash received from the disposal of subsidiaries and other business entities |
| investing activities |
15,998,484.00 1,931,753.79
1,388,465,680.40 1,589,951,156.88
| Sub-total of cash inflows from investing activities |
| Cash paid to acquire fixed assets, |
intangible assets and other long-term
152,045,278.38 138,364,122.34
| assets | ||
| Cash paid for investment | 1,177,618,780.00 | 1,582,280,000.00 |
Net increase in pledge loans
| Net cash paid for acquisition of subsidiaries and other business entities |
| Cash paid relating to other investing activities |
8,955,842.00 0.00
1,338,619,900.38 1,720,644,122.34
| Sub-total of cash outflows from investing activities | ||
| Net cash flows from investing activities | 49,845,780.02 | -130,692,965.46 |
| III. Cash flows from financing activities: |
Cash received from absorbinginvestments
128,500,000.00 0.00
| Cash received from absorbing investments |
| Including: cash received by |
subsidiaries from minority shareholders'
128,500,000.00 0.00
| investments | ||
| Cash received from borrowings | 77,924,339.14 | 75,601,270.39 |
Cash received relating to other
| financing activities |
| Sub-total of cash inflows from financing activities |
206,424,339.14 75,601,270.39Cash paid for repayment of debts
Cash paid for distribution ofdividends, profits or interest repayment
20,834,386.73 12,289,486.85
Including: dividends and profits paid
1,928,433.70
| by subsidiaries to minority shareholders |
| Other cash paid relating to financing activities |
2,874,145.90 56,273,820.35
23,708,532.63 68,563,307.20
| Sub-total of cash outflows from financing activities | ||
| Net cash flows from financing activities | 182,715,806.51 | 7,037,963.19 |
IV. Effects from the change of exchange
-842,578.74 236,196.60
| rate on cash and cash equivalents |
| V. Net increase in cash and cash equivalents |
179,751,243.50 3,192,929.23
211,655,585.86 208,462,656.63
| Add: beginning balance of cash and cash equivalents |
| VI. Ending balance of cash and cash equivalents |
391,406,829.36 211,655,585.86
6. Parent Company’s Cash Flow Statement
Unit: RMB
| Item | Year 2022 | Year 2021 |
| I. Cash flows from operating activities: |
Cash received from sales of goods or
42,472,472.08 52,499,175.63
| rendering of services | ||
| Taxes and surcharges refunds | 8,518,912.36 | |
| Other cash received relating to operating activities |
106,200,586.64 162,079,161.08
157,191,971.08 214,578,336.71
| Sub-total of cash inflows from operating activities | ||
| Cash paid for goods and services | ||
| Cash paid to and for employees | 32,704,526.01 | 27,385,052.19 |
| Taxes paid | 2,536,644.11 | 4,272,039.88 |
| Other cash paid relating to operating activities |
5,514,674.90 5,841,119.30
40,755,845.02 37,498,211.37
| Sub-total of cash outflows from operating activities | ||
| Net cash flows from operating activities | 116,436,126.06 | 177,080,125.34 |
| II. Cash flows from investing activities: | ||
| Cash received from investment recovery |
1,170,000,000.00 748,000,000.00
Cash received from investment
29,719,248.83 20,498,702.12
| incomes |
| Net cash received from the disposal of fixed assets, intangible assets, and other |
500.00 0.00
long-term assets
| long-term assets |
| Net cash received from the disposal of subsidiaries and other business entities |
0.00 103,777,307.13
15,998,484.00 910,112.34Sub-total of cash inflows from investing
| Other cash received relating to investing activities |
| activities |
1,215,718,232.83 873,186,121.59
intangible assets and other long-term
| assets |
153,782,004.60 115,295,464.00
| Cash paid for investment | 1,131,118,780.00 | 975,000,000.00 |
Net cash paid for acquisition of
| subsidiaries and other business entities |
| Cash paid relating to other investing activities |
1,284,900,784.60 1,090,295,464.00
| Sub-total of cash outflows from investing activities | ||
| Net cash flows from investing activities | -69,182,551.77 | -217,109,342.41 |
| III. Cash flows from financing activities: | ||
| Cash received from absorbing investments |
| Cash received from borrowings | 57,924,339.14 | 75,601,270.39 |
| Cash received relating to other financing activities |
Sub-total of cash inflows from financing
57,924,339.14 75,601,270.39
| activities | ||
| Cash paid for repayment of debts | ||
| Cash paid for distribution of dividends, profits or interest repayment |
15,834,386.73 10,314,757.50
Sub-total of cash outflows from
| Other cash paid relating to financing activities |
| financing activities |
15,834,386.73 10,314,757.50
| Net cash flows from financing activities | 42,089,952.41 | 65,286,512.89 |
| IV. Effects from the change of exchange rate on cash and cash equivalents |
-209,635.24 67,783.02
89,133,891.46 25,325,078.84Add: beginning balance of cash and
| V. Net increase in cash and cash equivalents |
| cash equivalents |
67,934,339.82 42,609,260.98
157,068,231.28 67,934,339.82
7. Consolidated Statement of Changes in Owners' Equity
Amount in the current period
Unit: RMB
Item
Year 2022Owners' equity attributable to the parent company
Minorityinterests
Total owners'
equityShare capital
Otherequityinstruments
Capitalreserves
Less
Othercomprehensiveincome
Spec
Surplusreserve
Gene
Undistributedprofit
Othe
Subtotal
Preferred
shares
Perpetual
bonds
Others
:
treasury
shares
ial
reserves
ral
risk
provision
rs
I.Endin
gbalanc
e of
theprevio
us
year
431,058,320.0
431,449,554.5
26,422.0
26,546,480.0
543,843,496.
1,432,924,273.4
24,265,552.35
1,457,189,825.8
Add:
chang
es in
accountingpolicies
0.00 0.00
Correction ofpriorperioderrors
0.00 0.00Businessmergerundercommoncontrol
0.00 0.00
Others
0.00 0.00II.Beginningbalanc
e ofthe
es incurren
431,058,320.0
431,449,554.5
26,422.0
26,546,480.0
543,843,496.
1,432,924,273.4
24,265,552.35
1,457,189,825.8
t year
III.Increases/decrease
s in
thecurrentperiod(decre
asesdenoted by "-
")
25,952,692.0
46,761,897.8
72,714,589.86
126,323,328.2
199,037,918.10
(I)
Total
compr
ehensi
ve
income
83,496,135.6
83,496,135.61 -2,176,671.76 81,319,463.85
(II)
Capita
l
invested and
decrea
sed by
owner
s
0.00 0.00
128,500,000.0
128,500,000.00
1.Ordina
rysharescontributed
byowner
s
0.00
128,500,000.0
128,500,000.00
2.Capita
lcontributedby theholder
s ofotherequityinstruments
0.00 0.00
3.Amount of
share-
0.00 0.00
basedpayme
ntscharge
d toowner
s'equity
4.Others
0.00 0.00
(III)Profitdistribution
25,952,692.0
-36,734,237.7
-10,781,545.75 0.00 -10,781,545.751.Withdrawal
ofsurplusreserves
25,952,692.0
-25,952,692.0
0.00 0.00
2.Appropriation togeneral riskprovision
-10,781,545.7
-10,781,545.75 -10,781,545.75
3.Distributiontoowners (orshareholders)
4.Others
(IV)Intern
altransfers ofowner
s'equity
1.Capita
lreserv
etransferred to
capital
(orsharecapital
)
2.Surplu
sreserv
etransferred tocapital
(orsharecapital
)
3.Recovery oflosses
bysurplu
sreserv
e
4.Retain
edearnin
gscarriedforward fromchanges indefine
dbenefit
plan
5.Retain
edearnin
gscarriedforward fromothercomprehensi
veincom
e
6.Others
(V)Specialreserve
1.Appropriatio
n in
thecurren
tperiod
2. Use
in thecurren
tperiod
(VI)Others
IV.
Ending
balanc
e of
the
current
period
431,058,320.0
431,449,554.5
26,422.0
52,499,172.1
590,605,394.
1,505,638,863.3
150,588,880.5
1,656,227,743.9
Amount in the previous period
Unit: RMB
Item
Year 2021Owners' equity attributable to the parent company
Minorityinterests
Total owners'equityShare capital
Otherequityinstruments
Capitalreserves
Less:
treasury
shares
Othercomprehensiveincome
Special
reserves
Surplusreserve
General
risk
provisio
Undistributed profit
Others
Subtotal
Preferred
shares
Perpetual
bonds
Others
nI.Endingbalance ofthepreviousyear
431,058,320.0
431,449,554.
26,422.
23,848,485.6
424,141,893.
1,310,524,675.4
74,121,426.34
1,384,646,101.8
Add:
changes inaccountingpolicies
0.00 0.00
Correction ofpriorperioderrors
0.00 0.00Businessmergerundercommoncontrol
0.00 0.00
Others
0.00 0.00II.Beginningbalance ofthecurrent year
431,058,320.0
431,449,554.
26,422.
23,848,485.6
424,141,893.
1,310,524,675.4
74,121,426.34
1,384,646,101.8
III.Increases/decreases inthecurrentperiod(decreasesdenoted by "-")
0.00 2,697,994.47
119,701,603.
122,399,597.98
-49,855,873.99
72,543,723.99
(I)131,020,764. 131,020,764.38 1,031,766.70 132,052,531.08
Totalcomprehensiveincome
(II)Capitalinvested anddecreased byowners
0.00 0.00 0.00 0.00
-50,000,000.00
-50,000,000.00
1.Ordinarysharescontributedbyowners
0.00
-50,000,000.00
-50,000,000.00
2.Capitalcontributedby theholders ofotherequityinstruments
0.00 0.00
3.Amount ofshare-basedpaymentscharged toowners'equity
0.00 0.00
4.Others
0.00 0.00(III)Profitdistribution
0.00 2,697,994.47
-11,319,160.8
-8,621,166.40 -1,928,433.70 -10,549,600.10
1.
2,697,994.47 - 0.00 0.00
Withdrawalofsurplusreserves
2,697,994.47
2.Appropriation togeneral riskprovision
-8,621,166.40
-8,621,166.40 -1,928,433.70 -10,549,600.10
3.Distributiontoowners (orshareholders)
4.Others
0.00(IV)Internaltransfers ofowners'equity
1.Capitalreservetransferred tocapital(orsharecapital)
2.Surplusreservetransferred tocapital(orshare
capital
)3.Recovery oflossesbysurplusreserve
4.Retainedearningscarriedforward fromchanges indefinedbenefitplan
5.Retainedearningscarriedforward fromothercomprehensiveincome
6.Others
0.00(V)Specialreserve
1.Appropriation inthecurrentperiod
2. Use
in the
currentperiod(VI)Others
0.00 1,040,793.01 1,040,793.01IV.Endingbalance ofthecurrentperiod
431,058,320.0
431,449,554.
26,422.
26,546,480.0
543,843,496.
1,432,924,273.4
24,265,552.35
1,457,189,825.8
8. Parent Company’s Statement of Changes in Owners' Equity
Amount in the current period
Unit: RMB
Item
Year 2022Share capital
Other equity instruments
Capital reserves
Less:
treasuryshare
s
Other
comprehensiv
e
income
Speci
alreservesSurplus reserve
Undistributed
profit
Others
Total owners' equityPreferredshares
Perpetu
albonds
OthersI. Endingbalance of theprevious year
431,058,320.00 428,256,131.23 26,546,480.09 203,041,327.99 1,088,902,259.31Add: changesin accountingpolicies
0.00Correction ofprior perioderrors
0.00Others
0.00II. Beginningbalance of thecurrent year
431,058,320.00 428,256,131.23 26,546,480.09 203,041,327.99 1,088,902,259.31III.Increases/decreases in thecurrent period(decreasesdenoted by "-")
0.00 0.00 25,952,692.04 222,792,682.58 248,745,374.62(I) Totalcomprehensiveincome
259,526,920.37 259,526,920.37(II) Capitalinvested anddecreased byowners
0.00 0.00 0.00 0.00 0.00
1. Ordinary
sharescontributed byowners
0.00
2. Capital
contributed bythe holders ofother equityinstruments
0.00
3. Amount of
share-basedpaymentscharged toowners' equity
0.00
4. Others 0.00(III) Profitdistribution
0.00 0.00 25,952,692.04 -36,734,237.79 -10,781,545.75
1. Withdrawal
of surplusreserves
25,952,692.04 -25,952,692.04 0.00
2. Distribution
to owners (orshareholders)
-10,781,545.75 -10,781,545.75
3. Others 0.00(IV) Internaltransfers ofowners' equity
0.00 0.00 0.00 0.00 0.00
1. Capital
reservetransferred tocapital (orshare capital)
0.00
2. Surplus
reservetransferred tocapital (orshare capital)
0.00
3. Recovery of
losses bysurplus reserve
0.00
4. Retained
earningscarriedforward fromchanges indefined benefitplan
0.00
5. Retained
earningscarriedforward fromother
comprehensive
0.00
income
6. Others 0.00(V) Specialreserve
0.00 0.00 0.00 0.00 0.001.Appropriationin the currentperiod
0.00
2. Use in the
current period
0.00(VI) Others
0.00IV. Endingbalance of thecurrent period
431,058,320.00 428,256,131.23 52,499,172.13 425,834,010.57 1,337,647,633.93
Amount in the previous period
Unit: RMB
Item
Year 2021Share capital
Other equity instruments
Capital reserves
Less
:
treasuryshares
Othercomprehensi
veincom
e
Speci
alreserves
Surplus reserve
Undistributedprofit
OthersTotal owners' equityPreferre
dsharesPerpetu
albonds
OthersI. Endingbalance of theprevious year
431,058,320.00 428,256,131.23 23,848,485.62 187,380,544.20 1,070,543,481.05Add: changesin accountingpolicies
Correction ofprior perioderrors
Others
II. Beginningbalance of thecurrent year
431,058,320.00 428,256,131.23 23,848,485.62 187,380,544.20 1,070,543,481.05III.Increases/decreases in thecurrent period(decreasesdenoted by "-")
2,697,994.47 15,660,783.79 18,358,778.26(I) Totalcomprehensiveincome
26,979,944.66 26,979,944.66(II) Capitalinvested anddecreased byowners
1. Ordinary
sharescontributed byowners
2. Capital
contributed bythe holders ofother equityinstruments
3. Amount of
share-basedpaymentscharged toowners' equity
4. Others
(III) Profitdistribution
2,697,994.47 -11,319,160.87 -8,621,166.40
1. Withdrawal
of surplusreserves
2,697,994.47 -2,697,994.47
2. Distribution
to owners (orshareholders)
-8,621,166.40 -8,621,166.40
3. Others(IV) Internaltransfers ofowners' equity
1. Capital
reservetransferred tocapital (orshare capital)
2. Surplus
reservetransferred tocapital (orshare capital)
3. Recovery of
losses bysurplus reserve
4. Retained
earningscarried forwardfrom changesin definedbenefit plan
5. Retained
earningscarried forwardfrom othercomprehensiveincome
6. Others
(V) Specialreserve
1.Appropriationin the currentperiod
2. Use in the
current period
(VI) OthersIV. Endingbalance of thecurrent period
431,058,320.00 428,256,131.23 26,546,480.09 203,041,327.99 1,088,902,259.31
III. Company Profile
1. Company profile
Shenzhen Tellus Holding Co., Ltd. (hereinafter referred to as "the Company") is a limitedliability company registered in Shenzhen Administration for Industry and Commerce onNovember 10, 1986. The Company was reorganized and established from the former ShenzhenMachinery Industry Company with the approval of the Reply on the Reorganization of ShenzhenMachinery Industry Company into Shenzhen Tellus Machinery Co., Ltd. (SFBF [1991] No. 1012)issued by the General Office of Shenzhen Municipal People's Government. The Companycurrently holds a business license with a unified social credit code of 91440300192192210U, witha registered capital of RMB 431,058,320.00 and a total of 431,058,320 shares, including392,778,320 A shares and 38,280,000 B shares without trading restrictions. The business addressof the Company's headquarters is Floors 3 and 4, Shuibei 2nd Road, Luohu District, Shenzhen.Legal representative: Fu Chunlong.In 1993, with the approval from the Reply of the General Office of Shenzhen MunicipalPeople's Government on the Reorganization of Shenzhen Tellus Machinery Co., Ltd. into a PublicCompany Limited by Shares (SFBF [1992] No. 1850) and the Reply of Shenzhen SpecialEconomic Zone Branch of the People's Bank of China on the Issuance of Shares by ShenzhenTellus Machinery Electric Co., Ltd. (SRYFZ [1993] No. 092), the Company was reorganized intoa public limited liability company through an initial public offering, with a registered capital ofRMB 166,880,000.00 and a total share capital of 166,880,000 shares. 120,900,000 shares wereconverted from former assets, 25,980,000 were issued as A shares and 20,000,000 were issued as
B shares. Shares issued by the Company had a par value of RMB 1 per share. On June 21, 1993,the Company's shares were listed and traded on the Shenzhen Stock Exchange.According to the resolution of the Company's 1993 Annual General Meeting of Shareholders,based on the share capital of 166,880,000 shares as of December 31 of that year, the Companydistributed a cash dividend of RMB 0.5 and issued 2 bonus shares to all shareholders for every 10shares held, totaling 33,376,000 shares, which was implemented in 1994. After the stock dividend,the registered capital increased to RMB 200,256,000.00.According to the resolution of the Company's 1994 annual general meeting of shareholders,based on the share capital of 200,256,000 shares as at December 31 of the current year, theCompany distributed cash dividends of RMB 0.5 for every 10 shares with 0.5 additional shares toall shareholders, totaling 20,025,600 shares, which was implemented in 1995. The registeredcapital was increased to RMB 220,281,600.00 after the share distribution and transfer.
According to the resolution of the fourth extraordinary general meeting of shareholders ofthe Company in 2014, upon the approval of the Official Reply to the Approval of Non-publicOffering of Shares by Shenzhen Tellus Holding Co., Ltd. (ZJXK [2015] No.173) issued by theChina Securities Regulatory Commission, the Company issued 77,000,000 ordinary A shares toShenzhen Special Economic Zone Development Group Co., Ltd. and Shenzhen Capital FortuneJewelry Industry Investment Enterprise (Limited Partnership) in 2015. After the issuance, theregistered capital is increased to RMB 297,281,600.00.According to the resolution of the Company's 2018 annual general meeting of shareholders,based on the share capital of 297,281,600 shares as at December 31 of the current year, theCompany increased 4.5 shares for every 10 shares to all shareholders with capital reserves,totaling 133,776,720 shares, which were implemented in 2019. After the transfer, the registeredcapital is increased to RMB 431,058,320.00.The Company's main business activities are automobile sales, automobile maintenance andtesting, jewelry operation, property leasing and services, etc.
Approval date of the financial statements: the financial statements have been approved fordisclosure by the board of directors of the Company on April 25, 2023.
1. Scope and change of the consolidated financial statements
(1) Subsidiaries included in the consolidation scope at the end of the reporting period
No.
Full name of subsidiary
Abbreviation ofsubsidiary
Shareholding
| No. | proportion % | ||
| Direct | Indirect | ||
| Shenzhen Tellus Xinyongtong Automobile Development Co., Ltd. | Xinyongtong Automobile Development Co. |
5.00 95.00
| Shenzhen Bao'an Shiquan Industry Co., Ltd. | Bao'an Shiquan Company |
100.00
Tellus Real Estate Co.,
| Ltd. | Tellus Real Estate Company |
100.00
| Shenzhen Tellus Chuangying Technology Co., Ltd. | Chuangying company |
100.00
| Shenzhen Xinyongtong Motor Vehicle Inspection Equipment Co., Ltd. | Testing Equipment Company |
51.00
| Shenzhen Automobile Industry and Trade Co., Ltd. | Automobile Industry and Trade Company |
100.00
| Shenzhen Automobile Industry Supply and Marketing Company | Automobile Supply and Marketing Company |
100.00
| Shenzhen SDG Huari Automobile Enterprise Co., Ltd. | Huari Company |
60.00
| Shenzhen Huari Anxin Automobile Inspection Co., Ltd. | Huari Anxin Company |
100.00
| 10 | Shenzhen Zhongtian Industry Co., Ltd. | Zhongtian Company | 100.00 |
| Shenzhen Huari Toyota Sales & Service Co., Ltd. | Huari Toyota |
60.00
| Shenzhen Tellus Treasury Supply Chain Tech Co., Ltd. | Treasury Supply Chain Company |
100.00
| Shenzhen Jewelry Industry Service Co., Ltd. | Shenzhen Jewelry Company |
65.00
| 14 | Shanghai Fanyue Diamond Co., Ltd. | Shanghai Fanyue | 100.00 | |
| 15 | Guorun Gold Shenzhen Co., Ltd. | Guorun Gold | 36.00 | 5.00 |
For detailed information about the above subsidiaries, see Note VII Interests in OtherEntities.
(2) Changes in the scope of the consolidated financial statements during the reporting period
Newly-added subsidiaries during the reporting period:
No. Full name of subsidiary
Abbreviation ofsubsidiary
Reporting
period
Reason ofincorporating into
| consolidation scope | ||||
| 1 | Guorun Gold Shenzhen Co., Ltd. | Guorun Gold | Year 2022 | Newly established |
See Note VI. Changes in the scope of consolidation for details of the increase and decrease ofsubsidiaries during the reporting period.IV. Basis for Preparation of the Financial Statements
1. Preparation basis
The Company has prepared its financial statements on a going-concern basis and inaccordance with the actual transactions and items, and recognition and measurement underprovisions of ASBE (Accounting Standards for Business Enterprises) and their applicationguidelines and interpretations. In addition, the Company also disclosed relevant financialinformation in accordance with the Rules for the Preparation of Information Disclosure ofCompanies Issuing Securities to the Public No.15 - General Provisions on Financial Reports(revised in 2014) issued by the CSRC.
2. Going concern
The Company evaluated its ability to continue as a going concern for the 12 months from theend of the reporting period, and no events affecting the going concern of the Company. It isbelieved reasonable that the Company's financial statements have been prepared based on goingconcern.
V. Significant Accounting Policies and Accounting EstimatesNotes to specific accounting policies and accounting estimates:
N/A
1. Statement of compliance with Accounting Standards for Business Enterprises (ASBE)
The financial statements prepared by the Company meet the requirements of AccountingStandards for Business Enterprises and truly and fully reflect the financial situation, businessperformance, changes in owners’ equity, cash flow and other relevant information of theCompany.
2. Accounting period
The accounting year of the Company is from January 1 to December 31.
3. Business cycle
The normal operating period of the Company is one year.
4. Bookkeeping base currency
Renminbi ("RMB") is adopted by the Company as the bookkeeping base currency.
5. Accounting Treatment Method for Business Merger under Common Control and Different Control
(1) Business merger under common control
The assets and liabilities obtained by the Company in business merger shall be calculatedbased on the book value of the merged party gained by the ultimate controlling party in itsconsolidated financial statements on the merger date. Where the accounting policies adopted bythe merged party and the Company before the business merger are different, the accountingpolicies shall be unified based on the principle of materiality, that is, the book value of the assetsand liabilities of the merged party shall be adjusted in accordance with the accounting policies ofthe Company. If there is a difference between the book value of the net assets obtained by theCompany in the business merger and the book value of the consideration paid, the capital reserve
(capital premium or share premium) shall be adjusted first. If the balance of the capital reserve(capital premium or share premium) is insufficient to be offset, the surplus reserve andundistributed profits shall be offset in turn.See Note III. 6(6) for the accounting treatment method for business merger under commoncontrol realized through step-by-step transactions.
(2) Business merger under different control
The identifiable assets and liabilities of the acquiree acquired by the Company in a businessmerger shall be measured at their fair values on the acquisition date. Where the accountingpolicies adopted by the acquiree and the Company before the business merger are different, theaccounting policies shall be unified based on the principle of materiality, that is, the book value ofthe assets and liabilities of the acquiree shall be adjusted in accordance with the accountingpolicies of the Company. The difference between the merger costs of the Company on theacquisition date and the fair value of the identifiable assets and liabilities obtained from theacquiree in the business merger is recognized as goodwill; If the merger cost is less than thedifference of the fair value of the identifiable assets and liabilities acquired from the acquiree inthe business merger, the merger cost and the fair value of the identifiable assets and liabilities ofthe acquiree obtained in the business combination shall be reviewed first. If the merger cost is stillless than the fair value of the identifiable assets and liabilities obtained from the acquiree afterreview, the difference shall be recognized as the current profit and loss of the merger.See Note III. 6(6) for the accounting treatment method for business merger under differentcontrol realized through step-by-step transactions.
(3) Disposal of related handling charges for business merger
Intermediation costs such as audit, legal service and assessment and consultation and otheradministration costs incurred shall be included in the current profit or loss when incurred duringthe business merger. The transaction expenses of the equity securities or liability securities issued
as the consideration for the merger shall be recorded as the initial recognition amount of theequity securities or liability securities.
6. Preparation methods of consolidated financial statements
(1) Determination of consolidation scope
The scope of consolidation of consolidated financial statements shall be defined on the basisof control, including not only subsidiaries defined according to voting rights (or similar votingrights) themselves or in combination with other arrangements, but also structured entities definedbased on one or more contractual arrangements.Control means the power of the Company over the investee, and the investor can enjoyvariable returns through participating in related activities of the investee and is able to influenceits amount of return with the power over the investee. Subsidiaries refer to the entities controlledby the Company (including the divisible parts of enterprises and investees, and structured entitiescontrolled by enterprises). Structured entities refer to entities designed without taking votingrights or similar rights as decisive factors when determining their controllers (Note: they aresometimes referred to as special purpose entities).
(2) Special provisions on the parent company being the investment entity
If the parent company is an investment entity, only those subsidiaries that provide relevantservices for the investment activities of the investment entity shall be included in the scope ofconsolidation, and other subsidiaries shall not be consolidated. The equity investors of thesubsidiaries that are not included in the scope of consolidation shall be recognized as financialassets at fair value through profit or loss.
When the parent company meets the following conditions at the same time, the parentcompany belongs to the investment entity:
① The entity obtains funds from one or more investors for the purpose of providing
investment management services to investors.
② The entity's sole objective of operation is to provide a return to the investors through capital
appreciation, investment income or both.
③ The entity considers and evaluates the performance of almost all investments at fair value.
When the parent company changes from a non-investment entity to an investment entity,except that only the subsidiaries that provide relevant services for its investment activities areincluded in the consolidated financial statements for preparation of consolidated financialstatements, other subsidiaries will not be consolidated by the entity from the date of change, andtreatment will be conducted according to the principle of partially disposing of the subsidiary'sequity without losing control.When the parent company changes from an investment entity to a non-investment entity, thesubsidiaries that were not originally included in the scope of the consolidated financial statementsshall be included in the scope of the consolidated financial statements on the change date, and thefair value of the subsidiaries that were not originally included in the scope of the consolidatedfinancial statements on the change date shall be regarded as the transaction consideration foracquisition, in accordance with the accounting treatment method of business merger underdifferent control.
(3) Preparation methods of consolidated financial statements
The Company prepares the consolidated financial statements based on the financialstatements of itself and all the subsidiaries and in accordance with other relevant materials.
The Company prepares the consolidated financial statements by taking the entire group as anaccounting entity in accordance with the requirements for recognition, measurement andpresentation in relevant accounting standards for business enterprises, and the unified accountingpolicies and accounting periods, with the aim of reflecting the overall financial positions,operating results and cash flows of the Group.
① Merge the assets, liabilities, owners' equity, income, expenses and cash flow of the parent
company and its subsidiaries.
② Offset long-term equity investment of the parent company to the subsidiaries and the
parent company’s share in the owners’ equity of subsidiaries.
③ Offset the effect of internal transactions between the parent company and its subsidiaries
and between different subsidiaries. If internal transactions indicate relevant assets have sufferedimpairment loss, the loss shall be recognized in full.
④ Adjust special transactions from the perspective of the Group.
(4) Treatment of increase/decrease in subsidiaries during the reporting period
① Increase of subsidiaries or business
A. Subsidiaries or businesses increased due to business merger under common control(a) When preparing the consolidated balance sheet, the beginning amount of the consolidatedbalance sheet shall be adjusted, and the relevant items of the comparative statements shall beadjusted at the same time. It shall be deemed that the consolidated reporting entity has alwaysexisted since the time when the ultimate controlling party begins to control.(b) When preparing the consolidated income statement, the income, expenses and profits ofthe subsidiary and the business combination from the beginning of the current period to the end ofthe reporting period shall be included in the consolidated income statement, and the relevant itemsof the comparative statements shall be adjusted at the same time. It shall be deemed that theconsolidated reporting entity has always existed since the time when the ultimate controlling partybegins to control.
(c) When preparing the consolidated cash flow statement, the cash flows of the subsidiaryand the business from the beginning of the current period to the end of the reporting period shallbe included in the consolidated cash flow statement, and the relevant items of the comparativestatements shall be adjusted at the same time. It shall be deemed that the consolidated reportingentity has existed since the time point when the ultimate controlling party begins to control.
B. Subsidiaries or businesses increased due to business merger under different control(a) In preparing the consolidated balance sheet, the beginning amounts of the consolidatedbalance sheet are not adjusted.(b) When preparing the consolidated income statement, the income, expenses and profits ofthe subsidiary and the business from the acquisition date to the end of the reporting period shallbe included in the consolidated income statement.(c) When preparing the consolidated cash flow statement, the cash flows of the subsidiaryfrom the acquisition date to the end of the reporting period shall be included in the consolidatedcash flow statement.
② Disposal of subsidiaries or business
A. In preparing the consolidated balance sheet, the beginning amounts of the consolidatedbalance sheet are not adjusted.B. When preparing the consolidated income statement, the income, expenses and profits ofthe subsidiary and the business from the beginning of the period to the disposal date shall beincluded in the consolidated income statement.
C. When preparing the consolidated cash flow statement, the cash flows of the subsidiaryand the business from the beginning of the period to the disposal date shall be included in theconsolidated cash flow statement.
(5) Special considerations in the consolidated offset
① Long-term equity investment of the Company held by subsidiaries should be treated as
the treasury shares of the Company and deduction item of owners’ equity and listed as "Less:
treasury shares" under owners’ equity in the consolidated balance sheet.
For the long-term equity investments held by subsidiaries, the long-term equity investmentand the share of the owner's equity of the corresponding subsidiary shall be offset with each otherby reference to the offset method of the Company's equity investment in subsidiary.
② Since the items of "special reserves" and "general risk reserves" are neither paid-in capital
(or share capital) nor capital reserves, nor different from retained earnings and undistributedprofits, they shall be restored according to the share attributable to the owners of the parentcompany after the long-term equity investments offset each other with the owners' equity of thesubsidiaries.
③ If a temporary difference occurs between the book value of assets and liabilities in the
consolidated balance sheet and the tax basis of the taxpayer to which the Company belongs due tothe offset of unrealized internal sales profit or loss, the deferred tax assets or deferred taxliabilities shall be recognized in the consolidated balance sheet, and the income tax expenses inthe consolidated income statement shall be adjusted at the same time, except for the deferred taxesrelated to transactions or events directly included in the owners' equity and business merger.
④ The unrealized gains and losses from internal transactions arising from the sale of assets
by the Company to subsidiaries shall fully offset the "net profit attributable to the owners of theparent company" Unrealized internal transaction profit or loss incurred by asset sales fromsubsidiaries to the Company should offset the “net profit attributable to the owners of the parentcompany” and “minority interests”, based on the distribution proportion between the Companyand the subsidiary. Unrealized internal transaction profit or loss incurred by asset sales amongsubsidiaries should offset the “net profit attributable to the owners of the parent company” and“minority interests”, based on the distribution proportion between the subsidiary (seller) and theCompany.
⑤ If the share of current losses of minority shareholders in a subsidiary exceeds their share
of owners' equity in that subsidiary at the beginning of the period, the difference shall still beoffset against the “minority interests”.
(6) Accounting treatment for special transactions
① Purchasing minority shareholders' equity
Where the Company purchases the equity of a subsidiary owned by minority shareholders ofthe subsidiary, in the individual financial statements, the investment cost of the long-term equityinvestment newly acquired by purchasing the minority equity is measured at the fair value of theconsideration paid. In the consolidated financial statements, the capital reserve (capital premiumor equity premium) shall be adjusted for the difference between the long-term equity investmentnewly acquired from the acquisition of a minority interest and the share of net assets of thesubsidiary that would continue to be calculated from the acquisition date or the merger date, asper the proportion of new equity holding. If the capital reserve is insufficient to be written down,the surplus reserve and undistributed profits shall be offset in turn.
② Acquisition of control of subsidiaries step by step through multiple transactions
A. Business merger under common control realized step-by-step through multipletransactions
On the merger date, in the individual financial statements of the Company, the initialinvestment cost of the long-term equity investment is determined according to the share of thebook value of the net assets of the subsidiary that shall be enjoyed after the merger in theconsolidated financial statements of the ultimate controlling party; Capital reserves (capitalpremium or share premium) shall be adjusted according to the difference between the initialinvestment cost and the sum of the book value of the long-term equity investment before themerger and the book value of the consideration paid for further shares on the merger date. If thecapital reserves (capital premium or stock premium) are insufficient to be offset, the surplusreserves and undistributed profits shall be offset in turn.
In the consolidated financial statements, except the adjustment made according to theaccounting policies, the assets and liabilities of the merged party obtained by the merging partyshall be measured according to the book value on the merger date in the consolidated financialstatements of the ultimate controlling party. According to the difference between the sum of thebook value of holding investment before merger and the book value of newly paid consideration
on the merger date and the book value of net assets obtained by merger, the capital reserve (stockpremium/capital premium) is adjusted; if the capital reserve is not sufficient for offset, theretained earnings may be adjusted.The equity investment held before the acquisition of the merged party’s control by themerging party and calculated by the equity method and the profit or loss, other comprehensiveincomes and other changes in owners’ equity that have been recognized during the period fromthe date of acquisition of the original equity, or the date of common control of the merging partyand the merged party (which is later) to the merger date shall offset against the beginning retainedearnings during the period of comparative statement respectively.
B. Business merger under different control realized step-by-step through multipletransactions
On the merger date, in the individual financial statements, the sum of the book value of thelong-term equity investment originally held and the newly increased investment costs on themerger date shall be recognized as the initial investment cost of the long-term investment inequity on the merger date.
In the consolidated financial statements, the acquiree's equity held before the acquisition dateis re-measured at the fair value of the equity at the acquisition date, and the difference betweenthe fair value and its book value is included in the current investment income; Where theacquiree's equity held before the acquisition date is related to any other comprehensive incomeunder the equity method, other comprehensive income related thereto shall be transferred to thecurrent income corresponding to the acquisition date, excluding other comprehensive incomeresulting from changes in net liabilities or net assets arising from the defined benefit plan throughthe re-measurement on the merged party. The Company discloses the fair value of the equity heldby the acquiree before the acquisition date and the relevant profits or loss arising fromremeasurement of fair value in the notes.
③ The Company's disposal of long-term equity investments in subsidiaries without losing
control
For partial disposal of long-term equity investment in a subsidiary by the parent companywithout loss of control, in the consolidated financial statements, the capital reserve (capitalpremium or equity premium) shall be adjusted by the difference between the disposal price andthe share of net assets of the subsidiary that would continue to be calculated from the acquisitiondate or the merger date corresponding to the disposal of the long-term equity investment, or if thecapital reserve is insufficient to be written down, the retained earnings shall be adjusted.
④ The Company's disposal of long-term equity investments in subsidiaries with the loss of
control
A. Disposal of with a single transaction
In the event the Company losses the right of control over an investee due to disposal ofpartial equity investments or other reasons, in the preparation of consolidated financial statements,the residual equity interest shall be measured again according to its fair value on the day when theCompany loses the right of control. The difference by using the sum of value received fromdisposal of equity and fair value of the residual equity to deduct share in net assets continuallycounted from the acquisition date or merger date of the original subsidiary (calculated as peroriginal share proportion) shall be recorded in the investment income of the current periodwithout the right of control.
Other comprehensive income and other changes in owners’ equity in connection with theequity investment of the original subsidiaries shall be transferred into current profit or loss at thetime of loss of control, except for other comprehensive incomes generated from the change in netliabilities or net assets of defined benefit plan re-measured by the investee.
B. Step-by-step disposal of through multiple transactions
Determine whether step-by-step transaction belongs to “a package deal” in consolidatedfinancial statements first.
If the step-by-step transaction does not belong to a "package deal", in the individual financialstatements, the book value of the long-term equity investment corresponding to each disposal ofequity shall be carried forward for each transaction before the loss of control of the subsidiary,and the difference between the proceeds and the book value of the disposal of the long-termequity investment shall be included in the current investment income; In the consolidatedfinancial statements, it shall be treated in accordance with the relevant provisions stating that "theparent company disposes of the long-term equity investment in the subsidiary without losing thecontrol right".If a step-by-step transaction belongs to a "package deal", each transaction shall be accountedfor as a transaction that disposes of subsidiaries and loses control; In the individual financialstatements, the difference between each disposal price before the loss of control and the bookvalue of the long-term equity investment corresponding to the equity disposed of shall berecognized as other comprehensive income first, and then transferred to the current profit and losson the loss of control when the control is lost; In the consolidated financial statements, for eachtransaction before the loss of control, the difference between the disposal price and the share ofnet assets of the subsidiary corresponding to the disposal of investment shall be recognized asother comprehensive income, and shall be transferred to the current profit and loss in case ofcontrol loss.Where the terms, conditions and economic impact of various transactions meet one or moreof the following circumstances, multiple transactions are generally accounted for as a "packagedeal":
(a) These transactions are concluded simultaneously or in consideration of mutual influence.
(b) These transactions can achieve a complete commercial result only when they are treatedas a whole.
(c) The occurrence of one transaction depends on the occurrence of at least one othertransaction.
(d) A transaction is uneconomical on its own, but is economical when considered togetherwith other transactions.
⑤ Dilution of equity ratio owned by the parent company due to the capital increase of
minority shareholders of the subsidiary
Other shareholders (minority shareholders) of the subsidiary increase the capital of thesubsidiary, thereby diluting the proportion of the parent company's equity in the branch. In theconsolidated financial statements, its share in the book net assets of the subsidiary before thecapital increase is calculated according to the shareholding ratio of the parent company before thecapital increase. The capital reserves (capital premium or share premium) are adjusted accordingto the difference between the share and share of book net assets of the subsidiaries after thecapital increase calculated according to the shareholdings ratio of the parent company after thecapital increase. If the capital reserves (capital premiums or share premiums) are insufficient to beoffset, the retained earnings are adjusted.
7. Classification of joint arrangements and accounting treatment methods for joint operations
Joint arrangement refers to an arrangement jointly controlled by two or more participants.Joint arrangement of the Company can be classified into joint operations and joint ventures.
(1) Joint operation
Joint operation refers to an arrangement that the Company enjoys assets related to thearrangement and bears liabilities related to the arrangement.
The Company recognizes the following items related to the Company among the interestshares of joint operation, and performs accounting treatment in accordance with relevantregulations of ASBE:
① Recognizing the assets held solely and the assets held jointly identified as per its shares;
② Recognizing the liabilities held solely and the liabilities held jointly identified as per its
shares;
③ Recognizing the income generated from the sale of shares enjoyed in the joint operations;
④ Recognizing the income generated from the sale of joint operation output as per its shares;
⑤ Recognizing the expenses incurred separately and the expenses arising from joint
operation as per its shares.
(2) Joint ventures
Joint venture refers to an arrangement that the Company only has the power governing netassets of the arrangement.
The Company shall conduct accounting treatment on the investment of the joint venture asper the provisions on business accounting for relevant equity method of long-term equityinvestment.
8. Standards for defining cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily drawn on demand. The cashequivalents are recognized as investment that is short-term (generally due within three monthssince the acquisition date), highly liquid and readily convertible to a known amount of cash, andhas an insignificant risk of changes in value.
9. Foreign currency transaction and foreign currency statement translation
(1) Recognition method of conversion exchange rate upon foreign currency
transactions
Upon the initial recognition upon the foreign currency transactions of the Company, the spotexchange rate on the transaction date or the exchange rate determined using systematic andreasonable methods and similar with the spot exchange rate on the transaction date (hereinafter
referred to as “exchange rate similar with spot exchange rate”) is used for the transaction intobookkeeping base currency.
(2) Conversion method used for foreign currency monetary items on the balance sheet
date
On the balance sheet date, for the foreign currency monetary items, use the spot exchangerate on balance sheet date. Exchange differences arising from these differences between the spotexchange rate at the balance sheet date and the one at the initial recognition or the previous one atthe balance sheet are included in the current profit or loss. Foreign currency non-monetary itemsmeasured at historical cost are still converted as per the spot exchange rate on the transaction date;the foreign currency non-monetary items measured at fair value are converted as per the spotexchange rate on the date of fair value determination, and the difference between the convertedrecording currency amount and the original bookkeeping base currency amount are included inthe current profit or loss.
10. Financial instruments
Financial instruments refer to contracts that form the financial assets of a party, and formfinancial liabilities or equity instruments of other parties.
(1) Recognition and derecognition of the financial instruments
As soon as the Company becomes one party of the financial instrument contract, it willrecognize the financial assets or financial liabilities.
A financial asset is derecognized if it meets one of the following conditions:
① The right of the contract to receive the cash flows of financial assets terminates;
② The financial asset has been transferred, and is in accordance with the following
conditions for derecognition.
Under the circumstance that the current obligation of the financial liabilities in whole (orpartially) has been relieved, the Company will derecognize the financial liabilities in whole (orpartially). Where a contract is signed by the Company (the debtor) and the creditor in ways ofbearing new financial liabilities instead of original financial liabilities and the clause on thefinancial liabilities in the new contract is in fact different from the same clause in the currentcontract, derecognize the original financial liabilities and confirm the new financial liability in thesame time. If the Company makes any substantial modification to the contract terms of theoriginal financial liabilities in whole (or partially), the original financial liabilities shall bederecognized and one new financial liability shall be recognized in accordance with the modifiedterms.Financial assets transacted in a conventional way are subject to accounting recognition andderecognition on the transaction day. Buying and selling financial assets in conventional wayrefers to the delivery of financial assets according to the time arrangement prescribed by the termsof the contract, and the laws, regulations or market practices. The trade date is the date when theCompany makes commitments to buy or sell the financial assets.
(2) Classification and measurement of financial assets
During the initial recognition, according to the business mode of financial assetsmanagement and the contractual cash flow characteristics of financial assets, the Companyclassifies financial assets into financial assets at amortized cost, financial assets at fair valuethrough profit or loss, and financial assets at fair value through other comprehensive income.Unless the Company changes its business mode for managing the financial assets, in this case, allaffected related financial assets shall be reclassified on the first day of the first reporting periodafter the change of business mode. Otherwise, the financial assets shall not be reclassified afterthe initial recognition.
Financial assets are initially recognized at fair value. For financial assets at fair valuethrough profit or loss, related transaction expenses shall be directly included in the profit or lossfor the current period; the related transaction expenses of other financial assets shall be included
in the initially recognized amount. For the notes receivable and accounts receivable that arisefrom the sales of goods or the provision of services and that do not contain or consider thesignificant financing component, the Company shall perform the initial measurement according tothe transaction price defined in the income standards.Subsequent measurement of financial assets depends on their classification:
① Financial assets at amortized cost
Where the financial assets meet all the following conditions, they will be classified asfinancial assets measured at amortized cost. The business mode of the Company for managingsuch financial assets is to collect contract cash flows. The contract of such financial assetsspecifies that the cash flows generated at a particular date are only for the payment of principaland interest based on the amount of outstanding principal. Such financial assets are measuredsubsequently by the effective interest method and based on the amortized cost, and all profit orloss due to derecognition, impairment, or amortization as per effective interest method areincluded in the current profit or loss.
② Financial assets at fair value through other comprehensive income
Where the financial assets meet all the following conditions, they will be classified asfinancial assets at fair value through other comprehensive income. The business mode of theCompany for managing such financial assets is to collect contract cash flows and to sell thefinancial assets. The contract of such financial assets specifies that the cash flows generated at aparticular date are only for the payment of principal and interest based on the amount ofoutstanding principal. For such financial assets, subsequent measurement shall be based on fairvalue. Except that the impairment gain or loss and the exchange gain or loss are recognized asprofit or loss of the current period, changes in fair value of such financial assets are recognized asthe other comprehensive income, and the accumulated profit or loss are transferred into profit orloss of the current period until the financial assets are derecognized. However, the relevantinterest income from the financial assets calculated by the effective interest method is included inthe current profit or loss.
The Company irrevocably chooses to designate some non-trading equity instrumentinvestments as financial assets at fair value through other comprehensive income, and onlyincludes the relevant dividend income in the current profit or loss. The changes in fair value arerecognized as other comprehensive income and, until the derecognition of such financial assets,the accumulated profit or loss is transferred into the retained earnings.
③ Financial assets at fair value through profit or loss
The financial assets other than the above financial assets at the amortized cost and financialassets at fair value through other comprehensive income will be classified into the financial assetsat fair value through profit or loss. Such financial assets are subsequently measured at the fairvalue and the changes in fair value are included in the current profit or loss.
(3) Classification and measurement of financial liabilities
The Company classifies financial liabilities into the financial liabilities at fair value throughprofit or loss, the loan commitment and liabilities under financial guarantee contract with aninterest rate lower than the market interest rate and the financial liabilities measured by amortizedcost.
Subsequent measurement of financial liabilities depends on their classification:
① Financial liabilities at fair value through profit or loss
These financial liabilities include trading financial liabilities (including derivativeinstruments classified as financial liabilities) and financial liabilities designated as at fair valuethrough profit or loss. After the initial recognition, such financial liabilities are subsequentlymeasured at fair value. Unless related to the hedge accounting, the profit or loss (includinginterest expenses) generated are included in the current profit or loss. However, for financialliabilities designated to be measured at fair value through profit or loss, the changes in fair valueof such financial liabilities caused by changes in the credit risk. Upon the derecognition of such
financial liabilities, the accumulated profit or loss previously included in other comprehensiveincome shall be transferred out from other comprehensive income and included in retainedearnings.
② Loan commitment and liabilities under financial guarantee contract
Loan commitment is an commitment provided by the Company to the client to issue a loanto the client under the established contract terms within the commitment period. For the loancommitment, the impairment loss shall be withdrawn according to the expected credit loss model.A financial guarantee contract is a contract in which the Company is required to pay aspecified amount of money to the contract holder who has suffered a loss because the specificdebtor failed to make due payment of debts in accordance with the original or modified terms fordebt instruments. The liabilities under financial guarantee contract are subsequently measuredaccording to the amount of the provision for loss recognized according to the impairmentprinciple for financial instruments or the balance of initially recognized amount after deductingthe accumulated amortized amount recognized according to the revenue confirmation principles,whichever is lower.
③ Financial liabilities at amortized cost
After the initial recognition, other financial liabilities will be measured by the effectiveinterest method based on the amortized cost.
Except for special circumstances, the financial liabilities and equity instrument shall bedistinguished according to the following principles:
① If the Company fails to unconditionally perform one contractual obligation by delivering
cash or other financial assets, the contractual obligation satisfies the definition of financialliability. While some financial instruments do not expressly include the terms and conditions forthe obligation to deliver cash or other financial assets, it is possible to form contract obligationsindirectly through other terms and conditions.
② If one financial instrument must or can be settled by the Company’s own equity
instrument, the Company’s own equity instrument used for settling such instrument shall beconsidered as a substitute of cash or other financial assets, or as residual equity in the issuer’sassets that the instrument holder enjoys after deducting all the liabilities. If it is the former one,this instrument is the financial liabilities of the Issuer. If it is the latter, the instrument is the equityinstrument of the Issuer. Under certain circumstances, a financial instrument contract requires thatthe Company must or may settle the financial instrument with its own equity instruments, wherethe amount of contractual rights or contractual obligations is equal to the number of own equityinstruments available or to be delivered multiplied by the fair value upon its settlement. In thiscase, regardless of whether the amount of the contractual right or obligation is a fixed value orchanges based in whole or in part on changes in variables other than the market price of theCompany's own equity instrument (such as interest rates, the price of a good or the price of afinancial instrument), the contract is classified as financial liabilities.
(4) Derivative financial instruments and embedded derivative instruments
Derivative financial instruments are initially measured at the fair value on the date when thederivative deal contract is signed, and subsequently measured at fair value. The derivativefinancial instrument whose fair value is positive is recognized as an asset. When the fair value isnegative, it is recognized as a liability.Except that the cash flow hedge belonging to the effective part of the hedge is included inother comprehensive income and transferred out and included in the current profit or loss, the gainor loss incurred by the changes in fair value of derivative instruments are directly included in thecurrent profit or loss.For hybrid instruments containing embedded derivative instruments, if the main contract isfor the financial assets, the hybrid instruments are used as a whole applicable to the relevantprovisions on classification of financial assets. Where the main contract is not for financial assetsand such hybrid instruments are not subject to the accounting treatment at fair value throughprofit or loss, if the embedded derivative instruments are not closely related to the main contract
in terms of economic characteristics and risks, the conditions of the hybrid instruments match theconditions of embedded derivative instruments, and the instruments existing solely conform todefinition of derivative instrument, the embedded derivative instruments shall be separated fromthe hybrid instruments and disposed as separate derivative financial instruments. If the fair valueof such embedded derivative instruments on the acquisition date or subsequent balance sheet datecannot be separately measured, the hybrid instruments shall be wholly designated as financialassets or financial liabilities at fair value through profit or loss.
(5) Impairment of financial instruments
For the financial assets at amortized cost and the creditor's rights investment, contract assets,rental receivables, loan commitments and financial guarantee contracts at fair value through othercomprehensive income, the Company recognizes the provision for loss on the basis of expectedcredit loss.
① Measurement of expected credit loss
The expected credit loss refers to the weighted average of the credit losses of financialinstruments that are weighted by the risk of default. Credit loss refers to the difference between allcontractual cash flows receivable according to the contract and discounted according to theoriginal effective interest rate and all cash flows receivable of the Company, that is, the presentvalue of all cash shortages. The credit-impaired financial assets that are purchased or derived bythe Company shall be discounted on the basis of the credit-adjusted effective interest rate of thefinancial assets.
The expected credit loss during the whole duration refers to the expected credit loss causedby all possible default events during the whole expected duration of financial instruments.
The expected credit loss in the next 12 months refers to the expected credit loss caused bythe possible default events of financial instruments within 12 months after the balance sheet date(or, if the expected duration of financial instruments is less than 12 months, the expectedduration), which is part of the expected credit loss in the whole duration.
On each balance sheet date, the Company separately measures the expected credit losses offinancial instruments at different stages. If the credit risk of financial instruments has notincreased significantly since the initial recognition, it is in the first stage. The Company willmeasure the provision for loss according to the expected credit loss in the next 12 months. If thecredit risk of financial instruments has increased significantly since its initial recognition but nocredit impairment has occurred, it is in the second stage, and the Company measures the provisionfor loss according to the lifetime expected credit loss of the instrument. If financial instrumentshave suffered credit impairment since their initial recognition, it is in the third stage, and theCompany measures the provision for loss according to the lifetime expected credit loss of theinstrument.For financial instruments with low credit risk on the balance sheet date, the Companyassumes that the credit risk has not increased significantly since the initial recognition, andmeasures the provision for loss according to the expected credit loss in the next 12 months.For financial instruments in the first and second stages and with low credit risk, theCompany calculates interest income according to the book balance before deducting provision forimpairment and the actual interest rate. For financial instruments in the third stage, the interestincome shall be calculated according to their book balance minus the amortized cost afterprovision for impairment and the actual interest rate.For notes receivable, accounts receivable, receivables financing and contract assets,regardless of whether there is any significant financing component, the Company measures theprovision for losses based on expected credit losses over the whole duration.A. Receivables/contract assetsFor notes receivable, accounts receivable, other receivables, receivables financing, contractassets and long-term receivables with objective evidence showing impairment and other accountsreceivable suitable for single evaluation, impairment test shall be conducted separately torecognize expected credit loss and accrue single provision for impairment. For notes receivable,accounts receivable, other receivables, receivables financing, contract assets and long-term
receivables without objective evidence of impairment or when information of the expected creditloss for a single financial asset cannot be evaluated at a reasonable cost, the Company divides thenotes receivable, accounts receivable, other receivables, receivables financing, contract assets andlong-term receivables into several portfolios according to the credit risk characteristics, calculatesthe expected credit loss on the basis of the portfolios, and determines the portfolio on thefollowing basis:
Basis for portfolio determination for notes receivable:
Notes receivable portfolio 1 - commercial acceptance billNotes receivable portfolio 2 - bank acceptance billFor notes receivable divided into portfolios, the Company refers to the historical credit lossexperience, combines the current situation with the forecast of the future economic situation, andcalculates the expected credit loss through default risk exposure and the expected credit loss ratefor the whole duration.Basis for portfolio determination for accounts receivable:
Accounts receivable portfolio 1 - aging portfolioAccounts receivable portfolio 2 - jewelry sales business portfolioFor the accounts receivable divided into portfolios, the Company refers to the historicalcredit loss experience, combines the current situation with the forecast of the future economicsituation, formulates the comparison table of aging of accounts receivable and the lifetimeexpected credit loss rate, and calculates the expected credit loss.
Basis for portfolio determination of other receivables:
Basis for portfolio determination of other receivables:
Other receivables portfolio 1 - interest receivable
Other receivables portfolio 2 - dividends receivableOther receivables portfolio 3 - aging portfolioOther receivables portfolio 4 - deposit receivable and security portfolioOther receivables portfolio 5 - portfolio of concerned intercourse funds within theconsolidation scope of receivablesFor other receivables divided into portfolios, the Company refers to the historical credit lossexperience, combines the current situation with the forecast of the future economic situation, andcalculates the expected credit loss through default risk exposure and the expected credit loss ratein the next 12 months or for the whole duration.Basis for portfolio determination of long-term receivables:
Long-term receivables portfolio 1 - other receivablesFor long-term receivables divided into portfolio 1, the Company refers to the historical creditloss experience, combines the current situation with the forecast of the future economic situation,and calculates the expected credit loss through default risk exposure and the expected credit lossrate for the whole duration.B. Creditor's rights investment and other creditor's rights investmentFor debt instruments at amortized cost and debt instruments at fair value through othercomprehensive income, the Company calculates the expected credit loss according to the natureof the investment and various types of counterparty and risk exposure through default riskexposure and the expected credit loss rate within the next 12 months or the whole duration.
② Rather low credit risk
If the default risk of a financial instrument is rather low, the borrower has a strong ability tofulfill its contractual cash flow obligations in a short period and, even if there are adverse changesin the economic situation and operating environment for a long period of time, it may not
necessarily for the borrower to reduce the ability to fulfill its contractual cash flow obligations,the financial instrument shall be considered to have a low credit risk.
③ Significant increase in credit risk
The Company compares the default probability of financial instruments in the expectedduration determined at the balance sheet date with the default probability in the expected durationdetermined upon the initial recognition to determine the relative change in the default probabilityof financial instruments in the expected duration, thus evaluating whether the credit risk offinancial instruments has increased significantly since the initial recognition.When determining whether the credit risk has significantly increased since the initialrecognition, the Company considers the reasonable and well-founded information obtained by itwithout unnecessary additional cost or effort, including the forward-looking information. Theinformation to be considered by the Company is as follows:
A. Whether the internal price index has changed significantly due to the changes in creditrisk;
B. Adverse changes in business, financial or economic conditions expected to lead tosignificant changes in the capability of the debtor to fulfill its debt payment obligations;
C. Whether there has been any significant change in the actual or expected financialperformance of the debtor; whether the regulatory, economic or technological environment inwhich the debtor is located has undergone significant adverse changes;
D. Whether there has been any significant change in the value of collateral used as debtcollateral or the quality of guarantee or credit enhancement provided by a third party. Suchchanges are expected to reduce the debtor's economic motivation to repay the loan within the timelimit stipulated in the contract or affect the probability of default;
E. Whether there has been any significant change in the economic motivation that isexpected to reduce the debtor's repayment within the time limit agreed in the contract;
F. Expected changes in the loan contract, including whether the expected breach of contractmay result in exemption or revision of contractual obligations, granting of interest-free period,interest rate jump, demand for additional collateral or guarantees, or other changes in thecontractual framework of financial instruments;G. Whether there has been any significant change in the debtor's expected performance andrepayment behavior;
H. Whether the contract payment is overdue for more than (including) 30 days.
According to the nature of financial instruments, the Company evaluates whether the creditrisk has increased significantly on the basis of individual financial instruments or portfolios offinancial instruments. When evaluating on the basis of portfolios of financial instruments, theCompany may classify the financial instruments based on common credit risk characteristics,such as overdue information and credit risk rating.
Under normal circumstances, if it is overdue for more than 30 days, the Company determinesthat the credit risk of the financial instrument has significantly increased, unless the Company canobtain reasonable and reliable information without paying too much cost or effort to prove thatthe credit risk has not increased significantly since the initial recognition although the paymentperiod stipulated in the contract has elapsed for more than 30 days.
④ Credit-impaired financial assets
On the balance sheet date, the Company evaluates whether the credit impairment hasoccurred to financial assets measured by amortized cost and the creditor's rights investment at fairvalue through other comprehensive income. When one or more events that have an adverse effecton the expected future cash flows of a financial asset occur, the financial asset becomes a credit-impaired financial asset. Evidence for credit-impaired financial assets includes the followingobservable information:
The issuer or debtor has major financial difficulties; the debtor violates the contract, such asdefault or overdue payment of interest or principal; the creditor makes the concession that thedebtor will not make under any other circumstances due to the economic or contractualconsiderations related to the debtor's financial difficulties; the debtor is likely to go bankrupt orundergo other financial restructuring; the financial difficulties of the issuer or debtor cause thedisappearance of the active market of financial assets; a financial asset is purchased or generatedat a substantial discount which reflects the fact that the credit losses have occurred.
⑤ Presentation of provision for expected credit loss
In order to reflect the changes in the credit risk of financial instruments since the initialrecognition, the Company re-measures the expected credit loss on each balance sheet date. Theincrease or reversal amount of provision for loss therefrom shall be regarded as impairment lossor gain and included in the current profit or loss. For the financial assets measured by amortizedcost, the provision for loss shall be used to offset against the book value of financial assetspresented in the balance sheet; for the creditor's rights investments at fair value through othercomprehensive income, the Company recognizes the provision for loss in other comprehensiveincome, and the book value of financial assets will not be deducted.
⑥ Write-off
When the Company no longer reasonably expects that the contract cash flow of the financialasset can be recovered in whole or in part, the book balance of the financial asset is directlywritten down. Such write-down constitutes the derecognition of related financial assets. Thisusually happens when the Company determines that the debtor has no assets or sources of incometo generate sufficient cash flow to repay the amount to be written off.
If the write-down financial assets are recovered later, they shall be regarded as the reversal ofimpairment loss and included in the profit or loss.
(6) Transfer of financial assets
Transfer of financial assets refers to the following two situations:
A. The contractual right for collecting this financial asset cash flow is transferred to the otherparty;B. All or part of the financial assets are transferred to the other party, but the contractualrights to collect the cash flow of financial assets are reserved, and the contractual obligation topay the collected cash flow to one or more recipients is fulfilled.
① Derecognition of transferred financial assets
If almost all risks and rewards from the ownership of financial assets have been transferredto the transferee, or almost all risks and rewards from the ownership of financial assets are neithertransferred nor retained, but the control of such financial assets have been abandoned, suchfinancial assets will be derecognized.
When judging whether the control over the transferred financial assets has been abandoned,pay attention to the actual ability of the transferee to sell the financial assets. If the transferee canunilaterally sell the transferred financial assets to an unrelated third party and there are noadditional conditions to restrict the sales, the Company has given up its control over the financialassets.
When judging whether the transfer of financial assets meets the conditions for derecognitionof financial assets, the Company shall pay attention to the essence of the transfer of financialassets.
If the entire transfer satisfies the derecognition criteria, the difference between the followingamount should be included in the current profit and loss:
A. Book value of the transferred financial assets;
B. Sum of the consideration received from transfer and the proportion – corresponding to thederecognized portion of the cumulative changes in fair value and directly included in other
comprehensive income (the financial assets involved in the transfer are classified as financialassets at fair value through other comprehensive income according to Article 18 of AccountingStandards for Enterprises No. 22 – Recognition and Measurement of Financial Instruments).If the partial transfer of financial assets satisfies the derecognition criteria, the book value,between the part for derecognition and the rest (in this case, the retained service assets shall bedeemed as a part of the continuously recognized financial assets), of the financial assetstransferred as a whole should be amortized at their respective fair values on the transfer date, andthe difference between the following amount should be included in the current profits and losses:
A. Book value of the derecognized portion on the derecognition date;B. Sum of the consideration received from disposal of the derecognized portion and theproportion – corresponding to the derecognized portion of the cumulative changes in fair valuethrough other comprehensive income (the financial assets involved in the transfer are classified asfinancial assets at fair value through other comprehensive income according to Article 18 ofAccounting Standards for Enterprises No. 22 – Recognition and Measurement of FinancialInstruments).
② Further involvement of the transferred financial assets
Where there is neither transfer nor retention of any risks and rewards on the financial assetownership, if the control over the financial asset is not waived, relevant financial assets shall berecognized to the extent of further involvement in the transferred financial assets, and relevantliabilities shall be recognized correspondingly.The extent of further involvement into the transferred financial asset refers to the extent towhich the Company bears the risks or rewards of changes in the value of transferred financialassets.
③ Further recognition of the transferred financial assets
Where almost all risks and returns related to the ownership of the financial assets transferredare still retained, the entirety of financial assets transferred are continued to be recognized, withthe consideration received being recognized as a financial liability.The financial assets and the recognized related financial liabilities shall not be offset againsteach other. In the subsequent accounting period, the Company shall further recognize the incomes(or profits) generated by the financial assets and the expenses (or losses) generated by thefinancial liabilities.
(7) Offset of financial assets and financial liabilities
Financial assets and financial liabilities will be listed on the balance sheet respectively, andthey will not offset each other. However, the net amount is presented in the balance sheet aftermutual offset, when the following conditions are met simultaneously:
The Company has the legal right to offset the recognized amount and such a legal right iscurrently enforceable;
It is planned to conduct net settlement or cash out the financial asset and pay off the financialliability.
For financial assets that do not meet the conditions for derecognition, the transferor will notoffset the transferred financial assets and related liabilities.
(8) Method of determining fair value of financial instruments
Refer to Note III. 11 for recognition methods for fair values of financial assets and financialliabilities.
11. Inventories
(1) Classification of inventories
Inventory refers to finished products or commodities held by the Company for sale in dailyactivities, products under production, materials and supplies consumed in the process ofproduction or rendering labor services, including raw materials, inventory commodities,consigned goods and revolving materials.
(2) Valuation methods for inventories transferred out
The Company's inventories are measured by the first-in first-out method and the specificmeasurement method when being dispatched.
(3) Inventory system
The Company adopts the perpetual inventory system for its inventory and makes theinventory at least once a year. The amount of inventory profit and inventory loss is included in thecurrent profit or loss.
(4) Method for providing provision for decline in the value of inventories
The inventories on the balance sheet date shall be valued by the lower one between cost andnet realizable value. If the inventory cost is greater than the net realizable value, provision fordecline in the value of inventories shall be withdrawn and included in the current profits andlosses.
The inventory net realizable value shall be recognized based on the obtained hard evidence,taking into account of purpose of holding inventory and its impact on events after the balancesheet date.
① For the finished products, commodities, materials for sale and other inventory directly for
sale, during the normal production and operation process, the amount of the estimated sale priceof the inventory deducting the estimated selling expenses and relevant taxes shall be determinedas the net realizable value. For inventory held for implementing sales contract or labor servicecontract, the net realizable value thereof shall be calculated based on the contract price. If thequantity of inventories held is greater than the ordered quantity of the sales contract, the net
realizable value of the excessive part shall be calculated based on the general selling price. Formaterials held for sale, the net realizable value thereof shall be calculated based on market price.
② For material inventories requiring to be processed, during the normal production and
operation process, the net realizable value is taken as the difference between the estimated sellingprices of these inventories and their estimated cost to be incurred till completion, estimated sellingexpenses and associated taxes; and If the net realizable value of the finished product is higher thanthe cost, the material shall be measured with the cost; if the reduction of the material priceindicates that the net realizable value of the finished product is lower than the cost, the materialshall be measured with the net realizable value and the provision for decline in the value ofinventories shall be withdrawn by the balance.
③ In principle, the provision for decline in the value of inventories will be withdrawn in
accordance with the individual inventory items; but for large quantity of inventories at low price,such provision can be withdrawn according to the inventory category.
④ On the balance sheet date, if the factors affecting write-down of the inventories value no
longer exist, the write-down amount shall be recovered and reversed from the provision fordecline in the value of inventories which has been drawn, and the recovered amount shall beincluded in the current profits and losses.
12. Contract assets
The Company presents the contract assets in the balance sheet in accordance with therelationship between the performance obligations and the payment by the customer. Theconsideration to which the Company is entitled to receive for the transfer of goods or services to acustomer (and the right depends on other factors excluding the passage of time) is presented ascontract assets.Please refer to Note III. 10 for details of the determination method and accounting treatmentmethod of the expected credit losses of the Company's contract assets.
Contract assets are presented separately in the Balance Sheet. Contract assets under the samecontract shall be presented at net amount. If the net amount is the debit balance, it shall bepresented in the item of "contract assets" or "other non-current assets" according to its liquidity.
13. Contract cost
The contract cost is divided into the contract performance cost and the contract acquisitioncost.The cost incurred by the Company in performing the contract shall be recognized as an assetof the contract performance cost when the following conditions are met at the same time:
① The cost is directly related to a current or expected contract, including direct labor, direct
materials, manufacturing costs (or similar costs), the costs clearly borne by the customer, andother costs incurred only by the contract;
② This cost increases the Company’s resources for performing the performance obligations
in the future.
③ This cost is expected to be recovered.
If the incremental cost incurred by the Company in obtaining the contract is expected to berecoverable, it will be recognized as an asset of the contract acquisition cost.
Assets related to the contract cost are amortized on the same basis as income from goods orservices related to the asset is recognized; however, if the contract acquisition cost is amortizedfor less than one year, the Company will include it into the current profits and losses at the time ofoccurrence.
If the book value of the assets related to the contract cost exceeds the difference between thefollowing two items, the Company will make preparation for impairment provision of the excessand recognize it as the impairment loss of the assets and further consider whether to makeprovision for estimated liabilities related to the onerous contract:
① Residual consideration expected to be obtained in connection with the transfer of goods or
services related to the asset;
② The cost expected to be incurred for the transfer of the relevant goods or services.
If the provision for impairment of the above assets is subsequently reversed, the book valueof the assets reversed will not exceed the book value of the assets at the date of reverse assumingno provision for impairment is made.The contract performance cost that is recognized as assets is presented in the item of"Inventories" if the amortization period at initial recognition is not more than one year/normaloperating cycle; or presented in the item of "Other non-current assets" if the amortization periodat initial recognition is more than one year/normal operating cycle.The contract acquisition cost that is recognized as assets is presented in the item of "Othercurrent assets" if the amortization period at initial recognition is not more than one year/normaloperating cycle; or presented in the item of "Other non-current assets" if the amortization periodat initial recognition is more than one year/normal operating cycle.
14. Held-for-sale assets
(1) Classification of held-for-sale non-current assets or disposal groups
The Company recognizes the non-current assets or disposal groups meeting all the followingconditions as the held-for-sale:
① Based on the practice of selling such assets or disposal groups in similar transactions,
those can be sold immediately under current conditions;
② Their sales are very likely to happen, that is, the Company has already made a resolution
on a sales plan and obtained a certain purchase commitment and their sales are expected to becompleted within one year. The relevant approval has been obtained from relevant authorities ofthe Company or regulators for those available for sale as required by the relevant regulations.
The Company classifies the non-current assets or disposal groups that are acquiredexclusively for resale, meet the specified conditions of “the sales are expected to be completedwithin one year” on the acquisition date and are likely to meet other conditions for classifying theheld-for-sale assets in a short time (usually 3 months) as the held-for-sale assets on the acquisitiondate.
If the Company loses control over its subsidiaries due to the sales of investment insubsidiaries and other reasons, whether the Company reserves some of its equity investments afterthe sales or not, when the investment in subsidiaries to be sold meets the conditions for the held-for-sale assets, the investment in subsidiaries will be classified as the held-for-sale assets as awhole in the individual financial statements of the parent company and all the assets and liabilitiesof subsidiaries will be classified as the held-for-sale assets in the consolidated financial statements.
(2) Measurement of held-for-sale non-current assets or disposal groups
The measurement of investment properties that are subsequently measured at fair value,biological assets that are measured by the net amount of fair value minus selling expenses, theassets formed by employee compensation, the deferred tax assets, the financial assets subject tothe financial instrument related accounting standards, and rights arising from insurance contractssubject to insurance contract relevant accounting standards are applicable to other relevantaccounting standards respectively.
When the held-for-sale non-current assets or disposal groups are measured initially orremeasured on the balance sheet date, if the book value is higher than the net amount obtained bydeducting the selling expenses from the fair value, the book value shall be reduced to the netamount obtained by deducting the selling expenses from the fair value, and the write-downamount shall be recognized as the asset impairment losses and shall be included in the currentprofits and losses and the impairment provision of held-for-sale assets shall be made at the sametime. If the net amount obtained by deducting the selling expenses from the fair value of held-for-sale non-current assets or disposal groups on the subsequent balance sheet date increases, theprevious write-down amount shall be recovered and reversed from the asset impairment lossesrecognized after being classified as the held-for-sale assets, and the reversed amount shall be
included in the current profits and losses. The book value of goodwill deducted shall not bereversed.
When a non-current asset or disposal group ceases to be classified as held for sale because itno longer meets the criteria for classification of held for sale or a non-current asset is excludedfrom a disposal group held for sale, it is measured at the lower of:
① The book value before being classified as held for sale, adjusted according to depreciation,
amortization or impairment that should have been recognized if it had not been classified as heldfor sale;
② Recoverable amount.
(3) Presentation
In the balance sheet, the Company shall separately present the non-current assets held forsale or the assets in the disposal group held for sale different from other assets, and separatelypresent the liabilities in the disposal group held for sale different from other liabilities, Non-current assets held for sale or assets in the disposal group held for sale and liabilities in thedisposal group held for sale shall not offset each other and shall be presented as current assets andcurrent liabilities respectively.
15. Long-term equity investments
The long-term equity investments of the Company include the equity investment to controlor significantly influence the investees and the equity investments of the joint ventures. Where theCompany can exercise significant influence over the investee, the investee is an associate.
(1) Basis for determining joint control and significant influences on the investee
Joint control refers to the sharing of control over certain arrangements under relatedagreements, and related activities of the arrangement can be determined only when the unanimousconsent of the parties sharing the control right is obtained. In assessing whether joint control of anarrangement exists, the Company first assesses whether all the parties or a group of the parties
control the arrangement collectively. When all the parties or a group of the parties must acttogether unanimously in directing the relevant activities, all the parties or a group of the partiesare regarded as having joint control of an arrangement. It then assesses whether decisions aboutthe relevant activities require the unanimous consent of those parties that control the arrangementcollectively. When more than one combination of the parties can control an arrangementcollectively, joint control does not exist. Protective rights are not taken into account indetermining whether or not there is joint control.Significant influence means the power of the investor to participate in making decisions onthe financial and operating policies of an investee, but the investor cannot control or jointlycontrol with other parties over the formulation of these policies. When determining whether aninvestor can exercise significant influence over an investee, the effect of potential voting rights(for example, warrants, share options and convertible bonds) held by the investors or other partiesthat are currently exercisable or convertible be considered.
It shall be regarded as significant influence on the investee when the Company directly orindirectly through a subsidiary owns 20% (included) – 50% voting shares of the investee.However, if there is any clear evidence showing that the Company cannot participate in makingdecisions on production and operation activities of the investee under such a condition,constituting no significant influence.
(2) Recognition of initial investment cost
? Cost of long-term equity investment arising from business merger should be determined asfollows:
A. Business merger under common control: If the merging party carries out mergerconsideration through cash payment, transfer of non-cash assets, assumption of liabilities, theshare of the book value of the owners' equity of the merged party in the consolidated financialstatements of the ultimate controlling party should be recognized as the initial investment cost oflong-term equity investment on the merger date. The difference between the initial investmentcost of the long-term equity investment and the paid cash, transferred non-cash assets and the
book value of assumed debts is adjusted to capital reserves. If the capital reserve is not sufficientto absorb the difference, any excess is adjusted to retained earnings;B. Business merger under common control: If the merging party uses the issuance of equitysecurities as the merger consideration, the share of book value of the owners' equity of the mergedparty in the consolidated financial statements of the ultimate controlling party should berecognized as the initial investment cost of long-term equity investment on the merger date.According to the total carrying amount of the issued shares as the share capital, the differencebetween the initial investment cost of the long-term equity investment and the total carryingamount of the shares issued shall be adjusted to the capital reserve; if the capital reserve isinsufficient to offset, the retained earnings shall be adjusted;C. Business merger under different control: merger cost and initial costs for long-term equityinvestment shall be determined based on the assets paid on the date of purchase for the right ofcontrol over the purchased party, liabilities occurred or undertaken, as well as the fair value of theissued equity securities. Any intermediary expenses such as audit, legal services, assessment andconsultation and other related management expenses incurred by the merging party in thebusiness merger are included in the current profits and losses when incurred.? Except for the long-term equity investment formed by business merger, the investmentcost of long-term equity investment acquired in other ways shall be determined inaccordance with the following provisions:
A. For long-term equity investment obtained by cash payment, the actual purchase priceshall be regarded as the investment cost. The initial investment cost includes expenses, taxes andother necessary fees which are directly related to acquiring the long-term equity investment.
B. For the long-term equity investment obtained by issuing equity securities, the fair value ofthe issued equity securities shall be taken as the initial investment cost;
C. For long-term equity investment obtained through non-monetary asset exchange, if theexchange has commercial essence and the fair value of the exchanged assets or the exchangedassets can be reliably measured, the fair value of exchanged assets and relevant taxes and feesshall be regarded as the initial investment cost, and the difference between the fair value of the
exchanged assets and the book value shall be included in the current profits and losses. If theexchange of monetary assets does not meet the above two conditions at the same time, the bookvalue of the exchanged assets and relevant taxes and fees shall be regarded as the initialinvestment cost.
D. For long-term equity investments acquired through debt restructuring, the entry valueshould be determined according to the fair value of the debt waived, taxes generated from suchassets and other costs, and the difference between the fair value and the book value of the debtwaived should be included in the current profits and losses.
(3) Subsequent measurement and recognition of profit or loss
The Company adopted the cost method for accounting of the long-term equity investmentimplementing control over the investee and equity method for accounting of long-term equityinvestment in joint ventures and associates.
① Cost method
The long-term equity investment will be calculated by the cost method: Add or recover theinvestment to adjust the investment cost of the long-term equity. The distributed cash dividend orprofit declared by the investees is recognized as investment income in the current period.
② Equity method
Long-term equity investments calculated by using equity method are generally subject to theaccounting treatment as follows:
Where the investment costs of long-term equity investments exceed the share of the fairvalue of the investee’s identifiable net assets at the time of the investment, the initial investmentcosts of the long-term equity investment are not adjusted; where their initial investment costs oflong-term equity investments are less than the share of the fair value of the investee’s identifiablenet assets at the time of the investment, the balance shall be included in the current profits andlosses and the costs of the long-term equity investment are adjusted accordingly.
The Company recognizes the investment income and other comprehensive incomerespectively according to its share of net profit or loss and other comprehensive income of theinvestee, and meanwhile adjusts the book value of long-term equity investments; the part of dueshare is calculated according to the profit distribution or cash dividends declared by the investee,and the book value of the long-term equity investments is reduced accordingly; for other changesof owners’ equity in addition to the net profit or loss and other comprehensive income and profitdistribution, the book value of long-term equity investments is adjusted and included in owners’equity. When determining the due share of net profit or loss of an investee, the Company shallrecognize the net profit of an investee after adjustment on the basis of fair value of variousidentifiable assets, etc. of an investee when acquiring investment. Where there are anyinconsistencies between the accounting policies and accounting period adopted by the investeeand the Company, financial statements of the investee shall be adjusted according to theaccounting policies and accounting period of the Company based on which the investment incomeand other comprehensive incomes are recognized. For transaction incurred between the Companyand the associates/joint ventures, the unrealized profit or loss arising from the internal transactionsamongst the Company and the investees are eliminated in proportion to the Company’s equityinterest in the investees, and then based on which the investment profit or loss are recognized. Theinternal trading losses incurred but not realized between the Company and the investees,belonging to asset impairment losses shall be recognized in full amount.When the Company becomes capable of exercising significant influence or joint control (butnot sole control) over an investee due to additional investment or other reasons, the accounting ischanged to the equity method and the initial investment cost on the date of change is the sum ofthe fair value of the previously-held equity investment and additional investment cost. If theoriginally-held equity investment is classified as other equity instrument investments, thedifference between its fair value and book value, and the accumulated gains or losses originallyincluded in other comprehensive income shall be transferred from other comprehensive incomeand included in retained earnings in the current period when accounting is changed to the equitymethod.
In case the Company loses the joint control of or the significant influence on the investee dueto the disposal of part of the equity investment, the residual equity after the disposal shall bemeasured by fair value, and the balance between the fair value and the book value since the dateof losing the joint control or significant influence shall be included in the current profits andlosses. For other comprehensive income from original equity investment recognized by the equitymethod is subject to the accounting treatment on the same basis as that adopted by the investee fordirectly handling related assets or liabilities when the equity method is not used anymore.
(4) Equity investment held for sale
For equity investments in associates or joint ventures that are classified in whole or in part asheld-for-sale assets, please refer to Notes III, 15 for relevant accounting treatment.
For the remaining equity investments not classified as Held-for-sale assets, the equitymethod is adopted for accounting treatment.
If the equity investments in associates or joint ventures that have been classified as held forsale no longer meet the classification conditions of held-for-sale assets, they shall be retroactivelyadjusted by the equity method from the date of being classified as held-for-sale assets. Financialstatements classified as held for sale shall be adjusted accordingly.
(5) Impairment test method and providing methods for impairment provision
For the investments of subsidiaries, associates and joint ventures, please see Note III. 21 forthe providing method of asset impairment.
16. Investment properties
Measurement model of investment properties: depreciation or amortization measured by the cost method
(1) Classification of investment properties
Investment properties mean the properties held for earning rent or capital appreciation, orboth. It mainly includes the following circumstances:
① Rented land use rights
② Land use rights possessed and ready for transfer after appreciation
③ Rented buildings
(2) Measurement model of investment properties
The Company uses the cost model for subsequent measurement of investment properties.Refer to Note III. 21 for the providing method of asset impairment.The Company calculates the depreciation or amortization based on the straight-line methodafter deducting the accumulated impairment and the net salvage value from the cost of investmentproperties. The category, estimated economic service life and estimated net residual rate ofinvestment properties are as follows:
Class Depreciation life (year) Residual value ratio (%)
Annual depreciation rate
(%)
| Annual depreciation rate (%) | |||
| Houses and buildings | 35-40 | 3 | 2.77-2.43 |
| Land right of use | 50 | — | 2.00 |
17. Fixed assets
(1) Recognition condition
Fixed assets shall be recognized as the actual cost obtained when all the following conditionsare met:
① Economic benefits associated with such fixed assets are likely to flow into the enterprises.
② The cost of such fixed assets can be measured reliably.
Subsequent expenditure related to fixed assets complying with confirmation conditions offixed assets shall be included in cost of fixed assets and those failing to comply with confirmationconditions of fixed assets shall be included in the current profits and losses when it occurs.
(2) Depreciation method
The Company shall withdraw the depreciation according to the straight-line method from themonth following the fixed assets reach the preset serviceable conditions. The depreciation life andannual depreciation rate shall be determined according to the category, estimated economicservice life and estimated net residual rate of fixed assets as follows:
Class
Depreciation
method
Depreciation life
| method | (year) |
Residual value
Annual depreciation
| ratio (%) | rate (%) | ||
| Houses and buildings |
Straight-line
10、35-40 0、3 2.43-2.77、10.00
| method | |
| Including: |
decoration
Straight-line
| of self-owned houses | method |
10 0 10.00
Straight-line
| Machinery and equipment | method |
12 3 8.08
Straight-line
| Transportation equipment | method |
7 3 13.86
Straight-line
| Electronic equipment | method |
5-7 3 13.86-19.40
other
| equipment |
Straight-line
7 3 13.86
For the fixed assets with the provision for impairment withdrawn, the withdrawn provisionfor impairment of fixed assets is deducted upon the depreciation withdrawal.
At the end of every year, the Company shall recheck the service life and expected netresidual value of, as well as the depreciation methods for the fixed assets. If there is differencebetween estimated service life and original estimate, the service life of fixed assets shall beadjusted.
18. Construction in progress
(1) Construction in progress is checked based on category of the proposed projects.
(2) Criteria and time-point for transferring construction in progress to fixed assets
For the construction in progress, all expenditures incurred before the asset is ready for itsserviceable condition will be used as the entry value of the fixed asset. Including constructioncosts, original prices of machinery and equipment, other necessary expenses incurred to make theconstruction in progress reach the working condition for its intended use, borrowing costsincurred for special borrowings of the project before the assets reach the working condition fortheir intended use and borrowing costs incurred for occupied general borrowings. The Companytransfers the works under construction to fixed assets when the installation or construction of theworks is completed and ready for the intended use. For the fixed assets constructed that havereached expected available state but haven't been settled for completion, when they reach to theexpected available state, according to construction budget, cost of building or actual cost of work,they shall be converted into the fixed assets as per the estimated value; and depreciation of thefixed assets are drawn as per the Company's depreciation policies for fixed assets. After finalsettlement of account is completed, original estimated value shall be adjusted as per the actualcost but the depreciation amount drawn will not be adjusted.
19. Borrowing costs
(1) Recognition principles for borrowing costs capitalization and capitalization period
Where the borrowing costs incurred to the Company are directly attributable to theacquisition, construction and production of assets eligible for capitalization, the costs shall becapitalized and included into the relevant asset cost when all of the following conditions are met:
① The asset expenditure has already occurred;
② Borrowing costs are being incurred; and
③ Acquisition, construction or production activities necessary to bring the asset ready for its
intended use are in progress.
Other interest, discount or premium on borrowings and balance arising from fluctuation inthe foreign exchange rate should be included in the current profits and losses.
Where the acquisition and construction or production of the assets qualified for capitalizationis interrupted abnormally for more than 3 consecutive months, the capitalization of the borrowingcosts shall be suspended.When the assets eligible for capitalization acquired, constructed or produced are available forintended use or sale, the capitalization of their borrowing costs shall be stopped, and thesubsequent borrowing costs are recognized as expenses for the corresponding period ofoccurrence.
(2) Calculation method for borrowing costs capitalization rate and capitalized amount
As to special borrowings borrowed for acquiring and constructing or producing assets thatconform to capitalization conditions, the capitalization amount of interest is determined by thebalance of interest cost incurred in the current period minus interest profit gained from theunspent borrowings deposited in bank, or investment profit gained from the unspent borrowingstemporarily invested, as the capitalization amount of borrowing interest expenses.
If some general borrowings are used for acquiring and constructing or producing assets thatmeet the capitalization conditions, the capitalization amount of interest of general borrowingsshall be calculated and determined by multiplying the weighted average of the part ofaccumulative asset expenditures exceeding special borrowing asset expenditures by thecapitalization rate of general borrowings used. The capitalization rate shall be calculated anddetermined based on the weighted average interest rate of the general borrowings.
20. Right-of-use assets
The right-of-use assets refer to the lessee's right to use the leased assets during the lease term.
At the commencement date of the lease term, the right-of-use assets shall be initiallymeasured based on costs. The cost includes:
? Initial measurement amount of lease liabilities;
? Lease payments paid on or before the commencement of the lease term. The relevantamount of lease incentives enjoyed shall be deduced if such incentives exist;
? Initial direct cost of the lessee;? Cost expected to be occurred by the lessee due to dismantling and removing the leasing
asset, recovering its location or recovering it to the state agreed in the leasing terms. TheCompany recognizes and measures the cost according to the recognition standard andmeasurement method of estimated liabilities. See Note III. 25 for details. The aforesaidcost is included in the inventory cost incurred for the production of inventory.The depreciation of the right-of-use assets is classified and accrued by the straight-linemethod. For fixed assets, if it can be reasonably confirmed that the ownership will be grantedwhen the term of lease expires, the rate of depreciation shall be determined according to thecategory of right-of-use assets and the estimated net residual value rate within the estimatedremaining service life of the leasing assets. If it is impossible to reasonably determine whether theownership of the leasing assets will be granted upon the expiration of the lease term, thedepreciation rate shall be determined according to the category of the right-of-use assets withinthe lease term or the remaining service life of the leasing assets, whichever is shorter.
21. Intangible assets
(1) Valuation method, useful life and impairment test
(1) Valuation method for intangible assets
They are recorded according to the actual cost when acquired.
(2) Service life and amortization of intangible assets
① Service life estimation for intangible assets with limited service life:
Item
Estimated useful
life
Basis
| life | ||
| Land right of use | 50 years | Legal right to use |
| Computer software |
5 years
Determine the service life with reference to the term
Trademark
10 years
Determine the service life with reference to the term
| Trademark | that can bring economic benefits to the Company |
At the end of each year, the Company shall re-check the service life and the amortizationmethod of intangible assets with limited service life. According to the review, the useful life andamortization method of the intangible asset at the end of the current period are the same as thoseestimated previously.
② If the economic interest period to be brought by the intangible assets to the Company is
unforeseeable, then the service life of the intangible assets shall be deemed as uncertain. For theintangible assets with uncertain service life, the Company shall check at the end of each year theservice life of the intangible assets with uncertain service life. If the service life is still uncertainafter such check, impairment test shall be conducted on the balance sheet date for such assets.
③ Amortization of intangible assets
For the intangible assets with limited service life, such service life shall be determined at themoment of acquisition of such assets, the amount that shall be amortized shall be systematicallyand reasonably amortized within the service life through straight-line method, and the amount ofamortization shall be included in the current profits and losses according to the income items. Thedue amortization amount of intangible assets shall be the amount of its cost deducting theestimated residual value. For intangible assets with impairment provisions provided, theaccumulative amount of provision for impairment of intangible assets shall also be deducted. Theresidual value of an intangible asset with limited service life is regarded as zero, except for thefollowing circumstances: a third party promises to purchase the intangible asset at the end of itsservice life or can obtain the expected residual value information according to the active market,and the market is likely to exist at the end of its service life.
Intangible assets with uncertain service life shall not be amortized. The Company shallreview the expected service life of intangible assets with uncertain service life at the end of eachyear. If any evidences indicate that the service life of intangible assets is limited, the service lifeshall be estimated and amortized properly within the expected service life.
(3) Long-term asset impairment
For long-term equity investment in subsidiaries, associates and joint ventures, investmentreal estate which follow-up measurement is carried out by cost pattern, fixed assets, constructionin progress, intangible assets, business reputation, etc. (excluding inventory, investment propertiesmeasured by fair value pattern, deferred tax assets, financial assets), the impairment of assets shallbe determined according to the following methods: The Company judges whether there is a signof impairment to assets on the balance sheet date. If such sign exists, the Company estimates therecoverable amount and conducts the impairment test. For goodwill arising from a businessmerger, intangible assets with indefinite useful life and intangible assets that have not reached theusable condition are tested for impairment annually regardless of whether such indication exists.
The recoverable amount is the net amount of the fair value minus the disposal costs of theasset, or the present value of the expected future cash flow of the asset, whichever is higher. Therecoverable amount is estimated of the individual asset. If it is not possible to estimate therecoverable amount of the individual asset, the Company determines the recoverable amount ofthe asset group to which the asset belongs. The identification of the asset group is based onwhether the major cash flow generated from the asset group is independent of the cash inflowsfrom other assets or asset groups.
When the asset or asset group’s recoverable amount is lower than its book value, theCompany reduces its book value to its recoverable amount, the reduced amount is recorded in thecurrent profits and losses and the provision for impairment of assets is recognized.
For tests of goodwill impairment, the book value of goodwill arising from a business mergeris allocated reasonably to the relevant asset group since the acquisition date. If the book value ofgoodwill is unable to be allocated to an asset group, the book value of goodwill will be allocatedto the portfolio of asset groups. Asset group or portfolio of asset group is asset group or portfolioof asset group which can be benefited from synergies of a business merger and is not greater thanthe reportable segment of the Company.
In impairment testing, if indication of impairment exists in asset group or portfolio of assetgroup containing allocated goodwill, impairment test is first conducted on asset group or portfolioof asset group that does not contain goodwill, and corresponding recoverable amount is estimatedand any impairment loss is recognized. Then asset group or portfolio of asset group containinggoodwill is conducted impairment test by comparing its book value and its recoverable amount. Ifthe recoverable amount is less than the book value, impairment loss of goodwill is recognized.
An impairment loss once recognized not be reversed in the subsequent period.
22. Long-term asset impairment
For long-term equity investment in subsidiaries, associates and joint ventures, investmentreal estate which follow-up measurement is carried out by cost pattern, fixed assets, constructionin progress, intangible assets, business reputation, etc. (excluding inventory, investment propertiesmeasured by fair value pattern, deferred tax assets, financial assets), the impairment of assets shallbe determined according to the following methods:
The Company judges whether there is a sign of impairment to assets on the balance sheetdate. If such sign exists, the Company estimates the recoverable amount and conducts theimpairment test. For goodwill arising from a business merger, intangible assets with indefiniteuseful life and intangible assets that have not reached the usable condition are tested forimpairment annually regardless of whether such indication exists.
The recoverable amount is the net amount of the fair value minus the disposal costs of theasset, or the present value of the expected future cash flow of the asset, whichever is higher. Therecoverable amount is estimated of the individual asset. If it is not possible to estimate therecoverable amount of the individual asset, the Company determines the recoverable amount ofthe asset group to which the asset belongs. The identification of the asset group is based onwhether the major cash flow generated from the asset group is independent of the cash inflowsfrom other assets or asset groups.
When the asset or asset group’s recoverable amount is lower than its book value, theCompany reduces its book value to its recoverable amount, the reduced amount is recorded in thecurrent profits and losses and the provision for impairment of assets is recognized.For tests of goodwill impairment, the book value of goodwill arising from a business mergeris allocated reasonably to the relevant asset group since the acquisition date. If the book value ofgoodwill is unable to be allocated to an asset group, the book value of goodwill will be allocatedto the portfolio of asset groups. Asset group or portfolio of asset group is asset group or portfolioof asset group which can be benefited from synergies of a business merger and is not greater thanthe reportable segment of the Company.In impairment testing, if indication of impairment exists in asset group or portfolio of assetgroup containing allocated goodwill, impairment test is first conducted on asset group or portfolioof asset group that does not contain goodwill, and corresponding recoverable amount is estimatedand any impairment loss is recognized. Then asset group or portfolio of asset group containinggoodwill is conducted impairment test by comparing its book value and its recoverable amount. Ifthe recoverable amount is less than the book value, impairment loss of goodwill is recognized.An impairment loss once recognized not be reversed in the subsequent period.
23. Long-term deferred expenses
Long-term deferred expenses are expenses that have been incurred but should be borne bythe current period and subsequent periods with an allocation period of more than one year.
The Company's long-term deferred expenses shall be subject to average amortization withinthe benefit period.
24. Contract liabilities
The Company presents the contract liabilities in the balance sheet in accordance with therelationship between the performance obligations and the payment by the customer. The
Company's obligations to transfer goods or services to the customer due to customer considerationreceived or receivable shall be presented as contract liabilities.Contract liabilities are presented separately in the Balance Sheet. The contractual assets andcontract liabilities under the same contract are presented on a net basis. If the net amount is thecredit balance, it shall be presented in items of "Contractual liabilities" or "Other non-currentliabilities" item according to its liquidity. Contract assets and contract liabilities under differentcontracts are not mutually offset.
25. Employee compensation
(1) Accounting treatment for short-term compensation
① Basic employee compensation (wages, bonuses, allowances and subsidies)
The Company recognizes, in the accounting period in which an employee provides service,short-term compensation actually incurred as liabilities, with a corresponding charge to currentprofits or losses or the cost of a relevant asset, otherwise than those recognized as cost of capitalrequired or permitted by other accounting standards.
② Employee benefits
The employee benefits incurred by the Company are included in the current profits andlosses or relevant asset cost according to the actual amount incurred when it is actually incurred.If the employee benefits are non-monetary, they shall be measured at fair value.
③ Medical insurance premium, industrial injury insurance premium, birth insurance
premium and other social insurance premium and housing fund, labor union funds and employeeeducation funds
For society insurance premiums such as medical insurance, industrial injury insurance andmaternity insurance, as well as housing provident funds paid by the Company for the employees,and for union funds and employee education funds accrued by the Company as specified, duringthe accounting period when the employees work for the Company, the amount of employee
compensation relevant are calculated according to the basis and proportion of calculation andaccruing as specified, to determine the corresponding liabilities, which is to be included in thecurrent profits and losses or relevant asset cost.
④ Short-term compensated absence
When the rights of compensated absence enjoyed by the staff of the Company in the future inthe provision of services are increased, the employee compensation related to the cumulativecompensated absence shall be confirmed and calculated according to the expected paymentamount increased due to the cumulative unexercised rights, The Company recognizes theemployee compensation related to non-cumulative compensated absences in the accountingperiod in which the employee is actually absent.
⑤ Short-term profit sharing plan
The Company recognizes the relevant employee compensation payable, provided that theprofit sharing plan also meets the following conditions:
A. The enterprise currently has legal obligation or constructive obligation to pay employeecompensation as a result of past events;
B. The amount of employee compensation payable generated from the profit sharing plancan be estimated reliably.
(2) Accounting treatment of post-employment benefits
① Defined contribution plans
The company shall recognize, in the accounting period in which the staff provides service,the contribution payable to a defined contribution plan as a liability, and include it in currentprofits and losses or relevant asset cost.
According to the defined contribution plan, if all the deposit amounts are expected not to bepaid within 12 months at the end of the annual reporting period during which the employees
provide relevant services, with reference to the corresponding discount rate, the employeecompensation payable shall be measured by the Company at the discounted amount of all thedeposit amounts. The discount rate is determined based on the market return on the national bondsmatching with the obligations under the defined contribution plan in terms of the term andcurrency or based on the high-quality corporate bonds in the active market on the balance sheetdate.
② Defined benefit plans
A. Determining the present value of the defined benefit plan obligation and the currentservice cost
According to the unbiased and consistent actuarial assumptions as per the expectedaccumulative projected unit credit method, the Company shall make estimates on thedemographic variables and financial variables, measure obligations for defined benefit plan andrecognize related obligations during the period it belongs to; The Company discounts theobligations arising from the defined benefit plan at a corresponding discount rate (determinedaccording to the market return on national bonds or high-quality corporate bonds in the activemarket that match the term and currency of obligations under the defined benefit plan on thebalance sheet date) to determine the present value of obligations under the defined benefit planand the current service cost.
B. Recognition of net liabilities or net assets of defined benefit plan
If there are assets in the defined benefit plan, the deficit or surplus formed by the presentvalue of obligations under the defined benefit plan minus the fair value of assets under a definedbenefit plan shall be recognized by the Company as a net liability or a net asset under the definedbenefit plan.
In case the defined benefit plan has surplus, the Company measures the net asset underdefined benefit plan as per the surplus under defined benefit plan and the upper asset limit,whichever is lower.
C. Determining the amount to be included in asset cost or current profits and lossesService costs, including current service costs, past service costs, and settlement gains orlosses. Among them, except for the current service cost required or allowed to be included in theasset cost by other accounting standards, other service costs are included in the current profits andlosses.Net interest of net liabilities or net assets of the defined benefit plan, including interestincome of planned assets, interest expense of defined benefit plan obligations, and interestaffected by asset ceiling, shall be included in the current profits and losses.;
D. Determination of the amount that should be included in other comprehensive income.Changes arising from re-measurement of net liabilities or net assets of defined benefit plan,including:
(a) Actuarial gains or losses, i.e. the increase or decrease in the present value of definedbenefit plan obligations measured previously due to actuarial assumptions and experienceadjustments;(b) Return on plan assets, deducting the amount included in the net interest of net liabilitiesor net assets of defined benefit plan;(c) Changes in the effect of the asset ceiling, deducting the amount included in the netinterest on net liabilities or net assets of defined benefit plans.The changes arising from the above-mentioned re-measurement of net liabilities or net assetsof the defined benefit plan are directly included in other comprehensive income and are notallowed to be reversed back to profit or loss in subsequent accounting periods, but the Companycan transfer these amounts recognized in other comprehensive income within the scope of equity.
(3) Accounting treatment for dismission welfare
When dismissal welfare are provided, the employee compensation liabilities for dismissalwelfare will be recognized by the Company and included in the current profits and losses, at theearlier of the following dates:
① The date when the Company cannot unilaterally withdraw the offer of termination
benefits because of an employment termination plan or a curtailment proposal;
② The Company recognizes the costs or expenses related to the restructuring of dismissal
welfare payment;
If it is expected that the dismissal welfare cannot be fully paid within 12 months at the end ofthe annual reporting period, the amount of dismissal welfare shall be discounted with reference tothe corresponding discount rate (determined according to the market return on national bonds orhigh-quality corporate bonds in the active market that match the obligation term and currency ofthe defined benefit plan on the balance sheet date), and the employee compensation payable shallbe measured at the discounted amount.
(4) Accounting treatment methods for other long-term employee benefits
① Qualified for defined contribution plan
For other long-term employee benefits provided by the Company to employees that meet theconditions of defined contribution plan, the employee compensation payable shall be measured atthe discounted amount of all payables.
② Qualified for the defined benefit plan
At the end of the report period, the Company shall recognize the following components ofemployee compensation cost arising from other long-term employee benefits:
A. Service costs;
B. Net interest for net liabilities or net assets of other long-term employee benefits;
C. Change arising from remeasurement of other net long-term employee benefits liabilitiesor net assets.In order to simplify the relevant accounting treatment, the total net amount of the aboveitems shall be included in the current profits and losses or the related cost of assets.
26. Lease liabilities
Lease liabilities shall be initially measured according to the present value of lease paymentsthat has not yet been made on the commencement date of lease term. The lease payment includesthe following five items:
? For the fixed payment and substantial fixed payment, the amount related to lease incentiveshall be deducted if there is lease incentive;? The variable leasing payment which depends on index or ratio;? The exercise price of the purchase option, provided that the lessee reasonably determines
that the option will be exercised;
? The amount to be paid by the lessee for exercising the termination option, provided thatthe lease term reflects that the lessee will exercise the termination option;? The payments expected to be made according to the residual value of the guarantee
provided by the lessee.
In the process of calculating the present value of lease payments, the interest rate set out inthe lease contract is taken as the discount rate. If such an interest rate is not available, theincremental borrowing rate shall be adopted. The difference between the lease payments and theirpresent value is recognized as an unrecognized financing expense, and the interest expense isrecognized at the discount rate of the present value of the recognized lease payments during eachperiod of the lease term and is charged to the current profit or loss. Variable lease payments notconsidered in the measurement of lease liabilities are charged to the current profits and losseswhen actually incurred.
In case of any changes in the amount of substantive fixed payments, the amount expected tobe payable for the residual guarantee, the index or rate used to determine the lease payments, or
the evaluation result or actual exercise of the call option, renewal option or termination optionafter the inception date of the lease term, the Company will remeasure the lease liabilities at thepresent value of the changed lease payments and adjust the book value of the right-of-use assetsaccordingly.
27. Estimated liabilities
(1) Criteria for recognition of estimated liabilities
Obligations related to contingencies, if satisfying the following conditions at the same time,will be recognized as provisions by the Company:
① The obligation is the current obligation of the Company;
② Performance of this obligation will probably cause outflow of economic interest of the
Company;
③ The amount of such obligation can be measured reliably.
(2) Measurement method for estimated liabilities
The estimated liabilities are initially measured at the best estimate of expenditures requiredto perform relevant current obligations, and the risks, uncertainties, and time value of moneyrelated to contingencies are taken into comprehensive consideration. The book value of theestimated liabilities are reviewed on each balance sheet date. With conclusive evidence indicatingthat the book value cannot reflect the current best estimate, the book value is adjusted accordingto the current best estimate.
28. Revenue
(1) General principle
Revenue refers to the gross inflow of economic benefits formed during the course ofordinary activities of the Company, which may increase the shareholders’ equity and is irrelevantto the invested capital of shareholders.
The Company has fulfilled its performance obligations of the Contract, which means itrecognizes the revenue when the customer has acquired the control rights of the relevant goods.The acquisition of control over the relevant goods means being able to dominate the use of thegoods and obtain almost all the economic benefits.If the contract contains two or more performance obligations, the Company shall, at thebeginning date of the contract, apportion the transaction price to each performance obligationaccording to the relative proportion of the individual selling price of the commodities or servicespromised by each performance obligation, and measure the revenue according to the transactionprice apportioned to each performance obligation.The transaction price is the amount of consideration that the Company is expected to beentitled to receive for the transfer of commodities or services to the customer, excluding paymentsreceived on behalf of third parties. In determining the contract transaction price, if there is avariable consideration, the Company shall determine the best estimate of the variableconsideration on the basis of the expected value or the amount most likely to occur, and include itin the transaction price in an amount not exceeding the amount most likely not to be materiallyreversed by accumulating the recognized income when the relevant uncertainty is eliminated. Ifthere is a significant financing component in the contract, the Company will determine thetransaction price according to the amount payable in cash when the customer obtains control ofthe goods. The difference between the transaction price and the contract consideration isamortized by the effective interest method during the contract period. If the interval between thetransfer of control and the payment by the customer does not exceed one year, the Company doesnot consider the financing components therein.In case one of the following conditions is met, the Company will perform the performanceobligations within a period of time. Otherwise, it will perform the performance obligations at atime point:
① The customer obtains and consumes the economic benefits brought by the performance of
the contract by the Company at the same time;
② The customer can control the goods under construction during the Company's
performance;
③ The goods generated during the performance of the Company are irreplaceable, and the
Company is entitled to receive payment for the performance accumulated so far throughout theterm of the contract.For the performance obligations performed within a certain period of time, the Companyshall recognize the income according to the performance progress within that period, except thatthe performance progress cannot be reasonably determined. The Company determines theprogress of performance for the rendering of services using the input method (or output method).If the performance progress cannot be reasonably confirmed, and the costs incurred by theCompany can be expected to be compensated, the incomes shall be recognized according to theamount of costs incurred until the performance progress can be reasonably confirmed.
For performance obligations performed at a certain time point, the Company shall confirmthe revenue at the time point when the customer gains control rights of the relevant goods. Indetermining whether a customer has obtained the control rights of the goods or services, theCompany shall take the following indications into consideration:
① The Company enjoys the current collection right in regard to such goods or services, i.e.
The customers have the obligation to pay immediately with respect to the goods;
② The Company has transferred the legal ownership of the goods to the customer, i.e., The
customer owns the legal ownership of the goods;
③ The Company has transferred the goods to the customer in kind, i.e. The customer has
possessed the goods;
④ The Company has transferred the major risks and remuneration on the ownership of the
goods to the customer, i.e., the customer has obtained the major risks and remuneration on theownership of the goods.
⑤ The customer has accepted the goods.
Sales Return TermsFor any sales with a sales return clause, when the customer obtains control of the relevantgoods, the Company recognizes the revenue according to the amount of consideration it is entitledto obtain due to the transfer of goods to the customer and recognizes the amount to be returneddue to sales return as estimated liabilities; At the same time, according to the book value of thereturned goods when they are expected to be transferred, the balance after deducting the expectedcost of recovering the goods (including the impairment of the value of the returned goods) isrecognized as an asset, that is, the return cost receivable, and the net amount of the above assetcost is carried forward according to the book value of the transferred goods when they aretransferred. On each balance sheet date, the Company re-estimates the return of future sales andre-measures the above assets and liabilities.
Warranty obligationsAccording to the contract agreement, laws, and regulations, the Company provides qualityassurance for the goods sold and the projects constructed. For the guarantee quality assuranceensuring that the sold goods meet the established standards, the Company conducts accountingtreatment in accordance with the Accounting Standards for Business Enterprises No. 13 -Contingencies. For service quality assurance that provides a separate service to ensure that theprovided goods meet the established standards, the Company regards it as a single fulfillmentobligation. According to the relative proportion of the individual selling price of the providedgoods and the service quality assurance, the transaction price is partially apportioned to part of thetransaction price. The income is to be confirmed when the customer obtains service control right.When assessing whether the quality assurance provides a separate service to the client that thesold goods meet the established standards, the Company shall consider whether the qualityassurance is a legal requirement, quality assurance period, and the Company’s commitment toperforming the task.
Principal responsible person and agent
The Company determines whether it is the principal responsible person or agent at the timeof the transaction based on whether it has control of the goods or services prior to the transfer ofthe goods or services to the customer. If the Company is able to control the goods or servicesbefore transferring the goods or services to the customer, the Company is the main responsibleperson and recognizes the income according to the total consideration received or receivable.Otherwise, the Company, as an agent, shall recognize the income according to the amount ofcommission or service fee expected to be entitled to receive, which shall be determined accordingto the net amount of the total consideration received or receivable after deducting the pricepayable to other related parties, or according to the established amount or proportion ofcommission.
Consideration payable to customer
Where there is consideration payable to a customer in a contract, unless the consideration isfor the purpose of obtaining other clearly distinguishable goods or services from the customer, theCompany offsets the consideration payable against the transaction price and deducts the currentincome at a later point between the recognition of the relevant income and the payment (orcommitted payment) of the customer consideration.
Contractual rights not exercised by the customer
If the Company receives the payment for sales of goods or services from customers inadvance, the payment is recognized as a liability first and then transferred to income whenrelevant performance obligations are fulfilled. When the Company's advances from customers arenot required to be returned and the customer is likely to waive all or part of his/her contractualrights, where the Company is expected to be entitled to obtain the amount related to thecontractual rights waived by the customer, the above amount should be recognized as revenue inproportion with a mode in which the customer exercises the contractual rights; Otherwise, theCompany should only transfer the balance related to the above liabilities to revenue when thepossibility of the customer requesting to perform the remaining performance obligations isextremely low.
Change contract
In case of change of the construction contract between the Company and the customer:
① If a clearly distinguishable construction service and contract price are added to the
contract change, and the new contract price reflects the separate price of the new constructionservice, the Company will treat the contract change as a separate contract for accounting;
② If the contract change is not the above circumstance ①, and there is a clear distinction
between the transferred construction services and the untransferred construction services on thecontract change date, the Company will regard it as the termination of the original contract, and atthe same time, combine the unperformed part of the original contract and the changed part of thecontract into a new contract for accounting treatment;
③ If the contract change is not the above circumstance ①, and there is no clear distinction
between the transferred construction services and the untransferred construction services on thecontract change date, the Company will take the changed part of the contract as an integral part ofthe original contract for accounting treatment, and the current revenue will be adjusted on thecontract change date for the impact on the recognized revenue arising therefrom.
(2) Specific method
Specific income recognition method of the Company is as follows:
① Commodity Sales Contract
The Commodity Sales Contract between the Company and the customer includes theperformance obligation of the transferred goods, which belongs to the performance obligation at acertain time point.The recognition of automobile sales revenue and jewelry wholesale revenue shall meet thefollowing conditions: The Company has delivered the goods to the Customer according to thecontract agreement and the Customer has accepted the goods, the payment for goods has beenrecovered or the receipt voucher has been obtained, the related economic benefits are likely toflow in, the major risks and rewards on the ownership of the goods have been transferred and thelegal ownership of the goods has been transferred.
② Vehicle and Testing Contract
The performance obligations contained in the Vehicle Maintenance and Testing Contractbetween the Company and the customer belong to the performance obligations at a certain timepoint.The recognition of vehicle maintenance and testing revenue shall meet the followingconditions: The Company has completed vehicle maintenance and testing services according tothe contract, settled all materials and man-hour expenses with the customer, and allowed thecustomer's vehicle to leave the Company's maintenance shop.
③ Service Contract
The service contract between the Company and the customer includes the performanceobligation of services related to the lease of real estate. Since the customer obtains and consumesthe economic benefits brought by the performance of the Company at the same time, theCompany regards it as the performance obligation to be performed within a certain period of time,which is equally apportioned and recognized during the service provision period.
④ Real Estate Lease Contract
See Note III. 29 for the recognition method of real estate rental income of the Company.
29. Government subsidies
(1) Recognition of government subsidies
The government subsidies shall meet all of the following conditions for recognition:
① The Company can meet the conditions of acquisition of government subsidies;
② The Company can receive government subsidies.
(2) Measurement of government subsidies
Government subsidies which are monetary assets are measured at the amount received orreceivable. The government subsidies considered as non-monetary assets are measured based onthe fair value, or the nominal amount of RMB 1, if the fair value cannot be acquired reliably.
(3) Accounting treatment for government subsidies
① Asset-related government subsidies
The Company classifies the government subsidies acquired for establishing or forming long-term assets in other ways as asset-related government subsidies. Asset-related governmentsubsidies shall be recognized as deferred incomes, and they shall be distributed with a reasonableand systematic method within the service life of related assets and included in the profits andlosses. Government subsidies measured at the nominal amount shall be directly included incurrent profits and losses. When the related assets are sold, assigned, transferred or damagedbefore the end of service life, all the undistributed deferred incomes shall be transferred to thecurrent profits and losses of assets disposal.
② Income-related government subsidies
Other than asset-related government subsidies, other government subsidies are income-related government subsidies. Accounting treatment shall be conducted for the income-relatedgovernment subsidies as per the following provisions according to different situations:
If used to compensate for related costs or losses during future periods of the Company, itshall be recognized as deferred incomes, and shall be included in the current profits and losses atthe period when it is recognized;
The amount used to compensate for the incurred related cost expenses or losses of theCompany shall be included in the current profits and losses.
For the government subsidies including both assets-related government subsidies andincome-related government subsidies, such two parts shall be separately provided with accounting
treatment; where such two parts cannot be distinguished, all government subsidies shall beclassified as income-related government subsidies.The government subsidies related to daily activities of the Company shall be included inother incomes based on the substance of business transactions. The government subsidies notrelated to daily activities of the Company shall be included in non-operating incomes andexpenses.
③ Policy-based preferential loan discount
Where the finance allocates the discount fund to the lending bank and the lending bankprovides a loan at the policy-based preferential interest rate for the Company, the Companyincludes the actually received loan amount as the entry value of the loan and counts relevantborrowing costs based on loan principal and the policy-based preferential interest rate.Where the finance directly allocates the discount fund to the Company, the Company shalluse the corresponding discount to offset relevant borrowing costs.
④ Refund of government subsidies
If a recognized government subsidy needs to be refunded, and the book value of relatedassets is offset when initially recognized, adjust the book value of assets; if there is relateddeferred income balance, offset the book balance of related deferred income, the exceeding part isincluded in the current profits and losses; in other cases, it shall be included in the current profitsand losses directly.
30. Deferred tax assets/deferred tax liabilities
According to the temporary differences between the book value of assets and liabilities onthe balance sheet date and the tax basis, the Company generally adopts the balance sheet liabilitymethod to recognize and measure the effect of taxable temporary difference or deductibletemporary differences on income tax as the deferred tax liabilities or the deferred tax assets. TheCompany will not perform the discounting for deferred tax assets and deferred tax liabilities:
(1) Recognition of deferred tax assets
For deductible temporary differences, deductible losses and tax credits which can betransferred to future years, the effect on income tax shall be calculated as per the income tax rateduring the expected reversal period, and the effect is recognized as the deferred tax assets to theextent of future taxable income the Company may obtain to deduct the deductible temporarydifferences, deductible losses and tax credit.Meanwhile, the effect on income tax of deductible temporary difference incurred in initialrecognition of assets or liabilities arising from transactions or events having the followingcharacteristics are not recognized as deferred tax assets:
A. The transaction is not a business merger;
B. The transaction proceeds, which affects neither the accounting profit nor the taxableincome (or deductible loss).
For the Company's deductible temporary differences associated with investments insubsidiaries, joint ventures and associates, if the following two conditions are satisfied at the sametime, the effect on income tax can is (or can be) recognized as deferred tax assets:
A. It is likely that the temporary difference will be reversed in the foreseeable future;
B. It is likely that taxable income will be available in the future for deducting the temporarydifferences;
At the balance sheet date, when concrete evidence show that sufficient taxable incomes canbe used to offset the deductible temporary differences if they will be available in the future, theCompany shall recognize the deferred tax assets that were not recognized in previous periods.
The book value of a deferred tax asset is reviewed on each balance sheet date. If it is likelythat sufficient taxable profits will not be available in future periods to deduct the benefit of thedeferred tax assets, the book value of the deferred tax assets is reduced. Any such write-down
shall be subsequently reversed where it becomes probable that sufficient taxable income will beavailable.
(2) Recognition of deferred tax liabilities
All taxable temporary differences of the Company shall be measured according to theincome tax rate during the expected reversal period, and such effect shall be recognized asdeferred tax liabilities, except for the following situations:
① The effect of taxable temporary difference arising from the following transactions or
events on the income tax will not be recognized as deferred tax liabilities:
A. Initial recognition of goodwill;
B. Initial recognition of assets or liabilities incurred in a transaction that is not a businessmerger and will affect neither the accounting profit nor taxable income/deductible loss at the timeof the transaction.
② The effect of taxable temporary difference related to the investment of the Company, its
subsidiaries, joint ventures and associates on income tax is generally recognized as deferred taxliabilities, but the following two conditions shall be met simultaneously:
A. The Company can control the time for the reversal of the temporary difference;
B. It is unlikely that the temporary difference will be reversed in the foreseeable future;
(3) Recognition of deferred tax liabilities or assets involved in specific transactions or
events
① Deferred tax liabilities or assets related to business merger
For taxable temporary differences or deductible temporary differences arising from businessmerger under different control, upon the recognition of deferred tax liabilities or deferred tax
assets, the goodwill recognized in the business merger is generally adjusted according to therelevant deferred tax expenses (or gains).
② Items directly recognized as the owners' equity
The current income tax and deferred tax related to the transactions or events directlyincluded in the owners’ equity will be included in the owners’ equity. Transactions or events inwhich the effect of temporary differences on income tax is included in owners' equity are asfollows: other comprehensive income generated by changes in fair value of other investment onbonds, the adjustment of retained earnings by retroactive adjustment method for changes inaccounting policies or retrospective restatement method for the correction of prior (important)accounting errors, and the hybrid financial instruments simultaneously containing liabilitycomponent and equity component included in the owners’ equity upon the initial recognition.
③ Deductible losses and tax credits
A. Deductible losses and tax credits arising from the own operations of the Company
Deductible losses refer to the losses that are calculated and determined in accordance withthe provisions of tax law and allowed to be compensated by the taxable income in the followingyears. Unrecovered losses (deductible losses) and tax credits that can be carried forward to thefollowing years according to the provisions of the tax law shall be deemed as deductibletemporary differences for treatment. When it is expected that sufficient taxable income can beobtained from available recoverable losses or tax credits in the future, with the possibly achievedtaxable income as the limit, recognize the corresponding deferred tax assets, and reduce theincome tax expenses in the current income statement.
B. Deductible but unrecovered losses of the merged enterprise generated by business merger
In the business merger, should the deductible temporary difference of the acquiree gained bythe Company not meet the recognition conditions of the deferred tax assets on the acquisition date,
the Company will not recognize such difference. Where new or further information obtainedwithin 12 months since the acquisition date reveals that relevant conditions were present at theacquisition date, and the economic benefit brought by deductible temporary difference at theacquisition date can be realized for expected acquiree, relevant deferred tax assets must berecognized, goodwill be decreased; where the goodwill is not sufficient to offset, the balance mustbe recognized as current profits and losses; except aforesaid conditions, deferred tax assets whichare recognized to be linked with business merger must be included in the current profits andlosses.
④ Temporary difference generated by consolidation and offset
In the preparation of the consolidated financial statements, if a temporary difference occursbetween the book value of assets and liabilities in the consolidated balance sheet and the tax basisof the taxpayer to which the Company belongs due to the offset of unrealized internal sales profitor loss, the deferred tax assets or deferred tax liabilities shall be recognized in the consolidatedbalance sheet, and the income tax expenses in the consolidated income statement shall be adjustedat the same time, except for the deferred taxes related to transactions or events directly included inthe owners' equity and business merger.
⑤ Equity-settled share-based payment
If the tax law stipulates that the expenses related to share-based payment are allowed to bededucted before tax, during the period for the recognition of cost in accordance with theaccounting standards, the Company shall calculate and determine its tax basis and the temporarydifferences arising therefrom based on the estimated amount that is deducted before tax based onthe information obtained at the end of the accounting period, and recognize the relevant deferredtax if the recognition conditions are met. If the amount that can be deducted before tax in thefuture is expected to exceed the cost expenses related to share-based payment recognized inaccordance with the accounting standards, the excess portion shall be directly included in theowners' equity.
31. Lease
(1) Accounting for operating leases
(1) Identification of lease
On the commencement date of a contract, the Company evaluates whether the contract is alease or includes a lease. If one party to the contract abalienates the right to control the use of oneor more identified assets within a certain period of time in exchange for consideration, thecontract is a lease or includes a lease. In order to determine whether one party to the contract hasabalienated the right to control the use of the identified assets within a certain period of time, theCompany evaluates whether the customers in the contract are entitled to obtain almost all theeconomic benefits arising from the use of the identified assets during the use period and todominate the use of the identified assets during the use period.
(2) Identification of separate lease
If the contract contains multiple separate leases at the same time, the Company will split thecontract and carry out accounting treatment for each separate lease. If the following conditions aremet at the same time, the right to use the identified assets constitutes a separate lease in thecontract: ① the lessee may benefit from the separate use of the assets or the use of the assets withother easily available resources; ② the assets are not highly dependent on or related to otherassets in the contract.
(3) Accounting treatment method of the Company as the lessee
On the commencement date of the lease term, the Company recognizes leases with a leaseterm of not more than 12 months and without a purchase option as short-term leases and leaseswith a lower value when the single leased asset is a brand-new asset as leases of low-value assets.Where the Company subleases or intends to sublease the leased asset, the original lease shall notbe recognized as a lease of low-value assets.
For all short-term leases and leases of low-value assets, the Company charges leasepayments on a straight-line basis over the respective periods of the lease term to the cost of therelated assets or to the current profits and losses.Except for the above short-term leases and leases of low-value assets that are simplified, theCompany recognizes right-of-use assets and lease liabilities for leases at the beginning of thelease term.
① Right-of-use assets
The right-of-use assets refer to the lessee's right to use the leased assets during the lease term.
At the commencement date of the lease term, the right-of-use assets shall be initiallymeasured based on costs. The cost includes:
? Initial measurement amount of lease liabilities;? Lease payments paid on or before the commencement of the lease term. The relevantamount of lease incentives enjoyed shall be deduced if such incentives exist;? Initial direct cost of the lessee;? Cost expected to be occurred by the lessee due to dismantling and removing the leasing
asset, recovering its location or recovering it to the state agreed in the leasing terms. TheCompany recognizes and measures the cost according to the recognition standard andmeasurement method of estimated liabilities. See Note III. 25 for details. The aforesaidcost is included in the inventory cost incurred for the production of inventory.
The depreciation of the right-of-use assets is classified and accrued by the straight-linemethod. For fixed assets, if it can be reasonably confirmed that the ownership will be grantedwhen the term of lease expires, the rate of depreciation shall be determined according to thecategory of right-of-use assets and the estimated net residual value rate within the estimatedremaining service life of the leasing assets. If it is impossible to reasonably determine whether theownership of the leasing assets will be granted upon the expiration of the lease term, thedepreciation rate shall be determined according to the category of the right-of-use assets withinthe lease term or the remaining service life of the leasing assets, whichever is shorter.
② Lease liabilities
Lease liabilities shall be initially measured according to the present value of lease paymentsthat has not yet been made on the commencement date of lease term. The lease payment includesthe following five items:
? For the fixed payment and substantial fixed payment, the amount related to lease incentive
shall be deducted if there is lease incentive;? The variable leasing payment which depends on index or ratio;? The exercise price of the purchase option, provided that the lessee reasonably determines
that the option will be exercised;? The amount to be paid by the lessee for exercising the termination option, provided that
the lease term reflects that the lessee will exercise the termination option;
? The payments expected to be made according to the residual value of the guarantee
provided by the lessee.In the process of calculating the present value of lease payments, the interest rate set out inthe lease contract is taken as the discount rate. If such an interest rate is not available, theincremental borrowing rate shall be adopted. The difference between the lease payments and theirpresent value is recognized as an unrecognized financing expense, and the interest expense isrecognized at the discount rate of the present value of the recognized lease payments during eachperiod of the lease term and is charged to the current profit or loss. Variable lease payments notconsidered in the measurement of lease liabilities are charged to the current profits and losseswhen actually incurred.In case of any changes in the amount of substantive fixed payments, the amount expected tobe payable for the residual guarantee, the index or rate used to determine the lease payments, orthe evaluation result or actual exercise of the call option, renewal option or termination optionafter the inception date of the lease term, the Company will remeasure the lease liabilities at thepresent value of the changed lease payments and adjust the book value of the right-of-use assetsaccordingly.
(4) Accounting treatment method of the Company as the lessor
On the commencement date of the lease term, the Company recognizes a lease that transferssubstantially all the risks and rewards associated with the ownership of the leased asset as afinance lease, except for those that are recognized as operating leases.
① Operating leases
During each period of the lease term, the Company recognizes lease receipts as rentalincome on a straight-line basis, and capitalizes and apportions the initial direct costs incurred onthe same basis as rental income, which shall be charged to the current profits and losses. Thevariable lease receipts obtained by the Company related to operating leases and not charged to thelease receipts shall be charged to the current profits and losses when actually incurred.
② Finance leases
On the commencement date of the lease, the Company recognizes finance lease receipts atthe net lease investment (the sum of the unguaranteed residual value and the present value of thelease receipts not yet received on the commencement date of the lease period discounted at theinterest rate of the lease) and derecognizes the finance lease assets. During each period of thelease term, the Company calculates and recognizes interest income at the interest rate of the lease.
Variable lease payments obtained by the Company but not considered in the measurement ofnet investment in leases are recognized in the current profits and losses when actually incurred.
(5) Accounting treatment of lease change
① Lease change is regarded as a separate lease
If the lease changes and meets the following conditions at the same time, the Company willtake the lease change as a separate lease for the accounting treatment: A. the lease changeexpands the lease scope by increasing the right to use one or more leased assets, and B. the
increased consideration is equivalent to the amount by adjusting the separate price of theexpanded lease scope according to the contract.
② Lease change is not regarded as a separate lease
A. The Company as the lesseeOn the effective date of the lease change, the Company re-determines the lease term anddiscounts the changed lease payment with the revised discount rate to re-measure the leaseliabilities. In calculating the present value of the changed lease payment, the Company adopts theinterest rate implicit in lease in the remaining lease term as the discount rate. If it is impossible todetermine the interest rate implicit in lease in the remaining lease term, the Company will adoptthe incremental borrowing rate at the effective date of the lease change as the discount rate.As for the impact of the above adjustment of lease liabilities, the following circumstancesshall be distinguished for accounting treatment:
? If the lease scope is reduced or the lease term is shortened due to the lease change, thebook value of the right-of-use asset shall be adjusted and the relevant gains or lossesarising from the partial or complete termination of the lease shall be included in thecurrent profits and losses;
? For other lease changes, the book value of the right-of-use asset shall be adjustedaccordingly.B. The Company as the lessorIn case of any change in an operating lease, the Company carries out accounting treatment asit is a new lease since the effective date of the change, and the advance receipts and receivablesrelated to the lease before the change are deemed as the receipts of the new lease.
For change of finance lease not regarded as a separate lease for accounting treatment, theCompany shall treat the changed lease under the following circumstances respectively: If thelease change takes effect on the lease commencement date and the lease will be classified as anoperating lease, the Company will take it as a new lease for accounting treatment from theeffective date of lease change, and take the net investment in the lease before the effective date of
lease change as the book value of the leased asset. If the lease change takes effect on the leasecommencement date and the lease will be classified as a finance lease, the Company shall carryout accounting treatment in accordance with the provisions on modifying or renegotiating thecontract.
(6) Leaseback
The Company assesses and determines whether the transfer of assets in the sale-leasebacktransaction is a sale in accordance with the provisions of Note III. 26.
① The Company is the seller (lessee)
If the transfer of assets in the sale-leaseback transaction does not belong to sales, theCompany shall continue to recognize the transferred assets, recognize a financial liability equal tothe transfer income, and carry out accounting treatment for the financial liability in accordancewith Note III. 10. If it is, the Company measures the right-of-use assets formed by sale-leasebackaccording to the part related to the right to use obtained by leaseback in the book value of theoriginal assets, and recognizes relevant gains or losses only for the rights transferred to the lessor.
② The Company is the buyer (lessor)
If the transfer of assets in the sale-leaseback transaction is not a sale, the Company does notrecognize the transferred assets, but recognizes a financial asset with an amount equal to thetransferred income, and carries out accounting treatment for the financial assets according to NoteIII. 10. If the transfer of assets is a sale, the Company carries out accounting treatment for assetpurchase and asset lease according to other applicable accounting standards for businessenterprises.
(2) Accounting for finance leases
32. Changes in significant accounting policies and accounting estimates
(1) Significant accounting policy changes
?Applicable □ Not applicable
① On December 30, 2021, the Ministry of Finance issued the Interpretation No. 15 of the
Accounting Standards for Business Enterprises (CK [2021] No. 35) (hereinafter referred to as"Interpretation No. 15"), in which the contents of "Accounting treatment for external sales ofproducts or by-products produced before the fixed assets reach the expected serviceable conditionor during the R&D process" and "judgment on onerous contracts" shall be implemented fromJanuary 1, 2022. Retroactive adjustments should be made for trial sales that occurred between thebeginning of the period in which the financial statements were presented and January 1, 2022.This provision shall be implemented for contracts that have not fulfilled all obligations as ofJanuary 1, 2022. The cumulative effect shall be adjusted to the retained earnings and otherrelevant financial statement items at the beginning of the year on the date of implementation,without adjustments to the comparative financial statement data of the previous period.The Company will implement the above provisions from January 1, 2022, and the changes inaccounting policies have no impact on the Company's financial statements.
② On November 30, 2022, the Ministry of Finance issued Interpretation No. 16 of the
Accounting Standards for Business Enterprises (CK [2022] No. 31, hereinafter referred to asInterpretation No. 16), in which the contents of "Accounting treatment of exemption from initialrecognition is not applicable to deferred income tax related to assets and liabilities arising fromindividual transactions" shall be implemented from January 1, 2023, and the contents of"Accounting treatment of income tax impact on dividends related to financial instrumentsclassified as equity instruments by the issuer" and "Accounting treatment of changing cash-settledshare-based payment to equity-settled share-based payment by enterprises" shall be implementedfrom the date of publication.For financial instruments classified as equity instruments, if the recognized dividendspayable occurred between January 1, 2022 and the implementation date of the provisions,involved the effect of income tax, and have not been handled in accordance with the aboveprovisions, they shall be adjusted in accordance with the above provisions. For financialinstruments classified as equity instruments, if the recognized dividends payable occurred beforeJanuary 1, 2022, the relevant financial instruments have not been derecognized before January 1,
2022, the effect of income tax was involved and the treatment was not carried out in accordancewith the above provisions, retroactive adjustment shall be made. For the above transactions newlymade between January 1, 2022 and the implementation date of the provisions, enterprises shalladjust them in accordance with the provisions.For the transaction of changing cash-settled share-based payment to equity-settled share-based payment before January 1, 2022, if it was not handled in accordance with the aboveprovisions, the enterprise shall make adjustments. The cumulative effect shall be adjusted toretained earnings and other related financial statement items as of January 1, 2022, withoutadjustments to information for comparable periods.Since November 30, 2022, the Company has implemented the provisions of InterpretationNo. 16 "accounting treatment for the impacts of income tax on dividends related to financialinstruments classified by the issuer as equity instruments" and "accounting treatment for themodification of the cash-settled share-based payment by an enterprise into equity-settled share-based payment". This change of accounting policy shall have no impact on the financialstatements of the Company.
(2) Changes in material accounting estimates
□ Applicable ? Not applicable
VI. Taxes
1. Main taxes and tax rates
Tax category Taxation basis Tax rateVAT
Selling goods or providing taxableservices
13%，9%，5%，6%，3%Consumption taxSales of goods 10%City maintenance and construction tax Turnover taxes payable 7%Enterprise income tax Taxable income 20%、25%Property tax
Selling goods or providing taxableservicesFor ad valorem collection,1.2% of the
remaining value after 30% of the originalvalue of the property is deducted bylump sum; for rent-based collection, 12%
| of the rental income |
1.2%、12%
| Educational surcharge | Turnover taxes payable | 3% |
| Local education surcharges | Turnover taxes payable | 2% |
Disclosure statement of taxable entities with different corporate income tax rates
Name of taxable entity Income tax rate
Shenzhen Xinyongtong Motor Vehicle Inspection EquipmentCo., Ltd.
20%
| Shenzhen Xinyongtong Motor Vehicle Inspection Equipment Co., Ltd. | |
| Shenzhen Huari Anxin Automobile Inspection Co., Ltd. | 20% |
| Shenzhen Tellus Chuangying Technology Co., Ltd. | 20% |
| Other taxable entities other than the above | 25% |
2. Tax preference
According to the Notice on Implementing the Inclusive Tax Reduction and ExemptionPolicies for Micro and Small Enterprises (CS [2019] No.13) issued by the State TaxationAdministration, Shenzhen Xinyongtong Motor Vehicle Inspection Equipment Co., Ltd., ShenzhenHuari Anxin Automobile Inspection Co., Ltd. and Shenzhen Tellus Chuangying Technology Co.,Ltd. enjoy preferential tax policies for small and micro enterprises. The enterprise income tax iscalculated and paid at the rate of 20%.VII. Notes to Consolidated Financial Statements
1. Cash at bank and on hand
Unit: RMBItem Ending balance Beginning balanceCash on hand 25,673.67 36,941.24Cash at bank394,258,891.55 240,545,115.92Other cash at bank and on hand 18,743,762.14Total413,028,327.36 240,582,057.16Other notes:
（1）The bank deposit of 10,665,656.00 CNY is the supervision fund of the company's development of plot 03 of the upgrading
and reconstruction project of Tellus-Jimeng gold jewelry industrial park. The performance guarantee fund is 2,000,000.00 CNY.Funds of 8,955,842.00 CNY in other monetary funds is margin for futures options accounts. In addition, there is no other moneywith limited use and potential recovery risk due to mortgage, pledge or freezing in the monetary fund at the end of the period.
（2）The monetary funds at the end of the period increased by 71.68% compared with the beginning of the period, mainly due to
the company's use of idle own funds for cash management.
2. Trading financial assets
Unit: RMBItem Ending balance Beginning balanceFinancial assets at fair value throughprofit or loss
176,133,569.95 412,712,843.84Including:
| Structured deposits and financial products |
176,133,569.95 412,712,843.84
Including:
Total176,133,569.95 412,712,843.84Other notes:
Held-for-trading financial assets at the end of the period decreased by 57.32% compared with the beginning of the period, mainlydue to the redemption of wealth management products at the end of the period.
3. Notes receivable
(1) Classified presentation of notes receivable
Unit: RMBItem Ending balance Beginning balanceBank acceptance bill 87,812,500.00 0.00Total 87,812,500.00 0.00
Unit: RMBIf the bad debt provision for notes receivable was withdrawn in accordance with the general model of expected credit losses,information related to bad debt provision shall be disclosed by reference to the disclosure method of other receivables:
□ Applicable ? Not applicable
(2) Notes receivable endorsed or discounted by the Company at the end of the period and not yet due at
the balance sheet date:
Unit: RMBItem
Derecognized amount at end of the
period
Un-derecognized amount at end of the
periodBank acceptance bill13,900,000.00 87,812,500.00Total 13,900,000.00 87,812,500.00
4. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: RMB
Class
Ending balance Beginning balanceBook balance
Provision for bad
debts
Book value
Book balance
Provision for bad
debts
Book valueAmount
Percen
tage
Amount
Proportion
ofprovis
ion
Amount
Percent
age
Amount
Proportion
ofprovis
ion
Accountsreceivable withprovision for baddebts on a singlebasis
48,781,485.16 53.63% 48,781,485.16 100.00% 48,781,485.16 72.74% 48,781,485.16
100.00
%
Including:
Accountsreceivable forwhich provisionfor bad debts ismade bycombination
42,175,581.79 46.37% 423,402.23 1.00% 41,752,179.56 18,277,473.05 27.26% 183,413.13 1.00% 18,094,059.92Including:
1. Aging
portfolio
41,508,602.26 45.64% 416,732.43 1.00% 41,091,869.83 18,277,473.05 27.26% 183,413.13 1.00% 18,094,059.92
2. Jewelry sales
| portfolio |
| business portfolio |
666,979.53 0.73% 6,669.80 1.00% 660,309.73
Total90,957,066.95 100.00% 49,204,887.39 54.10% 41,752,179.56 67,058,958.21 100.00% 48,964,898.29 73.02% 18,094,059.92Provision for bad debts is accrued on an individual basis:
Unit: RMBName
Ending balanceBook balance Provision for bad debts Proportion of provision Reasons for provision
Industry & Trade Co.,
| Ltd. |
9,846,607.00 9,846,607.00 100.00%
expected to be
| unrecoverable |
Guangdong ZhanjiangSamsung Automobile
4,060,329.44 4,060,329.44 100.00%
Long aging andexpected to be
| Co., Ltd. | unrecoverable |
Wang Changlong 2,370,760.40 2,370,760.40 100.00%
expected to be
| unrecoverable | ||
| Huizhou Jiandacheng |
Road and Bridge
2,021,657.70 2,021,657.70 100.00%
| Engineering Co., Ltd. | Long aging and |
expected to be
Jiangling MotorsFactory
1,191,059.98 1,191,059.98 100.00%
| unrecoverable |
| Long aging and |
expected to be
Yangjiang AutomobileTrading Co., Ltd.
1,150,000.00 1,150,000.00 100.00%
| unrecoverable |
| Long aging and |
expected to be
Guangdong MaterialsGroup Corporation
1,862,000.00 1,862,000.00 100.00%
Long aging andexpected to be
| unrecoverable |
| unrecoverable |
Others 26,279,070.64 26,279,070.64 100.00%
expected to be
| unrecoverable |
Total 48,781,485.16 48,781,485.16
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the generalmode of expected credit loss to withdraw bad debt provision of other receivables.?Applicable □ Not applicableDisclosure by aging
Unit: RMBAging Book balanceWithin 1 year (inclusive) 42,172,221.79Over 3 years48,784,845.16
Over 5 years 48,784,845.16Total90,957,066.95
(2) Bad debt provision provided, recovered or reversed in the current period
Bad debt provision withdrawn in the reporting Period:
Unit: RMBClass Beginning balance
Change during the current period
Ending balanceProvision
Recovery orreversal
Cancellation
afterverification
Others
Provision for
bad debts madeon an
| individual basis |
48,781,485.16 48,781,485.16Provision forbad debts made
183,413.13 239,989.10 423,402.23Total48,964,898.29 239,989.10 49,204,887.39The significant amount of provision reversal and recovery of bad debts in the current period:
(3) Accounts receivable of the top five ending balance by the owing party
Unit: RMBItem
Ending balance ofaccounts receivable
Proportion in thetotal ending balanceof accountsreceivable
Ending balance of provision
for bad debts
by portfolioShenzhen Jinlu Industry & Trade Co., Ltd.
| Shenzhen Jinlu Industry & Trade Co., Ltd. | 9,846,607.00 | 10.83% | 9,846,607.00 |
| Shenzhen Luohu Chengfa Property Management Co., Ltd. |
8,227,270.72 9.05% 82,272.71
4,060,329.44 4.46% 4,060,329.44
| Guangdong Zhanjiang Samsung Automobile Co., Ltd. |
| Shenzhen Showking Jewelry Industry Co., Ltd. |
3,873,224.68 4.26% 38,732.25
| Wang Changlong | 2,370,760.40 | 2.61% | 2,370,760.40 |
Total 28,378,192.24 31.21%
5. Advances to suppliers
(1) Advances to suppliers presented by aging
Unit: RMBAging
Ending balance Beginning balanceAmount Percentage Amount PercentageWithin 1 year 8,114,727.00 99.85% 16,519,701.91 99.92%Over 3 years12,525.94 0.15% 12,525.94 0.08%Total 8,127,252.94
16,532,227.85
Explanation of reasons for delayed settlement of important advances to suppliers with aging over 1 year:
N/A
(2) Advances to suppliers with top five ending balances by the supplier
Item
Balance as at December 31,
2022
Proportion in the totalending balance of
| Item | advances to suppliers (%) | |
| FAW Toyota Motor Sales Co., Ltd. | 5,913,528.53 | 72.76 |
| Xiaopeng Automobile Sales Co., Ltd. | 540,694.07 | 6.65 |
| Shenzhen Vanda Construction Group Co., Ltd. |
361,025.45 4.44
166,490.00 2.05
| Toyota Motor (China) Investment Co., Ltd. |
| Shenzhen Hongzhuo Electromechanical Equipment Co., Ltd. |
110,550.00 1.36
| Total | 7,092,288.05 | 87.26 |
Other notes:
The prepayment decreased by 50.84% from the beginning of the period, mainly due to the decrease in the prepaid purchase ofautomobiles.
6. Other receivables
Unit: RMBItem Ending balance Beginning balanceInterests receivable
0.00 0.00Dividends receivable 1,852,766.21 547,184.35Other receivables5,810,804.66 4,525,786.42Total 7,663,570.87 5,072,970.77
(1) Dividends receivable
1) Category of dividends receivable
Unit: RMBItem (or the investee) Ending balance Beginning balance
| China Pufa Machinery Industry Co., Ltd. | 1,852,766.21 | 547,184.35 |
Total 1,852,766.21 547,184.35
2) Significant dividends receivable Aged over 1 Year
Unit: RMBItem (or the investee) Ending balance Aging
Reasons for non-
recovery
Impairment andjudgment basis
China Pufa MachineryIndustry Co., Ltd.
547,184.35 3-4 years Not paid yet
The financial and
operating conditions ofthe company arenormal, and thedividends receivable
| are not impaired. |
Total 547,184.35
3) Provision for bad debts
□ Applicable ? Not applicable
(2) Other receivables
1) Classification of other receivables by nature of money
Unit: RMBPayment nature Ending book balance Beginning book balance
| Security deposit | 1,182,793.87 | 598,861.89 |
| Suspense payment receivable | 57,765,312.21 | 55,668,855.15 |
Total 58,948,106.08 56,267,717.04
2) Provision for bad debts
Unit: RMBProvision for bad debts
Stage I Stage II Stage III
TotalExpected credit lossesfor the next 12 months
Expected credit loss
within the wholeduration (no creditimpairment occurs)
Expected credit loss
within the wholeduration (creditimpairment has
occurred)Balance on January 1,2022
58,951.65 51,682,978.97 51,741,930.62Balance as at January1, 2022 is in the currentperiod.
Provision in the period -16,533.98 1,411,904.78 1,395,370.80Balance as atDecember 31, 2022
42,417.67 53,094,883.75 53,137,301.42Changes of book balance with significant amount changed of loss provision in the reporting period
□ Applicable ? Not applicable
Disclosure by aging
Unit: RMBAging Book balanceWithin 1 year (inclusive)4,043,874.771-2 years 345,930.242-3 years447,871.38Over 3 years 54,110,429.69
Over 5 years 54,110,429.69Total58,948,106.08
3) Other receivables of the top five ending balances by the owing party
Unit: RMBItem Nature Ending balance Aging
Proportion toending balance ofother receivables
Ending balance ofprovision for baddebts
China Automobile
South ChinaAutomobile Sales
| Co., Ltd. |
Current payments 9,832,956.37 Over 3 years 16.68% 9,832,956.37
Industry and Trade
| Industrial Co., Ltd. |
Current payments 7,359,060.75 Over 3 years 12.48% 7,359,060.75
Zhonghao (Group)
| Co., Ltd. |
Current payments 5,000,000.00 Over 3 years 8.48% 5,000,000.00Shenzhen KaifengSpecialAutomobile
Current payments 4,413,728.50 Over 3 years 7.49% 2,206,864.25
| Industry Co., Ltd. |
| Shenzhen Jinbeili |
Electric Appliance
Current payments 2,706,983.51 Over 3 years 4.59% 2,706,983.51Total
29,312,729.13
49.72% 27,105,864.88
7. Inventories
Whether the Company needs to comply with the disclosure requirements for real estate industryNo
(1) Inventory classification
Unit: RMB
Item
Ending balance Beginning balance
Book balance
Provision fordecline in the
value ofinventories or
impairmentprovisions of
contractperformance cost
Book value Book balance
Provision fordecline in the valueof inventories orimpairmentprovisions of
contractperformance cost
Book value
Raw materials 32,186,382.35 14,959,426.51 17,226,955.84 15,814,028.99 14,772,382.17 1,041,646.82Goods instocks
35,204,271.37 15,553,427.93 19,650,843.44 39,261,052.16 14,867,773.94 24,393,278.22
Co., Ltd.Arbitrageditems
79,191,876.11 79,191,876.11Total 146,582,529.83 30,512,854.44 116,069,675.39 55,075,081.15 29,640,156.11 25,434,925.04
The Company shall abide by the disclosure requirements of the Guidelines of Shenzhen Stock Exchange for Self-RegulatorySupervision of Listed Companies No. 3-Industry Information Disclosure for "Jewelry-related Industry"
Among them, the amount of gold inventory is RMB 95,666,434.60, mainly composed of:
Item
December 31, 2022Book balance Provision for falling price Book value
Gold
Raw materials
16,474,558.49
| Raw materials |
-
16,474,558.49
| Goods in |
stocks -
-
-
| Arbitraged items |
79,191,876.11
-
79,191,876.11
| Total |
95,666,434.60
-
95,666,434.60
(2) Provision for decline in the value of inventories/contract performance cost impairment
Unit: RMBItem Beginning balance
Increase in the current period Decrease in the current period
Ending balanceProvision Others
Reversal or
write-off
OthersRawmaterials
14,772,382.17 187,044.34 14,959,426.51Goods instocks
14,867,773.94 1,429,041.69 743,387.70 15,553,427.93Total29,640,156.11 1,616,086.03 743,387.70 30,512,854.44
8. Other current assets
Unit: RMBItem Ending balance Beginning balance
Input VAT to be deducted
| Input VAT to be deducted | 17,764,057.26 | 8,596,585.57 |
| Taxes pre-paid | 582,654.29 |
Total 18,346,711.55 8,596,585.57Other notes:
Other current assets increased by 113.42% from the beginning of the period, mainly due to the increase in input VAT to becredited due to the increase in inventory at the end of the period.
9. Long-term receivables
(1) Long-term receivables
Unit: RMBItem
Ending balance Beginning balance
Interval of
discountrateBook balance
Provision forbad debts
Bookvalue
Book balance
Provision for
bad debts
Book valueConcerned
2,179,203.68 2,179,203.68 0.00 2,179,203.68 2,179,203.68 0.00
e funds
Total 2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68
Impairment of bad debt provisionChanges of book balance with significant amount changed of loss provision in the reporting period
□ Applicable ? Not applicable
10. Long-term equity investments
Unit: RMB
Investee
Beginning balance
(book value)
Changes in the current period
Ending balance(book value)
Ending balanceof impairment
provision
Additionalinvestment
e funds
N
egative
invest
| m |
ent
Profit or loss on
investmentsrecognized underthe equity method
ther
co
| m |
prehensive
inco
e
adjust
| m |
ents
ther
changes
in
equity
Declaration ofcash dividends
or profits
Provision
for
i
pair
| m |
ent
thers
I. Joint ventures
O
Shenzhen Tellus-
Gmond Investment
| Co., Ltd. |
47,490,740.78 14,652,979.35 15,000,000.00 47,143,720.13Shenzhen Telixing
13,452,222.35 748,674.78 14,200,897.13
Ltd. [Note 3]
Subtotal 60,942,963.13 15,401,654.13 15,000,000.00 61,344,617.26II. AssociatesShenzhen RenfuTellus Automobiles
Ltd. [Note 3]Service Co., Ltd.
27,367,904.34 -4,504,482.85 3,183,672.81 19,679,748.68
| Service Co., Ltd. |
| Shenzhen Tellus |
Automobile ServiceChain Co., Ltd.
| [Note 2] |
| Shenzhen |
Yongtong XindaTesting Equipment
| Co., Ltd. [Note 2] |
| Hunan Changyang |
Industrial Co., Ltd.
1,810,540.70Shenzhen JiechengElectronics Co.,
| [Note 1] |
| Ltd. [Note 1] |
3,225,000.00
New Materials Co.,
| Ltd. [Note 1] |
4,751,621.62
Industry ShenzhenTrading Co., Ltd.
| [Note 1] |
400,000.00Shenzhen UniversalStandard Parts Co.,
500,000.00
| Ltd. [Note 1] |
| Shenzhen China |
Automobile SouthChina AutomobileSales Co., Ltd.
2,250,000.00
| [Note 1] |
| Shenzhen Bailiyuan |
Power Supply Co.,
1,320,000.00
| Ltd. [Note 1] |
| Shenzhen Yimin |
Auto Trading Co.,
200,001.10
| Ltd. [Note 1] |
| Shenzhen Torch |
Spark Plug Industry
17,849.20Subtotal 27,367,904.34 -4,504,482.85 3,183,672.81 19,679,748.68 14,475,012.62Total 88,310,867.47 10,897,171.28 18,183,672.81 81,024,365.94 14,475,012.62Other notes:
Note 1: The industrial and commercial registration of such companies has been revoked, and the Companyhas made full provision for impairment of such long-term equity investments.Note 2: After the book balance of such long-term equity investments is adjusted according to the profit andloss recognized by the equity method, the book balance is RMB 0.
Note 3: The Company holds 51% equity of such company. According to the relevant provisions of theArticles of Association of such company, the voting rights held by the Company are not sufficient tounilaterally pass the voting of the Board of Shareholders and the Board of Directors on the relevant decision-making proposals of such company, and the Company does not control such company.The operation period of Shenzhen Hanli High Tech Ceramics Co., Ltd. is from September 21, 1993 toSeptember 21, 1998. The operation period of Shenzhen South Automobile Maintenance Center is from July 12,1994 to July 11, 2002. These companies have ceased their business activities for many years and have notparticipated in the annual industrial and commercial inspection, so their industrial and commercial registrationhas been revoked. The Company cannot effectively control these companies, and these companies are notincluded in the consolidation scope of the Company's consolidated financial statements. The book value of theCompany's investment in these companies is zero.
11. Other equity instrument investments
Unit: RMBItem Ending balance Beginning balance
Listed equity instruments
| Listed equity instruments | ||
| Unlisted equity instruments | 10,176,617.20 | 10,176,617.20 |
Total10,176,617.20 10,176,617.20Non-trading equity instrument investment in the Reporting Period disclosed by items
Unit: RMB
Project name
Dividendincomerecognized
Cumulativeprofits
Cumulativelosses
Amount ofothercomprehensive
incometransferred to
retained
earnings
Reasons for
beingdesignated asbeing measured
at fair valuethrough othercomprehensive
income
Reasons fortransferring
othercomprehensive
income to
retainedearningsChina PufaMachineryIndustry Co.,Ltd.
1,305,581.86
investmentsexpected to beheld in the long
| term |
12. Investment properties
(1) Investment properties measured at cost
?Applicable □ Not applicable
Unit: RMB
Item Houses and buildings Land right of use
Construction in
progress
TotalI. Original book value
1. Beginning
balance
645,997,222.66 49,079,520.00 695,076,742.66
2. Increase in the
current period
209,039.10 209,039.10(1)Outsourcing
(2)Transferred frominventories, fixedassets or constructionin progress
(3) Increase
from business merger
Other increases
| Other increases | 209,039.10 | 209,039.10 |
3. Decrease in the
current period
15,696,086.82 15,696,086.82
(1) Disposal
(2) Other
transfer-out
15,696,086.82 15,696,086.82
4. Ending balance 630,510,174.94 49,079,520.00 679,589,694.94II. Accumulateddepreciation andaccumulatedamortization
1. Beginning
balance
140,347,117.08 3,346,331.04 143,693,448.12
2. Increase in the
current period
18,431,173.77 1,115,252.11 19,546,425.88
(1) Provision
or amortization
18,431,173.77 1,115,252.11 19,546,425.88
3. Decrease in the
current period
10,318.51 10,318.51
(1) Disposal
(2) Other
transfer-out
10,318.51 10,318.51
4. Ending balance 158,767,972.34 4,461,583.15 163,229,555.49III. Provision forimpairment
1. Beginning
balance
2. Increase in the
current period
(1) Provision
3. Decrease in the
current period
(1) Disposal
(2) Other
transfer-out
4. Ending balance
IV. Book value
1. Ending book
value
471,742,202.60 44,617,936.85 516,360,139.45
2. Beginning book
value
505,650,105.58 45,733,188.96 551,383,294.54
(2) Investment properties whose property certificates are not obtained
Unit: RMBItem Book value
Reason(s) for the failure to transact the
certificate of titleCNNC office building 4,184,307.33
The property ownership certificate hasnot been handled due to historical
Building 12, Sungang 10,136.21
| reasons. |
| The property ownership certificate has |
not been handled due to historical
Shops in Building 12, Sungang 31,040.31
| reasons. |
| The property ownership certificate has |
not been handled due to historical
| reasons. | ||
| Total | 4,225,483.85 |
13. Fixed assets
Unit: RMBItem Ending balance Beginning balanceFixed assets 102,689,546.42 109,438,198.23Total102,689,546.42 109,438,198.23
(1) Details of fixed assets
Unit: RMBItem
| Houses and buildings | Machinery and equipment | Transportation equipment | Electronic equipment | Office and other equipment |
TotalI. Original bookvalue:
1. Beginning
balance
274,856,177.01 22,226,232.29 5,835,922.65 12,344,805.36 7,850,954.29 323,114,091.60
2. Increase in
the current period
9,213,606.16 125,994.69 155,178.10 654,198.82 160,333.22 10,309,310.99(1)Purchase
9,213,606.16 125,994.69 155,178.10 654,198.82 160,333.22 10,309,310.99
(2)Transfer toconstruction inprogress
(3)Increase frombusiness merger
3. Decrease in
the current period
54,067.58 515,733.46 635,628.80 36,825.00 1,242,254.84
(1)Disposal orretirement
54,067.58 515,733.46 635,628.80 36,825.00 1,242,254.84
4. Ending
balance
284,069,783.17 22,298,159.40 5,475,367.29 12,363,375.38 7,974,462.51 332,181,147.75II. Accumulateddepreciation
1. Beginning
balance
184,795,722.04 9,720,537.85 3,555,622.71 8,426,565.35 2,931,992.36 209,430,440.31
2. Increase in
the current period
13,120,354.98 1,236,716.02 476,857.37 880,974.56 913,014.57 16,627,917.50(1)Provision
13,120,354.98 1,236,716.02 476,857.37 880,974.56 913,014.57 16,627,917.50
3. Decrease in
the current period
48,660.93 237,030.34 614,053.08 35,865.45 935,609.80(1)Disposal orretirement
48,660.93 237,030.34 614,053.08 35,865.45 935,609.80
4. Ending
balance
197,916,077.02 10,908,592.94 3,795,449.74 8,693,486.83 3,809,141.48 225,122,748.01III. Provision forimpairment
1. Beginning
balance
3,836,768.43 319,675.11 6,165.00 17,984.71 64,859.81 4,245,453.06
2. Increase in
the current period
91,460.11 31,940.15 123,400.26(1)Provision
3. Decrease in
the current period
(1)Disposal orretirement
4. Ending
balance
3,836,768.43 411,135.22 6,165.00 49,924.86 64,859.81 4,368,853.32
IV. Book value
1. Ending
book value
82,316,937.72 10,978,431.24 1,673,752.55 3,619,963.69 4,100,461.22 102,689,546.42
2. Beginning
book value
86,223,686.54 12,186,019.33 2,274,134.94 3,900,255.30 4,854,102.12 109,438,198.23
(2) Fixed assets leased out by operating lease
Unit: RMBItem Ending book value
Houses and buildings
| Houses and buildings | 59,642,369.26 |
(3) Fixed assets whose property certificates are not obtained
Unit: RMBItem Book value
Reasons for failure to accomplish
certification of propertyYongtong Building 25,292,054.35
not been handled due to historical
| reasons. |
Automobile Building 13,691,687.29
not been handled due to historical
| reasons. | ||
| Underground Parking Lot of Tellus Building |
7,964,538.92
Floor 3-5, Plant 1#, 2# and 3#, TaoyuanRoad
3,009,316.27
The property ownership certificate hasnot been handled due to historical
| The property ownership certificate of the parking lot cannot be handled. |
| reasons. |
Transfer floor of Tellus Building 1,314,600.92
Building 16, Taohuayuan 1,129,541.70
| Property ownership certificate unavailable |
| The property ownership certificate has |
not been handled due to historical
Shuibei Zhongtian Complex Building 708,932.34
The property ownership certificate hasnot been handled due to historical
| reasons. |
| reasons. |
First Floor of Bao'an Commercial andResidential Building
749,167.16
The property ownership certificate hasnot been handled due to historical
Warehouse 751,254.13
| reasons. |
| The property ownership certificate has |
not been handled due to historical
Warehouse of Trade Department 56,473.57
| reasons. |
| The property ownership certificate has |
not been handled due to historical
Songquan Apartment (mixed) 10,086.79
| reasons. |
| The property ownership certificate has |
not been handled due to historical
Guest House in Renmin North Road 5,902.41
The property ownership certificate hasnot been handled due to historical
| reasons. | ||
| reasons. | ||
| Total | 54,683,555.85 |
14. Construction in progress
Unit: RMBItem Ending balance Beginning balanceConstruction in progress 409,933,559.27 210,197,546.72Total 409,933,559.27 210,197,546.72
(1) Information of construction in progress
Unit: RMBItem
Ending balance Beginning balanceBook balance
Provision
forimpairment
Book value Book balance
Provision
forimpairment
Book value
Tellus Jinzuan
Trading
| Building |
409,808,714.95 409,808,714.95 210,072,702.40 210,072,702.40
| Other works | 124,844.32 | 124,844.32 | 124,844.32 | 124,844.32 |
Total 409,933,559.27 409,933,559.27 210,197,546.72 210,197,546.72
(2) Changes in major construction-in-progress projects in the current period
Unit: RMB
Projectname
Budget Beginning balance
Increase in thecurrent period
Fixedassetstransferredintothecurren
tperiod
Otherdecreasesinthecurren
tperiod
Ending balance
Proportion ofaccumulatedinvestment
inconstructions
tobudget
Constructionprogres
s
Accumulatedamount ofcapitalized
interest
Including:
Amount ofcapitalizedinterest in thecurrent period
Capitalizati
onrateforcurre
ntintere
st
Source offunds
TellusJinzuanTrading
491,060,000.00 210,072,702.40 199,736,012.55 409,808,714.95
83.45
%
83.45% 6,908,297.83 5,052,840.98
4.08
%
OthersTotal491,060,000.00 210,072,702.40 199,736,012.55 409,808,714.95
6,908,297.83 5,052,840.98
4.08
%
15. Right-of-use assets
Unit: RMBItem Houses and buildings Total
I. Original book value
1. Beginning balance
10,313,192.96 10,313,192.96
2. Increase in the current period
3. Decrease in the current period 163,469.13 163,469.13
4. Ending balance 10,149,723.83 10,149,723.83II. Accumulated depreciation
1. Beginning balance
2,976,277.13 2,976,277.13
2. Increase in the current period 2,992,203.84 2,992,203.84
(1) Provision
3. Decrease in the current period
(1) Disposal
4. Ending balance 5,968,480.97 5,968,480.97III. Provision for impairment
1. Beginning balance
2. Increase in the current period
(1) Provision
3. Decrease in the current period
(1) Disposal
4. Ending balanceIV. Book value
1. Ending book value 4,181,242.86 4,181,242.86
2. Beginning book value 7,336,915.83 7,336,915.83
16. Intangible assets
(1) Intangible assets
Unit: RMB
Item Land right of use Patent rights
Non-patentedtechnologies
Trademark Software TotalI. Original bookvalue
1.Beginningbalance
50,661,450.00 128,500.00 5,470,373.66 56,260,323.66
2. Increase
in the currentperiod
1,510,846.54 1,510,846.54(1)Purchase
1,510,846.54 1,510,846.54
| (2) |
Internal R&D
(3)Increase frombusinessmerger
Internal R&D
3.Decrease in thecurrent period
(1)Disposal
4. Ending
balance
50,661,450.00 128,500.00 6,981,220.20 57,771,170.20II.Accumulatedamortization
1.Beginningbalance
2,867,902.16 99,042.56 3,703,880.66 6,670,825.38
2. Increase
in the currentperiod
1,077,443.16 5,349.96 209,535.98 1,292,329.10(1)Provision
1,077,443.16 5,349.96 209,535.98 1,292,329.10
3.Decrease in thecurrent period
(1)Disposal
4. Ending
balance
3,945,345.32 104,392.52 3,913,416.64 7,963,154.48III. Provisionfor impairment
1.Beginningbalance
2. Increase
in the currentperiod
(1)Provision
3.Decrease in thecurrent period
(1)Disposal
4. Ending
balance
IV. Book value
1. Ending
book value
46,716,104.68 24,107.48 3,067,803.56 49,808,015.722.Beginning bookvalue
47,793,547.84 29,457.44 1,766,493.00 49,589,498.28The proportion of intangible assets formed from the internal R&D of the Company at the Period-end to the ending balance ofintangible assets was 0.00%.Other notes:
As of December 31, 2022, the Company's land use right with a book value of RMB 45,447,359.01has been mortgaged to the Bank of China as collateral for bank loans.
17. Long-term deferred expenses
Unit: RMB
Item Beginning balance
Increase in thecurrent period
Amortization inthe current period
Other decreases Ending balance
Renovation costs
| Renovation costs | 28,682,636.66 | 2,338,889.55 | 5,145,426.72 | 25,876,099.49 |
Total 28,682,636.66 2,338,889.55 5,145,426.72 25,876,099.49
18. Deferred tax assets/deferred tax liabilities
(1) Un-offset deferred tax assets
Unit: RMBItem
Ending balance Beginning balanceDeductible temporary
difference
Deferred tax assets
Deductible temporary
difference
Deferred tax assetsProvision for credit
34,072,935.08 8,518,233.77 33,998,204.09 8,499,551.03Total34,072,935.08 8,518,233.77 33,998,204.09 8,499,551.03
(2) Un-offset deferred tax liabilities
Unit: RMBItem
Ending balance Beginning balanceTaxable temporarydifference
Deferred tax liabilities
Taxable temporary
difference
Deferred tax liabilitiesTaxable temporary
impairmentsdifference
4,540,124.44 1,135,031.11 3,852,181.96 963,045.49Total 4,540,124.44 1,135,031.11 3,852,181.96 963,045.49
(3) Deferred tax assets or liabilities presented in net amount after being offset
Unit: RMB
Item
Ending mutual offset
amount betweendeferred tax assets and
liabilities
Ending balance ofdeferred tax assets orliabilities after offset
Mutual set-off amountof deferred tax assetsand liabilities at theperiod-begin
Beginning balance ofdeferred tax assets orliabilities after off-setDeferred tax assets8,518,233.77 8,499,551.03Deferred tax liabilities 1,135,031.11 963,045.49
(4) Breakdown of unrecognized deferred tax assets
Unit: RMBItem Ending balance Beginning balanceDeductible temporary difference 128,561,177.79 126,073,843.71Deductible losses23,458,252.21 19,228,072.00Total 152,019,430.00 145,301,915.71
(5) Deductible losses of unrecognized deferred tax assets will become mature and due in the following
years
Unit: RMBYear Ending amount Beginning amount Remarks
Year 2022
| Year 2022 | 330,146.48 | ||
| Year 2023 | 401,294.00 | ||
| Year 2024 | 113,396.51 | 497,832.28 | |
| Year 2025 | 9,002,510.80 | 9,182,475.07 | |
| Year 2026 | 8,816,324.17 | 8,816,324.17 | |
| Year 2027 | 5,526,020.73 |
Total 23,458,252.21 19,228,072.00
19. Other non-current assets
Unit: RMBItem
Ending balance Beginning balanceBook balance
Provision
forimpairment
Book value Book balance
Provision
forimpairme
nt
Book value
Prepaid amount
for engineering
| and equipment |
49,631,706.19 49,631,706.19 56,169,049.73 56,169,049.73
of VAT debit
| balance |
8,572,664.86 8,572,664.86 12,204,839.26 12,204,839.26
and interest
| over one year |
96,322,575.78 96,322,575.78
| Others | 100,000.00 | 100,000.00 |
Total 154,526,946.83 154,526,946.83 68,473,888.99 68,473,888.99Other notes:
Other non-current assets increased by 125.67% from the beginning of the period, mainly due to the company's plan to hold timedeposits with higher interest income at maturity for more than one year and the increase in interest.
20. Short-term borrowings
(1) Classification of short-term borrowing
Unit: RMBItem Ending balance Beginning balance
Discounted borrowings of notesreceivable not derecognized
20,000,000.00 0.00Total20,000,000.00 0.00
21. Trading financial liabilities
Unit: RMBItem Ending balance Beginning balanceTrading financial liabilities 18,572,684.91
Including:
Discounted borrowings of notesreceivable not derecognizedGold leasing
| Gold leasing | 18,572,684.91 |
Including:
Total 18,572,684.91 0.00Other notes:
Note: The financial liabilities at fair value through profit or loss are the physical gold leasing business of the Company frombanks. The Company rents gold from the bank, and buys gold of the same quantity and specification through Shanghai GoldExchange on the maturity date to repay the bank and pay the agreed rental interest. The lease term is within 1 year. As ofDecember 31, 2022, the cost of the financial liability was RMB 17,685,000.00, the change in fair value was a loss of RMB787,050.00, and the rent payable was RMB 100,634.91.
22. Derivative financial liabilities
Unit: RMBItem Ending balance Beginning balance
489,360.00 0.00Total 489,360.00 0.00Other notes:
The increase in derivative financial liabilities from the beginning of the period was due to the increase in the floating loss amountof the commodity futures contracts and T+D contracts at the end of the period.
23. Accounts payable
(1) Presentation of accounts payables
Unit: RMBItem Ending balance Beginning balance
Derivative financial liabilities withdesignated hedging relationshipPurchase payment for goods and services
| Purchase payment for goods and services | 5,397,040.27 | 4,068,460.06 |
| Payment for engineering equipment | 119,319,760.44 | 63,339,302.97 |
Total 124,716,800.71 67,407,763.03
(2) Significant accounts payable with the ageing over 1 year
Unit: RMBItem Ending balance
Reasons for not repaying or carrying
forward
Shenzhen Yinglong Jian'an (Group) Co.,Ltd.
28,869,883.28 Outstanding engineering
| Shenzhen Yinglong Jian'an (Group) Co., Ltd. | ||
| Shenzhen SDG Real Estate Co., Ltd. | 6,054,855.46 | Outstanding by related companies |
Shenzhen Yinuo Construction
3,555,095.22 Outstanding engineering
| Engineering Co., Ltd. | ||
| Shenzhen Cuilu Jewelry Co., Ltd. | 1,120,000.00 | Outstanding |
Total 39,599,833.96
Other notes:
Accounts payable increased by 85.02% from the beginning of the period, mainly due to the provisional estimate of theconstruction amount according to the progress of the Teli diamond trading building.
24. Advances from customers
(1) Presentation of advances from customers
Unit: RMBItem Ending balance Beginning balance
| Rent | 6,119,377.90 | 1,827,827.28 |
Total6,119,377.90 1,827,827.28
25. Contract liabilities
Unit: RMBItem Ending balance Beginning balance
| Goods fees receivable in advance | 4,581,999.11 | 17,959,187.61 |
| Services fees receivable in advance | 4,677,659.32 | 3,100,123.57 |
Total 9,259,658.43 21,059,311.18Amount and reasons for significant changes in book value during the reporting period
26. Employee compensation payable
(1) Presentation of employee compensation
Unit: RMBItem Beginning balance
Increase in the current
period
Decrease in the current
period
Ending balanceI. Short-term employeebenefits
38,893,597.75 69,340,733.64 69,684,149.69 38,550,181.70II. Post-employmentbenefits-definedcontribution plans
5,867,008.31 5,867,008.31III. Terminationbenefits
1,024,409.53 1,024,409.53Total 38,893,597.75 76,232,151.48 76,575,567.53 38,550,181.70
(2) Presentation of short-term remuneration
Unit: RMBItem Beginning balance
Increase in the current
period
Decrease in the current
period
Ending balance
1. Wages, bonuses,
allowances and subsidies
38,284,893.23 59,272,066.16 59,848,935.95 37,708,023.44
2. Employee benefits 410,244.25 1,831,714.87 1,675,259.12 566,700.00
3. Social insurance
premiums
2,637,860.26 2,637,860.26Including: medicalinsurance premiums
2,393,957.62 2,393,957.62Work-related injury insurancepremiums
56,094.48 56,094.48Maternityinsurance premiums
183,596.16 183,596.16
Other insurance expenses
| Other insurance expenses | 4,212.00 | 4,212.00 |
4. Housing accumulation
fund
4,037,136.94 4,037,136.94
5. Trade union funds and
staff education funds
198,460.27 1,337,968.33 1,260,970.34 275,458.26
| 8. Non-monetary welfare | 223,987.08 | 223,987.08 |
Total 38,893,597.75 69,340,733.64 69,684,149.69 38,550,181.70
(3) Presentation of defined contribution plan
Unit: RMBItem Beginning balance
Increase in the current
period
Decrease in the current
period
Ending balance
1. Basic endowment
insurance
5,808,296.23 5,808,296.23
2. Unemployment
insurance
58,712.08 58,712.08Total 5,867,008.31 5,867,008.31
27. Taxes and dues payable
Unit: RMBItem Ending balance Beginning balanceVAT3,220,124.57 808,520.40Consumption tax 7,964.60 7,964.60Enterprise income tax6,942,460.17 41,276,334.18Individual income tax 1,895,926.96 512,260.46City maintenance and construction tax 178,605.67 105,706.61
| Educational surcharge | 86,070.40 | 47,558.24 |
| Local education surcharges | 57,380.27 | 31,705.50 |
| Land appreciation tax | 5,362,682.64 | 5,362,682.64 |
Land use tax
| Land use tax | 40,949.07 | 26,459.98 |
| Others | 1,099,628.49 | 342,907.84 |
Total 18,891,792.84 48,522,100.45Other notes:
The tax payable decreased by 61.07% compared with the beginning of the period, mainly due to the payment of enterprise incometax payable on the income from the transfer of equity in the previous year.
28. Other payables
Unit: RMBItem Ending balance Beginning balanceOther payables 105,180,279.00 112,617,963.65Total 105,180,279.00 112,617,963.65
(1) Other payables
1) Other payables are presented by nature of payment
Unit: RMBItem Ending balance Beginning balance
| Security deposit | 42,765,478.88 | 41,657,964.73 |
| Current accounts associated | 18,990,738.98 | 24,146,524.51 |
| Withholdings | 11,499,312.36 | 15,417,939.62 |
| Temporary receipts payable | 31,924,748.78 | 31,395,534.79 |
Total105,180,279.00 112,617,963.65
2) Other important payables at aging of more than 1 year
Unit: RMBItem Ending balance
Reasons for not repaying or carrying
forward
12,345,594.94 Outstanding by related companies
| Shenzhen Special Economic Zone Development Group Co., Ltd. | ||
| Hongkong Yujia Investment Limited | 2,164,650.90 | Outstanding by related companies |
Total 14,510,245.84
29. Current portion of non-current liabilities
Unit: RMBItem Ending balance Beginning balanceCurrent portion of lease liabilities 2,009,819.15 3,021,452.25Total2,009,819.15 3,021,452.25
30. Other current liabilities
Unit: RMBItem Ending balance Beginning balance
| Taxes of items to be written off | 548,507.70 | 2,367,994.70 |
Notes receivable not derecognized
| Notes receivable not derecognized | 67,812,500.00 |
Total 68,361,007.70 2,367,994.70Other notes:
The larger increase in other current liabilities from the beginning of the period was mainly due to the increase in the sales scale ofthe company's jewelry business, the increase in the amount of notes settled by the use of notes and the increase in the number ofnotes receivable that have not been derecognized by endorsements.
31. Long-term borrowings
(1) Classification of long-term borrowing
Unit: RMBItem Ending balance Beginning balanceMortgage loans 144,820,511.42 86,875,874.39Total 144,820,511.42 86,875,874.39Notes for classifications of long-term borrowings:
The long-term loan at the end of the period is the fixed asset loan of the Tellus JinzuanTrading Building, with a loan term of 15 years.
32. Lease liabilities
Unit: RMBItem Ending balance Beginning balance
| Lease liabilities | 2,926,184.93 | 4,474,543.09 |
Total 2,926,184.93 4,474,543.09
33. Long-term payables
Unit: RMBItem Ending balance Beginning balanceLong-term payables3,920,160.36 3,920,160.36Total 3,920,160.36 3,920,160.36
(1) Long-term payables by nature of payment
Unit: RMBItem Ending balance Beginning balance
| Employee housing deposit | 3,908,848.40 | 3,908,848.40 |
| Grants for technology innovation projects |
11,311.96 11,311.96
| Subtotal | 3,920,160.36 | 3,920,160.36 |
Less: Current portion of long-term
| payables | ||
| Total | 3,920,160.36 | 3,920,160.36 |
34. Estimated liabilities
Unit: RMBItem Ending balance Beginning balance ReasonPending litigation 268,414.80 268,414.80Total 268,414.80 268,414.80
35. Deferred income
Unit: RMBItem Beginning balance
Increase in thecurrent period
Decrease in thecurrent period
Ending balance ReasonGovernmentsubsidies
10,235,331.21 1,833,090.00 1,488,875.50 10,579,545.71 Asset-relatedTotal 10,235,331.21 1,833,090.00 1,488,875.50 10,579,545.71 --Items related to government subsidies:
Unit: RMB
Liabilityitem
Beginning
balance
Increase insubsidies for
the period
Amou
ntcharge
d tonon-operati
ngrevenu
e for
theperiod
Amountcharged toother incomefor the period
Theamount ofcostswritte
ndownin thecurren
tperiod
Otherchang
es
Ending balance
Asset-related
/ Revenue-
related
Elevator
renovationsubsidyfunds forold elevatorrenovationandreconstruction workinggroup inFutian
| District |
111,188.09 19,914.29 91,273.80 Asset-related
Funds forIndustrialTransformation andUpgradingin LuohuDistrict in2021 -IndustrialServicePlatform
| Project |
3,511,821.20 442,348.68 3,069,472.52 Asset-related
Special
Funds forIndustrialTransformation andUpgradingin LuohuDistrict in2021 -GreenBuildingSupport
| Subsidy |
2,364,130.45 585,957.48 1,778,172.97 Asset-related
IncomefromProjects forPromotingConsumption andImprovingSupport ofCommerceBureau ofShenzhenMunicipal
| in 2020 |
4,248,191.47 326,086.92 3,922,104.55 Asset-related
Funds forGreenInnovationandDevelopment in theField ofEngineeringConstruction ofShenzhenMunicipalHousingand Urban-ruralDevelopme
| nt Bureau |
1,833,090.00 114,568.13 1,718,521.87 Asset-related
| Total | 10,235,331.21 | 1,833,090.00 | 1,488,875.50 | 10,579,545.71 |
36. Share capital
Unit: RMB
Beginning
balance
Increase or decrease (+,-)
Ending balanceIssuance ofnew shares
Bonusshares
Conversion ofthe reservefunds into
shares
Others Subtotal
Total shares 431,058,320.00 431,058,320.00
37. Capital reserves
Unit: RMBItem Beginning balance
Increase in the current
period
Decrease in the current
period
Ending balanceCapital premium (sharepremium)
425,768,053.35 425,768,053.35Other capital reserves5,681,501.16 5,681,501.16Total 431,449,554.51 431,449,554.51
38. Other comprehensive income
Unit: RMB
Item
Beginningbalance
Amount in the current period
EndingbalanceAmountincurredbeforeincome taxin thecurrentperiod
Less:
Amountincluded in
othercomprehensiveincome inthe
previousperiod andtransferredto profitand loss inthe current
period
Less:
Amountincluded inothercomprehensiveincome in
the
previousperiod andtransferredto retainedearnings inthe current
period
Less:
income tax
expenses
Attributabl
e to theparentcompany -
net ofincome tax
Attributabl
e to theminorityshareholder
s - net ofincome tax
II. Othercomprehensiveincome tobesubsequentlyreclassifiedinto profitor loss
26,422.00 26,422.00
Including:
Othercomprehensiveincome tobereclassifiedinto profitor loss bythe equitymethod
26,422.00 26,422.00
Total other
| Total other | 26,422.00 | 26,422.00 |
comprehen
siveincome
39. Surplus reserves
Unit: RMBItem Beginning balance
Increase in the current
period
Decrease in the current
period
Ending balanceStatutory surplusreserve
26,546,480.09 25,952,692.04 52,499,172.13Total 26,546,480.09 25,952,692.04 52,499,172.13
40. Undistributed profit
Unit: RMBItem Current period Previous periodUndistributed profits at the end of theprevious period before adjustment
543,843,496.85 424,141,893.34Undistributed profits at the beginning ofthe period after adjustment
543,843,496.85 424,141,893.34Add: Net profit attributable to owners ofthe parent company during the period
83,496,135.61 131,020,764.38Less: Statutory surplus reservesappropriated
25,952,692.04 2,697,994.47Ordinary share dividends payable 10,781,545.75 8,621,166.40Undistributed profits at the end of theperiod
590,605,394.67 543,843,496.85Breakdown of adjustments to undistributed profits at the beginning of the period
1) Due to retroactive adjustment of Accounting Standards for Business Enterprises and its relevant new regulations, the affected
retained earning at the beginning of the period is RMB 0.00.
2). Due to changes in accounting policies, the affected undistributed profit at the beginning of the period is RMB 0.00.
3) Due to correction of major accounting error, the affected retained earnings at the beginning of the period are RMB 0.00.
4) The amount that will affect the undistributed profit at the beginning of the year due to change of consolidation scope as a result
of common control is RMB 0.00.
5) Amount of the undistributed profit at the beginning of the year that will be affected due to total of other adjustments is RMB
0.00.
41. Operating revenue and operating cost
Unit: RMBItem
Amount in the current period Amount incurred in the previous periodRevenue Costs Revenue CostsMain business 830,367,312.21 693,409,590.68 498,882,949.81 350,429,078.94Other business7,288,962.30 6,879,652.74 9,637,076.37 2,500,636.87Total 837,656,274.51 700,289,243.42 508,520,026.18 352,929,715.81Audited net profit before and after deducting non-recurring gains and losses (whichever is lower, negative value or not)
□Yes ?No
Relevant information of revenue:
Unit: RMBClassification ofcontract
Segment 1 Segment 2 Revenue TotalBy type of product
Including:
Automobile sales
| Automobile sales | 196,357,649.27 | 196,357,649.27 | ||
| Automobile |
maintenance and
43,747,865.09 43,747,865.09
| testing | ||||
| Leasing and services | 168,778,477.27 | 168,778,477.27 |
Jewelry sales and
421,483,320.58 421,483,320.58By operating regions
Including:
services
| South China | 830,367,312.21 | 830,367,312.21 |
Type of market orcustomer
Including:
Contract type
Including:
By time of transfer ofgoods
Including:
651,723,017.06 651,723,017.06Services (providedwithin a certain period
| Goods (transferred at a certain time point) |
| of time) |
178,644,295.15 178,644,295.15Classification ofcontract term
Including:
Classification by saleschannel
Including:
| Direct sales | 830,367,312.21 | 830,367,312.21 | ||
| Agency factor |
TotalInformation related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not fully performed yetis RMB 0.00 at the period-end, among which RMB is expected to be recognized in the year, RMB in the year and RMB inthe year.
42. Taxes and surcharges
Unit: RMBItem Amount in the current period Amount incurred in the previous periodCity maintenance and construction tax 673,134.05 882,815.10Educational surcharge 489,636.17 618,340.17Property tax4,699,229.57 4,644,257.53Land use tax 255,483.11 358,823.13Vehicle and vessel use tax5,447.92 5,772.92Stamp duty 1,211,281.94 434,087.33Total 7,334,212.76 6,944,096.18
43. Selling expenses
Unit: RMBItem Amount in the current period Amount incurred in the previous period
Employee compensation
| Employee compensation | 11,309,494.91 | 13,380,126.45 |
| Advertising marketing expenses | 1,452,543.07 | 2,129,375.71 |
| Depreciation and amortization | 4,461,473.09 | 4,745,548.04 |
| Water and electricity charges | 911,189.85 | 1,052,593.95 |
| Material consumption | 131,482.51 | 149,556.88 |
| Office expenses | 386,796.03 | 460,348.34 |
| Hospitality expenses | 369,463.33 | 437,073.34 |
| Others | 3,012,269.69 | 4,823,552.32 |
Total 22,034,712.48 27,178,175.03
44. Administrative expenses
Unit: RMBItem Amount in the current period Amount incurred in the previous period
| Employee compensation | 36,915,969.42 | 34,350,624.60 |
| Consulting and service fees | 2,371,263.21 | 5,599,656.73 |
| Depreciation and amortization | 3,380,339.87 | 3,658,728.08 |
| Office expenses | 501,941.40 | 534,671.21 |
| Hospitality expenses | 227,403.28 | 411,497.26 |
| Advertising expenses | 233,491.72 | 206,020.49 |
| Transport and travel expenses | 156,715.15 | 107,532.98 |
| Others | 3,290,555.94 | 2,282,585.34 |
Total 47,077,679.99 47,151,316.69
45. Research and development expenses
Unit: RMBItem Amount in the current period Amount incurred in the previous period
| Wages, welfare, social security, etc. | 517,100.50 | |
| Direct input | 268,755.28 | |
| Depreciation and amortization | 16,898.02 |
Total802,753.80 0.00
46. Finance costs
Unit: RMBItem Amount in the current period Amount incurred in the previous period
Interest expenses
| Interest expenses | 338,730.75 | 2,253,915.94 |
| Interest income | -5,472,748.37 | -6,538,484.64 |
| Profit or loss on exchange | 842,578.74 | -236,196.60 |
| Others | 254,785.53 | 249,883.56 |
Total -4,036,653.35 -4,270,881.74
47. Other incomes
Unit: RMBSources of other incomes Amount in the current period Amount incurred in the previous period
6,575,043.88 2,923,779.58
| I. Government subsidies included in other income |
| Including: government subsidy related to deferred income |
1,488,875.50 1,985,771.17Government subsidies charged to the
5,086,168.38 938,008.41
| current profits and losses |
| II. Other items related to daily activities and included in other incomes |
49,829.40 46,275.77
49,829.40 46,275.77
| Including: service fee for individual income tax withholding | ||
| Total | 6,624,873.28 | 2,970,055.35 |
48. Investment income
Unit: RMBItem Amount in the current period Amount incurred in the previous periodIncome from long-term equity investmentscalculated by the equity method
10,897,171.28 17,874,805.32Investment income from the disposal of long-term equity investments
8,785,410.47 66,495,901.16Investment income from holding tradingfinancial assets
12,132,798.02 9,409,600.29Dividend income from investments in otherequity instruments during the holding period
1,305,581.86
-26,164.18
| Closing income from commodity futures contracts and T+D contracts (hedging) |
| Closing income from commodity futures |
contracts and T+D contracts (no hedging
277,302.12Total33,372,099.57 93,780,306.77
49. Income from changes in fair value
Unit: RMBSource of gain from changes in fair value Amount in the current period Amount incurred in the previous periodTrading financial assets -860,218.33 663,932.88
Including: gains from changes infair values arising from derivativefinancial instruments
-860,218.33 663,932.88Trading financial liabilities-787,050.00
Derivative instruments of effectivehedges
54,518.09Total -1,592,750.24 663,932.88
50. Credit impairment loss
Unit: RMBItem Amount in the current period Amount incurred in the previous periodLoss on bad debts of other receivables -1,428,507.19 15,171.74Loss on bad debts of accounts receivable-206,852.71 22,957.54Total -1,635,359.90 38,129.28
51. Asset impairment loss
Unit: RMBItem Amount in the current period Amount incurred in the previous periodII. Loss on diminution in value ofinventories and impairment loss oncontract performance cost
-1,616,086.03 -812,607.69V. Impairment loss of fixed assets-123,400.26XIII. Miscellaneous -100,000.00Total-1,839,486.29 -812,607.69
52. Income from disposal of assets
Unit: RMBSources of income from asset disposal Amount in the current period Amount incurred in the previous period
Derivative instruments of effectivehedgesProfits and losses from disposal of fixed
assets, construction in progress, bearerbiological assets and intangible assets not
| identified to held-for-sale assets |
40,765.92 158,228.49
| Including: fixed assets | 40,765.92 | 158,228.49 |
| Total | 40,765.92 | 158,228.49 |
53. Non-operating revenues
Unit: RMBItem Amount in the current period
Amount incurred in theprevious period
Amount included in non-recurring profits and losses of
the current period
retirement of non-current
| assets |
132.74Gains from unpayable
2,031,600.42 2,031,600.42
Others
| Others | 2,103,054.01 | 767,922.91 | 2,103,054.01 |
Total 4,134,654.43 768,055.65 4,134,654.43
54. Non-operating expenses
Unit: RMBItem Amount in the current period
Amount incurred in theprevious period
Amount included in non-recurring profits and losses ofthe current period
| Inventory loss of fixed assets | 344.92 | 344.92 | |
| Loss of retirement of non-current assets |
26,698.77 15,256.30 26,698.77Penalty and liquidated
35.56 22,246.85 35.56
| damages expenditure | |||
| Others | 389,383.00 | 389,383.00 |
Total416,462.25 37,503.15 416,462.25
55. Income tax expenses
(1) Income tax expense sheet
Unit: RMBItem Amount in the current period Amount incurred in the previous periodCurrent income tax expenses24,608,522.78 44,415,716.95Deferred tax expenses 153,302.88 962,316.56
| Income tax in earlier period | -3,238,629.58 | -1,314,362.80 |
Total21,523,196.08 44,063,670.71
(2) Accounting profit and income tax expense adjustment process
Unit: RMBItem Amount in the current periodTotal profit 102,842,659.93Income tax expenses based on statutory/applicable tax rate 25,710,664.98Effects of different tax rates applied to subsidiaries-141,699.39Impact of income tax in previous periods before adjustment -3,238,629.58Impact of non-taxable income-2,724,292.82Impact of non-deductible costs, expenses and losses 2,778,544.65Impact of using deductible losses of unrecognized deferred taxassets in the previous period
-323,960.13Impact of deductible temporary difference or deductible losseson unrecognized deferred tax assets in the current period
2,134,397.43
| Others | -2,671,829.06 |
Income costs 21,523,196.08Other notes:
See Note V. 38 Other Comprehensive Income for details of items of other comprehensiveincome and its income tax impact, the status of profit and loss of transfer-ins, and the adjustmentof each item of other comprehensive income.
56. Other comprehensive income
See notes for details.
57. Items in the statement of cash flow
(1) Other cash received related to operating activities
Unit: RMBItem Amount in the current period Amount incurred in the previous period
Security deposit
| Security deposit | 1,107,514.15 | 4,054,933.66 |
| Interest income | 1,871,273.53 | 3,827,201.61 |
| Government subsidies received | 1,833,090.00 | 13,028,008.41 |
| Other income received | 5,005,273.60 | 46,275.77 |
| Current accounts and others | 13,503,115.65 | 3,026,161.94 |
Total23,320,266.93 23,982,581.39
(2) Other cash paid related to operating activities
Unit: RMBItem Amount in the current period Amount incurred in the previous period
| Out-of-pocket expenses | 13,437,173.48 | 18,020,425.99 |
| Security deposit | 583,931.98 | 121,671.39 |
| Penalty for breach of contract | 389,418.56 | 22,246.85 |
| Current accounts and others | 4,408,405.00 |
Total 18,818,929.02 18,164,344.23
(3) Other cash received related to investment activities
Unit: RMBItem Amount in the current period Amount incurred in the previous period
| Recovery of regulatory funds | 15,998,484.00 | |
| Others | 1,931,753.79 |
Total15,998,484.00 1,931,753.79
(4) Other cash paid related to investment activities
Unit: RMBItem Amount in the current period Amount incurred in the previous period
| Security deposit for hedging instruments | 8,955,842.00 |
Total 8,955,842.00 0.00
(5) Other cash paid related to financing activities
Unit: RMBItem Amount in the current period Amount incurred in the previous period
Refund of minority shareholders' capital*
| Refund of minority shareholders' capital* | 50,000,000.00 | |
| Interest on performance bond for equity transfer |
2,893,150.68Payment of the principal and interest of
2,874,145.90 3,380,669.67Total 2,874,145.90 56,273,820.35
58. Supplementary information of statement of cash flow
(1) Supplementary information on cash flow statement
Unit: RMBSupplementary information Amount in the current period Amount in the previous period
1. Reconciliation of net profit to cash
flows from operating activities
Net profit 81,319,463.85 132,052,531.08Add: provision for impairment ofassets
3,474,846.19 774,478.41Depreciation of fixed assets,depletion of oil and gas assets anddepreciation of productive biologicalassets
36,135,739.82 30,459,581.08Depreciation of right-of-useassets
2,992,203.84 2,976,277.13Amortization of intangible assets 318,457.10 2,377,422.39Amortization of long-termdeferred expenses
5,145,426.72 7,323,714.29Losses on the disposal of fixedassets, intangible assets and other long-term assets (gain denoted by "-")
-14,067.15 -143,104.93Losses from retirement of fixedassets (gains to be listed with “-”)
344.92Losses from changes in fair value(gains to be listed with “-”)
1,592,750.24 -663,932.88Financial expenses (gains to belisted with “-”)
-2,420,165.35 -693,563.69Investment losses (gain to belisted with "-")
-33,372,099.57 -93,780,306.77Decrease in deferred tax assets(increase to be listed with "-")
-18,682.74 -728.93Increases in deferred taxliabilities (decrease to be listed with "-")
171,985.62 963,045.49Decrease in inventories (increaseto be listed with "-")
-91,706,958.29 -4,167,852.80
lease liabilitiesDecrease in operating receivables
| Decrease in operating receivables | -109,076,820.34 | -12,856,907.71 |
(increase to be listed with "-")
Increase in operating itemspayable (decrease to be listed with "-")
53,489,810.85 61,991,082.74
Others
Net cash flows from operatingactivities
-51,967,764.29 126,611,734.90
2. Major investment and financing
activities not relating to cash deposit andwithdrawal
Conversion of debt into capital
Current portion of convertiblecorporate bonds
Financing leased fixed assets
3. Net changes in cash and cash
equivalents:
Ending balance of cash 391,406,829.36 211,655,585.86
Less: beginning balance of cash211,655,585.86 208,462,656.63
Add: Ending balance of cashequivalents
Less: beginning balance of cashequivalents
Net increase in cash and cashequivalents
179,751,243.50 3,192,929.23
(2) Composition of cash and cash equivalents
Unit: RMBItem Ending balance Beginning balanceI. Cash 391,406,829.36 211,655,585.86Including: cash on hand25,673.67 36,941.24Cash at bank available forpayments at any time
381,593,235.55 211,618,644.62Other cash at bank and on handavailable for payment at any time
9,787,920.14III. Closing balance of cash and cashequivalents
391,406,829.36 211,655,585.86
59. Assets with restricted ownership or use right
Unit: RMBItem Ending book value Reasons for restrictionCash at bank and on hand 21,621,498.00 See Note V. 1 for detailsIntangible assets 45,447,359.01 Bank borrowing mortgageTotal 67,068,857.01
60. Foreign currency monetary items
(1) Monetary items in foreign currency
Unit: RMBItem
Ending foreign currency
balance
Conversion exchange rate
Ending balance of converted
RMBCash at bank and on hand
Including: USD 69,194.70 6.9646 481,913.41EURHKD22,016.80 0.89327 19,666.95
Total
| Total | 91,211.50 | 501,580.36 |
Accounts receivable
Including: USD
EURHKD
Long-term borrowings
Including: USDEURHKD
(2) The description of overseas operating entities, including main premises abroad, bookkeeping base
currency and selection basis to be disclosed for the important overseas operating entities; reasons shallalso be disclosed for the changed bookkeeping base currency.
□ Applicable ? Not applicable
61. Government subsidies
(1) Basic information about government subsidies
Unit: RMBType Amount Item presented
Amount charged to thecurrent profits and losses
13,071,694.37 Deferred income 1,488,875.50Income-related government
| Asset-related government subsidies |
| subsidies |
7,006,674.80 N/A 5,086,168.38
| Total | 20,078,369.17 | 6,575,043.88 |
(2) Refund of government subsidies
□ Applicable ? Not applicable
VIII. Changes in Consolidation Scope
1. Changes in consolidation scope for other reasons
Changes in the scope of consolidation due to other reasons (such as establishing new subsidiaries, liquidating subsidiaries) andrelated information:
Newly established subsidiaries in the current period
Company name
Date of company
establishment
Amount of contribution
Proportion of
| establishment | contribution (%) | ||
| Guorun Gold Shenzhen Co., Ltd. |
June 2022 82,000,000.00 41
IX. Equity in Other Entities
1. Interests in subsidiaries
(1) Composition of enterprise groups
Subsidiary name
Principalplace ofbusiness
Place ofregistration
Businessnature
Shareholding proportion
Acquisition
methodDirect IndirectShenzhen TellusXinyongtongAutomobile
Shenzhen Shenzhen Commerce 5.00% 95.00% Establishment
| Development Co., Ltd. |
| Shenzhen Bao'an |
Shiquan Industry Co.,
Shenzhen Shenzhen Commerce 0.00% 100.00% Establishment
| Ltd. |
| Shenzhen SDG Tellus Real Estate Co., Ltd. |
Shenzhen Shenzhen Commerce 100.00% 0.00% EstablishmentShenzhen TellusChuangying
Shenzhen Shenzhen Commerce 100.00% 0.00% Establishment
| Technology Co., Ltd. |
| Shenzhen Xinyongtong |
Motor VehicleInspection Equipment
Shenzhen Shenzhen Commerce 51.00% 0.00% Establishment
| Co., Ltd. |
| Shenzhen Automobile |
Industry and Trade Co.,
Shenzhen Shenzhen Commerce 100.00% 0.00% Establishment
| Ltd. |
| Shenzhen Automobile |
Industry Supply and
Shenzhen Shenzhen Commerce 0.00% 100.00% EstablishmentShenzhen SDG HuariAutomobile Enterprise
| Marketing Company |
| Co., Ltd. |
Shenzhen Shenzhen Commerce 60.00% 0.00% Establishment
Automobile Inspection
| Co., Ltd. |
Shenzhen Shenzhen Commerce 0.00% 100.00% Establishment
Shenzhen Shenzhen Commerce 100.00% 0.00% Establishment
Shenzhen Huari Toyota
Sales & Service Co.,
| Ltd. |
Shenzhen Shenzhen Commerce 60.00% 0.00% Establishment
Treasury Supply Chain
| Tech Co., Ltd. |
Shenzhen Shenzhen Commerce 100.00% 0.00% Establishment
Industry Service Co.,
| Ltd. |
Shenzhen Shenzhen Commerce 65.00% 0.00% EstablishmentShanghai Fanyue
Shanghai Shanghai Commerce 0.00% 100.00% Establishment
| Diamond Co., Ltd. |
| Guorun Gold Shenzhen Co., Ltd. |
Shenzhen Shenzhen Commerce 36.00% 5.00% EstablishmentExplanation of the fact that the shareholding percentage is different from proportion of votes in subsidiaries:
The shareholding proportion in Guorun Gold Shenzhen Co., Ltd. is different from theproportion of voting rights, and the basis for holding half or less of the voting rights but stillcontrolling the investee:
In June 2022, the Company cooperated with its subsidiaries Shenzhen Jewelry IndustryService Co., Ltd., Shenzhen HTI Group Co., Ltd., Chow Tai Fook Jewellery Park (Wuhan) Co.,Ltd., Chow Tai Seng Jewelry Co., Ltd., Beijing Caishikou Department Store Co., Ltd. andShenzhen ZHL Industrial Co., Ltd. to jointly invest in the establishment of Guorun GoldShenzhen Co., Ltd. Among them, the Company contributed RMB 72 million, with a shareholdingratio of 36%; Shenzhen Jewelry Industry Service Co., Ltd., a subsidiary of the Company,contributed RMB 10 million, with a shareholding ratio of 5%; Shenzhen HTI Group Co., Ltd.held 10%, and other shareholders held 49% in total. The Company signed a concerted actionagreement with Shenzhen HTI Group Co., Ltd., stipulating that Shenzhen Hi-tech InvestmentGroup Co., Ltd. shall maintain a consensus with the Company when voting at the shareholders'meeting and the board of directors of Guorun Gold Shenzhen Co., Ltd. Therefore, the Companyand its subsidiaries actually hold 51% of the voting rights of Guorun Gold Shenzhen Co., Ltd.,and have control over Guorun Gold Shenzhen Co., Ltd.The basis for the Company's control over the investee when holding half or less of the voting rights and the Company's controlover the investee when holding more than half of the voting rights:
N/A
Basis for control over the important structured entities incorporated in consolidated scope:
N/A
Basis to determine the company is the agent or the principal:
N/A
(2) Important non-wholly-owned subsidiaries
Unit: RMBSubsidiary name
Shareholdingpercentage of
minorityshareholders
Profit or lossattributable tominority shareholdersin the current period
Dividendsdeclared tominorityshareholders inthe current period
Balance of minorityinterests at the endof the period
Shenzhen Huari Toyota Sales & ServiceCo., Ltd.
40.00% -93,038.94 4,380,731.56
| Shenzhen Huari Toyota Sales & Service Co., Ltd. |
| Shenzhen SDG Huari Automobile Enterprise Co., Ltd. |
40.00% -778,375.16 11,822,422.99
| Guorun Gold Shenzhen Co., Ltd. | 60.75% | -339,505.43 | 117,660,494.57 |
Notes on the difference between the shareholding percentage of minority shareholders of subsidiaries and the voting rights ratio:
N/A
(3) Main financial information of important non-wholly-owned subsidiaries
Unit: RMB
Subsidiary name
Ending balance Beginning balanceCurrentassets
Non-currentassets
Totalassets
Currentliabiliti
es
Non-currentliabilities
Totalliabilities
Currentassets
Non-currentassets
Totalassets
Currentliabilities
Non-currentliabiliti
es
TotalliabilitiesShenzhen HuariToyota Sales &
64,370,96
9.91
2,808,69
8.79
67,179,6
68.70
56,227,8
39.79
56,227,83
9.79
85,290,0
18.33
5,005,912.
90,295,93
0.45
79,111,504.1
79,111,504.
Shenzhen SDGHuari AutomobileEnterprise Co.,
| Service Co., Ltd. |
| Ltd. |
62,124,49
1.13
12,983,1
05.53
75,107,5
96.66
45,551,5
39.19
45,551,53
9.19
61,681,9
38.58
20,655,893
.78
82,337,83
2.36
50,835,836.9
50,835,836.
Guorun Gold
308,524,7
| Shenzhen Co., Ltd. | 05.19 |
3,459,49
311,984,
| 1.14 | 196.33 |
110,466,
110,466,3
| 340.68 | 40.68 |
Unit: RMB
Subsidiary name
Amount in the current period Amount incurred in the previous periodOperating revenue Net profit
Totalcomprehensiveincome
Cash flow fromoperating activities
Operating
revenue
Net profit
Totalcomprehensive
income
Cash flow from
operatingactivitiesShenzhen HuariToyota Sales &
239,554,992.87 -232,597.36 -232,597.36 6,742,295.97 245,772,043.22 914,408.79 914,408.79 -11,521,597.56Shenzhen SDGHuari AutomobileEnterprise Co.,
| Service Co., Ltd. |
| Ltd. |
35,733,198.93 -1,945,937.90 -1,945,937.90 -4,073,241.16 39,729,074.81 3,964,557.97 3,964,557.97 7,232,060.46Guorun Gold
328,034,404.58 -558,856.67 -558,856.67 -107,590,934.59
Ltd.
2. Equities in joint ventures or associates
(1) Important associates and joint ventures
Name of joint
venture orassociate
Principal place
of business
Place ofregistration
Business nature
Shareholding proportionAccountingmethods for the
investment injoint venturesor associatesDirect Indirect
Ltd.Joint ventures:
| Joint ventures: | ||||||
| Shenzhen |
Tellus-GmondInvestment Co.,
Shenzhen Shenzhen
Investing in theestablishmentof industries
50.00% Equity method
| Ltd. | ||||||
| Associates: | ||||||
| Shenzhen |
Renfu TellusAutomobilesService Co.,
Shenzhen Shenzhen
Mercedes-BenzAuto Sales
35.00% Equity method
Explanation of the fact that the shareholding percentage is different from the proportion of voting rights in joint ventures orassociates:
N/A
Basis for determining a shareholder holding less than 20% of the voting rights has significant influence, or a shareholder holding20% or more of the voting rights does not have significant influence:
(2) Main financial information of important joint ventures
Unit: RMB
Ending balance / Amount incurred in the
current period
Beginning balance / Amount in the
previous period
Ltd.Shenzhen Tellus-Gmond Investment Co.,
Ltd.
| Shenzhen Tellus-Gmond Investment Co., Ltd. | Shenzhen Tellus-Gmond Investment Co., Ltd. |
Current assets 44,368,420.83 45,816,920.84Including: cash and cash equivalents42,326,853.66 41,913,040.87Non-current assets 346,703,460.52 366,402,308.03Total assets 391,071,881.35 412,219,228.87Current liabilities 37,674,441.11 39,971,747.31Non-current liabilities 259,110,000.00 277,266,000.00Total liabilities296,784,441.11 317,237,747.31Minority interestsEquity attributable to shareholders of theparent company
94,287,440.24 94,981,481.56Shares of net assets at the shareholdingpercentage
47,143,720.12 47,490,740.78Adjustments
--Goodwill--Unrealized profit of internal transaction
--OthersBook value of equity investments to jointventures
47,143,720.13 47,490,740.78Fair value of equity investment in jointventures with public offer
Operating revenue 102,987,695.69 94,989,415.30Financial expenses14,200,209.90 15,467,775.34Income costs 10,548,286.43 6,647,599.75Net profit 29,305,958.68 19,647,999.36Net profit from discontinued operationsOther comprehensive incomeTotal comprehensive income29,305,958.68 19,647,999.36
Dividends received from joint venturesin the current year
15,000,000.00
(3) Major financial information of important associates
Unit: RMB
Ending balance / Amount incurred in the
current period
Beginning balance / Amount in the
previous period
| Shenzhen Renfu Tellus Automobiles Service Co., Ltd. | Shenzhen Renfu Tellus Automobiles Service Co., Ltd. |
Current assets206,438,043.83 134,921,582.03Non-current assets 31,677,397.21 33,583,787.31Total assets 238,115,441.04 168,505,369.34Current liabilities167,288,864.40 80,369,170.77Non-current liabilities 14,598,723.35 9,942,186.16Total liabilities181,887,587.75 90,311,356.93
Minority interestsEquity attributable to shareholders of theparent company
56,227,853.29 78,194,012.41Shares of net assets at the shareholdingpercentage
19,679,748.68 27,367,904.34Adjustments--Goodwill
--Unrealized profit of internal transaction--Others
Book value of equity investments inassociates
19,679,748.68 27,367,904.34Fair value of equity investments inassociates with a public offer
Operating revenue 1,088,150,561.97 1,196,335,565.98
Net profit -18,782,486.31 26,521,546.61Net profit from discontinued operations
Other comprehensive incomeTotal comprehensive income -18,782,486.31 26,521,546.61
Dividends received from associates inthe current year
3,183,672.81 14,000,000.00
(4) Summary of financial information of unimportant joint ventures and associates
Unit: RMB
Ending balance / Amount incurred in the
current period
Beginning balance / Amount in the
previous periodJoint ventures:
Total book value of investments14,200,897.13 13,452,222.35Total amount of the following items atthe shareholding percentage
-- Net profit 748,674.78 1,174,566.00-- Total comprehensive income748,674.78 1,174,566.00Associates:
Total amount of the following items atthe shareholding percentage
(5) Excess losses incurred to joint ventures or associates
Unit: RMBName of joint venture or
associate
Unrecognized lossaccumulated in the previous
period
Unrecognized loss in thecurrent period (or net profitshared in the current period)
Unrecognized lossaccumulated at the end of the
current period
98,865.26 98,865.26
| Shenzhen Tellus Automobile Service Chain Co., Ltd. |
| Shenzhen Yongtong Xinda Testing Equipment Co., Ltd. |
1,176,212.73 1,176,212.73X. Risks Related to Financial Instruments
The risks related to financial instruments of the Company originate from financial assets andfinancial liabilities recognized by the Company in the course of operation, including credit risk,liquidity risk and market risk.The management of the Company is responsible for the management objectives and policiesof risks related to financial instruments of the Company. The management is responsible for dailyrisk management through functional departments (for example, the Credit ManagementDepartment of the Company reviews the credit sales business of the Company one by one). The
internal audit department of the Company supervises the implementation of the Company's riskmanagement policies and procedures on a daily basis, and reports relevant findings to the AuditCommittee of the Company in a timely manner.The overall objective of the Company’s risk management is to formulate risk managementpolicies that minimize the risks associated with various financial instruments without undulyaffecting the Company’s competitiveness and resilience.
1. Credit risks
Credit risk refers to the risk that one party to a financial instrument fails to perform itsobligations, resulting in financial losses to the other party. The credit risk of the Company mainlyarises from cash at bank and on hand, notes receivable, accounts receivable, receivables financing,other receivables, contract assets, creditor's rights investment and long-term receivables. Thecredit risk of these financial assets comes from the default of the counterparty, and the maximumrisk exposure is equal to the book amount of these instruments.
The Company's cash at bank and on hand are mainly deposited in commercial banks andother financial institutions. The Company believes that these commercial banks have highreputation and asset status and have low credit risk.
For notes receivable, accounts receivable, receivables financing, other receivables, contractassets, creditor's rights investment and long-term receivables, the Company sets relevant policiesto control credit risk exposure. The Company evaluates clients’ credit rating and sets the creditperiod based on their financial conditions, possibility of obtaining security from third party, creditrecord and other factors, such as current market situation. The Company will monitor the creditrecord of the customer periodically. For customers with poor credit record, measures such aswritten collection, shortening credit period or canceling the credit period will be adopted by theCompany, to ensure the overall credit risk being in the controllable scope.
(1) Criteria for judging a significant increase in credit risk
The Company assesses whether the credit risk of the relevant financial instrument hasincreased significantly since the initial recognition on each balance sheet date. In determiningwhether the credit risk has increased significantly since initial recognition, the Companyconsiders reasonable and supportable information that can be obtained without unnecessaryadditional costs or efforts, including the Company's qualitative and quantitative analysis based onhistorical data, external credit risk ratings and forward-looking information. Based on a singlefinancial instrument or a combination of financial instruments with similar credit riskcharacteristics, the Company determines the changes in the risk of default of the financialinstrument during the expected life of the instrument by comparing the risk of default on thefinancial instrument on the balance sheet date with that on the date of initial recognition.When one or more of the following quantitative and qualitative criteria are triggered, theCompany believes that the credit risk of financial instruments has increased significantly. Thequantitative criteria are mainly that the probability of default in the remaining duration at thereporting date increases by more than a certain proportion compared with that at initialrecognition. The qualitative criteria are significant adverse changes in the operation or financialsituation of the main debtor, warning list of customer, etc.
(2) Definition of assets with credit impairment
In order to determine whether credit impairment occurs, the definition criteria adopted by theCompany are consistent with the internal credit risk management objectives for relevant financialinstruments, taking consideration into quantitative and qualitative indicators at the same time.
The Company mainly considers the following factors when assessing whether the debtor hascredit impairment: The issuer or the debtor has major financial difficulties; the debtor violates thecontract, such as default or overdue payment of interest or principal; the creditor makes theconcession that the debtor will not make under any other circumstances due to the economic orcontractual considerations related to the debtor's financial difficulties; the debtor is likely to gobankrupt or undergo other financial restructuring; the financial difficulties of the issuer or debtor
cause the disappearance of the active market of financial assets; a financial asset is purchased orgenerated at a substantial discount which reflects the fact that the credit losses have occurred.Credit impairment of financial assets may be caused by the joint action of multiple events,not necessarily by individually identifiable events.
(3) Parameters of expected credit loss measurement
According to whether the credit risk has increased significantly and whether the creditimpairment has occurred, the Company measures the provision for impairment for different assetswith the expected credit loss of 12 months or the whole duration respectively. The key parametersof ECL measurement include probabilities of default (PD), losses given default (LGD) andexposures at default (EAD). The Company takes into account the quantitative analysis ofhistorical statistics (such as ratings of the counterparty, manners of guarantees and types ofcollateral, and repayments) and forward-looking information in order to establish a model of PD,LGD and EAD.
Relevant definitions are as follows:
Default probability refers to the possibility that the debtor will not be able to fulfill itsrepayment obligations in the next 12 months or the whole remaining duration.
Loss given default refers to the Company's expectation of the degree of loss in exposure atdefault. According to the type of counterparty, the way and priority of recourse, and the differenceof collaterals, loss given default is also different. Loss given default refers to the percentage ofrisk exposure loss at the time of default, which is calculated based on the next 12 months or thewhole duration;
Default risk exposure refers to the amount that the Company should be reimbursed whendefault occurs in the next 12 months or the whole remaining duration. Evaluation on significantincrease of forward-looking information credit risk and calculation of expected credit losses bothinvolve forward-looking information. Through historical data analysis, the Company has
identified key economic indicators that affect credit risks and expected credit losses of variousbusiness types.The maximum credit risk exposure tolerable by the Company is the book amount of each ofthe financial assets in the balance sheet. The Company does not provide any other guarantee thatallows the Company to accept credit risk.
1. Liquidity risks
Liquidity risk refers to the risk of capital shortage in performing obligation of settlingaccounts by cash payment or other financial assets. The Company is responsible for the overallmanagement of cash of all subsidiaries in the Company, including short-term investment of cashsurplus and raising loans to meet the estimated cash requirements. It is the policy of the Companyto regularly monitor short-term and long-term liquidity requirements and compliance with theprovisions of the loan agreement to ensure sufficient cash reserves and readily realizablesecurities.As of December 31, 2022, the maturity periods of the Company's financial liabilities are asfollows:
Project name
December 31, 2022
| December 31, 2022 | ||||
| Within 1 year | 1-2 years | 2-3 years | Over 3 years | |
| Accounts payable | 124,716,800.71 | |||
| Other payables | 105,180,279.00 | |||
| Current portion of non | ||||
-current
2,009,819.15
| liabilities | ||||
| Long-term borrowings | 6,948,649.17 | 9,070,099.98 | 10,241,847.84 | 183,567,105.37 |
| Long-term payables | 3,920,160.36 | |||
| Lease liabilities | 268,414.80 | |||
| Total | 243,044,123.19 | 9,070,099.98 | 10,241,847.84 | 183,567,105.37 |
(Continued)
| Project name | December 31, 2021 |
Within 1 year
| Within 1 year | 1-2 years | 2-3 years | Over 3 years | |
| Accounts payable | 67,407,763.03 | |||
| Other payables | 112,617,963.65 | |||
| Current portion of non |
-current
3,021,452.25
| liabilities | ||||
| Long-term borrowings | 3,644,467.25 | 4,609,457.14 | 5,967,792.71 | 118,790,550.21 |
| Long-term payables | 3,920,160.36 | |||
| Lease liabilities | 1,829,520.13 | 1,684,781.03 | 960,241.93 | |
| Total | 190,611,806.54 | 6,438,977.27 | 7,652,573.74 | 119,750,792.14 |
1. Market risks
(1) Exchange rate risk
The exchange rate risk of the Company mainly comes from foreign currency assets andliabilities held by the Company and its subsidiaries that are not denominated in their bookkeepingbase currency. The Company operates in mainland China. The main activities are counted inRMB. Therefore, the market risk of foreign exchange changes borne by the Company is notsignificant.On the balance sheet date, the Company's foreign currency monetary assets and liabilities aredetailed in Note V. 56 to the Financial Statement.
(2) Interest rate risk
Interest rate risks faced by the Company are mainly incurred from long-term bankborrowings. Due to financial liabilities with floating interest rate, the Company faces cash flowinterest rate risk; due to financial liabilities with fixed interest rate, the Company faces fair valueinterest rate risk. The Company decides the relative proportion of the fixed interest rate andfloating interest rate contracts in accordance with the current market environment.
The financial department of the Company’s headquarters continuously supervises theCompany's interest rate level. Rising interest rates will increase the cost of new interest-bearingdebt and the interest expense of the Company's outstanding interest-bearing debt with floating
interest rates, and adversely affect the Company's financial performance. Management will maketimely adjustments according to the latest market conditions.XI. Disclosure of Fair Value
1. Ending fair value of the assets and liabilities measured at fair value
Unit: RMBItem
Ending fair valueLevel 1 measurementat fair value
Level 2 measurementat fair value
Level 3 measurementat fair value
TotalI. Continuous fair valuemeasurement
-- -- -- --(I) Trading financialassets
176,133,569.95 176,133,569.95
1. Financial assets at
fair value throughprofit or loss
176,133,569.95 176,133,569.95
(4) Structured deposits
and financial products
176,133,569.95 176,133,569.95(III) Other equityinstrument investments
10,176,617.20 10,176,617.20
(4) Structured deposits
and financial products(VI) Arbitraged items
| (VI) Arbitraged items | 79,191,876.11 | 79,191,876.11 |
Total assetscontinuously measuredat fair value
79,191,876.11 186,310,187.15 265,502,063.26(VI) Trading financialliabilities
19,062,044.91 19,062,044.91Derivativefinancial liabilities
489,360.00 489,360.00(VII) Financialliabilities at fair valuethrough profit or lossdesignated
18,572,684.91 18,572,684.91
| (1) Gold leasing | 18,572,684.91 | 18,572,684.91 |
Total amount ofliabilities continuouslymeasured at fair value
19,062,044.91 19,062,044.91II. Non-continuous fairvalue measurement
-- -- -- --
2. Basis for determining the market price of items subject to continuous and non-continuous level 1 fair
value measurement
The hedged items of the Company are gold product inventory, and the hedging instrumentsare liabilities arising from changes in the fair value of gold futures contracts and gold spotdeferred settlement contracts held by the Company. The Company determines the fair value based
on the public quotations of gold spot transactions and futures transactions of Shanghai GoldExchange and Shanghai Futures Exchange.
The Company's gold leasing is a liability formed by borrowing gold in kind from bankingfinancial institutions, and the fair value is determined based on the public quotation of gold spottransaction of Shanghai Gold Exchange.
3. Valuation techniques and qualitative and quantitative information about key parameters of items
subject to continuous and non-continuous level 3 fair value measurement
The trading financial assets are the purchased structured deposits and financial products. Theexpected rate of return is used to predict the future cash flow, and the unobservable estimate is theexpected rate of return. Other equity instrument investments are measured by the Company basedon the investment cost as a reasonable estimate of the fair value, because the operatingenvironment, operating conditions and financial conditions of the investee China PUFAMachinery Industry Co., Ltd. have not changed significantly.XII. Related Parties and Related Party Transactions
1. Parent company
Name of parent
company
Place ofregistration
Business nature Registered capital
Shareholdingproportion of theparent companyto the Company
Votes proportion
of the parentcompany to the
CompanyShenzhen SpecialEconomic ZoneDevelopmentGroup Co., Ltd.
Shenzhen
Real estate
development andoperation,domestic
| commerce |
RMB 4,582,820,000 49.09% 47.51%Information of the parent companyShenzhen Special Economic Zone Development Group Co., Ltd.(hereinafter referred to as "SDG Group")was established on August 1, 1981 with the investment of the State-owned Assets Supervision and ManagementCommission of Shenzhen Municipal People's Government. The Company now holds a business license with aunified social credit code of 91440300192194195C, and a registered capital of RMB 4,582,820,000.The reason for the inconsistency between the proportion of voting rights and the shareholding ratio of SDGGroup in the Company is that SDG Group has carried out the refinancing securities lending business.
The ultimate controlling party of the Company: The State-owned Assets Supervision and ManagementCommission of Shenzhen Municipal People’s Government.The ultimate controlling party of the Company is the State-owned Assets Supervision and Management Commission of ShenzhenMunicipal People’s Government.
2. Subsidiaries of the Company
For details of the Company's subsidiaries, please refer to Note VII.
3. Joint ventures and associates of the Company
The important joint ventures or associates of the Company are detailed in Note VII.The information on other joint ventures or associates that produced balance by conducting related-party transactions with theCompany in the current period or in the earlier period is shown as follows:
Name of joint ventures or associates Relationship with the Company
Shenzhen Tellus Xinyongtong Automobile Service Co., Ltd.
| Shenzhen Tellus Xinyongtong Automobile Service Co., Ltd. | Associates |
| Shenzhen Tellus Automobile Service Chain Co., Ltd. | Associates |
| Shenzhen Yongtong Xinda Testing Equipment Co., Ltd. | Associates |
| Shenzhen Xiandao New Materials Co., Ltd. | Associates |
| Shenzhen Telixing Investment Co., Ltd. | Joint ventures |
4. Other related parties
Name of other related parties Relationship between other related parties and the Company
| Shenzhen SDG Microfinance Co., Ltd. | Controlled subsidiary of parent company |
| Shenzhen SDG Tiane Industrial Co., Ltd. | Controlled subsidiary of parent company |
| Shenzhen Machinery & Equipment Import & Export Co., Ltd. | Controlled subsidiary of parent company |
| Shenzhen SDG Real Estate Co., Ltd. | Wholly-owned subsidiary of parent company |
| Hongkong Yujia Investment Limited | Controlled subsidiary of parent company |
| Shenzhen SDG Engineering Management Co., Ltd. | Controlled subsidiary of parent company |
| Shenzhen Tellus Yangchun Real Estate Co., Ltd. | Controlled subsidiary of parent company |
| Shenzhen Longgang Tellus Real Estate Co., Ltd. | Controlled subsidiary of parent company |
| Shenzhen SDG Tellus Property Management Co., Ltd. | Controlled subsidiary of parent company |
| Shenzhen SDG Service Co., Ltd. Jewelry Park Branch | Controlled subsidiary of parent company |
| Shenzhen Wahlai Decoration & Furniture Co., Ltd. | Joint venture of parent company |
| Gu Zhiming | Key management personnel |
Shenzhen Zhigu Jinyun Technology Co., Ltd.
Enterprises subject to significant impact by key management
| personnel | |
| Shenzhen ZHL Industrial Co., Ltd. | Minority shareholders of significant subsidiaries |
Shenzhen Nubisi Jewelry Trading Co., Ltd.
Shenzhen Yuepengjin Jewelry & Gold Co., Ltd.
Companies controlled by minority shareholders of significant
| Companies controlled by minority shareholders of significant subsidiaries |
| subsidiaries |
Shenzhen Yuepengjin e-commerce Co., Ltd.
5. Transactions with related parties
(1) Related party transactions of purchase/sales of commodities and rendering/receiving of labor services
Purchase of goods / receipt of services
Unit: RMBRelated parties
Content ofrelated partytransaction
Amount in thecurrent period
Approvedtransaction amount
Exceeding thetransaction amount
or not
Amount incurredin the previous
period
Shenzhen SDG
Engineering
| Management Co., Ltd. |
Receivingservices
2,384,060.38 2,000,000.00 Yes 1,976,807.29
Property Management
| Co., Ltd. |
Receivingservices
3,148,143.25 3,000,000.00 Yes 10,137,230.33Shenzhen SDG
Receiving
| Service Co., Ltd. | services |
10,354,683.50 7,400,000.00 Yes 5,131,692.41
Decoration &
| Furniture Co., Ltd. |
Receivingservices
224,049.69 3,094,128.99
Jinyun Technology
| Co., Ltd. |
Purchasinggoods
16,814.16
| Shenzhen ZHL Industrial Co., Ltd. | Receiving of services |
1,032,213.33Shenzhen YuepengjinJewelry & Gold Co.,
| Ltd. | Receiving of |
services
631,540.56Sale of goods and provision of services
Unit: RMBRelated parties
Content of related party
transaction
Amount in the current period
Amount incurred in the
previous periodShenzhen SDG Microfinance
Rendering of labor
| Co., Ltd. | services |
202,126.23 207,640.32Shenzhen SDG Service Co., Ltd.
Rendering of labor
8,500.10 6,693.06
| services | |
| Shenzhen Special Economic |
Zone Development Group Co.,
Rendering of laborservices
41,061.00 45,592.00
| Ltd. | |
| Shenzhen SDG Tellus Property Management Co., Ltd. | Rendering of labor services |
6,600.00 1,876.11
Rendering of services 1,309,102.16Shenzhen Yuepengjin e-
| Shenzhen Nubisi Jewelry Trading Co., Ltd. |
| commerce Co., Ltd. |
Sales of goods 26,848,858.40
(2) Related party leases
The Company as the lessor:
Unit: RMBName of lessee Type of asset leasedLease income recognized in Lease income recognized in
the current period
| the current period | the previous period | ||
| Shenzhen Renfu Tellus |
Automobiles Service Co.,
Lease of houses 5,190,476.19 5,250,031.70
| Ltd. |
| Shenzhen Xinyongtong Automobile Service Co., Ltd. |
Lease of houses 717,300.00Shenzhen SDG Microfinance
Lease of houses 1,069,279.56 1,103,104.38
| Co., Ltd. |
| Shenzhen SDG Tellus |
Property Management Co.,
Lease of houses 38,262.91 75,897.40
| Ltd. |
| Shenzhen SDG Service Co., Ltd. |
Lease of houses 1,962,815.40 2,095,266.10
Lease of houses 16,000.00 32,061.90The Company as the lessee:
Unit: RMB
(3) Remuneration of key management personnel
Unit: RMBItem Amount in the current period Amount incurred in the previous period
Shenzhen Yongtong XindaTesting Equipment Co., Ltd.Remuneration of key managementpersonnel
9,844,700.00 9,035,700.00
6. Receivables and payables by related parties
(1) Receivables
Unit: RMBProject name Related parties
Ending balance Beginning balanceBook balance
Provision for
bad debts
Book balance
Provision for bad
debts
Remuneration of key managementpersonnelAccountsreceivable
| Accounts receivable | Shenzhen SDG Service Co., Ltd. |
9,167.57 91.68Accountsreceivable
Microfinance Co.,
| Ltd. |
355,565.61 3,555.66 17,791.06 177.91Accountsreceivable
Shenzhen SDG TellusProperty Management
5,362.00 53.62Accountsreceivable
Shenzhen NubisiJewelry Trading Co.,Ltd.
666,979.53 6,669.80
Co., Ltd.
| Total | 1,027,907.14 | 10,279.08 | 26,958.63 | 269.59 |
Advances tosuppliers
Decoration &
| Furniture Co., Ltd. |
106,696.30Advances tosuppliers
Shenzhen SDGEngineering
6,900.00
| Management Co., Ltd. | |||||
| Total | 113,596.30 |
Other receivables
Shenzhen Tellus
Automobile Service
| Chain Co., Ltd. |
1,359,297.00 1,359,297.00 1,359,297.00 1,359,297.00Other receivables
Xinda Testing
| Equipment Co., Ltd. |
531,882.24 531,882.24 531,882.24 531,882.24Other receivables
New Materials Co.,
| Ltd. |
660,790.09 660,790.09 660,790.09 660,790.09Other receivables
Shenzhen Telixing
37,608.61 376.09Other receivables
| Investment Co., Ltd. |
| Shenzhen SDG Tellus |
Property Management
16,959.19 409.59 12,829.59 128.30Other receivables
| Co., Ltd. |
| Shenzhen ZHL Industrial Co., Ltd. |
10,000.00 100.00
| Total | 2,616,537.13 | 2,552,855.01 | 2,564,798.92 | 2,552,097.63 |
Long-termreceivables
Shenzhen TellusAutomobile Service
2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68
| Chain Co., Ltd. | |||||
| Total | 2,179,203.68 | 2,179,203.68 | 2,179,203.68 | 2,179,203.68 |
(2) Payables
Unit: RMBProject name Related parties Ending book balance Beginning book balance
| Accounts payable | Shenzhen SDG Real Estate Co., Ltd. | 6,054,855.46 | 6,054,855.46 |
Accounts payable
45,300.00 45,300.00
| Shenzhen Machinery & Equipment Import & Export Co., Ltd. | |||
| Accounts payable | Shenzhen SDG Service Co., Ltd. | 1,654,014.40 |
Accounts payable
2,568,038.46 150,005.66Accounts payable
Shenzhen SDG Tellus Property
| Shenzhen SDG Engineering Management Co., Ltd. |
| Management Co., Ltd. |
336,533.57 1,708,125.16Accounts payable
432,712.27 1,042,036.18
| Shenzhen Wahlai Decoration & Furniture Co., Ltd. | |||
| Accounts payable | Shenzhen ZHL Industrial Co., Ltd. | 235,873.17 |
Accounts payable
| Shenzhen Yuepengjin Jewelry & Gold Co., Ltd. | 31,300.00 |
| Total | 11,358,627.33 | 9,000,322.46 | |
| Advances from customers | Shenzhen SDG Tellus Property Management Co., Ltd. |
5,234.34
| Total | 5,234.34 | ||
| Other payables | Hongkong Yujia Investment Limited | 2,164,650.90 | 1,961,673.06 |
| Other payables | Shenzhen SDG Tiane Industrial Co., Ltd. | 28,766.05 | 28,766.05 |
Other payables
1,575,452.52 1,575,452.52Other payables
| Shenzhen Machinery & Equipment Import & Export Co., Ltd. |
| Shenzhen Special Economic Zone Development Group Co., Ltd. |
12,345,594.94 17,383,655.94Other payables
1,095,742.50 1,095,742.50Other payables
Shenzhen Tellus Yangchun Real Estate
| Shenzhen Longgang Tellus Real Estate Co., Ltd. |
| Co., Ltd. |
476,217.49 476,217.49
| Other payables | Shenzhen Telixing Investment Co., Ltd. | 167,470.29 |
Other payables
5,602.99 5,600.00
Other payables
Shenzhen SDG Tellus PropertyManagement Co., Ltd.
145,043.21 122,141.49
| Shenzhen SDG Tellus Property Management Co., Ltd. | |||
| Other payables | Shenzhen SDG Service Co., Ltd. | 25,596.00 | 35,110.00 |
Other payables
833,334.00 833,334.00
| Shenzhen Renfu Tellus Automobiles Service Co., Ltd. | |||
| Other payables | Shenzhen SDG Microfinance Co., Ltd. | 237,804.66 | 237,804.66 |
Other payables
40,000.00 56,600.00Other payables
| Shenzhen SDG Engineering Management Co., Ltd. |
| Shenzhen Wahlai Decoration & Furniture Co., Ltd. |
16,933.72 166,956.51
| Total | 18,990,738.98 | 24,146,524.51 |
XIII. Commitments and Contingencies
1. Important commitments
Important commitments existing on the balance sheet date
(1) Capital commitment
Capital commitments contracted but not yet recognized in
December 31, 2022 December 31, 2021
| the financial statements | ||
| Large-amount contract (unit: RMB) | 70,136,870.42 | 153,763,306.33 |
2. Contingencies
(1) Important contingencies existing at the balance sheet date
N/A
XIV. Events after the Balance Sheet Date
1. Profit distribution
Unit: RMBProfit or dividend to be distributed 12,069,632.96Profit or dividend declared after approval through deliberation12,069,632.96
Profit distribution scheme
approved by the 7th formal meeting of the 10th Board ofDirectors of the Company on April 25, 2023, the Companyplans to distribute cash dividends of RMB 0.28 (tax inclusive)for every 10 shares to all shareholders based on the total sharecapital of 431,058,320 shares as of December 31, 2022. A totalof RMB 12,069,632.96 will be distributed, without bonusshares or transfer to paid-in capital. The above profitdistribution plan has yet to be reviewed and approved by the
| General Meeting of Shareholders of the Company. |
2. Descriptions for other events after the balance sheet date
Shenzhen SDG Huari Automobile Enterprise Co., Ltd. (hereinafter referred to as SDGHuari), a subsidiary of the Company, is a Sino-Japanese joint venture, with an operating periodexpired on March 13, 2022. Before and after the expiration of the business term, the Companycommunicated with Japanese shareholders for many times on the extension of the business term,equity trading, dissolution and liquidation of SDG Huari, but failed to reach an agreement. If thebusiness term of SDG Huari has expired, and the Company and Japanese shareholders cannotestablish a liquidation team to carry out liquidation within fifteen days from the expiration date ofthe business term of SDG Huari, the Company, as a shareholder holding 60% of the equity ofSDG Huari, shall apply to the People's Court of Shenzhen Qianhai Cooperation Zone forcompulsory liquidation of SDG Huari according to the relevant provisions of the Company Law.In January 2023, the Company received a civil ruling (2022) Y0391 Qingshen No.9 from theCourt of Qianhai Cooperation Zone, accepting the Company's application for liquidation of SDGHuari. On March 21, 2023, the Company received the Decision on Appointing a LiquidationTeam ([2023] Y0391 QQ No. 4) served by the People's Court of Shenzhen Qianhai CooperationZone, which designated King & Wood Mallesons, Beijing Office as the SDG Huari LiquidationTeam.
Since the business premises of Shenzhen Huari Toyota Sales & Service Co., Ltd. (hereinafterreferred to as Huari Toyota), a holding subsidiary of the Company, are the property owned bySDG Huari, if SDG Huari enters liquidation, Huari Toyota may face the situation of no businesspremises, and the Board of Directors of Huari Toyota decides to adjust the 2023 annual businessplan, authorize the management team of Huari Toyota to decide whether to purchase new vehiclesand replenish the inventory of spare parts according to the liquidation progress, market situationand own inventory of Huari Toyota from February 1, 2023, and authorize the management teamof Huari Toyota to hire personnel to deal with the inventory.
XV. Other Significant Events
1. Segment information
(1) Determination basis and accounting policy of reporting segments
The Company determines the reporting segment based on its internal organizational structure,management requirements and internal reporting system and takes the industry segment as thebasis to determine the reporting segment. The business performance of automobile sales,automobile maintenance and testing, leasing and service, jewelry sales and service, etc. areassessed respectively. Assets and liabilities commonly used in all segments are distributed amongdifferent segments according to the scale.
(2) Financial information of reporting segments
Unit: RMB
(3) Where the Company has no reportable segment or cannot disclose total assets and total liabilities of
reportable segments, the reasons shall be explainedN/A
(4) Other notes
N/A
Item
Automobilesales
Vehicle
maintenance
| and test |
Leasing and
services
Jewelry sales
and services
Inter-segmentoffset
Total
fromprincipal
| businesses |
196,357,649.27 71,673,738.14 181,128,461.73 421,483,320.58 -40,275,857.51 830,367,312.21
principal
| businesses |
189,054,253.07 62,233,188.43 68,980,662.26 414,655,011.77 -41,513,524.85 693,409,590.68Total
31,486,182.43 125,253,028.30 2,837,018,012.40 418,992,553.34 -1,180,721,221.90 2,232,028,554.57
XVI. Notes to Major Items of the Company’s Financial Statements
1. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: RMB
Class
Ending balance Beginning balanceBook balance
Provision for bad
debts
Book value
Book balance Provision for bad debts
Book valueAmount
Percenta
ge
Amount
Proportion ofprovision
Amount
Percentage
Amount
Proportio
n ofprovisionAccountsreceivable withprovision forbad debts on asingle basis
484,803.08 76.33% 484,803.08 100.00% 484,803.08 80.04% 484,803.08 100.00%
Including:
Accountsreceivable forwhichprovision forbad debts ismade bycombination
150,350.82 23.67% 3,149.91 2.10% 147,200.91 120,861.42 19.96% 1,847.01 1.53% 119,014.41
Including:
1. Aging
portfolio
150,350.82 23.67% 3,149.91 2.10% 147,200.91 120,861.42 19.96% 1,847.01 1.53% 119,014.41
Total 635,153.90 100.00% 487,952.99 76.82% 147,200.91 605,664.50 100.00% 486,650.09 80.35% 119,014.41
Provision for bad debts is accrued on an individual basis:
Unit: RMBName
Ending balanceBook balance Provision for bad debts Proportion of provision Reasons for provision
portfolioShenzhen BijiashanEntertainment Co., Ltd.
172,000.00 172,000.00 100.00%
| Shenzhen Bijiashan Entertainment Co., Ltd. | ||||
| Gong Yanqing | 97,806.64 | 97,806.64 | 100.00% | |
| Guangzhou Lemin Computer Center |
86,940.00 86,940.00 100.00%
| Others | 128,056.44 | 128,056.44 | 100.00% |
Total 484,803.08 484,803.08
Bad debt provision made as per portfolio:
Unit: RMBName
Ending balanceBook balance Provision for bad debts Proportion of provision
| 1. Aging portfolio | 150,350.82 | 3,149.91 | 2.10% |
Total 150,350.82 3,149.91
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the general
mode of expected credit loss to withdraw bad debt provision of other receivables.?Applicable □ Not applicableDisclosure by aging
Unit: RMBAging Book balanceWithin 1 year (inclusive) 146,990.82Over 3 years488,163.083-4 years 3,360.00Over 5 years 484,803.08Total 635,153.90
(2) Bad debt provision provided, recovered or reversed in the current period
Bad debt provision withdrawn in the reporting Period:
Unit: RMBClass
Beginningbalance
Change during the current period
Ending balanceProvision
Recovery or
reversal
Cancellation
afterverification
Others
Provision for
bad debts madeon an
| individual basis |
484,803.08 484,803.08
bad debts made
| by portfolio |
1,847.01 1,302.90 3,149.91Total 486,650.09 1,302.90 487,952.99The significant amount of provision reversal and recovery of bad debts in the current period:
(3) Accounts receivable of the top five ending balance by the owing party
Unit: RMBItem
Ending balance of accounts
receivable
Proportion in the total endingbalance of accountsreceivable
Ending balance of provisionfor bad debtsShenzhen Bijiashan
172,000.00 27.08% 172,000.00
| Entertainment Co., Ltd. | |||
| Gong Yanqing | 97,806.64 | 15.40% | 97,806.64 |
| Guangzhou Lemin Computer Center |
86,940.00 13.69% 86,940.00
77,741.87 12.24% 777.42
| Shenzhen Jincheng Yinyu Jewelry Co., Ltd. | |||
| Chen Junlin | 46,618.00 | 7.34% | 466.18 |
Total 481,106.51 75.75%
2. Other receivables
Unit: RMBItem Ending balance Beginning balance
Dividends receivable 1,852,766.21 547,184.35Other receivables3,114,221.75 89,854,408.23Total 4,966,987.96 90,401,592.58
(1) Dividends receivable
1) Category of dividends receivable
Unit: RMBItem (or the investee) Ending balance Beginning balance
China Pufa Machinery Industry Co., Ltd.
| China Pufa Machinery Industry Co., Ltd. | 1,852,766.21 | 547,184.35 |
Total 1,852,766.21 547,184.35
2) Significant dividends receivable Aged over 1 Year
Unit: RMBItem (or the investee) Ending balance Aging
Reasons for non-
recovery
Impairment andjudgment basisChina Pufa MachineryIndustry Co., Ltd.
547,184.35 3-4 years Not paid yet
operating conditions ofthe company arenormal, and thedividends receivable
| are not impaired. |
Total 547,184.35
3) Provision for bad debts
□ Applicable ? Not applicable
(2) Other receivables
1) Classification of other receivables by nature of money
Unit: RMBPayment nature Ending book balance Beginning book balance
| Other temporary payments of receivables | 14,295,706.79 | 13,776,179.52 |
| Concerned intercourse funds within the consolidation scope of receivables |
2,480,126.85 89,671,979.41Total 16,775,833.64 103,448,158.93
2) Provision for bad debts
Unit: RMBProvision for bad debts
Stage I Stage II Stage III
TotalExpected credit lossesfor the next 12 months
Expected credit loss
within the wholeduration (no creditimpairment occurs)
Expected credit loss
within the wholeduration (credit
occurred)
Balance on January 1,2022
10,804.96 13,582,945.74 13,593,750.70Balance as at January1, 2022 is in the currentperiod.
Provision in the period-3,776.83 71,638.02 67,861.19Balance as atDecember 31, 2022
7,028.13 13,654,583.76 13,661,611.89Changes of book balance with significant amount changed of loss provision in the reporting period
□ Applicable ? Not applicable
Disclosure by aging
Unit: RMBAging Book balanceWithin 1 year (inclusive) 3,076,641.181-2 years21,259.70Over 3 years 13,677,932.76
3-4 years46,698.00Over 5 years 13,631,234.76Total 16,775,833.64
3) Other receivables of the top five ending balances by the owing party
Unit: RMBItem Nature Ending balance Aging
Proportion toending balance ofother receivables
Ending balance ofprovision for bad
debts
occurred)Shenzhen Zhonghao(Group) Co., Ltd.
| Shenzhen Zhonghao (Group) Co., Ltd. | Current payments |
5,000,000.00 Over 5 years 29.80% 5,000,000.00
Electric Appliance
| Co., Ltd. |
Currentpayments
2,706,983.51 Over 5 years 16.14% 2,706,983.51
Industry Service Co.,
| Ltd. | Current |
accounts within
1,925,588.67 Within 1 year 11.48%
| the Group | |
| Shenzhen Petrochemical Group | Current payments |
1,919,733.45 Over 5 years 11.44% 1,919,733.45Creditor's rights for ofdebt repayment of
Currentpayments
1,212,373.79 Over 5 years 7.23% 1,212,373.79Total
| Huatong Packaging | |
12,764,679.42
76.09% 10,839,090.75
3. Long-term equity investment
Unit: RMBItem
Ending balance Beginning balanceBook balance
Provision forimpairment
Book value Book balance
Provision forimpairment
Book value
Investment insubsidiaries
786,245,472.73 1,956,000.00 784,289,472.73 694,745,472.73 1,956,000.00 692,789,472.73Investment inassociates andjoint ventures
90,811,528.26 9,787,162.32 81,024,365.94 98,098,029.79 9,787,162.32 88,310,867.47Total 877,057,000.99 11,743,162.32 865,313,838.67 792,843,502.52 11,743,162.32 781,100,340.20
(1) Investment in subsidiaries
Unit: RMBInvestee
Beginning balance(book value)
Changes in the current period
Ending balance(book value)
Ending balanceof impairmentprovisionAdditionalinvestment
Negativeinvestment
Provisionforimpairment
OthersShenzhenSDG TellusReal Estate
Co., Ltd.
31,152,888.87 31,152,888.87ShenzhenTellusChuangyingTechnology
| Co., Ltd. |
| Co., Ltd. |
14,000,000.00 14,000,000.00
TellusXinyongtongAutomobileDevelopment
| Co., Ltd. |
57,672,885.22 57,672,885.22
ZhongtianIndustry Co.,
| Ltd. |
369,680,522.90 369,680,522.90
AutomobileIndustry andTrade Co.,
| Ltd. |
126,251,071.57 126,251,071.57ShenzhenSDG HuariAutomobileEnterprise
19,224,692.65 19,224,692.65
| Co., Ltd. |
| Shenzhen |
Huari ToyotaSales &Service Co.,
1,807,411.52 1,807,411.52
| Ltd. |
| Shenzhen |
XinyongtongMotorVehicleInspection
10,000,000.00 10,000,000.00
Co., Ltd.
| Co., Ltd. |
| Shenzhen |
TellusTreasurySupply ChainTech Co.,
50,000,000.00 50,000,000.00
| Ltd. |
| Shenzhen |
Hanli HighTechCeramics
1,956,000.00ShenzhenJewelryIndustryService Co.,
| Co., Ltd. |
| Ltd. |
13,000,000.00 19,500,000.00 32,500,000.00
Shenzhen
| Co., Ltd. |
72,000,000.00 72,000,000.00Total692,789,472.73 91,500,000.00 784,289,472.73 1,956,000.00
(2) Investment in associates and joint ventures
Unit: RMB
Investor
Beginningbalance (bookvalue)
Changes in the current period
Ending balance
(book value)
Ending balanceof impairment
provision
Additional
invest
ent
Negative
investment
Profit or loss on
investmentsrecognized underthe equity method
Othercomprehensiveincomeadjustments
Otherchangesinequity
Declaration ofcash dividends
or profits
Provisionforimpairment
Others
I. Joint ventures
mShenzhen
Tellus-GmondInvestment
| Co., Ltd. |
47,490,740.78 14,652,979.35 15,000,000.00 47,143,720.13
Telixing
| Investment |
13,452,222.35 748,674.78 14,200,897.13
Co., Ltd.
Subtotal 60,942,963.13 15,401,654.13 15,000,000.00 61,344,617.26II. AssociatesShenzhenRenfu TellusAutomobilesService Co.,
Co., Ltd.Ltd.
27,367,904.34 -4,504,482.85 3,183,672.81 19,679,748.68
| Ltd. |
| Hunan |
ChangyangIndustrial Co.,
1,810,540.70
| Ltd. |
| Shenzhen |
JiechengElectronics
3,225,000.00
| Co., Ltd. |
| Shenzhen |
Xiandao NewMaterials Co.,
4,751,621.62Subtotal 27,367,904.34 -4,504,482.85 3,183,672.81 19,679,748.68 9,787,162.32Total88,310,867.47 10,897,171.28 18,183,672.81 81,024,365.94 9,787,162.32
4. Operating revenue and operating cost
Unit: RMBItem
Amount in the current period Amount incurred in the previous periodRevenue Costs Revenue CostsMain business 39,568,530.33 10,680,130.69 50,382,988.38 15,225,250.76Total 39,568,530.33 10,680,130.69 50,382,988.38 15,225,250.76Relevant information of revenue:
Information related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not fully performed yetis RMB0.00 at the period-end, among which RMB0.00 is expected to be recognized in the year, RMB0.00 in the year andRMB0.00 in the year.
5. Investment income
Unit: RMBItem Amount in the current period Amount incurred in the previous periodIncome from long-term equityinvestments calculated by the costmethod
244,000,000.00Income from long-term equityinvestments calculated by the equitymethod
10,897,171.28 18,339,555.32Investment income from the disposal oflong-term equity investments
3,777,307.13Investment income from holding tradingfinancial assets
10,967,191.55 6,070,326.25
Dividend income from investments inother equity instruments during theholding period
1,305,581.86Total267,169,944.69 28,187,188.70XVII. Supplementary information
1. Breakdown of non-recurring profit or loss of the current period
?Applicable □ Not applicable
Unit: RMBItem Amount DescriptionProfit or loss from disposal of non-current assets
8,826,176.39Government subsidies included in thecurrent profit or loss (excluding thoseclosely related to the normal business ofthe Company and granted under thenational policies and continuouslyenjoyed according to a certain quota ofamount or volume)
6,575,043.88
Except for the effective hedgingactivities related to the Company’sordinary activities, profit or loss arisingfrom changes in fair value of tradingfinancial assets and financial liabilities,and investment income from disposal oftrading financial assets and financialliabilities and available-for-sale financialassets
10,762,831.81
Other non-operating revenues andexpenses other than the above
3,718,192.18Other profit or loss conforming to thedefinition of non-recurring profit or loss
49,829.40Less: effect on income tax6,628,391.02Effect on minority interests 3,076,349.55Total 20,227,333.09 --Specific conditions of other profit or loss conforming to the definition of non-recurring profit or loss:
□ Applicable ? Not applicable
The Company has no other profit or loss conforming to the definition of non-recurring profit or loss.Explanation on defining the non-recurring profits and losses set out in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering Securities to the Public - Non-Recurring Profit or Loss as recurring profits and losses
□ Applicable ? Not applicable
2. Return on net profits and earnings per share
Profit during the Reporting
Period
Weighted average return on
net assets
Earnings per share
Basic earnings per share
| Basic earnings per share | Diluted earnings per share |
(RMB/share)
| (RMB/share) | (RMB/share) |
Net profit attributed toordinary shareholders of theCompany
5.69% 0.1937 0.1937Net profit attributed toordinary shareholders of theCompany after deductingnon-recurring profits andlosses
4.31% 0.1468 0.1468
3. Difference in accounting data under domestic and foreign accounting rules
(1) Differences in net profits and net assets in the financial reports disclosed simultaneously according to
the International Accounting Standards and the Accounting Standards of the People's Republic of China
□ Applicable ? Not applicable
(2) Differences in net profits and net assets in the financial reports disclosed simultaneously according to
the foreign accounting standards and the Accounting Standards of the People's Republic of China
□ Applicable ? Not applicable
(3) Specify the reasons for differences in accounting data under domestic and foreign accounting
standards (if any); if the adjustment is made to data audited by the overseas audit firm, specify the nameof such audit firmN/A