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个股公告正文

特 力B:2018年年度报告(英文版)

日期:2019-04-02附件下载

    SHENZHEN TELLUS HOLDING CO., LTD
    
    Annual Report 2018
    
    April 2019
    
    Section I. Important Notice, Contents and Paraphrase
    
    Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of
    
    Shenzhen Tellus Holding Co., Ltd. (hereinafter referred to as the Company) hereby confirm
    
    that there are no any fictitious statements, misleading statements, or important omissions
    
    carried in this report, and shall take all responsibilities, individual and/or joint, for the reality,
    
    accuracy and completion of the whole contents.
    
    Fu Chunlong, Principal of the Company, Lou Hong, person in charge of accounting works
    
    and Liu Yuhong, person in charge of accounting organ (accounting principal) hereby confirm
    
    that the Financial Report of 2018 Annual Report is authentic, accurate and complete.
    
    All directors are attended the Board Meeting for report deliberation.
    
    Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) are
    
    the media for information disclosure appointed by the Company, all information under the
    
    name of the Company disclosed on the above said media shall prevail. Concerning the
    
    forward-looking statements with future planning involved in the Report, they do not
    
    constitute a substantial commitment for investors, and investors are advised to exercise
    
    caution of investment risks.
    
    The profit distribution pre-plan deliberated and approved by the Board was: distributed 0.00
    
    Yuan (tax included) for every 10 shares held by whole shareholders of the Company based on
    
    297,281,600 shares in total, 0 share bonus (tax included), and 4.5 additional shares for each 10
    
    shares held by shareholders are being converted by the capital reserve.
    
    Contents
    
    Section I. Important Notice, Contents and Paraphrase .................................................................2
    
    Section II Company Profile and Main Financial Indexes ..............................................................5
    
    Section III Summary of Company Business ..................................................................................10
    
    Section V. Important Events............................................................................................................42
    
    Section VI. Changes in Shares and Particulars about Shareholders ..........................................62
    
    Section VII. Preferred Stock ...........................................................................................................70
    
    Section VIII. Particulars about Directors, Supervisors, Senior Executives and Employees ....71
    
    Section IX. Corporate Governance ................................................................................................82
    
    Section X. Corporate Bond .............................................................................................................92
    
    Section XI. Financial Report...........................................................................................................93
    
    Section XII Documents Available for Reference .........................................................................229
    
    Paraphrase
    
                  Items                Refersto                      Contents
    CSRC                              Refersto  ChinaSecuritiesRegulatoryCommission
    SZ Exchange                         Refersto  ShenzhenStockExchange
    Shenzhen BranchofSD&C               Refersto  ShenzhenBranchofChinaSecuritiesDepository&Clearing
                                              CorporationLimited
    Company, theCompany,ourCompany,Tellus   Refersto  ShenzhenTellusHoldingCo.,Ltd.
    Group
    Reporting period,thisreportingperiod,this     Refersto  Yearof2018
    year
    Auto IndustryandTradeCo.,              Refersto  ShenzhenAutoIndustryandTradeCorporation
    Zhongtian Company                    Refersto  ShenzhenZhongtianIndustrialCo,.Ltd.
    GAC                              Refersto  Gems&JewelryTradeAssociationofChina
    Huari Company                       Refersto  ShenzhenHuariToyotaAutoSalesCo.,Ltd,ShenzhenSDGHuari
                                              AutoEnterpriseCo.,Ltd.
    Zungfu Tellus                        Refersto  ShenzhenZungfuTellusAutoServiceCo.,Ltd
    Tellus Starlight                        Refersto  AnhuiTellusStarlightJewelryInvestmentCo.,Ltd.
    Tellus StarlightJinzun                   Refersto  AnhuiTellusStarlightJinzunJewelryCo.,Ltd.
    Sichuan ChannelPlatformCompany,Sichuan    Refersto  SichuanTellusJewelryTechnologyCo.,Ltd.
    Jewelry Company
    Xinglong  Company                   Refersto  ShenzhenXinglongMachineryMouldCo.,Ltd.
    Tellus Property                        Refersto  ShenzhenSDGTellusPropertyManagementCo.,Ltd.
    SDG                              Refersto  ShenzhenSpecialDevelopmentGroupCo.,Ltd.
    Xinyongtong TechnologyCompany          Refersto  ShenzhenXinyongtongTechnologyCo.,Ltd.
    Dongxiao InspectionCompany             Refersto  ShenzhenXinyongtongDongxiaoAuto.InspectionCo.,Ltd.
    
    
    Section II Company Profile and Main Financial Indexes
    
    I. Company information
    
    Short formofthestock      Tellus-A,Tellus-B               Stockcode            000025,200025
    Stock exchangeforlisting    ShenzhenStockExchange
    Name of the Company (in深圳市特力(集团)股份有限公司
    Chinese)
    Short form of the Company特力A
    (in Chinese)
    Foreign nameoftheCompany ShenzhenTellusHoldingCo.,Ltd
    (ifapplicable)
    Legal representative       FuChunlong
    Registrations add.         3/F,TellusBuilding,ShuiBeiErRoad,LuohuDistrict,Shenzhen
    Code forregistrationsadd    518020
    Offices add.             15/F,CNNCBuilding,ShennanMiddleRoad,FutianDistrict,Shenzhen
    Codes forofficeadd.       518031
    Company‘s InternetWebSite  www.tellus.cn
    E-mail                 ir@tellus.cn
    
    
    II. Person/Way to contact
    
                                        SecretaryoftheBoard              Rep.ofsecurityaffairs
    Name                         QiPeng                        SunBolun
    Contact add.                     15/F,CNNCBuilding,ShennanMiddle   15/F,CNNCBuilding,ShennanMiddle
                                 Road, FutianDistrict,Shenzhen        Road,FutianDistrict,Shenzhen
    Tel.                           (0755)83989378                (0755)83989339
    Fax.                          (0755)83989386                (0755)83989386
    E-mail                         ir@tellus.cn                     sunbl@tellus.cn
    
    
    III. Information disclosure and preparation place
    
    Newspaper appointedforinformationdisclosure     SecuritiesTimes(Shenzhen)andHongKongCommercialDaily(H.K.)
    Website forannualreportpublishappointedbyCSRC http://www.cninfo.com.cn
    Preparation placeforannualreport             SecretariatoftheBODofShenzhenTellusHoldingCo.,Ltd.
    
    
    IV. Registration changes of the Company
    
    Organization code                 91440300192192210U
    Changes ofmainbusinesssincelisting(if  Nochangesduringtheperiod
    applicable)
                                 1. On 31 March 1997, the 159,588,000 state shares held by Shenzhen Investment
                                 Management Co., Ltd., the only non-circulation shareholder, were transfer to SDG;
                                 total share capital of the Company was 220,281,600 shares while 159,588,000 state
                                 shares held by SDG, a 72.45% in total share capital. 2. On 4 January 2006, the
                                 13,717,440 shares, as the consideration of share merger reform, were transfer to
                                 account of A-shareholders from SDG. After share mergerreform, SDG holds 66.22%
    Previous   changes   for   controllingof the total share capital of the Company. 3. On March 27, 2015, the Company has
    shareholders (ifapplicable)           completed the non-public offering of A shares of 77,000,000, of which 6,000,000
                                 shares are issued to the controlling shareholder - SDG, and SDG holds 51.09% of the
                                 Company's total shares after the issuance.4. In 2016, SDG reduced part of the
                                 company‘s unrestricted outstanding shares by means of centralized bidding, the
                                 accumulatively reduced shareholdings accounted for 2% of the company‘stotal share
                                 capital. As of the end of the reporting period, SDG holds 49.09% of the Company‘s
                                 total shares,andisstillthecontrollingshareholderoftheCompany.
    
    
    V. Other relevant information
    
    CPA engaged by the Company
    
    Name ofCPA               RuihuaCertifiedPublicAccountants(LLP)
    Offices add.forCPA          3-9/F,WestTower,ChinaOverseaPropertyPlaza,7#Building,8#Yard,YongdingmenWest
                             BinheRd.,DongchengDistrict,Beijing
    Signing Accountants           CaiXiaodong,ZhouXuechun
    
    
    Sponsor engaged by the Company for performing continuous supervision duties in reporting period
    
    □Applicable √Not applicable
    
    Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
    
    □ Applicable √ Not applicable
    
    VI. Main accounting data and financial indexes
    
    Whether it has retroactive adjustment or re-statement on previous accounting data or not
    
    □ Yes √ No
    
                                  2018             2017       Changesoverlastyear       2016
    Operating income(RMB)            414,238,778.96      347,237,289.80           19.30%      324,240,841.90
    Net   profit   attributable   to      86,924,058.72      66,862,772.68           30.00%      27,193,562.63
    shareholders   of   the   listed
    Company(RMB)
    Net profitattributableto
    shareholders ofthelistedCompany       83,286,083.84      54,431,067.47           53.01%      24,233,716.21
    after deductingnon-recurringgains
    and losses(RMB)
    Net  cash  flow  arising  from       -6,574,979.97       -2,093,068.05                      57,874,934.32
    operating activities(RMB)
    Basic   earnings   per   share           0.2924           0.2249           30.01%           0.0915
    (RMB/Share)
    Diluted   earnings  per  share           0.2924           0.2249           30.01%           0.0915
    (RMB/Share)
    Weighted averageROE                    8.63%            7.20%            1.43%            3.08%
                                Endof2018        Endof2017     Changesoverendof     Endof2016
                                                                 lastyear
    Total assets(RMB)               1,658,295,531.00    1,403,314,594.42           18.17%    1,189,001,074.98
    Net   assets   attributable   to
    shareholder  of listed Company    1,050,209,537.35      963,259,056.63            9.03%      895,362,614.95
    (RMB)
    
    
    VII. Difference of the accounting data under accounting rules in and out of China
    
    1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
    
    Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
    
    □ Applicable √ Not applicable
    
    The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
    
    Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
    
    2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
    
    rules and Chinese GAAP (Generally Accepted Accounting Principles)
    
    □ Applicable √ Not applicable
    
    The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
    
    Chinese GAAP (Generally Accepted Accounting Principles) in the period.
    
    VIII. Quarterly main financial index
    
    In RMB
    
                                  1st Q             2ndQ            3rdQ            4thQ
    Operating income                  92,099,937.58      105,855,144.15      92,625,770.58     123,657,926.65
    Net   profit   attributable   to      16,101,533.51      10,818,746.35       8,920,175.03      51,083,603.83
    shareholders ofthelistedCompany
    Net profitattributableto
    shareholders ofthelistedCompany       13,473,427.60       8,625,228.08       6,816,699.27      54,370,728.89
    after deductingnon-recurringgains
    and losses
    Net cashflowarisingfrom            -8,305,634.44      -19,764,833.67       2,090,790.37      19,404,697.77
    operating activities
    
    
    Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
    
    index disclosed in the Company‘s quarterly report and semi-annual report
    
    □Yes √ No
    
    IX. Items and amounts of non-recurring profit (gain)/loss
    
    √Applicable □ Not applicable
    
    In RMB
    
                 Item                   2018           2017           2016           Note
                                                                            Expenditureofthe
                                                                            equitytransferfrom
                                                                            XinglongCompany;
    Gains/losses fromthedisposalof                                                  incomeofequity
    non-current asset(includingthewrite-off       -4,424,801.74     5,523,267.93       -51,690.07 transferfrom
    that accruedforimpairmentofassets)                                               Xinyongtong
                                                                            TechnologyCompany
                                                                            andDongxiao
                                                                            InspectionCompany
    Governmental subsidyreckonedinto current
    gains/losses  (not including the subsidy
    enjoyed in quota or ration according to        3,482.07       25,753.22
    national  standards,  which  are  closely
    relevant toenterprise‘sbusiness)
    Fund possessioncostreckonedintocurrent
    gains/losses chargedfromnon-financial           76,041.64       76,041.64
    business
    Gains/losses fromentrustinvestmentor         9,611,577.38     6,606,218.86     3,916,317.84
    assets management
    Gains/losses fromcontingencywithout         -2,225,468.76                   -1,192,618.90
    routine businessconcerned
    Restoring ofreceivableimpairment                           15,000.00
    provision thattestedindividually
    Other non-operatingincomeandexpenditure      485,180.13      690,397.76       -70,940.53
    except fortheaforementioneditems
    Less: Impactonincometax                 -161,206.61       59,964.10      -170,101.35
    Impact onminorityshareholders‘equity           49,242.45      445,010.10      -188,676.73
    (post-tax)
    Total                               3,637,974.88    12,431,705.21     2,959,846.42       --
    
    
    Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
    
    Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
    
    the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
    
    Securities to the Public --- Extraordinary Profit/loss, explain reasons
    
    □ Applicable √ Not applicable
    
    In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
    
    extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
    
    the Public --- Extraordinary Profit/loss
    
    Section III Summary of Company Business
    
    I. Main businesses of the Company in the reporting period
    
    Does the Company need to comply with the disclosure requirements of the special industry
    
    No
    
    The Company's main business includingautomobile sales; auto testing, maintenance, accessories sales, resource
    
    asset management and jewelry service business in the period.
    
    1. Car sales, testing, maintenance and parts sales: During the reporting period, influenced by the
    
    unfavorablemarket environment and the decline in sales revenue, the company continued to increase the
    
    performance of holding companies in various automobile business segmentsby strengthening the management of
    
    holding companies. The holding subsidiary Huari Company completed the store renewal and re-launched its grand
    
    opening, and the profit reached a new high in recent years, the inventory at the end of the year was reduced, the
    
    funds were sufficient, and the company had a smooth and steady development.Revenue of the Company from
    
    automobile sales amounted as 122.23 million Yuan, a 16.36% declined from a year earlier.
    
    2. Resourcesassetsmanagement:During the reporting period, the companyimproved its performance by
    
    strengthening data management, changing the way of renting, implementing incentive and restriction policies
    
    simultaneously, and adopting various management methods, achieved the annual resources assets management
    
    income of 93.62 million Yuan, and the income scale remained stable.
    
    3. Jewelry service business: During the reporting period, the company continued to focus on the strategic thinking
    
    of transforming into a third-party integrated operation service provider in the jewellery industry, and fully
    
    promoted the company‘s strategy. In the current year, Sichuan Jewellery Co., Ltd., the first project of the regional
    
    channel platform, perfected and formed a set of business process systems in the operation practice that have
    
    standard operations and conform to the industry‘s conditions, the supply chain settlement supporting service
    
    system has been officially operated, and the ERP system of jewelry industry is in an initial trial run, the annual
    
    revenue of jewelry wholesale and retail was 151.22 million Yuan.
    
    II. Major changes in main assets
    
    1. Major changes in main assets
    
              Majorassets                                Noteofmajorchanges
                                Book value of long-term equity investment up to 31st December 2018 amounting to
    Equity assets                   224.6448millionYuan,decreased59.82millionYuanoverthatofperiodbeginningwith
                                21.03% down,mainlybecausethe43%equityofXinglongCompanyaretrasnferredinto
                                the Company and the income accrual based on equity increased from investment for
                                enterprisewithsharesparticipated
    Fixed assets                    Nomajorchange
    Intangible assets                 Nomajorchange
                                Book value of the construction in progresstill endof 31st December2018 amountingto
    Construction inprogress            12.8436 million Yuan,a decrease of 365.3173 million Yuanover that of period-begin
                                with 96.60%declined.Mainlybecausethe transfer-outofShuibeiJewelryBuilding, and
                                inputforthepreliminaryprojectofPhaseIIofJewelryShuibei
                                Bookvalueofothercurrentassetstillendof31stDecember2018amountingto332.4325
    Other currentassets               million Yuan, an increase of 112.8502 million Yuan over that of period-begin with
                                51.39%up,mainlyduetotheincreaseoffinancialproductspurchasedintheperiod.
                                Book value of investment real estate till end of 31st December 2018 amounting to
    Investment realestate             503.9224 million Yuan,an increaseof 430.6989 million Yuanover that ofperiod-begin,
                                mainlyduetothetransfer-inforcompletionofShuibeiJewelryBuilding
                                Book value of account receivable till end of 31st December2018 amounting to 86.1047
    Account receivable               millionYuan,anincreaseof41.8894millionYuanoverthatofperiod-beginwith94.74%
                                up, mainly because the wholesale credit for jewelry from Sichuan Tellus Company
                                increasedintheperiod
                                Book value of assets held for sale up to 31st December 2018 amounting to 85.0173
    Assets heldforsale               millionYuan,increased85.0173millionYuanoverthatofperiodbeginningwith100.00%
                                up, mainly because the 43% equity of Xinglong Company are transferred into the
                                Company
    
    
    2. Main overseas assets
    
    □ Applicable √ Not applicable
    
    III. Core Competitiveness Analysis
    
    Does the Company need to comply with the disclosure requirements of the special industry
    
    No
    
    1. Mastering the property resources of the core gathering place of the jewelry industry, and stable in
    
    business income
    
    The output value of Shenzhen jewelry accounts for more than 70% of the national jewelry industry, and
    
    Shuibei-Buxin area is the core gathering area of jewelry industry in Shenzhen, its output value accounts for more
    
    than 70% of the jewelry industry in Shenzhen.Which has formed the largest cluster of gold jewelry enterprises in
    
    the country, covering the entire industry chain including raw material procurement, production and processing,
    
    and wholesale sales, and the economic and strategic position and the core aggregation effects of this area in
    
    jewelry industry have remained stable for many years.
    
    According to the ―13th Five-Year‖ plan for urban renewal in Luohu District, Shenzhen, Shuibei-Buxin area will be
    
    built into the jewellery fashion industrial zone of Luohu District,Shuibei area is the international jewellery art
    
    center and Buxin area is the jewellery intelligent high-end manufacturing center so as to form the Shuibei-Buxin
    
    international jewellery eco-creative area. The company is the largest owner of the Tellus Jimeng Gold Jewellery
    
    Industrial Park in Shuibei area, Tellus Shuibei Jewellery Building phase I has been put into use, and phase II
    
    construction project is about to be launched. At the same time, as the largest owner of land parcels 04 & 05 in the
    
    urban renewal unit planning project of Buxin industrial zone, the company will plan and construct an innovative
    
    industrial project in line with the city, district and the Company‘s overall strategic layout in Buxin area through
    
    the renovation method. The company will maintain the status of the largest owner of Shuibei and Buxin areas, and
    
    master the physical platform resource advantages of the core area of the jewelry industry. Meanwhile, the
    
    Company grasps a large number of property resources in various districts in Shenzhen which can bring stable
    
    business income and cash flow to the company and provide a solid foundation for the company‘s transformation
    
    and development through the resource assets business such as property leasing.
    
    2. Plough into the jewellery industry through resource advantages, and gradually expand the industry
    
    influence.
    
    In recent years, with the slowdown in the growth of jewellery industry, the uncertainties in the development of the
    
    industry have increased, a large number of jewelry companies have shrunk their businesses, and the industry
    
    continues to show the characteristics of bottom shocks. At the same time, under the continuous influence of
    
    financial policies such as de-leveraging and financial risks prevention, the financial services with internet color
    
    are greatly restricted, as a result, the entire jewellery industry continues to face financing difficulties, and some
    
    radical industry leading enterprises are even caught in debt crisis, the actual controllers have changed and the
    
    industry development has been affected. Under this circumstance, as a state-owned enterprise and a listed
    
    company, the company has good credit qualification and credit endorsement ability, and has low-cost and
    
    multi-channel capital sources, therefore, its special identity advantage in jewellery industry also becomes more
    
    prominent, which provide advantages for the company to plough into the supply chain services of jewellery
    
    industry that the privately operated jewellery companies can‘t obtain.
    
    The company takes the third-party integrated operation service provider of the jewelry industry as the strategic
    
    blueprint, does not participate in the specific product management of jewellery, does not compete for the stock
    
    market business, but plans to serve the vast number of jewellery enterprises through innovative business models to
    
    energize the development of industry. After years of efforts to transform into the jewellery industry, the company
    
    has formed a closer strategic partnership with a number of leading jewelry industry companies across the country,
    
    the jointly invested and established jewellery innovation platform project has been put into operation and achieved
    
    good results. The development strategy and corporate vision of the company are also highly recognized and
    
    supported by the industry. During the reporting period, the company was successfully elected as the vice president
    
    of the Gems and Jewelry Trade Association of China and the executive director of the first council of the
    
    Intellectual Property Service Committee of the Gems and Jewelry Trade Association of China, its influence in the
    
    jewelry industry is also continuously being expanded.
    
    The company will continue to give play to its own comprehensive resource advantages, unite the upstream and
    
    downstream of the jewelry industry chain, integrate the industry demand, improve the industry‘s traditional model,
    
    provide more comprehensive innovative services, solve the industry pain points, and promote the healthy
    
    development of the industry and achieve all-win while realizing its social responsibility and returning to the
    
    company‘s shareholders.
    
    Section IV Discussion and Analysis of the Operation
    
    I. Introduction
    
    In 2018, the negative impact of the ―trade war‖ on the world economy gradually emerged, which brought
    
    instability to international business activities and reduced investment confidence, the developed economies,
    
    emerging markets and developing economies all showed significant differentiation, and overall economic growth
    
    had signs of a downturn. China‘s GDP increased by 6.6% over the previous year which continued to operate in a
    
    reasonable range, and achieved overall stability and steady progress, but the external environment was complex
    
    and severe, and the economy was still facing downward pressure. Facing the complicated international and
    
    domestic economic situation, under the leadership of the party committee and the board of directors, the company
    
    firmly promoted the strategic transformation and optimized the resource allocation, on the one hand, elaborately
    
    handled the existing business, on the other hand, rapidly promoted the development of the project, ensured the
    
    smooth implementation of the strategic transformation, and all the work has achieved remarkable results, the
    
    profit index of each business segment has reached new heights.
    
    During the reporting period, the Company has achieved operating income of 414.24 million Yuan, increased 67
    
    million Yuan compared with 347.24 million Yuan in the same period of last year, an increase of 19.30%, income
    
    changes are mainly: ① the income has an increase of 108.51 million Yuan on a y-o-y basis for the business
    
    expansion of jewelry wholesale and retail in the year; ②the income from automobile sales have 23.91 million
    
    Yuan declined from a year earlier with 16.36 % down from Huari Company, which was resulted by the deduction
    
    of car supply, and parts of the production for car models are ends, no substitute car models for sales subsequently;
    
    ③ the property management and service income deducted a 18.43 million Yuan from a year earlier due to the
    
    equity of Tellus Property Company transfer. Total profit achieved in the year amounting to 90.55 million Yuan,
    
    increase 21.62 million Yuan by comparing with the 68.93 million Yuan last year, net profit attributable to parent
    
    company amounting as 86.92 million Yuan, an increase of 20.06 million Yuan compare with 66.86 million Yuan
    
    achieved last year, mainly because the investment income for enterprise with share participation increased on a
    
    y-o-y basis.
    
    In the market environment where the economy is facing downturn and the funds are generally tight, the company
    
    strengthens the management of participating companies, urges some participating companies to realize
    
    undistributed profit dividends to take back cash, and earnestly safeguards shareholders‘ rights and interests, which
    
    lay a solid foundation for the company‘s key projects. During the reporting period, the company‘s leasing income,
    
    jewelry operating income, wealth management income and financing scale reached new highs, and the financing
    
    cost was the lowest in recent years, which effectively ensured the capital needs of the company‘s business
    
    development.
    
    II. Main business analysis
    
    1. Introduction
    
    See the ―I-Introduction‖ in ―Discussion and Analysis of the Operation‖
    
    2. Revenue and cost
    
    (1) Constitute of operation revenue
    
    In RMB
    
                               2018                          2017
                       Amount      Ratioinoperation      Amount      Ratioinoperation  y-o-ychanges(+,-)
                                      revenue                       revenue
    Total operation        414,238,778.96           100%    347,237,289.80           100%         19.30%
    revenue
    According toindustries
    Auto sales           122,236,609.61         29.51%    146,150,511.84         42.09%         -16.36%
    Auto inspectionand
    maintenance and        47,153,619.46          11.38%     50,192,766.34         14.45%          -6.05%
    accessories sales
    Property rentaland       93,621,443.04         22.60%    108,174,167.58         31.15%         -13.45%
    service
    Jewelry wholesale      151,227,106.85         36.51%     42,719,844.04         12.30%         254.00%
    and retails
    According toproducts
    Auto sales           122,236,609.61         29.51%    146,150,511.84         42.09%         -16.36%
    Auto inspectionand
    maintenance and        47,153,619.46          11.38%     50,192,766.34         14.45%          -6.05%
    accessories sales
    Property rentaland       93,621,443.04         22.60%    108,174,167.58         31.15%         -13.45%
    service
    Jewelry wholesale      151,227,106.85         36.51%     42,719,844.04         12.30%         254.00%
    and retails
    According toregion
    Shenzhen            263,011,672.11         63.49%    304,517,445.76         87.70%         -13.63%
    Anhui               12,849,125.20          3.10%      4,884,558.80          1.40%         163.06%
    Sichuan             138,377,981.65         33.41%     37,835,285.24         10.90%         265.74%
    
    
    (2) About the industries, products, or regions accounting for over 10% of the Company’s operating income
    
    or operating profit
    
    √Applicable □ Not applicable
    
    Does the Company need to comply with the disclosure requirements of the special industry
    
    No
    
    In RMB
    
                   Operating                             Increase/decrease Increase/decrease Increase/decrease
                    revenue     Operatingcost  Grossprofitratio   ofoperating   ofoperatingcost  ofgrossprofit
                                                       revenue y-o-y      y-o-y       ratioy-o-y
    According toindustries
    Auto sales       122,236,609.61  116,630,283.37        4.59%       -16.36%       -17.42%        1.23%
    Auto inspection
    and maintenance    47,153,619.46   36,190,699.86       23.25%        -6.05%        -5.26%        -0.64%
    and accessories
    sales
    Property rental     85,750,554.94   37,260,988.51       56.55%       -14.95%       11.57%       -10.32%
    and service
    Jewelry
    wholesale and     151,227,106.85  139,519,914.92        7.74%       254.00%       260.35%        -1.63%
    retails
    According toproducts
    Auto sales       122,236,609.61  116,630,283.37        4.59%       -16.36%       -17.42%        1.23%
    Auto inspection
    and maintenance    47,153,619.46   36,190,699.86       23.25%        -6.05%        -5.26%        -0.64%
    and accessories
    sales
    Property rental     85,750,554.94   37,260,988.51       56.55%       -14.95%       11.57%       -10.32%
    and service
    Jewelry
    wholesale and     151,227,106.85  139,519,914.92        7.74%       254.00%       260.35%        -1.63%
    retails
    According toregion
    Shenzhen        255,140,784.01  185,332,389.35       27.36%       -14.14%       -10.93%        -2.62%
    Anhui           12,849,125.20   14,584,662.12       -13.51%       163.06%       81.22%       51.25%
    Sichuan         138,377,981.65  129,684,835.19        6.28%       265.74%       266.06%        -0.08%
    
    
    Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
    
    latest one year‘s scope of period-end
    
    □ Applicable √ Not applicable
    
    (3) Income from physical sales larger than income from labors
    
    √ Yes □ No
    
        Industries          Item            Unit           2018           2017      Y-o-ychanges(+,-)
                   Salesvolume      Set                        745            834         -10.67%
    Auto sales
                   Storage         Set                         64             58         10.34%
    
    
    Reasons for y-o-y relevant data with over 30% changes
    
    □Applicable √ Not applicable
    
    (4) Fulfillment of the Company’s signed significant sales contracts up to this reporting period
    
    □ Applicable √ Not applicable
    
    (5) Constitute of operation cost
    
    Classification of industries and products
    
    In RMB
    
                                        2018                     2017
       Industries        Item                 Ratioinoperation             Ratioinoperation  Y-o-ychanges
                                Amount         cost        Amount        cost          (+,-)
    Auto sales      Automobile      116,630,283.37       35.09%  141,236,154.23       55.55%       -17.42%
    Auto inspection  Accessory,
    and maintenance maintenanceand    36,190,699.86       10.89%   38,200,637.20       15.02%        -5.26%
    and accessories  detection
    sales
    Property rental   Lease,property
    and service     managementand    40,006,456.97       12.04%   36,099,814.88       14.20%       10.82%
                 other
                 Retailand
    Jewelry operation wholesaleof      139,519,914.92       41.98%   38,718,354.34       15.23%       260.35%
                 jewelry
    Total                       332,347,355.12       100.00%  254,254,960.65       100.00%       30.71%
    
    
    In RMB
    
                                        2018                     2017
       Products        Item                 Ratioinoperation             Ratioinoperation  Y-o-ychanges
                                Amount         cost        Amount        cost          (+,-)
    Auto sales      Automobile      116,630,283.37       35.09%  141,236,154.23       55.55%       -17.42%
    Auto inspection  Accessory,
    and maintenance maintenanceand    36,190,699.86       10.89%   38,200,637.20       15.02%        -5.26%
    and accessories  detection
    sales
    Property rental   Lease,property
    and service     managementand    40,006,456.97       12.04%   36,099,814.88       14.20%       10.82%
                 other
    Jewelry operation Retailand       139,519,914.92       41.98%   38,718,354.34       15.23%       260.35%
                 wholesaleof
                 jewelry
    Total                       332,347,355.12       100.00%  254,254,960.65       100.00%       30.71%
    
    
    Note
    
    (6) Whether the changes in the scope of consolidation in Reporting Period
    
    √Yes □ No
    
    Totally 15 enterprises included in consolidate statement for year of 2018, found more in the VIII. Equity in other body carry in the
    
    annotation of financial statement in Auditing Report 2018 released on Juchao Website on the same date. One enterprise decrease in
    
    the consolidate statement by comparing with last year.
    
    (7) Major changes or adjustment in business, product or service of the Company in Reporting Period
    
    □ Applicable √ Not applicable
    
    (8) Major sales and main suppliers
    
    Major sales client of the Company
    
    Total topfiveclientsinsales(RMB)                                                     30,080,309.84
    Proportion intotalannualsalesvolumefortopfiveclients                                            7.27%
    Ratio ofthesalesfromrelatedpartiesintotalannualsales                                            0.00%
    among thetopfiveclients
    
    
    Information of top five clients of the Company
    
      Serial               Name                   Sales(RMB)          Proportionintotalannualsales
    1       DengDebing                                 7,793,834.51                        1.88%
    2       WeiYanyun                                  5,589,604.33                        1.35%
    3       MaoHaitao                                  5,572,582.10                        1.35%
    4       JinJincheng                                  5,572,114.96                        1.35%
    5       ChenLiuhai                                  5,552,173.94                        1.34%
    Total                  --                          30,080,309.84                        7.27%
    
    
    Other situation of main clients
    
    □ Applicable √ Not applicable
    
    Main suppliers of the Company
    
    Total purchaseamountfromtopfivesuppliers(RMB)                                         276,302,382.28
    Proportion in total annual purchase amount for top five                                           83.14%
    suppliers
    Ratio ofthepurchasefromrelatedpartiesintotalannual                                             0.00%
    purchase amongthetopfivesuppliers
    
    
    Information of top five suppliers of the Company
    
      Serial              Suppliers               Procurement(RMB)     Proportionintotalannualprocurement
    1        FAWTOYOTAMotorSalesCo.,Ltd.              127,174,314.55                        38.27%
    2        ShandongMengjinyuanJewelryCo.,Ltd.             64,518,484.00                        19.41%
    3        ShenzhenJinyudeshangGoldCo.,Ltd.              58,683,841.00                        17.66%
    4        ShenzhenKaihengJewelryIndustrialCo.,            17,772,521.00                        5.35%
             Ltd.
    5        GoldDragonJewelryCo.,Ltd                     8,153,221.73                        2.45%
    Total                   --                        276,302,382.28                        83.14%
    
    
    Other notes of main suppliers of the Company
    
    □ Applicable √ Not applicable
    
    3. Expenses
    
    In RMB
    
                           2018            2017       Increase/decrease       Noteofmajorchanges
                                                        y-o-y
    Sales expense             19,987,406.50     16,490,379.71        21.21%
    Management expense        44,231,376.56     36,735,283.59        20.41%
                                                                 The interest  expenditure  increased
                                                                 fromayearearlierduetothenewbank
                                                                 loansincreasedat endof last year;and
    Financial expense           6,508,114.19      1,520,168.86       328.12% the Phase I project of Shuibei Jewelry
                                                                 Building from Zhongtian Company
                                                                 completedin the period and transferto
                                                                 fixedassetswithcapitalizationceased
    
    
    4. R&D investment
    
    □ Applicable √ Not applicable
    
    5. Cash flow
    
    In RMB
    
             Item                   2018                  2017              Y-o-ychanges(+,-)
    Subtotal ofcashin-flowfrom             446,554,238.53            360,454,671.41                 23.89%
    operation activity
    Subtotal ofcashout-flowfrom             453,129,218.50            362,547,739.46                 24.98%
    operation activity
    Net cashflowarisingfrom                -6,574,979.97             -2,093,068.05
    operating activities
    Subtotal ofcashin-flowfrom            1,283,663,305.04            686,489,369.68                 86.99%
    investment activity
    Subtotal ofcashout-flowfrom           1,261,960,622.90            835,440,610.55                 51.05%
    investment activity
    Net cashflowarisingfrom                21,702,682.14           -148,951,240.87
    investment activity
    Subtotal ofcashin-flowfrom             163,082,000.00            239,272,000.00                -31.84%
    financing activity
    Subtotal ofcashout-flowfrom             177,155,081.66            124,931,753.63                 41.80%
    financing activity
    Net cashflowarisingfrom                -14,073,081.66            114,340,246.37               -112.31%
    financing activity
    Net increasedamountofcash               1,054,902.13            -36,704,421.54
    and cashequivalent
    
    
    Main reasons for y-o-y major changes in aspect of relevant data
    
    √Applicable □ Not applicable
    
             Item               2018           2017       Y-o-ychanges
                                                           (+,-)    Note
    Netcashflowarisingfrom         -6,574,979.97     -2,093,068.05            The  credit  sales  for  jewelry
    operating activities                                                 wholesale  from  Sichuan  Tellus
                                                                  Company are not in the period of
                                                                  sales refund; and the goods margin
                                                                  are paid to the Chow Tai Fook
                                                                  (Shenzhen) Co., Ltd. by Anhui
                                                                  StarlightCompany
    Subtotalofcashin-flowfrom     1,283,663,305.04    686,489,369.68       86.99%Redemption of financial products
    investmentactivity                                                 increased in the period, bonus from
                                                                  enterprise with share participation
                                                                  increased and received the amount
                                                                  and interest of equity transfer from
                                                                  XinglongCompany
    Subtotalofcashout-flowfrom    1,261,960,622.90    835,440,610.55       51.05%Increase of the financial products
    investmentactivity                                                 investment   and   paying   the
                                                                  transaction  fee  to  SEHK  for
                                                                  transferring  equity  of  Xinglong
                                                                  Company
    Netcashflowarisingfrom         21,702,682.14   -148,951,240.87            The account and interest of equity
    investmentactivity                                                 transfer from Xinglong Company
                                                                  received
    Subtotalofcashin-flowfrom      163,082,000.00    239,272,000.00      -31.84%The newbank loansdeclined froma
    financingactivity                                                  year  earlier  and     minority
                                                                  shareholder‘s   investment   from
                                                                  Tellus  Starlight  Company  and
                                                                  Sichuan     Jewelry   Company
                                                                  increased
    Subtotalofcashout-flowfrom     177,155,081.66    124,931,753.63       41.80%The  amount  of  loan  payment
    financingactivity                                                  increased, liquidity loan principal
                                                                  and interest are paid in the period
                                                                  andintercoursefundstoSDG
    Netcashflowarisingfrom        -14,073,081.66    114,340,246.37            Thenewbank loansdeclined froma
    financingactivity                                                  year earlier and amount of loan
                                                                  paymentincreasedonay-o-ybasis
    
    
    Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
    
    □Applicable √Not applicable
    
    III. Analysis of the non-main business
    
    □ Applicable √ Not applicable
    
    IV. Assets and liability
    
    1. Major changes of assets composition
    
    In RMB
    
                       End of2018             Endof2017
                                                            Ratio
                   Amount    Ratiointotal   Amount   Ratiointotal  changes       Notesofmajorchanges
                               assets                 assets
    Monetary fund   169,512,260.69     10.22% 161,793,218.56     11.53%  -1.31%
    Account         86,104,660.51     5.19% 44,215,236.68     3.15%   2.04%
    receivable
    Inventory        12,342,854.40     0.74% 12,646,227.22     0.90%  -0.16%
    Investment  real  503,922,413.70     30.39% 73,223,512.21     5.22%  25.17%
    estate
    Long-term equity  224,644,766.21     13.55% 284,464,749.15     20.27%  -6.72%
    investment
    Fix assets       112,674,017.53     6.79% 120,296,822.84     8.57%  -1.78%
    Construction in    12,843,571.97     0.77% 378,160,896.69     26.95%  -26.18%
    process
    Short-term loans  143,000,000.00     8.62% 120,000,000.00     8.55%   0.07%
    Long-term loans   34,934,887.55      2.11% 38,600,000.00     2.75%  -0.64%
    Assets heldfor    85,017,251.77     5.13%                        5.13%
    sale
    Other current    332,432,494.44     20.05% 219,582,250.70     15.65%   4.40%
    assets
    
    
    2. Assets and liability measured by fair value
    
    □ Applicable √ Not applicable
    
    3. Right of the assets restrained till end of the Period
    
    Found more in the ―Auditing Report 2018‖ disclosed on the same day in Juchao Website: 49. Assets with
    
    ownership or use right restrained listed in Note VI. Items of Consolidate Statement
    
    V. Investment
    
    1. Overall situation
    
    √Applicable □Not applicable
    
     Investment amountintheperiod(RMB)  Investmentamountatsameperiodoflast             Changes
                                            year(RMB)
                       168,971,900.00                   97,600,000.00                        73.13%
    
    
    2. The major equity investment obtained in the reporting period
    
    √Applicable □Not applicable
    
    In RMB
    
                                                            Statu                  Dateof Index
     Name  Princi Method Amount                             Type sas       Current  Whet disclos  of
      of    pal    of     of   Shareh Capital           Termof  of   of  Expec investment  her
    invested busine investm investme olding sources   Partners   investm produ  the   ted  profitand litigati ure(if disclos
    compan   ss    ent     nt                          ent   cts  balan return   loss    on  applica ure(if
      y                                                      ce                     ble  applica
                                                            sheet                    )    ble
                                                            date                           )
                                                                                       Found
                                                                                       more
                                                                                       in
                                       Chengdu                                          Notice
                                       Ruihang                                           (No.:
                                       Jewelry Co.,                                        2017-0
                                       Ltd, Chengdu                                       53)
    Sichuan                              Caizhiyuan                                        release
    Tellus  Sales                         JewelryCo.,        Sales Regi                        don
    Jewelry of   New   70,000,0 66.67 Fund-rai Ltd.,Chengdu 2July  of   strati      3,081,288.     8July Securit
    Technol jewelr establis   00.00    % sing    Kaixing     2047   jewelr on    0.00      75 N    2017  ies
    ogy Co., y    hed                      IndustrialCo.,       y    comp                        Times,
    Ltd.                                 Ltd.and                leted                        Hong
                                       Sichuan                                           Kong
                                       Baoxie                                           Comm
                                       Commercial                                        ercial
                                       Management                                        Daily
                                       Co., Ltd.                                          and
                                                                                       Juchao
                                                                                       Websit
                                                                                       e
                                                                                       Found
                                                                                       more
                                                                                       in
                                                                                       Notice
                                                                                       (No.:
                                                                                       2018-0
                                                                                       11)
    Shenzhe Prope                                         Prope                            release
    n      rty                                     Not   rty   Com                        don
    Zhongti leasin Capital 98,971,9 100.00 Fund-rai           fixed  leasin plete      -12,585,23     9Feb. Securit
    an     gand increas    00.00    % sing    N/A       deadlin gand dthe   0.00     4.01 N    2018  ies
    Industri mana e                                 e     mana chan                        Times,
    al Co,.  geme                                         geme ges                         Hong
    Ltd.    nt                                            nt                               Kong
                                                                                       Comm
                                                                                       ercial
                                                                                       Daily
                                                                                       and
                                                                                       Juchao
                                                                                       Websit
                                                                                       e
    Total    --    --   168,971,  --     --       --       --    --   --   0.00 -9,503,945  --    --    --
                       900.00                                               .26
    
    
    3. The major non-equity investment doing in the reporting period
    
    □ Applicable √ Not applicable
    
    4. Financial assets investment
    
    (1) Securities investment
    
    □ Applicable √ Not applicable
    
    The Company had no securities investment in the reporting period.
    
    (2) Derivative investment
    
    □ Applicable √ Not applicable
    
    The Company has no derivatives investment in the Period
    
    5. Application of raised proceeds
    
    √Applicable □Not applicable
    
    (1) Overall application of raised proceeds
    
    √Applicable □Not applicable
    
    In 10 thousand Yuan
    
                                                                            Usage of
                                              Total   Cumulativ  Ratioof            the
                              Total     Total    raised   eraised  cumulative   Total   retained   Raised
                      Total    raised  accumulati capitalhas  capitals   raised  accumulati  raised   capitals
       Year    Way    raised    capital   veraised  purposeof   has    capitals  veraised   capitals   idlefor
                     capitals    used    capitals    uses   purposeof   has    capitals  andwhat  morethan
                                                      uses   purposeof         isexpected
                             inPeriod   used   changedin changedin   uses    unused  toinvested twoyears
                                             Period     total    changed          withthose
                                                                             capitals
                                                                            As    of
                                                                            December
            Non -                                                           31,  2018,
    2015年    Public        63,352   8,245.02  56,430.27         0   17,097.4    26.99%         0 the               0
            Offering                                                          fund-raisin
                                                                            g
                                                                            investment
                                                                           projects of
                                                                           the
                                                                           company‘s
                                                                           non-public
                                                                           offering of
                                                                           shares   in
                                                                           2015  have
                                                                           completed
                                                                           investment
                                                                           or  capital
                                                                           increase,
                                                                           andall  the
                                                                           raised
                                                                           funds have
                                                                           been  fully
                                                                           used.
    Total        --       63,352  8,245.02 56,430.27       0  17,097.4   26.99%       0    --          0
                                Explanation onGeneralusageofraisedcapital
    According to the ―Proposal of the Company‘splan for non-public offeringof shares‖ and other related proposals deliberated and
    approved bytheCompany‘s19th extraordinarymeetingoftheseventhboardofdirectorsandthe4th extraordinarygeneral meeting
    of 2014,andthe―Approvalfornon-public offeringofsharesofShenzhenTellus(Group)Co.,Ltd.‖(CSRClicense No.[2015]173)
    approved by China Securities Regulatory Commission, the Company has adopted non-public offering of shares to issue RMB
    ordinary shares(Ashares)of77million shares,andtheissuepriceis8.40Yuan/Share.Thetotalraisedfundsofthis issuanceare
    646,800,000 Yuan;thenetamountofraisedfundsis633,520,000Yuanafterdeductingthe issuancecostsof13,280,000Yuan.On
    March 12, 2015, Ruihua Certified Public Accountants (special general partnership) has verified the capital of this issuance and
    issued "CapitalVerificationReport"RHYZNo.[2015]48330003.Ended as31st December2018, theprojectswithfundraisingnon
    publicly offeringin2015arebeingcompletedorcapitalincreasecompletion,allthefundshavebeenused.
    
    
    (2) Situation of committed project of raised proceeds
    
    √Applicable □Not applicable
    
    In 10 thousand Yuan
    
                                                 Amount  Investme
                                                   of      nt   Predicted                Project
                     Projects   Total    Total   Amount accumula program serviceab  Profit  Reachthe feasibility
                     changed committe investme
     Committedinvestment  ornot     d           invested   ted    tillthe    le    realized predicted   was
     projects &investment  (includin investme  ntafter   inthis  investme period-en condition  inthis  interestor changed
        ofraisedfund       g     ntof   adjustme
                     changed  raised          period  nttillthe    d    dateof   year     not   hugelyor
                     partially) capitals   nt(1)         period-en (3)=(2)/(1  project                  not
                                                  d (2)     )
    Investment projectcommitment
    1.Tellus Shuibei     Y        26,000 33,097.4 1,036.69 27,035.94  81.69%             0 Not     N
    Jewelry Building                                                              applicabl
                                                                             e
    2.1Newly increased                                                            Not
    decoration costsof    Y         6,809 2,799.79   208.33   244.33   8.73%             0 applicabl N
    Tellus Shuibeiproject                                                          e
                                                                             Not
    2.2Bank loanspayment N        19,150   19,150      0   19,150 100.00%             0 applicabl N
                                                                             e
    2.3 SichuanRegional                                                           Not
    Jewelry Channel     Y            0   10,000   7,000   10,000 100.00%          308.13 applicabl N
    Platform Company                                                            e
    2.4Retail marketof                                                            Not
    jewelry business     Y        19,500      0      0      0   0.00%             0 applicabl Y
                                                                             e
                                                                             Not
    2.5Jewelry e-business  Y         4,500      0      0      0   0.00%             0 applicabl Y
                                                                             e
    2.6Jewelry training                                                            Not
    business           Y         3,800      0      0      0   0.00%             0 applicabl Y
                                                                             e
    2.7Automobile leasing                                                          Not
    business supportingthe Y         2,630      0      0      0   0.00%             0 applicabl Y
    jewelry market                                                               e
    Subtotal of            --     82,389 65,047.19 8,245.02 56,430.27   --      --     308.13   --      --
    commitment projects
    Investment orientationforoverraisedfund
    N/A
    Total                --     82,389 65,047.19 8,245.02 56,430.27   --      --     308.13   --      --
                    Tellus ShuibeiJewelryBuildinghascameintoserviceofficially.
                    2. IntheinvestmentprojectsofraisedfundsforsupplementingtheCompany'sworkingcapital:
                    (1) Repaymentofbankloansof191,500,000Yuanhasbeencompleted.
    Situation aboutnot    (2) Newly increased decoration costs of Tellus Shuibei project will put into use according to the
    coming uptoschemed constructionprogress.(3)On7April2017and4May2017,theCompanyholdingtheofficial7thmeeting
    progress orexpected   of 8th BOD and AGM of 2016 respectively,deliberated and approved the ―Proposal of Canceling Part of
    revenue andthe      the Fund-Raised Investment Projects‖, that is, the jewelry e-business, jewelry training, jewelry market
    reason(In specific    matching with the automobile leasing business supporting the jewelry market are determined to
    project)           removed.(4) On8 May2017 and25May2017, theCompanyholding the8th extraordinarymeetingof8th
                    BOD and First Extraordinary shareholders meeting of 2017 respectively, deliberated and approved the
                    ―Proposal of ‖Changed the Fund-Raised Purpose and Investment on JewelryChannel Platform Company
                    in Sichuan area‖, that is, the Company will contribute fund-raised of 100 million Yuanin the project of
                    Sichuan Regional Jewelry Channel Platform Company, the Company takes 66.67% equity in the above
                    mentioned newcompany.(5)On12December2017and28December2017,theCompanyholdingthe13th
                    extraordinary meeting of 8th BOD and Third Extraordinary Shareholders Meeting of 2017 respectively,
                    deliberated and approved ―Proposal of Change the Projects with Fund-Raised Investment‖, that is, the
                    Company willchangethefund-raisedprojectsaccordingtoactualconditions,increasedmoreinvestmentin
                    Tellus Shuibei Jewelry Buildings and the total fund raised investment, the second capital for decoration
                    will reduceto27.9979millionYuanfromformer68.09millionYuan,the13.93millionYuanwhichhasno
                    projects occupied,the40.0921 millionYuanreducedfromdecoration and16.9519millionYuanfrompart
                    of the interest and financial products will totally (70.974 million Yuan) invested in the follow-up
                    construction ofTellusShuibeiJewelryBuilding, theTellusShuibeiJewelryBuilding projectplanstohave
                    330.974 millionYuanfromthefund-raisedafterchanged.
                    (1) JewelryE-business:  Jewelrye-commercebusiness:thejewelrye-commercebusinessmarketishighly
                    competitive, payback period is long, the Company needs to bear some business risks and long-playing
                    losses, which may bring adverse effects on the Company‘soverall performance if investing the jewelry
                    e-commerce platform according to the original plan under the current market situation, so the Company
                    has decidedtosuspendtheplantouseraisedfundstoinvestinthisproject.Theraisedfundsintheoriginal
                    plan shallbeusedforotherprojects.(2)Jewelryretailmarketbusiness:since2015,affectedby thedecline
                    of prosperity in jewelry industry and the raise of property costs, large jewelry retail markets across the
                    country haveshrunk thebusinessand reducedthe incomeand profits,ifthe Companycontinuedtoinvest
                    large fundsintothejewelryretailmarket,thebusinessriskswouldbelarge,sotheCompanyhasplannedto
                    cancel theraised-fundinvestmentplanforthejewelryretailmarketbusiness.(3) Jewelrytrainingbusiness:
                    this project has not yet been put into use. The Company has started to investigate some schools in early
    Explanation ongreat  2015 and found that there are already many jewelry training schools in Shenzhen Shuibei area and the
    changes offeasibility  market competition is rather intense; at the same time, affected by the decline of prosperity in jewelry
    of project          industry, the demand for training business has substantially reduced. If the Company invests in the
                    construction ofjewelrytrainingschools,thereturnoninvestmentisrelativelylowandthepaybackperiod
                    is long,sotheCompanyhasdecidedtosuspendtheinvestmentplanforthisproject,andwaittoargueuntil
                    the businessofjewelryserviceindustry goessmoothlyand enough resourcesareaccumulated.Theraised
                    funds intheoriginalplanshallbeusedforotherprojects.  (4)Automobileleasingbusinesssupportingthe
                    jewelry market: the project has not yet been put into use. One main reason is that Shenzhen Municipal
                    Government announced the implementation of car-purchase restriction policyon December 29, 2014, the
                    car purchasetakestwomethods,i.e.lotteryandbidding,thispolicymadetheCompanyunabletocarryout
                    this businessasplanned;anotherreasonisthattheprosperityofjewelryindustryhasdeclined,thedemand
                    for automobile leasing has greatly reduced in jewelry industry of Shuibei, and the business prospects are
                    influenced, so the Company has decided to cancel the investment in this project. The raised funds in the
                    original planshallbeusedforotherprojects.
    Amount, usageand   Notapplicable
    progress ofusingfor
    fund raisingoutofthe
    plan
    Change of         Notapplicable
    implementation place
    of investmentproject
    of raisedcapitals
                    Applicable
                    Occurred inpreviousyear
                    1. On7April2017and4May2017,theCompanyholdingtheofficial7thmeetingof8thBODandAGMof
                    2016 respectively, deliberated and approved the ―Proposal of Canceling Part of the Fund-Raised
                    Investment Projects‖, that is, the jewelry e-business, jewelry training, jewelry market matching with the
                    automobile leasingbusinesssupportingthejewelrymarket aredetermined tocanceled.2.On8May2017
                    and  25 May 2017, the Company holding the 8th extraordinary meeting of 8th BOD and First
                    Extraordinaryshareholders  meeting of 2017 respectively, deliberated and approved the ―Proposal
    Adjustment of       of‖ChangedtheFund-Raised Purpose andInvestmenton JewelryChannelPlatformCompanyin Sichuan
    implementation way   area‖, that is, the Company will contribute fund-raised of 100 million Yuan in the project of Sichuan
    for investmentproject  Regional Jewelry ChannelPlatform Company,the Company takes 66.67% equityin the above mentioned
    of raisedcapitals     new company. 3.On 12 December 2017 and 28 December 2017, the Company holding the
                    13thextraordinary meetingof8thBODandThirdExtraordinaryShareholdersMeetingof2017respectively,
                    deliberated and approved ―Proposal of Change the Projects with Fund-Raised Investment‖, that is, the
                    Company willchangethefund-raisedprojectsaccordingtoactualconditions,increasedmoreinvestmentin
                    Tellus Shuibei Jewelry Buildings and the total fund raised investment, the second capital for decoration
                    will reduceto27.9979millionYuanfromformer68.09millionYuan,the13.93millionYuanwhichhasno
                    projects occupied,the40.0921millionYuanreducedfromdecoration and16.9519million Yuanfrompart
                    of the interest and financial products will totally (70.974 million Yuan) invested in the follow-up
                    construction ofTellusShuibeiJewelryBuilding, theTellusShuibeiJewelryBuilding projectplanstohave
                    330.974 millionYuanfromthefund-raisedafterchanged.
                    Applicable
                    On April27,2015,theCompanyheldthethirtiethinterimmeetingoftheseventhboardofdirectorswhich
                    deliberated and approved the motion about replacing the self-raised funds beforehand invested in
    Particular aboutthe   fund-raising project with the raise funds, and agreed the Company to replace the self-raised funds of
    advanced inputand   114,162,000 Yuaninvested in fund-raising project with the raise funds, of which 15.6 million Yuanwas
    replacement        used to replace and supplement the beforehand invested self-raised funds of the Company‘s circulating
                    funds and98,562,000 Yuanwasused toreplaceand supplementthe beforehandinvestedself-raised funds
                    of Tellus ShuibeiJewelry Building project. The Company‘s independent director and sponsor institution
                    have expressestheiragreementonthismatter.
    Temporarily        Notapplicable
    supplement forthe
    current capitalswith
    idle raisedcapitals
    Balance oftheamount Applicable
    for raised-fund      The fund-raising investment projects of the company‘s non-public offering of sharesin 2015 have
    investment projectafter completedinvestmentorcapitalincrease,andalltheraisedfundshavebeenused.Thetotalfundsraisedas
    implementation and   of December 31, 2018 amounted to 8,959,100 yuan, which was net interest income generated during the
    reasons            depositingperiodofraisedfunds.
                    In viewofthefactthatthefund-raisinginvestmentprojectsofthecompany‘snon-publicofferingofshares
    Use  of  funds  and havecompletedinvestmentorcapitalincrease,inordertofurtherimprovetheusageefficiencyoftheraised
    allocation for reserved funds,the2ndmeetingoftheninthboardofdirectors ofthecompanyreviewedandapprovedtheProposal
    raised capital       on the Company to Use the Surplus Raised Funds to Permanently Supplement the WorkingCapital, and
                    agreed the company to use the surplus raised funds and interest income from the fund-raising investment
                    projects topermanentlysupplementtheworkingcapital.
    Issues orother
    conditions foundinuse N/A
    of fundraisedand
    disclosure
    
    
    (3)The changed project of raised proceeds
    
    √Applicable □Not applicable
    
    In 10 thousand Yuan
    
                                                                                    Project
                      Totalraised          Accumulati Investment  Predicted                    feasibility
             Correspondi fundsplans  Amount   vefunds  programtill serviceable   Profit    Reachthe    was
    Project after ngoriginal  toinvested   actually    actually     the     condition  realizedin  predicted   changed
      changed   project     after    investedin  invested  period-end   dateof    thisyear   interestor  hugelyor
                      changed(1) thePeriod endedasthe (3)=(2)/(1)   project            not(Y/N)   notafter
                                        Period(2)                                      project
                                                                                    changed
    Tellus     Tellus
    Shuibei    Shuibei      33,097.4   1,036.69  27,035.94    81.69%                 0 N        N
    Jewelry    Jewelry
    Building   Building
    Newly     Newly
    increased   increased
    decoration  decoration
    costs of    costsof      2,799.79    208.33    244.33    8.73%                 0 N        N
    Tellus     Tellus
    Shuibei    Shuibei
    project    project
     Sichuan   Retail
    Regional   marketof
    Jewelry    jewelry
    Channel    business,      10,000     7,000    10,000   100.00%             308.13Y        N
    Platform   Jewelry
    Company   e-business,
             Jewelry
             training
             business,
             Automobile
             leasing
             business
             supporting
             thejewelry
             market
    Total         --      45,897.19   8,245.02  37,280.27    --        --        308.13    --        --
                              1. On 7 April 2017 and 4 May 2017, the Company holding the official 7th meeting of 8th
                              BOD andAGMof2016 respectively,deliberatedandapprovedthe―ProposalofCanceling
                              Part of the Fund-Raised Investment Projects‖, that is, the jewelry e-business, jewelry
                              training, jewelry market matching with the automobile leasing business supporting the
                              jewelry market are determined to canceled. 2. On 8 May 2017 and 25 May 2017, the
                              Company  holding  the  8th  extraordinary  meeting  of  8th  BOD  and  First
                              Extraordinaryshareholders meeting of 2017 respectively, deliberated and approved the
                              ―Proposal of ‖Changed the Fund-Raised Purpose and Investment on Jewelry Channel
                              Platform Company in Sichuan area‖, that is, the Company will contribute fund-raised of
    Explanation onreasonsofthechanges, 100 million Yuanin the project of Sichuan Regional JewelryChannel Platform Company,
    decision-making proceduresand     the Company takes 66.67% equity in the above mentioned new company. 3. On 12
    information disclosure(explainby    December 2017 and 28 December 2017, the Company holding the 13thextraordinary
    specific project)                meeting of 8th BOD and Third Extraordinary Shareholders Meeting of 2017 respectively,
                              deliberated andapproved―ProposalofChangetheProjects withFund-Raised Investment‖,
                              that is, the Company will change the fund-raised projects according to actual conditions,
                              increased more investment in Tellus Shuibei Jewelry Buildings and the total fund raised
                              investment, the second capital for decoration will reduce to 27.9979 million Yuan from
                              former 68.09 million Yuan,the 13.93 million Yuanwhich has no projects occupied, the
                              40.0921 million Yuanreduced from decoration and 16.9519 million Yuanfrompart of the
                              interest and financial products will totally (70.974 million Yuan)investedin the follow-up
                              construction of Tellus Shuibei Jewelry Building, the Tellus Shuibei Jewelry Building
                              project planstohave330.974millionYuanfromthefund-raisedafterchanged.
    Particular andreasonsoffailto      1.TellusShuibeiJewelryBuildinghasacceptancecompletedinAugust2018andofficially
    reached thetargetadvanceor       putintouse.
    anticipated income(explainby      2. Newly increased decoration costs of Tellus Shuibei project will put into service
    specific project)                accordingtotheprogressoftheconstruction
    Explanation onmajorchangeson
    project feasibilityafterproject      N/A
    changed
    
    
    VI. Sales of major assets and equity
    
    1. Sales of major assets
    
    □Applicable √Not applicable
    
    The Company had no sales of major assets in the reporting period.
    
    2. Sales of major equity
    
    √Applicable □Not applicable
    
                                 Netprofit             Ratioof
                                 contributed            thenet                                      Implementedon
                                 bythesold             profit              Whetherit          Ownership schedule(Y/N),
                          Trading equityfrom             from                wasa  Relationship transferred  explainedthe
     Counterpart  Equity  Sales price(10 period-begin Impactonthe  equity  Pricingprincipal  related   withthe  completely  reasonsand  Disclosure    Disclosureindex
                sold   day thousand  todatefor   Company  sales  in             transaction counterparty  ornot  countermeasure   day
                          Yuan)  sales(in10            totalnet               (Y/N)             (Y/N)     fornot
                                 thousand             profitof                                       completedon
                                  Yuan)                the                                          schedule
                                                    Company
                                                          In  accordance
                                                          with the Assets
              43%                        Theimpacton        Appraisal
    Shenzhen   equityof                      totalprofitof         Report                                                  Notice(No.:2018-040)
    Runhe Unite Shenzhen 15                  theCompany         (Guozonglian                                             releasedonSecurities
    Investment  Xinglong  June  28,667      -551 approximately        Ping  Bao  Zi N       N/A      N       Onschedule   20June  Times,HongKong
    Development Machinery 2018                amountedas         920170   No.                                    2018    CommercialDailyand
    Co., Ltd.    Mould                       201.88million                                                               JuchaoWebsite
                                                          3-0083  issued                                            (www.cninfo.com.cn).
              Co.,Ltd.                      Yuan              by
                                                          Guozhonglian
                                                          Land     Real
                                                          Estate   Assets
                                                           Appraisal Co.,
                                                           Ltd.-     the
                                                           enterprise with
                                                           qualificationof
                                                           exercising
                                                           securities  and
                                                           futures
                                                           business,  the
                                                           assessment  is
                                                           adopted
                                                           asset-based
                                                           approach  and
                                                           income
                                                           approach
    
    
    VII. Analysis of main holding Company and stock-jointly companies
    
    √Applicable □Not applicable
    
    Particular about main subsidiaries and stock-jointly companies net profit over 10%
    
    In RMB
    
      Company     Type       Main     Register   Totalassets  NetAssets   Operating   Operating   Netprofit
       name                business     capital                        revenue     profit
    Shenzhen
    Auto                 Salesofauto RMB58.96  367,507,215. 329,287,759. 19,586,969.8 75,377,436.9 71,806,075.5
    Industry and Subsidiary    and       million            83        22         0         8         5
    Trade                 accessories
    Corporation
    Shenzhen              Auto
    SDG Huari             maintenance
    Auto       Subsidiary    and       USD5     70,696,317.9 27,344,193.3 35,692,198.1  -534,194.27 -1,539,161.4
    Enterprise              production  million             0         4         9                  4
    Co., Ltd.               andsalesof
                         accessories
    Shenzhen                        RMB
    Zhongtian   Subsidiary    Property    366.2219    585,058,667. 367,396,026. 14,699,530.7 -12,585,880. -12,585,234.
    Industrial              rental      million            78        29         6        50        01
    Co,. Ltd.
    Shenzhen
    Huari Toyota Subsidiary    Salesof    RMB2     53,804,879.5 2,096,342.64 171,904,862. 3,492,698.33 3,501,822.26
    Automobile             automobile  million             8                 83
    Sales Co.Ltd
    Shenzhen              Manufacture
    Xinyongtong            ofinspection
    Auto Vehicle                     RMB19.61  10,916,976.2
    Inspection   Subsidiary    equipment   million             3 5,718,773.31 5,537,122.24 2,035,621.51 1,653,222.79
    Equipment              formotor
    Co., Ltd.               vehicle
    Shenzhen
    Tellus                 Inspection
    Xinyongtong Subsidiary    andrepairof RMB32.90  74,982,130.3 56,389,412.6 11,967,233.5 5,358,492.81 4,649,851.02
    Automobile             motor     million             4         0         0
    Development            vehicle
    Co. Ltd
    Anhui Tellus Subsidiary    Jewelrysales RMB9.8    13,367,177.6 4,692,436.76 12,849,125.2 -5,652,305.4 -5,652,295.4
    Starlight                         million             4                  0         3         3
    Jewelry
    Investment
    Co., Ltd.
    Sichuan
    Tellus                          RMB150   136,409,389. 135,459,429. 138,377,981.
    Jewelry     Subsidiary    Jewelrysales million            36        90        65 6,326,229.93 4,621,702.04
    Technology
    Co., Ltd.
    Shenzhen
    Zungfu
    TellusAuto  Jointstock    Carsalesand RMB30    279,725,679. 114,866,924. 1,212,159,35 29,011,810.0 24,539,734.0
    Service Co.,  Company     maintenance million            00        00       5.00         0         0
    Ltd
    Shenzhen              Manufacture
    Dongfeng   Jointstock    and       RMB100   846,048,516. 405,653,062. 494,413,981. 337,282,475. 274,312,241.
    Automobile  Company     maintenance million            34        12        09        02        81
    Co., Ltd.               of
                         automobile
    Shenzhen              Investmentin
    Tellus Gman Jointstock    industry,    RMB      392,842,245. 124,078,027. 77,472,993.9 10,230,461.9 11,589,473.5
    Investment   Company     property    123.70496          54        19         2         0         5
    Co., Ltd.               management million
                         andleasing
    
    
    Particular about subsidiaries obtained or disposed in report period
    
    √Applicable □Not applicable
    
                 Name             WaytoobtainedanddisposeinthePeriod     Impactonoveralloperationand
                                                                        performance
    Shenzhen XinyongtongDongxiaoAuto.   Soldbyequitytransfer              Achievedtransferinvestmentincomeof
    Inspection Co.,Ltd.                                             1,072,860.12Yuan
    
    
    Notes of holding and shareholding companies
    
    The Company‘s shareholding company, Shenzhen Dongfeng Motor Co., Ltd. (hereinafter referred to as ―Dongfeng Company‖),
    
    cooperated with Shenzhen Baoli Real Estate Development Co., Ltd. to develop urban renewal projects with the land use rights of its
    
    Longhua factory. After many negotiations and changes to the contract (agreement), the compensation method for the demolition of
    
    Dongfeng Company‘s Longhua factory was finally determined as the monetary compensation for the relocated residential area and
    
    the relocation of commercial real estate (Thearea is 1350 square meters). On December 27, 2017, the two parties signed the
    
    Pre-Settlement Agreement for the Longhua Factory Demolition and Reconstruction Cooperative Development Project‖,in 2018,
    
    Dongfeng Company confirmed the compensation income of 322.68 million Yuan for the relocation of Longhua factory; the Company
    
    confirmed the investment income of 68.57 million Yuan according to the shareholding ratio.
    
    VIII. Structured vehicle controlled by the Company
    
    □Applicable √Not applicable
    
    IX. Future Development Prospects
    
    (I) Industry pattern and development trend
    
    During the reporting period, due to the impact of the international and domestic economic situation, the domestic
    
    economic growth slowed down and entered a stable range. After going through the bottom shocks in recent years,
    
    although the market of jewellery industry was still uncertain due to the overall economic environment, in the long
    
    run, benefiting from the increase in per capital disposable income of urban residents, the increasing millennial
    
    young consumers and emerging middle class group, the demand for high-quality consumer demand and the
    
    increase in risk aversion, the gold jewelry market has recovered to some extent, and the industry has entered a
    
    recovery phase. According to Euromonitor data, the market size of China‘s gold and jewellery industry reached
    
    696.5 billion yuan in 2018, a year-on-year increase of 6.72%. Although the growth rate of total retail sales of
    
    consumer goods in 2018 declined, the gold jewelry industry is still one of the fastest growing consumer goods
    
    categories. .
    
    Under the dual stimulus of domestic tax reduction and encouragement of consumption upgrading policy, the
    
    consumer side will gradually become the engine of economic growth. Under the economic new normal
    
    background, with the maturity of the market and consumers‘ gradually higher requirements to the product quality,
    
    the gold and jewellery companies with brand connotation and high recognition will be increasingly favored by
    
    consumers. The technology overlay of internet + mode, internet of things, artificial intelligence, communication
    
    and other technologies has further promoted the transformation of business ecology, and the jewelry industry has
    
    also shifted from the original batch production expansion to the consumer-oriented and omni-channel sales
    
    management. The unceasing overlay and penetration of gold jewelry category and the possibility of multi-scenario
    
    consumption have increased the repurchase rate of products. Low-tier cities have become the main sinking
    
    channels for gold jewelry enterprises in the future, the differentiation and upgrading of consumer groups may also
    
    drive the development of the industry. It is foreseeable that in 2019, the gold jewelry consumer market will breed
    
    and give birth to more development opportunities.
    
    (II) The company development strategy
    
    Since formulated the strategic plan for transforming into a third-party integrated operation service provider in the
    
    jewelry industry in 2014, Tellus has been steadily pushing forward its strategy in accordance with the established
    
    strategy. Through the implementation of various transformation projects in recent years, we have accumulated
    
    practical experience in the jewelry industry, and further clarified the path of transformation,strategic layout and
    
    core work content, namely,took becoming the most influential third-party integrated operation service provider of
    
    fashion jewelry industry as the company‘s vision; took promoting industry norms, reducing industry costs,
    
    creating industry value, and enhancing industry efficiency as the mission; the strategy implementation path was to
    
    give full play to the advantages of state-owned listed companies, based on Shuibei-Buxin physical platform, with
    
    internet integrated service platform as the hub, with supply chain financial services as a means, with innovation
    
    and entrepreneurship platform as a breakthrough, with jewelry industry requirements as the goal, ploughed into
    
    the upstream, midstream, and downstream of jewelry industry supply chain,opened up the jewellery industry
    
    chain information island, formed the effective data cluster of industry chain, providedthe industry‘s
    
    comprehensive value-added services, and created an O2O vertical ecosystem in the jewelry industry. In the future,
    
    the company will actively adopt a variety of innovative models to promote the implementation of the company‘s
    
    transformation strategy.
    
    1. Physical platform
    
    (1) Shuibei Jewelry Industrial Park Project: The physical platform is the core foundation of the company‘s overall
    
    strategy. As of the end of the reporting period, the company‘s projects located at the Tellus Gmen Gold Jewelry
    
    Industrial Park included: the phase I project of Tellus ShuibeiJewellery Building built by the company‘s
    
    wholly-owned subsidiary, the Shuibei Jinzuo Building project constructed by the joint venture and the Xinglong
    
    Gold and Jewelry Building constructed by the joint stock companies have been completed and put into use; the
    
    phase II project of Tellus Shuibei Jewellery Building is also about to be put into construction. Relying on the
    
    above-mentioned physical platforms, the company will give full play to its resource advantages, make overall
    
    planning for the business format, and innovate the operation and management model, provide basic property
    
    services, business butler services, marketing promotion services, talent services, financial services, testing,
    
    packaging, catering, innovation and entrepreneurship, design creativity, incubators, warehousing, gold leasing and
    
    other industries and services supporting value-added contents by grafting ―Jinteli ICON‖ jewelry business butler
    
    services, innovation and entrepreneurship platforms, central treasury and safe deposit box projects, create a
    
    jewelry industry innovation ecosystem, and energize the transformation and development of the jewelry industry.
    
    (2) In the structural reform strategy and plan of the jewelry industry supply side in the Shuibei-Buxin area planned
    
    by the Shenzhen Municipal Government and the Luohu District Government, Buxin areais planned to be the
    
    jewelry intelligent manufacturing base of Luohu District. The company has a number of properties in the Buxin
    
    industrial zone, and is the largest owner of the 04 and 05 subunits of the Buxin urban renewal unit planning
    
    project. The company will actively promote the implementation of the reform project, improve the quality of the
    
    company‘s assets and lay a solid foundation for the company‘s strategic transformation under the established
    
    planning scheme of Luohu District.
    
    2. Regional channel platform
    
    In 2017, the company used the raised funds to cooperate with the channel vendors with strong strength in Sichuan
    
    to co-invest and establish Sichuan Tellus Jewelry Technology Co., Ltd. During the reporting period, Sichuan
    
    Tellus, the first project of the regional channel platform, was smoothly launched, and the supply chain settlement
    
    supporting service system was officially put into operation, the ERP system of the jewelry industry was also put
    
    into trial run, a standard business process system conforming to the industry situation was formed through practice
    
    and experience, risk management and control was reasonable and effective, achieved an annual business income
    
    of 138 million yuan and a total profit of 6.3262 million yuan. In the future, Sichuan Tellus will continue to give
    
    full play to its own advantages, improve and innovate its own business model, create a successful example of
    
    regional channel platform, and lay a solid foundation for the replication and expansion of the business model
    
    nationwide.
    
    3. Innovativeand entrepreneurial platform
    
    In order to cultivate the innovativeand entrepreneurial soil for Shenzhen jewelry industry and promote the
    
    transformation and upgrading of Shenzhen jewelry industry, Tellus Group plans to invest in the construction of
    
    ―Jewelry Industry Innovative and Entrepreneurial Base‖. The project is located on the third floor of the phase I
    
    podium building of Tellus Shuibei Jewelry Building, with a construction area of approximately 3,500 ㎡. ―Tellus
    
    Innovative and Entrepreneurial Base‖ is the first batch of licensed innovative and entrepreneurial bases in the
    
    jewelry industry in Shenzhen.
    
    The innovative and entrepreneurial base will take ―jewelers‖, ―Jinchuang Tellus makers service‖, ―new technology
    
    and new materials R&D platform‖, ―Xinggongchang designer platform‖ and ―jewelry business incubation
    
    platform‖ as five sub-platforms for construction, accelerate the space renovation and upgrading, ―Xinggongchang‖
    
    innovative and entrepreneurial space, jewelry industry financial incubation system, new technology and new
    
    materials laboratory, jewelry testing platform and other key projects, build the entire process incubation
    
    acceleration system for the small and micro enterprises from makers‘ training to entrepreneurship, entrepreneurial
    
    support, product marketization to the development and listing of small and micro enterprises, which provides a
    
    rooted entrepreneurial platform for the makers so as to enhance the entrepreneurial success rate of the jewelry
    
    industry and energize the industry innovation.
    
    4. Jewelry financial service platform
    
    With the full implementation of China‘s Golden Tax Phase III system and the increasing number of listed
    
    companies in the jewelry industry, the overall management standardization and compliance of the jewelry industry
    
    is increasing, and the entire industry is paying more and more attention to legal compliance operations. Under the
    
    circumstances of this market transformation, the credit and capital advantages brought by the company as a
    
    state-owned enterprise and a listed company have become more and more prominent, its popularity and industry
    
    status in the jewelry industry has been highlighted, and the conditions for establishing a large financial service
    
    platform are maturing day by day. In the future, Tellus will give full play to its comprehensive resource
    
    advantages, explore and carry out various financial services such as financing guarantee business, micro-credit
    
    business, factoring and pawn through investment, acquisition and other means to provide standardized and fast
    
    financial services to customers nationwide.
    
    5. Internet integrated service platform
    
    The Internet integrated service platform is the main channel for linking the entire Tellus jewelry ecosystem, and
    
    the ultimate carrier for data precipitation, and also the core platform for gathering resources of the entire industry
    
    chain. By focusing on the resources and data of each business platform, Tellus will take the internet integrated
    
    service platform as the hub and plough into the upstream, midstream and downstream of the jewelry industry
    
    chain. At the upstream, control and hold the internet integrated service platform by the jewellery fund investment
    
    method, introduce the channel resources of core brand owners and production wholesalers in the upstream of
    
    Shuibei area physical platform into the internet integrated service platform, and realize the integration of upstream
    
    resources. At the midstream, make strategic cooperation with important channel providers in each province or
    
    large regions, establish regional channel platforms, introduce supply chain resources of regional channel providers,
    
    and realize the integration of midstream resources. At the downstream, introduce the terminal retail store
    
    resources in various regions through value-added services such as financial services and ERP systems, and
    
    achieve resource integration of downstream terminals through data management. Each platform, section and
    
    service support each other, establish and strengthen partnerships, and jointly build a third-party service platform
    
    for the jewelry industry, create a jewelry industry ecosystem, and energize the innovation and development of the
    
    jewelry industry.
    
    (III) The company’s 2019 annual business plan
    
    In 2019, the company will seriously implement the ―Double Hundred Actions‖ in strict accordance with the work
    
    deployment of the board of directors, ensure the smooth realization of the ―13th Five-Year‖ planning objectives,
    
    and strive to advance various tasks.
    
    1. Original main business: On the basis of maintaining the stable scale of car sales and service business, actively
    
    explore the new model of incremental business of Huari Company. In the aspect of resource assets business,
    
    properly solve the problems left over from history through refined management, continue to tap potential and
    
    increase revenue, meanwhile, innovate the planning type through scientific design, transform and upgrade the
    
    original property, and improve asset quality and income level. In terms of enterprise management, continue to
    
    improve the management level, optimize and adjust the enterprise structure, maximize the value of the
    
    participating companies,gradually withdraw from the loss-making enterprises according to the plan,clean up the
    
    zombie enterprises, and enhance the enterprise vitality.
    
    2. Transformation business:
    
    (1) Continue to optimize and improve the business model of Sichuan Tellus Company, focus on promoting the
    
    supply chain settlement supporting service system and the ERP system in the jewelry industry, and increase the
    
    project revenue and profit items.
    
    (2) The key project of physical platform, i.e. phase I project of Tellus Shuibei Jewelry Building has been officially
    
    put into operation. The company will take advantage of various resources and actively explore innovative business
    
    models that rely on physical platforms to carry out various value-added services, and improve the comprehensive
    
    income of the project.
    
    (3) Actively promote the phase II project of Shuibei Jewelry Building and strive to put it into construction in 2019.
    
    (4) Continue to promote the Tellus jewelry industry mergers and acquisitions fund project, actively seek suitable
    
    targets for the company‘s transformation strategy, participate in and incubate the high quality projects through
    
    fund investment and mergers and acquisitions, and provide rich resources for strategic transformation.
    
    (5) Rapidly promote the implementation of the innovativeand entrepreneurial base project, serve the innovative
    
    and entrepreneurial enterprises through innovative value-added service, cultivate high-quality innovative
    
    enterprises, and inject new vitality into the industry.
    
    3. Management:
    
    (1) Strengthen human resource management, optimize performance management, and explore long-term incentive
    
    mechanisms.
    
    (2) Strengthen team building, enhance the transformation talents construction, and promote the overall quality of
    
    human resources.
    
    (3) Do a good job in risk internal control, strengthen risk management and control, and continue to improve the
    
    system and internal control system.
    
    (4) Thoroughly study and implement the spirit of the ―19th National Congress‖, combine party building work with
    
    the company‘s operation and management, continue to carry out the ―two studies and one do‖ and anti-corruption
    
    work, implement the targeted poverty alleviation work, and bring party building work to practice.
    
    (5) Implement the various tasks of informatization construction, and complete the IT system construction of the
    
    projects in Shuibei area and Sichuan Tellus Company in accordance with the overall business plan of the
    
    company.
    
    (6) Pay close attention to safety production, implement safety management responsibility system, eliminate safety
    
    hazards, and ensure safety and no accidents.
    
    (7) Strengthen the construction of corporate culture, focus on building a corporate culture atmosphere of striving
    
    to be the striver, and promote the healthy development of enterprises.
    
    (IV) Possible risks and countermeasures
    
    In the process of strategic transformation and project operation, we will objectively and clearly recognize the
    
    possible risks and take active and effective measures to prevent them:
    
    1. Risks caused by fluctuations in the macroeconomic situation
    
    In 2019, affected by the international environmental factors such as Sino-US trade disputes, exchange rate
    
    instability, and the domestic monetary policy shifting from relatively loose to stable, China‘s economy has entered
    
    a speed-shift period, and GDP growth has stepped into a stable ―new normal stage‖, the domestic economy is still
    
    facing a slowdown in growth, and the risk of increasing industrial restructuring pressure has an uncertain impact
    
    on the overall economic environment and company‘s operating results.
    
    In response to this risk, the company will actively take various preventive measures. The first is to continue to
    
    strengthen management, work hard, improve efficiency through scientific management, tap potential and increase
    
    revenue, and comprehensively improve the profitability of the original business; the second is to firmly promote
    
    the pace of strategic transformation of the company, promote the transformation of the project through innovative
    
    business models, expand the incremental market, expand the scale of business, look for new profit growth points,
    
    and provide a good foundation for the company‘s long-term stable development.
    
    2. Risks brought about by transforming into new areas
    
    In recent years, the company has fully promoted the strategic goal of transforming into a third-party integrated
    
    operation service provider in the jewelry industry, and many transformation projects have been implemented and
    
    achieved good results. However, in the process of deeply ploughing into the jewelry industry, the company has
    
    become more and more aware of the difficulties and risks that may be faced in the transformation to a new
    
    business area. Whether we can realize the innovative integration of the traditional characteristics of the jewelry
    
    industry and the new technology and new model, how to meet the ever-changing individualized diversified needs
    
    of emerging consumer groups, and how to take the path of innovation and development in the more competitive
    
    industry environment in the market segment are new challenges that the company needs to solve urgently and put
    
    forward higher requirements for the company‘s resource integration capabilities, project management capabilities
    
    and professional talent reserves in the layout of business transformation.
    
    In response to this risk, on the one hand, the company will continue to strengthen the transformation conviction,
    
    make full demonstration, prudently make decisions, elaboratemanagement, and carry out market-oriented
    
    operationin accordance with the established overall development strategy and business strategy so as to ensure
    
    that the transformation projects achieve good investment returns, and actively respond to market competition; on
    
    the other hand, the company will steadily promote reform and innovation, and take the opportunity of completing
    
    the ―Double Hundred Actions‖ to explore and improve the company‘s long-term incentive mechanism, mobilize
    
    the enthusiasm of all employees, improve the management level and operational efficiency of enterprises, and
    
    effectively enhance the core competitiveness of enterprises.
    
    X. Reception of research, communication and interview
    
    1. In the report period, reception of research, communication and interview
    
    □ Applicable √Not applicable
    
    No reception of research, communication and interview in the Period
    
    Section V. Important Events
    
    I. Profit distribution plan of common stock and capitalizing of common reserves plan
    
    Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during
    
    the Reporting Period
    
    √Applicable □Not applicable
    
    The company attaches great importance to the reasonable returns for investors; the Articles of Association clearly
    
    defines the standards and proportions of cash dividends, the decision-making procedures and mechanisms, and the
    
    form of profit distribution. The company strictly complies with the Articles of Association and the resolutions of
    
    the shareholders' general meeting, the dividends standards and proportions are clear, relevant decision-making
    
    procedures and mechanisms are complete, the independent directors are responsible and give play to their duties,
    
    the medium and small shareholders have the opportunities to express their opinions and demands, and the
    
    legitimate rights and interests of medium and small shareholders are fully maintained.
    
                                 Special descriptiononcashdividendpolicy
    Whether itmeetstherequirementsoftheArticleofAssociation  Y
    or theResolutionoftheGeneralMeeting(Y/N):
    Whether thebonusstandardsandproportionisclearand       Y
    well-defined (Y/N):
    Whether hasacompletedrelevantdecision-makingprocedures  Y
    and mechanism(Y/N):
    Whether independentdirectorsfulfilldutiesandplayaduerole  Y
    (Y/N):
    Minority shareholderswhetherhasopportunityoffullexpression
    and appeals,thelegalinterestoftheminorityarebeingprotected Y
    totally  (Y/N):
    As fortheadjustmentandchangeofcashbonuspolicy,the
    condition andprocedureswhethermeetsregulationsand       Y
    transparent (Y/N):
    
    
    Distribution plan (pre-plan) for common stock dividends, capitalization scheme of capital reserve (pre-plan) in latest three years
    
    (including this period)
    
    The parent Company‘s retained profit ended as 2016 was -55,254,500 Yuan, which is no profit distribution and
    
    cash bonus carried out for fails to meet the condition of dividends.
    
    As of December 31, 2017, the undistributed profit of the company‘s consolidated statements was RMB
    
    97,798,595.80, and the undistributed profit of the parent company was RMB -1,372,862.05. The only subsidiary
    
    that had an impact on the company‘s consolidated undistributed net profit of more than 10% was Shenzhen Auto
    
    Industry and Trade Corporation, the main reason why the company had no dividend was because the company‘s
    
    working capital was tight and there was no enough cash to pay dividends. According to Article 7.6.7 of the
    
    ―Guidelines for Standardized the Operation of Listed Companies on Main Board of Shenzhen Stock Exchange
    
    (2015 Revised), when a listed company formulates a profit distribution plan, it should be based on the profit
    
    available for distribution in the parent company‘s statements. At the same time, in order to avoid the situation of
    
    over-allocation, the company should determine the specific profit distribution ratio based on the lower profit
    
    available for distribution either in the consolidated statement or in the parent company‘s statement. Because the
    
    undistributed profit of the parent company was negative, the company did not distribute profits in 2017, nor
    
    increased the public reserve fund.
    
    Profit distribution plan for year of 2018 are:carry out 4.5 additional shares for each 10 shares held by shareholders
    
    are being converted by the capital reserve, based on total share capital 297,281,600 shares on 31st December 2018.
    
    totally133,776,720 shares are converted and the share capital of the Company increased to 431,058,320 after this
    
    conversion .
    
    Cash dividend of common stock in latest three years (including the reporting period)
    
    In RMB
    
                                                            Ratioofthe              Ratioofthe
                            Netprofit    Ratioofthe             cashbonusby              totalcash
                           attributableto  cashbonusin             otherwaysin             bonus(other
                          common stock   netprofit   Proportionfor   netprofit              waysincluded)
                Amount for  shareholdersof attributableto  cashbonusby  attributableto   Totalcash    innetprofit
     Yearforbonus cashbonus(tax listedcompany commonstock otherways(i.e. commonstock    bonus    attributableto
       shares      included)       in     shareholdersof    share    shareholdersof  (including   commonstock
                           consolidation listedcompany  buy-backs)  listedcompany  otherways)  shareholdersof
                           statementfor   containedin              containedin             listedcompany
                            bonusyear   consolidation             consolidation             containedin
                                       statement               statement              consolidation
                                                                                  statement
    2018               0.00 86,924,058.72       0.00%        0.00       0.00%        0.00       0.00%
    2017               0.00 66,862,772.68       0.00%        0.00       0.00%        0.00       0.00%
    2016               0.00 27,193,562.63       0.00%        0.00       0.00%        0.00       0.00%
    
    
    The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent Company is
    
    positive but no plan of cash dividend proposed of common stock
    
    √Applicable □Not applicable
    
      The reasonthatwhytherevenuesandprofitsdistributedfor
      common stockholderfromtheparentcompanyarepositive        Theusageandusingplanofundistributedprofit
     during reportingperiod,butthecashbonusdistributionplanof
                commonstockisnotproposed
    Ended as 31st December 2018, balance of monetary fund of the
    parent company amounted as 283.84 million Yuan, including
    fund-raising 3.3 million Yuan. According to the investment
    scheme, approximately 307 million Yuan will invest for the Accordingtotheinvestmentscheme,approximately307million
    projects in 2019 which has a great gap of fund. The premise of Yuanwillinvestfortheprojectsin2019
    cash dividend is that the listed company has sufficient capital,
    and afterdividenddistribution,itwillnothaveamajorimpacton
    the production and operation of the listed company. Therefore,
    we donotintendtoadoptthemethodofcashdividend.
    
    
    II. Profit distribution plan and capitalizing of common reserves plan for the Period
    
    √Applicable □Not applicable
    
    Bonus sharesforevery10-share(Share)                                                           0
    Dividends forevery10-share(RMB)(Tax                                                        0.00
    included)
    Shares transferredfromevery10shares(Share)                                                     4.5
    Equity baseofdistributionplan(Share)                                                    297,281,600
    Cash bonusdistribution(RMB)(Taxincluded)                                                     0.00
    Cash bonusdistributioninotherways(i.e.share                                                    0.00
    buy-backs) (RMB)
    Total cashbonus(includingotherways)(RMB)                                                      0
    Distributable profits(RMB)                                                           18,545,850.31
    Ratio oftotalcashdividend(otherwaysincluded)                                                     0
    in totalprofitdistribution
                                           Cashdividend
    Other
                          Explanationonprofitdistributionorcapitalizingofcapitalreserves
    In accordance with the Auditing Report 2018 issued by Ruihua Certified Public Accountants (LLP), the net profit attributable to
    owners of parent companyin consolidate statement for yearof 2018 amounted as 86.92 million Yuanand net profit of the parent
    company amounted as 20.11 million Yuan.Ended as 31st December 2018, the retained profit of the consolidate statement was
    184.54 millionYuan,capitalreservewas565.23millionYuan;andtheretainedprofitofparentcompanyamountedas18.55 million
    Yuan, capitalreservewas562.03millionYuan.AccordingtotheGuidelinesforStandardizedtheOperationofListedCompanieson
    Main Board of Shenzhen Stock Exchange (2015 Revised) article 7.6.7: when formulating profit distribution plans, the listed
    company shall take the profits available for distribution in the parent company‘sstatement as the basis. Meanwhile, in order to
    avoid the situation of over-distribution, the companyshould determinethe specific profit distribution proportion according to the
    principle ofthelowerprofitavailablefordistributionintheparentcompany‘sconsolidatedstatement.Intermsofthefinancialdata,
    the Companyshallbasedontheprofitavailablefordistributionintheparentcompany‘sstatement.
    Ended as 31st December 2018, balance of monetary fund of the parent company amounted as 283.84 million Yuan,including
    fund-raising 3.3 millionYuan.Accordingtotheinvestmentscheme, approximately307 millionYuanwillinvestforthe projectsin
    2019 which has a great gap of fund. The premise of cash dividend is that the listed company has sufficient capital, and after
    dividend distribution,itwillnot haveamajorimpactontheproductionandoperationofthelistedcompany.Therefore,wedonot
    intend toadoptthemethodofcashdividend.PursuittotherelevantregulationofNoticeonFurtherImplementingRelevantMatters
    of Dividend Distribution of Listed Companies from the CSRC and Article of Association, under the premise of guaranteeing the
    normal operation and long-term development of the Company with purpose of activelyreturn shareholders,the profit distribution
    plan foryearof2018are:carryout4.5additionalsharesforeach10sharesheldbyshareholdersarebeingconvertedbythecapital
    reserve, based on total share capital 297,281,600 shares on 31st December 2018. totally133,776,720 shares are converted and the
    share capitaloftheCompanyincreasedto431,058,320afterthisconversion.Aftertheabovementionedplanimplemented,retained
    capital reservesoftheparentcompanyamountedto428,256,131.23Yuan.
    
    
    III. Implementation of commitment
    
    1. Commitments that the actual controller, shareholders, related party, buyers and the Company have fulfilled during the reporting period and have not yet
    
    fulfilled by the end of reporting period
    
    √Applicable □Not applicable
    
                                      Typeof                                                          Commitment Commitment
         Commitments    Commitmentparty commitments                    Contentofcommitments                       date       term    Implementation
    Commitments forshare
    merger reform
    Commitments inreportof
    acquisition orequity
    change
    Commitments inassets
    reorganization
                                              Thecommitmentsto the fulfillmentofinformation disclosureabout the Company
                                              business development are as follows: except for the information has been
    Commitments makein                           disclosedpublicly,theCompanyhasnothadthedisclosedinformationaboutasset
                       ShenzhenTellus                                                                   17October
    initial publicofferingor   HoldingCo.,Ltd. Other       acquisitionandbusinessdevelopmentthathasnot beendisclosedwithinoneyear.2014       Long-term   Implementing
    re-financing                                  In the future, the Company shall timely, accurately and adequately disclose the
                                              relevant information according to the progress of new business and the related
                                              requirements.
    Equity incentive
    commitment
    Other commitmentsfor   ShenzhenSpecial Horizontal   In order to avoid the horizontal competition, the Company‘s controlling 26May2014 Long-term   Implementing
    medium andsmall      Development    Competition  shareholder, Shenzhen SDG has issued the ―commitment letter about the
    shareholders          GroupCo.,Ltd.             avoidanceofhorizontalcompetition‖onMay26,2014.Thefullcommitmentletter
                       (SDG)                   is as follows: 1. The Company and other enterprises controlled by the Company
                                              except Tellus Group haven‘t occupied in any business that could substantially
                                              compete with the main businesses of Tellus Group, and have no horizontal
                                              competitionrelationshipwithTellusGroup.
                                              From2017to2019,theCompany‘sprofitswillfirstbeusedtocoverthelossesof
                                              previousyears;aftermakingupforlossesofpreviousyears,inthepremisethatthe
                                              Company‘sprofits and cash flow can meet the Company's normal operations and
                                              long-term development, reward shareholders, the Company will implement
                                              positive profit distribution approaches to reward the shareholders, details are as
                                              follows: 1. The Company‘s profit distribution can adopt cash, stock or the
                                              combination of cash and stock or other methods permitted by law. The foreign
                                              currency conversion rates of domestically listed foreign shares dividend are
                                              calculated according to the standard price of HK dollar against RMB announced
                                              byPeople'sBankofChinaonthefirstworkingdayafterthe resolutiondateofthe
                       ShenzhenTellus  Dividend    shareholders' meeting. The Company prefers to adopt the cash dividends to          31December
                                                                                                     4May2017            Implementing
                       HoldingCo.,Ltd. commitment  distribute profits. In order to maintain the adaptability between capital expansion          2019
                                              and performance growth, in the premise of ensuring the full cash dividend
                                              distributions andthe rationalityofequity scale and equitystructure,the Company
                                              can adopt the stock dividend methods to distribute profits. 2. According to the
                                              "Company Law" and other relevant laws and the provisions of the Company‘s
                                              "Articles of Association", following conditions should be satisfied when the
                                              Company implements cash dividends: (1) the Company's annual distributable
                                              profits (i.e. the after-tax profits after making up for losses and withdrawing
                                              accumulationfunds)arepositivevalue,theimplementation ofcashdividends will
                                              not affect the Company's subsequent continuing operations; (2) the audit
                                              institution issues the standard audit report with clean opinion to the Company's
                                              annual financial report; (3) the Company has no significant investment plans or
                                              significant cash outlay (except for fund-raising projects). Major investment plans
                                              or significant cash outlay refer to: the accumulated expenditures the Company
                                              plans to used for investments abroad, acquisition of assets, or purchase of
                                              equipment within the next 12 months reach or exceed 30% of the net assets
                                              audited in the latest period. 3. In the premise of meeting the conditions of cash
                                              dividends and ensuring the Company‘s normal operation and long-term
                                              development, the Company makes cash dividends once a year in principle, the
                                              Company‘s board of directors can propose the Company to make interim cash
                                              dividends in accordance with the Company's profitability and capital demand
                                              conditions. The proportion of cash dividends in profits available for distribution
                                              and in distribution of profits should meet the following requirements: (1) in
                                              principle, the Company‘sprofits distributed in cash every yearshould not be less
                                              than 10% of profit available for distribution realized in the same year, and the
                                              Company‘sprofitsaccumulativelydistributedincashinthelastthreeyearsshould
                                              notbelessthan30%oftheannualaverageprofitavailablefordistributionrealized
                                              in the last three years.(2) if the Company‘sdevelopment stage belongs to mature
                                              stage and there is no significant capital expenditure arrangement, when
                                              distributing profits, the minimum proportion of cash dividends in this profit
                                              distribution should be 80%; (3) if the Company‘s development stage belongs to
                                              mature stage and there are significant capital expenditure arrangements, when
                                              distributing profits, the minimum proportion of cash dividends in this profit
                                              distribution should be 40%; (4) if the Company‘s development stage belongs to
                                              growth stage and there are significant capital expenditure arrangements, when
                                              distributing profits, the minimum proportion of cash dividends in this profit
                                              distributionshouldbe20%;whentheCompany'sdevelopmentstageisnoteasyto
                                              be differed but there are significant capital expenditure arrangements, please
                                              handle according to the preceding provisions. 4. On the condition of meeting the
                                              cashdividenddistribution,iftheCompany'soperationrevenueandnetprofitgrow
                                              fast, and the board of directors considers that the Company‘s equity scale and
                                              equity structure are reasonable, the Company can propose and implement the
                                              dividend distribution plans except proposing the cash dividend distribution plans.
                                              When allocating stock dividend every time, the stock dividend per 10 shares
                                              should be no less than 1 share. Stock allocation can be implemented individually
                                              orin combinationofcashdividends. Whenconfirmingthe exact amount ofprofit
                                              distribution by stock, the Company should fully consider if the general capital
                                              after profit distribution by stock matches with the Company‘s current operation
                                              scale and profit growth rate and consider the impact on future financing so as to
                                              makesuretheallocationplansmeettheoverallinterestsofallshareholders.
    Completed ontime(Y/N)  Y
    As forthecommitmentout
    of thecommitmenttime,
                       Notapplicable
    explain thespecific
    reasons andfurtherplans
    
    
    2. Concerning assets or project of the Company, which has profit forecast, and reporting period still in forecasting period, explain reasons of reaching the
    
    original profit forecast
    
    □Applicable √Not applicable
    
    IV. Non-operational fund occupation from controlling shareholders and its related party
    
    □ Applicable √ Not applicable
    
    No non-operational fund occupation from controlling shareholders and its related party in period.
    
    V. Explanation from Board of Directors, Supervisory Committee and Independent Directors (if applicable) for “Qualified Opinion” that
    
    issued by CPA
    
    □Applicable √Not applicable
    
    VI. Particulars about the changes in aspect of accounting policy, estimates and calculation method compared with the financial report of
    
    last year
    
    □Applicable √Not applicable
    
    No accounting policy, estimates and calculation method changed in the Period.
    
    VII. Major accounting errors within reporting period that needs retrospective restatement
    
    □ Applicable √ Not applicable
    
    No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
    
    VIII. Compare with last year’s financial report; explain changes in consolidation statement’s
    
    scope
    
    √Applicable □Not applicable
    
    Totally 15 enterprises included in consolidate statement for year of 2018, found more in the VIII. Equity in other body carry in the
    
    annotation of financial statement in Auditing Report 2018 released on Juchao Website on the same date. One enterprise decrease in
    
    the consolidate statement by comparing with last year.
    
    IX. Appointment and non-reappointment (dismissal) of CPA
    
    Accounting firm appointed
    
    Name ofdomesticaccountingfirm                                   RuihuaCertifiedPublicAccountants(LLP)
    Remuneration for domestic accounting firm (in 10 thousand
                                                                                         55
    Yuan)
    Continuous lifeofauditingservicefordomesticaccountingfirm                                            5
    Name ofdomesticCPA                                                   CaiXiaodong,ZhouXuechun
    Continuous lifeofauditingservicefordomesticaccountingfirm                                            3
    
    
    Re-appointed accounting firms in this period
    
    □Yes √No
    
    Appointment of internal control auditing accounting firm, financial consultant or sponsor
    
    □Applicable √Not applicable
    
    X. Particular about suspended and delisting after annual report disclosed
    
    □Applicable √Not applicable
    
    XI. Bankruptcy reorganization
    
    □ Applicable √ Not applicable
    
    No bankruptcy reorganization for the Company in reporting period
    
    XII. Significant lawsuits and arbitrationof the Company
    
    □Applicable √Not applicable
    
    No significant lawsuits and arbitration occurred in the reporting period.
    
    XIII. Penalty and rectification
    
    □ Applicable √ Not applicable
    
    No penalty and rectification for the Company in reporting period.
    
    XIV. Integrity of the Company and its controlling shareholders and actual controllers
    
    √Applicable □ Not applicable
    
    During the reporting period, the Company and the controlling shareholders and the actual controllers have had
    
    good reputation, and there is no large amount due un-liquidated debt sentenced by the court.
    
    XV. Implementation of the Company’s stock incentive plan, employee stock ownership plan
    
    or other employee incentives
    
    □ Applicable √ Not applicable
    
    During the reporting period, the Company has no stock incentive plan, employee stock ownership plan or other
    
    employee incentives that have not been implemented.
    
    XVI. Major related transaction
    
    1. Related transaction with routine operation concerned
    
    √Applicable □Not applicable
    
                                                                                Trading   Whether
                                                              Related              limit     overthe    Clearing   Available
                          Typeof   Contentof   Pricing    Related   transaction  Proportion                     formfor             Dateof    Indexof
     Relatedparty Relationship   related     related    principle   transaction amount  (in  insimilar  approved(in  approved    related    similar
                        transaction   transaction             price   10Ythuoauns)andtransactions 10thousand  limitedor  transaction marketprice  disclosure  disclosure
                                                                                Yuan)    not(Y/N)
        NoticeNo.:
               Director,    2018-022
               supervisor    on
               andsenior    Securities
    Shenzhen    executives    Times,
                        Routine    Offering    Reference                                               Agreedby
    Zungfu Tellus ofthe    HongKong
                        related    property    market     530             530     5.66%       530 N        contractor  530       3April2018
    Auto Service  Company   transaction  renal      pricing                                                 agreement                    Commercia
    Co., Ltd     serves    lDailyand
               directorof    Juchao
               the    Website
               enterprise    (www.cninf
        o.com.cn)
    Shenzhen SDG Subsidiary  Routine    Accept     Reference                                               Agreedby                    NoticeNo.:
    TellusProperty ofthe     related     property    market     751.18        751.18    18.42%      660 Y        contractor  751.18    3April2018 2018-022
    Management  controlling  transaction  management pricing                                                 agreement                    on
    Co., Ltd.     shareholder          services                                                                                     Securities
        Times,
        HongKong
        Commercia
        lDailyand
        Juchao
        Website
        (www.cninf
        o.com.cn)
    Shenzhen SDG Subsidiary
                        Routine    Offering    Reference                                               Agreedby
    TellusProperty ofthe
                        related    property    market     10.04          10.04     0.11%        0 Y        contractor  10.04
    Management  controlling  transaction  renal      pricing                                                 agreement
    Co., Ltd.     shareholder
                                 Offering
               Subsidiary
    Shenzhen SDG          Routine    property    Reference                                               Agreedby
               ofthe
    Petty Loan             related     renaland   market     8.73            8.73     0.09%        0 Y        contractor  8.73
    Co., Ltd.     controlling  transaction  management pricing                                                 agreement
               shareholder
                                 service
    Total                                       --        --       1,299.95    --         1,190    --        --        --        --        --
    Detail ofsalesreturnwithmajoramountinvolved     N/A
    Report theactualimplementationofthedailyrelated
    transactions whichwereprojectedabouttheirtotal
                                          Performing normally
    amount bytypesduringthereportingperiod(if
    applicable)
    Reasons formajordifferencesbetweentradingpriceand
                                          Not applicable
    market referenceprice
    
    
    2.Related transactions by assets acquisition and sold
    
    □ Applicable √ Not applicable
    
    No related transactions by assets acquisition and sold for the Company in reporting period.
    
    3. Main related transactions of mutual investment outside
    
    □ Applicable √ Not applicable
    
    No main related transactions of mutual investment outside for the Company in reporting period.
    
    4. Contact of related credit and debt
    
    √Applicable □Not applicable
    
    Whether the Company had non-operating contact of related credit and debt
    
    √ Yes □ No
    
    Debts payable to related party
    
                                   Balanceat    Current    Current              Current    Balanceat
                                  period-begin newlyadded   recovery              interest    period-end
     Relatedparty Relationship   Causes                                Interestrate
                                  (10thousand (10thousand (10thousand          (10thousand (10thousand
                                    Yuan)      Yuan)     Yuan)               Yuan)      Yuan)
    Shenzhen
    Special      Controlling  Intercourse
    Development  shareholders fundsand        3,244        36      1,561                 36      1,719
    Group Co.,             loaninterest
    Ltd. (SDG)
                        Loan
    Shenzhen
                        principal for
    Special      Controlling  theTellus
    Development  shareholders Groupand        1,868               1,279                           589
    Group Co.,
    Ltd.  (SDG)           Hurari
                        Company
    
    
    5. Other related transactions
    
    □Applicable √Not applicable
    
    Nil
    
    XVII. Significant contract and implementations
    
    1. Trusteeship, contract and leasing
    
    (1) Trusteeship
    
    □Applicable √Not applicable
    
    No trusteeship for the Company in reporting period
    
    (2) Contract
    
    □ Applicable √ Not applicable
    
    No contract for the Company in reporting period
    
    (3) Leasing
    
    □ Applicable √ Not applicable
    
    No leasing for the Company in reporting period
    
    2. Major guarantees
    
    √Applicable □Not applicable
    
    (1) Guarantees
    
    In 10 thousand Yuan
    
          ParticularsabouttheexternalguaranteeoftheCompanyanditssubsidiary(Barringtheguaranteeforsubsidiaries)
                Related                                                               Guarante
     Nameofthe  Announcem Guarantee Actualdate   Actual   Guarantee                     Implemen  efor
      Company     ent      limit      of     guarantee    type       Guaranteeterm     ted(Y/N)  related
      guaranteed  disclosure          happening    limit                                        party
                 date                                                                  (Y/N)
    Shenzhen
    Zungfu Tellus 30Sept.       3,500 17Apr.2007     3,500 Pledged  Totheexpiredateofjoint   N      Y
    Auto Service  2014                                       venturecontract
    Co., Ltd
                                                         Xinglong Company should
                                                         re-sign themortgagecontract
                                                         with the China Construction
                                                         Bank  and  complete  the
                                                         procedures of mortgaging all
                                                         theproperties     (hereafter
                                                         referred   to   as   ―new
    Shenzhen                                               collateral‖)  on  the  land
    Xinglong                                               certificate    to    China
    Machinery   28Dec.       28,000              28,000 Pledged  Construction Bank within 60 N      Y
    Mould Co.,   2018                                       working  days  after  the
    Ltd.                                                  release of the land use right
                                                         certificate (Shenfangdizi No.
                                                         2000599154) of land parcel
                                                         number H309-0024(1). After
                                                         the   China   Construction
                                                         Bankobtained the mortgage
                                                         of the new collateral, the
                                                         Stock EquityPledgeContract
                                                         (Gujie  2016  Fang  45605
                                                         Futian-1)  was lifted,  and
                                                         China  Construction  Bank
                                                         released  the  stock equity
                                                         under the contract and write
                                                         off  the  relevant  pledge
                                                         registration.
    Total approving external guarantee             Total  actual  occurred
    in reportperiod(A1)                 28,000external  guarantee  in                              31,500
                                        report period(A2)
                                        Total actual balance of
    Total approved external guarantee        31,500externalguaranteeatthe                              31,500
    at theendofreportperiod(A3)               end of report  period
                                        (A4)
                                 Guarantee oftheCompanyforsubsidiaries
                     Related                                                          Guarante
    Name oftheCompany Announce  Guarantee  Actualdateof    Actual    Guarantee   Guarantee  Implemen  efor
        guaranteed       ment     limit     happening    guarantee     type       term    ted(Y/N)  related
                    disclosure                         limit                               party
                      date                                                             (Y/N)
    Shenzhen Zhongtian  7May                                  Jointliability 24June2014
    Industrial Co,.Ltd.   2014         30,00024June2014        30,000guaranty    to23June   N      Y
                                                                   2024
    Total   amount  of  approving                     Total  amount  of  actual
    guarantee for subsidiaries in report                   0 occurred  guarantee  for                   30,000
    period (B1)                                     subsidiaries inreportperiod
                                                (B2)
    Total   amount   of   approved                     Total  balance  of  actual
    guarantee for subsidiaries at the                30,000guaranteeforsubsidiariesat                   30,000
    end ofreportingperiod(B3)                          the end of reporting period
                                                (B4)
                                 Guaranteeofthesubsidiariesforsubsidiaries
                     Related                                                          Guarante
    Name oftheCompany Announce  Guarantee  Actualdateof    Actual    Guarantee   Guarantee  Implemen  efor
        guaranteed       ment     limit     happening    guarantee     type       term    ted(Y/N)  related
                    disclosure                         limit                               party
                      date                                                             (Y/N)
    Total   amount  of  approving                     Total  amount  of  actual
    guarantee for subsidiaries in report                   0 occurred  guarantee  for                       0
    period (C1)                                     subsidiaries inreportperiod
                                                (C2)
    Total   amount   of   approved                   0 Total  balance  of  actual                       0
    guarantee for subsidiaries at the                     guaranteeforsubsidiariesat
    end ofreportingperiod(C3)                          the end of reporting period
                                                (C4)
                    TotalamountofguaranteeoftheCompany(totalofthreeabovementionedguarantee)
    Total amountofapproving                           Totalamountofactual
    guarantee inreportperiod                      28,000occurredguaranteeinreport                   61,500
    (A1+B1+C1)                                    period(A2+B2+C2)
    Total amountofapproved                           Totalbalanceofactual
    guarantee attheendofreport                    61,500guaranteeattheendof                       61,500
    period (A3+B3+C3)                               reportperiod(A4+B4+C4)
    The proportionofthetotalamountofactuallyguaranteeinthenet                                      58.56%
    assets oftheCompany(thatisA4+B4+C4)
    Including:
    Amount ofguaranteeforshareholders,actualcontrollerandits                                             0
    related parties(D)
    The debts guarantee amount provided for the guaranteed parties                                      28,000
    whose assets-liabilityratioexceed70%directlyorindirectly(E)
    Proportion oftotalamountofguaranteeinnetassetsofthe                                               0
    Company exceed50%(F)
    Total amountoftheaforesaidthreeguarantees(D+E+F)                                             28,000
    Explanations on possibly bearing joint and several liquidating N/A
    responsibilities forundueguarantees(ifapplicable)
    Explanations on external guarantee against regulated procedures N/A
    (if applicable)
    
    
    Explanation on guarantee with composite way
    
    (2) Guarantee outside against the regulation
    
    □Applicable √Not applicable
    
    No guarantee outside against the regulation in Period.
    
    3. Entrust others to cash asset management
    
    (1) Trust financing
    
    √Applicable □Not applicable
    
    Trust financing in the reporting period
    
    In 10 thousand Yuan
    
           Type          Capitalresources      Amountforentrust     Balanceun-expired     Overdueamount
    Bank financingproduct  Idleraisedfunds                     4,000                 0                0
    Bank financingproduct  Ownfunds                        15,920             33,040                0
    Total                                             19,920             33,040                0
    
    
    Details of the single major amount, or high-risk trust investment with low security, poor fluidity and non-guaranteed
    
    □Applicable √Not applicable
    
    Entrust financial expected to be unable to recover the principal or impairment might be occurred
    
    □Applicable √Not applicable
    
    (2) Entrusted loans
    
    □ Applicable √ Not applicable
    
    The Company had no entrusted loans in the reporting period.
    
    4. Other material contracts
    
    □ Applicable √ Not applicable
    
    No other material contracts for the Company in reporting period
    
    XVIII. Social responsibility
    
    1. Fulfill social responsibility
    
    The Company has always taken the shareholders‘ return, employees‘ achievements, and social feedback as its own
    
    duty. We adheres to the principle of fairness and actively safeguards the legitimate rights and interests of
    
    shareholders; actively advocates achieving the self-worth while realizing the enterprise value, and creates a
    
    working environment that the enterprise cares for employees and employees love the enterprise so as to have a
    
    harmoniousdevelopment together; actively returns to the society and the public, and commits itself to achieve the
    
    harmonious and sustainable development of the Company and society.
    
    2. Performance of taking targeted measures in poverty alleviation
    
    (1) Targeted measures in poverty alleviation
    
    During the period, the Company participates in the targeted measures in poverty alleviation for Libai Village,
    
    Shangguang Town, Dongyuan County, Heyuan City, Guangdong Province.
    
    (2) Annual poverty alleviation in the Year
    
    The Company is concerned about the mountainous areas, takes the initiative to assume social responsibilities for
    
    poverty alleviation. According to the arrangement, the Company is responsible for thehard bottoming and widening
    
    of village roads and thehard bottoming of roads for transporting of Li Bai village. The project has begun on
    
    December 29, 2017, currently, the project has completed. After the project is completed, it will greatly facilitate the
    
    production and transportation of Li Bai villagers, and the ―difficulties in roads‖ that have plagued the villagers for
    
    many years will be thoroughly resolved.
    
    (3) Results of targeted poverty alleviation
    
                  Target               Measurementunit             Numbers/implementation
    i. Overall                               ——                        ——
    ii. Investedbyspecificproject                  ——                        ——
      1.Industrialdevelopmentpoverty              ——                        ——
      2.Transferemployment                    ——                        ——
      3.Relocationthepoor                      ——                        ——
      4.Educationpoverty                       ——                        ——
      5.Healthpovertyalleviation                  ——                        ——
      6.Ecologicalprotectionandpoverty
                                          ——                        ——
    alleviation
      7.Fallbackprotection                      ——                        ——
      8.Socialpovertyalleviation                  ——                        ——
      9.Other                              ——                        ——
    iii. Awards(contentandgrade)                 ——                        ——
    
    
    (4) Follow-up of targeted poverty alleviation
    
    Expansion and repair the road in Li Bai village
    
    3. Environmental protection
    
    The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
    
    No
    
    No
    
    XIX. Explanation on other significant events
    
    □ Applicable √ Not applicable
    
    The Company had no explanation on other significant events in the reporting period.
    
    XX. Significant event of subsidiary of the Company
    
    □Applicable √Not applicable
    
    Section VI. Changes in Shares and Particulars about Shareholders
    
    I. Changes in Share Capital
    
    1. Changes in Share Capital
    
    In Share
    
                           Beforechange         Increase/decreaseinthistime(+,-)          Afterchange
                                                       Capitaliza
                                         New
                                                Bonus    tionof
                         Amount   Ratio    shares                   Other   Subtotal  Amount   Ratio
                                                 share   public
                                         issued
                                                        reserve
                         77,000,00                               -77,000,0 -77,000,0
    I. Restrictedshares                 25.90%       0       0       0                     0   0.00%
                               0                                   00      00
    1. Stateholding                0   0.00%       0       0       0       0       0      0   0.00%
    2. State-ownedcorporation                                         -6,000,00 -6,000,00
                         6,000,000   2.02%       0       0       0                     0   0.00%
    shares                                                            0       0
                         71,000,00                               -71,000,0 -71,000,0
    3. Otherdomesticshares          0  23.88%       0       0       0      00      00      0   0.00%
    Including: domesticlegal    71,000,00                               -71,000,0 -71,000,0
                                  23.88%       0       0       0                     0   0.00%
    person‘s shares                0                                    00      00
         Domestic natural
                               0   0.00%       0       0       0       0       0      0   0.00%
    person‘s shares
    4. Foreigner‘sshares             0   0.00%       0       0       0       0       0      0   0.00%
    Including: foreign
                               0   0.00%       0       0       0       0       0      0   0.00%
    corporation shares
         Foreign  natural
                               0   0.00%       0       0       0       0       0      0   0.00%
    person‘s shares
                         220,281,6                               77,000,00 77,000,00 297,281,6
    II. Un-restrictedshares               74.10%       0       0       0                        100.00%
                              00                                    0       0      00
                         193,881,6                               77,000,00 77,000,00 270,881,6
    1. RMBordinaryshares              65.22%       0       0       0                        91.12%
                              00                                    0       0      00
    2. Domesticallylistedforeign 26,400,00                                              26,400,00
    shares                       0   8.88%       0       0       0       0       0      0   8.88%
    2. Foreignshareslisted           0   0.00%       0       0       0       0       0      0   0.00%
    aboard
    3. Other                     0   0.00%       0       0       0       0       0      0   0.00%
                         297,281,6                                             297,281,6
    III. Totalshares                   100.00%       0       0       0       0       0         100.00%
                              00                                                  00
    
    
    Reasons for share changed
    
    √Applicable □Not applicable
    
    In March 2015, the company issued a total of 77,000,000 shares to two specific investors via non-public offering, and the issued
    
    shares were listed on the Shenzhen Stock Exchange on March 27, 2015. According to the Administrative Measures on the Securities
    
    Issuance of Listed Companies and other relevant regulations, the non-publicly issued A-shares were locked during the restricted
    
    period. In this non-public offering of shares, the restricted period of 77,000,000 shares subscribed by the two subscribers was 36
    
    months from the date of listing (March 27, 2015). During the reporting period, the restricted period of the company‘s non-public
    
    offering of stocks expired, and was listed and circulated on April 19, 2018.
    
    Approval of share changed
    
    √Applicable □Not applicable
    
    On April 11, 2018, the company submitted an application for the listing and circulatng of restricted shares toChina Securities
    
    Depository and Clearing Corporation LimitedShenzhen Branch and the Shenzhen Stock Exchange, China Securities Depository and
    
    Clearing Corporation Limited issued the Stock Change RegistrationConfirmation on April 18, 2018. According to the Stock Change
    
    RegistrationConfirmation, CSDC would officially complete the change registration of lifting the restriction on restricted shares after
    
    the market closing on April 18, 2018. On April 19, 2018, after being approved by the Shenzhen Stock Exchange, the company
    
    disclosed the Prompt Announcement on Lifting the Restriction on the Non-public Offering of Shares‖ at www.cninfo.com.cn.
    
    Ownership transfer of share changes
    
    □Applicable √Not applicable
    
    Progress of shares buy-back
    
    □Applicable √Not applicable
    
    Implementation progress of the reduction of repurchases shares by centralized bidding
    
    □Applicable √Not applicable
    
    Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
    
    shareholders of Company in latest year and period
    
    □Applicable √Not applicable
    
    Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
    
    □Applicable √Not applicable
    
    2. Changes of restricted shares
    
    √Applicable □Not applicable
    
    In Share
    
                                             Restricted
                                              Shares
                  Opening shares  Sharesreleased    Increased     Endingshares    Restricted
      Shareholders                                                                 Dateforreleased
                     restricted      inPeriod         In         restricted       reasons
                                               the
                                              Period
                                                                   Upon
                                                                   Expirationofthe
                                                                    restrictionon
    Shenzhen Special                                                    sharesissuedby
    Development          6,000,000      6,000,000           0           0             19April2018
    Group Co.,Ltd.                                                     theCompany
                                                                    non-publicly,
                                                                   thesharesshall
                                                                    belifted
                                                                   Upon
                                                                   Expirationofthe
    Shenzhen Capital                                                    restrictionon
    Fortune Jewelry                                                     sharesissuedby
    Industry             71,000,000     71,000,000           0           0             19April2018
    Investment                                                        theCompany
    Enterprise (LP)                                                     non-publicly,
                                                                   thesharesshall
                                                                    belifted
    Total               77,000,000     77,000,000           0           0      --           --
    
    
    II. Securities issuance and listing
    
    1. Security offering (without preferred stock) in Reporting Period
    
    □Applicable √Not applicable
    
    2. Changes of total shares and shareholders structure as well as explanation on changes of assets and
    
    liability structure
    
    □Applicable √Not applicable
    
    3. Current internal staff shares
    
    □Applicable √Not applicable
    
    III. Particulars about shareholder and actual controller of the Company
    
    1. Amount of shareholders of the Company and particulars about shares holding
    
    In Share
    
                                                                       Totalpreference
                                                Totalpreference            shareholders
                          Totalcommon                                   withvoting
    Total common                                  shareholderswith
                          stock                                         rightsrecovered
    stock                                        votingrights
                          shareholdersat                                   atendoflast
    shareholders in       52,687                 51,676recoveredatendof         0                    0
                          endoflastmonth                                 monthbefore
    reporting                                      reportingperiod(if
    period-end               beforeannual             applicable)(found           annualreport
                          reportdisclosed                                  disclosed(if
                                                innote8)
                                                                       applicable)
                                                                       (foundinnote8)
                      Particularsaboutsharesheldabove5%byshareholdersortoptenshareholders
                                       Total                          Numberofsharepledged/frozen
                                                     Amount  Amount
                                      sharehold
                               Proportio        Changes    of      of
       Fullnameof      Natureof      nof    ersat   inreport restricted un-restrict
      Shareholders     shareholder    shares  theendof                        Stateofshare     Amount
                                held           period   shares  edshares
                                       report           held     held
                                       period
    Shenzhen Special
    Development     State-owned            145,925,2               145,925,2
                                49.09%        0            0                               0
    Group Co.,Ltd.   corporation                 56                    56
    (SDG)
    Shenzhen Capital
    Fortune Jewelry   Domesticnon           65,001,60 -5,998,40         65,001,60
    Industry        state-owned       21.87%                     0                               0
                                           0 0                    0
    Investment      corporate
    Enterprise (LP)
    GUOTAI JUNAN
    SECURITIES(HO Foreign
                                 0.40%1,197,304 -900          0 1,197,304                        0
    NGKONG)      corporation
    LIMITED
    Agricultural Bank
    of ChinaLtd.–   Other            0.26%  778,841 542,741        0  778,841                        0
    CSI 500ETF
    Li Guangxin     Domesticnature     0.26%  761,161 0            0  761,161                        0
                  person
                  Domesticnature
    Zhong Yujian                    0.11%  312,392 312,392        0  312,392                        0
                  person
                  Domesticnature
    He Xing        person           0.10%  300,100 0            0  300,100                        0
                  Domesticnature
    Huang Chuyun                   0.09%  266,500 0            0  266,500                        0
                  person
                  Foreignnature
    Ding Bingfang                   0.09%  265,600 265,600        0  265,600                        0
                  person
                  Domesticnature
    Feng Weiyong                   0.08%  226,200 77,900        0  226,200
                  person
    Strategy investorsorgeneral
    corporation comestop10shareholders
                              Not applicable
    due torightsissue(ifapplicable)(see
    note3)
                              Among the top ten shareholders, there exists no associated relationship between the
    Explanation on associated relationship state-owned legal person‘sshareholders SDG, Ltd and other shareholders, andthey do not
                              belong  to the persons acting in concert regulated by the Management Measure of
    among the top ten shareholders or
    consistent action               Information Disclosure on Change of Shareholding for Listed Companies. For the other
                              shareholders of circulation share, the Company is unknown whether they belong to the
                              persons actinginconcert.
                          Particular abouttoptenshareholderswithun-restrictsharesheld
                                                                          Typeofshares
           Shareholders‘name         Amountofun-restrictsharesheldatPeriod-end
                                                                       Type        Amount
    Shenzhen SpecialDevelopmentGroup                                     RMBordinary
                                                          145,925,256                145,925,256
    Co., Ltd.                                                         shares
    Shenzhen CapitalFortuneJewelry                                        RMBordinary
                                                           65,001,600                 65,001,600
    Industry InvestmentEnterprise(LP)                                       shares
    GUOTAI JUNAN                                                   Domestically
    SECURITIES(HONGKONG)                                    1,197,304 listedforeign         1,197,304
    LIMITED                                                        shares
    Agricultural BankofChinaLtd.–CSI                                     RMBordinary
                                                             778,841                   778,841
    500 ETF                                                         shares
                                                                   Domestically
    Li Guangxin                                                761,161 listedforeign          761,161
                                                                   shares
    Zhong Yujian                                                312,392 RMBordinary         312,392
                                                                   shares
                                                                   Domestically
    He Xing                                                   300,100 listedforeign          300,100
                                                                   shares
                                                                   Domestically
    Huang Chuyun                                               266,500 listedforeign          266,500
                                                                   shares
                                                                   RMBordinary
    Ding Bingfang                                               265,600                   265,600
                                                                   shares
                                                                   RMBordinary
    Feng Weiyong                                               226,200 shares               226,200
                              Among the top ten shareholders, there exists no associated relationship between the
    Expiation onassociatedrelationshipor
                              state-owned legal person‘sshareholders SDG, Ltd and other shareholders, andthey do not
    consistent actors within the top 10
                              belong  to the persons acting in concert regulated by the Management Measure of
    un-restrict shareholders and between
                              Information Disclosure on Change of Shareholding for Listed Companies. For the other
    top 10un-restrict shareholdersandtop
    10 shareholders                shareholders of circulation share, the Company is unknown whether they belong to the
                              persons actinginconcert.
    Explanation onshareholdersinvolving
    margin businessabouttoptencommon
                              N/A
    shareholders withun-restrictshares
    held(if applicable)(seenote4)
    
    
    Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
    
    agreement dealing in reporting period
    
    □ Yes √ No
    
    The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
    
    buy-back agreement dealing in reporting period.
    
    2. Controlling shareholder of the Company
    
    Nature of controlling shareholders: local state-owned holding
    
    Type of controlling shareholders: legal person
    
     Majorityshareholder  Legalperson/person   Dateoffoundation   Organizationcode      Mainoperationbusiness
                     inchargeoftheunit
                                                                  Investment in industry (specific item
    Shenzhen Special                                                  shouldbe declaration);investmentin
                                                   91440300192194195 tourism industry; development and
    Development Group  ZhangJunlin       20June1982       C              operation ofthe realestate;domestic
    Co., Ltd.
                                                                  business,  material  supply  and
                                                                  marketing   industry   (excluding
                                                                  monopolized   commodity   and
                                                                  commodity     under    special
                                                                  government   control);  economic
                                                                  information(excluding    restricted
                                                                  projects); import&exportbusiness
    Equity   of   listed
                    Exceptthe shares of the Companyheld bySDG, SDG still holds253.93529 million shares  of Shenzhen
    Company in and out
                    SDGInformationCo.,Ltd.(Stockname:SDGI,Stockcode:000070),a40.5%takes;holds7,985,809shares
    of China control and
                    ofSichuan Jinlu Group Co., Ltd. (Stock name: Jinlu Group, Stock code: 000510),  a 1.31% takes; and
    hold by the majority
                    9,135,174shares of Huatai Securities Co., Ltd. (Stock name: Huatai Securities, Stock code:601688) with
    shareholder  in  the
                    0.13%takes.
    Period
    
    
    Changes of controlling shareholders in reporting period
    
    □ Applicable √ Not applicable
    
    The Company had no changes of controlling shareholders in reporting period
    
    3. Actual controller of the Company and persons acting in concert
    
    Nature of actual controller: local state-owned assets management
    
    Type of actual controller: legal person
    
                              Legal
     Actualcontrollingshareholders person/personin  Dateoffoundation   Organizationcode     Mainoperationbusiness
                          charge oftheunit
    Shenzhen  Municipal People‘s
    Government     State-owned
                          PengHaibin    20July2003     K31728067         Notapplicable
    Assets    Supervision   and
    Administration Commission
    Equity  of  domestic/oversea
    listed  Company  control  by Notapplicable
    actual controllerinreportperiod
    
    
    Changes of actual controller in reporting period
    
    □ Applicable √ Not applicable
    
    No changes of actual controllers for the Company in reporting period.
    
    Property right and controlling relationship between the actual controller and the Company is as follow:
    
    Actual controller controlling the Company by entrust or other assets management
    
    □Applicable √Not applicable
    
    4. Particulars about other legal person shareholders with over 10% shares held
    
    √Applicable □Not applicable
    
                             Legal rep./personin      Dateof                       Mainbusinessor
        Corporate shareholders                                    Registercapital
                               charge ofunit       foundation                     managementactivity
    Shenzhen CapitalFortuneJewelry
    Industry InvestmentEnterprise   ChengHoubo       18April2014    620millionYuan   Equityinvestment
    (LP)
    
    
    5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,
    
    restructuring side and other commitment subjects
    
    □Applicable √Not applicable
    
    Section VII. Preferred Stock
    
    □ Applicable √ Not applicable
    
    The Company had no preferred stock in the Period.
    
    Section VIII. Particulars about Directors, Supervisors, Senior
    
    Executives and Employees
    
    I. Changes of shares held by directors, supervisors and senior executives
    
                                                               Amount  Amount
                                                        Shares                         Shares
                                                               ofshares ofshares
                                          WorkingdaStetadrtofEnddate  heldat  increased decreased  Other   heldat
      Name   Title    status    Sex     Age    office   ofteorfmficeperiod-be  inthis   inthis   changes period-en
                                          term            gin                  (share)     d
                                                        (Share)   period   period          (Share)
                                                               (Share)   (Share)
    Fu             Currently               7Sept.   6Sept.
    Chunlong Chairman inoffice  M           46 2018    2021          0      0      0      0      0
                   Currently               6June   6Sept.
    YuLei   Director         F           51                     0      0      0      0      0
                   inoffice                2012    2021
    Zhang           Currently               20May  6Sept.
            Director         M           46                     0      0      0      0      0
    Quanxun         inoffice                2015    2021
    Gu             Currently               7Sept.   6Sept.
            Director         M           48                     0      0      0      0      0
    Zhiming         inoffice                2018    2021
            Director, Currently               7Sept.   6Sept.
    Lv Hang                M           58                     0      0      0      0      0
             GM   inoffice                2018    2021
                   Currently               9Feb.   6Sept.
    Lou Hong Director         F           51                     0      0      0      0      0
                   inoffice                2018    2021
                   Currently               4Jan.   6Sept.
    Lou Hong CFO           F           51                     0      0      0      0      0
                   inoffice                2018    2021
            Independ
    Hu             Currently               7Sept.   6Sept.
    Yuming  ent     inoffice  M           54 2018    2021          0      0      0      0      0
            director
            Independ
    Jiang           Currently               7Sept.   6Sept.
    Dinghang ent     inoffice  M           56 2018    2021          0      0      0      0      0
            director
            Independ
    Zhang           Currently               7Sept.   6Sept.
    Dong    ent     inoffice  M           45 2018    2021          0      0      0      0      0
            director
            Chairman
            ofthe
    Guo     Superviso Currently               7Sept.   6Sept.
                          M           55                     0      0      0      0      0
    Xiaodong ry      inoffice                2018    2021
            Committe
            e
    Chen
            SupervisoCurrently               4May   6Sept.
    Yangshen r       inoffice  M           56 2017    2021          0      0      0      0      0
    g
    Yang    Superviso Currently               7Sept.   6Sept.
                          F           47                     0      0      0      0      0
    Jianping  r       inoffice                2018    2021
    Liu     Superviso Currently               7Sept.   6Sept.
                          F           50                     0      0      0      0      0
    Haicheng r       inoffice                2018    2021
    Zhang   Superviso Currently               7Sept.   6Sept.
    Zheng   r       inoffice  M           35 2018    2021          0      0      0      0      0
            Deputy  Currently               17June  6Sept.
    Feng Yu                M           52                     0      0      0      0      0
            GM    inoffice                2006    2021
            Deputy  Currently               25Oct.  6Sept.
    Xie Jing                M           54                     0      0      0      0      0
            GM    inoffice                2018    2021
            Secretary
                   Currently               28Dec.  6Sept.
    Qi Peng  ofthe           M           46                     0      0      0      0      0
                   inoffice                2015    2021
            Board
    Lv Hang         Leavethe               20May  7Sept.
            Chairmanoffice   M           58 2015    2018          0      0      0      0      0
    Chen           Leavethe               20May  7Sept.
            Director         M           47                     0      0      0      0      0
    Gengsen         office                  2015    2018
            Director, Leavethe               20May  7Sept.
    Ding Hui                M           46                     0      0      0      0      0
            GM    office                  2015    2018
            Independ
    Wei            Leavethe               20May  7Sept.
    Shaohui  ent     office   M           47 2015    2018          0      0      0      0      0
            director
            Independ
                   Leavethe               20May  7Sept.
    Ji Huibin ent            M           49                     0      0      0      0      0
                   office                  2015    2018
            director
            Independ
    Li             Leavethe               20May  7Sept.
    Xiangjun ent     office   M           57 2015    2018          0      0      0      0      0
            director
            Chairman
            ofthe
            SuperviosLeavethe               20May  7Sept.
    Chen Hua               F           55                     0      0      0      0      0
            ry     office                  2015    2018
            Committe
            e
    Fu      Superviso Leavethe               20May  7Sept.
                          M           46                     0      0      0      0      0
    Chunlong r       office                  2015    2018
    Li      Superviso Leavethe               20Dec.  7Sept.
                          F           53                     0      0      0      0      0
    Yudong  r       office                  2017    2018
            SupervisoLeavethe               20Dec.  7Sept.
    WangBei               F           38                     0      0      0      0      0
            r      office                  2017    2018
    Ren     Deputy  Leavethe               20May  7Sept.
                          M           56                     0      0      0      0      0
    Yongjian GM     office                  2015    2018
            Deputy  Leavethe               20May  7Sept.
    Li Ming                M           57                     0      0      0      0      0
            GM    office                  2015    2018
    Total       --      --      --      --      --      --         0      0      0      0      0
    
    
    II. Changes of directors, supervisors and senior executives
    
    √Applicable □Not applicable
    
        Name         Title         Type         Date                     Reasons
                            Dismiss &
    Fu Chunlong   Chairman                  7Sept.2018    Generalelection
                            appoint
                            Dismiss &
    YuLei        Director       appoint       7Sept.2018    Generalelection
                            Dismiss &
    Zhang Quanxun Director                   7Sept.2018    Generalelection
                            appoint
                            Dismiss &
    Gu Zhiming    Director                   7Sept.2018    Generalelection
                            appoint
                            Dismiss &
    Lv Hang      Director,GM               7Sept.2018    Generalelection
                            appoint
                            Dismiss &
    Lou Hong     Director,CFO               7Sept.2018    Generalelection
                            appoint
                Independent    Dismiss&
    Hu Yuming                             7Sept.2018    Generalelection
                director       appoint
    Jiang Dinghang  Independent    Dismiss&     7Sept.2018    Generalelection
                director       appoint
                Independent    Dismiss&
    Zhang Dong                            7Sept.2018    Generalelection
                director       appoint
                Chairman ofthe
                            Dismiss &
    Guo Xiaodong  Supervisory                7Sept.2018    Generalelection
                            appoint
                Committee
                            Dismiss &
    Chen Yangsheng Supervisor                 7Sept.2018    Generalelection
                            appoint
                            Dismiss &
    YangJianping   Supervisor                 7Sept.2018    Generalelection
                            appoint
                            Dismiss &
    Liu Haicheng   Supervisor                 7Sept.2018    Generalelection
                            appoint
                            Dismiss &
    Zhang Zheng   Supervisor     appoint       7Sept.2018    Generalelection
                            Dismiss &
    Feng Yu      DeputyGM                25Oct.2018    Generalelection
                            appoint
                            Dismiss &
    Xie Jing       DeputyGM                25Oct.2018    Generalelection
                            appoint
                Secretary ofthe  Dismiss&
    Qi Peng                               25Oct.2018    Generalelection
                Board        appoint
                            Leave theoffice
    Lv Hang      Chairman      whileofficeterm 7Sept.2018    Generalelection
                            ends
                            Leave theoffice
    Chen Gengsen  Director       whileofficeterm 7Sept.2018    Generalelection
                            ends
                            Leave theoffice
    Ding Hui      Director,GM   whileofficeterm 7Sept.2018    Generalelection
                            ends
                            Leave theoffice
                Independent
    WeiShaohui                whileofficeterm 7Sept.2018    Generalelection
                director
                            ends
                            Leave theoffice
                Independent
    Ji Huibin                  whileofficeterm 7Sept.2018    Generalelection
                director
                            ends
                Independent    Leavetheoffice
    Li Xiangjun                            7Sept.2018    Generalelection
                director       whileofficeterm
                            ends
                Chairman ofthe Leavetheoffice
    Chen Hua     Supervisory    whileofficeterm 7Sept.2018    Generalelection
                Committee     ends
                            Leave theoffice
    Fu Chunlong   Supervisor     whileofficeterm 7Sept.2018    Generalelection
                            ends
                            Leave theoffice
    Li Yudong     Supervisor     whileofficeterm 7Sept.2018    Generalelection
                            ends
                            Leave theoffice
    WangBei      Supervisor     whileofficeterm 7Sept.2018    Generalelection
                            ends
                            Leave theoffice
    Ren Yongjian   DeputyGM    whileofficeterm 7Sept.2018    Generalelection
                            ends
                            Leave theoffice
    Li Ming       DeputyGM    whileofficeterm 7Sept.2018    Generalelection
                            ends
    
    
    III. Post-holding
    
    Professional background, major working experience and present main responsibilities in Company of directors, supervisors and
    
    senior executive
    
        Name                           Mainworkexperienceandholdingthepost
                Bornin1973,Masterdegree,seniorhumanresourcesmanager.HeevertooktheDeputyTeamLeaderinWorkTeam
                of Shenzhen SDG Huatong Packaging Co., Ltd., Business Deputy General Manager /GM and deputy
    Fu Chunlong   director/directorofHRDepartmentofShenzhenSDGCo., Ltd.,andsupervisoroftheCompany.Now,heisDeputy
                GMofShenzhen SDGCo., Ltd- controlling shareholderofthe Companyand Supervisor ofShenzhen State-Owned
                DutyfreeCommodity(Group)Co.,LtdandChairmanoftheCompany
                Bornin 1968, Master degree, a certified real estate appraiser and real estate economist. She successivelyserved as
                secretary of the international project cooperation department of Beijing Chaoyan Vocation Education Training
                Center,deputy chief, chief and deputy director of Luohu Branch, the Bureau of Planning and Land of Shenzhen
    Yu Lei
                Municipality,thedeputydirectoranddirectorofState-ownedAssetsSupervisionandAdministrationCommissionof
                thePeople‘sGovernmentofShenzhenMunicipality.NowsheservesasdeputyGMofthecontrollingshareholderof
                theCompany-SDGandDirectoroftheCompany
                Born in 1973, Master degree, he successively served as auditor and project manager in auditing department of
    Zhang Quanxun Shenzhen Zhixing CPA Office; the GM assistant of Xiamen Xingdao Feilu Investment Co., Ltd., secretary of the
                Board,GMassistantandstaffdirectorofFujianLogisticsInvestmentFinancingCo.,Ltd.;deputydirectorofXiamen
                ProductivityPromotion Center; director of the plastic business department and strategydevelopment department of
                ShenzhenTongchanPackageGroupandthedirectorofstrategyresearchandmergerdepartmentofSZCapital.Now
                he serves as deputy president and member of the investment committee of Shenzhen Capital Fortune Investment
                ManagementCo.,Ltd.andDirectoroftheCompany
                Bornin 1971, a seniorgold investmentanalyst.He successivelyserves as the staffof business dept. in Guilin Wan
                Ya Jewelry Co., Ltd., business director of Shenzhen Chenzhixin Jewelry Co., Ltd., the business director of the
    GuZhiming    business division of Luk Fook Holdings(International), GM of Shenzhen Jing Long JewelryCo., Ltd. and COOof
                theShenzhen XINGGUANGDA Jewelry Co., Ltd. No he serves as the deputy GM of the Shenzhen Yue Peng Jin
                JewelryCo.,Ltd.andDirectoroftheCompany.
                Born in 1961, Master degree, a seniorpolitical division. He successively served as lecturer and secretary of the
                principalofShenzhenUniversity;thebusinessmanager,deputydirectoranddirector oftheofficeofthePartyDept.
    LvHang
                ofShenzhenSDG;chairmanandGMofShenzhenSDGXiaomeishaTourismCenter;DirectorandGMofShenzhen
                TellusHoldingCo.,Ltd;GMofShenzhenSDGPropertyManagementCo.,LtdandchairmanoftheCompanyetc.
                Bornin 1968, a Bachelor degree and senior account. Used to worked as staff of the financial dept. in Suzhou Silk
                IndustryCompany and in Shenzhen Southeast Silk Co., Ltd.; staffof the accounting & financial dept. of Shenzhen
                SpecialEconomicZoneDevelopment(Group)Companyandworkedinaccountingmanagementoffice;alsoworked
                asdeputy GM of Shenzhen SDG Liancheng Real Estate Development Co., Ltd.; manager of the financial dept. of
    Lou Hong
                ShenzhenSDG Investment Co., Ltd.; the business manager and deputy director in accounting & financial dept. of
                ShenzhenSDG Group Co., Ltd.; CFO of the Shenzhen SDG Real Estate Co., Ltd. and the deputy director of the
                planning financial dept. Of Shenzhen SDG and Director and CFO of the Shenzhen SDG Xiaomeisha Investment
                DevelopmentCo.,Ltd.CurrentlyworksastheDirectorandCFOoftheCompany.
                Bornin1965,adoctoralcandidateandaccountingprofessor.Hesuccessivelyservedasateachingassistant,lecturer
                andviceprofessorofXiamenUniversity,associateprofessoroftheschoolofmanagement,vicedirectoranddirector
    Hu Yuming    of accounting department of Jinan University,the deputy dean of the school of international institute and school of
                management of the Jinan University. Now he serves as the professor and doctoral supervisor of school of
                managementoftheJinanUniversityandIndependentdirectoroftheCompany
                Bornin1963,amasterdegreeandalawyer.Hesuccessivelyserved astheministeroflegalconsultationdepartment
                ofShenzhen SocialSecurityBureau,deputydirectorofShenzhenLaborBureauOffice,directorofgeneralofficeof
    Jiang Dinghang Shenzhen SDG, GM of the Shenzhen SDG Songli Company, GM of the Shenzhen Communications Industry Co.,
                Ltd and apprentice lawyer of Guangdong Zhong An Laws Firm. Now he serves as senior partner of Shanghai
                ALLBRIGHT(Shenzhen)LawOfficeandIndependentdirectoroftheCompany.
                Born in 1974, a doctoral candidate, postdoctoral economics and senior gold investment analyst. He successively
                servedasDeputy GM of Shenzhen Qiang Zhuang Computer Tech. Co., Ltd, Deputy GM of Shenzhen Brain Age
                Economic and Cultural Co., Ltd, the assistant president of Hong Kong Leader Culture Media Co., Ltd, GM of
    Zhang Dong
                ShenzhenZhong Shi Advertising Co., Ltd, GM of Heilongjiang Luk Kwai Fook Jewelry Limited and President of
                LukKwai Fook Jewelry Group. No he serves as executive director of Shenzhen Yongtian Shengdao Investment
                DevelopmentCo.,LtdandIndependentdirectoroftheCompany.
                Bornin 1964, a bachelor degree and senior economist. He successively served as assistant engineer of Shuangliao
                Agricultural Machinery Bureau in Jilin Province, engineer of Fourth Research Laboratory of Jilin Institute of
    Guo Xiaodong
                Agricultural Machinery, manager of Gaodao industrial (Shenzhen) Co., Ltd., minister of the engineering dept.,
                deputy GM and GM of Shenzhen SDG Development Center Property Management Company, deputy GM of
                Shenzhen SDG Development Center Construction Supervision Company, Director and GM of Shenzhen SDG
                DevelopmentCenter Property Management Company, deputy GM of Shenzhen SDGProperty Co., Ltd., Chairman
                oftheSupervisoryCommitteeofShenzhen SDRealEstateCo.,LtdandChairmanoftheSupervisoryCommitteeof
                ShenzhenSDXiaomeishaTourismDevelopmentCo.,Ltd.NowheservesasChairmanofSupervisoryCommitteeof
                theCompany
                Bornin1963,apostgraduateandsenioraccountant.Heeverservedasdeputydirector/directorofthefinancialdept.
                inShenzhenIndustrialProductsTradeGroupCompany;deputydirector/director/CFOofthefinancialdept.in
                ShenzhenAokangdeGroupCompany;directorandCFOofShenzhenState-ownedDuty-FreeCommodity(Group)
    Chen Yangsheng
                Company;directorandCFOofShenzhenAgriculturalProductsCo.,Ltd.andsupervisorofShenzhenTagenGroup
                Co.,Ltd.;nowheservesasdirectorandCFOofShenzhenSDGCo.,Ltd-controllingshareholderoftheCompany,
                andSupervisoroftheCompany.
                Bornin1972,apostgraduateandcertifiedpublicaccountant.HeeverservedasBusinessmanagerofaccountingand
                finance department of SDGI, financial manager of Taike Branch, financial manager of Guanglan Branch, deputy
    Yang Jianping  manager and manager of the accounting & finance dept; Director and CFO of Shenzhen Tellus Holding Co., Ltd.
                Now he serves as director of the accounting & finance dept of SDG-controlling shareholder of the Company and
                SupervisoroftheCompany
                Bornin 1969, a postgraduate and certified public accountant. She ever served as staff of design dept. of Dongfeng
                Auto Wheel Co., Ltd., staff of technical dept. of Shenzhen Dongfeng Motor Co., Ltd., staff of the secretariat of
    Liu Haicheng   Shenzhen Automobile Association, operations dept. staff of the automobile division of the Company, staff of
                enterprise management dept. and deputy manager of the Company. Now she serves as manager of the enterprise
                managementdept.andsupervisoroftheCompany
                Born in 1984, a Bachelor degree. He successively served as senior auditor of Shenzhen Branch of Shenzhen
                Zhongqin Wanxin Accountant Affairs, the financing commissioner of planning & finance dept. of SDG, deputy
    Zhang Zheng
                manageroftheplanning&financedept.oftheCompany.Nowheservesasdeputymanageroftheauditsupervision
                departmentandsupervisoroftheCompany
                Born in 1967, bachelor‘s degree. He ever took the deputy director of Haicheng Foreign Economic and Trade
                Commission of Liaoning Province, director of liaison department of Youth President Committee of State-owned
    Feng Yu      AssetsAdministration,DeputyGMofShenzhenXiankeReal-estateCo.,Ltd.,ManagerofInvestmentDepartmentof
                ChinaSports Group IndustryCo., Ltd.; Deputy director and Director to the Officeof GeneralManger of Shenzhen
                SDGCo.,Ltd;andSupervisoroftheCompany.Now,heactsasDeputyGeneralManageroftheCompany
                Born in 1965, a citizenship of Canadian, bachelor‘s degree, and a senior engineer, national registered supervision
                engineer.He successively served as structural engineer of Hunan Light Industry Design Institute, engineer of the
    Xie Jing      Hunan Branch of Bankof China,assistant GMof the realestate dept. andGM of Engineering departmentof SDG,
                deputyGM of Shenzhen JinchengReal Estate Group Co., Ltd., the executivepresident of Shenzhen Jiaanda Group
                andGMetc.ofthelandreservecenterofWeiyeHolding.CurrentlyheservesasDeputyGMoftheCompany.
                Bornin1973,master'sdegree,economist,hehasobtainedthequalificationcertificateofsecretaryoftheboardfrom
                ShenzhenStockExchange.Hesuccessivelyserved assecretaryto the presidentanddirectorininformationcenterof
    Qi Peng      Shenzhen Special Economic Zone Development (Group) Co., Ltd.; deputy director in secretariat of the board, and
                deputy manager in enterprise development department, and manager in automobile business department and
                management department of Shenzhen Tellus(Group) Co., Ltd.; general manager of Shenzhen Tellus Automobile
                ServiceChain Co., Ltd.; general manager of Shenzhen Tellus New Yongtong Automobile Development Co., Ltd.;
                directorsecretariat of the board of Shenzhen Tellus(Group) Co., Ltd.; and serves as secretary of the board of the
                Company
    
    
    Post-holding in shareholder‘s unit
    
    √Applicable □Not applicable
    
                                                                                 Received
                                              Positionin
        Name         Nameofshareholder‘sunit      shareholder‘s  Startdatedof   Enddateof   remunerationfrom
                                                        office term    officeterm   shareholder‘sunit
                                               unit n
                                                                                  (Y/N)
    Fu Chunlong  ShenzhenSDGCo.,Ltd.             DeputyGM  Dec.2017                 Y
    YuLei       ShenzhenSDGCo.,Ltd.             DeputyGM   Aug.2011                Y
    Chen
               Shenzhen SDGCo.,Ltd.             CFO       Dec.2016                Y
    Yangsheng
                                             Directorof
    YangJianping  ShenzhenSDGCo.,Ltd.             planning&    Jan.2018                Y
                                             financedept.
    
    
    Post-holding in other unit
    
    √Applicable □Not applicable
    
                                                                                  Received
                                              Position in   Startdatedof Enddateofoffice  remuneration
        Name            Nameofotherunits          otherunitn   officeterm       term      fromotherunit
                                                                                   (Y/N)
               Shenzhen CapitalFortuneInvestment     Deputy
    Zhang Quanxun                                        Feb.2013                 Y
               Management Co.,Ltd.               President
    Gu Zhiming   ShenzhenYuePengJinJewelryCo.,Ltd   DeputyGM   May2011                Y
                                             professor of
                                             school of
    Hu Yuming   JinanUniversity                   management  June2003                Y
                                             and doctoral
                                             supervisor
               Shanghai ALLBRIGHT(Shenzhen)Law
    Jiang Dinghang                               Seniorpartner April2005                Y
               Office
               Shenzhen YongtianShengdaoInvestment  Executive
    Zhang Dong                                            April2014                Y
               Development Co.,Ltd.               Director
    
    
    Punishment of securities regulatory authority in recent three years to the Company‘s current and outgoing directors, supervisors and
    
    senior management during the reporting period
    
    □Applicable √Not applicable
    
    IV. Remuneration for directors, supervisors and senior executives
    
    Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
    
    The Company executes in strict accordance with the "Salary Management System for Headquarters of Shenzhen
    
    Tellus(Group) Co., Ltd. ", "Staff Performance Management System for Headquarters of Shenzhen Tellus (Group)
    
    Co., Ltd. ", "Implementing Rules of Remuneration and Appraisal Committee of the Board of Shenzhen
    
    Tellus(Group) Co., Ltd.", "Annual Performance Management Approaches for Leading Group Members of
    
    Shenzhen Tellus(Group) Co., Ltd." and other relevant system regulations, strictly implements the performance
    
    appraisal, and pay the remuneration in accordance with the assessment results.
    
    Remuneration for directors, supervisors and senior executives in reporting period
    
    In 10 thousand Yuan
    
                                                                       Total        Whether
                                                                    remuneration    remuneration
                                                        Post-holding
        Name         Title          Sex          Age                  obtainedfromthe  obtainedfrom
                                                          status
                                                                   Company(before  relatedpartyof
                                                                      taxes)      theCompany
                 Chairman,Party                           Currentlyin
    Fu Chunlong                M                     46                        0 Y
                 secretary                               office
                                                      Currentlyin
    Lv Hang       Director,GM    M                     58                    108.31 N
                                                      office
    Ding Hui      Director,GM    M                     46 Leavetheoffice          91.32 N
                 Chairmanofthe
                                                      Currentlyin
    Guo Xiaodong   Superviosry     M                     55                       8.5 N
                                                      office
                 Committee
                 Chairmanofthe
    Chen Hua      Superviosry     F                      55 Leavetheoffice           44.9N
                 Committee
    Ren Yongjian   DeputyGM     M                     56 Leavetheoffice           71.7N
                                                      Currentlyin
    Lou Hong      Director,CFO   F                      51                      32.5N
                                                      office
                                                      Currentlyin
    Feng Yu       DeputyGM     M                     52                     90.59 N
                                                      office
    Li Ming       DeputyGM     M                     57 Leavetheoffice          71.93 N
                                                      Currentlyin
    Xie Jing       DeputyGM     M                     54                      8.16N
                                                      office
                 Secretaryofthe                           Currentlyin
    Qi Peng                    M                     46                     52.33 N
                 Board                                 office
    WangBei      Supervisor     F                      38 Leavetheoffice          26.98 N
    Li Yudong     Supervisor     F                      53 Leavetheoffice          34.03 N
                                                      Currentlyin
    Liu Haicheng    Supervisor     F                      50                     18.53 N
                                                      office
                                                      Currentlyin
    Zhang Zheng    Supervisor     M                     35                     13.93 N
                                                      office
                 Independent
    Ji Huibin                   M                     49 Leavetheoffice             5 N
                 director
                 Independent
    Wei Shaohui                 M                     47 Leavetheoffice             5 N
                 director
                 Independent
    Li Xiangjun     director       M                     57 Leavetheoffice             5 N
                 Independent                             Currentlyin
    Hu Yuming                 M                     54                        3 N
                 director                                office
                 Independent                             Currentlyin
    Jiang Dinghang               M                     56                        3 N
                 director                                office
                 Independent                             Currentlyin
    Zhang Dong                 M                     45                        3 N
                 director                                office
    Total               --           --           --           --             697.71      --
    
    
    Delegated equity incentive for directors and senior executives in reporting period
    
    □Applicable √Not applicable
    
    V. Particulars of workforce
    
    1.Number of Employees, Professional composition, Education background
    
    Employee in-postoftheparentCompany(people)                                                    47
    Employee in-postofmainSubsidiaries(people)                                                     290
    The totalnumberofcurrentemployees(people)                                                     337
    The totalnumberofcurrentemployeestoreceivepay(people)                                           337
    Retired employee‘sexpensesbornebytheparentCompanyand
                                                                                          0
    main Subsidiaries(people)
                                       Professional composition
             Category ofprofessionalcomposition                Numbersofprofessionalcomposition(people)
    Production personnel                                                                       40
    Sales personnel                                                                           86
    Technician                                                                             115
    Financial staff                                                                           28
    Administration staff                                                                        68
    Total                                                                                 337
                                        Education background
    Type ofeducationbackground                        Numbers(people)
    Master                                                                                 23
    Bachelor degree                                                                          83
    Junior college                                                                            78
    Technical secondaryschool                                                                   43
    Other                                                                                 110
    Total                                                                                 337
    
    
    2. RemunerationPolicy
    
    The Company executes in strict accordance with the "Salary Management System for Headquarters of Shenzhen
    
    Tellus Holding Co., Ltd. ", "Staff Performance Management System for Headquarters of Shenzhen Tellus Holding
    
    Co., Ltd. " and other relevant system regulations strictly implement.
    
    3. Training programs
    
    The Company always attaches importance to the training and development work for employees; and committed to
    
    creating a comprehensive talent training system in order to helping the successful achievement in continuous
    
    improvement of staff‘s comprehensive ability and in strategy target of the Company. Combine with current
    
    situation of the Company, and take annual planning, position requirement and responsibility as well as
    
    enterprise‘s development needs into consideration, the Company formulated a systematic training plans and talent
    
    cultivation projects; strengthen training works in aspect of multi-tiered, multi-channel, multi-field and multi-form,
    
    including induction training for new employees, business training for on-job employees, operation skill training
    
    for workers at the production line, upgrade training for manager, project development and risk control training,
    
    continues to improve general quality for employees in order to achieve a win-win situation for the Company and
    
    employees.
    
    4. Labor outsourcing
    
    □Applicable √Not applicable
    
    Section IX. Corporate Governance
    
    I. Corporate governance of the Company
    
    During the reporting period, the Company has been observing the laws and regulations as Company Law,
    
    Securities Law, Governance Criteria of the Listed Companies, Guidelines for Standardized Operation of Listed
    
    Companies on the Main Board of Shenzhen Stock Exchange and relevant rules issued by the CSRC, for the
    
    purpose of improving its legal person governance structure, setting up and improving the internal control system,
    
    and standardizing its operation level. According to the Articles of Association, Procedure Rules of Shareholders
    
    General Meeting, Procedure Rules of Board of Directors, Procedure Rules of Supervisory Committee, Working
    
    Rules of Independent Directors, Working Rules of General Manager, working rules of every committee of the
    
    Board and a series of rules and regulations, the Company maintained formal procedures, clearly duties and
    
    obligations of its general meeting, board of directors, supervisory committee, each specialized committee of the
    
    board and senior manager. Each of its directors, supervisors and senior managers can perform their duties
    
    earnestly.
    
    In 2018, the Company have convened four shareholders general meetings, 16 meetings of the Board, 6 meeting of
    
    the Supervisory Committee, 2 meetings of Auditing Committee of the Board, one meeting of Strategy Committee
    
    of the Board and one meeting of Remuneration and Appraisal Committee of the Board; relevant governance
    
    documents as Articles of Association, Procedure Rules of Shareholders General Meeting, Procedure Rules of
    
    Board of Directors, Implementation Rules and Procedure Rules of Supervisory Committee and Working Rules of
    
    General Manager etc. are being revised;in accordance with the principles of professionalization, professionalism,
    
    and marketization, the company completed the election of the board of directors, the board of supervisors, and the
    
    senior management. In order to establish and improve the company‘s standardized operation mechanism and
    
    improve the company‘s internal control system, the company promoted the revision, promulgation and abolition
    
    of the system in accordance with the established system construction work plan, and revised a number of rules and
    
    regulations throughout the year.
    
    As of the end of the reporting period, the actual situation of corporate governance was in line with the
    
    requirements of the regulatory documents issued by the China Securities Regulatory Commission on the
    
    governance of listed companies.
    
    Is there any difference between the actual condition of corporate governance and relevant regulations about
    
    corporate governance for listed Company from CSRC?
    
    □Yes √ No
    
    There are no differences between the actual condition of corporate governance and relevant regulations about
    
    corporate governance for listed Company from CSRC.
    
    II. Independent of the Company relative to controlling shareholders’ in aspect of businesses,
    
    personnel, assets, organization and finance
    
    The Company has been independent from the controlling shareholders in terms of business, personnel, asset,
    
    institution and finance. The Company has independent and complete business and is able to operate
    
    independently.
    
    (i) Business: the Company belongs to independent legal person entity. Being completely independent from
    
    controlling shareholders, it has independent and complete business system and is able to operate independently.
    
    The Company has independent production, sales and service systems and its major business. There is no
    
    inter-competition between the Company and its controlling shareholders and related parties.
    
    (ii) Personnel: the Company establishes complete labor, human resources and salary management systems. Senior
    
    executive as GM, Deputy GM, CFO and Secretary of the Board etc. are receives remuneration from the Company
    
    since they are employed by the Company, and no one takes position in the enterprises owned by shareholders.
    
    (iii) Assets:The Company independently and completely owns the business system and underlying assets related
    
    to the operation, and independently registers, establishes accounts, adjusts accounts and manages the assets, and
    
    the assets are independent of the controlling shareholders and other enterprises controlled by them.
    
    (iv) Finance: the Company has independent financial accounting department which set independent accounting
    
    calculation system and finance management system. No controlling shareholder intervenes in the capital
    
    application of the Company. The Company opens separate bank accounts. No capital is saved in the financial
    
    Company or settlement center account controlled by substantial shareholder or other related parties; the Company
    
    does not share bank account with controlling shareholders and other enterprise under their control.And The
    
    Company pays taxes by law independently.
    
    (v) Institution: the board, the supervisory committee and other internal institutions of the Company operate
    
    independently. All the institutions of the Company are set according to the standards requirements applicable to
    
    listed Company and actual business natures of the Company. It has independent office location.
    
    III. Horizontal competition
    
    □Applicable √Not applicable
    
    IV. In the report period, the Company held annual shareholders’ general meeting and
    
    extraordinary shareholders’ general meeting
    
    1. Annual Shareholders’ General Meeting in the report period
    
                                   Ratioofinvestor
     Sessionofmeeting       Type                       MeetingDate    Dateofdisclosure  Indexofdisclosure
                                    participation
    First Extraordinary  Extraordinary              73.01%27Feb.2018      28Feb.2018      ‖ResolutionNotice
    General Meeting   GeneralMeeting                                               ofFirst
    of2018                                                                    Extraordinary
                                                                             GeneralMeetingof
                                                                             2018‖(No.:
                                                                             2018-014)published
                                                                             onSecuritiesTimes,
                                                                             HongKong
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                                                                             ―ResolutionNotice
                                                                             ofAnnualGeneral
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                                                                             (No.:2018-041)
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    Annual General    AnnualGeneral
                                          73.07% 29June2018      30June2018      SecuritiesTimes,
    Meeting of2017    Meeting
                                                                             HongKong
                                                                             CommercialDaily
                                                                             andJuchaoWebsite
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                                                                             ‖ResolutionNotice
                                                                             ofSecond
                                                                             Extraordinary
                                                                             GeneralMeetingof
    Second
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    Extraordinary      Extraordinary              72.06%7Sept.2018      8Sept.2018      2018-050)published
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                                                                             HongKong
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                                                                             ‖ResolutionNotice
                                                                             ofThird
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    Third Extraordinary                                                           GeneralMeetingof
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    2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
    
    □Applicable √Not applicable
    
    V. Responsibility performance of independent directors
    
    1.The attending of independent directors to Board meetings and general meeting
    
                  TheattendingofindependentdirectorstoBoardMeetingandshareholdersgeneralmeeting
                   Times of               Timesof                         Absentthe    Timesof
        Nameof    Boardmeeting                        Timesof              Meetingfor
                              Timesof    attendingby              Timesof               attending
      independent    supposedto    Presence   communicatio   entrusted     Absence    thesecond   shareholders‘
        director     attendinthe                         presence              timeinarow
                  reportperiod                n                             (Y/N)      meeting
    Wei Shaohui              9          1          8          0          0 N                   0
    Ji Huibin                9          1          8          0          0 N                   2
    Li Xiangjun              9          1          8          0          0 N                   0
    Hu Yuming               7          1          6          0          0 N                   2
    Jiang Dinghang            7          1          6          0          0 N                   2
    Zhang Dong              7          1          6          0          0 N                   1
    
    
    Explanation of absent the Board Meeting for the second time in a row
    
    No independent directors did not attend the Board Meeting for the second time in a row during the period
    
    2. Objection for relevant events from independent directors
    
    Independent directors come up with objection about Company‘s relevant matters
    
    □Yes √No
    
    Independent directors has no objections for relevant events in reporting period
    
    3. Other explanation about responsibility performance of independent directors
    
    The opinions from independent directors have been adopted
    
    √ Yes □ No
    
    Explanation on advice that accepted/not accepted from independent directors
    
    In accordance with the provisions of the Company Law, the Securities Law, the Stock Listing Rules, the
    
    Independent Director System and other relevant laws and regulations, the company‘s independent directors paid
    
    attention to the normalization of the company‘s operations, performed their duties independently, diligently and
    
    conscientiously did their duties, and made independent, objective and fair opinions on the company‘s fund
    
    occupation of related party and external guarantees during the reporting period, profit distribution matters,
    
    self-evaluation of internal control of the company, deposit and use of raised funds, changes in accounting
    
    policies,related transactions,use of partially idle raised funds and self-owned funds to purchase bank financial
    
    products, election of the board of directors, appointment of senior management personnel, providing stock equity
    
    pledge guarantee for the bank loans of Shenzhen Xinglong Machinery Mould Co., Ltd., engaging audit
    
    institutions for financial reports and internal control and other matters requiring independent directors to express
    
    independent opinions, which played an active role in improving the company‘s supervision mechanism and
    
    helping the board of directorsmake scientific and objective decisions, and played an important role in
    
    safeguarding the legitimate rights and interests of the company and all shareholders.
    
    VI. Duty performance of the special committees under the board during the reporting period
    
    Board of Director of the Company have three special committees as strategic committee, auditing committee and
    
    remuneration and appraisal committee, and formulated implementation rules for the special committees
    
    independently. During the reporting period, all committees had clear responsibilities and the overall operations
    
    were good, which ensured efficient operation and scientific decision-making of the board of directors, and there
    
    were no other important opinions and suggestions.
    
    1. Duty performance of the strategic committee
    
    The strategic committee of the board is specially set-up according to the regulation of Governance Criteria of the
    
    Listed Companies, responsible for study on the long term development strategy and material investment decisions
    
    and raising its recommendations.The committee comprised of 5 directors, and the committee is chaired by
    
    chairman of the Company.During the reporting period, the committee actively performed its duties, and carry out
    
    works strictly in accordance with relevant rules of the CSRC, Shenzhen Stock Exchange and Working Rules of
    
    Strategic Committee, with each of its members doing their best to perform the respective duties, provides strategic
    
    supports for the sustained and steady development of the Company. One meeting was held by strategic committee
    
    in 2018, which including:
    
    On December 24, 2018, the strategy committee of the board of directors held a meeting and reviewed the Proposal
    
    on Investment and Construction of Tellus Innovative and Entrepreneurial Base Project‖,each committee member
    
    made research on the investment project and offered proposals, which played an important role in strengthening
    
    the scientificity of investment decisionand improving the benefits and quality of investment decision..
    
    2. Duty performance of theaudit committee
    
    The audit committee of the board of directors is a specialized work organization set up by the board of directors in
    
    accordance with the Guidelines for the Governance of Listed Companies, and is mainly responsible for the
    
    communication, supervision and verification of internal and external audits of the company.The committee
    
    comprised of 5 directors, including 3 independent directors, and the committee is chaired by independent director
    
    of the Company.During the reporting period, the committee actively performed its duties, and carry out works
    
    strictly in accordance with relevant rules of the CSRC, Shenzhen Stock Exchange and Working Rules of Audit
    
    Committee. Pay close attention to the company‘s management, financing and implementation of internal control
    
    standards; strengthen the communication and contact with the company‘s relevant responsible departments,
    
    review the validity assessment of the company‘s internal control and enterprise risk management through
    
    communication, inspection, reporting, etc., and check whether the company‘s operations, financing and
    
    accounting policies comply with laws and regulations, and provide management and audit opinions.
    
    Two meetings were held by audit committee in 2018, which including:
    
    (1) During the annual audit, the audit committee took active attitude in relevant works. Prior to the official
    
    involvement of Ruihua Certified Public Accountants (LLP) (hereinafter referred to as Ruihua) in the annual audit,
    
    on 30 January 2018, the audit committee held meeting and determined the working arrangement for annual report
    
    after negotiation with Ruihua, reviewed the financial statements prepared by the Company, the committee agreed
    
    to submit the financial statements and related information to Ruihua for audit.
    
    (2) The audit committee held meeting on 2 April 2018 to re-review the financial statements, and formed written
    
    opinions and resolutions in respect of the annual financial statements, audit work summary report.
    
    3. Duty performance of the remuneration and appraisal committee
    
    The remuneration and appraisal committee of the board of directors is a specialized working organization set up
    
    by the board of directors in accordance with the Guidelines for the Governance of Listed Companies,it is mainly
    
    responsible for formulating the assessment criteria for the company‘s directors and senior management personnel
    
    and making the assessment, responsible for formulating and reviewing the pay policy and programs of the
    
    company‘s directors and senior management personnel, and responsible for the board of directors.The committee
    
    comprised of 5 directors, including 3 independent directors, and the committee is chaired by independent director
    
    of the Company.During the reporting period, the committee actively performed its duties, and carry out works
    
    strictly in accordance with relevant rules of the CSRC, Shenzhen Stock Exchange and Working Rules of Audit
    
    Committee. The committee comprised of 5 directors, including 3 independent directors, and the committee is
    
    chaired by independent director of the Company.During the reporting period, the committee actively performed its
    
    duties, and carry out works strictly in accordance with relevant rules of the CSRC, Shenzhen Stock Exchange and
    
    Working Rules of Audit Committee. One meeting was held by remuneration and appraisal committee in 2018,
    
    which including:
    
    On August 3, 2018, the remuneration and appraisal committee of the board of directors held a meeting and
    
    reviewed the annual performance appraisal indicators and remuneration of the company‘s directors, supervisors
    
    and senior management personnel. After review, all members of the remuneration and appraisal committee
    
    considered that the remuneration payment during the reporting period was in line with the company‘s performance
    
    appraisal system, the remuneration of directors, supervisors and senior executives were determined by the
    
    company‘s relevant system.
    
    VII. Works from Supervisory Committee
    
    The Company has risks in reporting period that found in supervisory activity from supervisory committee
    
    □ Yes √ No
    
    Supervisory committee has no objection about supervision events in reporting period
    
    VIII. Examination and incentives of senior management
    
    Board of the Company evaluated senior executives based on relevant regulations at end of this reporting period.
    
    IX. Internal Control (IC)
    
    1. Details of major defects in IC appraisal report that found in reporting period
    
    □Yes √ No
    
    2. Appraisal Report of Internal Control
    
    Disclosure  date  of  full  internal2April2019
    control evaluationreport
    Disclosure  index of full internalJuchaowebsiteforinformationdisclosureappointedbyShenzhenStock
    control evaluationreport          Exchange:
                                 http://www.cninfo.com.cn
    Ratio ofthetotalassetsfromenterprise
    included intheappraisalrangeintotal                                                        97.58%
    assets inconsolidatestatement
    Ratio oftheoperationrevenuefrom
    enterprise includedintheappraisalrange                                                       98.66%
    in totalrevenueinconsolidatestatement
                                    Defects EvaluationStandards
               Category                   FinancialReports              Non-financialReports
                                 Significant defects: Individual defects or 1. Major deficiencies: A. Great
                                 together  with other defects causing the decisions violate the Company‘s
    Qualitative criteria               material misstatementsin financial reports established procedure, resultingin
                                 cannot be timely prevented or found orsignificantlossestotheCompany;
                                 corrected. It is recognized as a significant B. Serious violation of laws and
                                 defect if following cases happen.A. Fraudregulations results in significant
                                 of  management leading to material losses  to  the  Company;  C.
                                 misstatements of financial results or Important businesses are lack of
                                 false financial reports, which misleadsystem control or system control
                                 users offinancialstatementsandresultfails; D. Serious brain drain of
                                 in  decision-making  mistakes  andcore   management   or   core
                                 litigation;   B.  Ineffective  control technical  staff;  E.  Significant
                                 environment;C. Major internal controldeficiencies   in   the   internal
                                 deficiencies found and reported to the evaluation results have not been
                                 management   but   haven‘t   been corrected. F. The failure of internal
                                 corrected after a reasonable time; D. controltoinformationdisclosurecauses
                                 The    decision-making   of   the the companyto be publicly condemned
                                 Company‘s  major matters has notby   the   regulatory   authorities.
                                 fulfilled     the     corresponding2. Significantdeficiencies:A. The
                                 decision-making process, resulting in Company violates the enterprise
                                 significant losses of the Company; E. internal regulations and causes
                                 Important businesses  involving the significant  losses;  B.  Serious
                                 Company‘s     production     and brain drain of business personnel
                                 management  are  lack  of  effectivein the Company‘s key positions;
                                 control;F.    Other    defects    that C.  The  Company‘s significant
                                 seriouslymislead thecorrectjudgmentsmade business     systems     have
                                 by the users of the statements, resulting in deficiencies; D. The significant
                                 the company‘smajorcompensation.       deficiencies in the internal control
                                 2. Important defects: Individual defects or of the Company have not been
                                 together  with other defects causing the corrected.
                                 misstatementsin financial reports cannot be 3. General deficiencies refers to
                                 timely  prevented or found or corrected, deficiencies except for major and
                                 though the misstatements don‘t reach and significantdeficiencies.
                                 exceed the importancelevel, they should still
                                 cause  the management‘s attention. It is
                                 recognized  as  an  important  defect  if
                                 following cases happen.A. The selection
                                 and application of accounting policies
                                 do not follow the generally accepted
                                 accounting principles; B. Anti-fraud
                                 programs and control measures have
                                 been     not    established;    C.
                                 Corresponding control mechanism for
                                 accounts handling of unconventional
                                 or special transactions has not been
                                 established orimplementedandhasno
                                 there is no appropriate compensatory
                                 controls;  D.  The  controls  to  the
                                 period-end financial reporting process
                                 have one or more defects and cannot
                                 reasonably ensure that the financial
                                 statements  prepared  are  true  and
                                 accurate.3. General deficiencies refers
                                 to  thedeficiencies except for major
                                 and significantdeficiencies.
                                                                1.  Major   deficiencies:   loss
                                                                amount> 1.5% of owner's equity
                                 1. Major deficiencies: misstatement attributable to parent Company,
                                 amount > 10% of total profit, and and absolute amount > 5 million
                                 absolute amount > 2 million Yuan; Yuan;
                                 2.  Significant deficiencies: 5% of 2. Significant deficiencies: 0.5%
                                 total profit < misstatement amount of owner's equity attributable to
                                 ≤10% of total profit, and absolute parent Company < loss amount ≤
    Quantitative standard             amount > 1 million Yuan; or 1 1.5%   of   owner's   equity
                                 million Yuan< absolute amount ≤ 2 attributableto parent Company,or
                                 million  Yuan,  and  misstatement 1 million Yuan< absolute amount
                                 amount >5%oftotalprofit.         ≤5millionYuan;
                                 3. General deficiencies: misstatement 3.  General  deficiencies:  loss
                                 amount  ≤ 5% of total profit, or amount   ≤  0.5%  of  owner's
                                 absolute amount≤1millionYuan    equity  attributable  to  parent
                                                                Company,or absolute amount ≤ 1
                                                                millionYuan
    Amount  of significant defects in                                                         0
    financial reports
    Amount  of significant defects in                                                         0
    non-financial reports
    Amount  of  important  defects  in                                                         0
    financial reports
    Amount  of  important  defects  in                                                         0
    non-financial reports
    
    
    X. Auditing report of internal control
    
    √Applicable □Not applicable
    
                              DeliberationsinInternalControlAuditReport
    We considerthat:inallmajoraspects,ShenzhenTellusHoldingCo.,Ltd.hasefficiencyinfinancialreportof
    internal controldated31December2018accordingtoBasicStandardsofInternalControlforEnterpriseand
    relevant regulations.
    Disclosure  details  of  auditDisclosure
    report ofinternalcontrol
    Disclosure date of audit report2April2019
    of internalcontrol(full-text)
    Index  of  audit  report  of JuchaowebsiteforinformationdisclosureappointedbyShenzhenStock
    internal control(full-text)     Exchange:
                            http://www.cninfo.com.cn
    Opinion  type  of  auditing Standardwithoutreservedreports
    report ofIC
    whether   the  non-financialNo
    report hadmajordefects
    
    
    Carried out modified opinion for internal control audit report from CPA
    
    □Yes √ No
    
    The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
    
    √ Yes □ No
    
    Section X. Corporate Bond
    
    Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
    
    annual report approved for released or fail to cash in full on due
    
    No
    
    Section XI. Financial Report
    
    I. Audit Report
    
    Type ofauditopinion                             Standardunqualifiedauditor‘sreport
    Date ofauditreportsigning                         1April2019
    Audit authority                                 RuihuaCertifiedPublicAccountants(LLP)
    Serial ofAuditReport                             RuihuaShenZi 【2019】No.:48400003
    CPA‘sname                                    CaiXiaodong,ZhouXuechun
    
    
    Text of audit report
    
    To the shareholders of Shenzhen Tellus Holding Company Limited:
    
    I. Opinion
    
    We have audited the financial statements of Shenzhen Tellus Holding Company Limited (―the Company‖), which
    
    comprise the consolidated and company balance sheet as at 31 December 2018, and the consolidated and the
    
    Company‘s income statements, the consolidated and the Company‘s statements of changes in equity and the
    
    consolidated and the Company‘s statements of cash flows for the year then ended, and notes to the financial
    
    statements.
    
    In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and
    
    the Company‘s financial position as at 31 December 2018, and the consolidated and the Company‘s financial
    
    performance and cash flows for the year then ended in accordance with Accounting Standards for Business
    
    Enterprises.
    
    II. Basis for Opinion
    
    We conducted our audit in accordance with China Standards on Auditing (―CSAs‖). Our responsibilities under
    
    those standards are further described in the Auditor‘s responsibilities for the audit of the financial statements
    
    section of our report. We are independent of the Company in accordance with China Code of Ethics for Certified
    
    Public Accountants (the ―Code‖), and we have fulfilled our other ethical responsibilities in accordance with the
    
    Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
    
    opinion.
    
    III. Key Audit Matters
    
    Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
    
    the financial statements of the current period. These matters were addressed in the context of our audit of the
    
    financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
    
    these matters. We determine the followings are key audit matters in need of communication in our report.
    
    (I) Measurement of the carrying value of construction in progress
    
    1. Factual description
    
    As disclosed notes VI, 2 and VI, 14 to the financial statements,After the completion of the first phase of the Teli
    
    Shuibei Jewelry Building project in this year, the original value of the investment real estate was RBM438.086
    
    million, which accounted for a significant proportion of the total assets. When carrying over the first phase of the
    
    Teli Shuibei Jewelry Building project to the investment real estate, the management should make judgments on
    
    the following aspects: determining the time when the project under construction will be transferred to the
    
    investment real estate and starting to calculate depreciation; estimating the cost of the completed project that has
    
    not yet been settled; estimating the expected useful life and residual value of the corresponding investment real
    
    estate. Because the confirmation and measurement of the investment real estate in construction involves the
    
    management's judgment and the amount is of great importance, the confirmation and measurement of the
    
    investment real estate in Tereshuibei Jewelry Building Phase I project are identified as the key audit items.
    
    2. How our audit addressed the matter
    
    (1) We have tested the design and implementation of key internal controls in the relevant projects to confirm the
    
    effectiveness of internal controls;
    
    (2) We have carried out the field investigation procedure, inquired the person in charge of the first phase of the
    
    project of Teli Shuibei Jewelry Building to know the construction progress of the project;
    
    (3) We inspected the original vouchers of the first phase of the project added in this year, such as the project
    
    contract, acceptance report, settlement documents, progress payment application, invoice and payment vouchers,
    
    in order to determine whether the entry amount is accurate.
    
    We have acquired and checked the payment progress account, the cumulative measurement report of important
    
    individual or unit projects for the first phase of the Tereshuibei Jewelry Building project, and cross-checked the
    
    account, statement records and book amount to check the integrity of the construction under construction.
    
    Check the correctness and completeness of the end-of-period balance of the payable project with the auditing of
    
    the payable project funds, and corroborate the total contract amount, the accumulative payment amount and the
    
    unpaid amount of the completed project amount of the important single or unit project.
    
    We performed the following procedures for construction in progress.
    
    We assessed the design and implementation of the key project-related internal controls of the Company in order to
    
    determine the effectiveness of the internal control policies;
    
    We conducted a field investigation procedure by consulting supervision company as well as the person who was in
    
    charge of the Project about the progress of the Project.
    
    We verified the accounting records about the Project by obtaining substantial accounting vouchers, such as
    
    construction contracts、acceptance reports、project statement、demand notes for interim payments、invoices、
    
    payment certificate and so on, in order to determine the accuracy of the construction in progress.
    
    We obtained and cross-checked the records in the Project payments standing books and applications of bill of
    
    quantities so as to verify the completeness of the construction in progress.
    
    (4) For projects completed in the current year, check the completed individual or comprehensive acceptance
    
    documents, including building foundation, main project, installation project acceptance documents and planning
    
    acceptance documents, and confirm the time point for completion and transfer of investment real estate;
    
    (5) Evaluate the reasonableness of accounting estimates related to depreciation and review the depreciation
    
    charged on the books.
    
    (II) Revenue recognition for sales of cars
    
    1.Factual description
    
    As disclosed in Note (Ⅵ) 35 and Note (13) 4 to financial statements,In 2018, sales revenue of automobiles and
    
    jewelry was RMB 27,346.37 million, which accounted for a large proportion of total sales revenue and increased
    
    rapidly. Therefore, there may be related risks in the confirmation of sales revenue. Therefore, we regard the
    
    confirmation of sales revenue as a key audit item.
    
    2.How our audit addressed the matter
    
    Our main audit procedures for the above key audit matters related to revenue recognition include:
    
    (1) Understanding and testing the design and implementation of the internal control system related to sales and
    
    receipts of Tellus Co., Ltd.
    
    (2) In view of the identified items requiring the use of analytical procedures, and based on the understanding of
    
    customers and their environment, the sales revenue of the current period is compared with that of the previous
    
    period, and the abnormal structure and price changes of the sales products are analyzed, and the reasons for the
    
    abnormal changes are analyzed.
    
    (3) Drawing accounting vouchers from the accounting records of sales revenue of goods, cross-checking contracts,
    
    invoices, receipts and receipts related to sales, checking the consistency of the names, quantities and amounts of
    
    goods entered into accounts, checking whether the period of entry is consistent with the period of invoices and
    
    receipts, paying special attention to the samples before and after the balance sheet date. Is this included in the
    
    correct accounting period.
    
    (4) Combined with the audit of accounts receivable, we select the current sales volume of the main customer
    
    letters and test the samples of unresponsive letters.
    
    IV. Other information
    
    Management of the Company is responsible for the other information. The other information comprises all of the
    
    information included in 2018 annual report of the Company other than the financial statements and our auditor‘s
    
    report thereon.
    
    Our opinion on the financial statements does not cover the other information and we do not express any form of
    
    assurance conclusion thereon.
    
    In connection with our audit of 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. If, based on the work we have
    
    performed, we conclude that there is a material misstatement of this other information. We are required to report
    
    that fact. We have nothing to report in this regard.
    
    (V) Responsibilities of the management and those charged with governance for the financial statements
    
    The management of the Company is responsible for the preparation and fair presentation of the financial
    
    statements in accordance with CSAs, and for designing, implementing and maintaining such internal control as
    
    the management determines is necessary to enable the preparation of financial statements that are free from
    
    material misstatement, whether due to fraud or error.
    
    In preparing the financial statements, the management is responsible for assessing the Company‘s ability to
    
    continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
    
    concern basis of accounting, unless the management either intends to liquidate the Company or to cease
    
    operations or has no realistic alternative but to do so.
    
    Those charged with governance are responsible for overseeing the Company‘s financial reporting process
    
    (VI) Auditor’s responsibilities for the audit of the financial statements
    
    Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
    
    material misstatement, whether due to fraud or error, and to issue an auditor‘s report that includes our opinion.
    
    Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
    
    with CSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
    
    and are generally considered material if, individually or in the aggregate, they could reasonably be expected to
    
    influence the economic decisions of users taken on the basis of these financial statements.
    
    As part of an audit in accordance with CSAs, we exercise professional judgment and maintain professional
    
    skepticism throughout the audit. We also:
    
    A. Identify and assess the risks of material misstatement of the financial statements due to fraud and error, design
    
    and implement audit procedures to address these risks, and obtain sufficient and appropriate audit evidence as a
    
    basis for forming the audit opinion. As fraud may involve collusion, forgery, willful omission, misrepresentation
    
    or override of internal control, the risk of not discovering a material misstatement due to fraud is higher than the
    
    risk of failing to detect a material misstatement resulting from a mistake.
    
    B. Understand the internal controls related to auditing in order to design appropriate audit procedures.
    
    C. Evaluate the appropriateness of accounting policies adopted by the management and the reasonableness of
    
    accounting estimates and relevant disclosures made by management.
    
    D. Conclude on the appropriateness of management‘s application of the going concern assumption. Meanwhile,
    
    based on the audit evidence obtained, conclude whether there is material uncertainty about the Company‘s ability
    
    to continue as a going-concern. If we conclude that there is material uncertainty, the auditing standards require us
    
    to draw attention of the users of the financial statements to the relevant disclosures in the financial statements. If
    
    the disclosure is inadequate, we shall express a qualified opinion. Our conclusion is based on information
    
    available as of the date of the audit report. However, future events or circumstances may cause the Company not
    
    being able to continue as a going-concern.
    
    E. Evaluate the overall presentation, structure and content of financial statements (including disclosures), and
    
    evaluate whether the financial statements present fairly the relevant transactions and events.
    
    F. Obtain sufficient and appropriate audit evidence regarding to the Company‘s financial information of the
    
    entities or business activities in order to express opinion on the financial statements. We are responsible for the
    
    guidance, supervision and execution of the group audit. We take full responsibility for the audit opinion.
    
    We communicate with those charged with governance on the scope and time schedule of the audit, and significant
    
    audit findings, etc., including deficiency of internal control that we identified during the audit which warrants
    
    attention.
    
    We also provide a statement to those charged with governance regarding the fact that we comply with the
    
    requirements of professional ethics relating to independence, and also communicate with them about all
    
    relationships and other matters that may be reasonably deemed to affect our independence,as well as, where
    
    applicable, the relevant precautions(if applicable).
    
    Through the matters we communicate with those charged with governance, we identify matters that are significant
    
    in the audit of the financial statements for the current period, which therefore become the key audit items. We
    
    disclose these items in the audit report, unless public disclosure of such items is prohibited by laws and
    
    regulations; in exceptional circumstances, where the benefit arising from public disclosure of certain matters is
    
    outweighed by the negative consequence brought by such disclosure in consideration of public interest, we do not
    
    disclosure such items in the audit report.
    
    II. Financial Statement
    
    Statement in Financial Notes are carried in RMB/CNY
    
    1. Consolidated balance sheet
    
    Prepared by Shenzhen Tellus Holding Co., Ltd.
    
    2018-12-31
    
    In RMB
    
                 Item                     Balanceatperiod-end              Balanceatperiod-begin
    Current assets:
        Monetaryfund                                    169,512,260.69                 161,793,218.56
        Settlementprovisions
        Capitallent
        Financialassetsmeasuredbyfair
    value andwithvariationreckonedinto
    current gains/losses
        Derivativefinancialassets
        Notereceivableandaccount
                                                      86,104,660.51                  44,215,236.68
    receivable
         Including: Notereceivable
              Accountreceivable                            86,104,660.51                  44,215,236.68
        Accountspaidinadvance                               9,112,473.27                  3,737,706.70
        Insurancereceivable
        Reinsurancereceivables
        Contractreserveofreinsurance
    receivable
        Otheraccountreceivable                              14,483,208.41                  15,820,265.08
         Including: Interestreceivable                            723,407.50                    221,232.88
              Dividendreceivable                             232,683.74                    779,868.09
        Buyingbackthesaleoffinancial
    assets
        Inventory                                        12,342,854.40                  12,646,227.22
        Assetsheldforsale                                  85,017,251.77
        Non-currentassetduewithinoneyear
        Othercurrentassets                                 332,432,494.44                 219,582,250.70
    Total currentassets                                     709,005,203.49                 457,794,904.94
    Non-current assets:
        Loansandpaymentsonbehalf
        Financeassetavailableforsales                          10,176,617.20                  10,176,617.20
        Held-to-maturityinvestment
        Long-termaccountreceivable
        Long-termequityinvestment                           224,644,766.21                 284,464,749.15
        Investmentrealestate                                503,922,413.70                  73,223,512.21
        Fixassets                                        112,674,017.53                 120,296,822.84
        Constructioninprocess                               12,843,571.97                 378,160,896.69
        Productivebiologicalasset
        Oilandgasasset
        Intangibleassets                                    51,012,282.25                  52,349,686.92
        Expenseondevelopment
        Goodwill
        Long-termexpensestobeapportioned                      6,304,607.22                  1,779,713.94
        Deferredincometaxasset                              24,355,086.71                  24,394,028.91
        Othernon-currentasset                                3,356,964.72                    673,661.62
    Total non-currentasset                                  949,290,327.51                 945,519,689.48
    Total assets                                        1,658,295,531.00                1,403,314,594.42
    Current liabilities:
        Short-termloans                                   143,000,000.00                 120,000,000.00
        Loanfromcentralbank
        Absorbingdepositandinterbank
    deposit
        Capitalborrowed
        Financialliabilitymeasuredbyfair
    value andwithvariationreckonedinto
    current gains/losses
        Derivativefinancialliability
        Notepayableandaccountpayable                        73,365,876.09                  28,032,708.69
        Accountsreceivedinadvance                           15,897,763.97                  13,790,019.47
        Sellingfinancialassetofrepurchase
        Commissionchargeandcommission
    payable
        Wagepayable                                      25,802,670.36                  23,171,154.53
        Taxespayable                                      9,377,393.57                  9,927,572.27
        Otheraccountpayable                               250,489,094.47                 153,329,405.21
         Including: Interestpayable                              290,215.78                    229,494.72
              Dividendpayable
        Reinsurancepayable
        Insurancecontractreserve
        Securitytradingofagency
        Securitysalesofagency
        Liabilityheldforsale
        Non-currentliabilitiesduewithinone
    year
        Othercurrentliabilities
    Total currentliabilities                                  517,932,798.46                 348,250,860.17
    Non-current liabilities:
        Long-termloans                                    34,934,887.55                  38,600,000.00
        Bondspayable
         Including: preferredstock
              Perpetualcapitalsecurities
        Long-termaccountpayable                              3,920,160.36                  3,920,160.36
        Long-termwagespayable
        Accrualliability                                     2,225,468.76
        Deferredincome
        Deferredincometaxliabilities
        Othernon-currentliabilities                                                        14,520,000.00
    Total non-currentliabilities                                41,080,516.67                  57,040,160.36
    Total liabilities                                       559,013,315.13                 405,291,020.53
    Owner‘s equity:
        Sharecapital                                     297,281,600.00                 297,281,600.00
        Otherequityinstrument
         Including: preferredstock
              Perpetualcapitalsecurities
        Capitalpublicreserve                                565,226,274.51                 565,226,274.51
        Less:Inventoryshares
        Othercomprehensiveincome                              26,422.00
        Reasonablereserve
        Surpluspublicreserve                                 3,139,918.14                  2,952,586.32
        Provisionofgeneralrisk
        Retainedprofit                                    184,535,322.70                  97,798,595.80
    Total owner‘sequityattributabletoparent
                                                    1,050,209,537.35                 963,259,056.63
    company
        Minorityinterests                                   49,072,678.52                  34,764,517.26
    Total owner‘sequity                                   1,099,282,215.87                 998,023,573.89
    Total liabilitiesandowner‘sequity                         1,658,295,531.00                1,403,314,594.42
    
    
    Legal representative: Fu Chunlong
    
    Accounting Principal: Lou Hong
    
    Accounting Firm‘s Principal: Liu Yuhong
    
    2. Balance Sheet of Parent Company
    
    In RMB
    
                  Item                     Balanceatperiod-end             Balanceatperiod-begin
    Current assets:
        Monetaryfund                                     88,836,626.14                  97,991,738.05
        Financialassetsmeasuredbyfairvalue
    and withvariationreckonedintocurrent
    gains/losses
        Derivativefinancialassets
        Notereceivableandaccountreceivable                        38,274.00
         Including: Notereceivable
              Accountreceivable                              38,274.00
        Accountspaidinadvance                                604,800.00
        Otheraccountreceivable                              115,782,944.37                  99,322,267.37
         Including: Interestreceivable                            723,407.50                    221,232.88
              Dividendreceivable                             232,683.74                    779,868.09
        Inventory
        Assetsheldforsale                                  85,017,251.77
        Non-currentassetduewithinoneyear
        Othercurrentassets                                 195,506,958.35                 203,500,000.00
    Total currentassets                                     485,786,854.63                 400,814,005.42
    Non-current assets:
        Financeassetavailableforsales                          10,176,617.20                  10,176,617.20
        Held-to-maturityinvestment
        Long-termaccountreceivable
        Long-termequityinvestment                           836,283,491.38                 789,830,758.66
        Investment realestate                               44,820,151.69                  46,749,467.61
        Fixassets                                        14,824,845.14                  15,536,781.07
        Constructioninprocess                               12,843,571.97                  5,554,512.79
        Productivebiologicalasset
        Oilandgasasset
        Intangibleassets                                      249,731.94                    341,121.77
        Expenseondevelopment
        Goodwill
        Long-termexpensestobeapportioned                      2,958,817.65                    223,715.66
        Deferredincometaxasset                              13,830,369.64                  13,869,311.84
        Othernon-currentasset
    Total non-currentasset                                  935,987,596.61                 882,282,286.60
    Total assets                                         1,421,774,451.24                1,283,096,292.02
    Current liabilities:
        Short-termloans                                   143,000,000.00                 120,000,000.00
        Financialliabilitymeasuredbyfair
    value andwithvariationreckonedinto
    current gains/losses
        Derivativefinancialliability
        Notepayableandaccountpayable                           19,800.00                    14,000.00
        Accountsreceivedinadvance                               4,742.51                     1,511.00
        Wagepayable                                      4,858,788.51                  5,769,360.88
        Taxespayable                                        331,909.65                    474,977.89
        Otheraccountpayable                               392,558,990.89                 295,942,266.75
         Including: Interestpayable                              232,810.41                    165,604.16
              Dividendpayable
        Liabilityheldforsale
        Non-currentliabilitiesduewithinone
    year
        Othercurrentliabilities
    Total currentliabilities                                  540,774,231.56                 422,202,116.52
    Non-current liabilities:
        Long-termloans
        Bondspayable
         Including: preferredstock
              Perpetualcapitalsecurities
        Long-termaccountpayable
        Long-termwagespayable
        Accrualliability
        Deferredincome
        Deferredincometaxliabilities
        Othernon-currentliabilities
    Total non-currentliabilities
    Total liabilities                                       540,774,231.56                 422,202,116.52
    Owner‘s equity:
        Sharecapital                                      297,281,600.00                 297,281,600.00
        Otherequityinstrument
         Including: preferredstock
              Perpetualcapitalsecurities
        Capitalpublicreserve                                562,032,851.23                 562,032,851.23
        Less:Inventoryshares
        Othercomprehensiveincome
        Reasonablereserve
        Surpluspublicreserve                                 3,139,918.14                  2,952,586.32
        Retainedprofit                                     18,545,850.31                  -1,372,862.05
    Total owner‘sequity                                    881,000,219.68                 860,894,175.50
    Total liabilitiesandowner‘sequity                         1,421,774,451.24                1,283,096,292.02
    
    
    3. Consolidated Profit Statement
    
    In RMB
    
                Item                      Currentperiod                      Lastperiod
    I. Totaloperatingincome                              414,238,778.96                    347,237,289.80
        Including:Operatingincome                        414,238,778.96                    347,237,289.80
            Interest income
            Insurance gained
            Commission chargeand
    commission income
    II. Totaloperatingcost                               410,735,581.28                    313,002,481.12
        Including:Operatingcost                          332,347,355.12                    254,254,960.65
            Interest expense
            Commission chargeand
    commission expense
            Cash surrendervalue
            Net amountofexpenseof
    compensation
        Netamountofwithdrawalof
    insurance contractreserve
        Bonusexpenseofguaranteeslip
           Reinsuranceexpense
            Tax andextras                              6,276,612.65                     3,638,454.37
            Sales expense                              19,987,406.50                     16,490,379.71
            Management expense                         44,231,376.56                     36,735,283.59
            R&D expense
            Financial expense                            6,508,114.19                     1,520,168.86
              Including:Interest
                                                    8,909,350.20                      4,189,844.30
    expenses
                   Interestincome                       2,755,755.76                     2,776,945.85
            Losses ofdevaluationof
                                                    1,384,716.26                       363,233.94
    asset
        Add:otherincome                                   3,482.07                       25,753.22
           Investmentincome(Lossis
                                                   88,785,468.69                     33,599,860.09
    listed with―-‖)
           Including:Investmentincome
                                                   83,051,508.69                     21,297,772.09
    on affiliatedcompanyandjointventure
           Incomefromchangeoffair
    value (Lossislistedwith―-‖)
           Exchangeincome(Lossis
    listed with―-‖)
           Incomefromassetsdisposal
                                                                                   374,583.14
    (Loss islistedwith  ―-‖)
    III. Operatingprofit  (Lossislisted
                                                   92,292,148.44                     68,235,005.13
    with ―-‖)
        Add:Non-operatingincome                          1,739,055.65                       725,518.07
        Less:Non-operatingexpense                          3,479,344.28                       35,120.31
    IV.TotalProfit  (Lossislistedwith
                                                   90,551,859.81                     68,925,402.89
    ―-‖)
        Less:Incometaxexpense                            4,411,880.45                     3,143,834.18
    V.Netprofit(Netlossislistedwith―-‖)                     86,139,979.36                     65,781,568.71
        (i)netprofitfromcontinuous
                                                   86,139,979.36                     65,781,568.71
    operation (Netlossislistedwith―-‖)
        (ii)netprofitfromdiscontinued
    operation (Netlossislistedwith―-‖)
        Netprofitattributabletoowner‘s
                                                   86,924,058.72                     66,862,772.68
    of parentcompany
        Minorityshareholders‘gainsand
                                                     -784,079.36                     -1,081,203.97
    losses
    VI. Netafter-taxofother
                                                      26,422.00
    comprehensive income
      Netafter-taxofothercomprehensive
    income attributabletoownersofparent                        26,422.00
    company
        (i)Othercomprehensiveincome
    items whichwillnotbereclassified
    subsequently togain/loss
            1.Re-measurement ofthe
    change ofdefinedbenefitplan
            2.Other comprehensive
    income unabletransfertogain/loss
    under equitymethod
        (II)Othercomprehensiveincome
    items whichwillbereclassified                             26,422.00
    subsequently toprofitorloss
            1.Other comprehensive
    income abletotransfertogain/loss                           26,422.00
    under equitymethod
            2.Gains orlossesarising
    from changesinfairvalueof
    available-for-sale financialassets
            3.Gains orlossesarising
    from reclassificationofheld-to-maturity
    investment asavailable-for-sale
    financial assets
            4.The effecthedging
    portion ofgainsorlossesarisingfrom
    cash flowhedginginstruments
            5.Translation differences
    arising ontranslationofforeign
    currency financialstatements
            6.Other
      Netafter-taxofothercomprehensive
    income attributabletominority
    shareholders
    VII. Totalcomprehensiveincome                         86,166,401.36                     65,781,568.71
        Totalcomprehensiveincome
    attributable toownersofparent                           86,924,058.72                     66,862,772.68
    Company
        Totalcomprehensiveincome
                                                     -784,079.36                     -1,081,203.97
    attributable tominorityshareholders
    VIII. Earningspershare:
        (i)Basicearningspershare                               0.2924                          0.2249
        (ii)Dilutedearningspershare                             0.2924                          0.2249
    
    
    As for the enterprise combined under the same control, net profit of Yuan achieved by the merged party before combination while
    
    Yuan achieved last period
    
    Legal representative: Fu Chunlong
    
    Accounting Principal: Lou Hong
    
    Accounting Firm‘s Principal: Liu Yuhong
    
    4.Profit Statement of Parent Company
    
    In RMB
    
                Item                      Currentperiod                      Lastperiod
    I. Operationincome                                  42,607,127.11                     44,035,720.63
       Less: Operatingcost                              12,747,839.01                     3,662,936.04
           Taxandextras                                1,683,760.67                     1,658,236.32
           Salesexpense
           Managementexpense                          20,609,716.66                     15,151,430.07
           R&Dexpense
           Financialexpense                              4,850,337.92                       856,292.09
            Including: Interest
                                                    6,902,903.32                     3,667,547.94
    expenses
                 Interest income                         2,179,149.78                     2,655,947.30
           Lossesofdevaluationofasset                       117,864.17                      -178,762.83
       Add: otherincome
           Investmentincome(Lossis
    listed with―-‖)                                     16,298,388.00                     31,049,977.47
           Including:Investmentincome
                                                   14,998,084.49                     17,123,423.23
    on affiliatedcompanyandjointventure
           Incomefromchangeoffair
    value (Lossislistedwith―-‖)
           Incomefromassetsdisposal
    (Loss islistedwith  ―-‖)
    II. Operatingprofit  (Lossislisted
                                                   18,895,996.68                     41,288,575.93
    with ―-‖)
       Add: Non-operatingincome                          1,253,151.18                           0.04
       Less: Non-operatingexpense                            4,161.48                       15,033.48
    III. TotalProfit  (Lossislistedwith
                                                   20,144,986.38                     41,273,542.49
    ―-‖)
       Less:Income taxexpense                              38,942.20                       38,942.20
    IV.Netprofit(Netlossislistedwith
                                                   20,106,044.18                     41,234,600.29
    ―-‖)
       (i) netprofitfromcontinuous
                                                   20,106,044.18                     41,234,600.29
    operation (Netlossislistedwith―-‖)
       (ii) netprofitfromdiscontinued
    operation (Netlossislistedwith―-‖)
    V.Netafter-taxofothercomprehensive
    income
       (i) Othercomprehensiveincome
    items whichwillnotbereclassified
    subsequently togain/loss
            1.Re-measurement ofthe
    change ofdefinedbenefitplan
            2.Other comprehensive
    income unabletransfertogain/loss
    under equitymethod
       (II) Othercomprehensiveincome
    items whichwillbereclassified
    subsequently toprofitorloss
            1.Other comprehensive
    income abletotransfertogain/loss
    under equitymethod
            2.Gains orlossesarising
    from changesinfairvalueof
    available-for-sale financialassets
            3.Gains orlossesarising
    from reclassificationofheld-to-maturity
    investment asavailable-for-sale
    financial assets
            4.The effecthedging
    portion ofgainsorlossesarisingfrom
    cash flowhedginginstruments
            5.Translation differences
    arisingontranslationofforeign
    currencyfinancialstatements
            6.Other
    VI.Totalcomprehensiveincome                          20,106,044.18                     41,234,600.29
    VII.Earningspershare:
       (i) Basicearningspershare
       (ii) Dilutedearningspershare
    
    
    5. Consolidated Cash Flow Statement
    
    In RMB
    
                Item                      Currentperiod                      Lastperiod
    I. Cashflowsarisingfromoperating
    activities:
        Cashreceivedfromselling
    commodities andprovidinglabor                        426,869,708.10                    351,036,436.94
    services
        Netincreaseofcustomerdeposit
    and interbankdeposit
        Netincreaseofloanfromcentral
    bank
        Netincreaseofcapitalborrowed
    from otherfinancialinstitution
        Cashreceivedfromoriginal
    insurance contractfee
    Net cashreceivedfromreinsurance
    business
       Netincreaseofinsuredsavingsand
    investment
        Netincreaseofamountfrom
    disposal financialassetsthatmeasured
    by fairvalueandwithvariation
    reckoned intocurrentgains/losses
        Cashreceivedfrominterest,
    commission chargeandcommission
        Netincreaseofcapitalborrowed
        Netincreaseofreturnedbusiness
    capital
        Write-backoftaxreceived
        Othercashreceivedconcerning
                                                   19,684,530.43                      9,418,234.47
    operating activities
    Subtotal ofcashin-flowfromoperation
                                                  446,554,238.53                    360,454,671.41
    activity
        Cashpaidforpurchasing
    commodities andreceivinglabor                         335,367,549.57                    236,140,838.02
    service
        Netincreaseofcustomerloansand
    advances
        Netincreaseofdepositsincentral
    bank andinterbank
        Cashpaid for original insurance
    contract compensation
        Cashpaidforinterest,commission
    charge andcommission
        Cashpaidforbonusofguarantee
    slip
        Cashpaidto/forstaffandworkers                      52,732,468.64                     55,047,561.06
        Taxespaid                                     23,689,718.46                     20,250,075.88
        Othercashpaidconcerning
    operating activities                                   41,339,481.83                     51,109,264.50
    Subtotal ofcashout-flowfrom
                                                  453,129,218.50                    362,547,739.46
    operation activity
    Net cashflowarisingfromoperating
                                                    -6,574,979.97                    -2,093,068.05
    activities
    II. Cashflowsarisingfrominvesting
    activities:
        Cashreceivedfromrecovering
                                                 1,106,320,000.00                    628,171,900.00
    investment
        Cashreceivedfrominvestment
                                                   68,064,559.78                     15,714,288.78
    income
        Netcashreceivedfromdisposalof                       263,520.00                       259,940.00
    fixed, intangibleandotherlong-term
    assets
        Netcashreceivedfromdisposalof
                                                    1,504,125.26                      2,343,240.90
    subsidiaries andotherunits
        Othercashreceivedconcerning
    investing activities                                  107,511,100.00                     40,000,000.00
    Subtotal ofcashin-flowfrom
                                                 1,283,663,305.04                    686,489,369.68
    investment activity
        Cashpaidforpurchasingfixed,
                                                   31,343,082.90                     31,340,610.55
    intangible andotherlong-termassets
        Cashpaidforinvestment                         1,224,884,140.00                    804,100,000.00
        Netincreaseofmortgagedloans
        Netcashreceivedfrom
    subsidiaries andotherunitsobtained
        Othercashpaidconcerning
                                                    5,733,400.00
    investing activities
    Subtotal ofcashout-flowfrom
                                                 1,261,960,622.90                    835,440,610.55
    investment activity
    Net cashflowarisingfrominvestment
                                                   21,702,682.14                    -148,951,240.87
    activity
    III. Cashflowsarisingfromfinancing
    activities
        Cashreceivedfromabsorbing
    investment                                        15,000,000.00                     22,672,000.00
        Including:Cashreceivedfrom
    absorbing minorityshareholders‘                         15,000,000.00                     22,672,000.00
    investment bysubsidiaries
        Cashreceivedfromloans                          148,082,000.00                    216,600,000.00
        Cashreceivedfromissuingbonds
        Othercashreceivedconcerning
    financing activities
    Subtotal ofcashin-flowfromfinancing
                                                  163,082,000.00                    239,272,000.00
    activity
        Cashpaidforsettlingdebts                         145,943,235.58                    120,000,000.00
        Cashpaidfordividendandprofit
                                                   15,066,890.08                      4,931,753.63
    distributing orinterestpaying
        Including:Dividendandprofitof
    minority shareholderpaidby
    subsidiaries
        Othercashpaidconcerning
                                                   16,144,956.00
    financing activities
    Subtotal ofcashout-flowfrom
                                                  177,155,081.66                    124,931,753.63
    financing activity
    Net cashflowarisingfromfinancing
                                                   -14,073,081.66                    114,340,246.37
    activity
    IV.Influenceoncashandcash
    equivalents duetofluctuationin                               281.62                         -358.99
    exchange rate
    V.Netincreasedamountofcashand
                                                    1,054,902.13                    -36,704,421.54
    cash equivalent
        Add:Balanceofcashandcash
                                                  141,793,218.56                    178,497,640.10
    equivalents attheperiod-begin
    VI. Balanceofcashandcash
                                                  142,848,120.69                    141,793,218.56
    equivalents attheperiod-end
    
    
    6. Cash Flow Statement of Parent Company
    
    In RMB
    
                Item                      Currentperiod                      Lastperiod
    I. Cashflowsarisingfromoperating
    activities:
        Cashreceivedfromselling
    commodities andprovidinglabor                         42,987,480.31                     60,856,831.09
    services
        Write-backoftaxreceived
        Othercashreceivedconcerning
                                                   26,178,276.09                      9,696,177.07
    operating activities
    Subtotal ofcashin-flowfromoperation
                                                   69,165,756.40                     70,553,008.16
    activity
        Cashpaidforpurchasing
    commodities andreceivinglabor
    service
        Cashpaidto/forstaffandworkers                      18,738,644.84                     14,515,785.88
        Taxespaid                                      4,065,009.38                     3,755,038.44
        Othercashpaidconcerning
                                                   38,903,678.52                     21,185,336.08
    operating activities
    Subtotal ofcashout-flowfrom
                                                   61,707,332.74                     39,456,160.40
    operation activity
    Net cashflowarisingfromoperating
    activities                                          7,458,423.66                     31,096,847.76
    II. Cashflowsarisingfrominvesting
    activities:
        Cashreceivedfromrecovering
                                                  733,500,000.00                    535,500,000.00
    investment
        Cashreceivedfrominvestment
                                                   59,901,381.01                     15,146,686.15
    income
        Netcashreceivedfromdisposalof
    fixed, intangibleandotherlong-term                                                        13,195.84
    assets
        Netcashreceivedfromdisposalof
                                                                                 14,150,000.00
    subsidiaries andotherunits
        Othercashreceivedconcerning
                                                   107,511,100.00                    40,000,000.00
    investing activities
    Subtotal ofcashin-flowfrom
                                                  900,912,481.01                    604,809,881.99
    investment activity
        Cashpaidforpurchasingfixed,
                                                   10,556,123.04                      4,549,479.98
    intangible andotherlong-termassets
        Cashpaidforinvestment                           900,636,040.00                    730,598,000.00
        Netcashreceivedfrom
    subsidiaries andotherunitsobtained
        Othercashpaidconcerning
                                                    5,733,400.00
    investing activities
    Subtotal ofcashout-flowfrom
    investment activity                                  916,925,563.04                    735,147,479.98
    Net cashflowarisingfrominvestment
                                                   -16,013,082.03                   -130,337,597.99
    activity
    III. Cashflowsarisingfromfinancing
    activities
        Cashreceivedfromabsorbing
    investment
        Cashreceivedfromloans                          143,000,000.00                    190,000,000.00
        Cashreceivedfromissuingbonds
        Othercashreceivedconcerning
    financing activities
    Subtotal ofcashin-flowfromfinancing
                                                  143,000,000.00                    190,000,000.00
    activity
        Cashpaidforsettlingdebts                         137,278,123.13                    120,000,000.00
        Cashpaidfordividendandprofit
                                                   12,986,470.41                      3,568,402.11
    distributing orinterestpaying
        Othercashpaidconcerning
    financing activities
    Subtotal ofcashout-flowfrom
                                                  150,264,593.54                    123,568,402.11
    financing activity
    Net cashflowarisingfromfinancing
    activity                                           -7,264,593.54                     66,431,597.89
    IV.Influenceoncashandcash
    equivalents duetofluctuationin
    exchange rate
    V.Netincreasedamountofcashand
                                                   -15,819,251.91                    -32,809,152.34
    cash equivalent
        Add:Balanceofcashandcash
                                                   77,991,738.05                    110,800,890.39
    equivalents attheperiod-begin
    VI. Balanceofcashandcash
    equivalents attheperiod-end                            62,172,486.14                     77,991,738.05
    
    
    7. Statement of Changes in Owners’ Equity (Consolidated)
    
    Current period
    
    In RMB
    
                                                 Current period
                                 Owners‘equityattributabletoparentcompany
                         Other equity
         Item              instrument           Less:  Other              Provisio       Minorit  Total
                                     Capital              Reason Surplus
                  Share      Perpet            Invento compre              nof  Retaine   y   owner‘s
                 capital Prefer  ual       public   ry   hensive  able   public  general dprofit interests equity
                        red      Other reserve             reserve reserve
                       stock capita            shares  income              risk
                             l
                           securi
                            ties
                 297,28
    I. Balanceatthe                      565,226                   2,952,5       97,798, 34,764, 998,023
    end ofthelastyear 1,600.                ,274.51                    86.32        595.80  517.26 ,573.89
                    00
        Add:
    Changes of
    accounting policy
           Error
    correction ofthe
    last period
         Enterprise
    combined under
    the samecontrol
           Other
    II. Balanceatthe  297,28
                                     565,226                   2,952,5       97,798, 34,764, 998,023
    beginning ofthis  1,600.
                                      ,274.51                    86.32        595.80  517.26 ,573.89
    year             00
    III. Increase/
    Decrease inthis                                   26,422.       187,331       86,736, 14,308, 101,258
    year (Decreaseis                                     00          .82        726.90  161.26 ,641.98
    listed with―-‖)
    (i)Total
                                                  26,422.                   86,924, -784,07 86,166,
    comprehensive                                       00                    058.72   9.36 401.36
    income
    (ii)Owners‘
                                                                                15,092, 15,092,
    devoted and                                                                    240.62 240.62
    decreased capital
    1.Commonshares                                                               15,092, 15,092,
    invested by                                                                     240.62 240.62
    owners
    2. Capitalinvested
    by holdersofother
    equity instruments
    3. Amount
    reckoned into
    owners equitywith
    share-based
    payment
    4.Other
    (III) Profit                                                  187,331       -187,33
    distribution                                                     .82         1.82
    1. Withdrawalof                                              187,331       -187,33
    surplus reserves                                                  .82         1.82
    2. Withdrawalof
    general risk
    provisions
    3. Distributionfor
    owners (or
    shareholders)
    4. Other
    (IV) Carrying
    forward internal
    owners‘ equity
    1. Capitalreserves
    conversed to
    capital (orshare
    capital)
    2. Surplusreserves
    conversed to
    capital (orshare
    capital)
    3. Remedyingloss
    with surplus
    reserve
    4. Changeamount
    of definedbenefit
    plans thatcarry
    forward retained
    earnings
    5. Other
    (V) Reasonable
    reserve
    1. Withdrawalin
    the reportperiod
    2. Usageinthe
    report period
    (VI)Other
    IV.Currentperiod 297,28                                                                1,099,2
                                     565,226       26,422.       3,139,9       184,535 49,072,
    Balance at       1,600.                ,274.51          00        18.14       ,322.70  678.52 82,215.
    period-end         00                                                                   87
    
    
    Last period
    
    In RMB
    
                                                  Last period
                                 Owners‘equityattributabletoparentcompany
                         Other equity
                          instrument
                                                                                Minorit
         Item               Perpet            Less:  Other              Provisio              Total
                                     Capital              Reason Surplus               y
                  Share       ual             Invento compre              nof  Retaine       owner‘s
                 capital Prefer capita      public   ry   hensive  able   public  general dprofit interest  equity
                        red      Other reserve             reserve reserve                s
                       stock   l              shares  income              risk
                           securi
                            ties
                 297,28
    I. Balanceatthe                      564,192                   2,952,5       30,935, 13,173, 908,536
    end ofthelastyear 1,600.                ,605.51                    86.32        823.12 721.23 ,336.18
                    00
        Add:
    Changes of
    accounting policy
           Error
    correction ofthe
    last period
    Enterprise
    combined under
    the samecontrol
           Other
    II. Balanceatthe  297,28
                                     564,192                   2,952,5       30,935, 13,173, 908,536
    beginning ofthis  1,600.                ,605.51                    86.32        823.12 721.23 ,336.18
    year             00
    III. Increase/                         1,033,6                               66,862, 21,590, 89,487,
    Decrease inthis                        69.00                                772.68 796.03  237.71
    year (Decreaseis
    listed with―-‖)
    (i)Total
                                                                          66,862, -1,081, 65,781,
    comprehensive                                                            772.68 203.97  568.71
    income
    (ii)Owners‘
                                                                                22,672, 22,672,
    devoted and                                                                    000.00  000.00
    decreased capital
    1.Commonshares                                                               22,672, 22,672,
    invested by                                                                     000.00 000.00
    owners
    2. Capitalinvested
    by holdersofother
    equity instruments
    3. Amount
    reckoned into
    owners equitywith
    share-based
    payment
    4.Other
    (III) Profit
    distribution
    1. Withdrawalof
    surplus reserves
    2. Withdrawalof
    general risk
    provisions
    3. Distributionfor
    owners (or
    shareholders)
    4.Other
    (IV) Carrying
    forward internal
    owners‘ equity
    1. Capitalreserves
    conversed to
    capital (orshare
    capital)
    2. Surplusreserves
    conversed to
    capital (orshare
    capital)
    3. Remedyingloss
    with surplus
    reserve
    4. Changeamount
    of definedbenefit
    plans thatcarry
    forward retained
    earnings
    5.Other
    (V) Reasonable
    reserve
    1. Withdrawalin
    the reportperiod
    2. Usageinthe
    report period
                                      1,033,6                                           1,033,6
    (VI) Other
                                       69.00                                            69.00
    IV).Current period 297,28
                                     565,226                   2,952,5       97,798, 34,764, 998,023
    Balance at       1,600.                ,274.51                    86.32        595.80 517.26 ,573.89
    period-end         00
    
    
    8. Statement of Changes in Owners’ Equity (Parent Company)
    
    Current period
    
    In RMB
    
                                                 Current period
                         Otherequityinstrument
                              Perpetu        Capital   Less:    Other          Surplus         Total
         Item      Share          al                       comprehe Reasonab        Retaine
                  capital Preferre capital  Other   public  Inventory  nsive  lereserve  public  dprofit  owner‘s
                        dstock              reserve   shares                 reserve         equity
                              securiti                      income
                                es
    I. Balanceatthe   297,281,                   562,032,8                      2,952,586 -1,372,8 860,894,1
    end ofthelastyear  600.00                      51.23                           .32  62.05   75.50
        Add:Changes
    of accounting
    policy
           Error
    correction ofthe
    last period
           Other
    II. Balanceatthe
                 297,281,                   562,032,8                      2,952,586 -1,372,8 860,894,1
    beginning ofthis   600.00                      51.23                           .32  62.05   75.50
    year
    III. Increase/
    Decrease inthis                                                        187,331.8 19,918, 20,106,04
    year (Decreaseis                                                             2  712.36    4.18
    listed with―-‖)
    (i)Total
                                                                               20,106,20,106,04
    comprehensive                                                                 044.18    4.18
    income
    (ii)Owners‘
    devoted and
    decreased capital
    1.Commonshares
    invested by
    owners
    2. Capitalinvested
    by holdersofother
    equity instruments
    3. Amount
    reckoned into
    owners equitywith
    share-based
    payment
    4.Other
    (III) Profit                                                            187,331.8 -187,33
    distribution                                                                 2   1.82
    1. Withdrawalof                                                        187,331.8 -187,33
    surplus reserves                                                              2   1.82
    2. Distributionfor
    owners (or
    shareholders)
    3.Other
    (IV) Carrying
    forward internal
    owners‘ equity
    1. Capitalreserves
    conversed to
    capital (orshare
    capital)
    2. Surplusreserves
    conversed to
    capital (orshare
    capital)
    3. Remedyingloss
    with surplus
    reserve
    4. Changeamount
    of definedbenefit
    plans thatcarry
    forward retained
    earnings
    5.Other
    (V) Reasonable
    reserve
    1. Withdrawalin
    the reportperiod
    2. Usageinthe
    report period
    (VI) Other
    IV.Currentperiod
                 297,281,                   562,032,8                      3,139,918 18,545, 881,000,2
    Balance at        600.00                      51.23                           .14  850.31   19.68
    period-end
    
    
    Last period
    
    In RMB
    
                                                  Last period
                         Otherequityinstrument
                              Perpetu        Capital   Less:    Other          Surplus         Total
         Item      Share          al                       comprehe Reasonab        Retaine
                  capital Preferre capital  Other   public  Inventory  nsive  lereserve  public  dprofit  owner‘s
                        dstock              reserve   shares                 reserve         equity
                              securiti                      income
                                es
    I. Balanceatthe   297,281,                   560,999,1                      2,952,586 -55,254, 805,978,9
    end ofthelastyear  600.00                      82.23                           .32  452.82   15.73
        Add:Changes
    of accounting
    policy
           Error
    correction ofthe
    last period
           Other
    II. Balanceatthe
                 297,281,                   560,999,1                      2,952,586 -55,254, 805,978,9
    beginning ofthis   600.00                      82.23                           .32  452.82   15.73
    year
    III. Increase/
    Decrease inthis                           1,033,669                              53,881, 54,915,25
    year (Decreaseis                               .00                               590.77    9.77
    listed with―-‖)
    (i)Total
                                                                               53,881,53,881,59
    comprehensive                                                                 590.77    0.77
    income
    (ii)Owners‘
    devoted and
    decreased capital
    1.Commonshares
    invested by
    owners
    2. Capitalinvested
    by holdersofother
    equity instruments
    3. Amount
    reckoned into
    owners equitywith
    share-based
    payment
    4.Other
    (III) Profit
    distribution
    1. Withdrawalof
    surplus reserves
    2. Distributionfor
    owners (or
    shareholders)
    3.Other
    (IV) Carrying
    forward internal
    owners‘ equity
    1. Capitalreserves
    conversed to
    capital (orshare
    capital)
    2. Surplusreserves
    conversed to
    capital (orshare
    capital)
    3. Remedyingloss
    with surplus
    reserve
    4. Changeamount
    of definedbenefit
    plans thatcarry
    forward retained
    earnings
    5.Other
    (V) Reasonable
    reserve
    1. Withdrawalin
    the reportperiod
    2. Usageinthe
    report period
                                          1,033,669                                    1,033,669
    (VI) Other
                                              .00                                         .00
    IV.Currentperiod
                 297,281,                   562,032,8                      2,952,586 -1,372,8 860,894,1
    Balance at
                   600.00                     51.23                           .32  62.05   75.50
    period-end
    
    
    SHENZHEN TELLUS HOLDING CO., LTD.
    
    Notes to Financial Statements
    
    (For the Year Ended 31 December, 2018 Expressed in RMB Yuan)
    
    Ⅰ、 Corporation profile
    
    1.Foundation of Tellus
    
    The Chinese name of Tellus: 深圳市特力(集团)股份有限公司
    
    The English name of Tellus: ShenZhen Tellus Holding Co.,Ltd
    
    Registered company addrss: Tellus Building level 3, Shuibei second Road, Luohu, Shenzhen City,
    
    Guangdong Province.
    
    Office address: the 15th Floor of Nuclear Building ,Shennan Road, Futian District, Shenzhen
    
    Stock market: Shenzhen Stock Exchange
    
    Name and code: Tellus A(000025),Tellus B(200025)
    
    Legal representative:Fu Chunlong
    
    The number of business license: 91440300192192210U
    
    2. Theindustry characteristic and business scope with the main products or services
    
    Theindustry characteristic:Theindustry of providing energy materials, machinery and electronics
    
    equipment
    
    The business scope:automotive integrated services, including the test of equipment maintenance, property
    
    leasing and management etc.
    
    The main products or services: sales of vehicles and accessories, the maintenance and inspection of
    
    vehicles and the services of property leasing etc.
    
    3. The history of Tellus
    
    Shenzhen Tellus Holding Company Limited (―the Company‖) was developed from the Shenzhen Tellus
    
    Machinery Co.,Ltd., which established on 11 October, 1986. On 2nd January, 1992, with the approval of
    
    Shenzhen Municipal People‘s Government ―shen fu ban fu (1992), No. 1850‖, Shenzhen Tellus
    
    Machinery Co.,Ltd. reorganized to a public limited company and renamed to Shenzhen Tellus Machinery
    
    Holding Company Limited. On 15 March 1993, with the approval of Bank of China Shenzhen branch
    
    ―Shen Ren Yin Fu Zi (1993) No.92‖, the Company issued the initial public registered shares and turned
    
    into Limited Liability Company with the name of ―Tellus mechanical and electrical co. LTD, Shenzhen‖.
    
    At this moment, the whole share capital is 166.88million shares, including the original 120.9million
    
    shares with 45.98million new shares. The new shares is divided into two parts, one is RMB 25.98 million
    
    ordinary shares (A shares) ,the other is special shares (B) RMB 20 million shares .
    
    In June 1993, Shenzhen securities management office was about to agree that ―Tellus mechanical and
    
    electrical co. LTD, Shenzhen―wasqualified to list in Shenzhenstock exchange market(shen zheng ban
    
    fu[1993]34) and (shen zheng shi zi [1993]22).On 30 June 1994, the Company changed name to Shenzhen
    
    Tellus Holding Company Limited with the approval of Shenzhen administrative bureau for industry and
    
    commerce .
    
    On March 15, 1993, with the approval of the branch of people‘s bank of China in shenzhen special
    
    economic zone, the group could issue A ordinary shares 25.98 million with B ordinary shares20 million
    
    (shen ren yin fu zi (1993)092).On June 30, 1994, with the approval of the shenzhen city administration
    
    for industry and commerce, Tellus mechanical and electrical co. LTD, Shenzhen was renamed ShenZhen
    
    Tellus Holding Co.,Ltd
    
    The capital structure of the Company at listing date:
    
    Category Amount (share) Ratio(%)
    
    1. Non-tradable shares
    
    Include: State shares 120,900,000 72.45Sub-total of non-tradable shares 120,900,000 72.452. Tradable shares
    
    - A 25,980,000 15.57
    
    - B 20,000,000 11.98
    
    Sub-total tradable shares 45,980,000 27.55
    
    Total 166,880,000 100.00
    
    Change of capital structure after established:
    
    (1)Issue bonus shares in 1993
    
    According to the decision made by general meeting of shareholders in 1993, the company distributed a 2
    
    for 10 bonus shares with cash dividend of RMB 0.5. The whole capital changed into 2,002.56 million
    
    shares.
    
    On 22 April 1994,the Shenzhen Stock Management Office agreed about plan of distributing bonus .
    
    After plan, the company‘s capital structure changed as follows:
    
    Category Amount(share) Ratio(%)
    
    State - owned shares 145,080,000 72.45
    
    Public shares 31,176,000 15.57
    
    RMB special stock(B shares) 24,000,000 11.98
    
    Total 200,256,000 100.00
    
    (2)Issue bonus shares and increase capital in 1994
    
    On 28 May 1995, the Group shareholder meeting agreed about plan of distributing bonus and increasing
    
    capital. On the basis of 2,002.56 million shares in the end of 1994, the Group distributed 0.5 of 10 shares,
    
    and give RMB 0.5 from every increasing 0.5 share capital. After the Group‘s share capital increased to
    
    2,202.816 million shares.
    
    After plan, the company‘s capital structure changed as follows:
    
    Category Amount(share) Ratio(%)
    
    State - owned shares 159,588,000 72.45
    
    Public shares 34,293,600 15.57
    
    RMB special stock(B shares) 26,400,000 11.98
    
    Total 220,281,600 100.00
    
    (3)Majority shareholder change in 1997
    
    On 31st March 1997, with the approval of Shenzhen Municipal People‘s Government ―shen fu han (1997),
    
    No. 19‖ and China Securities Regulatory Commission ―zheng jian han shang (1997), No. 5‖, Shenzhen
    
    Investment Administrative Company transferred its 159,588,000 shares to Shenzhen Te Fa (Group)
    
    Company Limited (hereinafter referred to as ―the Te Fa Group‖). The shares transferred represent 72.45%
    
    of the total issued shares of the Company.
    
    (4)The reform of listing non-tradable shares in 2006
    
    In December 2005, shenzhen, the State-owned Assets Supervision and Administration Commission
    
    agreed about the plan of reforming non-tradable shares.
    
    On 4th January 2006, Te Fa Group gave 13,717,440 shares to the holders of tradable shares of the
    
    company in the A share market. After the split-share reform was completed, it held 66.22% of the shares
    
    capital of the Company.
    
    After the split-share reform, the company‘s capital structure changed as follows:
    
    Category Amount(share) Ratio(%)
    
    State - owned shares 145,870,560 66.22
    
    Public shares 48,011,040 21.79
    
    RMB special stock(B shares) 26,400,000 11.98
    
    Total 220,281,600 100.00
    
    (5) Private placement of RMB ordinary shares in 2015
    
    According to the 19th special meeting of the 7th Board Meeting on April 21st,2015, and the 4th
    
    stockholders‘ meeting on June 3rd, 2015, the Company private issued RMB ordinary shares (A shares)
    
    77,000,000.00 shares to Shenzhen Tefa Group Co. and Shenzhen Yuanzhifuhai Jewerly Investment Co.
    
    The total raising money is less than RMB 646,800,000.00 and it is all by cash.After plan, the company‘s
    
    capital structure changed as follows:
    
    Category Amount Ratio(%)
    
    State-owned legal person shares 151,870,560 51.09
    
    Domestic public shares 119,011,040 40.03
    
    RMB special shares (b share) 26,400,000 8.88
    
    Total 297,281,600 100.00
    
    (6)Shares reduction of controlling shareholders in 2016
    
    According to Shares Reduction of Controlling Shareholders Announcement, Shenzhen SDG co., LTD
    
    reducted 2,972,537 circulation stocks with unrestricted in terms by concentrated bidding during May 4th
    
    to May 31st in 2016, which accounts for 1% of total shares of the Company. On September 30th 2016,
    
    the Company received Notation of Compliment Shares Reduction Schedule of Tellus A from SDG
    
    Company, who reducted 2,972,767 circulation stocks with unrestricted in terms by concentrated bidding
    
    during August 29th to September 29th in 2016, accounting for 1% of total shares of the Company. Up to
    
    September 29th 2016, SDG Company had completed its shares reduction schedule.The company‘s capital
    
    structure changed as follows:
    
    Category Amount Ratio(%)
    
    State-owned legal person shares 145,925,256 49.09
    
    Domestic public shares 124,956,344 42.03
    
    RMB special shares (b share) 26,400,000 8.88
    
    Total 297,281,600 100.00
    
    Till the end of 2018, the Company had issued 29,728.16 million shares, details in VI-32.
    
    4. The scope of consolidation
    
    There are 15 subsidiariesincluded in the 2018 consolidation scope, details in notes8―the equity in other
    
    entities‖. Compared with last year(2017), one entity is excluded to the consolidation scope.
    
    5. The approval and the date of financial statements
    
    The financial statements of the Company are authorized to be issued to the public on April 1st,2019by the
    
    Board of Directors.
    
    Ⅱ、 Basis of Preparation1. Basis of preparation
    
    The financial statements of the Company have been prepared on the basis of going concern in conformity
    
    with Chinese Accounting Standards for Business Enterprises and Accounting Systems for Business
    
    Enterprises issued by the Ministry of Finance of People‘s Republic of China in February 2006, and
    
    Accounting Standards (order No.33 of the Ministry of Finance announcedand order No.76 of the Ministry
    
    of Finance revised ) and Compilation Rules for Information Disclosure by Companies Offering Securities
    
    to the Public No.15—General Provisions on Financial Reports (2015 Revision) issued by the China
    
    Securities Regulatory Commission (CSRC).
    
    According to the relevant accounting regulations in Chinese Accounting Standards for Business
    
    Enterprises, the Group has adopted the accrual basis of accounting. Except for certain financial
    
    instruments which are measured by at fair value, the Group adopts the historical cost as the principle of
    
    measurement in the financial statements. Where assets are impaired, provisions for asset impairment are
    
    made in accordance with relevant requirements.
    
    Ⅲ、 Statement of Compliance with Enterprise Accounting Standards
    
    The financial statements of the Group comply are recognized and measured in accordance with the
    
    regulations in the Chinese Accounting Standards for Business Enterprises and they give a true and fair
    
    view of the financial position, business results and cash flow of the Group as of 31 December 2018. In
    
    addition, in all material respects ,the financial statements of the Company and the Group complywith the
    
    revised disclosing requirements for financial statements and the notes ?Compilation Rules for Information
    
    Disclosure by Companies Offering Securities to the Public No.15—General Provisions on Financial
    
    Reports (2014 Revision)‘ issued by China Securities Regulatory Commission (CSRC) in 2014.
    
    Ⅳ、 Important Accounting Principles and Accounting Estimates
    
    According to the Chinese Accounting standards,the Group ensures the relevant accounting policies and
    
    estimation by means of characteristics of subsidiaries. In terms of theexplanation of judgment and
    
    estimation of important accounting policies made by Board of Directors, details will be found in note
    
    Ⅳ.29‖the important judgment and estimation‖.
    
    1、 Accounting period
    
    The accounting period of the Group is classified as annual period and interim period. Interim period
    
    refers to the reporting period shorter than a complete annual period. The accounting period of the Group
    
    is the calendar year from January 1 to December 31.
    
    2、Operating Cycle
    
    The normal operating cycle is referring to buying assets used into generating new products to sell
    
    products and recollect monetary assets.
    
    3、 Monetary Unit
    
    Renminbi (RMB) is the currency of the primary economic environment in which the Group and its
    
    domestic subsidiaries operate. Therefore, the Group and its domestic subsidiaries choose RMB as their
    
    functional currency. The Group adopts RMB to prepare its functional statements.
    
    4、Basis of accounting
    
    A business combination is a transaction or event that brings together two or more separate entities into
    
    one reporting entity. Business combinations are classified into business combinations involving
    
    enterprises under common control and business combinations not involving enterprises under common
    
    control.
    
    (1)Business combination involving entities under common control
    
    A business combination involving enterprises under common control is a business combination in which
    
    all of the combining enterprises are ultimately controlled by the same party or parties both before and
    
    after the combination, and that control is not transitory. For a business combination involving enterprises
    
    under common control, the party that, on the combination date, obtains control of another enterprise
    
    participating in the combination is the absorbing party, while that other enterprise participating in the
    
    combination is a party being absorbed. Combination date is the date on which the absorbing party
    
    effectively obtains control of the party being absorbed.
    
    The assets and liabilities obtained are measured at the carrying amount as recorded by the enterprise
    
    being combined at the combination date. The differences between the carrying amount of the net assets
    
    obtained and the carrying amount of consideration paid for the combination (or the total face value of
    
    shares issued) is adjusted to the capital premium (or share premium) in the capital reserve. If the balance
    
    of the capital premium (or share premium) is insufficient, any excess is adjusted to retained earnings.
    
    The cost of a combination incurred by the absorbing party includes any costs directly attributable to the
    
    combination shall be recognized as an expense through profit or loss for the current period when
    
    incurred.
    
    (2)Business combination involving entities not under common control
    
    A business combination involving enterprises not under common control is a business combination in
    
    which all of the combining enterprises are not ultimately controlled by the same party or parties both
    
    before and after the business combination. For a business combination not involving enterprises under
    
    common control, the party that, on the acquisition date, obtains control of another enterprise participating
    
    in the combination is the acquirer, while that other enterprise participating in the combination is the
    
    acquiree. Acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
    
    For a business combination not involving enterprise under common control, the combination cost
    
    including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed,
    
    and equity securities issued by the acquirer. The intermediary expenses incurred by the acquirer in respect
    
    of auditing, legal services, valuation and consultancy services etc. and other associated administrative
    
    expenses attributable to the business combination are recognized in profit or loss when they are incurred.
    
    The transaction cost arose from issuing of equity securities or liability securities shall be initially
    
    recognized as equity securities or liability securities.
    
    The contingent consideration related to the combination shall be booked as combination cost at the fair
    
    value at the acquisition date. If, within the 12 months after acquisition, additional information can prove
    
    the existence of related information at acquisition date and the contingent consideration need to be
    
    adjusted, goodwill can be offset. For a business combination achieved in stages that involves multiple
    
    exchange transactions, the equity interest in the acquiree previously held before the acquisition date
    
    re-assessed at the fair value at the acquisition date, with any differences between its fair value and its
    
    carrying amount is recorded as investment income. The other comprehensive income of the acquiree
    
    before the acquisition date relating to the previously held interest in the acquiree is transferred to
    
    investment income. Combination cost is the aggregate of the carrying amount of the equity interest held
    
    in the acquiree prior to the acquisition date and the fair value of the cost of the additional investment at
    
    the acquisition date.
    
    Combination cost of the acquirer‘s interest and identifiable net assets of the acquirer acquired through the
    
    business combination shall be measured by the fair value at the acquisition date. Where the cost of
    
    combination exceeds the acquirer‘s interest in the fair value of the acquiree‘s identifiable net assets, the
    
    difference shall be recognized as goodwill. Where the cost of combination is less than the acquirer‘s
    
    interest in the fair value of the acquiree‘s identifiable net assets, the difference shall be accounted for
    
    according to the following requirements: (i) the acquirer shall reassess the measurement of the fair values
    
    of the acquiree‘s identifiable assets, liabilities and contingent liabilities and measurement of the cost of
    
    combination; (ii) if after that reassessment, the cost of combination is still less than the acquirer‘s interest
    
    in the fair values of the acquiree‘s identifiable net assets, the acquirer shall recognize the remaining
    
    difference immediately in profit or loss for the current period.
    
    Where the temporary difference obtained by the acquirer was not recognized due to inconformity with
    
    the conditions applied for recognition of deferred income tax, if, within the 12 months after acquisition,
    
    additional information can prove the existence of related information at acquisition date and the expected
    
    economic benefits on the acquisition date arose from deductible temporary difference by the acquiree can
    
    be achieved, relevant income tax assets can be recognized, and goodwill offset. If the goodwill is not
    
    sufficient, the differences shall be recognized as profit of the current period.
    
    Apart from above, the differences shall be taken into profit or loss of the current period if the recognition
    
    of deferred income tax assets is related to the combination.
    
    5、Preparation of consolidated financial statements
    
    (1)The scope of consolidated financial statements
    
    The scope of consolidation in the consolidated financial statements is determined on the basis of control.
    
    Control is the power to govern the financial and operating policies of an enterprise so as to obtain
    
    benefits from its operating activities. The scope of consolidation includes the Group and all of the
    
    subsidiaries. Subsidiary is an enterprise or entity under the control of the Group.
    
    (2)Preparation of the consolidated financial statements
    
    The subsidiary of the Group is included in the consolidated financial statements from the date when the
    
    control over the net assets and business decisions of the subsidiary is effectively obtained, and excluded
    
    from the date when the control ceases. For a subsidiary disposed of by the Group, the operating results
    
    and cash flows before the date of disposal (the date when control is lost) are included in the consolidated
    
    income statement and consolidated statement of cash flows, as appropriate. For a subsidiary disposed
    
    during the period, no adjustment is made to the opening balance of the consolidated financial statements.
    
    For a subsidiary acquired through a business combination not under common control, the operating
    
    results and cash flows from the acquisition (the date when the control is obtained) are included in the
    
    consolidated income statement and consolidated statement of cash flows, as appropriated; no adjustment
    
    is made to the opening balance and comparative figures in the consolidated financial statements. Where a
    
    subsidiary was acquired during the reporting period, through a business combination involving
    
    enterprises under common control, the financial statements of the subsidiaries are included in the
    
    consolidated financial statements. The results of operations and cash flow are included in the
    
    consolidated balance sheet and the consolidated income statement, respectively, based on their carrying
    
    amounts, from the date that common control was established, and the opening balances and the
    
    comparative figures of the consolidated financial statements are restated.
    
    When the accounting period or accounting policies of a subsidiary are different from those of the Group,
    
    the Group makes necessary adjustments to the financial statements of the subsidiary based on the Group‘s
    
    own accounting period or accounting policies. Where a subsidiary was acquired during the reporting
    
    period through a business combination not under common control, the financial statements was
    
    re-conciliated on the basis of the fair value of identifiable net assets at the date of acquisition. Intra-group
    
    balances and transactions, and any unrealized profit or loss arising from intra-group transactions, are
    
    eliminated in preparing the consolidated financial statements.
    
    Minority interest and the portion in the net profit or loss not attributable to the Group are presented
    
    separately in the consolidated balance sheet within shareholders‘ equity and net profit. Net profit or loss
    
    attributable to minority shareholders in the subsidiaries is presented separately as minority interest in the
    
    consolidated income statement below the net profit line item. When the amount of loss for the current
    
    period attributable to the minority shareholders of a subsidiary exceeds the minority shareholders‘ portion
    
    of the opening balance of owners‘ equity of the subsidiary, the excess is allocated against the minority
    
    interests.
    
    When the Group loses control of a subsidiary due to the disposal of a portion of an equity investment or
    
    other reasons, the remaining equity investment is re-measured at its fair value at the date when control is
    
    lost. The difference between 1) the total amount of consideration received from the transaction that
    
    resulted in the loss of control and the fair value of the remaining equity investment and 2) the carrying
    
    amounts of the interest in the former subsidiary‘s net assets immediately before the loss of the control is
    
    recognized as investment income for the current period when control is lost. The amount recognized in
    
    other comprehensive income in relation to the former subsidiary‘s equity investment is reclassified as
    
    investment income for the current period when control is lost. The retained interest is subsequently
    
    measured according to the rules stipulated in the ―Chinese Accounting Standards for Business Enterprises
    
    No.2—Long-term equity investment‖ or ―Chinese Accounting Standards for Business Enterprises
    
    No.22—Determination and measurement of financial instruments‖ . Details in Note Ⅳ. 9 ―Financial
    
    instruments‖ or Note Ⅳ.13 ‖Long-term equity investments ‖.
    
    Control is the foundation of ensuring the scope financial statements. Control is referring to the power of
    
    controlling investee via the relevant investing activities with changeable returns and of influencing to
    
    change values of them. The consolidation scope refers to the group and subsidiaries. Subsidiary is entity
    
    of the controlled party.
    
    From the day of acquiring the equity and actual control of management decisions, it should be in the
    
    scope vice versa. As for the subsidiary of disposition, the assets and monetary flow should be included
    
    into the consolidated financial statements, not adjusting the opening balance. Under the non-same control
    
    surrounding, the operating results and cash flows have been included in the consolidated financial
    
    statements properly and accurately with no adjustment of the opening balance.Under the same control
    
    surrounding, the operating results and cash flows have been included in the consolidated financial
    
    statements properly and accurately with adjustment of the opening balance.
    
    When making financial statements, if the period of the group and the subsidiary is different, we should
    
    necessarily adjust the subsidiary‘ period in accordance with the group‘s. As for the non-same control
    
    subsidiaries, the values at acquisition date will be applied when adjusting.
    
    The values all major transactions in the group and unrealized profits should be offsetin the preparation of
    
    consolidated financial statements.
    
    It should be listed individually when the entity of subsidiaries have non-controlling shares. Furthermore,
    
    if there are share belonging to the non-controlling shareholders, we should classify it as ―Non-controlling
    
    interests‖. If there is a loss in the investment of non-controlling shareholders, we still list the loss in the
    
    category of ―Non-controlling interests‖.
    
    When losing the control power of subsidiesbecause of deposing partial share capital, for the remaining
    
    values, it will be recalculated. The sum of consideration at acquisition date minus the original equity held
    
    by the group with the relevant route, the difference should be listed into current investment outcome. The
    
    comprehensive income relevant to subsidiaries should be used the same accounting methods to measure.
    
    Besides, for the remaining share capital, it should be measured by the accounting standards of NO.2
    
    andNO.22, details will be found in noteⅣ.9 or noteⅣ.13.
    
    It is necessary to distinguish how to lose the control power: for a package of transactions or not. The
    
    following would suggest whether affected by a package of transactions:①fair and equal;②the result of
    
    the entire trasanction could be accomplished by the transaction;③the transaction happens depends on the
    
    other;④it will be considered as a whole when measuring the economic results, details will be found in
    
    noteⅣ.13.(2)④.
    
    6.Joint Venture
    
    Joint venture refers to an arrangement controlled be two or more than two parties. The group will divide
    
    joint venture into joint management and joint ventures in accordance with the standards.Joint venture is
    
    the arrangement of acquiringbenefits .
    
    The equity method will be used into the calculation ,details will be found in noteⅣ.13(2)②.
    
    As a party of joint venture, we should ensure the assets and liabilities individually; besides, revenues and
    
    costs of production and sales.
    
    If selling or buying assets, the group should only ensure gain or loss which belonged to the other
    
    partiesparticipated in joint venture, accounting standards—8.
    
    7. Cash and Cash equivalent
    
    Cash and cash equivalents of the Group include cash on hand, ready usable deposits and investments
    
    having short holding term (normally will be due within three months from the day of purchase), with
    
    strong liquidity and easy to be exchanged into certain amount of cash that can be measured reliably and
    
    have low risks of change.
    
    8. Foreign exchange
    
    (1)Translation in foreign exchange transactions
    
    The foreign currency transactions are recorded, on initial recognition in the functional currency, by
    
    applying the spot exchange rate on the date of the transaction (an exchange rate that approximates the
    
    actual spot exchange rate on the date of transaction). The exchange of foreign currency and transactions
    
    related to the foreign exchange are translated at the spot exchange rate.
    
    (2)Translation of monetary foreign currency and non-monetary foreign currency
    
    At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at
    
    the balance sheet date. All the exchange differences thus resulted are taken to profit or loss, except for ①
    
    those relating to foreign currency borrowings specifically for construction and acquisition of qualifying
    
    assets, which are capitalized in accordance with the principle of capitalization of borrowing costs. ②The
    
    exchange difference from changes of other account balance of foreign currency monetary items
    
    available-for-trade is recorded into profit or loss except for amortized cost.
    
    Non-monetary foreign currency items measured at historical cost shall still be translated at the spot
    
    exchange rate prevailing on the transaction date, and the amount denominated in the functional currency
    
    is not changed. Non-monetary foreign currency items measured at fair value are translated at the spot
    
    exchange rate prevailing at the date when the fair values are determined. The exchange difference thus
    
    resulted are recognized in profit or loss for the current period or as capital reserve.
    
    9、Financial instruments
    
    (1)Determination of financial assets and liabilities‘ fair value
    
    Fair value is the amount for which an asset could be exchanged, or a liability settled, between
    
    knowledgeable, willing parties in an arm‘s length transaction. For a financial instrument which has an
    
    active market, the Group uses quoted price in the active market to establish its fair value. The quoted
    
    price in the active market refers to the price that can be regularly obtained from exchange market,
    
    agencies, industry associations, pricing authorities; it represents the fair market trading price in the actual
    
    transaction.
    
    For a financial instrument which does not have an active market, the Group establishes fair value by
    
    using a valuation technique. Valuation techniques include using recent arm‘s length market transactions
    
    between knowledgeable, willing parties, reference to the current fair value of another instrument that is
    
    substantially the same, discounted cash flow analysis and option pricing models.
    
    (2)Classification, recognition and measurement of financial assets
    
    All regular way purchases or sales of financial assets are recognized and derecognized on a trade date
    
    basis. On initial recognition, the Group‘s financial assets are classified into one of the four categories,
    
    including financial assets at fair value though profit or loss, held-to maturity investments, loans and
    
    receivables and available-for-trade financial assets. A financial asset is recognized initially at fair value.
    
    In the case of financial assets at fair value through profit or loss, relevant transaction costs are
    
    immediately charged to the profit and loss of the current period; transaction costs relating to financial
    
    assets of other categories are included in the amount initially recognized.
    
    ① Financial assets at fair value through profit or loss:
    
    Including financial assets held-for-trade and financial assets designated at fair value through profit or
    
    loss.
    
    Financial asset held-for-trade is the financial asset that meets one of the following conditions:
    
    A. the financial asset is acquired for the purpose of selling it in a short term;
    
    B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively
    
    managed, and there is objective evidence indicating that the enterprise recently manages this portfolio for
    
    the purpose of short-term profits;
    
    C. the financial asset is a derivative, except for a derivative that is designated and effective hedging
    
    instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by
    
    delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair
    
    value cannot be reliably measured. For such kind of financial assets, fair values are adopted for
    
    subsequent measurement.
    
    Financial asset is designated on initial recognition as at fair value through profit or loss only when it
    
    meets one of the following conditions:
    
    A. the designation eliminates or significantly reduces the inconsistency in the measurement or
    
    recognition of relevant gains or losses that would otherwise arise from measuring the financial
    
    instruments on different bases.
    
    B. a group of financial instruments is managed and its performance is evaluated on a fair value basis,
    
    and is reported to the enterprise‘s key management personnels. Formal documentation regarding risk
    
    management or investment strategy has prepared.
    
    Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any gains
    
    or losses arising from changes in the fair value and any dividends or interest income earned on the
    
    financial assets are recognized in the profit or loss.
    
    ② Investment held-to maturity
    
    Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and
    
    fixed maturity that an entity has the positive intention and ability to hold to maturity. Such kind of
    
    financial assets are subsequently measured at amortized cost using the effective interest method. Gains or
    
    losses arising from derecognition, impairment or amortization are recognized in profit or loss for the
    
    current period.
    
    Effective interest rate is the rate that exactly discounted estimated future cash flows through the expected
    
    life of the financial asset or financial liability or, where appropriate, a shorter period to the net carrying
    
    amount of the financial asset or financial liability.
    
    When calculating the effective interest rate, the Group shall estimate future cash flow considering all
    
    contractual terms of the financial asset or financial liability without considering future credit losses, and
    
    also consider all fees paid or received between the parties to the contract giving rise to the financial asset
    
    and financial liability that are an integral part of the effective interest rate, transaction costs, and
    
    premiums or discounts, etc.
    
    ③ Loans and receivables
    
    Loans and receivables are non-derivative financial assets with fixed determinable payment that are not
    
    quoted in an active market. Financial assets classified as loans and receivables by the Group include note
    
    receivables, account receivables, interest receivable dividends receivable and other receivables.
    
    Loans and receivables are subsequently measured at amortized cost using the effective interest method.
    
    Gain or loss arising from derecognition, impairment or amortization is recognized in profit or loss.
    
    ④ Financial assets available-for-trade
    
    Financial assets available-for-trade include non-derivative financial assets that are designated on initial
    
    recognition as available for trade, and financial assets that are not classified as financial assets at fair
    
    value through profit or loss, loans and receivables or investment held-to-maturity.
    
    Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising
    
    from changes in the fair value are recognized as other comprehensive income and included in the capital
    
    reserve, except that impairment losses and exchange differences related to amortized cost of monetary
    
    financial assets denominated in foreign currencies are recognized in profit or loss, until the financial
    
    assets are derecognized, at which time the gains or losses are released and recognized in profit or loss.
    
    Interests obtained and dividends declared by the investee during the period in which the financial assets
    
    available-for-trade are held, are recognized in investment gains.
    
    (3)Impairment of financial assets
    
    The Group assesses at the balance sheet date the carrying amount of every financial asset except for the
    
    financial assets that measured by the fair value. If there is objective evidence indicating a financial asset
    
    may be impaired, a provision is provided for the impairment.
    
    The Group makes an impairment test for a financial asset that is individually significant. For a financial
    
    asset that is not individually significant, it is included in a group of financial assets with similar credit
    
    risk characteristics and collectively assessed for impairment [or individually assessed for impairment]. If
    
    no objective evidence of impairment incurs for an individually assessed financial asset (whether the
    
    financial asset is individually significant or not individually significant), it is included in a group of
    
    financial assets with similar credit risk characteristics and collectively assessed for impairment. Assets for
    
    which an impairment loss is individually recognized is not included in a group of financial assets with
    
    similar credit risk characteristics and collectively assessed for impairment.
    
    ① Impairment on held-to maturity investment, loans and receivables
    
    The financial assets measured by cost or amortized cost write down their carrying value by the estimated
    
    present value of future cash flow. The difference is recorded as impairment loss. If there is objective
    
    evidence to indicate the recovery of value of financial assets after impairment, and it is related with
    
    subsequent event after recognition of loss, the impairment loss recorded originally can be reversed. The
    
    carrying value of financial assets after impairment loss reversed shall not exceed the amortized cost of the
    
    financial assets without provisions of impairment loss on the reserving date.
    
    ② Impairment loss on available-for-trade financial assets
    
    When decision is made with all related factors on whether the fall of fair value investment of an equity
    
    instrument available-for-trade is significant or non-transient, it indicates impairment of such equity
    
    instrument investment, in which, ―significant‖ means over 20% of fall in fair value and ―non-transient‖
    
    means over 12 months of subsequent fall.
    
    When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair
    
    value that had been recognized in capital reserve shall be removed and recognized in profit or loss. The
    
    amount of the cumulative loss that is removed shall be difference between the acquisition cost with
    
    deduction of recoverable amount less amortized cost, current fair value and any impairment loss on that
    
    financial asset previously recognized in profit or loss.
    
    If, after an impairment loss has been recognized, there is objective evidence that the value of the financial
    
    asset is recovered, and it is objectively related to an event occurring after the impairment loss was
    
    recognized, the initial impairment loss can be reversed and the reserved impairment loss on
    
    available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on
    
    available-for-trade debt instrument is recorded in the current profit or loss.
    
    The equity instrument where there is no quoted price in an active market, and whose fair value cannot be
    
    reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by
    
    delivery of such an unquoted equity instrument shall not be reversed.
    
    (4)Recognition and measurement of financial assets transfer
    
    The Group derecognizes a financial asset when one of the following conditions is met:
    
    1) the rights to receive cash flows from the asset have expired;
    
    2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a
    
    ―pass-through‖ arrangement;
    
    3) the enterprise has transferred its rights to receive cash flows from the asset and either (a) has
    
    transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained
    
    substantially all the risks and rewards of the asset, but has transferred control of the asset.
    
    If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the
    
    asset, the asset is recognized according to the extent it exists as financial asset, and correspondent liability
    
    is recognized. The extent of existence refers the level of risk by the financial asset changes the enterprise
    
    is facing.
    
    For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the carrying
    
    amount of the financial asset transferred; and (b) the sum of the consideration received from the transfer
    
    and any cumulative gain or loss that had been recognized in other comprehensive income, is recognized
    
    in profit or loss.
    
    If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the
    
    transferred financial asset is allocated between the part that continues to be recognized and the part that is
    
    derecognized, based on the relative fair value of those parts. The difference between (a) the carrying
    
    amount allocated to the part derecognized; and (b) the sum of the consideration received for the part
    
    derecognized and any cumulative gain or loss allocated to the part derecognized which has been
    
    previously recognized in other comprehensive income, is recognized in profit or loss.
    
    (5)Classification and measurement of financial liabilities
    
    The Group‘s financial liabilities are, on initial recognition, classified into financial liabilities at fair value
    
    through profit or loss and other financial liabilities. For financial liabilities at fair value through profit or
    
    loss, relevant transaction costs are immediately recognized in profit or loss for the current period, and
    
    transaction costs relating to other financial liabilities are included in the initial recognition amounts.
    
    ①Financial liabilities measured by the fair value and the changes recorded in profit or loss
    
    The classification by which financial liabilities held-for-trade and financial liabilities designed at the
    
    initial recognition to be measured by the fair value follows the same criteria as the classification by which
    
    financial assets held-for-trade and financial assets designed at the initial recognition to be measured by
    
    the fair value and their changes are recorded in the current profit or loss.
    
    For the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair
    
    values are adopted for subsequent measurement. All the gains or losses on the change of fair value and
    
    the expenses on dividends or interests related to these financial liabilities are recognized in profit or loss
    
    for the current period.
    
    ②Other financial liabilities
    
    Derivative financial liabilities that linked with equity instruments, which do not have a quoted price in an
    
    active market and their fair value cannot be measured&ensp