Shenzhen Tellus Holding Co. Ltd.2022 Annual Report
April 20232022 Annual Report
Section I Important Notice Contents and Definition
The Board of Directors and Board of Supervisors as well as directors
supervisors and senior executives of the Company guarantee that the present
annual report is true accurate and complete without false record misleading
statement or major omission and undertake the joint and several legal
liabilities arising therefrom.Fu Chunlong head of the Company Lou Hong person in charge of
accounting and Yu Taiping person in charge of accounting firm (accountant
in charge) declare to guarantee the truthfulness accuracy and completeness of
the financial report in this annual report.All directors of the Company have attended the board meeting to review
the report.The forward-looking statements such as plans for the future and
development strategies involved in this annual report do not constitute a
substantial commitment of the Company to investors. Investors and
stakeholders shall be aware of risks therein and understand the differences
among plans forecasts and commitments. Investors shall pay attention to
investment risks.The Company's profit distribution plan adopted by the Board of Directorsis: based on the total share capital of 431058320 as of December 31 2022 the
Company plans to pay RMB 0.28 (tax inclusive) in cash as dividends for every
10 shares to the Company’s all shareholders send 0 bonus (tax inclusive) and
capital reserve will not be transferred to equity.Contents
Section I Important Notice Contents and Definition... 2
Section II Company Profile and Major Financial Ind... 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 .......................ction
(I) Financial statements signed and sealed by the head of the Company person in charge of accounting and
person 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 public
accountants.(III) Originals of all company documents and announcements that have been publicly disclosed during the
reporting period.
1Interpretations
Term refers to Interpretation
CSRC refers to China Securities Regulatory Commission
SZSE refers to Shenzhen Stock Exchange
CSDC Shenzhen Branch refers to Shenzhen Branch of China Securities Depository and Clearing Corporation Limited
Company the Company and Tellus
Holding refer to Shenzhen Tellus Holding Co. Ltd.Reporting period the reporting
period and the year refer to Year 2022
State-owned Assets Supervision and
Shenzhen SASAC refers to Management Commission of Shenzhen
Municipal People's Government
SDG SDG Group and controlling refer to Shenzhen Special Economic Zone shareholder 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
Shenzhen Tellus Treasury Supply Chain Tech
Co. Ltd.Shanghai Fanyue and Fanyue refer to Shanghai Fanyue Diamond Co. Ltd.Zhongtian Company refers to Shenzhen Zhongtian Industry Co. Ltd.Automobile Industry and Trade refers to Shenzhen Automobile Industry and Trade Company Co. Ltd.SDG Huari refers to Shenzhen SDG Huari Automobile Enterprise Co. Ltd.Huari Toyota refers to Shenzhen Huari Toyota Sales & Service Co.Ltd.Renfu Tellus refers to 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
Tellus Jinzuan Building Jinzuan
Building refer to Tellus Jinzuan Trading Building
2Section II Company Profile and Major Financial Indicators
I. Company Information
Stock abbreviation Tellus A and Tellus B Stock code 000025 and 200025
Stock abbreviation before change
N/A
(if any)
Stock exchange on which the
Shenzhen Stock Exchange
shares are listed
Chinese name of the Company Shenzhen Tellus Holding Co. Ltd.Chinese abbreviation Tellus A
English name of the Company (if
ShenZhen Tellus Holding Co. Ltd.any)
English abbreviation (if any) N/A
Legal representative of the
Fu Chunlong
Company
Registered address 3F Tellus Building No. 56 2nd Shuibei Road Luohu District Shenzhen
Postal code of the registered
518020
address
Office address 3F and 4F Tellus Building No. 56 2nd Shuibei Road Luohu District Shenzhen
Postal code of the office address 518020
Website of the Company www.tellus.cn
E-mail ir@tellus.cn
II. Contact Person and Contact Information
Secretary of the Board of Directors Securities Representative
Name Qi Peng Liu Menglei
3F Tellus Building No. 56 2nd Shuibei 3F Tellus Building No. 56 2nd Shuibei
Address
Road Luohu District Shenzhen Road Luohu District Shenzhen
Tel. （0755）83989390 （0755）88394183
Fax （0755）83989386 （0755）83989386
E-mail ir@tellus.cn liuml@tellus.cn
III. Information Disclosure and Designated Location
Website designated by the Stock Exchange for publishing the
Shenzhen Stock Exchange (www.szse.cn)
annual report
Newspapers selected by the Company for information
Securities Times and CNINFO (www.cninfo.com.cn)
disclosure
Secretariat of the Board of Directors of Shenzhen Tellus
Place for inspection of annual reports of the Company Holding Co. Ltd.
3IV. Changes of Registration
Unified social credit code 91440300192192210U
Change of main business
No change during the reporting period.after listing (if any)
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 Shenzhen
Special Economic Zone Development Group Co. Ltd. (“SDG”). Then 159.588 million shares were
held by the SDG Group accounting for 72.45% of the total share capital (namely 220.2816 million
shares) 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 tradable
shares without trading restrictions a total of 211591621 shares of the Company were held by the
SDG Group by the end of the reporting period accounting for 49.09% of the Company's total share
Previous changes of
capital; among them 204798621 shares held by the SDG Group were voting shares accounting for
controlling shareholder (if
47.51% of the Company's total share capital and 6793000 shares held by the SDG Group were in
any)
the state of refinancing and lending accounting for 1.58% of the Company's total share capital. The
SDG 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 of
the Voting Rights Entrustment Agreement did not result in the change of the direct controlling
shareholder of the Company while the indirect controlling shareholder was changed from Shenzhen
SASAC to its wholly-owned subsidiary SIHC.V. Other Related Information
Accounting firm engaged by the Company
Name of accounting firm RSM China (Special General Partnership)
Rooms 901-22 to 901-26 Foreign Trade Building Block 1
Business address of the accounting firm No. 22 Fuchengmenwai Street Xicheng District Beijing
China
Names of signing accountants Chen Lianwu Qin Changming
Sponsor 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
Change over the Year 2022 Year 2021 previous year Year 2020
Operating revenue (RMB) 837656274.51 508520026.18 64.72% 424419203.34
Net profit attributable to
shareholders of the listed 83496135.61 131020764.38 -36.27% 57663828.89
company (RMB)
Net profit attributable to 63268802.52 71731038.87 -11.80% 47719889.72
4shareholders of the listed
company after deducting
non-recurring profit or
loss (RMB)
Net cash flows from
-51967764.29126611734.90-141.04%109105302.88
operating activities (RMB)
Basic earnings per share
0.19370.3040-36.28%0.1338
(RMB/share)
Diluted earnings per share
0.19370.3040-36.28%0.1338
(RMB/share)
Weighted average return
5.69%9.56%-3.87%4.48%
on net assets
Change over the end End of 2022 End of 2021 of the previous year End of 2020
Total assets (RMB) 2232028554.57 1859645205.43 20.02% 1708442301.15
Net assets attributable to
shareholders of the listed 1505638863.31 1432924273.45 5.07% 1310524675.47
company (RMB)
The lower of the Company's net profits before and after deducting non-recurring profit and loss in the last three accounting years is
negative 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 and
Abroad
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 disclosed
simultaneously 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 disclosed
simultaneously according to foreign accounting standards and Chinese accounting standards.VIII. Quarterly Major Financial Indicators
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 140069923.14 109945229.09 422203386.69 165437735.59
Net profit attributable to 33807359.53 9672876.66 18637364.28 21378535.14
shareholders of the listed
5company
Net profit attributable to
shareholders of the listed
24480787.786542368.5813393195.8818852450.28
company after deducting non-
recurring profit or loss
Net cash flows from operating
-15687977.314369681.90-72148582.9631499114.08
activities
Is 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: RMB
Descri
Item Amount for 2022 Amount for 2021 Amount for 2020
ption
Income
s from
equity
disposa
Profit or loss from disposal of non-current assets
l of
(including the offset part of provisions for impairment 8826176.39 66654129.65 1.00
shareh
of assets)
olding
enterpr
ises
etc.Subsidi
es
under
the
Government subsidies included in the current profit or
govern
loss (excluding those closely related to the normal
ment's
business of the Company and granted under the 6575043.88 2923779.58 1522079.42
prefere
national policies and continuously enjoyed according
ntial
to a certain quota of amount or volume)
policie
s for
enterpr
ises
Payment for the use of state funds included in the
current profit and loss and collected from non- 629671.75 435887.15
financial business
Invest
Except for the effective hedging activities related to
ment
the Company’s ordinary activities profit or loss
income
arising from changes in fair value of trading financial
from
assets and trading financial liabilities and investment 10762831.81 10073533.17 8812468.26
financi
income from disposal of trading financial assets and
al
trading financial liabilities and available-for-sale
product
financial assets
s
Reversed impairment provision in value of receivables
493295.33
under independent impairment test
Other non-operating revenues and expenses other than 3718192.18 730552.50 3196406.42 Liquid
6the above ated
damag
es
confisc
ation
deposit
s etc.Return
of
handlin
g
Other profit or loss conforming to the definition of charges
49829.4046275.7744839.26
non-recurring profit or loss of
individ
ual
income
tax
Less: effect on income tax 6628391.02 19790228.25 3123780.55
Effect on minority interests (after-tax) 3076349.55 1977988.66 1437257.12
Total 20227333.09 59289725.51 9943939.17 --
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 Information
Disclosure 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 on
Information Disclosure for Companies Offering Securities to the Public - Non-Recurring Profit or Loss as a recurring one during
the reporting period.
7Section III Management Discussion and Analysis
I. Industry Development during the Reporting Period
The Company shall abide by the disclosure requirements of the Guidelines of Shenzhen Stock Exchange for Self-Regulatory
Supervision of Listed Companies No. 3-Industry Information Disclosure for "Jewelry-related Industry"
(I) Macroeconomic Situation
In 2022 due to insufficient momentum of international trade and cross-border investment global
economic growth remained weak. International trade protectionism and unilateralism continued to be major
constraints on the development of the global economy. With the continuation of international geopolitical
conflicts major American and European advanced economies adopted a series of policies for interest rate hikes
under inflationary pressure which resulted in the sharp fluctuation of international commodity prices continued
turbulence in financial markets and strikes on the development of emerging economies. While being affected by
the 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 and
demand as well as shrunk demand. Under the impact of complex factors at home and abroad and the national
macro-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 with
recovered economic activities and enhanced market vitality. From January to February 2023 the national index
of 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 consumer
goods reached RMB 7706.7 billion up 3.5% year-on-year of which the retail sales of gold silver and jewelry
goods of units above designated size increased by 5.9%.(II) Gold Jewelry Industry
As for the industry chain links of the gold jewelry industry the upstream is gold jewelry raw ore
prospecting and mining the midstream is ore smelting or design and processing and the downstream is
wholesale 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
8the whole category of the jewelry industry the market scale of China's germ and jewelry industry in 2022 was
about 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 took
about RMB 147 billion colored gemstone products took about RMB 28 billion pearl products took about RMB
24 billion platinum and silver products took about RMB 9 billion and popular accessories and other categories
of products totaled about RMB 19 billion. Gold jewelry has a large consumer market capacity and abundant
categories whose main consumption scenarios include traditional weddings fashionable wear collection and
preservation. In the gold jewelry industry chain the consumer terminal is a high-value-added link due to
differentiation 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 metals
such as gold and silver. Based on different generation conditions jewelry jade can be divided into natural
jewelry jade and artificial jewelry jade. At present China is the most important producer and consumer of
jewelry ornaments in the world. Under the background of the continuous improvement of per capita income
level in China the fashion attribute of jewelry ornaments has made them one kind of consumer goods to meet
people's needs for a better life.With the gradual upgrading of young consumers' demands the young generation's jewelry consumption
habits tend to be routinized which can improve the re-purchase rate of jewelry products in a variety of
scenarios 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. According
to the statistics of China Gold Association from 2012 to 2022 China's actual gold consumption fluctuated
around the median of 950 – 1050 tons. The gold consumption in China from 2012 to 2022 is as follows:
Unit: ton
9China's gold jewelry consumption recovered rapidly in the past two years after a demand bottom-out in
2020. In 2022 the actual gold consumption in China was 1001.74 tons which decreased by 10.63% compared
with 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 a
dominant position.On one hand the demand for gold ornaments consumption has recovered mainly due to the complex
economic situation at home and abroad where the hedging function of gold ornaments regained attention; on
the other hand thanks to the improved design and upgraded technology of gold ornaments and the enhanced
cultural confidence and aesthetic appreciation of consumer groups the aesthetic feeling of gold has been
favored and recognized by the majority of consumer groups and both the color and the design which are
characterized by Chinese style and full of new Chinese fashionable elements are especially favored by the
young 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 and
jewelry of units above the designated size reached RMB 301.4 billion down 1.1% year-on-year but the total
retail sales still remained at a high level of over RMB 300 billion indicating that the consumption of gold
jewelry was active. With the elimination of external factors hindering economic activities the expansion of
online e-commerce channels and offline channels of major gold and jewelry enterprises has accelerated and the
10competition 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 consumption
demand for gold jewelry ornaments is developing towards individuation and diversification. Gold jewelry brand
enterprises pay more attention to sales channel construction design concepts and design aesthetics and actively
carry out consumer profiling redefine the consumer market and explore consumption preferences and
subdivisions. At the same time the prospecting and mining enterprises located upstream of the gold and jewelry
industry 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 leading
brands are occupying the market striving to expand from the channels brands product differentiation and other
aspects.In the fierce market competition the Company relies on its own advantages and takes the industry demand
as 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 Industry
In 2022 affected by objective factors such as macroeconomic disturbances and restrictions on offline
consumption scenarios small and micro enterprises were under significant pressure and faced difficulties in
operation and the vacancy rate of office buildings increased. To assist small and micro enterprises in
overcoming difficulties many local governments have introduced preferential policies of "rent reduction and
waving" however the commercial real estate leasing industry was hit by this. On the one hand the delivery of
some commercial projects was delayed. According to the data of JLL the new supply area of prime retail
throughout 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 China
decreased by 2.9% year-on-year in 2022.(IV) Automobile Service Industry
In 2022 China's macro-control which continued to expand the domestic demand enabled both production
and marketing to thrive in the automobile industry. According to the data of the China Association of
Automobile Manufacturers in 2022 China's automobile production and sales volumes reached 27.021 million
and 26.864 million respectively with a year-on-year increase of 3.4% and 2.1%. And the new energy vehicles
sector presented steady growth in terms of production and sales volumes. In 2022 the production and sales
volume of new energy vehicles in China reached 7.058 million and 6.887 million respectively with a year-on-
11year 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 a
strong positive correlation with the demand in the automobile maintenance and inspection market increased
rapidly. According to the statistics of the Ministry of Public Security national motor vehicle ownership reached
417 million in 2022 including 319 million automobiles. Among them national new energy vehicle ownership
reached 13.1 million accounting for 4.10% of the total automobile ownership.II. Main Business during the Reporting Period
The Company shall abide by the disclosure requirements of the Guidelines of Shenzhen Stock Exchange for Self-Regulatory
Supervision 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 Shenzhen
Jewelry Company held 16 exhibitions throughout the year and bonded inbound and outbound goods value
reached RMB 2.1 billion; at the same time the Company continuously improved the service system to implement
new service categories. In June 2022 the holding subsidiary Guorun Gold was established which further
completes the Company's layout in the gold jewelry industry by taking the gold circulation business as the core
and aiming to promote the digitalization standardization and normalization of gold spot transactions. Besides the
Company 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 from
the 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 and
standardized 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 and
popularity of the basement 1 stores of the podium building were significantly improved; during the construction of
the Tellus Jinzuan Building project numerous difficulties were resolved to ensure that the construction period was
promoted as planned and investment attraction and operation plans were made in advance to make adequate
preparations for the opening and operation of the building; and through the significant improvement of the
operation quality of Tellus Home Experience Store as well as optimization of the business structure of tenants the
annual rent increased dramatically compared with last year.
3. Sales inspection maintenance and spare parts sales of automobiles: In terms of automobile sales with the
12optimization of the internal and external promotion policies for new vehicle sales value chain products 1057
vehicles were sold throughout the year; in terms of maintenance services attention was paid to customer
experience 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 provides
certain 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 Amount of operating cost Gross margin in
revenue (RMB 10000) (RMB 10000) 2022
Wholesale 40887.36 40462.52 1.04%
Other 1260.56 928.80 26.32%
services
Total 42147.92 41391.33 1.80%
2. Production mode
At present the Company mainly adopts the entrusted processing mode for gold and its products while
diamonds and colored gemstones do not involve processing. The production mode composition in 2022 is as
follows:
Production mode Amount (RMB 10000) Proportion
Consigned processing 39937.20 100.00%
Total 39937.20 100.00%
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 through
the Shanghai Diamond Exchange;
Other jewelry jade: by purchasing products from overseas jewelry jade suppliers and going through the
import formalities of tax payment through Shenzhen Jewelry Company.The purchase model in 2022 is as follows:
Purchase Raw Purchase quantity Purchase amount (RMB 10000)
mode materials (kg)
Spot trading Gold 1345.47 51737.34
13Gold rental Gold 45.00 1768.50
business
Total 1390.47 53505.84
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 RMB
95675616.72 of which the amount measured at fair value was RMB 79191876.11 corresponding to hedged
items with commodity futures contracts and T+D contracts as hedging instruments. The fair value of the
hedged 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 purchase
investment was RMB 251100 and the fair value change was RMB 54500.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 the
Company gave full play to the advantages of a state-owned listed company solidly promoted the construction
of the third-party jewelry ecosystem kept trying to innovate business models deeply entered the jewelry
industry 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; in
2020 Shenzhen Jewelry Company was established to provide bonded exhibition bonded warehousing customs
declaration logistics settlement and other services aiming to build a comprehensive factor trading service
platform with international influence integrating jewelry raw materials and finished products exhibition spot
trading 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 general
trade imports for diamond business; in 2022 Guorun Gold was established to build a comprehensive service
platform for gold circulation so as to further consolidate the overall layout of the jewelry industry. The bonded
platform and gold circulation platform aimed to serve the industry and adhered to entrepreneurship-led
14development. Their successful operation was highly recognized by relevant government departments and
greatly enhanced the Company's popularity and influence in the jewelry industry gradually forming the
Company's competitive advantage.
2. High-quality development of the commercial operation sector providing stable business income and
financial support
The 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. The
construction of the Tellus Jinzuan Trading Building was promoted according to the working schedule and the
scheduled official opening would be in 2023. At the same time the Company planned to implement innovative
industrial projects in the Buxin area in line with the overall strategic layout of the city district and the Company
by means of renovation. In addition the Company held a large number of property resources in Luohu Futian
and other areas of Shenzhen. On the basis of maintaining the stability of the original leasing business the
Company would actively promote the improvement of property quality and transform its old properties from
the traditional way of simple leasing to the direction of commercial property operation so as to fully enhance
and 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
Company
In recent years with the transformation and upgrading of the Company's business sectors internal
management has also been greatly improved becoming the driving force and guarantee for the Company's
development. In 2022 from the perspective of management promotion and operation the Company established
a "4S" management mainline system based on the management orientation and the actual situation of the
Company. 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 have
been linked which serve the Company's strategic implementation in a unified way. The Company leverages
various work with performance management as a "lever" and continuously evaluates and optimizes the
organizational structure to improve operational efficiency. Adhering to the cultural construction purpose of
refining the corporate culture from business the Company collects the conventions of strivers from the
grassroots to build a consensus among all employees.
15IV. Analysis on Main Business
1. Overview
In 2022 in the face of complicated internal and external situations and extremely arduous risks and
challenges under the correct leadership of the Party Committee and the Board of Directors of the Group all
Tellus 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 of
RMB 329.14 million or 64.72% compared with RMB 508.52 million in 2021. The main reasons for such an
income 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 421
Home Experience Store of Tellus Jewelry Building and other factors. In 2022 the total profit of the Company
reached RMB 102.84 million a decrease of RMB 73.28 million compared with RMB 176.12 million in 2021; the
net profit attributable to the parent company was RMB 83.50 million a decrease of RMB 47.52 million compared
with RMB 131.02 million in 2021. The main reasons for this change are as follows: first the confirmed
investment income of the transfer shareholding enterprises in 2021 was RMB 66.17 million while the current
investment income of the transfer shareholding enterprises was only RMB 8.78 million; second in order to cope
with 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 in
profits and the gradual decrease in period expenses might also play a role. The specific business situation is as
follows.
(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 16
exhibitions were held throughout the year. The leading position in the domestic seawater pearl trading market was
further 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 risk
control system and gradually started its business. This platform born the industry mission of the pilot reform of
gold circulation.
16(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 island
counters was increased from 75% to 95% through various measures; the Jinzuan Building positioning itself as an
advance planner and a Doer by formulating investment attraction and operation plans in advance introduced
well-known jewelry enterprises built a jewelry headquarters base and gathered industry traffic; as for the Tellus
Home a series of benchmarking upgrading actions were taken the operation quality was significantly improved
and 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 effectively
implemented and a total of 31 talents had been introduced throughout the year; the corporate culture was
deepened and solidified and discussions on the conventions of strivers were organized many times to further
consolidate 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 important
speeches and the education of Party members and cadres' ideals and beliefs was deepened; Discipline Education
and Learning Month activities were carried out including 7 centralized studies 13 lectures by leading cadres and
28 integrity education; the responsibilities of state-owned enterprises were fulfilled by warming the hearts of
merchants 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-
year Proportion in Proportion in
Amount operating revenue Amount
increase/de
operating revenue crease
Total operating
837656274.51
revenue 100%
508520026.18100%64.72%
By segment
Automobile sales 196357649.27 23.44% 194373092.47 38.22% 1.02%
Automobile
inspection
45059294.865.38%49668740.609.77%-9.28%
maintenance and
spare parts sales
Property lease and
174756009.8020.86%205073101.9540.33%-14.78%
service
Wholesale and
421483320.5850.32%59405091.1611.68%609.51%
retail of jewelry
By product
Automobile sales 196357649.27 23.44% 194373092.47 38.22% 1.02%
Automobile 45059294.86 5.38% 49668740.60 9.77% -9.28%
17inspection
maintenance and
spare parts sales
Property lease and
174756009.8020.86%205073101.9540.33%-14.78%
service
Wholesale and
421483320.5850.32%59405091.1611.68%609.51%
retail of jewelry
By region
Shenzhen 837656274.51 100.00% 508520026.18 100.00% 64.72%
By sales mode
Direct sales 837656274.51 100.00% 508520026.18 100.00% 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
Increase/decrease Increase/decrease Increase/decrease
Operating Gross in operating in operating cost in gross margin
revenue Operating cost margin revenue over the over the same over the same same period of period of period of
previous year previous year previous year
By segment
Automobile
sales 196357649.27 189054253.07 3.72% 1.02% 2.46% -1.35%
Automobile
inspection and
maintenance 43747865.09 34307315.38 21.58% -9.92% -11.49% 1.39%
and spare parts
sales
Property lease
and service 168778477.27 57262402.60 66.07% -14.12% -19.78% 2.39%
Wholesale and
retail of 421483320.58 412785619.63 2.06% 609.52% 640.07% -4.04%
jewelry
By product
Automobile
sales 196357649.27 189054253.07 3.72% 1.02% 2.46% -1.35%
Automobile
inspection and
maintenance 43747865.09 34307315.38 21.58% -9.92% -11.49% 1.39%
and spare parts
sales
Property lease
and service 168778477.27 57262402.60 66.07% -14.12% -19.78% 2.39%
Wholesale and
retail of 421483320.58 412785619.63 2.06% 609.52% 640.07% -4.04%
jewelry
By region
Shenzhen 830367312.21 693409590.68 16.49% 66.45% 97.87% -13.26%
By sales mode
Direct sales 830367312.21 693409590.68 16.49% 66.45% 97.87% -13.26%
(3) Whether the Company's sales revenue of products is greater than the service revenue
□Yes □ No
Industry Item Unit Year 2022 Year 2021 Year-on-year
18classification increase/decrease
Sales volume Set 1057 1071 -1.31%
Automobile sales Production - - - -
Inventory Set 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: RMB
Year 2022 Year 2021 Year-on-
Industry year
classification Item Proportion in Proportion in Amount Amount increase/d
operating cost operating cost ecrease
Automobile sales Automotive 189054253.07 27.00% 184509794.34 52.28% 2.46%
Automobile
Spare parts
inspection and
and 35790213.87 5.11% 39971148.37 11.33% -10.46%
maintenance and
maintenance
spare parts sales
Leasing
Property lease property
62659156.858.95%72672237.2220.59%-13.78%
and service management
and others
Retail and
Wholesale and
wholesale of 412785619.63 58.95% 55776535.88 15.80% 640.07%
retail of jewelry
jewelry
Unit: RMB
Year 2022 Year 2021 Year-on-
Product year
Item
classification Proportion in Proportion in Amount Amount increase/d
operating cost operating cost ecrease
Automobile sales Automotive 189054253.07 27.00% 184509794.34 52.28% 2.46%
Automobile
Spare parts
inspection and
and 35790213.87 5.11% 39971148.37 11.33% -10.46%
maintenance and
maintenance
spare parts sales
Leasing
Property lease property
62659156.858.95%72672237.2220.59%-13.78%
and service management
and others
Retail and
Wholesale and
wholesale of 412785619.63 58.95% 55776535.88 15.80% 640.07%
retail of jewelry
jewelry
19(6) Whether the consolidation scope is changed during the reporting period
□Yes □ No
During the reporting period Tellus Holding and its partners jointly invested to establish Guorun Gold Shenzhen Co. Ltd. Guorun
Gold registered and established on June 28 2022 was consolidated by Tellus Holding. Therefore a new consolidated enterprise
was 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 applicable
Guorun Gold registered and established on June 28 2022 is a comprehensive service platform company for
gold circulation established by Tellus Holding to further improve its layout in the gold and jewelry industry. It is
controlled by Tellus Holding and jointly established with many leading brands and investment enterprises in the
industry such as Chow Tai Fook Chow Tai Seng Caishikou Shenzhen ZHL Shenzhen HTI and Shenzhen
Jewelry Company. With the gold circulation business as the core Guorun Gold is committed to promoting the
digitalization standardization and normalization of gold spot transactions promoting the compliance legality and
healthy development of the gold industry and providing open transparent standardized and safe gold circulation
solutions. Its main businesses include investment in gold bar sales gold recovery and gold purification/exchange
services. During the reporting period Guorun Gold achieved an operating revenue of RMB 328 million with a net
profit of RMB -558800. The negative profit of Guorun Gold was mainly due to the fact that the company's
business was still in the unfledged stage after a fairly recent establishment unformed scale effect plus the
organization costs to be borne etc. The main risk control measures of Guorun Gold include the arrangement of
full-time risk control departments and personnel building of a customer credit rating management system regular
and irregular tracking assessment of the credit status and operation status of clients establishment of an early
warning mechanism formulation of relevant systems such as the Measures for the Administration of Hedging
Transactions against the risk of gold price fluctuation and strict implementation of business approval and risk
control etc.
(8) Information on main sales customers and main suppliers
Main sales customers of the Company
Total sales amount of the top 5 customers (RMB) 336006904.91
Proportion of the total sales amount of the top 5 customers to
40.12%
total annual sales amount
Proportion of the sales amount of the related parties among the
0.00%
top 5 customers to total annual sales amount
Information on the top 5 customers of the Company
Proportion to total annual
No. Name of customer Sales amount (RMB) sales amount
201 Customer 1 152160931.28 18.17%
2 Customer 2 66140447.43 7.90%
3 Customer 3 54966535.20 6.56%
4 Customer 4 35890132.75 4.28%
5 Customer 5 26848858.25 3.21%
Total -- 336006904.91 40.12%
Explanation on other conditions of main customers
□ Applicable □Not applicable
Main suppliers of the Company
Total purchase amount of the top 5 suppliers (RMB) 576710489.38
Proportion of the total purchase amount of the top 5 suppliers
70.84%
to total annual purchase amount
Proportion of the purchase amount of the related parties among
0.00%
the top 5 suppliers to total annual purchase amount
Information on the top 5 suppliers of the Company
Proportion to total annual
No. Supplier name Purchase amount (RMB)
purchase amount
1 Supplier 1 207938663.71 25.54%
2 Supplier 2 169710255.27 20.85%
3 Supplier 3 79559566.37 9.77%
4 Supplier 4 76194690.27 9.36%
5 Supplier 5 43307313.76 5.32%
Total -- 576710489.38 70.84%
Explanation on other conditions of main suppliers
□ Applicable □Not applicable
3. Expenses
Unit: RMB
Year-on-year Explanation on major Year 2022 Year 2021 increase/decrease changes
Selling expenses 22034712.48 27178175.03 -18.92%
General and
administrative 47077679.99 47151316.69 -0.16%
expenses
Financial expenses -4036653.35 -4270881.74 5.48%
R&D expenses 802753.80 0.00 -
4. Investment in R&D
□Applicable □Not applicable
Expected impact on the
Name of major R&D Project Objectives to be
Project purpose future development of
project progress achieved
the Company
Research and At present most small-sized jewelry Accepte To optimize the It will be able to
21Development of enterprises in the market still adopt the d membership improve the efficiency
Integrated Service traditional manual recording and management module; of system data use
System for Jewelry management mode in their own to meet the needs of provide system support
Industry experience and commodity sales which the new business for new businesses and
is very inefficient and lacks unified model by adding R&D enhance the auxiliary
management of suppliers and clients and processing supervision function.thus increasing the communication cost modules; to facilitate
with clients and factories. In order to the customs's real-time
meet the needs of upgrading the supervision of the
business functions of the jewelry business development
industry integrated service system it is and bonded goods
urgent to develop a jewelry industry inventory of the
integrated service system to strengthen platform and reduce
the business management of the jewelry the number of offline
industry. on-site verifications.Jewelry jade etc. are of great value so
the security during their exhibition or
preservation is particularly important
and each treasure will also be insured
To realize real-time
for a huge amount. Based on the needs Through the integration
supervision of platform
Research and of jewelry and jade protection a of human precautions
warehouses and
Development of software and hardware system and technical
exhibition halls to
Intelligent Security integrating multiple functions such as Accepte prevention the security
ensure place safety
System for Jewelry intelligent early warning data analysis d of goods and places
goods safety and
and Jade Exhibition and remote data storage is developed will be strengthened to
personnel safety. To
Hall and built to realize the real-time linkage ensure the safety of the
enable real-time alarm
between the alarm system and the company's inventory.in case of abnormality.monitoring system and the personnel
positioning system so as to solve the
security problem of jewelry and jade
with an overall intelligent solution.R&D personnel of the Company
Year 2022 Year 2021 Change proportion
Number of R&D personnel
20
(Headcount)
Proportion of the number of
0.63%0.00%
R&D personnel
Educational level of R&D personnel
Junior college 2
Age composition of R&D personnel
Below 30 1 0 0
30-40 years old 0 0 0
Over 40 1 0 0
R&D investment of the Company
Year 2022 Year 2021 Change proportion
R&D investment amount
802753.800.00-
(RMB)
Proportion of investment in
0.10%0.00%-
R&D to operating revenue
Capitalized amount of R&D
0.000.00-
investment (RMB)
22Proportion of capitalized
R&D investment to R&D 0.00% 0.00% -
investment
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 the
previous 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: RMB
Year-on-year
Item Year 2022 Year 2021
increase/decrease
Sub-total of cash inflows
1004298180.83593319656.8069.27%
from operating activities
Sub-total of cash outflows
1056265945.12466707921.90126.32%
from operating activities
Net cash flows from operating
-51967764.29126611734.90-141.04%
activities
Sub-total of cash inflows
1388465680.401589951156.88-12.67%
from investing activities
Sub-total of cash outflows
1338619900.381720644122.34-22.20%
from investing activities
Net cash flows from investing
49845780.02-130692965.46138.14%
activities
Sub-total of cash inflows
206424339.1475601270.39173.04%
from financing activities
Sub-total of cash outflows
23708532.6368563307.20-65.42%
from financing activities
Net cash flows from financing
182715806.517037963.192496.15%
activities
Net increase in cash and cash
179751243.503192929.235529.67%
equivalents
Explanation on main influence factors for a year-on-year major change of related data
□Applicable □Not applicable
Unit: RMB
Item Year 2022 Year 2021 Year-on-year increase/decrease Description
Sub-total of cash inflows from 1004298180.83 593319656.80 69.27% New gold business during the operating activities reporting period
Sub-total of cash outflows from
operating activities 1056265945.12 466707921.90 126.32%
New gold business during the
reporting period
Mainly due to: first rent reduction
Net cash flows from operating -51967764.29 126611734.90 -141.04% policy during the reporting period; activities second gold notes receivable and
stocking business in the current year
23Net cash flows from investing Mainly due to the year-on-year
activities 49845780.02 -130692965.46 138.14% increase in the redemption of financial products at maturity
Sub-total of cash inflows from 206424339.14 75601270.39 173.04% Mainly due to capital injection by financing activities minority shareholders
This is mainly due to the increase in
cash outflows from financing activities
Sub-total of cash outflows from 23708532.63 68563307.20 -65.42% during the same period when Sichuan financing activities Company canceled and returned the
investment funds to minority
shareholders
Net cash flows from financing
activities 182715806.51 7037963.19 2496.15%
Mainly due to capital injection by
minority shareholders
Net increase in cash and cash
equivalents 179751243.50 3192929.23 5529.67%
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 period
and the net profits of the Company in the year
□ Applicable □Not applicable
V. Analysis on Non-main Business
□Applicable □Not applicable
Unit: RMB
Proportion to SustainablAmount Explanation of formation reasons total profits e or not
Income from disposal of equity wealth
Investment incomes 33372099.57 32.45% management income and recognized equity-method No
investment income of joint-stock enterprises
Profits or losses from
-1592750.24 -1.55% Changes in fair value of undue financial products No
changes in fair value
Provision for impairment losses of inventories and
Impairment of assets -3474846.19 -3.38% No
fixed assets
Gains from damage and scrapping of non-current
Non-operating revenue 4134654.43 4.02% No assets and gains from unpayable payments
Non-operating Non-current assets retirement losses and liquidated
416462.25 0.40% No
expenses damages expenses
VI. Analysis of Assets and Liabilities
1. Major changes in asset composition
Unit: RMB
End of 2022 Beginning of 2022 Explanati
Proportion
on on Proportion to Proportion to increase/d
Amount Amount major
total assets total assets ecrease changes
Cash at bank
413028327.3618.50%240582057.1612.94%5.56%
and on hand
Accounts
41752179.561.87%18094059.920.97%0.90%
receivable
Inventories 116069675.39 5.20% 25434925.04 1.37% 3.83%
Investment 516360139.45 23.13% 551383294.54 29.65% -6.52%
24properties
Long-term
equity 81024365.94 3.63% 88310867.47 4.75% -1.12%
investments
Fixed assets 102689546.42 4.60% 109438198.23 5.88% -1.28%
Construction in
409933559.2718.37%210197546.7211.30%7.07%
progress
Right-of-use
4181242.860.19%7336915.830.39%-0.20%
assets
Short-term
20000000.000.90%0.000.90%
borrowings
Contract
9259658.430.41%21059311.181.13%-0.72%
liabilities
Long-term
144820511.426.49%86875874.394.67%1.82%
borrowings
Lease liabilities 2926184.93 0.13% 4474543.09 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
Profits or
Accumulat
losses from
ed change Impairment Purchase Sales
changes in
Beginning in fair accrued in amount in amount in Other Ending
Item fair value
amount value the current the current the current changes amount
in the
included in period period period
current
equity
period
Financial assets
1. Trading
financial
assets
41271284-107500001316000017613356
(excluding
3.84860218.3300.0000.009.95
derivative
financial
assets)
2. Other
equity
10176617.10176617.
instrument
2020
investment
s
Sub-total of
42288946-107500001316000018631018
financial
1.04860218.3300.0000.007.15
assets
Arbitraged 543878.09 43952426 34440171 79191876.
25items 9.03 2.52 11
Total of the 42288946 - 15145242 16604017 26550206
0.000.000.00
above 1.04 316340.24 69.03 12.52 3.26
-
Financial 17685000. 19062044.
0.001276410.0100634.91
liabilities 00 91
0
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
Cash at bank and on hand 21621498.00 See the description in this table
Intangible assets 45447359.01 Bank borrowing mortgage
Total 67068857.01 -
Descriptions: RMB 10665656.00 in the bank deposits is the supervision fund for the Company's Tellus-Gmond Gold
Jewelry Industrial Park Upgrading and Reconstruction Project Plot 03; RMB 10955842.00 is the performance guarantee and
futures 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 applicable
Investment in the reporting period Amount of investment in the same period
Changes rate
(RMB) of the previous year (RMB)
281736012.6141744792.0198.76%
2. Significant equity investment acquired in the reporting period
□Applicable □Not applicable
Unit: RMB
Inves
Situa tmen La
So tion t wsu Disc
Na Inves Share Exp
Invest urc Inves as at profi it losur Disclos
me tmen holdin ecte
Main ment e Part tmen Product the t or inv e ure
of t g d
business amoun of ner t type bala loss olv date index
inve mod propo ben
t fun term nce durin ed (if (if any)
stee es rtion efits
ds sheet g the or any)
date perio not
d
Guo Investmen Newl Sel Cho Investmen - For
82000 Non- Com June
run t in bar y f- w t in bar 558 details
000.0 41% fixed plete 0.00 No 15
Gol sales gold estab ow Tai sales gold 856. please
0 term d 2022
d recycling lishe ne Sen recycling 67 refer to
26She gold d d g gold the
nzhe purificatio fun Jew purificatio Announ
n n/exchang d elry n/exchang cement
Co. e services Co. e services on
Ltd. Ltd. Investm
She ent in
nzhe Gold
n Circula
ZH tion
L Platfor
Indu m
stria Project
l s
Co. (Annou
Ltd. ncemen
etc. t No.:
2022-
027)
disclos
ed by
CNINF
O.-
82000
Tota 558
000.00.00
l -- -- -- -- -- -- -- -- 856. -- -- --
0
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 10000
Profits or Proportion of the
losses from Purchased Sold
Accumulated investment
Initial changes in amount amount
Type of derivative change in fair Ending amount at the end
investment fair value during the during the
investment value included amount of the period to
amount in the reporting reporting
in equity the net assets of
current period period the Company at
period the end of the
27reporting period
Futures-Everbright
38.2-30.7301559.51018.32546.420.33%
Account
Futures-Ping An
77.6-18.203407.373057.91349.170.21%
Account
Total 115.81 -48.94 0 4966.87 4076.23 895.58 0.54%
Description of the
accounting policies and
the specific principles During the reporting period the hedging business was handled according to hedging accounting standards
of accounting for the fair value of gold inventory was designated as the hedged item and the futures contract contracts
hedging business purchased by Shanghai Gold Exchange were designated as hedging instruments. The hedging instrument
during the reporting is included in the "derivative instrument at fair value through profit or loss". The gain or loss arising from
period and whether the hedging instrument is included in the current profits and losses. The gain or loss of the hedged item-
there is any significant gold inventory due to gold price fluctuation is included in the current profits and losses and the book
change compared with value of the hedged item is adjusted at the end of the period.those in the previous
reporting period
Description of actual
The liquidation profit and loss of the futures account was RMB -6300 the floating profit and loss was
profit and loss during
RMB -489400 and the annual trading expenses were RMB 19800.the reporting period
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 direction
to spot positions; the time period in which the futures position is held corresponds to the time period in
Description of the which the risk is borne by the spot market there is an economic relationship between the hedging
hedging effect instrument futures contract and the hedged item-gold inventory and the changes in the fair value of gold
spot can be mostly offset by changes in the fair value of the futures contract which meets the hedging
effectiveness requirements. The Company shall continuously evaluate whether the hedging relationship
meets the hedging effectiveness requirements on and after the hedging commencement date.Source of derivative
Invested capital of shareholders
investment fund
The Company's hedging business follows the basic principles: The value change of futures variety and
contract quantity is roughly equivalent to that of spot positions; futures positions are in the opposite
direction to spot positions; and the time period in which the futures position is held corresponds to the
Risk analysis and time period in which the risk is borne by the spot market. The main risks of gold futures positions include:
control measures for basis risk forced liquidation risk and operational error risk. For basis risk gold lease shall be used as
derivative positions in inventory as much as possible when the basis is narrowed and self-owned inventory shall be built less or
the reporting period not; establish risk early warning for forced liquidation risks-when there is a risk of violent fluctuation in
(including but not gold price make a fund plan in advance to maintain the sufficient fund status of the margin account; if
limited to market risk there is any emergency that triggers forced liquidation it shall be reported to the management of the
liquidity risk credit Company as soon as possible and the hedging position of forced liquidation shall be replenished at the
risk operational risk right time; for the risk of operational errors a trader training mechanism shall be established operations
legal risk etc.) and 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 hedging
management 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 market
price or product fair
value during the
reporting period of
invested derivatives
During the reporting period the fair value change of the futures contract hedging the holding position was
analysis of the fair
RMB -489400. The Company adopted the closing price of the futures contract held in the Shanghai Gold
value of derivatives
Exchange on the last trading day in December 2022 (December 30) as the fair value and the floating
shall disclose the
profit and loss was the change in fair value.specific measures used
and related hypotheses
and parameter setting
28Involvement in
N/A
litigation (if applicable)
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
This
equity
from Whethe
the r it is
Propo
beginn implem
rtion
ing of ented
of net
the as
profit Whet
period schedul
which her
to the Prici ed; if
contri Relate the
Transa date Effect ng Relate not
butes d cover
ction of s of princ d please
Date to the relatio ed Discl Discl
Counte Shares price sales sale iple party indicat
of listed nship equity osure osure
rparty sold (RMB is the on the of transa e the
sale comp with is date index
10000 net Comp equit ction reasons
any counter fully
) profit any y or not and the
by its party transf
contri sale measur
equity erred
buted es
sale to or not
by the already
the
listed taken
total
compa by the
profit
ny (in Compa
RMB ny
1000
0)
35.75 As
Dece
% The per
Zhou mber 658.9
equity 933.46 impac 7.89% mark No N/A No N/A N/A
Ren 21 1
of t of et
2021
Shenz the valu
29hen Projec e
Autom t on
obile the
Industr Comp
y any's
Import total
and profit
Export is
Co. about
Ltd. RMB
8785
400.
IX. Analysis of Main Holding Companies and Joint-stock Companies
□Applicable □Not applicable
Main subsidiaries and joint-stock companies affecting over 10% of the Company’s net profit
Unit: RMB
Company Type of Main Registered Operating Operating
Total assets Net assets Net profit
name company business capital revenue profit
Shenzhen
Sales of
Automobil
automobile RMB 58.96 25608165 21630408 32593302. 29859820. 26715050.e Industry Subsidiary
s and million 7.97 9.65 18 24 53
and Trade
accessories
Co. Ltd.Shenzhen
Automobil
SDG Huari
e repair and - -
Automobil USD 5 75107596. 29556057. 35733198.Subsidiary spare parts 2829121.4 1945937.9
e million 66 47 93
production 3 0
Enterprise
and sales
Co. Ltd.Shenzhen
RMB
Zhongtian Property 58505851 46155332 96457354. 51254477. 39251356.Subsidiary 366.2219
Industry lease 7.33 7.60 10 03 57
million
Co. Ltd.Shenzhen
Huari
Toyota Automobil RMB 2 67179668. 10951828. 23955499 -
Subsidiary 471317.71
Sales & e sales million 70 91 2.87 232597.36
Service
Co. Ltd.Shenzhen
Xinyongto
ng Motor
Property RMB 19.61 17826951. 12477329. 4870461.3 1037344.9
Vehicle Subsidiary 846433.05
lease million 34 69 0 5
Inspection
Equipment
Co. Ltd.Shenzhen
Tellus
Xinyongto
Property RMB 32.9 96647880. 77784694. 8709877.4 4715518.6 4163355.6
ng Subsidiary
lease million 48 02 8 3 7
Automobil
e
Developme
30nt Co. Ltd.
Shenzhen
Tellus
Chuangyin Property RMB 14 21253369. 17499089. 4327492.9 2044135.5 2165956.9
Subsidiary
g lease million 51 63 9 2 0
Technolog
y Co. Ltd.Purchase
sale and
leasing of
gold
Shenzhen ornaments
Tellus and
Treasury precious RMB 50 49317581. 46096043. 77044112. - -
Subsidiary
Supply metal million 77 90 89 746141.46 746150.98
Chain Tech products
Co. Ltd. leasing of
safe deposit
boxes and
warehousin
g services
Jewelry fair
planning
jewelry
Shenzhen consignme
Jewelry nt - -
RMB 100 57690775. 31100550. 10619854.Industry Subsidiary exhibition 4211575.0 4211575.0
million 24 41 93
Service planning 2 2
Co. Ltd. conference
services
marketing
planning
Investment
in bar sales
Guorun gold
Gold recycling RMB 200 31198419 19944114 32803440 - -
Subsidiary
Shenzhen gold million 6.33 3.33 4.58 544141.04 558856.67
Co. Ltd. purification
/exchange
services
Shenzhen
Renfu Automobil
--
Tellus Joint stock e sales and RMB 30 23811544 56227853. 10881505
24438889.18782486.
Automobil company maintenanc million 1.04 29 61.97
2331
es Service e
Co. Ltd.Investment
Shenzhen in
Tellus- industrial RMB
Joint stock 39107188 94287440. 10298769 37407836. 29305958.Gmond property 53.70496
company 1.35 24 5.69 06 68
Investment manageme million
Co. Ltd. nt and
leasing
Acquisition and disposal of subsidiaries during the reporting period
□Applicable □Not applicable
Company name Method for acquisition and Impacts on the overall production & operation and performance
31disposal of subsidiaries during
the reporting period
Guorun Gold is a comprehensive service platform company for gold circulation
Guorun Gold
established by Tellus Holding to further improve its layout in the gold and
Shenzhen Co. New establishment
jewelry industry. It is in the construction period in 2022 with a net profit of
Ltd.RMB -560000 in 2022.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 comprehensive
service provider in the jewelry industry in 2014 it has been unswervingly and steadily promoting the strategic
transformation and project implementation in accordance with the established plan. After years of exploration
and attempts substantial results have been achieved. During the 14th Five-Year Plan period based on the new
development 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 production
capacity and efficiency around the strategic idea of "adhering to the comprehensive value to cross the economic
cycle improving the value chain with services seeking capital assignment and deeply developing third-party
jewelry services" to strive to build the most influential third-party comprehensive service provider in the
domestic jewelry and jade industry. In 2023 the Company will closely focus on the decomposition and
implementation of the annual objectives of the "14th Five-Year Plan" make overall plans for various tasks from
the four perspectives of long-term vision implementation operability and effectiveness and lead high-quality
and 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. The
overall requirements are: fully implement the spirit of the 20th National Congress of the Communist Party of
China firmly seize the policy opportunities and the opportunity of jewelry industry reform take advantage of
the 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
32supports for jewelry and gold projects; strengthen the development of Party members especially actively
stimulate outstanding employees to move closer to the Party organization on the front line and develop and
expand the Party member team; study publicize and implement the spirit of the 20th National Congress of the
Communist Party of China according to the deployment of the superior; carry out integrity and self-discipline
education for all employees and shape the integrity culture of all employees in a targeted manner in
combination with the characteristics of the industry.(II) Deepen cultivation and promote the efficient development of the jewelry industry. Comprehensively
strengthen market development continuously expand business channels deepen customer stickiness and
diversify services; improve the service system implement new service categories and business models actively
promote 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 of
safe boxes inside and outside the industry; strengthen risk control innovation effectively improve the quality
and efficiency of risk control strengthen industry exchanges and research continuously improve risk control
systems and methods explore digital risk control means and promote the construction and implementation of a
comprehensive risk control system; we will vigorously promote the construction of informatization take the
actual business needs as the guide make efforts in product informatization standards and create the core value
of the enterprise around digital innovation.(III) Comprehensively improve the comprehensive ability of commercial operation business by
benchmarking against advanced standards. Focus on the investment promotion and opening of the Jinzuan
Building to ensure the opening of the building as scheduled and steadily improve the occupancy rate; introduce
commercial complex operation consulting projects carry out industry benchmarking comprehensively optimize
the existing level and improve service capabilities; continuously improve the operation capabilities of jewelry
building 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 and
development tasks integrate talents and release resources and energy; standardize the operation of the control
system optimize the main line of 4S management promote the implementation of strategies and form an
effective closed-loop.(V) Continuously improve the incentive mechanism and strengthen the construction of talent team. Adjust
the organizational structure and staffing of front-line business departments and optimize the salary structure
33and 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 introduction
channels and explore industry recommendation association recommendation internal recommendation
headhunting recruitment and other means to introduce talents in the jewelry industry on the basis of existing
channels.(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 punishments
for work safety assessment; improve work safety capabilities with higher requirements increase internal and
external training and retraining and establish a common growth mechanism; pay close attention to safety
management such as reinforcement and reconstruction of old properties; carry out evaluation activities of work
safety management system.
3. Possible Risks and Countermeasures
In the process of strategy implementation and project operation we will objectively and clearly recognize
the 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 the
pressure on industrial restructuring increased and the overall economic environment had an uncertain impact on
the 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 to
ensure the Company's compliance operation and steady development; Second firmly advance the Company's
strategic transformation pace promote the implementation of transformation projects through innovative
business models explore incremental markets expand business scale seek new profit growth points and
continuously 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 the
demand for various talents in the industry and management is increasing and the existing talent team is
gradually unable to meet the requirements of development.
34Countermeasures: 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 the
organizational 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 to
ensure the stability of enterprise transformation.XII. Reception Investigation Communication Interview and Other Activities during the
Reporting Period
□Applicable □Not applicable
Main points Index of
Classification
Way of Reception talked about general
Reception time Reception place of reception
reception object and information investigation
object
provided information
For details
Investors
please refer to
participating in The Company's
Investor
the Company's strategy 2021
"Value Online" Relations on
2021 online annual
IR Platform the interactive
April 22 2022 Others Others performance performance
(www.ir- platform of
briefing main business
online.cn) Shenzhen Stock
through the and operation
Exchange
"Value Online" management.(http://irm.cninf
IR platform
o.com.cn) .Corporate
January 7 2022 Company On the phone Individual Investor N/A
operations
Fourth quarter
January 13
Company On the phone Individual Investor performance of N/A
2022
the Company
Whether the
Company
January 19
Company On the phone Individual Investor discloses the N/A
2022
performance
forecast
February 14 Corporate
Company On the phone Individual Investor N/A
2022 operations
February 25 Corporate
Company On the phone Individual Investor N/A
2022 operations
Shareholding
reduction of
March 23 2022 Company On the phone Individual Investor N/A
shareholders of
the Company
Disclosure time
point of the
March 31 2022 Company On the phone Individual Investor N/A
annual report of
the Company
Corporate
April 9 2022 Company On the phone Individual Investor N/A
operations
Development
May 8 2022 Company On the phone Individual Investor of main N/A
business sectors
35of the Company
Number of
May 9 2022 Company On the phone Individual Investor shareholders of N/A
the Company
Rent reduction
May 23 2022 Company On the phone Individual Investor N/A
of the Company
Corporate
May 27 2022 Company On the phone Individual Investor N/A
operations
Stock price
June 1 2022 Company On the phone Individual Investor issues of the N/A
Company
Stock price
June 6 2022 Company On the phone Individual Investor issues of the N/A
Company
Operation of
the Company's
June 17 2022 Company On the phone Individual Investor N/A
automotive
sector
Semi-annual
June 28 2022 Company On the phone Individual Investor performance of N/A
the Company
The Company's
purchase of
directors
supervisors and
July 1 2022 Company On the phone Individual Investor N/A
senior
management
liability
insurance
Semi-annual
performance
July 11 2022 Company On the phone Individual Investor N/A
forecast of the
Company
Stock price
July 27 2022 Company On the phone Individual Investor issues of the N/A
Company
The Company's
business and
August 3 2022 Company On the phone Individual Investor N/A
stock price
issues
Relevant
August 11
Company On the phone Individual Investor information of N/A
2022
Huari Company
August 26 Business
Company On the phone Individual Investor N/A
2022 situation
Purchasing of
directors
supervisors and
August 30
Company On the phone Individual Investor senior N/A
2022
management
liability
insurance
September 1 Business
Company On the phone Individual Investor N/A
2022 situation
Completion of
October 14
Company On the phone Individual Investor state-owned N/A
2022
enterprise
36reform
November 17 Corporate
Company On the phone Individual Investor N/A
2022 operations
Whether the
November 24
Company On the phone Individual Investor Company has N/A
2022
acquired
Number of
December 21
Company On the phone Individual Investor shareholders of N/A
2022
the Company
Operation of
December 29
Company On the phone Individual Investor the Company in N/A
2022
2022
37Section IV Corporate Governance
I. Basic Information on Corporate Governance
During the reporting period the Company continuously improved the corporate governance structure and
the internal control system in strict accordance with the Company Law the Securities Law the Rules Governing
the Listing of Stocks on the Shenzhen Stock Exchange the Guidelines for the Standardized Operation of Listed
Companies on the Shenzhen Stock Exchange and other relevant laws and regulations. During the reporting
period the Company has standardized operation strong independence standardized information disclosure and
the actual situation of corporate governance meets the requirements of normative documents for listed corporate
governance. 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 the
General Meeting of Shareholders of the Company comply with the relevant provisions and requirements of the
Company 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 and
medium-sized shareholders were treated fairly enjoying equal rights based on their shares. The Company
strictly implements the Detailed Rules for the Implementation of Online Voting at the General Meeting of
Shareholders 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 witnessed
by lawyers to effectively maintain the legitimate rights and interests of the listed company and all the
shareholders. The Company also communicated with small and medium-sized shareholders through the investor
relations column on the official website and telephone ensuring the smooth and fair information exchange with
small 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 the
2021 Annual General Meeting of Shareholders and 1 Extraordinary General Meeting of Shareholders and
exercised its functions and powers in accordance with laws and regulations the Articles of Association and the
Rules of Procedure for General Meetings of Shareholders to form effective resolutions.
382. Directors and Board of Directors
During the reporting period the Company has 9 members of the Board of Directors including 3
independent directors. The number and structure of the Board of Directors comply with the requirements of
relevant laws and regulations and the Articles of Association. The Board of Directors has three special
committees namely the Strategy Committee the Audit Committee and the Remuneration and Appraisal
Committee. Each special committee strictly abides by the relevant systems and regulations and performs its own
duties which effectively strengthens the standardized operation of the work of the Board of Directors of the
Company 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 special
committees of the Board of Directors in accordance with laws and regulations the Articles of Association the
Rules of Procedure for the Board of Directors and the rules of procedure for special committees. The convening
procedures proposal review procedures and decision-making procedures of the meeting all comply with
relevant regulations. The directors can attend the board meeting with a serious and responsible attitude actively
participate 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 structure
of expertise are diligent and responsible in the performance of their duties and safeguard the overall interests
of the Company. The independent directors have expressed prior approval opinions and independent opinions
on relevant matters with a fair and diligent attitude which has improved the scientific and fair decision-making
of 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 including
2 employee representative supervisors. The number and personnel of the Board of Supervisors meet the
requirements of laws regulations and the Articles of Association. During the reporting period the Company
held 4 meetings of the Board of Supervisors in accordance with relevant laws and regulations the Articles of
Association and the Rules of Procedure for the Board of Supervisors. The supervisors supervised the
Company's operation and financial status and the legality and compliance of the Company's directors and senior
executives in performing their duties and safeguarded the legitimate rights and interests of the Company and
shareholders.
4. Information Disclosure and Investor Relation Management
The Company shall in strict accordance with the requirements of the Information Disclosure System
39designate 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 shareholders
of 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 General
Meeting of Shareholders without directly or indirectly intervening in the Company's decision-making and
business activities in any other way and without occupying the funds of the listed company; the Company and
its controlling shareholder have achieved "five separations" in terms of assets finance personnel institutions
and business; the Board of Directors the Board of Supervisors and the internal management organization of the
Company can operate independently to ensure that major decisions of the Company are made in accordance
with standardized procedures.
6. Performance evaluation and incentive and restraint mechanism
The Company has gradually established and improved the open and transparent performance evaluation
standards and incentive and restraint mechanisms for directors supervisors and senior executives. The
appointment of senior executives of the Company is open and transparent which complies with the provisions
of laws and regulations.
7. About stakeholders
While pursuing economic benefits and protecting the interests of shareholders the Company can fully
respect and safeguard the legitimate rights and interests of stakeholders and effectively communicate and
cooperate with stakeholders. The Company pays attention to the protection of employees' rights and interests
and supports the congress of workers and staff and trade union organizations to exercise their functions and
powers according to law. During the reporting period the Company cultivated talents attached importance to
social responsibility paid attention to social welfare undertakings such as welfare environmental protection and
voluntary service and achieved good social benefits while achieving economic benefits. As of the end of the
reporting period the actual situation of corporate governance met the requirements of the normative documents
on 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
40administrative regulations or the rules of the CSRC governing the governance of listed companies.
II. Independence of the Company from Controlling Shareholder and Actual Controller in
the Company's Assets Personnel Finance Organization Business etc.The Company has been independent from business personnel assets organizations and finance etc. of
the controlling shareholder and is provided with independent and complete businesses and self-operation
capabilities.
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 operation
ability. The Company has independent operation and service systems and its own leading industries. There is no
horizontal 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 General
Manager Chief Financial Officer Secretary of the Board of Directors and other senior executives of the
Company all worked in the Company and received remuneration during their tenure in the Company and did
not 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 assets
are 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 controlling
shareholder interferes with the Company's capital operation; the Company has opened an independent bank
account and there is no deposit of funds into the account of a finance company or a settlement center controlled
by a major shareholder or other related parties; the Company does not share bank accounts with the controlling
shareholder 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 of
the specifications of listed companies and the actual business characteristics of the Company. The Company has
an independent office address.
41III. Horizontal Competition
□ Applicable □Not applicable
IV. Annual General Meeting and Extraordinary General Meetings (EGM) during the
Reporting Period
1. Situation of General Meeting of Shareholders during the reporting period
Attendance
Session of Type of Holding Disclosure
proportion of
meeting meeting date date Resolution
investors
For details please refer to the Announcement
on Resolutions of 2021 Annual General
2021 Annual Annual General April 29 April 30 Meeting of Shareholders (Announcement No.:
60.77%
General Meeting Meeting 2022 2022 2022-016) of Securities Times Hong Kong
Commercial Daily and CNINFO
(www.cninfo.com.cn).For details please refer to the Announcement
The First on Resolutions of the First Extraordinary
Extraordinary
Extraordinary September September General Meeting of 2022 (Announcement No.:
General 59.79%
General Meeting 15 2022 16 2022 2022-043) of Securities Times Hong Kong
Meeting
in 2022 Commercial 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
Numb Num
Numb
er of Numb ber of
er of Reaso
increa er of share
shares ns for
sed decrea s at
Date of Date of held at the
Servic shares sed Other the
Gen Ag term term the increa
Name Title e in shares increase/dec end
der e commence expirati beginn se or
status curren in rease (share) of the
ment on ing of decre
t current perio
the ase of
period period d
period shares
(share (share) (shar
(share)
) e)
Fu In- Septem
Chairma September
Chunl servic Male 50 ber 12 0 0 0 0 0 -
n 7 2018
ong e 2024
In- Septem
Hong September
Director servic Male 49 ber 12 0 0 0 0 0 -
Wenya 13 2021
e 2024
Director In- Septem
Wu September
General servic Male 52 ber 12 0 0 0 0 0 -
Ruikai 13 2021
Manager e 2024
42In- Septem
Yang April 29
Director servic Male 42 ber 12 0 0 0 0 0 -
Xi 2022
e 2024
In- Septem
Huang September
Director servic Male 36 ber 12 0 0 0 0 0 -
Liang 15 2022
e 2024
In- Septem
Lou Fem February
Director servic 55 ber 12 0 0 0 0 0 -
Hong ale 27 2018
e 2024
Chief In- Septem
Lou Fem January 4
Financia servic 55 ber 12 0 0 0 0 0 -
Hong ale 2018
l Officer e 2024
Hu Indepen In- Septem
January 4
Yumin dent servic Male 58 ber 12 0 0 0 0 0 -
2018
g Director e 2024
Jiang Indepen In- Septem
September
Dingh dent servic Male 60 ber 12 0 0 0 0 0 -
72018
ang Director e 2024
Indepen In- Septem
Zhang September
dent servic Male 49 ber 12 0 0 0 0 0 -
Dong 7 2018
Director e 2024
Chairma
Guo n of In- Septem
September
Xiaod Board of servic Male 59 ber 12 0 0 0 0 0 -
72018
ong Supervis e 2024
ors
In- Septem
Zhang Supervis September
servic Male 53 ber 12 0 0 0 0 0 -
Baojun or 13 2021
e 2024
Zeng In- Septem
Supervis September
Xingy servic Male 42 ber 12 0 0 0 0 0 -
or 13 2021
u e 2024
Liu Staff In- Septem
Fem September
Haiche Supervis servic 54 ber 12 0 0 0 0 0 -
ale 7 2018
ng or e 2024
Staff In- Septem
Zhang September
Supervis servic Male 39 ber 12 0 0 0 0 0 -
Zheng 7 2018
or e 2024
Deputy
Secretar
In- Septem
Tan y of September
servic Male 55 ber 12 0 0 0 0 0 -
Zhong Party 7 2018
e 2024
Committ
ee
Deputy In- Septem
Xie October
General servic Male 58 ber 12 0 0 0 0 0 -
Jing 25 2018
Manager e 2024
Deputy In- Septem
Qi September
General servic Male 50 ber 12 0 0 0 0 0 -
Peng 29 2021
Manager e 2024
Secretar
y of the In- Septem
Qi December
Board of servic Male 50 ber 12 0 0 0 0 0 -
Peng 28 2015
Director e 2024
s
Yang Resig September March
Director Male 45 0 0 0 0 0 -
Hongy ned 13 2021 28
43u 2022
Gu May
Resig September
Zhimi Director Male 52 20 0 0 0 0 0 -
ned 7 2018
ng 2022
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 the
reporting period
□Yes □ No
Mr. Yang Hongyu the former director of the Company resigned as a director of the 10th Board of
Directors and a member of the Strategy Committee of the Board of Directors due to work arrangement
application 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 and
CNINFO (www.cninfo.com.cn).Mr. Gu Zhiming the former director of the Company resigned as a director of the 10th Board of Directors
and a member of the Strategy Committee of the Board of Directors due to work arrangement application and no
longer held any position in the Company after resignation. The resignation report of Mr. Gu Zhiming 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.: 2022-021) published by
the 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
Yang Resign from the position of director of the Company due to work
Director Resigned March 28 2022
Hongyu arrangement.He was elected as a director of the 10th Board of Directors of the
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 Resign from the position of director of the Company due to work
Director Resigned May 20 2022
Zhiming arrangement.He was elected as a director of the 10th Board of Directors of the
Huang Company at the 4th formal meeting of the 10th Board of Directors of the
Director Elected September 15 2022
Liang Company 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 supervisors
and senior executives
44Name Main Work Experience and Employment
Born in 1973 he holds a master's degree and is a senior human resource manager. He once served as the deputy
leader of the working group of Shenzhen SDG Huatong Packaging Co. Ltd. the deputy business manager business
manager deputy director and director of the Human Resources Department of Shenzhen Special Economic Zone
Fu Chunlong Development Group Co. Ltd. the vice president of Shenzhen Special Economic Zone Development Group Co.Ltd. the supervisor of Shenzhen State-Owned Duty Free Commodity (Group) Co. Ltd. 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.Born in 1974 Master Senior Accountant Certified Public Accountant and International Certified Internal Auditor
(CIA). He once served as the Audit Manager of Shenzhen Lyingda Group the Financial Manager of the Business
Department and the Audit Manager of the Supervision and Audit Headquarters of Guosen Securities Co. Ltd. the
Financial Manager of Shenzhen International Security Technology Ltd. the Deputy Manager and Deputy Director of
the Audit Department of Shenzhen Yunfa Industrial Co. Ltd. and the Chief Financial Officer of Shenzhen Institute
Hong Wenya of Building Research Deputy Director of the Finance Department of Shenzhen Yuanzhi Investment Co. Ltd.Director of the Budget Management and Financial Supervision Department of State-owned Assets Supervision 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.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
Yang Xi 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
Wu Ruikai and Manager of the Party-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
Lou Hong 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.Born in 1987 bachelor's degree in economics an assistant economist. Holding the qualification certificate of the
secretary of the board of directors of a listed company on the Shenzhen Stock Exchange and the qualification
certificate of securities practitioners. Successively worked as a clerk of the Nanshan Branch of Shenzhen Municipal
Administration of Work Safety president secretary of Shenzhen Qixin Construction Group Co. Ltd. assistant to the
Huang Liang Chairman of Hong Kong Litong International Holdings (Group) Limited and senior secretary of the Office of China
Baoan Group Co. Ltd. In May 2017 he joined Shenzhen Special Economic Zone Development Group Co. Ltd. and
successively served as office secretary-manager and senior secretary-manager. He is currently the deputy office
director (in charge) of Shenzhen Special Economic Zone Development Group Co. Ltd. and a director of the
Company.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
Hu Yuming 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
Jiang Dinghang 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
45investment analyst and a GIA research gemologist. He once served as deputy general manager of Shenzhen
Qiangzhuang Computer Technology Co. Ltd. deputy general manager of Shenzhen Brain Times Economy and
Culture 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.Born in 1964 he holds a bachelor's degree and is a senior economist. He once worked as an assistant engineer at the
Agricultural Machinery Bureau of Shuangliao City Jilin Province engineer at the Fourth Research Office of Jilin
Agricultural Machinery Research Institute manager of Gaodao Industrial (Shenzhen) Co. Ltd. director deputy
general manager and general manager of Engineering Department of Shenzhen Tefa Development Center Property
Guo Xiaodong 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.Born in 1969 she holds a master's degree and is a senior engineer. She once served as a staff member of the Design
Department of Dongfeng Motor Wheel Co. Ltd. a staff member of the Technical Department of Shenzhen
Dongfeng Motor Co. Ltd. a staff member of the Secretariat of Shenzhen Automobile Industry Association a staff
Liu Haicheng member of the Business Department of the Automobile Business Division of the Company and a staff member
deputy manager and manager of the Business Management Department of the Company. She is currently the deputy
general manager and employee representative supervisor of the Jewelry Industry Management Division of the
Company.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
Zhang Zheng 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
Tan Zhong 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.Born in 1965 a Canadian he holds a bachelor's degree in Engineering and is a Senior Engineer and National
Registered Supervision Engineer. He once served as structural engineer of Hunan Light Industry Design Institute
engineer of the Hunan Branch of Bank of China general manager assistant of the Real Estate Department and
Xie Jing 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.Born in 1973 he holds a master's degree and is an economist. He has obtained the qualification certificate of
Secretary of the Board of Directors of Shenzhen Stock Exchange. He once served as the secretary of the chairman
and the head of the Information Center of Shenzhen Special Economic Zone Development Group Co. Ltd. the
deputy director of the Secretariat of the Board of Directors the deputy manager of the Enterprise Management
Qi Peng Department and the manager of the Business Department of the Automobile Business Division of Shenzhen Tellus
Holding Co. Ltd. the general manager of Shenzhen Tellus Automobile Service Chain Co. Ltd. the general manager
of Shenzhen Tellus Xinyongtong Automobile Development Co. Ltd. director of the Secretariat of the Board of
Directors of Shenzhen Tellus Holding Co. Ltd. etc. He currently serves as the Deputy General Manager and the
Secretary of the Board of Directors of the Company.Position in the Shareholder's Entity
□Applicable □Not applicable
Whether there is
Date of
Name compensation or
Name of the shareholder's Position in the shareholder's Date of term term
of allowance in the
entity entity commencement expirati
officer shareholder's
on
entity or not
Shenzhen Special Economic Member of the Party
Hong
Zone Development Group Committee Director and June 15 2021 - Yes
Wenya
Co. Ltd. Chief Financial Officer
Yang Shenzhen Special Economic General Manager of Strategic December 6 2021 - Yes
46Xi Zone Development Group Investment Department
Co. Ltd.Shenzhen Special Economic
Huang Deputy Office Director (in
Zone Development Group December 6 2021 - Yes
Liang charge)
Co. Ltd.Conditions on service in other units
□Applicable □Not applicable
Whether there is
Position
Name of Date of term Date of term compensation or
Name of other units held in other
officer commencement expiration allowance in the
units
other units or not
Hong Shenzhen SDG Information Co.Director December 16 2022 July 15 2024 No
Wenya Ltd.Hong Shenzhen SEZ Construction Group
Supervisor December 23 2021 - No
Wenya Co. Ltd.Shenzhen SDG Information Co.Yang Xi Director December 13 2021 July 15 2024 No
Ltd.Shenzhen Zhishenggao Technology
Yang Xi Director December 24 2021 - No
Development Co. Ltd.Shenzhen Renfu Tellus Automobiles Vice
Lou Hong March 28 2019 - No
Service Co. Ltd. Chairman
Professor
and Doctoral
Hu Supervisor
Jinan University June 1 2003 - Yes
Yuming of the
School of
Management
Jiang Shanghai Allbright (Shenzhen) Law Senior
April 1 2005 - Yes
Dinghang Offices Partner
Jiang Gaoxin Modern Intelligent System Independent
January 21 2020 - Yes
Dinghang Co. Ltd. Director
Zhang Yijixuan Jewelry (Chengdu) Co.Chairman September 3 2021 - Yes
Dong Ltd.Conditions
on service The positions of the Company's directors supervisors and senior executives in other units are those of non-holding
in other subsidiaries of the Company.units
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 senior
executives shall be implemented in strict accordance with the Detailed Rules for the Implementation of the Remuneration and
Appraisal Committee of the Board of Directors of Shenzhen Tellus Holding Co. Ltd. the Measures for the Management of
Remuneration and Performance of Members of the Management Team of Shenzhen Tellus Holding Co. Ltd. the Remuneration
Management System for Employees of Headquarters of Shenzhen Tellus Holding Co. Ltd. the Measures for the Management of
Employee 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 10000
47Whether to
Total
receive
compensation
compensation
Name Title Gender Age Service status before tax
from related
received from
parties of the
the Company
Company
Fu Chunlong Chairman Male 50 In-service 159.82 No
Hong Wenya Director Male 49 In-service 0 Yes
Director
Wu Ruikai General Male 52 In-service 94.04 No
Manager
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
Independent
Hu Yuming Male 58 In-service 8 No
Director
Independent
Jiang Dinghang Male 60 In-service 8 No
Director
Independent
Zhang Dong Male 49 In-service 8 No
Director
Chairman of
Guo Xiaodong 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
Employee
Liu Haicheng Female 54 In-service 67.06 No
Supervisor
Employee
Zhang Zheng Male 39 In-service 55.27 No
Supervisor
Deputy
Secretary of
Tan Zhong Male 55 In-service 119.53 No
Party
Committee
Deputy General
Xie Jing Male 58 In-service 156.71 No
Manager
Deputy General
Manager
Qi Peng Secretary of the Male 50 In-service 103.48 No
Board of
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
Holding Disclosure
Session of meeting date date Resolution
For details please refer to the Announcement on Resolutions of the
The Second Formal
April 7 April 8 Second Formal Meeting of the Tenth Board of Directors (Announcement
Meeting of the Tenth
2022 2022 No.: 2022-005) of Securities Times Hong Kong Commercial Daily and
Board of Directors
CNINFO (www.cninfo.com.cn)
The Third Formal April 28 April 29 For details please refer to the Announcement on Resolutions of the
48Meeting of the Tenth 2022 2022 Third Formal Meeting of the Tenth Board of Directors (Announcement
Board of Directors No.: 2022-014) of Securities Times Hong Kong Commercial Daily and
CNINFO (www.cninfo.com.cn)
For details please refer to the Announcement on Resolutions of the
The Third Extraordinary
May 19 May 20 Third Extraordinary Meeting of the Tenth Board of Directors
Meeting of the Tenth
2022 2022 (Announcement No.: 2022-019) of Securities Times Hong Kong
Board of Directors
Commercial Daily and CNINFO (www.cninfo.com.cn)
For details please refer to the Announcement on Resolutions of the
The Fourth Extraordinary
June 14 June 15 Fourth Extraordinary Meeting of the Tenth Board of Directors
Meeting of the Tenth
2022 2022 (Announcement No.: 2022-026) of Securities Times Hong Kong
Board of Directors
Commercial Daily and CNINFO (www.cninfo.com.cn)
For details please refer to the Announcement on Resolutions of the
The Fourth Formal
August 24 August 25 Fourth Formal Meeting of the Tenth Board of Directors (Announcement
Meeting of the Tenth
2022 2022 No.: 2022-040) of Securities Times Hong Kong Commercial Daily and
Board of Directors
CNINFO (www.cninfo.com.cn)
For details please refer to the Announcement on Resolutions of the Fifth
The Fifth Extraordinary
September September Extraordinary Meeting of the Tenth Board of Directors (Announcement
Meeting of the Tenth
29 2022 30 2022 No.: 2022-047) of Securities Times Hong Kong Commercial Daily and
Board of Directors
CNINFO (www.cninfo.com.cn)
The Fifth Formal
October 27
Meeting of the Tenth Deliberation of a proposal for the third quarterly report of 2022
2022
Board of Directors
For details please refer to the Announcement on Resolutions of the
The Sixth Extraordinary
November November Sixth Extraordinary Meeting of the Tenth Board of Directors
Meeting of the Tenth
24 2022 25 2022 (Announcement No.: 2022-051) of Securities Times Hong Kong
Board of Directors
Commercial Daily and CNINFO (www.cninfo.com.cn)
The Seventh For details please refer to the Announcement on Resolutions of the
Extraordinary Meeting of December December Seventh Extraordinary Meeting of the Tenth Board of Directors
the Tenth Board of 23 2022 27 2022 (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 Shareholders
Number of
Attendances at Attendances Attending the
attendances Attendances
Attendances the Board at the Board Board
to the Board Times of absence at the
Name of at the Board Meeting Meeting Meeting not in
Meeting at the Board General
Director Meeting in through through person for two
during the Meeting Meeting of
person communication entrusting consecutive
reporting Shareholders
tools others times or not
period
Fu
10 1 9 0 0 No 1
Chunlong
Hong
10 0 10 0 0 No 0
Wenya
Yang Xi 7 0 7 0 0 No 0
Wu
10 1 9 0 0 No 2
Ruikai
Huang
5 0 5 0 0 No 0
Liang
Lou Hong 10 1 9 0 0 No 2
Hu
10 0 10 0 0 No 0
Yuming
Jiang
10 0 10 0 0 No 1
Dinghang
Zhang 10 0 10 0 0 No 1
49Dong
Gu
3 0 3 0 0 No 0
Zhiming
Explanation on failure to attend the Board Meeting in person two consecutive times: During the reporting period there were no
cases 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 □ No
Description 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 with
the Company Law the Securities Law the Guidelines for Self-discipline Regulation of Listed Companies of
Shenzhen 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 the
Board of Directors and were faithful to their duties diligent and responsible. They all actively attended the
Board Meeting understood the essence of the proposals under consideration and related business carefully
reviewed and discussed various proposals and put forward targeted suggestions for the Company's internal
control operation management and strategic layout. In accordance with the relevant provisions of the Rules for
Independent Directors of Listed Companies the independent directors of the Company give full play to their
own professional knowledge make independent and impartial judgments carry out limited supervision on the
financial production and operation activities and information disclosure of the Company play a positive role in
the scientific decision-making and standardized operation of the Board of Directors and effectively safeguard
the legitimate rights and interests of the Company and all shareholders. The Company listens carefully to the
suggestions put forward by the directors and actively adopts reasonable suggestions that meet the development
needs of the Company.VII. Special Commission Set under the Board of Directors during the Reporting Period
Number Important
Other Details of
Name of of Holding comments
Members Meeting content performance objections
Committee meetings date and
of duties (if any)
Held suggestions
Hong Wenya
Lou Hong Review of preliminary
Audit Hu Yuming January arrangements for an
3 Agreed - -
Committee Jiang 13 2022 audit of the 2021
Dinghang annual financial report
Zhang Dong
Hong Wenya Review of 2021
Audit April 7
Lou Hong 3 financial position and Agreed - -
Committee 2022
Hu Yuming operating results
50Jiang
Dinghang
Zhang Dong
Hong Wenya
Lou Hong Deliberation on the
Audit Hu Yuming September Proposal on
3 Agreed - -
Committee Jiang 28 2022 Reappointment of
Dinghang Auditors in 2022
Zhang Dong
Fu Chunlong
Hong Wenya Review of the 2022
Remuneration
Hu Yuming April 7 performance indicators
and Appraisal 4 Agreed - -
Jiang 2022 of Tellus Holding and
Committee
Dinghang its management team
Zhang Dong
Review of the results
Fu Chunlong of the 2021 annual
Hong Wenya performance appraisal
Remuneration
Hu Yuming August 22 and the approval of the
and Appraisal 4 Agreed - -
Jiang 2022 2021 annual
Committee U
Dinghang performance salary of
Zhang Dong the management team
of Tellus Holding
Fu Chunlong Deliberation on the
Hong Wenya report on the results of
Remuneration
Hu Yuming September the 2019-2021 tenure
and Appraisal 4 Agreed - -
Jiang 7 2022 appraisal of the
Committee U
Dinghang management team of
Zhang Dong Tellus Holding
Fu Chunlong
Deliberation on the
Hong Wenya
Remuneration report on the 2019-
Hu Yuming October
and Appraisal 4 2021 tenure incentives Agreed - -
Jiang 28 2022
Committee U of the management
Dinghang
team of Tellus Holding
Zhang Dong
Fu Chunlong
Deliberation on the
Hong Wenya
Strategy April 7 Development Strategy
Wu Ruikai 2 Agreed - -
Committee 2022 Plan for the "14th
Yang Xi
Five-Year Plan"
Huang Liang
Fu Chunlong Deliberation on the
Hong Wenya proposal for
Strategy June 14
Wu Ruikai 2 investment in the gold Agreed - -
Committee 2022
Yang Xi circulation platform
Huang Liang project
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.
51IX. Employees of the Company
1. Number of employees professional composition and level of education
Number of existing employees in the parent company at the
106
end of the reporting period (person)
Number of existing employees in the main subsidiaries at the
211
end of the reporting period (person)
Total number of existing employees at the end of the reporting
317
period (person)
Total number of employees payable in current period (person) 317
Number of retired employees with expenses incurred by the
2
parent company and main subsidiaries (person)
Professions
Type of professions Number of professional persons (person)
Production personnel 0
Sales personnel 88
Technician 75
Financial personnel 28
Administrative personnel 126
Total 317
Level of education
Level of education Number of employees
Master's degree and above 31
Bachelor's degree 102
Junior college 67
Others 117
Total 317
2. Compensation policy
The Company strictly implements remuneration policy in accordance with the Remuneration Management
System for Employees of Headquarters of Shenzhen Tellus Holding Co. Ltd. and the Performance Assessment
Management 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 and
the professional skills of reserve talents and core staff. In the actual training work the Company should
constantly enrich the training content expand the training form optimize the training process and clarify the
training purpose so as to improve the training effect. Specific measures: First enrich optimize and update the
learning 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 strengthen
the management of departmental training quotas and improve the efficiency of training funds; Fourth optimize
the reward rules of the network college and continuously improve the learning atmosphere; Fifth refine
management capability requirements and carry out targeted training for middle managers to improve
52management capability; Sixth focus on external training and carry out strategic management ability training to
enhance the vision of senior management.
4. Labor outsourcing
□ Applicable □Not applicable
X. Profit Distribution and Capital Reserve Converted into Share Capital of the Company
Preparation implementation or adjustment of the profit distribution policy during the reporting period especially the cash
dividend policy
□Applicable □Not applicable
The Company attaches great importance to the reasonable return to investors. The Articles of Association specifies the standards
and proportions of cash dividends decision-making procedures and mechanisms and the form of profit distribution. The Company
strictly implements the Articles of Association and the resolutions of the General Meeting of Shareholders. The standard and
proportion 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 fully
express their opinions and demands and the legitimate rights and interests of minority shareholders are fully safeguarded.Special explanation on cash dividend policy
Whether it complies with the provisions of the Articles of
Association or the requirements of resolutions of the general Yes
meeting of shareholders:
Whether the dividend standards and proportions are definite
Yes
and clear:
Whether the relevant decision-making processes and
Yes
mechanisms are complete:
Whether the independent directors perform their duties and
Yes
play their due role:
Whether the minority shareholders have the opportunity to
fully express their opinions and demands and whether their Yes
legitimate rights and interests are adequately protected:
Whether the conditions and procedures for adjusting and
changing the cash dividend policy are compliant and Yes
transparent:
During 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 applicable
Number of bonus shares per 10 shares (share) 0
Number of dividends per 10 shares (RMB) (tax-inclusive) 0.28
Base of share capital in distribution pre-plan (share) 431058320
Total cash dividends (RMB) (tax-inclusive) 12069632.96
Amount of cash dividends in other ways (for example share
0.00
repurchase) (RMB)
53Total amount of cash dividends (including other ways) (RMB) 12069632.96
Distributable profit (RMB) 57543443.57
The proportion of total cash dividends (including other forms)
100%
to total profit distribution
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
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 the
Company the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange and other regulations on cash dividends and
taking into account the Company's future strategic layout and other capital expenditure needs Based on the total share capital of
431058320 shares as of December 31 2022 the Company plans to distribute a cash dividend of RMB 0.28 (including tax) for
every 10 shares to all shareholders with a total cash dividend of RMB 12069632.96 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 Ownership
Plan 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 incentive
measures and their implementation for the Company.XII. Establishment and Implementation of Internal Control System during the Reporting
period
1. Establishment and implementation of internal control
During the reporting period the Company has established a systematic and effective internal control
system from the governance level to each work process level and will continuously improve it. The Board of
Directors is responsible for the establishment improvement and effective implementation of the internal control
system; 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 is
responsible for the specific organization and implementation of the Company's internal control system; The
person in charge of the enterprise department and office specifically undertakes the internal control work of the
enterprise department and office; The Board of Supervisors shall supervise the internal control system
established and implemented by the Board of Directors. The Company has established the above internal
control organizational structure according to the Basic Standard for Enterprise Internal Control and its
supporting 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 post
performs its duties within the scope of authority.
54Based on the identification results of material deficiencies in internal control over financial reports of the
Company there are no material deficiencies in internal control over financial reports on the base date of the
internal control assessment report. The Company has maintained effective internal control over financial
reporting in all material aspects in accordance with the requirements of the enterprise's internal control standard
system 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
Problems
Integration Solutions Resolution Follow-up
Company name Integration Plan Encountered in
Progress Taken Progress Resolution Plan
Integration
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 the
internal controls April 27 2023
evaluation report
Disclosure index of
For details please refer to the 2022 Annual Internal Control Self-evaluation Report disclosed by the
the internal controls
Company on CNINFO (http://www.cninfo.com.cn)
evaluation report
Proportion of total
unit assets included in
the evaluation scope
to total assets from 100.00%
the Company’s
consolidated financial
statements
Proportion of unit
revenue included in
the evaluation scope
to operating revenue 100.00%
from the Company’s
consolidated financial
statements
Deficiency identification standards
Class Financial reports Non-financial reports
1. Material deficiencies: Deficiencies either individually 1. Material deficiencies:
or in combination with other deficiencies resulting in a * Major decisions violate the Company's
Qualitative standards material misstatement in a financial report that cannot be prescribed procedures causing major losses
prevented or detected and corrected in a timely manner. to the Company;
The following situations shall be deemed as material * Serious violation of laws and regulations
55deficiencies: causing heavy losses to the Company;
* Management fraud leads to material misstatement of * Lack of system control or failure of
financial results or provision of false financial reports system for important business;
misleading users of financial reports resulting in decision- * Serious turnover of core management
making errors and litigation; personnel or core technical personnel;
* The control environment is invalid; * The material deficiencies in the internal
* Major internal control deficiencies found and reported control evaluation results have not been
to the management have not been corrected after a rectified;
reasonable period of time; * The internal control of information
* The Company fails to perform the corresponding disclosure fails resulting in the Company
decision-making procedures for the decision-making of being publicly condemned by regulatory
major matters resulting in significant losses to the authorities.Company; 2. Significant deficiencies:
* Lack of effective control over important businesses * The Company violates the internal rules
involving the Company's production and operation; and regulations of the enterprise resulting in
* Other deficiencies that seriously mislead the correct relatively large losses;
judgment of the user of the statement and lead to major * Serious brain-drain in key positions of the
compensation of the Company. Company;
2. Significant deficiencies: Deficiencies either * The Company's important business system
individually or in combination with other deficiencies or system has defects;
resulting in the failure to prevent or detect and correct * The significant deficiencies in the
misstatements in the financial report in a timely manner Company's internal control have not been
that do not meet or exceed the level of materiality but still rectified.deserve the attention of management. The following 3. General deficiencies: other control
situations shall be deemed as significant deficiencies: deficiencies than the above-mentioned
* Failure to select and apply accounting policies in material deficiencies and significant
accordance with generally accepted accounting principles; deficiencies.* Failure to establish anti-fraud procedures and control
measures;
* There is no corresponding control mechanism
established or implemented for the accounting treatment of
unconventional or special transactions and there is no
corresponding compensatory control;
* There are one or more deficiencies in the control of the
financial reporting process at the end of the period and
there is no reasonable assurance that the financial
statements prepared are true and accurate.
3. General deficiency refers to other deficiencies in control
other than the above-mentioned material deficiency and
significant deficiency.
1. Material deficiencies: the amount of loss >
1.5% of the owner's equity attributable to the
parent company and the absolute amount is >
1. Material deficiencies: misstatement > 10% of the total
RMB 5 million;
profit and the absolute amount > RMB 2 million;
2. Significant deficiencies: 0.5% of the
2. Significant deficiencies: 5% of the total profit <
owner's equity attributable to the parent
misstatement ≤ 10% of the total profit and the absolute
Quantitative company < loss amount ≤ 1.5% of the
amount > RMB 1 million; or RMB 1 million < absolute
standards owner's equity attributable to the parent
amount ≤ RMB 2 million and the misstatement amount >
company or RMB 1 million < absolute
5% of the total profit;
amount ≤ RMB 5 million;
3. General deficiencies: misstatement ≤ 5% of the total
3. General deficiencies: the amount of loss ≤
profit or absolute amount ≤ RMB 1 million.
0.5% of the owner's equity attributable to the
parent company or the absolute amount ≤
RMB 1 million.Number of material
deficiencies in the 0
financial report (Nr.)
56Number of material
deficiencies in the
0
non-financial report
(Nr.)
Number of significant
deficiencies in the 0
financial report (Nr.)
Number of significant
deficiencies in the
0
non-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 Disclosure
Disclosure date of auditor's report on internal control April 27 2023
For details please refer to the Internal Control Assurance
Disclosure index of auditor's report on internal control 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 opinion
Whether there are material deficiencies in the non-financial
No
report
Does 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 of
Directors
□Yes □ No
XV. Rectification of Problems Identified in the Self-inspection over the Listed Company's
Special Governance Measures
N/A
57Section V Environmental and Social Responsibility
I. Major Environmental Protection Issues
Whether the listed company and its subsidiaries belong to the key pollutant discharging entities announced by the environmental
protection authorities
□Yes □No
Administrative penalties imposed for environmental problems during the reporting period
Impact on the
Rectification
Name of company Reason for Production and
Violations Penalty Measures of the or subsidiary Punishment Operation of
Company
Listed Companies
N/A N/A N/A N/A N/A N/A
Disclosure of other environmental information with reference to key pollutant discharging entities
During the reporting period the Company and its subsidiaries have not been subject to administrative punishment due to
environmental 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 discharge
units announced by the environmental protection department and there was no punishment due to violations of laws and
regulations during the reporting period.II. Social Responsibilities
The Company takes it as its duty to return shareholders cultivate outstanding employees and give back to
society. Based on the principle of fairness the Company actively safeguards the legitimate rights and interests
of shareholders advocates realizing self-value while realizing enterprise value creates an enterprise atmosphere
of common and harmonious development actively repays society and the public highlights the responsibility of
state-owned enterprises and gives full play to the strength of the Company's youth commando Party member
pioneer team volunteer service team etc. A total of more than 60 people voluntarily participated in community
health and environment work and served the community more than 300 times; 63 people have been sent to
participate in health services in Futian District and Luohu District with an average service period of 10 days per
capita.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 work
safety management system carried out various safety inspections completed the rectification of all hidden
58dangers organized 23 safety publicity education and training sessions and 3 emergency drills and actively
promoted the special rectification of the safety of self-built houses.III. Details on Consolidating and Expanding its Achievements in Poverty alleviation and
Rural Revitalization
In response to the implementation of the rural revitalization strategy the Company assigned special
personnel to Chengtian Town Shantou City to carry out the assistance work and address the agricultural and
sideline products in the assistance areas by purchasing instead of donating so as to promote poverty alleviation
through consumption and open up the sales channels of agricultural products and effectively promote the local
poverty alleviation and rural revitalization with practical actions.
59Section VI Important Matters
I. 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 purchasers
and other commitment related parties
□Applicable □Not applicable
Commitment Committed Commitment Commitment Commitment
Commitment content Performance
causes party type time period
The Company will
maintain the independence
of the listed company and
maintain personnel
independence institutional
independence financial
independence and asset
integrity with the listed
company. The listed
During the
company will still have
period of being
Commitment independent operation
Shenzhen Ensure the the indirect
made in ability independent
Investment independence December controlling In
acquisition procurement production
Holdings Co. of listed 30 2022 shareholder of performance
report or report and sales system and
Ltd. companies Tellus
of equity change independent intellectual
Holding a
property rights.listed company
In case of violation of the
above commitments the
Company will bear
corresponding legal
responsibilities including
but not limited to
compensation for all
losses caused to the listed
company.
1. As of the signing date
of this Letter of
Commitment the
Company and other During the
enterprises controlled by period of being
Commitment
Shenzhen the Company have not the indirect
made in Avoid
Investment engaged in businesses and December controlling In
acquisition horizontal
Holdings Co. activities that are in direct 30 2022 shareholder of performance
report or report competition
Ltd. competition with or may Tellus
of equity change
constitute direct Holding a
competition with Tellus listed company
and will not engage in
businesses and activities
that are in direct
60competition with or may
constitute direct
competition with Tellus in
the future (except those
arranged based on the
Shenzhen SASAC or
similar government
agencies);
2. During the period of
being the controlling
shareholder of Tellus and
during its listing on
Shenzhen Stock
Exchange the Company
will fully respect the
independent operation
autonomy of all
subsidiaries controlled by
the Company and ensure
that the legitimate rights
and interests of Tellus and
its minority shareholders
will not be infringed;
3. The Company promises
not to seek illegitimate
interests with the status of
controlling shareholder of
Tellus thus damaging the
rights and interests of
Tellus and its
shareholders;
4. The Company promises
not to assist any party or
third party to engage in
any business activities that
are in substantial
competition or potential
competition with the main
business of Tellus by
using the information
learned or known from
Tellus;
5. If the Company or other
enterprises controlled by
the Company violate the
above commitments and
guarantees the Company
shall bear the economic
losses caused to the listed
company.
1. The Company and the During the
companies enterprises and period of being
Commitment
Shenzhen Reduce and economic organizations the indirect
made in
Investment standardize controlled or actually December controlling In
acquisition
Holdings Co. related party controlled by the 30 2022 shareholder of performance
report or report
Ltd. transactions Company (excluding Tellus
of equity change
enterprises controlled by Holding a
listed companies listed company
61hereinafter collectively
referred to as "affiliated
companies") will exercise
the rights of shareholders
fulfill the obligations of
shareholders and maintain
the independence of listed
companies in terms of
assets finance personnel
business and institutions in
strict accordance with the
provisions of laws
regulations and other
normative documents;
2. The Company promises
not to use its position as a
controlling shareholder to
urge the General Meeting
of Shareholders or the
Board of Directors of the
listed company to make
resolutions that infringe
upon the legitimate rights
and interests of other
shareholders of the listed
company;
3. The Company or its
affiliated companies will
try to avoid related party
transactions with listed
companies. If it is
inevitable to have related
party transactions with
listed companies the
Company or its affiliated
companies will urge the
controlled entities to trade
with listed companies on
an equal and voluntary
basis in accordance with
fair reasonable and
normal commercial
transaction conditions;
4. The Company or its
affiliated companies will
perform the decision-
making procedures of
related party transactions
and the corresponding
information disclosure
obligations in strict
accordance with the
Articles of Association of
the listed company and
relevant laws and
regulations;
5. The Company or its
affiliated companies will
62ensure that they will not
seek special interests
beyond the above
provisions through related
party transactions with the
listed company illegally
transfer the funds and
profits of the listed
company through related
party transactions and
maliciously damage the
legitimate rights and
interests of the listed
company and its
shareholders through
related party transactions.In case of violation of the
above commitments the
Company will bear
corresponding legal
responsibilities including
but not limited to
compensation for all
losses caused to the listed
company.The commitment to the
performance of
information disclosure
business for the
Company's business
Commitment
Shenzhen development matters is as
made during the
Tellus follows: In the future the October 17 In
initial public Others Long-term
Holding Co. Company will disclose 2014 performance
offering or
Ltd. relevant information in a
refinancing
timely accurate and full
manner according to the
progress of the new
business and relevant
requirements.In order to avoid
horizontal competition
Shenzhen Special
Economic Zone
Development Group Co.Ltd. the controlling
Shenzhen shareholder of the
Other
Special Company issued the
commitments
Economic Letter of Commitment to
made for Horizontal May 26 In
Zone Avoiding Horizontal Long-term
minority competition 2015 performance
Development Competition on May 26
shareholders of
Group Co. 2014. The full text of the
the Company
Ltd. Commitment is as follows:
1. The Company and other
enterprises controlled by
the Company other than
Tellus Holding are not
engaged in businesses that
are in substantial
63competition with the main
business of Tellus
Holding and there is no
horizontal competition
relationship with Tellus
Holding;
2. The Company and other
enterprises controlled by it
shall not directly or
indirectly engage in or
participate in any business
that constitutes or may
constitute competition
with the main business of
Tellus Holding in any
form;
3. If the Company and
other enterprises
controlled by it can engage
in or participate in any
business opportunity that
may compete with the
main business of Tellus
Holding they shall notify
Tellus Holding of the
above business
opportunity before
implementing or signing
relevant agreements. If
Tellus Holding makes a
positive reply within a
reasonable period
specified in the notice that
it is willing to take
advantage of the business
opportunity the business
opportunity will be given
priority to Tellus Holding.From 2020 to 2022 the
Company's profits will be
first used to cover the
losses of previous years;
After making up for the
losses of previous years
on the premise that the
Other Company's profits and
commitments Shenzhen cash flow meet the normal
made for Tellus Dividend operation and long-term April 3 December 31 Performance
minority Holding Co. commitment development of the 2020 2022 completed
shareholders of Ltd. Company the Company
the Company will implement an active
profit distribution method
to return it to shareholders.For details please refer to
the Shareholder Return
Plan for the Next Three
Years (2020-2022)
disclosed on CNINFO on
64April 3 2020.
Whether the
commitments
Yes
are duly
performed
If the
commitment is
not fulfilled after
the time limit
the specific
reasons for the N/A
failure for
fulfillment and
the next work
plan shall be
specified
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 can
realize the original profit forecast and specify the reasons.□ Applicable □Not applicable
II. Controlling Shareholder and Other Related Parties’ Occupation of Non-operating Funds
of the Listed Company
□ Applicable □Not applicable
Non-operating fund occupied by the controlling shareholder and other related parties towards the listed company is not identified
within 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 during
the Reporting Period
□ Applicable □Not applicable
65VI. Description of the Changes in Accounting Policies and Accounting Estimates or
Correction of Major Accounting Errors as Compared with Those in the Financial Report
for 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 Business
Enterprises (CK [2021] No. 35) (hereinafter referred to as "Interpretation No. 15") in which the contents of "Accounting
treatment for external sales of products or by-products produced before the fixed assets reach the expected serviceable condition or
during the R&D process" and "judgment on onerous contracts" shall be implemented from January 1 2022. Retroactive
adjustments should be made for trial sales that occurred between the beginning 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 of
January 1 2022. The cumulative effect shall be adjusted to the retained earnings and other relevant 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 in accounting policies have no
impact on the Company's financial statements.(II) 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 as Interpretation No. 16) in which the contents of "Accounting treatment of
exemption from initial recognition is not applicable to deferred income tax related to assets and liabilities arising from individual
transactions" shall be implemented from January 1 2023 and the contents of "Accounting treatment of income tax impact on
dividends related to financial instruments classified as equity instruments by the issuer" and "Accounting treatment of changing
cash-settled share-based payment to equity-settled share-based payment by enterprises" shall be implemented from the date of
publication.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 accordance
with the above provisions they shall be adjusted in accordance with the above provisions. For financial instruments classified as
equity instruments if the recognized dividends payable occurred before January 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
accordance with the above provisions retroactive adjustment shall be made. For the above transactions newly made between
January 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 effect
shall be adjusted to retained earnings and other related financial statement items as of January 1 2022 without adjustments to
information for comparable periods.
66Since November 30 2022 the Company has implemented the provisions of Interpretation No. 16 "accounting treatment for
the 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-based
payment". 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 with
the Financial Statement of the Previous Year
□Applicable □Not applicable
No. Full name of subsidiary
Abbreviation of Reporting Reason of incorporating into
subsidiary period consolidation scope
1 Guorun Gold Shenzhen Co. Ltd. Guorun Gold Year 2022 Newly established
VIII. Employment and Dismissal of Accounting Firms
Current employed accounting firm
Name of domestic accounting firm RSM China (Special General Partnership)
Salary of domestic accounting firm (RMB 10000) 70.5
Duration of audit service provided by domestic accounting firm 3
Names of CPA of domestic accounting firm Chen Lianwu Qin Changming
Duration of audit service provided by CPA with domestic
Chen Lianwu 1 year Qin Changming 4 years
accounting firm
Whether 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 and
internal control auditor. The employment term was one year and the internal control audit fee was RMB 205000.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.
67XII. 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 Actual
Controller
□ Applicable □Not applicable
XIV. Major Related Party Transactions
1. Related party transactions concerning daily operations
□Applicable □Not applicable
Unit: RMB 10000
Propo Mark
Pricin Settle
rtion Whet et
g Price ment
Type Conten Amou to Appr her price
Relatio princi of metho
Related of t of nt of transa oved excee of
nship ple of relate ds of Discl
transac related related related ction transa ding availa Disclosu
of relate d relate osure
tions party party party amou ction the ble re index
related d party d date
parties transa transac transa nt of amou appro simila
parties party transa party
ctions tion ctions the nt ved r
transa ction transa
same limit transa
ction ction
kind ction
Havin
Shenzh g a Accor Securitie
en directo Provid ding s Times
Renfu r who Daily e Refer to the Hong
Tellus also related propert to the contra April 2.97 Kong
Autom serves party y marke 545 545 545 No ct 545 8 % Commer
obiles the transa leasing t amou 2022 cial
Service Compa ctions service price nt or Daily
Co. ny as a s agree and the
Ltd. directo ment Announc
r ement on
Shenzh Daily Accor
en Related
Provid ding
SDG Subsid Party
Daily e Refer to the
Tellus iary of Transact
related propert to the contra April
Propert control 0.04 ions in
party y marke 6.7 6.7 10 No ct 6.7 8
y ling % 2022 on
transa leasing t amou 2022
Manag shareh the
ctions service price nt or
ement older CNINF
s agree
Co. O ment
Ltd. website
Shenzh Subsid Provid Accor (Announ
Daily Refer
en iary of e ding cement
related to the April
SDG control propert 100.2 100.2 0.55 to the 100.2 No.:
party marke 150 No 8
Microfi ling y 5 5 % contra 5 2022-
transa t 2022
nance shareh leasing ct 009)
ctions price
Co. older and amou
68Ltd. manag nt or
ement agree
service ment
s
Shenzh Accor
en Provid ding
Subsid
SDG Daily e Refer to the
iary of
Service related propert to the
control 289.9 289.9 1.58
contra April
Co. party y marke 255 Yes
289.9
ct 8
ling 1 1 % 1
Ltd. transa leasing t amou 2022
shareh
and its ctions service price nt or
older
branch s agree
es ment
Shenzh
en Provid Accor
Special e ding
Subsid
Econo Daily vehicle Refer to the
iary of
mic related mainte to the contra April
control 0.09
Zone party nance marke 4.11 4.11 5 No ct 4.11 8
ling %
Develo transa and t amou 2022
shareh
pment ctions testing price nt or
older
Group service agree
Co. s ment
Ltd.Shenzh
Provid Accor
en
e ding
SDG Subsid
Daily vehicle Refer to the
Tellus iary of
related mainte to the contra April
Propert control 0.01
party nance marke 0.66 0.66 5 No ct 0.66 8
y ling %
transa and t amou 2022
Manag shareh
ctions testing price nt or
ement older
service agree
Co.s ment
Ltd.Shenzh Accor
en Accept ding
Subsid
SDG Daily engine Refer to the
iary of
Engine related ering to the
control 238.4 238.4 95.68
contra April
238.4
ering party superv marke 200 Yes 1 1 % ct 8 ling 1
Manag transa ision t amou 2022
shareh
ement ctions service price nt or
older
Co. s agree
Ltd. ment
Shenzh Accor
en Accept ding
Subsid
SDG Daily propert Refer to the
iary of
Service related y to the contra April
control 1046. 1046. 76.38 1046.Co. party manag marke 740 Yes ct 8
ling 98 98 % 98
Ltd. transa ement t amou 2022
shareh
and its ctions service price nt or
older
branch s agree
es ment
Shenzh Subsid Accept Accor
Daily Refer
en iary of propert ding
related to the April
SDG control y 320.2 320.2 23.37 to the 320.2
party marke 300 Yes 8
Tellus ling manag 8 8 % contra 8
transa t 2022
Propert shareh ement ct
ctions price
y older service amou
69Manag s nt or
ement agree
Co. ment
Ltd.
2552.
Total -- -- -- 2210 3 -- -- -- -- --
Details of large sales return N/A
If the total amount of daily related
party transactions occurring in the
current period is estimated by Normal settlement
category the actual performance
during the reporting period (if any)
Reasons for the great difference
between the transaction price and N/A
market reference price (if applicable)
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 applicable
Whether 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 related
parties.
7. Other major related party transactions
□ Applicable □Not applicable
During the reporting period the Company has no other major related transactions.
70XV. 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 10000
Foreign guarantees of the Company and its subsidiaries (excluding the guarantees to subsidiaries)
Disclosure Guaran
Gu Whet
date of the Typ tee
Guaran ara her it
Name of the relevant Actual date Actual e of Counter- provid
tee Collateral nte is
guaranteed announceme of guarantee gua guarantee ed to
amoun (if any) e fully
object nt of the occurrence amount rant (if any) related
t peri fulfill
guarantee ee parties
od ed
amount or not
Shenzhen To the date
Renfu Tellus of expiry of
September April 17 Ple
Automobiles 3500 3500 the Joint No Yes No Yes
30 2014 2007 dge
Service Co. Venture
Ltd. Contract
Total actual
Total foreign guarantee amount foreign guarantee
approved in the reporting 0 amount in the 3500
period (A1) reporting period
(A2)
Total foreign
Total foreign guarantee amount guarantee balance
approved at the end of the 3500 at the end of 3500
reporting period (A3) reporting period
(A4)
Guarantee to subsidiaries
Name of the Disclosure Guaran Actual date Actual Typ Counter- Gu Whet Guaran
Collateral
guaranteed date of the tee of guarantee e of guarantee ara her it tee
71object relevant amoun occurrence amount gua (if any) (if any) nte is provid
announceme t rant e fully ed to
nt of the ee peri fulfill related
guarantee od ed parties
amount or not
-----------
Total actual
Total guarantee amount to guarantee amount
subsidiaries approved in the 0 to the subsidiaries 0
reporting period (B1) in the reporting
period (B2)
Total actual
Total guarantee amount to guarantee balance
subsidiaries approved at the to subsidiaries at
00
end of the reporting period the end of the
(B3) reporting period
(B4)
Guarantee between subsidiaries
Disclosure Guaran
Gu Whet
date of the Typ tee
Guaran ara her it
Name of the relevant Actual date Actual e of Counter- provid
tee Collateral nte is
guaranteed announceme of guarantee gua guarantee ed to
amoun (if any) e fully
object nt of the occurrence amount rant (if any) related
t peri fulfill
guarantee ee parties
od ed
amount or not
-----------
Total actual
Total guarantee amount to guarantee amount
subsidiaries approved in the 0 to the subsidiaries 0
reporting period (C1) in the reporting
period (C2)
Total actual
guarantee balance
Total guarantee amount to
incurred to
subsidiaries approved at the
0 subsidiaries at the 0
end of the reporting period
end of the
(C3)
reporting period
(C4)
Total amount of the Company’s guarantee (i.e. total of the first three items)
Total actual
Total guarantee amount guarantee amount
approved in the reporting 0 in the reporting 3500
period (A1 + B1 + C1) period (A2 + B2 +
C2)
Total actual
Total guarantee amount
guarantee balance
approved at the end of the
3500 at the end of the 3500
reporting period (A3 + B3 +
reporting period
C3)
(A4 + B4 + C4)
Proportion of total actual guarantee amount (i.e. A4 + B4
2.32%
+ C4) to the Company’s net assets
Including:
The guarantee balance provided for the shareholder 0
72actual controller and related parties (D)
The debt guarantee balance provided directly or
indirectly for the guaranteed party whose asset-liability 0
ratio is more than 70% (E)
The total of guarantee amount which exceeds 50% of the
0
net assets (F)
Total of above three guarantee amounts (D+E+F) 0
Description of the guarantee liability occurred during the
reporting period or the case where there is evidence
showing that it is possible to bear the joint and several N/A
liability for repayment for the unexpired guarantee
contract (if any)
Description of providing guarantees in violation of
N/A
prescribed procedures (if any)
Specific description of the composite guarantee
N/A
3. Management of cash assets by other entrusted parties
(1) Entrusted financial management
□Applicable □Not applicable
Overview of entrusted financial management in the reporting period
Unit: RMB 10000
Impairment
provision for
Capital source of Amount of Overdue overdue
Outstanding
Category entrusted financial entrusted financial irrecoverable unrecovered
balance
management management amount wealth
management
products
Bank financial
Self-owned fund 118138 21200 0 0
products
Total 118138 21200 0 0
Details 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.
73XVI. 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 applicable
After the expiration of the business term of the Company's holding subsidiary SDG Huari the shareholders
could not reach an agreement and the Company applied to the People's Court of Qianhai Cooperation Zone in
Shenzhen for the compulsory liquidation of SDG Huari. The court has ruled to accept the liquidation
application 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 with
legal procedures. For details please refer to the Company's Announcement on the Court's Acceptance of the
Application 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.
74Section 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 change
Conversion
Issuance Bonus of the
Quantity Percentage of new Others Subtotal Quantity Percentage
shares reserve funds
shares
into shares
I. Restricted
00.00%0000000.00%
shares
1. State
00.00%0000000.00%
shareholding
2. State-
owned legal
00.00%0000000.00%
person
shareholding
3. Other
domestic 0 0.00% 0 0 0 0 0 0 0.00%
shareholding
Including
: Domestic
00.00%0000000.00%
legal person
shareholding
Domestic
natural person 0 0.00% 0 0 0 0 0 0 0.00%
shareholding
4. Foreign
00.00%0000000.00%
shareholding
Including
: Foreign legal
00.00%0000000.00%
person
shareholding
Foreign
natural person 0 0.00% 0 0 0 0 0 0 0.00%
shareholding
II.Unrestricted 431058320 100.00% 0 0 0 0 0 431058320 100.00%
shares
1. RMB-
denominated
39277832091.12%0000039277832091.12%
ordinary
shares
752. Domestic
listed foreign 38280000 8.88% 0 0 0 0 0 38280000 8.88%
shares
3. Foreign
listed foreign 0 0.00% 0 0 0 0 0 0 0.00%
shares
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total
amount of 431058320 100.00% 0 0 0 0 0 431058320 100.00%
shares
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 most
recent 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 67131 Total 64114 Total 0 Total number of 0
76shareholders as of the end number of number of preferred
of the reporting period ordinary preferred shareholders (if
shareholder shareholde any) resuming
s as at the rs (if any) voting rights as at
end of the resuming the end of the
month voting month before the
before the rights at disclosure date of
disclosure the end of the annual report
date of the the (see Note 8)
annual reporting
report period (see
Note 8)
Shareholders holding more than 5% shares of the Company or shareholdings of top 10 shareholders
Increase Pledged marked or
Number of
and Number frozen shares
shares Number of
Nature of Shareholdi decrease of
held at the unrestricte
Name of shareholder sharehold ng changes restricte Statu
end of the d shares
er proportion during the d shares s of
reporting held Quantity
reporting held share
period
period s
Shenzhen Special Economic State-
204798620479862
Zone Development Group owned 47.51% -6793000 0 - 0
211
Co. Ltd. corporate
Shenzhen Capital Fortune Domestic
Jewelry Industry Investment non-state- 3661293 -
8.49%036612932-0
Enterprise (Limited owned 2 18931505
Partnership) corporate
Domestic
Li Xiaoming natural 0.67% 2891700 2891700 0 2891700 - 0
person
GUOTAIJUNANSECURIT
Overseas
IES (HONGKONG) 0.40% 1741491 -115055 0 1741491 - 0
corporate
LIMITED
Domestic
Li Bozhi natural 0.29% 1260300 1260300 0 1260300 - 0
person
Ningbo Meishan Bonded
Port Area Lingding
Investment Management
Others 0.28% 1200000 1200000 0 1200000 - 0
Co. Ltd.—Lingding Chuqi
No. 2 Private Securities
Investment Fund
Nanjing Shengquan
Hengyuan Investment Co.Ltd.—Shengquan
Others 0.25% 1060000 1060000 0 1060000 - 0
Hengyuan Flexible
Configuration No. 8 Private
Securities Investment Fund
Nanjing Shengquan
Hengyuan Investment Co.Ltd.—Shengquan
Others 0.24% 1020000 1020000 0 1020000 - 0
Hengyuan Quantitative
Arbitrage No. 17 Private
Securities Investment Fund
State-
China Merchants Securities
owned 0.21% 902478 902478 0 902478 - 0
Co. Ltd.corporate
77Industrial and Commercial
Bank of China Limited -
Others 0.19% 837475 837475 0 837475 - 0
Southern CSI All Index
Real Estate ETF
Status of the strategic investor or general
legal person becoming one of top 10
N/A
shareholders due to equity offering (if
any) (see Note 3)
Among the top ten shareholders Shenzhen Special Economic Zone Development Group
Explanations of relationships between or Co. Ltd. was not related to other shareholders and was not a person acting in concert as
concerted actions of the aforementioned stipulated in the Measures for the Administration of the Takeover of Listed Companies.shareholders It was unknown whether other shareholders of tradable shares were persons acting in
concert.Description of the above shareholders'
involvement in proxy/entrusted voting N/A
rights and waiver of voting rights
Special description of repurchase special
account among the top 10 shareholders N/A
(if any) (see Note 10)
Shareholding of top 10 unrestricted shareholders
Types of shares
Number of shares not subject to trading restriction as at
Name of shareholder the end of reporting period Types of Quantity
shares
Ordinary
Shenzhen Special Economic Zone shares 2047986
204798621
Development Group Co. Ltd. denominated 21
in RMB
Ordinary
Shenzhen Capital Fortune Jewelry
shares 3661293
Industry Investment Enterprise (Limited 36612932
denominated 2
Partnership)
in RMB
Ordinary
shares
Li Xiaoming 2891700 2891700
denominated
in RMB
Domestic
GUOTAIJUNANSECURITIES
1741491 listed foreign 1741491
(HONGKONG) LIMITED
shares
Ordinary
shares
Li Bozhi 1260300 1260300
denominated
in RMB
Ningbo Meishan Bonded Port Area Ordinary
Lingding Investment Management Co. shares
12000001200000
Ltd.—Lingding Chuqi No. 2 Private denominated
Securities Investment Fund in RMB
Nanjing Shengquan Hengyuan Ordinary
Investment Co. Ltd.—Shengquan shares
10600001060000
Hengyuan Flexible Configuration No. 8 denominated
Private Securities Investment Fund in RMB
Nanjing Shengquan Hengyuan Ordinary
Investment Co. Ltd.—Shengquan shares
10200001020000
Hengyuan Quantitative Arbitrage No. 17 denominated
Private Securities Investment Fund in RMB
China Merchants Securities Co. Ltd. 902478 Ordinary 902478
78shares
denominated
in RMB
Ordinary
Industrial and Commercial Bank of
shares
China Limited - Southern CSI All Index 837475 837475
denominated
Real Estate ETF
in RMB
Description on the related relationship or Among the top ten shareholders Shenzhen Special Economic Zone Development Group
concerted action among top 10 Co. Ltd. a state-owned corporate shareholder was not related to other shareholders and
unrestricted tradable shareholders and was not a person acting in concert as stipulated in the Measures for the Administration
between top 10 unrestricted tradable of the Takeover of Listed Companies. It was unknown whether other shareholders of
shareholders and top 10 shareholders tradable shares were persons acting in concert.
1. The controlling shareholder of the company Shenzhen Special Economic Zone
Development Group Co. Ltd. was engaged in refinancing business. The number of
shares held at the end of this reporting period decreased by 6793000 compared to the
end of 2021. This decrease in the number of shares held was caused by the lending of
shares and the ownership of the borrowed shares would not be transferred. 2. The
Description on conditions of top 10
shareholder Nanjing Shengquan Hengyuan Investment Co. Ltd.—Shengquan Hengyuan
common shareholders participating in the
Flexible Configuration No. 8 Private Securities Investment Fund held 1060000 shares
margin financing (if any) (refer to Note
of the Company through guaranteed credit accounts and 0 shares of the Company
4)
through ordinary securities accounts holding a total of 1060000 shares. The
shareholder Nanjing Shengquan Hengyuan Investment Co. Ltd.—Shengquan Hengyuan
Quantitative Arbitrage No. 17 Private Securities Investment Fund held 1020000 shares
of the Company through guaranteed credit accounts and 0 shares of the Company
through ordinary securities accounts holding a total of 1020000 shares.Whether top 10 ordinary shareholders and top 10 ordinary shareholders without trading limited conditions have performed the
agreed 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 the
agreed repurchase transactions during the reporting period.
2. Controlling shareholder of the Company
Property of controlling shareholder: local state-owned holding
Type of controlling shareholder: legal person
Name of Legal
Date of
controlling representative/person Organization code Main business
establishment
shareholder in charge
Investment in the establishment of industries
Shenzhen (specific projects will be declared separately);
Special investment in the establishment of the tourism
Economic industry; real estate development and operation;
June 20
Zone Zhang Junlin 91440300192194195C domestic trade and material supply and marketing
1982
Development (excluding monopoly exclusive control and
Group Co. monopolized commodities); economic
Ltd. information consultation (excluding restricted
items); operation of import and export business.Equity of At the end of the reporting period in addition to the equity of the Company the SDG Group also held equity of other
other listed companies as follows:
domestic and 1. Holding 47.78% equity of Shenzhen SDG Service Co. Ltd. (stock abbreviation: SDG Service stock code:
foreign listed 300917) and holding 0.98% equity of Shenzhen SDG Service Co. Ltd. through Shenzhen SDG Investment Co.companies Ltd.;
controlled 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.
79participation Ltd.;
by the 3. Holding 8.37% equity of Shenzhen Microgate Technology Co. Ltd. (stock abbreviation: MicrogateTech stock
controlling code: 300319) and controlling 16.16% equity of Shenzhen Microgate Technology Co. Ltd. through the Company's
shareholder holding subsidiary Shenzhen Capital Fortune Electronic Information Investment Enterprise (Limited Partnership).during the
reporting
period
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 authority
Type of actual controller: legal person
Legal
Name of actual
representative/person in Date of establishment Organization code Main business
controller
charge
Performing the
State-owned Assets responsibilities of the
Supervision and investor on behalf of
Management the state supervising
Wang Yongjian July 1 2004 K3172806-7
Commission of and managing the state-
Shenzhen Municipal owned assets authorized
People's Government for supervision
according to law.Equity of other
domestic and foreign
listed companies
N/A
controlled by the actual
controller during the
reporting period
Change 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
80Actual 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 Period
Progress in the implementation of share repurchase
□ Applicable □Not applicable
Progress in the implementation of share repurchase reduction through centralized bidding
□ Applicable □Not applicable
81Section VIII Preferred Shares
□ Applicable □Not applicable
During the reporting period the Company has no preferred shares.
82Section IX Bonds
□ Applicable □Not applicable
83Section X Financial Report
I. Auditor's Report
Opinion type Unqualified opinion
Signed on April 25 2023
Audited by RSM China (Special General Partnership)
Auditor’s Report No. RCSZ [2023] No. 518Z0408
Name of certified public accountant Chen Lianwu Qin Changming
Text of Auditor’s Report
All shareholders of Shenzhen Tellus Holding Co. Ltd.:
I. Opinion
We have audited the attached financial statements of Shenzhen Tellus Holding Co. Ltd.(hereinafter referred to as “Tellus”) including Consolidated and Parent Company's Balance
Sheets as of December 31 2022 Consolidated and Parent Company's Income Statements
Consolidated and Parent Company's Cash Flow Statements Consolidated and Parent Company's
Statements of Changes in Owners' Equity for the year then ended and relevant Notes to Financial
Statements.In our opinion the attached financial statements present fairly in all material respects the
consolidated and parent company’s financial positions of Tellus as of December 31 2022 and its
consolidated and parent company’s financial performance and cash flows for the year then ended
in accordance with the Accounting Standards for Business Enterprises.II. Basis for Opinion
We 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 Public
Accountants and we have fulfilled our other ethical responsibilities. We believe that the audit
84evidence we have obtained is sufficient and appropriate to provide a basis for the auditor’s
opinion.III. Key Audit Matters
Key audit matters are those matters that are deemed most important to the audit of the
financial statements for the current period based on our professional judgment. These matters are
addressed by auditing the financial statements integrally and forming the auditor’s opinion so we
do 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 information
disclosure.The operating revenue of Tellus mainly comes from real estate leasing and services gold and
jewelry sales and services automobile sales automobile maintenance and testing. The operating
revenue in 2022 was RMB 837656274.51 representing an increase of 64.72% over the same
period of last year. Operating revenue is one of the key performance indicators and there is an
inherent risk of revenue recognition. Therefore we identify revenue recognition as a key audit
matter.
2. Audit response
The relevant procedures that we implement for the recognition of operating revenue mainly
include:
(1) Understanding the key internal controls related to revenue recognition evaluating the
design of these controls determining whether these controls are implemented and testing the
implementation 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 Accounting
Standards for Business Enterprises;
85(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 current
period;
(4) Checking the supporting documents related to revenue recognition by sampling
including real estate leasing contracts or commodity sales contracts invoices commodity sales
orders 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 and
customer receipts by sampling and evaluating whether the operating revenue is recognized in an
appropriate 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 for
details of relevant information disclosure.As of December 31 2022 the book value of investment properties fixed assets and
construction in progress of Tellus was RMB 1028983245.14 accounting for 46.10% of the total
assets.The book value of investment properties fixed assets and construction in progress involve
significant management judgment including determining the scope and conditions of capitalized
expenditure deciding the time-point for transferring construction in progress to real estate and
fixed assets after completion and estimating the economic service life and residual value rate of
fixed assets. As the evaluation of the book value of investment properties fixed assets and
86construction in progress involves significant management judgment and is vital to the
consolidated 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 fixed
assets 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 in
progress in the current year checking whether the recorded amount of construction in progress is
accurate and determining whether the indirect costs included in the construction in progress meet
the 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 is
included 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 items
corresponding to the construction in progress and judging whether the construction in progress
meets 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;
87(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 Information
The management of Tellus (hereinafter referred to as the “Management”) is responsible for
other information. Other information comprises the information included in the Annual Report of
Year 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 neither
express any form of authentication opinion for other information.In connection with our audit on the financial statements our responsibility is to read the
other information and in doing so consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated.Based on the work that we have executed we should report the fact in case of determining
the material misstatement of other information. In this regard we have nothing to report.V. Responsibilities of the Management and the Governance for the Financial
Statements
The Management shall be responsible for preparing financial statements that present fairly
the 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 enable
the preparation of financial statements free from material misstatement whether due to fraud or
error.In preparation of the financial statement the management is responsible for assessing
Tellus’s sustainable operation ability disclosing the sustainable operation related items (if
applicable) and applying sustainable operation assumptions unless otherwise the management
plans to liquidate Tellus stop operation or it has no other practical choice.The governance is responsible for supervising Tellus’s financial reporting process.
88VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objective is to obtain reasonable assurance as to whether the financial statements as a
whole are free from material misstatement caused by fraud or error and to issue an Auditor’s
Report containing our opinions. Reasonable assurance is a high level of assurance but it does not
guarantee that an audit conducted in accordance with auditing standards can always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if individually or in aggregate they could reasonably be expected to
influence the economic decisions users would take on the basis of these financial statements.We exercise professional judgment and maintain professional skepticism in carrying out our
audit 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 obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
failing to detect a material misstatement due to fraud is higher than that due to error as fraud may
involve collusion forgery intentional omissions misrepresentations or overriding internal
controls.
(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 uncertainty
exists related to any events or conditions that cast significant doubt on the ability of Tellus to
continue as a going concern. If we conclude that a material uncertainty exists we are required to
draw attention in our Auditor’s Report to the related disclosures in the financial statements or if
such disclosures are inadequate to modify our opinion. Our conclusions are based on information
available as of the date of the Auditor’s Report. However future events or conditions may cause
Tellus to cease to continue as a going concern.
89(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 and
events.
(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 are
responsible for guiding supervising and performing the group audit and assume all
responsibilities for our opinion.We communicate with the governance regarding among other matters the planned scope
and timing of the audit and significant audit findings including any significant deficiencies in
internal control that we identify during our audit.We also provide the governance with a statement regarding compliance with ethical
requirements related to independence and communicate with the governance about all
relationships and other matters that could reasonably be considered to affect our independence as
well as related precautions (if applicable).From the matters communicated with the governance we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We have described these matters in the auditor’s report except that they are
prohibited from being publicly disclosed as per the laws and regulations or in the rare cases if a
negative result that may be caused by communicating some matter in the auditor’s report as
reasonably expected exceeds the benefit generated by the public interest we determine not to
communicate 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: RMB
Item December 31 2022 January 1 2022
Current assets:
90Cash at bank and on hand 413028327.36 240582057.16
Settlement reserves
Loans to banks and other financial
institutions
Trading financial assets 176133569.95 412712843.84
Derivative financial assets
Notes receivable 87812500.00 0.00
Accounts receivable 41752179.56 18094059.92
Receivables financing
Advances to suppliers 8127252.94 16532227.85
Premiums receivable
Reinsurance premium receivable
Reinsurance contract reserves
receivable
Other receivables 7663570.87 5072970.77
Including: interest receivable 0.00 0.00
Dividends receivable 1852766.21 547184.35
Financial assets purchased under
agreements to resell
Inventories 116069675.39 25434925.04
Contract assets
Held-for-sale assets 0.00 530520.33
Current portion of non-current assets
Other current assets 18346711.55 8596585.57
Total current assets 868933787.62 727556190.48
Non-current assets:
Disbursement of loans and advances to
customers
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 81024365.94 88310867.47
Investment in other equity instruments 10176617.20 10176617.20
Other non-current financial assets
Investment properties 516360139.45 551383294.54
Fixed assets 102689546.42 109438198.23
Construction in progress 409933559.27 210197546.72
Productive biological assets
Oil and gas assets
Right-of-use assets 4181242.86 7336915.83
Intangible assets 49808015.72 49589498.28
Development expenditures
Goodwill
91Long-term deferred expenses 25876099.49 28682636.66
Deferred tax assets 8518233.77 8499551.03
Other non-current assets 154526946.83 68473888.99
Total non-current assets 1363094766.95 1132089014.95
Total assets 2232028554.57 1859645205.43
Current liabilities:
Short-term borrowings 20000000.00 0.00
Borrowings from the central bank
Placements from banks and other
financial institutions
Trading financial liabilities 18572684.91 0.00
Derivative financial liabilities 489360.00 0.00
Notes payable
Accounts payable 124716800.71 67407763.03
Advances from customers 6119377.90 1827827.28
Contract liabilities 9259658.43 21059311.18
Financial assets sold under agreements
to repurchase
Customer bank deposits and due to
banks and other financial institutions
Customer brokerage deposits
Securities underwriting brokerage
deposits
Employee compensation payable 38550181.70 38893597.75
Taxes payable 18891792.84 48522100.45
Other payables 105180279.00 112617963.65
Including: interest payable
Dividends payable
Handling charges and commission
payable
Reinsurance premium payable
Held-for-sale liabilities
Current portion of non-current
2009819.153021452.25
liabilities
Other current liabilities 68361007.70 2367994.70
Total current liabilities 412150962.34 295718010.29
Non-current liabilities:
Insurance contract reserves
Long-term borrowings 144820511.42 86875874.39
Bonds payable
Including: preferred shares
Perpetual bonds
Lease liabilities 2926184.93 4474543.09
Long-term payables 3920160.36 3920160.36
92Long-term employee compensation
payable
Estimated liabilities 268414.80 268414.80
Deferred income 10579545.71 10235331.21
Deferred tax liabilities 1135031.11 963045.49
Other non-current liabilities
Total non-current liabilities 163649848.33 106737369.34
Total liabilities 575800810.67 402455379.63
Owners' equity:
Share capital 431058320.00 431058320.00
Other equity instruments
Including: preferred shares
Perpetual bonds
Capital reserves 431449554.51 431449554.51
Less: treasury shares
Other comprehensive income 26422.00 26422.00
Special reserves
Surplus reserve 52499172.13 26546480.09
General risk provision
Undistributed profit 590605394.67 543843496.85
Total owners' equity attributable to the
1505638863.311432924273.45
parent company
Minority interests 150588880.59 24265552.35
Total owners' equity 1656227743.90 1457189825.80
Total liabilities and owners' equity 2232028554.57 1859645205.43
Legal representative: Fu Chunlong Person in charge of accounting: Lou Hong Person in charge of the accounting firm:
Yu Taiping
2. Parent Company's Balance Sheet
Unit: RMB
Item December 31 2022 January 1 2022
Current assets:
Cash at bank and on hand 169733887.28 96860811.12
Trading financial assets 176133569.95 346485780.83
Derivative financial assets
Notes receivable
Accounts receivable 147200.91 119014.41
Receivables financing
Advances to suppliers 249559.50 180505.50
Other receivables 4966987.96 90401592.58
Including: interest receivable
Dividends receivable 1852766.21 547184.35
Inventories
Contract assets
Held-for-sale assets
Current portion of non-current assets
93Other current assets 137126.11 0.00
Total current assets 351368331.71 534047704.44
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 865313838.67 781100340.20
Investment in other equity instruments 10176617.20 10176617.20
Other non-current financial assets
Investment properties 26915545.20 29425213.32
Fixed assets 16433526.75 17792917.53
Construction in progress 419793938.49 210072702.40
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 48413279.08 48214014.93
Development expenditures
Goodwill
Long-term deferred expenses 8465289.34 8853627.44
Deferred tax assets 3415402.97 3398437.68
Other non-current assets 73340576.28 32375515.49
Total non-current assets 1472268013.98 1141409386.19
Total assets 1823636345.69 1675457090.63
Current liabilities:
Short-term borrowings
Trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 58797324.02 344098.18
Advances from customers 962064.00 60656.39
Contract liabilities
Employee compensation payable 28220652.45 25851294.89
Taxes payable 3317946.24 1873430.60
Other payables 249870213.63 471549476.87
Including: interest payable
Dividends payable
Held-for-sale liabilities
Current portion of non-current
liabilities
Other current liabilities
Total current liabilities 341168200.34 499678956.93
Non-current liabilities:
Long-term borrowings 144820511.42 86875874.39
94Bonds payable
Including: preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee compensation
payable
Estimated liabilities
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 144820511.42 86875874.39
Total liabilities 485988711.76 586554831.32
Owners' equity:
Share capital 431058320.00 431058320.00
Other equity instruments
Including: preferred shares
Perpetual bonds
Capital reserves 428256131.23 428256131.23
Less: treasury shares
Other comprehensive income
Special reserves
Surplus reserve 52499172.13 26546480.09
Undistributed profit 425834010.57 203041327.99
Total owners' equity 1337647633.93 1088902259.31
Total liabilities and owners' equity 1823636345.69 1675457090.63
3. Consolidated Income Statement
Unit: RMB
Item Year 2022 Year 2021
I. Total operating revenue 837656274.51 508520026.18
Including: operating revenue 837656274.51 508520026.18
Interest income
Earned premiums
Handling charges and
commission income
II. Total operating cost 773501949.10 429932421.97
Including: operating cost 700289243.42 352929715.81
Interest expenses
Handling charges and
commission expenses
Surrender value
Net payments for insurance
claims
Net provision for insurance
contract reserves
95Policy dividend expenses
Reinsurance expenses
Taxes and surcharges 7334212.76 6944096.18
Selling expenses 22034712.48 27178175.03
General and administrative
47077679.9947151316.69
expenses
R&D expenses 802753.80 0.00
Financial expenses -4036653.35 -4270881.74
Including: interest expenses 338730.75 2253915.94
Interest income 5472748.37 6538484.64
Add: other incomes 6624873.28 2970055.35
Investment income (loss to be
33372099.5793780306.77
listed with “-”)
Including: income from
investment in associates and joint 10897171.28 17874805.32
ventures
Investment income
from derecognition of financial assets at
amortized cost
Exchange earnings (losses to be
listed with “-”)
Net exposure hedging income
(loss to be listed with “-”)
Income from changes in fair
-1592750.24663932.88
value (loss to be listed with “-”)
Credit impairment loss (loss to be
-1635359.9038129.28
listed with “-”)
Asset impairment loss (loss to be
-1839486.29-812607.69
listed with "-")
Income of assets disposal (loss to
40765.92158228.49
be listed with “-”)
III. Operating profit (loss to be listed
99124467.75175385649.29
with "-")
Add: non-operating revenue 4134654.43 768055.65
Less: non-operating expenses 416462.25 37503.15
IV. Total profit (total loss to be listed
102842659.93176116201.79
with "-")
Less: income tax expenses 21523196.08 44063670.71
V. Net profit (net loss to be listed with "-
81319463.85132052531.08
")
(I) Classified by going concern
1. Net profit from continuing
81319463.85132052531.08
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
83496135.61131020764.38
parent company's shareholders
962. Minority interest -2176671.76 1031766.70
VI. Net of tax of other comprehensive
income
Net of tax of other comprehensive
income attributable to the owner of the
parent company
(I) Other comprehensive income
that cannot be reclassified through profit
or loss
1. Changes arising from re-
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
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 81319463.85 132052531.08
Total comprehensive income
attributable to the owners of the parent 83496135.61 131020764.38
company
Total comprehensive income
-2176671.761031766.70
attributable to minority shareholders
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 merger
is 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
97Item Year 2022 Year 2021
I. Operating revenue 39568530.33 50382988.38
Less: operating cost 10680130.69 15225250.76
Taxes and surcharges 1102099.28 1563395.23
Selling expenses 0.00 0.00
General and administrative
36500937.8137305543.73
expenses
R&D expenses 0.00 0.00
Financial expenses -2003919.64 -2644425.65
Including: interest expenses 0.00 0.00
Interest income 2226376.85 2593770.67
Add: other incomes 112656.14 42502.63
Investment income (loss to be
267169944.6928187188.70
listed with “-”)
Including: income from
investment in associates and joint 10897171.28 18339555.32
ventures
Derecognition income
of financial assets at amortized cost (loss
to be listed with “-”)
Net exposure hedging income
(loss to be listed with “-”)
Income from changes in fair
-633155.32745798.64
value (loss to be listed with “-”)
Credit impairment loss (loss to be
-69164.09-2107.49
listed with “-”)
Asset impairment loss (loss to be
listed with "-")
Income of assets disposal (loss to
be listed with “-”)
II. Operating profit (loss to be listed with
259869563.6127906606.79
"-")
Add: non-operating revenue 74563.02 345457.00
Less: non-operating expenses 396639.55 0.00
III. Total profits (total losses to be listed
259547487.0828252063.79
with “-” )
Less: income tax expenses 20566.71 1272119.13
IV. Net profits (net losses to be listed
259526920.3726979944.66
with “-” )
(I) Net profit from continuing
259526920.3726979944.66
operations (net loss to be listed with "-")
(II) Net profit from discontinued
operations (net loss to be listed with "-")
V. Net of tax of other comprehensive
income
(I) Other comprehensive income
that cannot be reclassified through profit
or loss
1. Changes arising from re-
98measurement 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
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
VI. Total comprehensive incomes 259526920.37 26979944.66
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
969342149.01569337075.41
rendering of services
Net increase in deposits from
customers and placements from banks
and other financial institutions
Net increase in borrowings from the
central bank
Net increase in placements from other
financial institutions
Cash received for receiving premium
of original insurance contract
Net cash received from reinsurance
business
Net increase in deposits of the insured
and investment
Cash received from interest handling
charges and commission
Net increase in placements from banks
and other financial institutions
99Net increase in capital for repurchase
Net cash received from securities
trading agency services
Taxes and surcharges refunds 11635764.89 0.00
Other cash received relating to
23320266.9323982581.39
operating activities
Sub-total of cash inflows from operating
1004298180.83593319656.80
activities
Cash paid for goods and services 895794039.65 353121840.30
Net increase in loans and advances to
customers
Net increase in deposits in the central
bank and other financial institutions
Cash paid for claim settlements on
original 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 66872318.98 59390161.24
Taxes paid 74780657.47 36031576.13
Other cash paid relating to operating
18818929.0218164344.23
activities
Sub-total of cash outflows from
1056265945.12466707921.90
operating activities
Net cash flows from operating activities -51967764.29 126611734.90
II. Cash flows from investing activities:
Cash received from investment
1333567068.741539526090.00
recovery
Cash received from investment
31135993.2447997386.49
incomes
Net cash received from the disposal of
fixed assets intangible assets and other 7764134.42 495926.60
long-term assets
Net cash received from the disposal of
subsidiaries and other business entities
Other cash received relating to
15998484.001931753.79
investing activities
Sub-total of cash inflows from investing
1388465680.401589951156.88
activities
Cash paid to acquire fixed assets
intangible assets and other long-term 152045278.38 138364122.34
assets
Cash paid for investment 1177618780.00 1582280000.00
Net increase in pledge loans
Net cash paid for acquisition of
subsidiaries and other business entities
Cash paid relating to other investing
8955842.000.00
activities
Sub-total of cash outflows from investing
1338619900.381720644122.34
activities
Net cash flows from investing activities 49845780.02 -130692965.46
III. Cash flows from financing activities:
100Cash received from absorbing
128500000.000.00
investments
Including: cash received by
subsidiaries from minority shareholders' 128500000.00 0.00
investments
Cash received from borrowings 77924339.14 75601270.39
Cash received relating to other
financing activities
Sub-total of cash inflows from financing
206424339.1475601270.39
activities
Cash paid for repayment of debts
Cash paid for distribution of
20834386.7312289486.85
dividends profits or interest repayment
Including: dividends and profits paid
1928433.70
by subsidiaries to minority shareholders
Other cash paid relating to financing
2874145.9056273820.35
activities
Sub-total of cash outflows from
23708532.6368563307.20
financing activities
Net cash flows from financing activities 182715806.51 7037963.19
IV. Effects from the change of exchange
-842578.74236196.60
rate on cash and cash equivalents
V. Net increase in cash and cash
179751243.503192929.23
equivalents
Add: beginning balance of cash and
211655585.86208462656.63
cash equivalents
VI. Ending balance of cash and cash
391406829.36211655585.86
equivalents
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
42472472.0852499175.63
rendering of services
Taxes and surcharges refunds 8518912.36
Other cash received relating to
106200586.64162079161.08
operating activities
Sub-total of cash inflows from operating
157191971.08214578336.71
activities
Cash paid for goods and services
Cash paid to and for employees 32704526.01 27385052.19
Taxes paid 2536644.11 4272039.88
Other cash paid relating to operating
5514674.905841119.30
activities
Sub-total of cash outflows from
40755845.0237498211.37
operating activities
Net cash flows from operating activities 116436126.06 177080125.34
II. Cash flows from investing activities:
Cash received from investment
1170000000.00748000000.00
recovery
Cash received from investment
29719248.8320498702.12
incomes
Net cash received from the disposal of
500.000.00
fixed assets intangible assets and other
101long-term assets
Net cash received from the disposal of
0.00103777307.13
subsidiaries and other business entities
Other cash received relating to
15998484.00910112.34
investing activities
Sub-total of cash inflows from investing
1215718232.83873186121.59
activities
Cash paid to acquire fixed assets
intangible assets and other long-term 153782004.60 115295464.00
assets
Cash paid for investment 1131118780.00 975000000.00
Net cash paid for acquisition of
subsidiaries and other business entities
Cash paid relating to other investing
activities
Sub-total of cash outflows from investing
1284900784.601090295464.00
activities
Net cash flows from investing activities -69182551.77 -217109342.41
III. Cash flows from financing activities:
Cash received from absorbing
investments
Cash received from borrowings 57924339.14 75601270.39
Cash received relating to other
financing activities
Sub-total of cash inflows from financing
57924339.1475601270.39
activities
Cash paid for repayment of debts
Cash paid for distribution of
15834386.7310314757.50
dividends profits or interest repayment
Other cash paid relating to financing
activities
Sub-total of cash outflows from
15834386.7310314757.50
financing activities
Net cash flows from financing activities 42089952.41 65286512.89
IV. Effects from the change of exchange
-209635.2467783.02
rate on cash and cash equivalents
V. Net increase in cash and cash
89133891.4625325078.84
equivalents
Add: beginning balance of cash and
67934339.8242609260.98
cash equivalents
VI. Ending balance of cash and cash
157068231.2867934339.82
equivalents
7. Consolidated Statement of Changes in Owners' Equity
Amount in the current period
Unit: RMB
Year 2022
Owners' equity attributable to the parent company
Item Other L Other S G O Minority Total owners'
equity Capital e compreh p Surplus e Undistributed t interests
Share capital Subtotal equity
instrume reserves s ensive e reserve n profit h
nts s income c e e
102: i r r
P a a s
P
r t l l
e
e r
r
f e r r
p
e a e i
e
r O s s s
t
r t u e k
u
e h r r
a
d e y v p
l
r e r
s s s s o
b
h h v
o
a a i
n
r r s
d
e e i
s
s s o
n
I.Endin
g
balanc
431058320.0431449554.526422.026546480.0543843496.1432924273.41457189825.8
e of 24265552.35
01098550
the
previo
us
year
Add:
chang
es in
accou 0.00 0.00
nting
policie
s
Correc
tion of
prior 0.00 0.00
period
errors
Busine
ss
merge
r
under 0.00 0.00
comm
on
contro
l
Others 0.00 0.00
II.Begin
ning
431058320.0431449554.526422.026546480.0543843496.1432924273.41457189825.8
balanc 24265552.35
01098550
e of
the
curren
103t year
III.Increa
ses/de
crease
s in
the
curren 25952692.0 46761897.8 126323328.2
72714589.86199037918.10
t 4 2 4
period
(decre
ases
denote
d by "-
")
(I)
Total
compr
83496135.6
ehensi 83496135.61 -2176671.76 81319463.85
ve
incom
e
(II)
Capita
l
invest
128500000.0
ed and 0.00 0.00 128500000.00
0
decrea
sed by
owner
s
1.
Ordina
ry
shares
128500000.0
contri 0.00 128500000.00
0
buted
by
owner
s
2.
Capita
l
contri
buted
by the
0.000.00
holder
s of
other
equity
instru
ments
3.
Amou
0.000.00
nt of
share-
104based
payme
nts
charge
d to
owner
s'
equity
4.
0.000.00
Others
(III)
-
Profit 25952692.0
36734237.7-10781545.750.00-10781545.75
distrib 4
9
ution
1.
Withd
rawal
-
of 25952692.0
25952692.00.000.00
surplu 4
4
s
reserv
es
2.
Appro
priatio
-
n to
10781545.7-10781545.75-10781545.75
genera
5
l risk
provisi
on
3.
Distrib
ution
to
owner
s (or
shareh
olders)
4.
Others
(IV)
Intern
al
transfe
rs of
owner
s'
equity
1.
Capita
l
reserv
e
transfe
rred to
105capital
(or
share
capital
)
2.
Surplu
s
reserv
e
transfe
rred to
capital
(or
share
capital
)
3.
Recov
ery of
losses
by
surplu
s
reserv
e
4.
Retain
ed
earnin
gs
carried
forwar
d from
chang
es in
define
d
benefit
plan
5.
Retain
ed
earnin
gs
carried
forwar
d from
other
compr
ehensi
ve
incom
e
6.
Others
106(V)
Specia
l
reserv
e
1.
Appro
priatio
n in
the
curren
t
period
2. Use
in the
curren
t
period
(VI)
Others
IV.Endin
g
balanc
431058320.0431449554.526422.052499172.1590605394.1505638863.3150588880.51656227743.9
e of
010367190
the
curren
t
period
Amount in the previous period
Unit: RMB
Year 2021
Owners' equity attributable to the parent company
Other L G
equity e e
instrume s n
S
nts s e
p
: r
P e
P a
r c
e t l
e i
r r
f a O
p e r
Item e Other l t
e a i Minority Total owners' Capital compre Surplus Undistribute h
Share capital r Ot s s Subtotal interests equity
r t reserves hensive r reserve d profit e
u u k
e h income e r
a r
d e s s
l y p
r e
r
s s r
b s o
h v
o h v
a e
n a i
r s
d r s
e
s e i
s s o
107n
I.Endin
g
balanc
431058320.0431449554.26422.23848485.6424141893.1310524675.41384646101.8
e of 74121426.34
0510023471
the
previo
us
year
Add:
chang
es in
accou 0.00 0.00
nting
policie
s
Correc
tion of
prior 0.00 0.00
period
errors
Busine
ss
merge
r
under 0.00 0.00
comm
on
contro
l
Others 0.00 0.00
II.Begin
ning
balanc 431058320.0 431449554. 26422. 23848485.6 424141893. 1310524675.4 1384646101.8
74121426.34
e of 0 51 00 2 34 7 1
the
curren
t year
III.Increa
ses/de
crease
s in
the
curren 119701603. -
0.002697994.47122399597.9872543723.99
t 51 49855873.99
period
(decre
ases
denote
d by "-
")
(I) 131020764. 131020764.38 1031766.70 132052531.08
108Total 38
compr
ehensi
ve
incom
e
(II)
Capita
l
invest
-
ed and 0.00 0.00 0.00 0.00 -50000000.00
50000000.00
decrea
sed by
owner
s
1.
Ordina
ry
shares
-
contri 0.00 -50000000.00
50000000.00
buted
by
owner
s
2.
Capita
l
contri
buted
by the
0.000.00
holder
s of
other
equity
instru
ments
3.
Amou
nt of
share-
based
payme
0.000.00
nts
charge
d to
owner
s'
equity
4.
0.000.00
Others
(III)
-
Profit
0.002697994.4711319160.8-8621166.40-1928433.70-10549600.10
distrib
7
ution
1.2697994.47-0.000.00
109Withd 2697994.47
rawal
of
surplu
s
reserv
es
2.
Appro
priatio
n to -
-8621166.40-1928433.70-10549600.10
genera 8621166.40
l risk
provisi
on
3.
Distrib
ution
to
owner
s (or
shareh
olders)
4.
0.00
Others
(IV)
Intern
al
transfe
rs of
owner
s'
equity
1.
Capita
l
reserv
e
transfe
rred to
capital
(or
share
capital
)
2.
Surplu
s
reserv
e
transfe
rred to
capital
(or
share
capital
110)
3.
Recov
ery of
losses
by
surplu
s
reserv
e
4.
Retain
ed
earnin
gs
carried
forwar
d from
chang
es in
define
d
benefit
plan
5.
Retain
ed
earnin
gs
carried
forwar
d from
other
compr
ehensi
ve
incom
e
6.
0.00
Others
(V)
Specia
l
reserv
e
1.
Appro
priatio
n in
the
curren
t
period
2. Use
in the
111curren
t
period
(VI)
0.001040793.011040793.01
Others
IV.Endin
g
balanc
431058320.0431449554.26422.26546480.0543843496.1432924273.41457189825.8
e of 24265552.35
0510098550
the
curren
t
period
8. Parent Company’s Statement of Changes in Owners' Equity
Amount in the current period
Unit: RMB
Year 2022
Other equity instruments Less: Other
Speci
Item treas comprePreferr Perpetu al Undistributed OtherShare capital Capital reserves ury hensiv Surplus reserve Total owners' equity
ed al Others reser profit s share e
shares bonds ves s income
I. Ending
balance of the 431058320.00 428256131.23 26546480.09 203041327.99 1088902259.31
previous year
Add: changes
in accounting 0.00
policies
Correction of
prior period 0.00
errors
Othe
0.00
rs
II. Beginning
balance of the 431058320.00 428256131.23 26546480.09 203041327.99 1088902259.31
current year
III.Increases/decre
ases in the
0.000.0025952692.04222792682.58248745374.62
current period
(decreases
denoted by "-")
(I) Total
comprehensive 259526920.37 259526920.37
income
(II) Capital
invested and
0.000.000.000.000.00
decreased by
owners
1121. Ordinary
shares
0.00
contributed by
owners
2. Capital
contributed by
the holders of 0.00
other equity
instruments
3. Amount of
share-based
payments 0.00
charged to
owners' equity
4. Others 0.00
(III) Profit
0.000.0025952692.04-36734237.79-10781545.75
distribution
1. Withdrawal
of surplus 25952692.04 -25952692.04 0.00
reserves
2. Distribution
to owners (or -10781545.75 -10781545.75
shareholders)
3. Others 0.00
(IV) Internal
transfers of 0.00 0.00 0.00 0.00 0.00
owners' equity
1. Capital
reserve
transferred to 0.00
capital (or
share capital)
2. Surplus
reserve
transferred to 0.00
capital (or
share capital)
3. Recovery of
losses by 0.00
surplus reserve
4. Retained
earnings
carried
forward from 0.00
changes in
defined benefit
plan
5. Retained
earnings
carried
0.00
forward from
other
comprehensive
113income
6. Others 0.00
(V) Special
0.000.000.000.000.00
reserve
1.
Appropriation
0.00
in the current
period
2. Use in the
0.00
current period
(VI) Others 0.00
IV. Ending
balance of the 431058320.00 428256131.23 52499172.13 425834010.57 1337647633.93
current period
Amount in the previous period
Unit: RMB
Year 2021
Other equity instruments Less Other
Pref : compr Speci
Item trea ehensi al Undistributed Other
Share capital erre Perpetu Other Capital reserves Surplus reserve Total owners' equity
d al sury ve reser profit s
s
shar bonds shar incom ves
es es e
I. Ending
balance of the 431058320.00 428256131.23 23848485.62 187380544.20 1070543481.05
previous year
Add: changes
in accounting
policies
Correction of
prior period
errors
Others
II. Beginning
balance of the 431058320.00 428256131.23 23848485.62 187380544.20 1070543481.05
current year
III.Increases/decre
ases in the
2697994.4715660783.7918358778.26
current period
(decreases
denoted by "-")
(I) Total
comprehensive 26979944.66 26979944.66
income
(II) Capital
invested and
decreased by
owners
1. Ordinary
114shares
contributed by
owners
2. Capital
contributed by
the holders of
other equity
instruments
3. Amount of
share-based
payments
charged to
owners' equity
4. Others
(III) Profit
2697994.47-11319160.87-8621166.40
distribution
1. Withdrawal
of surplus 2697994.47 -2697994.47
reserves
2. Distribution
to owners (or -8621166.40 -8621166.40
shareholders)
3. Others
(IV) Internal
transfers of
owners' equity
1. Capital
reserve
transferred to
capital (or
share capital)
2. Surplus
reserve
transferred to
capital (or
share capital)
3. Recovery of
losses by
surplus reserve
4. Retained
earnings
carried forward
from changes
in defined
benefit plan
5. Retained
earnings
carried forward
from other
comprehensive
income
6. Others
115(V) Special
reserve
1.
Appropriation
in the current
period
2. Use in the
current period
(VI) Others
IV. Ending
balance of the 431058320.00 428256131.23 26546480.09 203041327.99 1088902259.31
current period
III. Company Profile
1. Company profile
Shenzhen Tellus Holding Co. Ltd. (hereinafter referred to as "the Company") is a limited
liability company registered in Shenzhen Administration for Industry and Commerce on
November 10 1986. The Company was reorganized and established from the former Shenzhen
Machinery Industry Company with the approval of the Reply on the Reorganization of Shenzhen
Machinery Industry Company into Shenzhen Tellus Machinery Co. Ltd. (SFBF [1991] No. 1012)
issued by the General Office of Shenzhen Municipal People's Government. The Company
currently holds a business license with a unified social credit code of 91440300192192210U with
a registered capital of RMB 431058320.00 and a total of 431058320 shares including
392778320 A shares and 38280000 B shares without trading restrictions. The business address
of 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 Municipal
People's Government on the Reorganization of Shenzhen Tellus Machinery Co. Ltd. into a Public
Company Limited by Shares (SFBF [1992] No. 1850) and the Reply of Shenzhen Special
Economic Zone Branch of the People's Bank of China on the Issuance of Shares by Shenzhen
Tellus Machinery Electric Co. Ltd. (SRYFZ [1993] No. 092) the Company was reorganized into
a public limited liability company through an initial public offering with a registered capital of
RMB 166880000.00 and a total share capital of 166880000 shares. 120900000 shares were
converted from former assets 25980000 were issued as A shares and 20000000 were issued as
116B 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 166880000 shares as of December 31 of that year the Company
distributed a cash dividend of RMB 0.5 and issued 2 bonus shares to all shareholders for every 10
shares held totaling 33376000 shares which was implemented in 1994. After the stock dividend
the registered capital increased to RMB 200256000.00.According to the resolution of the Company's 1994 annual general meeting of shareholders
based on the share capital of 200256000 shares as at December 31 of the current year the
Company distributed cash dividends of RMB 0.5 for every 10 shares with 0.5 additional shares to
all shareholders totaling 20025600 shares which was implemented in 1995. The registered
capital was increased to RMB 220281600.00 after the share distribution and transfer.According to the resolution of the fourth extraordinary general meeting of shareholders of
the Company in 2014 upon the approval of the Official Reply to the Approval of Non-public
Offering of Shares by Shenzhen Tellus Holding Co. Ltd. (ZJXK [2015] No.173) issued by the
China Securities Regulatory Commission the Company issued 77000000 ordinary A shares to
Shenzhen Special Economic Zone Development Group Co. Ltd. and Shenzhen Capital Fortune
Jewelry Industry Investment Enterprise (Limited Partnership) in 2015. After the issuance the
registered capital is increased to RMB 297281600.00.According to the resolution of the Company's 2018 annual general meeting of shareholders
based on the share capital of 297281600 shares as at December 31 of the current year the
Company increased 4.5 shares for every 10 shares to all shareholders with capital reserves
totaling 133776720 shares which were implemented in 2019. After the transfer the registered
capital is increased to RMB 431058320.00.The Company's main business activities are automobile sales automobile maintenance and
testing jewelry operation property leasing and services etc.
117Approval date of the financial statements: the financial statements have been approved for
disclosure 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
Shareholding
Abbreviation of
No. Full name of subsidiary proportion % subsidiary
Direct Indirect
Xinyongtong
Shenzhen Tellus Xinyongtong
1 Automobile 5.00 95.00
Automobile Development Co. Ltd.Development Co.Shenzhen Bao'an Shiquan Industry Co. Bao'an Shiquan
2100.00
Ltd. Company
Shenzhen SDG Tellus Real Estate Co. Tellus Real Estate
3100.00
Ltd. Company
Shenzhen Tellus Chuangying Technology
4 Chuangying company 100.00
Co. Ltd.Shenzhen Xinyongtong Motor Vehicle Testing Equipment
551.00
Inspection Equipment Co. Ltd. Company
Shenzhen Automobile Industry and Trade Automobile Industry
6100.00
Co. Ltd. and Trade Company
Automobile Supply
Shenzhen Automobile Industry Supply
7 and Marketing 100.00
and Marketing Company
Company
Shenzhen SDG Huari Automobile
8 Huari Company 60.00
Enterprise Co. Ltd.Shenzhen Huari Anxin Automobile
9 Huari Anxin Company 100.00
Inspection Co. Ltd.
10 Shenzhen Zhongtian Industry Co. Ltd. Zhongtian Company 100.00
Shenzhen Huari Toyota Sales & Service
11 Huari Toyota 60.00
Co. Ltd.Shenzhen Tellus Treasury Supply Chain Treasury Supply
12100.00
Tech Co. Ltd. Chain Company
Shenzhen Jewelry Industry Service Co. Shenzhen Jewelry
1365.00
Ltd. Company
11814 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 Other
Entities.
(2) Changes in the scope of the consolidated financial statements during the reporting period
Newly-added subsidiaries during the reporting period:
Reason of
Abbreviation of Reporting
No. Full name of subsidiary incorporating into
subsidiary period
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 of
subsidiaries 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 in
accordance with the actual transactions and items and recognition and measurement under
provisions of ASBE (Accounting Standards for Business Enterprises) and their application
guidelines and interpretations. In addition the Company also disclosed relevant financial
information in accordance with the Rules for the Preparation of Information Disclosure of
Companies 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 the
end of the reporting period and no events affecting the going concern of the Company. It is
believed reasonable that the Company's financial statements have been prepared based on going
concern.
119V. Significant Accounting Policies and Accounting Estimates
Notes 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 Accounting
Standards for Business Enterprises and truly and fully reflect the financial situation business
performance changes in owners’ equity cash flow and other relevant information of the
Company.
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 calculated
based on the book value of the merged party gained by the ultimate controlling party in its
consolidated financial statements on the merger date. Where the accounting policies adopted by
the merged party and the Company before the business merger are different the accounting
policies shall be unified based on the principle of materiality that is the book value of the assets
and liabilities of the merged party shall be adjusted in accordance with the accounting policies of
the Company. If there is a difference between the book value of the net assets obtained by the
Company in the business merger and the book value of the consideration paid the capital reserve
120(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 and
undistributed profits shall be offset in turn.See Note III. 6(6) for the accounting treatment method for business merger under common
control 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 business
merger shall be measured at their fair values on the acquisition date. Where the accounting
policies adopted by the acquiree and the Company before the business merger are different the
accounting policies shall be unified based on the principle of materiality that is the book value of
the assets and liabilities of the acquiree shall be adjusted in accordance with the accounting
policies of the Company. The difference between the merger costs of the Company on the
acquisition date and the fair value of the identifiable assets and liabilities obtained from the
acquiree in the business merger is recognized as goodwill; If the merger cost is less than the
difference of the fair value of the identifiable assets and liabilities acquired from the acquiree in
the business merger the merger cost and the fair value of the identifiable assets and liabilities of
the acquiree obtained in the business combination shall be reviewed first. If the merger cost is still
less than the fair value of the identifiable assets and liabilities obtained from the acquiree after
review 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 different
control 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 other
administration costs incurred shall be included in the current profit or loss when incurred during
the business merger. The transaction expenses of the equity securities or liability securities issued
121as the consideration for the merger shall be recorded as the initial recognition amount of the
equity 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 basis
of control including not only subsidiaries defined according to voting rights (or similar voting
rights) themselves or in combination with other arrangements but also structured entities defined
based on one or more contractual arrangements.Control means the power of the Company over the investee and the investor can enjoy
variable returns through participating in related activities of the investee and is able to influence
its amount of return with the power over the investee. Subsidiaries refer to the entities controlled
by the Company (including the divisible parts of enterprises and investees and structured entities
controlled by enterprises). Structured entities refer to entities designed without taking voting
rights or similar rights as decisive factors when determining their controllers (Note: they are
sometimes 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 relevant
services for the investment activities of the investment entity shall be included in the scope of
consolidation and other subsidiaries shall not be consolidated. The equity investors of the
subsidiaries that are not included in the scope of consolidation shall be recognized as financial
assets at fair value through profit or loss.When the parent company meets the following conditions at the same time the parent
company belongs to the investment entity:
* The entity obtains funds from one or more investors for the purpose of providing
investment management services to investors.
122* The entity's sole objective of operation is to provide a return to the investors through capital
appreciation investment income or both.* 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 are
included in the consolidated financial statements for preparation of consolidated financial
statements other subsidiaries will not be consolidated by the entity from the date of change and
treatment will be conducted according to the principle of partially disposing of the subsidiary's
equity without losing control.When the parent company changes from an investment entity to a non-investment entity the
subsidiaries that were not originally included in the scope of the consolidated financial statements
shall be included in the scope of the consolidated financial statements on the change date and the
fair value of the subsidiaries that were not originally included in the scope of the consolidated
financial statements on the change date shall be regarded as the transaction consideration for
acquisition in accordance with the accounting treatment method of business merger under
different control.
(3) Preparation methods of consolidated financial statements
The Company prepares the consolidated financial statements based on the financial
statements 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 an
accounting entity in accordance with the requirements for recognition measurement and
presentation in relevant accounting standards for business enterprises and the unified accounting
policies and accounting periods with the aim of reflecting the overall financial positions
operating results and cash flows of the Group.* Merge the assets liabilities owners' equity income expenses and cash flow of the parent
company and its subsidiaries.
123* Offset long-term equity investment of the parent company to the subsidiaries and the
parent company’s share in the owners’ equity of subsidiaries.* Offset the effect of internal transactions between the parent company and its subsidiaries
and between different subsidiaries. If internal transactions indicate relevant assets have suffered
impairment loss the loss shall be recognized in full.* Adjust special transactions from the perspective of the Group.
(4) Treatment of increase/decrease in subsidiaries during the reporting period
* 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 consolidated
balance sheet shall be adjusted and the relevant items of the comparative statements shall be
adjusted at the same time. It shall be deemed that the consolidated reporting entity has always
existed since the time when the ultimate controlling party begins to control.(b) When preparing the consolidated income statement the income expenses and profits of
the subsidiary and the business combination from the beginning of the current period to the end of
the reporting period shall be included in the consolidated income statement and the relevant items
of the comparative statements shall be adjusted at the same time. It shall be deemed that the
consolidated reporting entity has always existed since the time when the ultimate controlling party
begins to control.(c) When preparing the consolidated cash flow statement the cash flows of the subsidiary
and the business from the beginning of the current period to the end of the reporting period shall
be included in the consolidated cash flow statement and the relevant items of the comparative
statements shall be adjusted at the same time. It shall be deemed that the consolidated reporting
entity has existed since the time point when the ultimate controlling party begins to control.
124B. Subsidiaries or businesses increased due to business merger under different control
(a) In preparing the consolidated balance sheet the beginning amounts of the consolidated
balance sheet are not adjusted.(b) When preparing the consolidated income statement the income expenses and profits of
the subsidiary and the business from the acquisition date to the end of the reporting period shall
be included in the consolidated income statement.(c) When preparing the consolidated cash flow statement the cash flows of the subsidiary
from the acquisition date to the end of the reporting period shall be included in the consolidated
cash flow statement.* Disposal of subsidiaries or business
A. In preparing the consolidated balance sheet the beginning amounts of the consolidated
balance sheet are not adjusted.B. When preparing the consolidated income statement the income expenses and profits of
the subsidiary and the business from the beginning of the period to the disposal date shall be
included in the consolidated income statement.C. When preparing the consolidated cash flow statement the cash flows of the subsidiary
and the business from the beginning of the period to the disposal date shall be included in the
consolidated cash flow statement.
(5) Special considerations in the consolidated offset
* 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.
125For the long-term equity investments held by subsidiaries the long-term equity investment
and the share of the owner's equity of the corresponding subsidiary shall be offset with each other
by reference to the offset method of the Company's equity investment in subsidiary.* 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 undistributed
profits they shall be restored according to the share attributable to the owners of the parent
company after the long-term equity investments offset each other with the owners' equity of the
subsidiaries.* 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 to
the offset of unrealized internal sales profit or loss the deferred tax assets or deferred tax
liabilities shall be recognized in the consolidated balance sheet and the income tax expenses in
the consolidated income statement shall be adjusted at the same time except for the deferred taxes
related to transactions or events directly included in the owners' equity and business merger.* 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 the
parent 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 Company
and the subsidiary. Unrealized internal transaction profit or loss incurred by asset sales among
subsidiaries 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 the
Company.* 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 be
offset against the “minority interests”.
(6) Accounting treatment for special transactions
126* Purchasing minority shareholders' equity
Where the Company purchases the equity of a subsidiary owned by minority shareholders of
the subsidiary in the individual financial statements the investment cost of the long-term equity
investment newly acquired by purchasing the minority equity is measured at the fair value of the
consideration paid. In the consolidated financial statements the capital reserve (capital premium
or equity premium) shall be adjusted for the difference between the long-term equity investment
newly acquired from the acquisition of a minority interest and the share of net assets of the
subsidiary that would continue to be calculated from the acquisition date or the merger date as
per 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.* Acquisition of control of subsidiaries step by step through multiple transactions
A. Business merger under common control realized step-by-step through multiple
transactions
On the merger date in the individual financial statements of the Company the initial
investment cost of the long-term equity investment is determined according to the share of the
book value of the net assets of the subsidiary that shall be enjoyed after the merger in the
consolidated financial statements of the ultimate controlling party; Capital reserves (capital
premium or share premium) shall be adjusted according to the difference between the initial
investment cost and the sum of the book value of the long-term equity investment before the
merger and the book value of the consideration paid for further shares on the merger date. If the
capital reserves (capital premium or stock premium) are insufficient to be offset the surplus
reserves and undistributed profits shall be offset in turn.In the consolidated financial statements except the adjustment made according to the
accounting policies the assets and liabilities of the merged party obtained by the merging party
shall be measured according to the book value on the merger date in the consolidated financial
statements of the ultimate controlling party. According to the difference between the sum of the
book value of holding investment before merger and the book value of newly paid consideration
127on the merger date and the book value of net assets obtained by merger the capital reserve (stock
premium/capital premium) is adjusted; if the capital reserve is not sufficient for offset the
retained earnings may be adjusted.The equity investment held before the acquisition of the merged party’s control by the
merging party and calculated by the equity method and the profit or loss other comprehensive
incomes and other changes in owners’ equity that have been recognized during the period from
the date of acquisition of the original equity or the date of common control of the merging party
and the merged party (which is later) to the merger date shall offset against the beginning retained
earnings during the period of comparative statement respectively.B. Business merger under different control realized step-by-step through multiple
transactions
On the merger date in the individual financial statements the sum of the book value of the
long-term equity investment originally held and the newly increased investment costs on the
merger date shall be recognized as the initial investment cost of the long-term investment in
equity on the merger date.In the consolidated financial statements the acquiree's equity held before the acquisition date
is re-measured at the fair value of the equity at the acquisition date and the difference between
the fair value and its book value is included in the current investment income; Where the
acquiree's equity held before the acquisition date is related to any other comprehensive income
under the equity method other comprehensive income related thereto shall be transferred to the
current income corresponding to the acquisition date excluding other comprehensive income
resulting from changes in net liabilities or net assets arising from the defined benefit plan through
the re-measurement on the merged party. The Company discloses the fair value of the equity held
by the acquiree before the acquisition date and the relevant profits or loss arising from
remeasurement of fair value in the notes.* The Company's disposal of long-term equity investments in subsidiaries without losing
control
128For partial disposal of long-term equity investment in a subsidiary by the parent company
without loss of control in the consolidated financial statements the capital reserve (capital
premium or equity premium) shall be adjusted by the difference between the disposal price and
the share of net assets of the subsidiary that would continue to be calculated from the acquisition
date or the merger date corresponding to the disposal of the long-term equity investment or if the
capital reserve is insufficient to be written down the retained earnings shall be adjusted.* 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 of
partial 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 the
Company loses the right of control. The difference by using the sum of value received from
disposal of equity and fair value of the residual equity to deduct share in net assets continually
counted from the acquisition date or merger date of the original subsidiary (calculated as per
original share proportion) shall be recorded in the investment income of the current period
without the right of control.Other comprehensive income and other changes in owners’ equity in connection with the
equity investment of the original subsidiaries shall be transferred into current profit or loss at the
time of loss of control except for other comprehensive incomes generated from the change in net
liabilities 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 consolidated
financial statements first.
129If the step-by-step transaction does not belong to a "package deal" in the individual financial
statements the book value of the long-term equity investment corresponding to each disposal of
equity 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-term
equity investment shall be included in the current investment income; In the consolidated
financial statements it shall be treated in accordance with the relevant provisions stating that "the
parent company disposes of the long-term equity investment in the subsidiary without losing the
control right".If a step-by-step transaction belongs to a "package deal" each transaction shall be accounted
for as a transaction that disposes of subsidiaries and loses control; In the individual financial
statements the difference between each disposal price before the loss of control and the book
value of the long-term equity investment corresponding to the equity disposed of shall be
recognized as other comprehensive income first and then transferred to the current profit and loss
on the loss of control when the control is lost; In the consolidated financial statements for each
transaction before the loss of control the difference between the disposal price and the share of
net assets of the subsidiary corresponding to the disposal of investment shall be recognized as
other comprehensive income and shall be transferred to the current profit and loss in case of
control loss.Where the terms conditions and economic impact of various transactions meet one or more
of the following circumstances multiple transactions are generally accounted for as a "package
deal":
(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 treated
as a whole.(c) The occurrence of one transaction depends on the occurrence of at least one other
transaction.
130(d) A transaction is uneconomical on its own but is economical when considered together
with other transactions.* 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 the
subsidiary thereby diluting the proportion of the parent company's equity in the branch. In the
consolidated financial statements its share in the book net assets of the subsidiary before the
capital increase is calculated according to the shareholding ratio of the parent company before the
capital increase. The capital reserves (capital premium or share premium) are adjusted according
to the difference between the share and share of book net assets of the subsidiaries after the
capital increase calculated according to the shareholdings ratio of the parent company after the
capital increase. If the capital reserves (capital premiums or share premiums) are insufficient to be
offset 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 the
arrangement and bears liabilities related to the arrangement.The Company recognizes the following items related to the Company among the interest
shares of joint operation and performs accounting treatment in accordance with relevant
regulations of ASBE:
* Recognizing the assets held solely and the assets held jointly identified as per its shares;
131* Recognizing the liabilities held solely and the liabilities held jointly identified as per its
shares;
* Recognizing the income generated from the sale of shares enjoyed in the joint operations;
* Recognizing the income generated from the sale of joint operation output as per its shares;
* 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 net
assets of the arrangement.The Company shall conduct accounting treatment on the investment of the joint venture as
per the provisions on business accounting for relevant equity method of long-term equity
investment.
8. Standards for defining cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily drawn on demand. The cash
equivalents are recognized as investment that is short-term (generally due within three months
since the acquisition date) highly liquid and readily convertible to a known amount of cash and
has 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 spot
exchange rate on the transaction date or the exchange rate determined using systematic and
reasonable methods and similar with the spot exchange rate on the transaction date (hereinafter
132referred to as “exchange rate similar with spot exchange rate”) is used for the transaction into
bookkeeping 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 exchange
rate on balance sheet date. Exchange differences arising from these differences between the spot
exchange rate at the balance sheet date and the one at the initial recognition or the previous one at
the balance sheet are included in the current profit or loss. Foreign currency non-monetary items
measured 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 spot
exchange rate on the date of fair value determination and the difference between the converted
recording currency amount and the original bookkeeping base currency amount are included in
the current profit or loss.
10. Financial instruments
Financial instruments refer to contracts that form the financial assets of a party and form
financial 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 will
recognize the financial assets or financial liabilities.A financial asset is derecognized if it meets one of the following conditions:
* The right of the contract to receive the cash flows of financial assets terminates;
* The financial asset has been transferred and is in accordance with the following
conditions for derecognition.
133Under the circumstance that the current obligation of the financial liabilities in whole (or
partially) has been relieved the Company will derecognize the financial liabilities in whole (or
partially). Where a contract is signed by the Company (the debtor) and the creditor in ways of
bearing new financial liabilities instead of original financial liabilities and the clause on the
financial liabilities in the new contract is in fact different from the same clause in the current
contract derecognize the original financial liabilities and confirm the new financial liability in the
same time. If the Company makes any substantial modification to the contract terms of the
original financial liabilities in whole (or partially) the original financial liabilities shall be
derecognized and one new financial liability shall be recognized in accordance with the modified
terms.Financial assets transacted in a conventional way are subject to accounting recognition and
derecognition on the transaction day. Buying and selling financial assets in conventional way
refers to the delivery of financial assets according to the time arrangement prescribed by the terms
of the contract and the laws regulations or market practices. The trade date is the date when the
Company 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 assets
management and the contractual cash flow characteristics of financial assets the Company
classifies financial assets into financial assets at amortized cost financial assets at fair value
through 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 all
affected related financial assets shall be reclassified on the first day of the first reporting period
after the change of business mode. Otherwise the financial assets shall not be reclassified after
the initial recognition.Financial assets are initially recognized at fair value. For financial assets at fair value
through profit or loss related transaction expenses shall be directly included in the profit or loss
for the current period; the related transaction expenses of other financial assets shall be included
134in the initially recognized amount. For the notes receivable and accounts receivable that arise
from the sales of goods or the provision of services and that do not contain or consider the
significant financing component the Company shall perform the initial measurement according to
the transaction price defined in the income standards.Subsequent measurement of financial assets depends on their classification:
* Financial assets at amortized cost
Where the financial assets meet all the following conditions they will be classified as
financial assets measured at amortized cost. The business mode of the Company for managing
such financial assets is to collect contract cash flows. The contract of such financial assets
specifies that the cash flows generated at a particular date are only for the payment of principal
and interest based on the amount of outstanding principal. Such financial assets are measured
subsequently by the effective interest method and based on the amortized cost and all profit or
loss due to derecognition impairment or amortization as per effective interest method are
included in the current profit or loss.* Financial assets at fair value through other comprehensive income
Where the financial assets meet all the following conditions they will be classified as
financial assets at fair value through other comprehensive income. The business mode of the
Company for managing such financial assets is to collect contract cash flows and to sell the
financial assets. The contract of such financial assets specifies that the cash flows generated at a
particular date are only for the payment of principal and interest based on the amount of
outstanding principal. For such financial assets subsequent measurement shall be based on fair
value. Except that the impairment gain or loss and the exchange gain or loss are recognized as
profit or loss of the current period changes in fair value of such financial assets are recognized as
the other comprehensive income and the accumulated profit or loss are transferred into profit or
loss of the current period until the financial assets are derecognized. However the relevant
interest income from the financial assets calculated by the effective interest method is included in
the current profit or loss.
135The Company irrevocably chooses to designate some non-trading equity instrument
investments as financial assets at fair value through other comprehensive income and only
includes the relevant dividend income in the current profit or loss. The changes in fair value are
recognized as other comprehensive income and until the derecognition of such financial assets
the accumulated profit or loss is transferred into the retained earnings.* Financial assets at fair value through profit or loss
The financial assets other than the above financial assets at the amortized cost and financial
assets at fair value through other comprehensive income will be classified into the financial assets
at fair value through profit or loss. Such financial assets are subsequently measured at the fair
value 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 through
profit or loss the loan commitment and liabilities under financial guarantee contract with an
interest rate lower than the market interest rate and the financial liabilities measured by amortized
cost.Subsequent measurement of financial liabilities depends on their classification:
* Financial liabilities at fair value through profit or loss
These financial liabilities include trading financial liabilities (including derivative
instruments classified as financial liabilities) and financial liabilities designated as at fair value
through profit or loss. After the initial recognition such financial liabilities are subsequently
measured at fair value. Unless related to the hedge accounting the profit or loss (including
interest expenses) generated are included in the current profit or loss. However for financial
liabilities designated to be measured at fair value through profit or loss the changes in fair value
of such financial liabilities caused by changes in the credit risk. Upon the derecognition of such
136financial liabilities the accumulated profit or loss previously included in other comprehensive
income shall be transferred out from other comprehensive income and included in retained
earnings.* Loan commitment and liabilities under financial guarantee contract
Loan commitment is an commitment provided by the Company to the client to issue a loan
to the client under the established contract terms within the commitment period. For the loan
commitment 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 a
specified amount of money to the contract holder who has suffered a loss because the specific
debtor failed to make due payment of debts in accordance with the original or modified terms for
debt instruments. The liabilities under financial guarantee contract are subsequently measured
according to the amount of the provision for loss recognized according to the impairment
principle for financial instruments or the balance of initially recognized amount after deducting
the accumulated amortized amount recognized according to the revenue confirmation principles
whichever is lower.* Financial liabilities at amortized cost
After the initial recognition other financial liabilities will be measured by the effective
interest method based on the amortized cost.Except for special circumstances the financial liabilities and equity instrument shall be
distinguished according to the following principles:
* If the Company fails to unconditionally perform one contractual obligation by delivering
cash or other financial assets the contractual obligation satisfies the definition of financial
liability. While some financial instruments do not expressly include the terms and conditions for
the obligation to deliver cash or other financial assets it is possible to form contract obligations
indirectly through other terms and conditions.
137* 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 be
considered as a substitute of cash or other financial assets or as residual equity in the issuer’s
assets 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 equity
instrument of the Issuer. Under certain circumstances a financial instrument contract requires that
the Company must or may settle the financial instrument with its own equity instruments where
the amount of contractual rights or contractual obligations is equal to the number of own equity
instruments available or to be delivered multiplied by the fair value upon its settlement. In this
case regardless of whether the amount of the contractual right or obligation is a fixed value or
changes based in whole or in part on changes in variables other than the market price of the
Company's own equity instrument (such as interest rates the price of a good or the price of a
financial 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 the
derivative deal contract is signed and subsequently measured at fair value. The derivative
financial instrument whose fair value is positive is recognized as an asset. When the fair value is
negative it is recognized as a liability.Except that the cash flow hedge belonging to the effective part of the hedge is included in
other comprehensive income and transferred out and included in the current profit or loss the gain
or loss incurred by the changes in fair value of derivative instruments are directly included in the
current profit or loss.For hybrid instruments containing embedded derivative instruments if the main contract is
for the financial assets the hybrid instruments are used as a whole applicable to the relevant
provisions on classification of financial assets. Where the main contract is not for financial assets
and such hybrid instruments are not subject to the accounting treatment at fair value through
profit or loss if the embedded derivative instruments are not closely related to the main contract
138in terms of economic characteristics and risks the conditions of the hybrid instruments match the
conditions of embedded derivative instruments and the instruments existing solely conform to
definition of derivative instrument the embedded derivative instruments shall be separated from
the hybrid instruments and disposed as separate derivative financial instruments. If the fair value
of such embedded derivative instruments on the acquisition date or subsequent balance sheet date
cannot be separately measured the hybrid instruments shall be wholly designated as financial
assets 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 other
comprehensive income the Company recognizes the provision for loss on the basis of expected
credit loss.* Measurement of expected credit loss
The expected credit loss refers to the weighted average of the credit losses of financial
instruments that are weighted by the risk of default. Credit loss refers to the difference between all
contractual cash flows receivable according to the contract and discounted according to the
original effective interest rate and all cash flows receivable of the Company that is the present
value of all cash shortages. The credit-impaired financial assets that are purchased or derived by
the Company shall be discounted on the basis of the credit-adjusted effective interest rate of the
financial assets.The expected credit loss during the whole duration refers to the expected credit loss caused
by 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 by
the 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 expected
duration) which is part of the expected credit loss in the whole duration.
139On each balance sheet date the Company separately measures the expected credit losses of
financial instruments at different stages. If the credit risk of financial instruments has not
increased significantly since the initial recognition it is in the first stage. The Company will
measure the provision for loss according to the expected credit loss in the next 12 months. If the
credit risk of financial instruments has increased significantly since its initial recognition but no
credit impairment has occurred it is in the second stage and the Company measures the provision
for loss according to the lifetime expected credit loss of the instrument. If financial instruments
have suffered credit impairment since their initial recognition it is in the third stage and the
Company measures the provision for loss according to the lifetime expected credit loss of the
instrument.For financial instruments with low credit risk on the balance sheet date the Company
assumes that the credit risk has not increased significantly since the initial recognition and
measures 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 the
Company calculates interest income according to the book balance before deducting provision for
impairment and the actual interest rate. For financial instruments in the third stage the interest
income shall be calculated according to their book balance minus the amortized cost after
provision 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 the
provision for losses based on expected credit losses over the whole duration.A. Receivables/contract assets
For notes receivable accounts receivable other receivables receivables financing contract
assets and long-term receivables with objective evidence showing impairment and other accounts
receivable suitable for single evaluation impairment test shall be conducted separately to
recognize expected credit loss and accrue single provision for impairment. For notes receivable
accounts receivable other receivables receivables financing contract assets and long-term
140receivables without objective evidence of impairment or when information of the expected credit
loss for a single financial asset cannot be evaluated at a reasonable cost the Company divides the
notes receivable accounts receivable other receivables receivables financing contract assets and
long-term receivables into several portfolios according to the credit risk characteristics calculates
the expected credit loss on the basis of the portfolios and determines the portfolio on the
following basis:
Basis for portfolio determination for notes receivable:
Notes receivable portfolio 1 - commercial acceptance bill
Notes receivable portfolio 2 - bank acceptance bill
For notes receivable divided into portfolios the Company refers to the historical credit loss
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 loss rate
for the whole duration.Basis for portfolio determination for accounts receivable:
Accounts receivable portfolio 1 - aging portfolio
Accounts receivable portfolio 2 - jewelry sales business portfolio
For the accounts receivable divided into portfolios the Company refers to the historical
credit loss experience combines the current situation with the forecast of the future economic
situation formulates the comparison table of aging of accounts receivable and the lifetime
expected 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
141Other receivables portfolio 2 - dividends receivable
Other receivables portfolio 3 - aging portfolio
Other receivables portfolio 4 - deposit receivable and security portfolio
Other receivables portfolio 5 - portfolio of concerned intercourse funds within the
consolidation scope of receivables
For other receivables divided into portfolios the Company refers to the historical credit loss
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 loss rate
in the next 12 months or for the whole duration.Basis for portfolio determination of long-term receivables:
Long-term receivables portfolio 1 - other receivables
For long-term receivables divided into portfolio 1 the Company refers to the historical credit
loss 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 loss
rate for the whole duration.B. Creditor's rights investment and other creditor's rights investment
For debt instruments at amortized cost and debt instruments at fair value through other
comprehensive income the Company calculates the expected credit loss according to the nature
of the investment and various types of counterparty and risk exposure through default risk
exposure and the expected credit loss rate within the next 12 months or the whole duration.* Rather low credit risk
If the default risk of a financial instrument is rather low the borrower has a strong ability to
fulfill its contractual cash flow obligations in a short period and even if there are adverse changes
in the economic situation and operating environment for a long period of time it may not
142necessarily 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.* Significant increase in credit risk
The Company compares the default probability of financial instruments in the expected
duration determined at the balance sheet date with the default probability in the expected duration
determined upon the initial recognition to determine the relative change in the default probability
of financial instruments in the expected duration thus evaluating whether the credit risk of
financial instruments has increased significantly since the initial recognition.When determining whether the credit risk has significantly increased since the initial
recognition the Company considers the reasonable and well-founded information obtained by it
without unnecessary additional cost or effort including the forward-looking information. The
information to be considered by the Company is as follows:
A. Whether the internal price index has changed significantly due to the changes in credit
risk;
B. Adverse changes in business financial or economic conditions expected to lead to
significant 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 financial
performance of the debtor; whether the regulatory economic or technological environment in
which the debtor is located has undergone significant adverse changes;
D. Whether there has been any significant change in the value of collateral used as debt
collateral or the quality of guarantee or credit enhancement provided by a third party. Such
changes are expected to reduce the debtor's economic motivation to repay the loan within the time
limit stipulated in the contract or affect the probability of default;
E. Whether there has been any significant change in the economic motivation that is
expected to reduce the debtor's repayment within the time limit agreed in the contract;
143F. Expected changes in the loan contract including whether the expected breach of contract
may 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 the
contractual framework of financial instruments;
G. Whether there has been any significant change in the debtor's expected performance and
repayment 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 credit
risk has increased significantly on the basis of individual financial instruments or portfolios of
financial instruments. When evaluating on the basis of portfolios of financial instruments the
Company 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 determines
that the credit risk of the financial instrument has significantly increased unless the Company can
obtain reasonable and reliable information without paying too much cost or effort to prove that
the credit risk has not increased significantly since the initial recognition although the payment
period stipulated in the contract has elapsed for more than 30 days.* Credit-impaired financial assets
On the balance sheet date the Company evaluates whether the credit impairment has
occurred to financial assets measured by amortized cost and the creditor's rights investment at fair
value through other comprehensive income. When one or more events that have an adverse effect
on 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 following
observable information:
144The issuer or debtor has major financial difficulties; the debtor violates the contract such as
default or overdue payment of interest or principal; the creditor makes the concession that the
debtor will not make under any other circumstances due to the economic or contractual
considerations related to the debtor's financial difficulties; the debtor is likely to go bankrupt 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 or generated
at a substantial discount which reflects the fact that the credit losses have occurred.* Presentation of provision for expected credit loss
In order to reflect the changes in the credit risk of financial instruments since the initial
recognition the Company re-measures the expected credit loss on each balance sheet date. The
increase or reversal amount of provision for loss therefrom shall be regarded as impairment loss
or gain and included in the current profit or loss. For the financial assets measured by amortized
cost the provision for loss shall be used to offset against the book value of financial assets
presented in the balance sheet; for the creditor's rights investments at fair value through other
comprehensive income the Company recognizes the provision for loss in other comprehensive
income and the book value of financial assets will not be deducted.* Write-off
When the Company no longer reasonably expects that the contract cash flow of the financial
asset can be recovered in whole or in part the book balance of the financial asset is directly
written down. Such write-down constitutes the derecognition of related financial assets. This
usually happens when the Company determines that the debtor has no assets or sources of income
to 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 of
impairment loss and included in the profit or loss.
(6) Transfer of financial assets
145Transfer of financial assets refers to the following two situations:
A. The contractual right for collecting this financial asset cash flow is transferred to the other
party;
B. All or part of the financial assets are transferred to the other party but the contractual
rights to collect the cash flow of financial assets are reserved and the contractual obligation to
pay the collected cash flow to one or more recipients is fulfilled.* Derecognition of transferred financial assets
If almost all risks and rewards from the ownership of financial assets have been transferred
to the transferee or almost all risks and rewards from the ownership of financial assets are neither
transferred nor retained but the control of such financial assets have been abandoned such
financial 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 can
unilaterally sell the transferred financial assets to an unrelated third party and there are no
additional conditions to restrict the sales the Company has given up its control over the financial
assets.When judging whether the transfer of financial assets meets the conditions for derecognition
of financial assets the Company shall pay attention to the essence of the transfer of financial
assets.If the entire transfer satisfies the derecognition criteria the difference between the following
amount 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 the
derecognized portion of the cumulative changes in fair value and directly included in other
146comprehensive income (the financial assets involved in the transfer are classified as financial
assets at fair value through other comprehensive income according to Article 18 of Accounting
Standards 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 be
deemed as a part of the continuously recognized financial assets) of the financial assets
transferred as a whole should be amortized at their respective fair values on the transfer date and
the 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 the
proportion – corresponding to the derecognized portion of the cumulative changes in fair value
through other comprehensive income (the financial assets involved in the transfer are classified as
financial assets at fair value through other comprehensive income according to Article 18 of
Accounting Standards for Enterprises No. 22 – Recognition and Measurement of Financial
Instruments).* Further involvement of the transferred financial assets
Where there is neither transfer nor retention of any risks and rewards on the financial asset
ownership if the control over the financial asset is not waived relevant financial assets shall be
recognized to the extent of further involvement in the transferred financial assets and relevant
liabilities shall be recognized correspondingly.The extent of further involvement into the transferred financial asset refers to the extent to
which the Company bears the risks or rewards of changes in the value of transferred financial
assets.* Further recognition of the transferred financial assets
147Where almost all risks and returns related to the ownership of the financial assets transferred
are still retained the entirety of financial assets transferred are continued to be recognized with
the consideration received being recognized as a financial liability.The financial assets and the recognized related financial liabilities shall not be offset against
each 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 the
financial liabilities.
(7) Offset of financial assets and financial liabilities
Financial assets and financial liabilities will be listed on the balance sheet respectively and
they will not offset each other. However the net amount is presented in the balance sheet after
mutual offset when the following conditions are met simultaneously:
The Company has the legal right to offset the recognized amount and such a legal right is
currently enforceable;
It is planned to conduct net settlement or cash out the financial asset and pay off the financial
liability.For financial assets that do not meet the conditions for derecognition the transferor will not
offset 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 financial
liabilities.
11. Inventories
(1) Classification of inventories
148Inventory refers to finished products or commodities held by the Company for sale in daily
activities products under production materials and supplies consumed in the process of
production 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 specific
measurement method when being dispatched.
(3) Inventory system
The Company adopts the perpetual inventory system for its inventory and makes the
inventory at least once a year. The amount of inventory profit and inventory loss is included in the
current 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 and
net realizable value. If the inventory cost is greater than the net realizable value provision for
decline in the value of inventories shall be withdrawn and included in the current profits and
losses.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 balance
sheet date.* 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 price
of the inventory deducting the estimated selling expenses and relevant taxes shall be determined
as the net realizable value. For inventory held for implementing sales contract or labor service
contract the net realizable value thereof shall be calculated based on the contract price. If the
quantity of inventories held is greater than the ordered quantity of the sales contract the net
149realizable value of the excessive part shall be calculated based on the general selling price. For
materials held for sale the net realizable value thereof shall be calculated based on market price.* 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 selling
prices of these inventories and their estimated cost to be incurred till completion estimated selling
expenses and associated taxes; and If the net realizable value of the finished product is higher than
the cost the material shall be measured with the cost; if the reduction of the material price
indicates that the net realizable value of the finished product is lower than the cost the material
shall be measured with the net realizable value and the provision for decline in the value of
inventories shall be withdrawn by the balance.* 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.* 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 for
decline in the value of inventories which has been drawn and the recovered amount shall be
included in the current profits and losses.
12. Contract assets
The Company presents the contract assets in the balance sheet in accordance with the
relationship between the performance obligations and the payment by the customer. The
consideration to which the Company is entitled to receive for the transfer of goods or services to a
customer (and the right depends on other factors excluding the passage of time) is presented as
contract assets.Please refer to Note III. 10 for details of the determination method and accounting treatment
method of the expected credit losses of the Company's contract assets.
150Contract assets are presented separately in the Balance Sheet. Contract assets under the same
contract shall be presented at net amount. If the net amount is the debit balance it shall be
presented 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 acquisition
cost.The cost incurred by the Company in performing the contract shall be recognized as an asset
of the contract performance cost when the following conditions are met at the same time:
* 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 and
other costs incurred only by the contract;
* This cost increases the Company’s resources for performing the performance obligations
in the future.* This cost is expected to be recovered.If the incremental cost incurred by the Company in obtaining the contract is expected to be
recoverable 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 or
services related to the asset is recognized; however if the contract acquisition cost is amortized
for less than one year the Company will include it into the current profits and losses at the time of
occurrence.If the book value of the assets related to the contract cost exceeds the difference between the
following two items the Company will make preparation for impairment provision of the excess
and recognize it as the impairment loss of the assets and further consider whether to make
provision for estimated liabilities related to the onerous contract:
151* Residual consideration expected to be obtained in connection with the transfer of goods or
services related to the asset;
* 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 value
of the assets reversed will not exceed the book value of the assets at the date of reverse assuming
no 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/normal
operating cycle; or presented in the item of "Other non-current assets" if the amortization period
at 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 "Other
current assets" if the amortization period at initial recognition is not more than one year/normal
operating cycle; or presented in the item of "Other non-current assets" if the amortization period
at 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 following
conditions as the held-for-sale:
* Based on the practice of selling such assets or disposal groups in similar transactions
those can be sold immediately under current conditions;
* 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 be
completed within one year. The relevant approval has been obtained from relevant authorities of
the Company or regulators for those available for sale as required by the relevant regulations.
152The 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 the
held-for-sale assets in a short time (usually 3 months) as the held-for-sale assets on the acquisition
date.If the Company loses control over its subsidiaries due to the sales of investment in
subsidiaries and other reasons whether the Company reserves some of its equity investments after
the 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 a
whole in the individual financial statements of the parent company and all the assets and liabilities
of 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 the
assets formed by employee compensation the deferred tax assets the financial assets subject to
the financial instrument related accounting standards and rights arising from insurance contracts
subject to insurance contract relevant accounting standards are applicable to other relevant
accounting standards respectively.When the held-for-sale non-current assets or disposal groups are measured initially or
remeasured on the balance sheet date if the book value is higher than the net amount obtained by
deducting the selling expenses from the fair value the book value shall be reduced to the net
amount obtained by deducting the selling expenses from the fair value and the write-down
amount shall be recognized as the asset impairment losses and shall be included in the current
profits and losses and the impairment provision of held-for-sale assets shall be made at the same
time. 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 the
previous write-down amount shall be recovered and reversed from the asset impairment losses
recognized after being classified as the held-for-sale assets and the reversed amount shall be
153included in the current profits and losses. The book value of goodwill deducted shall not be
reversed.When a non-current asset or disposal group ceases to be classified as held for sale because it
no longer meets the criteria for classification of held for sale or a non-current asset is excluded
from a disposal group held for sale it is measured at the lower of:
* 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 held
for sale;
* Recoverable amount.
(3) Presentation
In the balance sheet the Company shall separately present the non-current assets held for
sale or the assets in the disposal group held for sale different from other assets and separately
present 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 the
disposal group held for sale shall not offset each other and shall be presented as current assets and
current liabilities respectively.
15. Long-term equity investments
The long-term equity investments of the Company include the equity investment to control
or significantly influence the investees and the equity investments of the joint ventures. Where the
Company 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 related
agreements and related activities of the arrangement can be determined only when the unanimous
consent of the parties sharing the control right is obtained. In assessing whether joint control of an
arrangement exists the Company first assesses whether all the parties or a group of the parties
154control the arrangement collectively. When all the parties or a group of the parties must act
together unanimously in directing the relevant activities all the parties or a group of the parties
are regarded as having joint control of an arrangement. It then assesses whether decisions about
the relevant activities require the unanimous consent of those parties that control the arrangement
collectively. When more than one combination of the parties can control an arrangement
collectively joint control does not exist. Protective rights are not taken into account in
determining whether or not there is joint control.Significant influence means the power of the investor to participate in making decisions on
the financial and operating policies of an investee but the investor cannot control or jointly
control with other parties over the formulation of these policies. When determining whether an
investor 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 parties
that are currently exercisable or convertible be considered.It shall be regarded as significant influence on the investee when the Company directly or
indirectly 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 making
decisions 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 as
follows:
A. Business merger under common control: If the merging party carries out merger
consideration through cash payment transfer of non-cash assets assumption of liabilities the
share of the book value of the owners' equity of the merged party in the consolidated financial
statements of the ultimate controlling party should be recognized as the initial investment cost of
long-term equity investment on the merger date. The difference between the initial investment
cost of the long-term equity investment and the paid cash transferred non-cash assets and the
155book value of assumed debts is adjusted to capital reserves. If the capital reserve is not sufficient
to absorb the difference any excess is adjusted to retained earnings;
B. Business merger under common control: If the merging party uses the issuance of equity
securities as the merger consideration the share of book value of the owners' equity of the merged
party in the consolidated financial statements of the ultimate controlling party should be
recognized 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 difference
between the initial investment cost of the long-term equity investment and the total carrying
amount of the shares issued shall be adjusted to the capital reserve; if the capital reserve is
insufficient to offset the retained earnings shall be adjusted;
C. Business merger under different control: merger cost and initial costs for long-term equity
investment shall be determined based on the assets paid on the date of purchase for the right of
control over the purchased party liabilities occurred or undertaken as well as the fair value of the
issued equity securities. Any intermediary expenses such as audit legal services assessment and
consultation and other related management expenses incurred by the merging party in the
business merger are included in the current profits and losses when incurred.* Except for the long-term equity investment formed by business merger the investment
cost of long-term equity investment acquired in other ways shall be determined in
accordance with the following provisions:
A. For long-term equity investment obtained by cash payment the actual purchase price
shall be regarded as the investment cost. The initial investment cost includes expenses taxes and
other 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 of
the issued equity securities shall be taken as the initial investment cost;
C. For long-term equity investment obtained through non-monetary asset exchange if the
exchange has commercial essence and the fair value of the exchanged assets or the exchanged
assets can be reliably measured the fair value of exchanged assets and relevant taxes and fees
shall be regarded as the initial investment cost and the difference between the fair value of the
156exchanged assets and the book value shall be included in the current profits and losses. If the
exchange of monetary assets does not meet the above two conditions at the same time the book
value of the exchanged assets and relevant taxes and fees shall be regarded as the initial
investment cost.D. For long-term equity investments acquired through debt restructuring the entry value
should be determined according to the fair value of the debt waived taxes generated from such
assets and other costs and the difference between the fair value and the book value of the debt
waived 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 investment
implementing control over the investee and equity method for accounting of long-term equity
investment in joint ventures and associates.* Cost method
The long-term equity investment will be calculated by the cost method: Add or recover the
investment to adjust the investment cost of the long-term equity. The distributed cash dividend or
profit declared by the investees is recognized as investment income in the current period.* Equity method
Long-term equity investments calculated by using equity method are generally subject to the
accounting treatment as follows:
Where the investment costs of long-term equity investments exceed the share of the fair
value of the investee’s identifiable net assets at the time of the investment the initial investment
costs of the long-term equity investment are not adjusted; where their initial investment costs of
long-term equity investments are less than the share of the fair value of the investee’s identifiable
net assets at the time of the investment the balance shall be included in the current profits and
losses and the costs of the long-term equity investment are adjusted accordingly.
157The Company recognizes the investment income and other comprehensive income
respectively according to its share of net profit or loss and other comprehensive income of the
investee and meanwhile adjusts the book value of long-term equity investments; the part of due
share 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 changes
of owners’ equity in addition to the net profit or loss and other comprehensive income and profit
distribution 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 shall
recognize the net profit of an investee after adjustment on the basis of fair value of various
identifiable assets etc. of an investee when acquiring investment. Where there are any
inconsistencies between the accounting policies and accounting period adopted by the investee
and the Company financial statements of the investee shall be adjusted according to the
accounting policies and accounting period of the Company based on which the investment income
and other comprehensive incomes are recognized. For transaction incurred between the Company
and the associates/joint ventures the unrealized profit or loss arising from the internal transactions
amongst the Company and the investees are eliminated in proportion to the Company’s equity
interest in the investees and then based on which the investment profit or loss are recognized. The
internal 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 (but
not sole control) over an investee due to additional investment or other reasons the accounting is
changed to the equity method and the initial investment cost on the date of change is the sum of
the fair value of the previously-held equity investment and additional investment cost. If the
originally-held equity investment is classified as other equity instrument investments the
difference between its fair value and book value and the accumulated gains or losses originally
included in other comprehensive income shall be transferred from other comprehensive income
and included in retained earnings in the current period when accounting is changed to the equity
method.
158In case the Company loses the joint control of or the significant influence on the investee due
to the disposal of part of the equity investment the residual equity after the disposal shall be
measured by fair value and the balance between the fair value and the book value since the date
of losing the joint control or significant influence shall be included in the current profits and
losses. For other comprehensive income from original equity investment recognized by the equity
method is subject to the accounting treatment on the same basis as that adopted by the investee for
directly 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 as
held-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 equity
method is adopted for accounting treatment.If the equity investments in associates or joint ventures that have been classified as held for
sale no longer meet the classification conditions of held-for-sale assets they shall be retroactively
adjusted by the equity method from the date of being classified as held-for-sale assets. Financial
statements 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 for
the 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 or
both. It mainly includes the following circumstances:
* Rented land use rights
159* Land use rights possessed and ready for transfer after appreciation
* 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 method
after deducting the accumulated impairment and the net salvage value from the cost of investment
properties. The category estimated economic service life and estimated net residual rate of
investment properties are as follows:
Annual depreciation rate
Class Depreciation life (year) Residual value ratio (%)
(%)
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 conditions
are met:
* Economic benefits associated with such fixed assets are likely to flow into the enterprises.* The cost of such fixed assets can be measured reliably.Subsequent expenditure related to fixed assets complying with confirmation conditions of
fixed assets shall be included in cost of fixed assets and those failing to comply with confirmation
conditions of fixed assets shall be included in the current profits and losses when it occurs.
160(2) Depreciation method
The Company shall withdraw the depreciation according to the straight-line method from the
month following the fixed assets reach the preset serviceable conditions. The depreciation life and
annual depreciation rate shall be determined according to the category estimated economic
service life and estimated net residual rate of fixed assets as follows:
Depreciation Depreciation life Residual value Annual depreciation
Class
method (year) ratio (%) rate (%)
Straight-line 10、35-40 0、3 2.43-2.77、10.00
Houses and buildings
method
Including: decoration Straight-line 10 0 10.00
of self-owned houses method
Machinery and Straight-line 12 3 8.08
equipment method
Transportation Straight-line 7 3 13.86
equipment method
Straight-line 5-7 3 13.86-19.40
Electronic equipment
method
Office and other Straight-line 7 3 13.86
equipment method
For the fixed assets with the provision for impairment withdrawn the withdrawn provision
for 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 net
residual value of as well as the depreciation methods for the fixed assets. If there is difference
between estimated service life and original estimate the service life of fixed assets shall be
adjusted.
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
161For the construction in progress all expenditures incurred before the asset is ready for its
serviceable condition will be used as the entry value of the fixed asset. Including construction
costs original prices of machinery and equipment other necessary expenses incurred to make the
construction in progress reach the working condition for its intended use borrowing costs
incurred for special borrowings of the project before the assets reach the working condition for
their intended use and borrowing costs incurred for occupied general borrowings. The Company
transfers the works under construction to fixed assets when the installation or construction of the
works is completed and ready for the intended use. For the fixed assets constructed that have
reached expected available state but haven't been settled for completion when they reach to the
expected 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 the
fixed assets are drawn as per the Company's depreciation policies for fixed assets. After final
settlement of account is completed original estimated value shall be adjusted as per the actual
cost 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 the
acquisition construction and production of assets eligible for capitalization the costs shall be
capitalized and included into the relevant asset cost when all of the following conditions are met:
* The asset expenditure has already occurred;
* Borrowing costs are being incurred; and
* 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 in
the foreign exchange rate should be included in the current profits and losses.
162Where the acquisition and construction or production of the assets qualified for capitalization
is interrupted abnormally for more than 3 consecutive months the capitalization of the borrowing
costs shall be suspended.When the assets eligible for capitalization acquired constructed or produced are available for
intended use or sale the capitalization of their borrowing costs shall be stopped and the
subsequent borrowing costs are recognized as expenses for the corresponding period of
occurrence.
(2) Calculation method for borrowing costs capitalization rate and capitalized amount
As to special borrowings borrowed for acquiring and constructing or producing assets that
conform to capitalization conditions the capitalization amount of interest is determined by the
balance of interest cost incurred in the current period minus interest profit gained from the
unspent borrowings deposited in bank or investment profit gained from the unspent borrowings
temporarily invested as the capitalization amount of borrowing interest expenses.If some general borrowings are used for acquiring and constructing or producing assets that
meet the capitalization conditions the capitalization amount of interest of general borrowings
shall be calculated and determined by multiplying the weighted average of the part of
accumulative asset expenditures exceeding special borrowing asset expenditures by the
capitalization rate of general borrowings used. The capitalization rate shall be calculated and
determined 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 initially
measured based on costs. The cost includes:
* Initial measurement amount of lease liabilities;
163* Lease payments paid on or before the commencement of the lease term. The relevant
amount 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. The
Company recognizes and measures the cost according to the recognition standard and
measurement method of estimated liabilities. See Note III. 25 for details. The aforesaid
cost 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-line
method. For fixed assets if it can be reasonably confirmed that the ownership will be granted
when the term of lease expires the rate of depreciation shall be determined according to the
category of right-of-use assets and the estimated net residual value rate within the estimated
remaining service life of the leasing assets. If it is impossible to reasonably determine whether the
ownership of the leasing assets will be granted upon the expiration of the lease term the
depreciation rate shall be determined according to the category of the right-of-use assets within
the 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
* Service life estimation for intangible assets with limited service life:
Estimated useful
Item Basis
life
Land right of use 50 years Legal right to use
Determine the service life with reference to the term
Computer software 5 years
that can bring economic benefits to the Company
164Determine the service life with reference to the term
Trademark 10 years
that can bring economic benefits to the Company
At the end of each year the Company shall re-check the service life and the amortization
method of intangible assets with limited service life. According to the review the useful life and
amortization method of the intangible asset at the end of the current period are the same as those
estimated previously.* 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 the
intangible assets with uncertain service life the Company shall check at the end of each year the
service life of the intangible assets with uncertain service life. If the service life is still uncertain
after such check impairment test shall be conducted on the balance sheet date for such assets.* Amortization of intangible assets
For the intangible assets with limited service life such service life shall be determined at the
moment of acquisition of such assets the amount that shall be amortized shall be systematically
and reasonably amortized within the service life through straight-line method and the amount of
amortization shall be included in the current profits and losses according to the income items. The
due amortization amount of intangible assets shall be the amount of its cost deducting the
estimated residual value. For intangible assets with impairment provisions provided the
accumulative amount of provision for impairment of intangible assets shall also be deducted. The
residual value of an intangible asset with limited service life is regarded as zero except for the
following circumstances: a third party promises to purchase the intangible asset at the end of its
service 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 shall
review the expected service life of intangible assets with uncertain service life at the end of each
year. If any evidences indicate that the service life of intangible assets is limited the service life
shall be estimated and amortized properly within the expected service life.
165(3) Long-term asset impairment
For long-term equity investment in subsidiaries associates and joint ventures investment
real estate which follow-up measurement is carried out by cost pattern fixed assets construction
in progress intangible assets business reputation etc. (excluding inventory investment properties
measured by fair value pattern deferred tax assets financial assets) the impairment of assets shall
be determined according to the following methods: The Company judges whether there is a sign
of impairment to assets on the balance sheet date. If such sign exists the Company estimates the
recoverable amount and conducts the impairment test. For goodwill arising from a business
merger intangible assets with indefinite useful life and intangible assets that have not reached the
usable 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 the
asset or the present value of the expected future cash flow of the asset whichever is higher. The
recoverable amount is estimated of the individual asset. If it is not possible to estimate the
recoverable amount of the individual asset the Company determines the recoverable amount of
the asset group to which the asset belongs. The identification of the asset group is based on
whether the major cash flow generated from the asset group is independent of the cash inflows
from other assets or asset groups.When the asset or asset group’s recoverable amount is lower than its book value the
Company reduces its book value to its recoverable amount the reduced amount is recorded in the
current 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 merger
is allocated reasonably to the relevant asset group since the acquisition date. If the book value of
goodwill is unable to be allocated to an asset group the book value of goodwill will be allocated
to the portfolio of asset groups. Asset group or portfolio of asset group is asset group or portfolio
of asset group which can be benefited from synergies of a business merger and is not greater than
the reportable segment of the Company.
166In impairment testing if indication of impairment exists in asset group or portfolio of asset
group containing allocated goodwill impairment test is first conducted on asset group or portfolio
of asset group that does not contain goodwill and corresponding recoverable amount is estimated
and any impairment loss is recognized. Then asset group or portfolio of asset group containing
goodwill is conducted impairment test by comparing its book value and its recoverable amount. If
the 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 investment
real estate which follow-up measurement is carried out by cost pattern fixed assets construction
in progress intangible assets business reputation etc. (excluding inventory investment properties
measured by fair value pattern deferred tax assets financial assets) the impairment of assets shall
be determined according to the following methods:
The Company judges whether there is a sign of impairment to assets on the balance sheet
date. If such sign exists the Company estimates the recoverable amount and conducts the
impairment test. For goodwill arising from a business merger intangible assets with indefinite
useful life and intangible assets that have not reached the usable 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 the
asset or the present value of the expected future cash flow of the asset whichever is higher. The
recoverable amount is estimated of the individual asset. If it is not possible to estimate the
recoverable amount of the individual asset the Company determines the recoverable amount of
the asset group to which the asset belongs. The identification of the asset group is based on
whether the major cash flow generated from the asset group is independent of the cash inflows
from other assets or asset groups.
167When the asset or asset group’s recoverable amount is lower than its book value the
Company reduces its book value to its recoverable amount the reduced amount is recorded in the
current 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 merger
is allocated reasonably to the relevant asset group since the acquisition date. If the book value of
goodwill is unable to be allocated to an asset group the book value of goodwill will be allocated
to the portfolio of asset groups. Asset group or portfolio of asset group is asset group or portfolio
of asset group which can be benefited from synergies of a business merger and is not greater than
the reportable segment of the Company.In impairment testing if indication of impairment exists in asset group or portfolio of asset
group containing allocated goodwill impairment test is first conducted on asset group or portfolio
of asset group that does not contain goodwill and corresponding recoverable amount is estimated
and any impairment loss is recognized. Then asset group or portfolio of asset group containing
goodwill is conducted impairment test by comparing its book value and its recoverable amount. If
the 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 by
the 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 within
the benefit period.
24. Contract liabilities
The Company presents the contract liabilities in the balance sheet in accordance with the
relationship between the performance obligations and the payment by the customer. The
168Company's obligations to transfer goods or services to the customer due to customer consideration
received or receivable shall be presented as contract liabilities.Contract liabilities are presented separately in the Balance Sheet. The contractual assets and
contract liabilities under the same contract are presented on a net basis. If the net amount is the
credit balance it shall be presented in items of "Contractual liabilities" or "Other non-current
liabilities" item according to its liquidity. Contract assets and contract liabilities under different
contracts are not mutually offset.
25. Employee compensation
(1) Accounting treatment for short-term compensation
* 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 current
profits or losses or the cost of a relevant asset otherwise than those recognized as cost of capital
required or permitted by other accounting standards.* Employee benefits
The employee benefits incurred by the Company are included in the current profits and
losses 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.* Medical insurance premium industrial injury insurance premium birth insurance
premium and other social insurance premium and housing fund labor union funds and employee
education funds
For society insurance premiums such as medical insurance industrial injury insurance and
maternity 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 during
the accounting period when the employees work for the Company the amount of employee
169compensation relevant are calculated according to the basis and proportion of calculation and
accruing as specified to determine the corresponding liabilities which is to be included in the
current profits and losses or relevant asset cost.* Short-term compensated absence
When the rights of compensated absence enjoyed by the staff of the Company in the future in
the provision of services are increased the employee compensation related to the cumulative
compensated absence shall be confirmed and calculated according to the expected payment
amount increased due to the cumulative unexercised rights The Company recognizes the
employee compensation related to non-cumulative compensated absences in the accounting
period in which the employee is actually absent.* Short-term profit sharing plan
The Company recognizes the relevant employee compensation payable provided that the
profit sharing plan also meets the following conditions:
A. The enterprise currently has legal obligation or constructive obligation to pay employee
compensation as a result of past events;
B. The amount of employee compensation payable generated from the profit sharing plan
can be estimated reliably.
(2) Accounting treatment of post-employment benefits
* 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 current
profits and losses or relevant asset cost.According to the defined contribution plan if all the deposit amounts are expected not to be
paid within 12 months at the end of the annual reporting period during which the employees
170provide relevant services with reference to the corresponding discount rate the employee
compensation payable shall be measured by the Company at the discounted amount of all the
deposit amounts. The discount rate is determined based on the market return on the national bonds
matching with the obligations under the defined contribution plan in terms of the term and
currency or based on the high-quality corporate bonds in the active market on the balance sheet
date.* Defined benefit plans
A. Determining the present value of the defined benefit plan obligation and the current
service cost
According to the unbiased and consistent actuarial assumptions as per the expected
accumulative projected unit credit method the Company shall make estimates on the
demographic variables and financial variables measure obligations for defined benefit plan and
recognize related obligations during the period it belongs to; The Company discounts the
obligations arising from the defined benefit plan at a corresponding discount rate (determined
according to the market return on national bonds or high-quality corporate bonds in the active
market that match the term and currency of obligations under the defined benefit plan on the
balance sheet date) to determine the present value of obligations under the defined benefit plan
and 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 present
value of obligations under the defined benefit plan minus the fair value of assets under a defined
benefit plan shall be recognized by the Company as a net liability or a net asset under the defined
benefit plan.In case the defined benefit plan has surplus the Company measures the net asset under
defined benefit plan as per the surplus under defined benefit plan and the upper asset limit
whichever is lower.
171C. Determining the amount to be included in asset cost or current profits and losses
Service costs including current service costs past service costs and settlement gains or
losses. Among them except for the current service cost required or allowed to be included in the
asset cost by other accounting standards other service costs are included in the current profits and
losses.Net interest of net liabilities or net assets of the defined benefit plan including interest
income of planned assets interest expense of defined benefit plan obligations and interest
affected 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 defined
benefit plan obligations measured previously due to actuarial assumptions and experience
adjustments;
(b) Return on plan assets deducting the amount included in the net interest of net liabilities
or net assets of defined benefit plan;
(c) Changes in the effect of the asset ceiling deducting the amount included in the net
interest on net liabilities or net assets of defined benefit plans.The changes arising from the above-mentioned re-measurement of net liabilities or net assets
of the defined benefit plan are directly included in other comprehensive income and are not
allowed to be reversed back to profit or loss in subsequent accounting periods but the Company
can transfer these amounts recognized in other comprehensive income within the scope of equity.
172(3) Accounting treatment for dismission welfare
When dismissal welfare are provided the employee compensation liabilities for dismissal
welfare will be recognized by the Company and included in the current profits and losses at the
earlier of the following dates:
* The date when the Company cannot unilaterally withdraw the offer of termination
benefits because of an employment termination plan or a curtailment proposal;
* 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 of
the annual reporting period the amount of dismissal welfare shall be discounted with reference to
the corresponding discount rate (determined according to the market return on national bonds or
high-quality corporate bonds in the active market that match the obligation term and currency of
the defined benefit plan on the balance sheet date) and the employee compensation payable shall
be measured at the discounted amount.
(4) Accounting treatment methods for other long-term employee benefits
* Qualified for defined contribution plan
For other long-term employee benefits provided by the Company to employees that meet the
conditions of defined contribution plan the employee compensation payable shall be measured at
the discounted amount of all payables.* Qualified for the defined benefit plan
At the end of the report period the Company shall recognize the following components of
employee 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;
173C. Change arising from remeasurement of other net long-term employee benefits liabilities
or net assets.In order to simplify the relevant accounting treatment the total net amount of the above
items 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 payments
that has not yet been made on the commencement date of lease term. The lease payment includes
the 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 in
the lease contract is taken as the discount rate. If such an interest rate is not available the
incremental borrowing rate shall be adopted. The difference between the lease payments and their
present value is recognized as an unrecognized financing expense and the interest expense is
recognized at the discount rate of the present value of the recognized lease payments during each
period of the lease term and is charged to the current profit or loss. Variable lease payments not
considered in the measurement of lease liabilities are charged to the current profits and losses
when actually incurred.In case of any changes in the amount of substantive fixed payments the amount expected to
be payable for the residual guarantee the index or rate used to determine the lease payments or
174the evaluation result or actual exercise of the call option renewal option or termination option
after the inception date of the lease term the Company will remeasure the lease liabilities at the
present value of the changed lease payments and adjust the book value of the right-of-use assets
accordingly.
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:
* The obligation is the current obligation of the Company;
* Performance of this obligation will probably cause outflow of economic interest of the
Company;
* 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 required
to perform relevant current obligations and the risks uncertainties and time value of money
related to contingencies are taken into comprehensive consideration. The book value of the
estimated liabilities are reviewed on each balance sheet date. With conclusive evidence indicating
that the book value cannot reflect the current best estimate the book value is adjusted according
to the current best estimate.
28. Revenue
(1) General principle
Revenue refers to the gross inflow of economic benefits formed during the course of
ordinary activities of the Company which may increase the shareholders’ equity and is irrelevant
to the invested capital of shareholders.
175The Company has fulfilled its performance obligations of the Contract which means it
recognizes 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 the
goods and obtain almost all the economic benefits.If the contract contains two or more performance obligations the Company shall at the
beginning date of the contract apportion the transaction price to each performance obligation
according to the relative proportion of the individual selling price of the commodities or services
promised by each performance obligation and measure the revenue according to the transaction
price apportioned to each performance obligation.The transaction price is the amount of consideration that the Company is expected to be
entitled to receive for the transfer of commodities or services to the customer excluding payments
received on behalf of third parties. In determining the contract transaction price if there is a
variable consideration the Company shall determine the best estimate of the variable
consideration on the basis of the expected value or the amount most likely to occur and include it
in the transaction price in an amount not exceeding the amount most likely not to be materially
reversed by accumulating the recognized income when the relevant uncertainty is eliminated. If
there is a significant financing component in the contract the Company will determine the
transaction price according to the amount payable in cash when the customer obtains control of
the goods. The difference between the transaction price and the contract consideration is
amortized by the effective interest method during the contract period. If the interval between the
transfer of control and the payment by the customer does not exceed one year the Company does
not consider the financing components therein.In case one of the following conditions is met the Company will perform the performance
obligations within a period of time. Otherwise it will perform the performance obligations at a
time point:
* The customer obtains and consumes the economic benefits brought by the performance of
the contract by the Company at the same time;
176* The customer can control the goods under construction during the Company's
performance;
* 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 the
term of the contract.For the performance obligations performed within a certain period of time the Company
shall recognize the income according to the performance progress within that period except that
the performance progress cannot be reasonably determined. The Company determines the
progress 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 the
Company can be expected to be compensated the incomes shall be recognized according to the
amount of costs incurred until the performance progress can be reasonably confirmed.For performance obligations performed at a certain time point the Company shall confirm
the revenue at the time point when the customer gains control rights of the relevant goods. In
determining whether a customer has obtained the control rights of the goods or services the
Company shall take the following indications into consideration:
* 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;
* The Company has transferred the legal ownership of the goods to the customer i.e. The
customer owns the legal ownership of the goods;
* The Company has transferred the goods to the customer in kind i.e. The customer has
possessed the goods;
* 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 the
ownership of the goods.
177* The customer has accepted the goods.
Sales Return Terms
For any sales with a sales return clause when the customer obtains control of the relevant
goods the Company recognizes the revenue according to the amount of consideration it is entitled
to obtain due to the transfer of goods to the customer and recognizes the amount to be returned
due to sales return as estimated liabilities; At the same time according to the book value of the
returned goods when they are expected to be transferred the balance after deducting the expected
cost of recovering the goods (including the impairment of the value of the returned goods) is
recognized as an asset that is the return cost receivable and the net amount of the above asset
cost is carried forward according to the book value of the transferred goods when they are
transferred. On each balance sheet date the Company re-estimates the return of future sales and
re-measures the above assets and liabilities.Warranty obligations
According to the contract agreement laws and regulations the Company provides quality
assurance for the goods sold and the projects constructed. For the guarantee quality assurance
ensuring that the sold goods meet the established standards the Company conducts accounting
treatment in accordance with the Accounting Standards for Business Enterprises No. 13 -
Contingencies. For service quality assurance that provides a separate service to ensure that the
provided goods meet the established standards the Company regards it as a single fulfillment
obligation. According to the relative proportion of the individual selling price of the provided
goods and the service quality assurance the transaction price is partially apportioned to part of the
transaction 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 the
sold goods meet the established standards the Company shall consider whether the quality
assurance is a legal requirement quality assurance period and the Company’s commitment to
performing the task.Principal responsible person and agent
178The Company determines whether it is the principal responsible person or agent at the time
of the transaction based on whether it has control of the goods or services prior to the transfer of
the goods or services to the customer. If the Company is able to control the goods or services
before transferring the goods or services to the customer the Company is the main responsible
person 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 of
commission or service fee expected to be entitled to receive which shall be determined according
to the net amount of the total consideration received or receivable after deducting the price
payable to other related parties or according to the established amount or proportion of
commission.Consideration payable to customer
Where there is consideration payable to a customer in a contract unless the consideration is
for the purpose of obtaining other clearly distinguishable goods or services from the customer the
Company offsets the consideration payable against the transaction price and deducts the current
income at a later point between the recognition of the relevant income and the payment (or
committed 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 in
advance the payment is recognized as a liability first and then transferred to income when
relevant performance obligations are fulfilled. When the Company's advances from customers are
not required to be returned and the customer is likely to waive all or part of his/her contractual
rights where the Company is expected to be entitled to obtain the amount related to the
contractual rights waived by the customer the above amount should be recognized as revenue in
proportion with a mode in which the customer exercises the contractual rights; Otherwise the
Company should only transfer the balance related to the above liabilities to revenue when the
possibility of the customer requesting to perform the remaining performance obligations is
extremely low.Change contract
179In case of change of the construction contract between the Company and the customer:
* 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 construction
service the Company will treat the contract change as a separate contract for accounting;
* If the contract change is not the above circumstance * and there is a clear distinction
between the transferred construction services and the untransferred construction services on the
contract change date the Company will regard it as the termination of the original contract and at
the same time combine the unperformed part of the original contract and the changed part of the
contract into a new contract for accounting treatment;
* If the contract change is not the above circumstance * and there is no clear distinction
between the transferred construction services and the untransferred construction services on the
contract change date the Company will take the changed part of the contract as an integral part of
the original contract for accounting treatment and the current revenue will be adjusted on the
contract change date for the impact on the recognized revenue arising therefrom.
(2) Specific method
Specific income recognition method of the Company is as follows:
* Commodity Sales Contract
The Commodity Sales Contract between the Company and the customer includes the
performance obligation of the transferred goods which belongs to the performance obligation at a
certain time point.The recognition of automobile sales revenue and jewelry wholesale revenue shall meet the
following conditions: The Company has delivered the goods to the Customer according to the
contract agreement and the Customer has accepted the goods the payment for goods has been
recovered or the receipt voucher has been obtained the related economic benefits are likely to
flow in the major risks and rewards on the ownership of the goods have been transferred and the
legal ownership of the goods has been transferred.
180* Vehicle and Testing Contract
The performance obligations contained in the Vehicle Maintenance and Testing Contract
between the Company and the customer belong to the performance obligations at a certain time
point.The recognition of vehicle maintenance and testing revenue shall meet the following
conditions: The Company has completed vehicle maintenance and testing services according to
the contract settled all materials and man-hour expenses with the customer and allowed the
customer's vehicle to leave the Company's maintenance shop.* Service Contract
The service contract between the Company and the customer includes the performance
obligation of services related to the lease of real estate. Since the customer obtains and consumes
the economic benefits brought by the performance of the Company at the same time the
Company 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.* 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:
* The Company can meet the conditions of acquisition of government subsidies;
* The Company can receive government subsidies.
(2) Measurement of government subsidies
181Government subsidies which are monetary assets are measured at the amount received or
receivable. The government subsidies considered as non-monetary assets are measured based on
the fair value or the nominal amount of RMB 1 if the fair value cannot be acquired reliably.
(3) Accounting treatment for government subsidies
* 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 government
subsidies shall be recognized as deferred incomes and they shall be distributed with a reasonable
and systematic method within the service life of related assets and included in the profits and
losses. Government subsidies measured at the nominal amount shall be directly included in
current profits and losses. When the related assets are sold assigned transferred or damaged
before the end of service life all the undistributed deferred incomes shall be transferred to the
current profits and losses of assets disposal.* 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-related
government 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 it
shall be recognized as deferred incomes and shall be included in the current profits and losses at
the period when it is recognized;
The amount used to compensate for the incurred related cost expenses or losses of the
Company shall be included in the current profits and losses.For the government subsidies including both assets-related government subsidies and
income-related government subsidies such two parts shall be separately provided with accounting
182treatment; where such two parts cannot be distinguished all government subsidies shall be
classified as income-related government subsidies.The government subsidies related to daily activities of the Company shall be included in
other incomes based on the substance of business transactions. The government subsidies not
related to daily activities of the Company shall be included in non-operating incomes and
expenses.* Policy-based preferential loan discount
Where the finance allocates the discount fund to the lending bank and the lending bank
provides a loan at the policy-based preferential interest rate for the Company the Company
includes the actually received loan amount as the entry value of the loan and counts relevant
borrowing 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 shall
use the corresponding discount to offset relevant borrowing costs.* Refund of government subsidies
If a recognized government subsidy needs to be refunded and the book value of related
assets is offset when initially recognized adjust the book value of assets; if there is related
deferred income balance offset the book balance of related deferred income the exceeding part is
included in the current profits and losses; in other cases it shall be included in the current profits
and losses directly.
30. Deferred tax assets/deferred tax liabilities
According to the temporary differences between the book value of assets and liabilities on
the balance sheet date and the tax basis the Company generally adopts the balance sheet liability
method to recognize and measure the effect of taxable temporary difference or deductible
temporary differences on income tax as the deferred tax liabilities or the deferred tax assets. The
Company will not perform the discounting for deferred tax assets and deferred tax liabilities:
183(1) Recognition of deferred tax assets
For deductible temporary differences deductible losses and tax credits which can be
transferred to future years the effect on income tax shall be calculated as per the income tax rate
during the expected reversal period and the effect is recognized as the deferred tax assets to the
extent of future taxable income the Company may obtain to deduct the deductible temporary
differences deductible losses and tax credit.Meanwhile the effect on income tax of deductible temporary difference incurred in initial
recognition of assets or liabilities arising from transactions or events having the following
characteristics 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 taxable
income (or deductible loss).For the Company's deductible temporary differences associated with investments in
subsidiaries joint ventures and associates if the following two conditions are satisfied at the same
time 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 temporary
differences;
At the balance sheet date when concrete evidence show that sufficient taxable incomes can
be used to offset the deductible temporary differences if they will be available in the future the
Company 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 likely
that sufficient taxable profits will not be available in future periods to deduct the benefit of the
deferred tax assets the book value of the deferred tax assets is reduced. Any such write-down
184shall be subsequently reversed where it becomes probable that sufficient taxable income will be
available.
(2) Recognition of deferred tax liabilities
All taxable temporary differences of the Company shall be measured according to the
income tax rate during the expected reversal period and such effect shall be recognized as
deferred tax liabilities except for the following situations:
* 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 business
merger and will affect neither the accounting profit nor taxable income/deductible loss at the time
of the transaction.* 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 tax
liabilities 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
* Deferred tax liabilities or assets related to business merger
For taxable temporary differences or deductible temporary differences arising from business
merger under different control upon the recognition of deferred tax liabilities or deferred tax
185assets the goodwill recognized in the business merger is generally adjusted according to the
relevant deferred tax expenses (or gains).* Items directly recognized as the owners' equity
The current income tax and deferred tax related to the transactions or events directly
included in the owners’ equity will be included in the owners’ equity. Transactions or events in
which the effect of temporary differences on income tax is included in owners' equity are as
follows: other comprehensive income generated by changes in fair value of other investment on
bonds the adjustment of retained earnings by retroactive adjustment method for changes in
accounting policies or retrospective restatement method for the correction of prior (important)
accounting errors and the hybrid financial instruments simultaneously containing liability
component and equity component included in the owners’ equity upon the initial recognition.* 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 with
the provisions of tax law and allowed to be compensated by the taxable income in the following
years. Unrecovered losses (deductible losses) and tax credits that can be carried forward to the
following years according to the provisions of the tax law shall be deemed as deductible
temporary differences for treatment. When it is expected that sufficient taxable income can be
obtained from available recoverable losses or tax credits in the future with the possibly achieved
taxable income as the limit recognize the corresponding deferred tax assets and reduce the
income 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 by
the Company not meet the recognition conditions of the deferred tax assets on the acquisition date
186the Company will not recognize such difference. Where new or further information obtained
within 12 months since the acquisition date reveals that relevant conditions were present at the
acquisition date and the economic benefit brought by deductible temporary difference at the
acquisition date can be realized for expected acquiree relevant deferred tax assets must be
recognized goodwill be decreased; where the goodwill is not sufficient to offset the balance must
be recognized as current profits and losses; except aforesaid conditions deferred tax assets which
are recognized to be linked with business merger must be included in the current profits and
losses.* Temporary difference generated by consolidation and offset
In the preparation of the consolidated financial statements 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 to the offset of unrealized internal sales profit
or loss the deferred tax assets or deferred tax liabilities shall be recognized in the consolidated
balance sheet and the income tax expenses in the consolidated income statement shall be adjusted
at the same time except for the deferred taxes related to transactions or events directly included in
the owners' equity and business merger.* Equity-settled share-based payment
If the tax law stipulates that the expenses related to share-based payment are allowed to be
deducted before tax during the period for the recognition of cost in accordance with the
accounting standards the Company shall calculate and determine its tax basis and the temporary
differences arising therefrom based on the estimated amount that is deducted before tax based on
the information obtained at the end of the accounting period and recognize the relevant deferred
tax if the recognition conditions are met. If the amount that can be deducted before tax in the
future is expected to exceed the cost expenses related to share-based payment recognized in
accordance with the accounting standards the excess portion shall be directly included in the
owners' equity.
18731. Lease
(1) Accounting for operating leases
(1) Identification of lease
On the commencement date of a contract the Company evaluates whether the contract is a
lease or includes a lease. If one party to the contract abalienates the right to control the use of one
or more identified assets within a certain period of time in exchange for consideration the
contract is a lease or includes a lease. In order to determine whether one party to the contract has
abalienated the right to control the use of the identified assets within a certain period of time the
Company evaluates whether the customers in the contract are entitled to obtain almost all the
economic benefits arising from the use of the identified assets during the use period and to
dominate 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 the
contract and carry out accounting treatment for each separate lease. If the following conditions are
met at the same time the right to use the identified assets constitutes a separate lease in the
contract: * the lessee may benefit from the separate use of the assets or the use of the assets with
other easily available resources; * the assets are not highly dependent on or related to other
assets 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 lease
term of not more than 12 months and without a purchase option as short-term leases and leases
with 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 not
be recognized as a lease of low-value assets.
188For all short-term leases and leases of low-value assets the Company charges lease
payments on a straight-line basis over the respective periods of the lease term to the cost of the
related assets or to the current profits and losses.Except for the above short-term leases and leases of low-value assets that are simplified the
Company recognizes right-of-use assets and lease liabilities for leases at the beginning of the
lease term.* 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 initially
measured 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 relevant
amount 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. The
Company recognizes and measures the cost according to the recognition standard and
measurement method of estimated liabilities. See Note III. 25 for details. The aforesaid
cost 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-line
method. For fixed assets if it can be reasonably confirmed that the ownership will be granted
when the term of lease expires the rate of depreciation shall be determined according to the
category of right-of-use assets and the estimated net residual value rate within the estimated
remaining service life of the leasing assets. If it is impossible to reasonably determine whether the
ownership of the leasing assets will be granted upon the expiration of the lease term the
depreciation rate shall be determined according to the category of the right-of-use assets within
the lease term or the remaining service life of the leasing assets whichever is shorter.
189* Lease liabilities
Lease liabilities shall be initially measured according to the present value of lease payments
that has not yet been made on the commencement date of lease term. The lease payment includes
the 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 in
the lease contract is taken as the discount rate. If such an interest rate is not available the
incremental borrowing rate shall be adopted. The difference between the lease payments and their
present value is recognized as an unrecognized financing expense and the interest expense is
recognized at the discount rate of the present value of the recognized lease payments during each
period of the lease term and is charged to the current profit or loss. Variable lease payments not
considered in the measurement of lease liabilities are charged to the current profits and losses
when actually incurred.In case of any changes in the amount of substantive fixed payments the amount expected to
be 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 option
after the inception date of the lease term the Company will remeasure the lease liabilities at the
present value of the changed lease payments and adjust the book value of the right-of-use assets
accordingly.
190(4) Accounting treatment method of the Company as the lessor
On the commencement date of the lease term the Company recognizes a lease that transfers
substantially all the risks and rewards associated with the ownership of the leased asset as a
finance lease except for those that are recognized as operating leases.* Operating leases
During each period of the lease term the Company recognizes lease receipts as rental
income on a straight-line basis and capitalizes and apportions the initial direct costs incurred on
the same basis as rental income which shall be charged to the current profits and losses. The
variable lease receipts obtained by the Company related to operating leases and not charged to the
lease receipts shall be charged to the current profits and losses when actually incurred.* Finance leases
On the commencement date of the lease the Company recognizes finance lease receipts at
the net lease investment (the sum of the unguaranteed residual value and the present value of the
lease receipts not yet received on the commencement date of the lease period discounted at the
interest rate of the lease) and derecognizes the finance lease assets. During each period of the
lease 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 of
net investment in leases are recognized in the current profits and losses when actually incurred.
(5) Accounting treatment of lease change
* Lease change is regarded as a separate lease
If the lease changes and meets the following conditions at the same time the Company will
take the lease change as a separate lease for the accounting treatment: A. the lease change
expands the lease scope by increasing the right to use one or more leased assets and B. the
191increased consideration is equivalent to the amount by adjusting the separate price of the
expanded lease scope according to the contract.* Lease change is not regarded as a separate lease
A. The Company as the lessee
On the effective date of the lease change the Company re-determines the lease term and
discounts the changed lease payment with the revised discount rate to re-measure the lease
liabilities. In calculating the present value of the changed lease payment the Company adopts the
interest rate implicit in lease in the remaining lease term as the discount rate. If it is impossible to
determine the interest rate implicit in lease in the remaining lease term the Company will adopt
the 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 circumstances
shall be distinguished for accounting treatment:
* If the lease scope is reduced or the lease term is shortened due to the lease change the
book value of the right-of-use asset shall be adjusted and the relevant gains or losses
arising from the partial or complete termination of the lease shall be included in the
current profits and losses;
* For other lease changes the book value of the right-of-use asset shall be adjusted
accordingly.B. The Company as the lessor
In case of any change in an operating lease the Company carries out accounting treatment as
it is a new lease since the effective date of the change and the advance receipts and receivables
related 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 the
Company shall treat the changed lease under the following circumstances respectively: If the
lease change takes effect on the lease commencement date and the lease will be classified as an
operating lease the Company will take it as a new lease for accounting treatment from the
effective date of lease change and take the net investment in the lease before the effective date of
192lease change as the book value of the leased asset. If the lease change takes effect on the lease
commencement date and the lease will be classified as a finance lease the Company shall carry
out accounting treatment in accordance with the provisions on modifying or renegotiating the
contract.
(6) Leaseback
The Company assesses and determines whether the transfer of assets in the sale-leaseback
transaction is a sale in accordance with the provisions of Note III. 26.* The Company is the seller (lessee)
If the transfer of assets in the sale-leaseback transaction does not belong to sales the
Company shall continue to recognize the transferred assets recognize a financial liability equal to
the transfer income and carry out accounting treatment for the financial liability in accordance
with Note III. 10. If it is the Company measures the right-of-use assets formed by sale-leaseback
according to the part related to the right to use obtained by leaseback in the book value of the
original assets and recognizes relevant gains or losses only for the rights transferred to the lessor.* The Company is the buyer (lessor)
If the transfer of assets in the sale-leaseback transaction is not a sale the Company does not
recognize the transferred assets but recognizes a financial asset with an amount equal to the
transferred income and carries out accounting treatment for the financial assets according to Note
III. 10. If the transfer of assets is a sale the Company carries out accounting treatment for asset
purchase and asset lease according to other applicable accounting standards for business
enterprises.
(2) Accounting for finance leases
32. Changes in significant accounting policies and accounting estimates
(1) Significant accounting policy changes
□Applicable □ Not applicable
193* 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 of
products or by-products produced before the fixed assets reach the expected serviceable condition
or during the R&D process" and "judgment on onerous contracts" shall be implemented from
January 1 2022. Retroactive adjustments should be made for trial sales that occurred between the
beginning 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 of
January 1 2022. The cumulative effect shall be adjusted to the retained earnings and other
relevant 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 in
accounting policies have no impact on the Company's financial statements.* 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 as
Interpretation No. 16) in which the contents of "Accounting treatment of exemption from initial
recognition is not applicable to deferred income tax related to assets and liabilities arising from
individual transactions" shall be implemented from January 1 2023 and the contents of
"Accounting treatment of income tax impact on dividends related to financial instruments
classified as equity instruments by the issuer" and "Accounting treatment of changing cash-settled
share-based payment to equity-settled share-based payment by enterprises" shall be implemented
from the date of publication.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 accordance with the above
provisions they shall be adjusted in accordance with the above provisions. For financial
instruments classified as equity instruments if the recognized dividends payable occurred before
January 1 2022 the relevant financial instruments have not been derecognized before January 1
1942022 the effect of income tax was involved and the treatment was not carried out in accordance
with the above provisions retroactive adjustment shall be made. For the above transactions newly
made between January 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 effect shall be adjusted to
retained earnings and other related financial statement items as of January 1 2022 without
adjustments to information for comparable periods.Since November 30 2022 the Company has implemented the provisions of Interpretation
No. 16 "accounting treatment for the 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-
based payment". This change of accounting policy shall have no impact on the financial
statements 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 rate
Selling goods or providing taxable
VAT 13%，9%，5%，6%，3% servicesConsumption tax Sales of goods 10%
City maintenance and construction tax Turnover taxes payable 7%
Enterprise income tax Taxable income 20%、25%
For ad valorem collection1.2% of the
remaining value after 30% of the original
Property tax value of the property is deducted by 1.2%、12%
lump sum; for rent-based collection 12%
of the rental income
Educational surcharge Turnover taxes payable 3%
Local education surcharges Turnover taxes payable 2%
195Disclosure statement of taxable entities with different corporate income tax rates
Name of taxable entity Income tax rate
Shenzhen Xinyongtong Motor Vehicle Inspection Equipment
20%
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 Exemption
Policies for Micro and Small Enterprises (CS [2019] No.13) issued by the State Taxation
Administration Shenzhen Xinyongtong Motor Vehicle Inspection Equipment Co. Ltd. Shenzhen
Huari 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 is
calculated and paid at the rate of 20%.VII. Notes to Consolidated Financial Statements
1. Cash at bank and on hand
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 25673.67 36941.24
Cash at bank 394258891.55 240545115.92
Other cash at bank and on hand 18743762.14
Total 413028327.36 240582057.16
Other notes:
（1）The bank deposit of 10665656.00 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 2000000.00 CNY.Funds of 8955842.00 CNY in other monetary funds is margin for futures options accounts. In addition there is no other money
with 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: RMB
Item Ending balance Beginning balance
Financial assets at fair value through
176133569.95412712843.84
profit or loss
Including:
Structured deposits and financial
176133569.95412712843.84
products
196Including:
Total 176133569.95 412712843.84
Other notes:
Held-for-trading financial assets at the end of the period decreased by 57.32% compared with the beginning of the period mainly
due to the redemption of wealth management products at the end of the period.
3. Notes receivable
(1) Classified presentation of notes receivable
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 87812500.00 0.00
Total 87812500.00 0.00
Unit: RMB
If 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: RMB
Derecognized amount at end of the Un-derecognized amount at end of the
Item
period period
Bank acceptance bill 13900000.00 87812500.00
Total 13900000.00 87812500.00
4. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: RMB
Ending balance Beginning balance
Provision for bad Provision for bad
Book balance Book balance
debts debts
Class Propo Propo
rtion Book value rtion Book value
Percen Percent
Amount tage Amount
of Amount Amount of age
provis provis
ion ion
Accounts
receivable with
100.00
provision for bad 48781485.16 53.63% 48781485.16 100.00% 48781485.16 72.74% 48781485.16
%
debts on a single
basis
197Including:
Accounts
receivable for
which provision
42175581.7946.37%423402.231.00%41752179.5618277473.0527.26%183413.131.00%18094059.92
for bad debts is
made by
combination
Including:
1. Aging
41508602.2645.64%416732.431.00%41091869.8318277473.0527.26%183413.131.00%18094059.92
portfolio
2. Jewelry sales
666979.530.73%6669.801.00%660309.73
business portfolio
Total 90957066.95 100.00% 49204887.39 54.10% 41752179.56 67058958.21 100.00% 48964898.29 73.02% 18094059.92
Provision for bad debts is accrued on an individual basis:
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision Reasons for provision
Shenzhen Jinlu Long aging and
Industry & Trade Co. 9846607.00 9846607.00 100.00% expected to be
Ltd. unrecoverable
Guangdong Zhanjiang Long aging and
Samsung Automobile 4060329.44 4060329.44 100.00% expected to be
Co. Ltd. unrecoverable
Long aging and
Wang Changlong 2370760.40 2370760.40 100.00% expected to be
unrecoverable
Huizhou Jiandacheng Long aging and
Road and Bridge 2021657.70 2021657.70 100.00% expected to be
Engineering Co. Ltd. unrecoverable
Long aging and
Jiangling Motors
1191059.98 1191059.98 100.00% expected to be
Factory
unrecoverable
Long aging and
Yangjiang Automobile
1150000.00 1150000.00 100.00% expected to be
Trading Co. Ltd.unrecoverable
Long aging and
Guangdong Materials
1862000.00 1862000.00 100.00% expected to be
Group Corporation
unrecoverable
Long aging and
Others 26279070.64 26279070.64 100.00% expected to be
unrecoverable
Total 48781485.16 48781485.16
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 applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 42172221.79
Over 3 years 48784845.16
198Over 5 years 48784845.16
Total 90957066.95
(2) Bad debt provision provided recovered or reversed in the current period
Bad debt provision withdrawn in the reporting Period:
Unit: RMB
Change during the current period
Class Beginning balance Cancellation Recovery or Ending balance
Provision after Others
reversal
verification
Provision for
bad debts made
48781485.1648781485.16
on an
individual basis
Provision for
bad debts made 183413.13 239989.10 423402.23
by portfolio
Total 48964898.29 239989.10 49204887.39
The 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: RMB
Proportion in the
Ending balance of total ending balance Ending balance of provision
Item
accounts receivable of accounts for bad debts
receivable
Shenzhen Jinlu Industry & Trade Co. Ltd. 9846607.00 10.83% 9846607.00
Shenzhen Luohu Chengfa Property
8227270.729.05%82272.71
Management Co. Ltd.Guangdong Zhanjiang Samsung
4060329.444.46%4060329.44
Automobile Co. Ltd.Shenzhen Showking Jewelry Industry Co.
3873224.684.26%38732.25
Ltd.Wang Changlong 2370760.40 2.61% 2370760.40
Total 28378192.24 31.21%
5. Advances to suppliers
(1) Advances to suppliers presented by aging
Unit: RMB
Ending balance Beginning balance
Aging
Amount Percentage Amount Percentage
Within 1 year 8114727.00 99.85% 16519701.91 99.92%
Over 3 years 12525.94 0.15% 12525.94 0.08%
Total 8127252.94 16532227.85
Explanation of reasons for delayed settlement of important advances to suppliers with aging over 1 year:
199N/A
(2) Advances to suppliers with top five ending balances by the supplier
Proportion in the total
Balance as at December 31
Item ending balance of 2022
advances to suppliers (%)
FAW Toyota Motor Sales Co. Ltd. 5913528.53 72.76
Xiaopeng Automobile Sales Co. Ltd. 540694.07 6.65
Shenzhen Vanda Construction Group Co.
361025.454.44
Ltd.Toyota Motor (China) Investment Co.
166490.002.05
Ltd.Shenzhen Hongzhuo Electromechanical
110550.001.36
Equipment Co. Ltd.Total 7092288.05 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 of
automobiles.
6. Other receivables
Unit: RMB
Item Ending balance Beginning balance
Interests receivable 0.00 0.00
Dividends receivable 1852766.21 547184.35
Other receivables 5810804.66 4525786.42
Total 7663570.87 5072970.77
(1) Dividends receivable
1) Category of dividends receivable
Unit: RMB
Item (or the investee) Ending balance Beginning balance
China Pufa Machinery Industry Co. Ltd. 1852766.21 547184.35
Total 1852766.21 547184.35
2) Significant dividends receivable Aged over 1 Year
Unit: RMB
Reasons for non- Impairment and
Item (or the investee) Ending balance Aging recovery judgment basis
200The financial and
operating conditions of
China Pufa Machinery the company are
547184.35 3-4 years Not paid yet
Industry Co. Ltd. normal and the
dividends receivable
are not impaired.Total 547184.35
3) Provision for bad debts
□ Applicable □ Not applicable
(2) Other receivables
1) Classification of other receivables by nature of money
Unit: RMB
Payment nature Ending book balance Beginning book balance
Security deposit 1182793.87 598861.89
Suspense payment receivable 57765312.21 55668855.15
Total 58948106.08 56267717.04
2) Provision for bad debts
Unit: RMB
Stage I Stage II Stage III
Expected credit loss
Expected credit loss
Provision for bad debts within the whole Expected credit losses within the whole Total
duration (credit
for the next 12 months duration (no credit
impairment has
impairment occurs)
occurred)
Balance on January 1
58951.6551682978.9751741930.62
2022
Balance as at January
1 2022 is in the current
period.Provision in the period -16533.98 1411904.78 1395370.80
Balance as at
42417.6753094883.7553137301.42
December 31 2022
Changes of book balance with significant amount changed of loss provision in the reporting period
□ Applicable □ Not applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 4043874.77
1-2 years 345930.24
2-3 years 447871.38
Over 3 years 54110429.69
201Over 5 years 54110429.69
Total 58948106.08
3) Other receivables of the top five ending balances by the owing party
Unit: RMB
Proportion to Ending balance of
Item Nature Ending balance Aging ending balance of provision for bad
other receivables debts
China Automobile
South China
Current payments 9832956.37 Over 3 years 16.68% 9832956.37
Automobile Sales
Co. Ltd.Shenzhen Nanfang
Industry and Trade Current payments 7359060.75 Over 3 years 12.48% 7359060.75
Industrial Co. Ltd.Shenzhen
Zhonghao (Group) Current payments 5000000.00 Over 3 years 8.48% 5000000.00
Co. Ltd.Shenzhen Kaifeng
Special
Current payments 4413728.50 Over 3 years 7.49% 2206864.25
Automobile
Industry Co. Ltd.Shenzhen Jinbeili
Electric Appliance Current payments 2706983.51 Over 3 years 4.59% 2706983.51
Co. Ltd.Total 29312729.13 49.72% 27105864.88
7. Inventories
Whether the Company needs to comply with the disclosure requirements for real estate industry
No
(1) Inventory classification
Unit: RMB
Ending balance Beginning balance
Provision for
Provision for
decline in the
decline in the value
value of
Item of inventories or inventories or
Book balance Book value Book balance impairment Book value
impairment
provisions of
provisions of
contract
contract
performance cost
performance cost
Raw materials 32186382.35 14959426.51 17226955.84 15814028.99 14772382.17 1041646.82
Goods in
35204271.3715553427.9319650843.4439261052.1614867773.9424393278.22
stocks
Arbitraged
79191876.1179191876.11
items
Total 146582529.83 30512854.44 116069675.39 55075081.15 29640156.11 25434925.04
202The Company shall abide by the disclosure requirements of the Guidelines of Shenzhen Stock Exchange for Self-Regulatory
Supervision of Listed Companies No. 3-Industry Information Disclosure for "Jewelry-related Industry"
Among them the amount of gold inventory is RMB 95666434.60 mainly composed of:
December 31 2022
Item
Book balance Provision for falling price Book value
Raw materials 16474558.49 - 16474558.49
Goods in stocks - - -
Gold
Arbitraged items 79191876.11 - 79191876.11
Total 95666434.60 - 95666434.60
(2) Provision for decline in the value of inventories/contract performance cost impairment
Unit: RMB
Increase in the current period Decrease in the current period
Item Beginning balance Reversal or Ending balance
Provision Others Others
write-off
Raw
14772382.17187044.3414959426.51
materials
Goods in
14867773.941429041.69743387.7015553427.93
stocks
Total 29640156.11 1616086.03 743387.70 30512854.44
8. Other current assets
Unit: RMB
Item Ending balance Beginning balance
Input VAT to be deducted 17764057.26 8596585.57
Taxes pre-paid 582654.29
Total 18346711.55 8596585.57
Other notes:
Other current assets increased by 113.42% from the beginning of the period mainly due to the increase in input VAT to be
credited due to the increase in inventory at the end of the period.
9. Long-term receivables
(1) Long-term receivables
Unit: RMB
Ending balance Beginning balance Interval of
Item Provision for Book Provision for discount
Book balance Book balance Book value
bad debts value bad debts rate
Concerned
2179203.682179203.680.002179203.682179203.680.00
intercours
203e funds
Total 2179203.68 2179203.68 2179203.68 2179203.68
Impairment of bad debt provision
Changes of book balance with significant amount changed of loss provision in the reporting period
□ Applicable □ Not applicable
10. Long-term equity investments
Unit: RMB
Changes in the current period
O
t
h
e
r
c
o P
O
m r
t
p o
N h
r v
A e e
e i
d g r
h s
d a
e i
it t c
n o
i i h
s n
o v a
i O
n e n Ending balance
Beginning balance Profit or loss on v f tal g Declaration of Ending balance Investee investments e o h of impairment (book value) i i e cash dividends (book value)
recognized under r e provision
n n s or profits
the equity method i r
v v
n i s
e e i
c m
st s n
o p
m t
m a
e m e
e i
n e q
r
t n u
a m
t i
d e
t
j n
y
u t
s
t
m
e
n
t
s
I. Joint ventures
Shenzhen Tellus-
Gmond Investment 47490740.78 14652979.35 15000000.00 47143720.13
Co. Ltd.Shenzhen Telixing
13452222.35748674.7814200897.13
Investment Co.
204Ltd. [Note 3]
Subtotal 60942963.13 15401654.13 15000000.00 61344617.26
II. Associates
Shenzhen Renfu
Tellus Automobiles 27367904.34 -4504482.85 3183672.81 19679748.68
Service Co. Ltd.Shenzhen Tellus
Automobile Service
Chain Co. Ltd.[Note 2]
Shenzhen
Yongtong Xinda
Testing Equipment
Co. Ltd. [Note 2]
Hunan Changyang
Industrial Co. Ltd. 1810540.70
[Note 1]
Shenzhen Jiecheng
Electronics Co. 3225000.00
Ltd. [Note 1]
Shenzhen Xiandao
New Materials Co. 4751621.62
Ltd. [Note 1]
China Automotive
Industry Shenzhen
400000.00
Trading Co. Ltd.[Note 1]
Shenzhen Universal
Standard Parts Co. 500000.00
Ltd. [Note 1]
Shenzhen China
Automobile South
China Automobile 2250000.00
Sales Co. Ltd.[Note 1]
Shenzhen Bailiyuan
Power Supply Co. 1320000.00
Ltd. [Note 1]
Shenzhen Yimin
Auto Trading Co. 200001.10
Ltd. [Note 1]
Shenzhen Torch
Spark Plug Industry 17849.20
Co. Ltd.Subtotal 27367904.34 -4504482.85 3183672.81 19679748.68 14475012.62
Total 88310867.47 10897171.28 18183672.81 81024365.94 14475012.62
Other notes:
Note 1: The industrial and commercial registration of such companies has been revoked and the Company
has 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 and
loss recognized by the equity method the book balance is RMB 0.
205Note 3: The Company holds 51% equity of such company. According to the relevant provisions of the
Articles of Association of such company the voting rights held by the Company are not sufficient to
unilaterally 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 to
September 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 not
participated in the annual industrial and commercial inspection so their industrial and commercial registration
has been revoked. The Company cannot effectively control these companies and these companies are not
included in the consolidation scope of the Company's consolidated financial statements. The book value of the
Company's investment in these companies is zero.
11. Other equity instrument investments
Unit: RMB
Item Ending balance Beginning balance
Listed equity instruments
Unlisted equity instruments 10176617.20 10176617.20
Total 10176617.20 10176617.20
Non-trading equity instrument investment in the Reporting Period disclosed by items
Unit: RMB
Reasons for
Amount of Reasons for
being
other transferring
designated as
Dividend comprehensive other
Cumulative Cumulative being measured
Project name income income comprehensive profits losses at fair value
recognized transferred to income to
through other
retained retained
comprehensive
earnings earnings
income
Strategic
China Pufa
investments
Machinery
1305581.86 expected to be
Industry Co.held in the long
Ltd.term
12. Investment properties
(1) Investment properties measured at cost
□Applicable □ Not applicable
Unit: RMB
206Construction in
Item Houses and buildings Land right of use Total
progress
I. Original book value
1. Beginning
645997222.6649079520.00695076742.66
balance
2. Increase in the
209039.10209039.10
current period
(1)
Outsourcing
(2)
Transferred from
inventories fixed
assets or construction
in progress
(3) Increase
from business merger
Other increases 209039.10 209039.10
3. Decrease in the
15696086.8215696086.82
current period
(1) Disposal
(2) Other
15696086.8215696086.82
transfer-out
4. Ending balance 630510174.94 49079520.00 679589694.94
II. Accumulated
depreciation and
accumulated
amortization
1. Beginning
140347117.083346331.04143693448.12
balance
2. Increase in the
18431173.771115252.1119546425.88
current period
(1) Provision
18431173.771115252.1119546425.88
or amortization
3. Decrease in the
10318.5110318.51
current period
(1) Disposal
(2) Other
10318.5110318.51
transfer-out
4. Ending balance 158767972.34 4461583.15 163229555.49
III. Provision for
impairment
1. Beginning
balance
2. Increase in the
current period
(1) Provision
2073. Decrease in the
current period
(1) Disposal
(2) Other
transfer-out
4. Ending balance
IV. Book value
1. Ending book
471742202.6044617936.85516360139.45
value
2. Beginning book
505650105.5845733188.96551383294.54
value
(2) Investment properties whose property certificates are not obtained
Unit: RMB
Reason(s) for the failure to transact the
Item Book value certificate of title
The property ownership certificate has
CNNC office building 4184307.33 not been handled due to historical
reasons.The property ownership certificate has
Building 12 Sungang 10136.21 not been handled due to historical
reasons.The property ownership certificate has
Shops in Building 12 Sungang 31040.31 not been handled due to historical
reasons.Total 4225483.85
13. Fixed assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 102689546.42 109438198.23
Total 102689546.42 109438198.23
(1) Details of fixed assets
Unit: RMB
Houses and Machinery and Transportation Electronic Office and other
Item buildings equipment equipment equipment equipment Total
I. Original book
value:
1. Beginning
274856177.0122226232.295835922.6512344805.367850954.29323114091.60
balance
2. Increase in
9213606.16125994.69155178.10654198.82160333.2210309310.99
the current period
(1)
9213606.16125994.69155178.10654198.82160333.2210309310.99
Purchase
208(2)
Transfer to
construction in
progress
(3)
Increase from
business merger
3. Decrease in
54067.58515733.46635628.8036825.001242254.84
the current period
(1)
Disposal or 54067.58 515733.46 635628.80 36825.00 1242254.84
retirement
4. Ending
284069783.1722298159.405475367.2912363375.387974462.51332181147.75
balance
II. Accumulated
depreciation
1. Beginning
184795722.049720537.853555622.718426565.352931992.36209430440.31
balance
2. Increase in
13120354.981236716.02476857.37880974.56913014.5716627917.50
the current period
(1)
13120354.981236716.02476857.37880974.56913014.5716627917.50
Provision
3. Decrease in
48660.93237030.34614053.0835865.45935609.80
the current period
(1)
Disposal or 48660.93 237030.34 614053.08 35865.45 935609.80
retirement
4. Ending
197916077.0210908592.943795449.748693486.833809141.48225122748.01
balance
III. Provision for
impairment
1. Beginning
3836768.43319675.116165.0017984.7164859.814245453.06
balance
2. Increase in
91460.1131940.15123400.26
the current period
(1)
Provision
3. Decrease in
the current period
(1)
Disposal or
retirement
4. Ending
3836768.43411135.226165.0049924.8664859.814368853.32
balance
209IV. Book value
1. Ending
82316937.7210978431.241673752.553619963.694100461.22102689546.42
book value
2. Beginning
86223686.5412186019.332274134.943900255.304854102.12109438198.23
book value
(2) Fixed assets leased out by operating lease
Unit: RMB
Item Ending book value
Houses and buildings 59642369.26
(3) Fixed assets whose property certificates are not obtained
Unit: RMB
Reasons for failure to accomplish
Item Book value certification of property
The property ownership certificate has
Yongtong Building 25292054.35 not been handled due to historical
reasons.The property ownership certificate has
Automobile Building 13691687.29 not been handled due to historical
reasons.Underground Parking Lot of Tellus The property ownership certificate of the
7964538.92
Building parking lot cannot be handled.The property ownership certificate has
Floor 3-5 Plant 1# 2# and 3# Taoyuan
3009316.27 not been handled due to historical
Road
reasons.Property ownership certificate
Transfer floor of Tellus Building 1314600.92
unavailable
The property ownership certificate has
Building 16 Taohuayuan 1129541.70 not been handled due to historical
reasons.The property ownership certificate has
Shuibei Zhongtian Complex Building 708932.34 not been handled due to historical
reasons.The property ownership certificate has
First Floor of Bao'an Commercial and
749167.16 not been handled due to historical
Residential Building
reasons.The property ownership certificate has
Warehouse 751254.13 not been handled due to historical
reasons.The property ownership certificate has
Warehouse of Trade Department 56473.57 not been handled due to historical
reasons.The property ownership certificate has
Songquan Apartment (mixed) 10086.79 not been handled due to historical
reasons.The property ownership certificate has
Guest House in Renmin North Road 5902.41 not been handled due to historical
reasons.Total 54683555.85
21014. Construction in progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 409933559.27 210197546.72
Total 409933559.27 210197546.72
(1) Information of construction in progress
Unit: RMB
Ending balance Beginning balance
Provision
Item Provision for
Book balance impairme Book value Book balance
for Book value
impairment
nt
Tellus Jinzuan
Trading 409808714.95 409808714.95 210072702.40 210072702.40
Building
Other works 124844.32 124844.32 124844.32 124844.32
Total 409933559.27 409933559.27 210197546.72 210197546.72
(2) Changes in major construction-in-progress projects in the current period
Unit: RMB
Fi
xe
d
Ot
ass Proport
her
ets ion of Capit
dec
tra accum alizati
rea
nsf ulated Including: on
ses Constru Accumulated
err invest Amount of rate Sour
Project Increase in the in ction amount of
Budget Beginning balance ed Ending balance ment capitalized for ce of
name current period the progres capitalized
int in interest in the curre funds
cur s interest
o constru current period nt
ren
the ctions intere
t
cur to st
per
ren budget
iod
t
per
iod
Tellus
Jinzuan 83.45 4.08 Other
491060000.00210072702.40199736012.55409808714.9583.45%6908297.835052840.98
Trading % % s
Building
4.08
Total 491060000.00 210072702.40 199736012.55 409808714.95 6908297.83 5052840.98
%
15. Right-of-use assets
Unit: RMB
Item Houses and buildings Total
211I. Original book value
1. Beginning balance 10313192.96 10313192.96
2. Increase in the current period
3. Decrease in the current period 163469.13 163469.13
4. Ending balance 10149723.83 10149723.83
II. Accumulated depreciation
1. Beginning balance 2976277.13 2976277.13
2. Increase in the current period 2992203.84 2992203.84
(1) Provision
3. Decrease in the current period
(1) Disposal
4. Ending balance 5968480.97 5968480.97
III. Provision for impairment
1. Beginning balance
2. Increase in the current period
(1) Provision
3. Decrease in the current period
(1) Disposal
4. Ending balance
IV. Book value
1. Ending book value 4181242.86 4181242.86
2. Beginning book value 7336915.83 7336915.83
16. Intangible assets
(1) Intangible assets
Unit: RMB
Non-patented
Item Land right of use Patent rights Trademark Software Total
technologies
I. Original book
value
1.
Beginning 50661450.00 128500.00 5470373.66 56260323.66
balance
2. Increase
in the current 1510846.54 1510846.54
period
(1)
1510846.541510846.54
Purchase
(2)
212Internal R&D
(3)
Increase from
business
merger
3.
Decrease in the
current period
(1)
Disposal
4. Ending
50661450.00128500.006981220.2057771170.20
balance
II.Accumulated
amortization
1.
Beginning 2867902.16 99042.56 3703880.66 6670825.38
balance
2. Increase
in the current 1077443.16 5349.96 209535.98 1292329.10
period
(1)
1077443.165349.96209535.981292329.10
Provision
3.
Decrease in the
current period
(1)
Disposal
4. Ending
3945345.32104392.523913416.647963154.48
balance
III. Provision
for impairment
1.
Beginning
balance
2. Increase
in the current
period
(1)
Provision
3.
Decrease in the
current period
(1)
Disposal
2134. Ending
balance
IV. Book value
1. Ending
46716104.6824107.483067803.5649808015.72
book value
2.
Beginning book 47793547.84 29457.44 1766493.00 49589498.28
value
The proportion of intangible assets formed from the internal R&D of the Company at the Period-end to the ending balance of
intangible assets was 0.00%.Other notes:
As of December 31 2022 the Company's land use right with a book value of RMB 45447359.01
has been mortgaged to the Bank of China as collateral for bank loans.
17. Long-term deferred expenses
Unit: RMB
Increase in the Amortization in
Item Beginning balance current period the current period Other decreases Ending balance
Renovation costs 28682636.66 2338889.55 5145426.72 25876099.49
Total 28682636.66 2338889.55 5145426.72 25876099.49
18. Deferred tax assets/deferred tax liabilities
(1) Un-offset deferred tax assets
Unit: RMB
Ending balance Beginning balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
difference difference
Provision for credit
34072935.088518233.7733998204.098499551.03
impairments
Total 34072935.08 8518233.77 33998204.09 8499551.03
(2) Un-offset deferred tax liabilities
Unit: RMB
Ending balance Beginning balance
Item Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
difference difference
Taxable temporary
4540124.441135031.113852181.96963045.49
difference
Total 4540124.44 1135031.11 3852181.96 963045.49
(3) Deferred tax assets or liabilities presented in net amount after being offset
Unit: RMB
214Ending mutual offset Mutual set-off amount
Ending balance of Beginning balance of
amount between of deferred tax assets
Item deferred tax assets or deferred tax assets or
deferred tax assets and and liabilities at the
liabilities after offset liabilities after off-set
liabilities period-begin
Deferred tax assets 8518233.77 8499551.03
Deferred tax liabilities 1135031.11 963045.49
(4) Breakdown of unrecognized deferred tax assets
Unit: RMB
Item Ending balance Beginning balance
Deductible temporary difference 128561177.79 126073843.71
Deductible losses 23458252.21 19228072.00
Total 152019430.00 145301915.71
(5) Deductible losses of unrecognized deferred tax assets will become mature and due in the following
years
Unit: RMB
Year Ending amount Beginning amount Remarks
Year 2022 330146.48
Year 2023 401294.00
Year 2024 113396.51 497832.28
Year 2025 9002510.80 9182475.07
Year 2026 8816324.17 8816324.17
Year 2027 5526020.73
Total 23458252.21 19228072.00
19. Other non-current assets
Unit: RMB
Ending balance Beginning balance
Provision
Item Provision for
Book balance for Book value Book balance impairme Book value
impairment
nt
Prepaid amount
for engineering 49631706.19 49631706.19 56169049.73 56169049.73
and equipment
Reclassification
of VAT debit 8572664.86 8572664.86 12204839.26 12204839.26
balance
Fixed deposits
and interest 96322575.78 96322575.78
over one year
Others 100000.00 100000.00
Total 154526946.83 154526946.83 68473888.99 68473888.99
Other notes:
Other non-current assets increased by 125.67% from the beginning of the period mainly due to the company's plan to hold time
deposits with higher interest income at maturity for more than one year and the increase in interest.
21520. Short-term borrowings
(1) Classification of short-term borrowing
Unit: RMB
Item Ending balance Beginning balance
Discounted borrowings of notes
20000000.000.00
receivable not derecognized
Total 20000000.00 0.00
21. Trading financial liabilities
Unit: RMB
Item Ending balance Beginning balance
Trading financial liabilities 18572684.91
Including:
Gold leasing 18572684.91
Including:
Total 18572684.91 0.00
Other notes:
Note: The financial liabilities at fair value through profit or loss are the physical gold leasing business of the Company from
banks. The Company rents gold from the bank and buys gold of the same quantity and specification through Shanghai Gold
Exchange on the maturity date to repay the bank and pay the agreed rental interest. The lease term is within 1 year. As of
December 31 2022 the cost of the financial liability was RMB 17685000.00 the change in fair value was a loss of RMB
787050.00 and the rent payable was RMB 100634.91.
22. Derivative financial liabilities
Unit: RMB
Item Ending balance Beginning balance
Derivative financial liabilities with
489360.000.00
designated hedging relationship
Total 489360.00 0.00
Other notes:
The increase in derivative financial liabilities from the beginning of the period was due to the increase in the floating loss amount
of the commodity futures contracts and T+D contracts at the end of the period.
23. Accounts payable
(1) Presentation of accounts payables
Unit: RMB
Item Ending balance Beginning balance
Purchase payment for goods and services 5397040.27 4068460.06
Payment for engineering equipment 119319760.44 63339302.97
Total 124716800.71 67407763.03
216(2) Significant accounts payable with the ageing over 1 year
Unit: RMB
Reasons for not repaying or carrying
Item Ending balance
forward
Shenzhen Yinglong Jian'an (Group) Co.
28869883.28 Outstanding engineering
Ltd.Shenzhen SDG Real Estate Co. Ltd. 6054855.46 Outstanding by related companies
Shenzhen Yinuo Construction
3555095.22 Outstanding engineering
Engineering Co. Ltd.Shenzhen Cuilu Jewelry Co. Ltd. 1120000.00 Outstanding
Total 39599833.96
Other notes:
Accounts payable increased by 85.02% from the beginning of the period mainly due to the provisional estimate of the
construction amount according to the progress of the Teli diamond trading building.
24. Advances from customers
(1) Presentation of advances from customers
Unit: RMB
Item Ending balance Beginning balance
Rent 6119377.90 1827827.28
Total 6119377.90 1827827.28
25. Contract liabilities
Unit: RMB
Item Ending balance Beginning balance
Goods fees receivable in advance 4581999.11 17959187.61
Services fees receivable in advance 4677659.32 3100123.57
Total 9259658.43 21059311.18
Amount and reasons for significant changes in book value during the reporting period
26. Employee compensation payable
(1) Presentation of employee compensation
Unit: RMB
Increase in the current Decrease in the current
Item Beginning balance Ending balance
period period
I. Short-term employee
38893597.7569340733.6469684149.6938550181.70
benefits
II. Post-employment
benefits-defined 5867008.31 5867008.31
contribution plans
III. Termination
1024409.531024409.53
benefits
Total 38893597.75 76232151.48 76575567.53 38550181.70
217(2) Presentation of short-term remuneration
Unit: RMB
Increase in the current Decrease in the current
Item Beginning balance Ending balance
period period
1. Wages bonuses
38284893.2359272066.1659848935.9537708023.44
allowances and subsidies
2. Employee benefits 410244.25 1831714.87 1675259.12 566700.00
3. Social insurance
2637860.262637860.26
premiums
Including: medical
2393957.622393957.62
insurance premiums
Work-
related injury insurance 56094.48 56094.48
premiums
Maternity
183596.16183596.16
insurance premiums
Other insurance expenses 4212.00 4212.00
4. Housing accumulation
4037136.944037136.94
fund
5. Trade union funds and
198460.271337968.331260970.34275458.26
staff education funds
8. Non-monetary welfare 223987.08 223987.08
Total 38893597.75 69340733.64 69684149.69 38550181.70
(3) Presentation of defined contribution plan
Unit: RMB
Increase in the current Decrease in the current
Item Beginning balance Ending balance
period period
1. Basic endowment
5808296.235808296.23
insurance
2. Unemployment
58712.0858712.08
insurance
Total 5867008.31 5867008.31
27. Taxes and dues payable
Unit: RMB
Item Ending balance Beginning balance
VAT 3220124.57 808520.40
Consumption tax 7964.60 7964.60
Enterprise income tax 6942460.17 41276334.18
Individual income tax 1895926.96 512260.46
City maintenance and construction tax 178605.67 105706.61
Educational surcharge 86070.40 47558.24
Local education surcharges 57380.27 31705.50
Land appreciation tax 5362682.64 5362682.64
218Land use tax 40949.07 26459.98
Others 1099628.49 342907.84
Total 18891792.84 48522100.45
Other notes:
The tax payable decreased by 61.07% compared with the beginning of the period mainly due to the payment of enterprise income
tax payable on the income from the transfer of equity in the previous year.
28. Other payables
Unit: RMB
Item Ending balance Beginning balance
Other payables 105180279.00 112617963.65
Total 105180279.00 112617963.65
(1) Other payables
1) Other payables are presented by nature of payment
Unit: RMB
Item Ending balance Beginning balance
Security deposit 42765478.88 41657964.73
Current accounts associated 18990738.98 24146524.51
Withholdings 11499312.36 15417939.62
Temporary receipts payable 31924748.78 31395534.79
Total 105180279.00 112617963.65
2) Other important payables at aging of more than 1 year
Unit: RMB
Reasons for not repaying or carrying
Item Ending balance
forward
Shenzhen Special Economic Zone
12345594.94 Outstanding by related companies
Development Group Co. Ltd.Hongkong Yujia Investment Limited 2164650.90 Outstanding by related companies
Total 14510245.84
29. Current portion of non-current liabilities
Unit: RMB
Item Ending balance Beginning balance
Current portion of lease liabilities 2009819.15 3021452.25
Total 2009819.15 3021452.25
30. Other current liabilities
Unit: RMB
Item Ending balance Beginning balance
Taxes of items to be written off 548507.70 2367994.70
219Notes receivable not derecognized 67812500.00
Total 68361007.70 2367994.70
Other notes:
The larger increase in other current liabilities from the beginning of the period was mainly due to the increase in the sales scale of
the company's jewelry business the increase in the amount of notes settled by the use of notes and the increase in the number of
notes receivable that have not been derecognized by endorsements.
31. Long-term borrowings
(1) Classification of long-term borrowing
Unit: RMB
Item Ending balance Beginning balance
Mortgage loans 144820511.42 86875874.39
Total 144820511.42 86875874.39
Notes for classifications of long-term borrowings:
The long-term loan at the end of the period is the fixed asset loan of the Tellus Jinzuan
Trading Building with a loan term of 15 years.
32. Lease liabilities
Unit: RMB
Item Ending balance Beginning balance
Lease liabilities 2926184.93 4474543.09
Total 2926184.93 4474543.09
33. Long-term payables
Unit: RMB
Item Ending balance Beginning balance
Long-term payables 3920160.36 3920160.36
Total 3920160.36 3920160.36
(1) Long-term payables by nature of payment
Unit: RMB
Item Ending balance Beginning balance
Employee housing deposit 3908848.40 3908848.40
Grants for technology innovation
11311.9611311.96
projects
Subtotal 3920160.36 3920160.36
Less: Current portion of long-term
payables
Total 3920160.36 3920160.36
22034. Estimated liabilities
Unit: RMB
Item Ending balance Beginning balance Reason
Pending litigation 268414.80 268414.80
Total 268414.80 268414.80
35. Deferred income
Unit: RMB
Increase in the Decrease in the
Item Beginning balance Ending balance Reason
current period current period
Government
10235331.21 1833090.00 1488875.50 10579545.71 Asset-related
subsidies
Total 10235331.21 1833090.00 1488875.50 10579545.71 --
Items related to government subsidies:
Unit: RMB
Amou The
nt amou
charge nt of
d to costs
Amount
Increase in non- writte Other Asset-related
Liability Beginning charged to
subsidies for operati n chang Ending balance / Revenue-
item balance other income
the period ng down es related
for the period
revenu in the
e for curren
the t
period period
Elevator
renovation
subsidy
funds for
old elevator
renovation
111188.09 19914.29 91273.80 Asset-related
and
reconstructi
on working
group in
Futian
District
Special
Funds for
Industrial
Transforma
tion and
Upgrading
in Luohu 3511821.20 442348.68 3069472.52 Asset-related
District in
2021-
Industrial
Service
Platform
Project
221Special
Funds for
Industrial
Transforma
tion and
Upgrading
in Luohu 2364130.45 585957.48 1778172.97 Asset-related
District in
2021-
Green
Building
Support
Subsidy
Subsidy
Income
from
Projects for
Promoting
Consumpti
on and
4248191.47 326086.92 3922104.55 Asset-related
Improving
Support of
Commerce
Bureau of
Shenzhen
Municipal
in 2020
Special
Funds for
Green
Innovation
and
Developme
nt in the
Field of
Engineerin
g 1833090.00 114568.13 1718521.87 Asset-related
Constructio
n of
Shenzhen
Municipal
Housing
and Urban-
rural
Developme
nt Bureau
Total 10235331.21 1833090.00 1488875.50 10579545.71
36. Share capital
Unit: RMB
Increase or decrease (+-)
Conversion of
Beginning balance Issuance of Bonus the reserve Ending balance Others Subtotal
new shares shares funds into
shares
222Total shares 431058320.00 431058320.00
37. Capital reserves
Unit: RMB
Increase in the current Decrease in the current
Item Beginning balance Ending balance
period period
Capital premium (share
425768053.35425768053.35
premium)
Other capital reserves 5681501.16 5681501.16
Total 431449554.51 431449554.51
38. Other comprehensive income
Unit: RMB
Amount in the current period
Less: Less:
Amount Amount
included in included in
other other
Amount comprehen comprehen
Attributabl Attributabl
incurred sive sive
Beginning e to the e to the Ending
Item before income in income in Less: balance parent minority income tax the the income tax balance
company - shareholder
in the previous previous expenses
net of s - net of
current period and period and
income tax income tax
period transferred transferred
to profit to retained
and loss in earnings in
the current the current
period period
II. Other
comprehen
sive
income to
be
26422.0026422.00
subsequentl
y
reclassified
into profit
or loss
Including:
Other
comprehen
sive
income to
be 26422.00 26422.00
reclassified
into profit
or loss by
the equity
method
Total other 26422.00 26422.00
223comprehen
sive
income
39. Surplus reserves
Unit: RMB
Increase in the current Decrease in the current
Item Beginning balance Ending balance
period period
Statutory surplus
26546480.0925952692.0452499172.13
reserve
Total 26546480.09 25952692.04 52499172.13
40. Undistributed profit
Unit: RMB
Item Current period Previous period
Undistributed profits at the end of the
543843496.85424141893.34
previous period before adjustment
Undistributed profits at the beginning of
543843496.85424141893.34
the period after adjustment
Add: Net profit attributable to owners of
83496135.61131020764.38
the parent company during the period
Less: Statutory surplus reserves
25952692.042697994.47
appropriated
Ordinary share dividends payable 10781545.75 8621166.40
Undistributed profits at the end of the
590605394.67543843496.85
period
Breakdown 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: RMB
Amount in the current period Amount incurred in the previous period
Item
Revenue Costs Revenue Costs
Main business 830367312.21 693409590.68 498882949.81 350429078.94
Other business 7288962.30 6879652.74 9637076.37 2500636.87
Total 837656274.51 700289243.42 508520026.18 352929715.81
Audited net profit before and after deducting non-recurring gains and losses (whichever is lower negative value or not)
224□Yes □No
Relevant information of revenue:
Unit: RMB
Classification of
Segment 1 Segment 2 Revenue Total
contract
By type of product
Including:
Automobile sales 196357649.27 196357649.27
Automobile
maintenance and 43747865.09 43747865.09
testing
Leasing and services 168778477.27 168778477.27
Jewelry sales and
421483320.58421483320.58
services
By operating regions
Including:
South China 830367312.21 830367312.21
Type of market or
customer
Including:
Contract type
Including:
By time of transfer of
goods
Including:
Goods (transferred at a
651723017.06651723017.06
certain time point)
Services (provided
within a certain period 178644295.15 178644295.15
of time)
Classification of
contract term
Including:
Classification by sales
channel
Including:
Direct sales 830367312.21 830367312.21
Agency factor
Total
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 yet
is RMB 0.00 at the period-end among which RMB is expected to be recognized in the year RMB in the year and RMB in
the year.
22542. Taxes and surcharges
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
City maintenance and construction tax 673134.05 882815.10
Educational surcharge 489636.17 618340.17
Property tax 4699229.57 4644257.53
Land use tax 255483.11 358823.13
Vehicle and vessel use tax 5447.92 5772.92
Stamp duty 1211281.94 434087.33
Total 7334212.76 6944096.18
43. Selling expenses
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Employee compensation 11309494.91 13380126.45
Advertising marketing expenses 1452543.07 2129375.71
Depreciation and amortization 4461473.09 4745548.04
Water and electricity charges 911189.85 1052593.95
Material consumption 131482.51 149556.88
Office expenses 386796.03 460348.34
Hospitality expenses 369463.33 437073.34
Others 3012269.69 4823552.32
Total 22034712.48 27178175.03
44. Administrative expenses
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Employee compensation 36915969.42 34350624.60
Consulting and service fees 2371263.21 5599656.73
Depreciation and amortization 3380339.87 3658728.08
Office expenses 501941.40 534671.21
Hospitality expenses 227403.28 411497.26
Advertising expenses 233491.72 206020.49
Transport and travel expenses 156715.15 107532.98
Others 3290555.94 2282585.34
Total 47077679.99 47151316.69
45. Research and development expenses
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Wages welfare social security etc. 517100.50
Direct input 268755.28
Depreciation and amortization 16898.02
Total 802753.80 0.00
22646. Finance costs
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Interest expenses 338730.75 2253915.94
Interest income -5472748.37 -6538484.64
Profit or loss on exchange 842578.74 -236196.60
Others 254785.53 249883.56
Total -4036653.35 -4270881.74
47. Other incomes
Unit: RMB
Sources of other incomes Amount in the current period Amount incurred in the previous period
I. Government subsidies included in
6575043.882923779.58
other income
Including: government subsidy related to
1488875.501985771.17
deferred income
Government subsidies charged to the
5086168.38938008.41
current profits and losses
II. Other items related to daily activities
49829.4046275.77
and included in other incomes
Including: service fee for individual
49829.4046275.77
income tax withholding
Total 6624873.28 2970055.35
48. Investment income
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Income from long-term equity investments
10897171.2817874805.32
calculated by the equity method
Investment income from the disposal of long-
8785410.4766495901.16
term equity investments
Investment income from holding trading
12132798.029409600.29
financial assets
Dividend income from investments in other
1305581.86
equity instruments during the holding period
Closing income from commodity futures
-26164.18
contracts and T+D contracts (hedging)
Closing income from commodity futures
contracts and T+D contracts (no hedging 277302.12
specified)
Total 33372099.57 93780306.77
49. Income from changes in fair value
Unit: RMB
Source of gain from changes in fair value Amount in the current period Amount incurred in the previous period
Trading financial assets -860218.33 663932.88
227Including: gains from changes in
fair values arising from derivative -860218.33 663932.88
financial instruments
Trading financial liabilities -787050.00
Derivative instruments of effective
54518.09
hedges
Total -1592750.24 663932.88
50. Credit impairment loss
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Loss on bad debts of other receivables -1428507.19 15171.74
Loss on bad debts of accounts receivable -206852.71 22957.54
Total -1635359.90 38129.28
51. Asset impairment loss
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
II. Loss on diminution in value of
inventories and impairment loss on -1616086.03 -812607.69
contract performance cost
V. Impairment loss of fixed assets -123400.26
XIII. Miscellaneous -100000.00
Total -1839486.29 -812607.69
52. Income from disposal of assets
Unit: RMB
Sources of income from asset disposal Amount in the current period Amount incurred in the previous period
Profits and losses from disposal of fixed
assets construction in progress bearer
40765.92158228.49
biological assets and intangible assets not
identified to held-for-sale assets
Including: fixed assets 40765.92 158228.49
Total 40765.92 158228.49
53. Non-operating revenues
Unit: RMB
Amount included in non-
Amount incurred in the
Item Amount in the current period recurring profits and losses of previous period
the current period
Gains from destruction and
retirement of non-current 132.74
assets
Gains from unpayable
2031600.422031600.42
payments
228Others 2103054.01 767922.91 2103054.01
Total 4134654.43 768055.65 4134654.43
54. Non-operating expenses
Unit: RMB
Amount included in non-
Amount incurred in the
Item Amount in the current period recurring profits and losses of
previous period
the current period
Inventory loss of fixed assets 344.92 344.92
Loss of retirement of non-
26698.7715256.3026698.77
current assets
Penalty and liquidated
35.5622246.8535.56
damages expenditure
Others 389383.00 389383.00
Total 416462.25 37503.15 416462.25
55. Income tax expenses
(1) Income tax expense sheet
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Current income tax expenses 24608522.78 44415716.95
Deferred tax expenses 153302.88 962316.56
Income tax in earlier period -3238629.58 -1314362.80
Total 21523196.08 44063670.71
(2) Accounting profit and income tax expense adjustment process
Unit: RMB
Item Amount in the current period
Total profit 102842659.93
Income tax expenses based on statutory/applicable tax rate 25710664.98
Effects of different tax rates applied to subsidiaries -141699.39
Impact of income tax in previous periods before adjustment -3238629.58
Impact of non-taxable income -2724292.82
Impact of non-deductible costs expenses and losses 2778544.65
Impact of using deductible losses of unrecognized deferred tax
-323960.13
assets in the previous period
Impact of deductible temporary difference or deductible losses
2134397.43
on unrecognized deferred tax assets in the current period
Others -2671829.06
Income costs 21523196.08
Other notes:
229See Note V. 38 Other Comprehensive Income for details of items of other comprehensive
income and its income tax impact the status of profit and loss of transfer-ins and the adjustment
of 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: RMB
Item Amount in the current period Amount incurred in the previous period
Security deposit 1107514.15 4054933.66
Interest income 1871273.53 3827201.61
Government subsidies received 1833090.00 13028008.41
Other income received 5005273.60 46275.77
Current accounts and others 13503115.65 3026161.94
Total 23320266.93 23982581.39
(2) Other cash paid related to operating activities
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Out-of-pocket expenses 13437173.48 18020425.99
Security deposit 583931.98 121671.39
Penalty for breach of contract 389418.56 22246.85
Current accounts and others 4408405.00
Total 18818929.02 18164344.23
(3) Other cash received related to investment activities
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Recovery of regulatory funds 15998484.00
Others 1931753.79
Total 15998484.00 1931753.79
(4) Other cash paid related to investment activities
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Security deposit for hedging instruments 8955842.00
Total 8955842.00 0.00
230(5) Other cash paid related to financing activities
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Refund of minority shareholders' capital* 50000000.00
Interest on performance bond for equity
2893150.68
transfer
Payment of the principal and interest of
2874145.903380669.67
lease liabilities
Total 2874145.90 56273820.35
58. Supplementary information of statement of cash flow
(1) Supplementary information on cash flow statement
Unit: RMB
Supplementary information Amount in the current period Amount in the previous period
1. Reconciliation of net profit to cash
flows from operating activities
Net profit 81319463.85 132052531.08
Add: provision for impairment of
3474846.19774478.41
assets
Depreciation of fixed assets
depletion of oil and gas assets and
36135739.8230459581.08
depreciation of productive biological
assets
Depreciation of right-of-use
2992203.842976277.13
assets
Amortization of intangible assets 318457.10 2377422.39
Amortization of long-term
5145426.727323714.29
deferred expenses
Losses on the disposal of fixed
assets intangible assets and other long- -14067.15 -143104.93
term assets (gain denoted by "-")
Losses from retirement of fixed
344.92
assets (gains to be listed with “-”)
Losses from changes in fair value
1592750.24-663932.88
(gains to be listed with “-”)
Financial expenses (gains to be
-2420165.35-693563.69
listed with “-”)
Investment losses (gain to be
-33372099.57-93780306.77
listed with "-")
Decrease in deferred tax assets
-18682.74-728.93
(increase to be listed with "-")
Increases in deferred tax
171985.62963045.49
liabilities (decrease to be listed with "-")
Decrease in inventories (increase
-91706958.29-4167852.80
to be listed with "-")
Decrease in operating receivables -109076820.34 -12856907.71
231(increase to be listed with "-")
Increase in operating items
53489810.8561991082.74
payable (decrease to be listed with "-")
Others
Net cash flows from operating
-51967764.29126611734.90
activities
2. Major investment and financing
activities not relating to cash deposit and
withdrawal
Conversion of debt into capital
Current portion of convertible
corporate bonds
Financing leased fixed assets
3. Net changes in cash and cash
equivalents:
Ending balance of cash 391406829.36 211655585.86
Less: beginning balance of cash 211655585.86 208462656.63
Add: Ending balance of cash
equivalents
Less: beginning balance of cash
equivalents
Net increase in cash and cash
179751243.503192929.23
equivalents
(2) Composition of cash and cash equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 391406829.36 211655585.86
Including: cash on hand 25673.67 36941.24
Cash at bank available for
381593235.55211618644.62
payments at any time
Other cash at bank and on hand
9787920.14
available for payment at any time
III. Closing balance of cash and cash
391406829.36211655585.86
equivalents
59. Assets with restricted ownership or use right
Unit: RMB
Item Ending book value Reasons for restriction
Cash at bank and on hand 21621498.00 See Note V. 1 for details
Intangible assets 45447359.01 Bank borrowing mortgage
Total 67068857.01
23260. Foreign currency monetary items
(1) Monetary items in foreign currency
Unit: RMB
Ending foreign currency Ending balance of converted
Item Conversion exchange rate
balance RMB
Cash at bank and on hand
Including: USD 69194.70 6.9646 481913.41
EUR
HKD 22016.80 0.89327 19666.95
Total 91211.50 501580.36
Accounts receivable
Including: USD
EUR
HKD
Long-term borrowings
Including: USD
EUR
HKD
(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 shall
also be disclosed for the changed bookkeeping base currency.□ Applicable □ Not applicable
61. Government subsidies
(1) Basic information about government subsidies
Unit: RMB
Amount charged to the
Type Amount Item presented
current profits and losses
Asset-related government
13071694.37 Deferred income 1488875.50
subsidies
Income-related government
7006674.80 N/A 5086168.38
subsidies
Total 20078369.17 6575043.88
(2) Refund of government subsidies
□ Applicable □ Not applicable
233VIII. 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) and
related information:
Newly established subsidiaries in the current period
Date of company Proportion of
Company name Amount of contribution
establishment contribution (%)
Guorun Gold Shenzhen Co.June 2022 82000000.00 41
Ltd.IX. Equity in Other Entities
1. Interests in subsidiaries
(1) Composition of enterprise groups
Principal Shareholding proportion
Place of Business Acquisition
Subsidiary name place of
registration nature Direct Indirect method business
Shenzhen Tellus
Xinyongtong
Shenzhen Shenzhen Commerce 5.00% 95.00% Establishment
Automobile
Development Co. Ltd.Shenzhen Bao'an
Shiquan Industry Co. Shenzhen Shenzhen Commerce 0.00% 100.00% Establishment
Ltd.Shenzhen SDG Tellus
Shenzhen Shenzhen Commerce 100.00% 0.00% Establishment
Real Estate Co. Ltd.Shenzhen Tellus
Chuangying Shenzhen Shenzhen Commerce 100.00% 0.00% Establishment
Technology Co. Ltd.Shenzhen Xinyongtong
Motor Vehicle
Shenzhen Shenzhen Commerce 51.00% 0.00% Establishment
Inspection Equipment
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% Establishment
Marketing Company
Shenzhen SDG Huari
Automobile Enterprise Shenzhen Shenzhen Commerce 60.00% 0.00% Establishment
Co. Ltd.Shenzhen Huari Anxin
Automobile Inspection Shenzhen Shenzhen Commerce 0.00% 100.00% Establishment
Co. Ltd.Shenzhen Zhongtian
Shenzhen Shenzhen Commerce 100.00% 0.00% Establishment
Industry Co. Ltd.
234Shenzhen Huari Toyota
Sales & Service Co. Shenzhen Shenzhen Commerce 60.00% 0.00% Establishment
Ltd.Shenzhen Tellus
Treasury Supply Chain Shenzhen Shenzhen Commerce 100.00% 0.00% Establishment
Tech Co. Ltd.Shenzhen Jewelry
Industry Service Co. Shenzhen Shenzhen Commerce 65.00% 0.00% Establishment
Ltd.Shanghai Fanyue
Shanghai Shanghai Commerce 0.00% 100.00% Establishment
Diamond Co. Ltd.Guorun Gold Shenzhen
Shenzhen Shenzhen Commerce 36.00% 5.00% Establishment
Co. Ltd.Explanation 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 the
proportion of voting rights and the basis for holding half or less of the voting rights but still
controlling the investee:
In June 2022 the Company cooperated with its subsidiaries Shenzhen Jewelry Industry
Service 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. and
Shenzhen ZHL Industrial Co. Ltd. to jointly invest in the establishment of Guorun Gold
Shenzhen Co. Ltd. Among them the Company contributed RMB 72 million with a shareholding
ratio 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 action
agreement with Shenzhen HTI Group Co. Ltd. stipulating that Shenzhen Hi-tech Investment
Group 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 Company
and 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 control
over 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
235Basis to determine the company is the agent or the principal:
N/A
(2) Important non-wholly-owned subsidiaries
Unit: RMB
Dividends
Shareholding Profit or loss
declared to Balance of minority
percentage of attributable to
Subsidiary name minority interests at the end
minority minority shareholders
shareholders in of the period
shareholders in the current period
the current period
Shenzhen Huari Toyota Sales & Service
40.00%-93038.944380731.56
Co. Ltd.Shenzhen SDG Huari Automobile
40.00%-778375.1611822422.99
Enterprise Co. Ltd.Guorun Gold Shenzhen Co. Ltd. 60.75% -339505.43 117660494.57
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
Ending balance Beginning balance
Non-
Subsidiary name Non- Current Non- Non-Current Total Total Current Total Current current Total
current liabiliti current current
assets assets liabilities assets assets liabilities liabiliti liabilities
assets es liabilities assets
es
Shenzhen Huari
643709628086967179656227856227838529005005912.902959379111504.179111504.
Toyota Sales &
9.918.7968.7039.799.7918.33120.45818
Service Co. Ltd.Shenzhen SDG
Huari Automobile 6212449 129831 751075 455515 4555153 616819 20655893 8233783 50835836.9 50835836.Enterprise Co. 1.13 05.53 96.66 39.19 9.19 38.58 .78 2.36 9 99
Ltd.Guorun Gold 3085247 345949 311984 110466 1104663
Shenzhen Co. Ltd. 05.19 1.14 196.33 340.68 40.68
Unit: RMB
Amount in the current period Amount incurred in the previous period
Subsidiary name Total Total Cash flow from Cash flow from Operating
Operating revenue Net profit comprehensive Net profit comprehensive operating
operating activities revenue
income income activities
Shenzhen Huari
Toyota Sales & 239554992.87 -232597.36 -232597.36 6742295.97 245772043.22 914408.79 914408.79 -11521597.56
Service Co. Ltd.Shenzhen SDG
Huari Automobile
35733198.93-1945937.90-1945937.90-4073241.1639729074.813964557.973964557.977232060.46
Enterprise Co.Ltd.Guorun Gold
328034404.58-558856.67-558856.67-107590934.59
Shenzhen Co.
236Ltd.
2. Equities in joint ventures or associates
(1) Important associates and joint ventures
Shareholding proportion Accounting
Name of joint methods for the
Principal place Place of
venture or
of business registration Business nature
investment in
associate Direct Indirect joint ventures
or associates
Joint ventures:
Shenzhen
Investing in the
Tellus-Gmond
Shenzhen Shenzhen establishment 50.00% Equity method
Investment Co.of industries
Ltd.Associates:
Shenzhen
Renfu Tellus
Mercedes-Benz
Automobiles Shenzhen Shenzhen 35.00% Equity method
Auto Sales
Service Co.Ltd.Explanation of the fact that the shareholding percentage is different from the proportion of voting rights in joint ventures or
associates:
N/A
Basis for determining a shareholder holding less than 20% of the voting rights has significant influence or a shareholder holding
20% 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 Beginning balance / Amount in the
current period previous period
Shenzhen Tellus-Gmond Investment Co. Shenzhen Tellus-Gmond Investment Co.Ltd. Ltd.Current assets 44368420.83 45816920.84
Including: cash and cash equivalents 42326853.66 41913040.87
Non-current assets 346703460.52 366402308.03
Total assets 391071881.35 412219228.87
Current liabilities 37674441.11 39971747.31
Non-current liabilities 259110000.00 277266000.00
Total liabilities 296784441.11 317237747.31
Minority interests
Equity attributable to shareholders of the
94287440.2494981481.56
parent company
Shares of net assets at the shareholding
47143720.1247490740.78
percentage
Adjustments
237--Goodwill
--Unrealized profit of internal transaction
--Others
Book value of equity investments to joint
47143720.1347490740.78
ventures
Fair value of equity investment in joint
ventures with public offer
Operating revenue 102987695.69 94989415.30
Financial expenses 14200209.90 15467775.34
Income costs 10548286.43 6647599.75
Net profit 29305958.68 19647999.36
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income 29305958.68 19647999.36
Dividends received from joint ventures
15000000.00
in the current year
(3) Major financial information of important associates
Unit: RMB
Ending balance / Amount incurred in the Beginning balance / Amount in the
current period previous period
Shenzhen Renfu Tellus Automobiles Shenzhen Renfu Tellus Automobiles
Service Co. Ltd. Service Co. Ltd.Current assets 206438043.83 134921582.03
Non-current assets 31677397.21 33583787.31
Total assets 238115441.04 168505369.34
Current liabilities 167288864.40 80369170.77
Non-current liabilities 14598723.35 9942186.16
Total liabilities 181887587.75 90311356.93
Minority interests
Equity attributable to shareholders of the
56227853.2978194012.41
parent company
Shares of net assets at the shareholding
19679748.6827367904.34
percentage
Adjustments
--Goodwill
--Unrealized profit of internal transaction
--Others
Book value of equity investments in
19679748.6827367904.34
associates
Fair value of equity investments in
associates with a public offer
Operating revenue 1088150561.97 1196335565.98
238Net profit -18782486.31 26521546.61
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income -18782486.31 26521546.61
Dividends received from associates in
3183672.8114000000.00
the current year
(4) Summary of financial information of unimportant joint ventures and associates
Unit: RMB
Ending balance / Amount incurred in the Beginning balance / Amount in the current period previous period
Joint ventures:
Total book value of investments 14200897.13 13452222.35
Total amount of the following items at
the shareholding percentage
-- Net profit 748674.78 1174566.00
-- Total comprehensive income 748674.78 1174566.00
Associates:
Total amount of the following items at
the shareholding percentage
(5) Excess losses incurred to joint ventures or associates
Unit: RMB
Unrecognized loss Unrecognized loss in the Unrecognized loss
Name of joint venture or
accumulated in the previous current period (or net profit accumulated at the end of the
associate
period shared in the current period) current period
Shenzhen Tellus Automobile
98865.2698865.26
Service Chain Co. Ltd.Shenzhen Yongtong Xinda
1176212.731176212.73
Testing Equipment Co. Ltd.X. Risks Related to Financial Instruments
The risks related to financial instruments of the Company originate from financial assets and
financial 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 policies
of risks related to financial instruments of the Company. The management is responsible for daily
risk management through functional departments (for example the Credit Management
Department of the Company reviews the credit sales business of the Company one by one). The
239internal audit department of the Company supervises the implementation of the Company's risk
management policies and procedures on a daily basis and reports relevant findings to the Audit
Committee of the Company in a timely manner.The overall objective of the Company’s risk management is to formulate risk management
policies that minimize the risks associated with various financial instruments without unduly
affecting 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 its
obligations resulting in financial losses to the other party. The credit risk of the Company mainly
arises 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. The
credit risk of these financial assets comes from the default of the counterparty and the maximum
risk 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 and
other financial institutions. The Company believes that these commercial banks have high
reputation and asset status and have low credit risk.For notes receivable accounts receivable receivables financing other receivables contract
assets creditor's rights investment and long-term receivables the Company sets relevant policies
to control credit risk exposure. The Company evaluates clients’ credit rating and sets the credit
period based on their financial conditions possibility of obtaining security from third party credit
record and other factors such as current market situation. The Company will monitor the credit
record of the customer periodically. For customers with poor credit record measures such as
written collection shortening credit period or canceling the credit period will be adopted by the
Company to ensure the overall credit risk being in the controllable scope.
(1) Criteria for judging a significant increase in credit risk
240The Company assesses whether the credit risk of the relevant financial instrument has
increased significantly since the initial recognition on each balance sheet date. In determining
whether the credit risk has increased significantly since initial recognition the Company
considers reasonable and supportable information that can be obtained without unnecessary
additional costs or efforts including the Company's qualitative and quantitative analysis based on
historical data external credit risk ratings and forward-looking information. Based on a single
financial instrument or a combination of financial instruments with similar credit risk
characteristics the Company determines the changes in the risk of default of the financial
instrument during the expected life of the instrument by comparing the risk of default on the
financial 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 the
Company believes that the credit risk of financial instruments has increased significantly. The
quantitative criteria are mainly that the probability of default in the remaining duration at the
reporting date increases by more than a certain proportion compared with that at initial
recognition. The qualitative criteria are significant adverse changes in the operation or financial
situation 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 the
Company are consistent with the internal credit risk management objectives for relevant financial
instruments taking consideration into quantitative and qualitative indicators at the same time.The Company mainly considers the following factors when assessing whether the debtor has
credit impairment: The issuer or the debtor has major financial difficulties; the debtor violates the
contract such as default or overdue payment of interest or principal; the creditor makes the
concession that the debtor will not make under any other circumstances due to the economic or
contractual considerations related to the debtor's financial difficulties; the debtor is likely to go
bankrupt or undergo other financial restructuring; the financial difficulties of the issuer or debtor
241cause the disappearance of the active market of financial assets; a financial asset is purchased or
generated 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 credit
impairment has occurred the Company measures the provision for impairment for different assets
with the expected credit loss of 12 months or the whole duration respectively. The key parameters
of ECL measurement include probabilities of default (PD) losses given default (LGD) and
exposures at default (EAD). The Company takes into account the quantitative analysis of
historical statistics (such as ratings of the counterparty manners of guarantees and types of
collateral 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 its
repayment 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 at
default. According to the type of counterparty the way and priority of recourse and the difference
of collaterals loss given default is also different. Loss given default refers to the percentage of
risk exposure loss at the time of default which is calculated based on the next 12 months or the
whole duration;
Default risk exposure refers to the amount that the Company should be reimbursed when
default occurs in the next 12 months or the whole remaining duration. Evaluation on significant
increase of forward-looking information credit risk and calculation of expected credit losses both
involve forward-looking information. Through historical data analysis the Company has
242identified key economic indicators that affect credit risks and expected credit losses of various
business types.The maximum credit risk exposure tolerable by the Company is the book amount of each of
the financial assets in the balance sheet. The Company does not provide any other guarantee that
allows the Company to accept credit risk.
1. Liquidity risks
Liquidity risk refers to the risk of capital shortage in performing obligation of settling
accounts by cash payment or other financial assets. The Company is responsible for the overall
management of cash of all subsidiaries in the Company including short-term investment of cash
surplus and raising loans to meet the estimated cash requirements. It is the policy of the Company
to regularly monitor short-term and long-term liquidity requirements and compliance with the
provisions of the loan agreement to ensure sufficient cash reserves and readily realizable
securities.As of December 31 2022 the maturity periods of the Company's financial liabilities are as
follows:
December 31 2022
Project name
Within 1 year 1-2 years 2-3 years Over 3 years
Accounts payable 124716800.71
Other payables 105180279.00
Current portion of non-current
2009819.15
liabilities
Long-term borrowings 6948649.17 9070099.98 10241847.84 183567105.37
Long-term payables 3920160.36
Lease liabilities 268414.80
Total 243044123.19 9070099.98 10241847.84 183567105.37
(Continued)
Project name December 31 2021
243Within 1 year 1-2 years 2-3 years Over 3 years
Accounts payable 67407763.03
Other payables 112617963.65
Current portion of non-current
3021452.25
liabilities
Long-term borrowings 3644467.25 4609457.14 5967792.71 118790550.21
Long-term payables 3920160.36
Lease liabilities 1829520.13 1684781.03 960241.93
Total 190611806.54 6438977.27 7652573.74 119750792.14
1. Market risks
(1) Exchange rate risk
The exchange rate risk of the Company mainly comes from foreign currency assets and
liabilities held by the Company and its subsidiaries that are not denominated in their bookkeeping
base currency. The Company operates in mainland China. The main activities are counted in
RMB. Therefore the market risk of foreign exchange changes borne by the Company is not
significant.On the balance sheet date the Company's foreign currency monetary assets and liabilities are
detailed 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 bank
borrowings. Due to financial liabilities with floating interest rate the Company faces cash flow
interest rate risk; due to financial liabilities with fixed interest rate the Company faces fair value
interest rate risk. The Company decides the relative proportion of the fixed interest rate and
floating interest rate contracts in accordance with the current market environment.The financial department of the Company’s headquarters continuously supervises the
Company's interest rate level. Rising interest rates will increase the cost of new interest-bearing
debt and the interest expense of the Company's outstanding interest-bearing debt with floating
244interest rates and adversely affect the Company's financial performance. Management will make
timely 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: RMB
Ending fair value
Item Level 1 measurement Level 2 measurement Level 3 measurement
Total
at fair value at fair value at fair value
I. Continuous fair value
--------
measurement
(I) Trading financial
176133569.95176133569.95
assets
1. Financial assets at
fair value through 176133569.95 176133569.95
profit or loss
(4) Structured deposits
176133569.95176133569.95
and financial products
(III) Other equity
10176617.2010176617.20
instrument investments
(VI) Arbitraged items 79191876.11 79191876.11
Total assets
continuously measured 79191876.11 186310187.15 265502063.26
at fair value
(VI) Trading financial
19062044.9119062044.91
liabilities
Derivative
489360.00489360.00
financial liabilities
(VII) Financial
liabilities at fair value
18572684.9118572684.91
through profit or loss
designated
(1) Gold leasing 18572684.91 18572684.91
Total amount of
liabilities continuously 19062044.91 19062044.91
measured at fair value
II. Non-continuous fair
--------
value 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 instruments
are liabilities arising from changes in the fair value of gold futures contracts and gold spot
deferred settlement contracts held by the Company. The Company determines the fair value based
245on the public quotations of gold spot transactions and futures transactions of Shanghai Gold
Exchange and Shanghai Futures Exchange.The Company's gold leasing is a liability formed by borrowing gold in kind from banking
financial institutions and the fair value is determined based on the public quotation of gold spot
transaction 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. The
expected rate of return is used to predict the future cash flow and the unobservable estimate is the
expected rate of return. Other equity instrument investments are measured by the Company based
on the investment cost as a reasonable estimate of the fair value because the operating
environment operating conditions and financial conditions of the investee China PUFA
Machinery Industry Co. Ltd. have not changed significantly.XII. Related Parties and Related Party Transactions
1. Parent company
Shareholding Votes proportion
Name of parent Place of proportion of the of the parent
company registration Business nature Registered capital parent company company to the
to the Company Company
Real estate
Shenzhen Special
development and
Economic Zone
Shenzhen operation RMB 4582820000 49.09% 47.51%
Development
domestic
Group Co. Ltd.commerce
Information of the parent company
Shenzhen 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 Management
Commission of Shenzhen Municipal People's Government. The Company now holds a business license with a
unified social credit code of 91440300192194195C and a registered capital of RMB 4582820000.The reason for the inconsistency between the proportion of voting rights and the shareholding ratio of SDG
Group in the Company is that SDG Group has carried out the refinancing securities lending business.
246The ultimate controlling party of the Company: The State-owned Assets Supervision and Management
Commission of Shenzhen Municipal People’s Government.The ultimate controlling party of the Company is the State-owned Assets Supervision and Management Commission of Shenzhen
Municipal 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 the
Company 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. 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
Enterprises subject to significant impact by key management
Shenzhen Zhigu Jinyun Technology Co. Ltd.personnel
Shenzhen ZHL Industrial Co. Ltd. Minority shareholders of significant subsidiaries
Companies controlled by minority shareholders of significant
Shenzhen Nubisi Jewelry Trading Co. Ltd.subsidiaries
Companies controlled by minority shareholders of significant
Shenzhen Yuepengjin Jewelry & Gold Co. Ltd.subsidiaries
Companies controlled by minority shareholders of significant
Shenzhen Yuepengjin e-commerce Co. Ltd.subsidiaries
2475. 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: RMB
Content of Exceeding the Amount incurred
Amount in the Approved
Related parties related party transaction amount in the previous
current period transaction amount
transaction or not period
Shenzhen SDG
Receiving
Engineering 2384060.38 2000000.00 Yes 1976807.29
services
Management Co. Ltd.Shenzhen SDG Tellus
Receiving
Property Management 3148143.25 3000000.00 Yes 10137230.33
services
Co. Ltd.Shenzhen SDG Receiving
10354683.50 7400000.00 Yes 5131692.41
Service Co. Ltd. services
Shenzhen Wahlai
Receiving
Decoration & 224049.69 3094128.99
services
Furniture Co. Ltd.Shenzhen Zhigu
Purchasing
Jinyun Technology 16814.16
goods
Co. Ltd.Shenzhen ZHL Receiving of
1032213.33
Industrial Co. Ltd. services
Shenzhen Yuepengjin
Receiving of
Jewelry & Gold Co. 631540.56
services
Ltd.Sale of goods and provision of services
Unit: RMB
Content of related party Amount incurred in the
Related parties Amount in the current period
transaction previous period
Shenzhen SDG Microfinance Rendering of labor
202126.23207640.32
Co. Ltd. services
Rendering of labor
Shenzhen SDG Service Co. Ltd. 8500.10 6693.06
services
Shenzhen Special Economic
Rendering of labor
Zone Development Group Co. 41061.00 45592.00
services
Ltd.Shenzhen SDG Tellus Property Rendering of labor
6600.001876.11
Management Co. Ltd. services
Shenzhen Nubisi Jewelry Trading
Rendering of services 1309102.16
Co. Ltd.Shenzhen Yuepengjin e-
Sales of goods 26848858.40
commerce Co. Ltd.
(2) Related party leases
The Company as the lessor:
Unit: RMB
Name of lessee Type of asset leased Lease income recognized in Lease income recognized in
248the current period the previous period
Shenzhen Renfu Tellus
Automobiles Service Co. Lease of houses 5190476.19 5250031.70
Ltd.Shenzhen Xinyongtong
Lease of houses 717300.00
Automobile Service Co. Ltd.Shenzhen SDG Microfinance
Lease of houses 1069279.56 1103104.38
Co. Ltd.Shenzhen SDG Tellus
Property Management Co. Lease of houses 38262.91 75897.40
Ltd.Shenzhen SDG Service Co.Lease of houses 1962815.40 2095266.10
Ltd.Shenzhen Yongtong Xinda
Lease of houses 16000.00 32061.90
Testing Equipment Co. Ltd.The Company as the lessee:
Unit: RMB
(3) Remuneration of key management personnel
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Remuneration of key management
9844700.009035700.00
personnel
6. Receivables and payables by related parties
(1) Receivables
Unit: RMB
Ending balance Beginning balance
Project name Related parties Provision for Provision for bad
Book balance Book balance
bad debts debts
Accounts Shenzhen SDG
9167.5791.68
receivable Service Co. Ltd.Shenzhen SDG
Accounts
Microfinance Co. 355565.61 3555.66 17791.06 177.91
receivable
Ltd.Shenzhen SDG Tellus
Accounts
Property Management 5362.00 53.62
receivable
Co. Ltd.Accounts Shenzhen Nubisi Jewelry Trading Co. 666979.53 6669.80
receivable Ltd.Total 1027907.14 10279.08 26958.63 269.59
Shenzhen Wahlai
Advances to
Decoration & 106696.30
suppliers
Furniture Co. Ltd.Shenzhen SDG
Advances to
Engineering 6900.00
suppliers
Management Co. Ltd.Total 113596.30
249Shenzhen Tellus
Other receivables Automobile Service 1359297.00 1359297.00 1359297.00 1359297.00
Chain Co. Ltd.Shenzhen Yongtong
Other receivables Xinda Testing 531882.24 531882.24 531882.24 531882.24
Equipment Co. Ltd.Shenzhen Xiandao
Other receivables New Materials Co. 660790.09 660790.09 660790.09 660790.09
Ltd.Shenzhen Telixing
Other receivables 37608.61 376.09
Investment Co. Ltd.Shenzhen SDG Tellus
Other receivables Property Management 16959.19 409.59 12829.59 128.30
Co. Ltd.Shenzhen ZHL
Other receivables 10000.00 100.00
Industrial Co. Ltd.Total 2616537.13 2552855.01 2564798.92 2552097.63
Shenzhen Tellus
Long-term
Automobile Service 2179203.68 2179203.68 2179203.68 2179203.68
receivables
Chain Co. Ltd.Total 2179203.68 2179203.68 2179203.68 2179203.68
(2) Payables
Unit: RMB
Project name Related parties Ending book balance Beginning book balance
Accounts payable Shenzhen SDG Real Estate Co. Ltd. 6054855.46 6054855.46
Shenzhen Machinery & Equipment
Accounts payable 45300.00 45300.00
Import & Export Co. Ltd.Accounts payable Shenzhen SDG Service Co. Ltd. 1654014.40
Shenzhen SDG Engineering Management
Accounts payable 2568038.46 150005.66
Co. Ltd.Shenzhen SDG Tellus Property
Accounts payable 336533.57 1708125.16
Management Co. Ltd.Shenzhen Wahlai Decoration & Furniture
Accounts payable 432712.27 1042036.18
Co. Ltd.Accounts payable Shenzhen ZHL Industrial Co. Ltd. 235873.17
Shenzhen Yuepengjin Jewelry & Gold
Accounts payable
Co. Ltd. 31300.00
Total 11358627.33 9000322.46
Advances from Shenzhen SDG Tellus Property
5234.34
customers Management Co. Ltd.Total 5234.34
Other payables Hongkong Yujia Investment Limited 2164650.90 1961673.06
Other payables Shenzhen SDG Tiane Industrial Co. Ltd. 28766.05 28766.05
Shenzhen Machinery & Equipment
Other payables 1575452.52 1575452.52
Import & Export Co. Ltd.Shenzhen Special Economic Zone
Other payables 12345594.94 17383655.94
Development Group Co. Ltd.Shenzhen Longgang Tellus Real Estate
Other payables 1095742.50 1095742.50
Co. Ltd.Shenzhen Tellus Yangchun Real Estate
Other payables 476217.49 476217.49
Co. Ltd.Other payables Shenzhen Telixing Investment Co. Ltd. 167470.29
Shenzhen Yongtong Xinda Testing
Other payables 5602.99 5600.00
Equipment Co. Ltd.
250Shenzhen SDG Tellus Property
Other payables 145043.21 122141.49
Management Co. Ltd.Other payables Shenzhen SDG Service Co. Ltd. 25596.00 35110.00
Shenzhen Renfu Tellus Automobiles
Other payables 833334.00 833334.00
Service Co. Ltd.Other payables Shenzhen SDG Microfinance Co. Ltd. 237804.66 237804.66
Shenzhen SDG Engineering Management
Other payables 40000.00 56600.00
Co. Ltd.Shenzhen Wahlai Decoration & Furniture
Other payables 16933.72 166956.51
Co. Ltd.Total 18990738.98 24146524.51
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) 70136870.42 153763306.33
2. Contingencies
(1) Important contingencies existing at the balance sheet date
N/A
XIV. Events after the Balance Sheet Date
1. Profit distribution
Unit: RMB
Profit or dividend to be distributed 12069632.96
Profit or dividend declared after approval through deliberation 12069632.96
According to the 2022 profit distribution plan reviewed and
approved by the 7th formal meeting of the 10th Board of
Directors of the Company on April 25 2023 the Company
plans to distribute cash dividends of RMB 0.28 (tax inclusive)
for every 10 shares to all shareholders based on the total share
Profit distribution scheme capital of 431058320 shares as of December 31 2022. A total
of RMB 12069632.96 will be distributed without bonus
shares or transfer to paid-in capital. The above profit
distribution plan has yet to be reviewed and approved by the
General Meeting of Shareholders of the Company.
2512. Descriptions for other events after the balance sheet date
Shenzhen SDG Huari Automobile Enterprise Co. Ltd. (hereinafter referred to as SDG
Huari) a subsidiary of the Company is a Sino-Japanese joint venture with an operating period
expired on March 13 2022. Before and after the expiration of the business term the Company
communicated 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 the
business term of SDG Huari has expired and the Company and Japanese shareholders cannot
establish a liquidation team to carry out liquidation within fifteen days from the expiration date of
the business term of SDG Huari the Company as a shareholder holding 60% of the equity of
SDG Huari shall apply to the People's Court of Shenzhen Qianhai Cooperation Zone for
compulsory 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 the
Court of Qianhai Cooperation Zone accepting the Company's application for liquidation of SDG
Huari. On March 21 2023 the Company received the Decision on Appointing a Liquidation
Team ([2023] Y0391 QQ No. 4) served by the People's Court of Shenzhen Qianhai Cooperation
Zone which designated King & Wood Mallesons Beijing Office as the SDG Huari Liquidation
Team.Since the business premises of Shenzhen Huari Toyota Sales & Service Co. Ltd. (hereinafter
referred to as Huari Toyota) a holding subsidiary of the Company are the property owned by
SDG Huari if SDG Huari enters liquidation Huari Toyota may face the situation of no business
premises and the Board of Directors of Huari Toyota decides to adjust the 2023 annual business
plan authorize the management team of Huari Toyota to decide whether to purchase new vehicles
and replenish the inventory of spare parts according to the liquidation progress market situation
and own inventory of Huari Toyota from February 1 2023 and authorize the management team
of Huari Toyota to hire personnel to deal with the inventory.
252XV. 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 the
basis to determine the reporting segment. The business performance of automobile sales
automobile maintenance and testing leasing and service jewelry sales and service etc. are
assessed respectively. Assets and liabilities commonly used in all segments are distributed among
different segments according to the scale.
(2) Financial information of reporting segments
Unit: RMB
Vehicle
Jewelry sales
Automobile maintenance Leasing and Inter-segment
Item Total
sales services offset
and services
and test
Revenue
from
196357649.2771673738.14181128461.73421483320.58-40275857.51830367312.21
principal
businesses
Cost of
principal 189054253.07 62233188.43 68980662.26 414655011.77 -41513524.85 693409590.68
businesses
Total
31486182.43125253028.302837018012.40418992553.34-1180721221.902232028554.57
assets
(3) Where the Company has no reportable segment or cannot disclose total assets and total liabilities of
reportable segments the reasons shall be explained
N/A
(4) Other notes
N/A
253XVI. Notes to Major Items of the Company’s Financial Statements
1. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: RMB
Ending balance Beginning balance
Provision for bad
Book balance Book balance Provision for bad debts
debts
Class Proporti Book value Proportio Book value
Percenta on of Percenta
Amount Amount Amount Amount n of
ge provisio ge
provision
n
Accounts
receivable with
provision for 484803.08 76.33% 484803.08 100.00% 484803.08 80.04% 484803.08 100.00%
bad debts on a
single basis
Including:
Accounts
receivable for
which
provision for 150350.82 23.67% 3149.91 2.10% 147200.91 120861.42 19.96% 1847.01 1.53% 119014.41
bad debts is
made by
combination
Including:
1. Aging
150350.8223.67%3149.912.10%147200.91120861.4219.96%1847.011.53%119014.41
portfolio
Total 635153.90 100.00% 487952.99 76.82% 147200.91 605664.50 100.00% 486650.09 80.35% 119014.41
Provision for bad debts is accrued on an individual basis:
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision Reasons for provision
Shenzhen Bijiashan
172000.00172000.00100.00%
Entertainment Co. Ltd.Gong Yanqing 97806.64 97806.64 100.00%
Guangzhou Lemin
86940.0086940.00100.00%
Computer Center
Others 128056.44 128056.44 100.00%
Total 484803.08 484803.08
Bad debt provision made as per portfolio:
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
1. Aging portfolio 150350.82 3149.91 2.10%
Total 150350.82 3149.91
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the general
254mode of expected credit loss to withdraw bad debt provision of other receivables.
□Applicable □ Not applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 146990.82
Over 3 years 488163.08
3-4 years 3360.00
Over 5 years 484803.08
Total 635153.90
(2) Bad debt provision provided recovered or reversed in the current period
Bad debt provision withdrawn in the reporting Period:
Unit: RMB
Change during the current period
Beginning
Class Cancellation
balance Recovery or
Ending balance
Provision after reversal Others
verification
Provision for
bad debts made
484803.08484803.08
on an
individual basis
Provision for
bad debts made 1847.01 1302.90 3149.91
by portfolio
Total 486650.09 1302.90 487952.99
The 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: RMB
Proportion in the total ending
Ending balance of accounts Ending balance of provision
Item balance of accounts
receivable for bad debts
receivable
Shenzhen Bijiashan
172000.0027.08%172000.00
Entertainment Co. Ltd.Gong Yanqing 97806.64 15.40% 97806.64
Guangzhou Lemin Computer
86940.0013.69%86940.00
Center
Shenzhen Jincheng Yinyu
77741.8712.24%777.42
Jewelry Co. Ltd.Chen Junlin 46618.00 7.34% 466.18
Total 481106.51 75.75%
2. Other receivables
Unit: RMB
Item Ending balance Beginning balance
255Dividends receivable 1852766.21 547184.35
Other receivables 3114221.75 89854408.23
Total 4966987.96 90401592.58
(1) Dividends receivable
1) Category of dividends receivable
Unit: RMB
Item (or the investee) Ending balance Beginning balance
China Pufa Machinery Industry Co. Ltd. 1852766.21 547184.35
Total 1852766.21 547184.35
2) Significant dividends receivable Aged over 1 Year
Unit: RMB
Reasons for non- Impairment and
Item (or the investee) Ending balance Aging recovery judgment basis
The financial and
operating conditions of
China Pufa Machinery the company are
547184.35 3-4 years Not paid yet
Industry Co. Ltd. normal and the
dividends receivable
are not impaired.Total 547184.35
3) Provision for bad debts
□ Applicable □ Not applicable
(2) Other receivables
1) Classification of other receivables by nature of money
Unit: RMB
Payment nature Ending book balance Beginning book balance
Other temporary payments of receivables 14295706.79 13776179.52
Concerned intercourse funds within the
2480126.8589671979.41
consolidation scope of receivables
Total 16775833.64 103448158.93
2) Provision for bad debts
Unit: RMB
Stage I Stage II Stage III
Expected credit loss Expected credit loss
Provision for bad debts Expected credit losses within the whole within the whole Total
for the next 12 months duration (no credit duration (credit
impairment occurs) impairment has
256occurred)
Balance on January 1
10804.9613582945.7413593750.70
2022
Balance as at January
1 2022 is in the current
period.Provision in the period -3776.83 71638.02 67861.19
Balance as at
7028.1313654583.7613661611.89
December 31 2022
Changes of book balance with significant amount changed of loss provision in the reporting period
□ Applicable □ Not applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 3076641.18
1-2 years 21259.70
Over 3 years 13677932.76
3-4 years 46698.00
Over 5 years 13631234.76
Total 16775833.64
3) Other receivables of the top five ending balances by the owing party
Unit: RMB
Proportion to Ending balance of
Item Nature Ending balance Aging ending balance of provision for bad
other receivables debts
Shenzhen Zhonghao Current
5000000.00 Over 5 years 29.80% 5000000.00
(Group) Co. Ltd. payments
Shenzhen Jinbeili
Current
Electric Appliance 2706983.51 Over 5 years 16.14% 2706983.51
payments
Co. Ltd.Shenzhen Jewelry Current
Industry Service Co. accounts within 1925588.67 Within 1 year 11.48%
Ltd. the Group
Shenzhen Current
1919733.45 Over 5 years 11.44% 1919733.45
Petrochemical Group payments
Creditor's rights for of
Current
debt repayment of 1212373.79 Over 5 years 7.23% 1212373.79
payments
Huatong Packaging
Total 12764679.42 76.09% 10839090.75
3. Long-term equity investment
Unit: RMB
Ending balance Beginning balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
257Investment in
786245472.731956000.00784289472.73694745472.731956000.00692789472.73
subsidiaries
Investment in
associates and 90811528.26 9787162.32 81024365.94 98098029.79 9787162.32 88310867.47
joint ventures
Total 877057000.99 11743162.32 865313838.67 792843502.52 11743162.32 781100340.20
(1) Investment in subsidiaries
Unit: RMB
Changes in the current period
Provision Ending balance Beginning balance
Investee Negative
Ending balance
Additional for of impairment (book value) investmen Others (book value)
investment impairme provision
t
nt
Shenzhen
SDG Tellus
31152888.8731152888.87
Real Estate
Co. Ltd.Shenzhen
Tellus
Chuangying 14000000.00 14000000.00
Technology
Co. Ltd.Shenzhen
Tellus
Xinyongtong
57672885.2257672885.22
Automobile
Development
Co. Ltd.Shenzhen
Zhongtian
369680522.90369680522.90
Industry Co.Ltd.Shenzhen
Automobile
Industry and 126251071.57 126251071.57
Trade Co.Ltd.Shenzhen
SDG Huari
Automobile 19224692.65 19224692.65
Enterprise
Co. Ltd.Shenzhen
Huari Toyota
Sales & 1807411.52 1807411.52
Service Co.Ltd.Shenzhen
Xinyongtong
Motor
10000000.0010000000.00
Vehicle
Inspection
Equipment
258Co. Ltd.
Shenzhen
Tellus
Treasury
50000000.0050000000.00
Supply Chain
Tech Co.Ltd.Shenzhen
Hanli High
Tech 1956000.00
Ceramics
Co. Ltd.Shenzhen
Jewelry
Industry 13000000.00 19500000.00 32500000.00
Service Co.Ltd.Guorun Gold
Shenzhen 72000000.00 72000000.00
Co. Ltd.Total 692789472.73 91500000.00 784289472.73 1956000.00
(2) Investment in associates and joint ventures
Unit: RMB
Changes in the current period
A
O
d N O
th
d e t
er P
i g h
co ro
t a e
m vi
i t r
pr si
o i c
eh o
n v h
en n O
Beginning a e aProfit or loss on si fo t Ending balance Ending balance
Investor balance (book l n Declaration of investments ve r h of impairment
value) i g cash dividends
(book value)
recognized under in i e provision
i n e or profits
the equity method co m r
n v s
m p s
v e i
e ai
e s n
ad r
s t e
ju m
t m q
st e
m e u
m nt
e n it
en
n t y
ts
t
I. Joint ventures
Shenzhen
Tellus-Gmond
47490740.7814652979.3515000000.0047143720.13
Investment
Co. Ltd.Shenzhen
Telixing 13452222.35 748674.78 14200897.13
Investment
259Co. Ltd.
Subtotal 60942963.13 15401654.13 15000000.00 61344617.26
II. Associates
Shenzhen
Renfu Tellus
Automobiles 27367904.34 -4504482.85 3183672.81 19679748.68
Service Co.Ltd.Hunan
Changyang
1810540.70
Industrial Co.Ltd.Shenzhen
Jiecheng
3225000.00
Electronics
Co. Ltd.Shenzhen
Xiandao New
4751621.62
Materials Co.Ltd.Subtotal 27367904.34 -4504482.85 3183672.81 19679748.68 9787162.32
Total 88310867.47 10897171.28 18183672.81 81024365.94 9787162.32
4. Operating revenue and operating cost
Unit: RMB
Amount in the current period Amount incurred in the previous period
Item
Revenue Costs Revenue Costs
Main business 39568530.33 10680130.69 50382988.38 15225250.76
Total 39568530.33 10680130.69 50382988.38 15225250.76
Relevant 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 yet
is RMB0.00 at the period-end among which RMB0.00 is expected to be recognized in the year RMB0.00 in the year and
RMB0.00 in the year.
5. Investment income
Unit: RMB
Item Amount in the current period Amount incurred in the previous period
Income from long-term equity
investments calculated by the cost 244000000.00
method
Income from long-term equity
investments calculated by the equity 10897171.28 18339555.32
method
Investment income from the disposal of
3777307.13
long-term equity investments
Investment income from holding trading
10967191.556070326.25
financial assets
260Dividend income from investments in
other equity instruments during the 1305581.86
holding period
Total 267169944.69 28187188.70
XVII. Supplementary information
1. Breakdown of non-recurring profit or loss of the current period
□Applicable □ Not applicable
Unit: RMB
Item Amount Description
Profit or loss from disposal of non-
8826176.39
current assets
Government subsidies included in the
current profit or loss (excluding those
closely related to the normal business of
the Company and granted under the 6575043.88
national policies and continuously
enjoyed according to a certain quota of
amount or volume)
Except for the effective hedging
activities related to the Company’s
ordinary activities profit or loss arising
from changes in fair value of trading
financial assets and financial liabilities 10762831.81
and investment income from disposal of
trading financial assets and financial
liabilities and available-for-sale financial
assets
Other non-operating revenues and
3718192.18
expenses other than the above
Other profit or loss conforming to the
49829.40
definition of non-recurring profit or loss
Less: effect on income tax 6628391.02
Effect on minority interests 3076349.55
Total 20227333.09 --
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 Information
Disclosure 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 Weighted average return on Earnings per share
Period net assets Basic earnings per share Diluted earnings per share
261(RMB/share) (RMB/share)
Net profit attributed to
ordinary shareholders of the 5.69% 0.1937 0.1937
Company
Net profit attributed to
ordinary shareholders of the
Company after deducting 4.31% 0.1468 0.1468
non-recurring profits and
losses
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 name
of such audit firm
N/A
262
沪公网安备31011802005267号
