important notice - 广东科达洁能股份有限公司- · important notice i. board of directors,...

Important Notice

I. The Board of Directors, the Board of Supervisors, the Supervisors and Senior Management ensure that contents

of the annual report are authentic, accurate and complete, and do not contain any false statement, misleading

statement or significant omissions, and bear individual and joint and several legal liabilities.

II. All directors of the Company attended conference of the Board of Directors.

III. Zhongxi CPA Firm (special general partnership) provides the Company with standard audit report without

reservations.

IV. The Principal of the Company Wu Muhai, the principal in charge of accounting Zeng Fei and the principal of

accounting body (accounting manager) Zeng Fei declare that: ensure that financial report of the annual report is

authentic, accurate and complete.

V. Proposals of profit distribution or increased share capital by public reserve fund transfer in the reporting period

reviewed and discussed by the Board of Directors

The proposal of profit distribution for the year 2015 is described as follows: the Company’s total number of shares

705,732,161 as the base number, cash 2.00 yuan (tax included) is allocated to all shareholders for each 10 shares,

and cash dividend of 141,146,432.20 yuan is allocated. Meanwhile, 10 shares are increased for each 10 shares to

all shares by transferring public reserve fund, and the share number to be increased is 705,732,161. The proposal

comes into force upon being reviewed and passed by the Shareholders’ Conference.

VI. Declaration on risks in forward-looking statement

The annual report includes future plan and other forward-looking statement, and does not constitute substantial

commitment to investors by the Company. The investors are encourages to focus on investment risks.

VII. Any fund occupied by controlling shareholders and its related parties not for business?

No

VIII. Any external guarantee provided in violation of decision-making procedures?

No

IX. Significant risk disclosure

In this annual report, the Company details risks that the Company may challenge. Please refer to Section V of the

Annual Report “the Management’s Analysis and Discussion”.

The Annual Report is prepared in Chinese and English .In case of discrepancy,the Chinese version will prevail.

Table of Contents

Section I Definitions ......................................................................................... 1

Section II Company Profile ............................................................................... 2

Section III Main Financial Indexes ...................................................................... 12

Section IV Profile of company business ............................................................. 15

Section V The Management’s Discussion and Analysis ..................................... 16

Section VI Important Notice ............................................................................... 26

Section VII Change of ordinary shares and details of shareholders ..................... 28

Section VIII Details of directors, supervisors, senior management and staff ......... 31

Section IX Financial Report ................................................................................ 33

I. The Management’s responsibility for financial statements ............ 33

II. CPA’s responsibilities .................................................................. 34

III. Audit opinions ............................................................................. 47

Section I Definitions

1Annual Report 2015

I. Definitions

In the report, unless otherwise specified, the following terms are defined as follows:

Definitions of usually used terms

Company, the Company, KEDA

Clean Energy Refers to KEDA Clean Energy Co., Ltd.

Shunde Ceramics Machinery Refers to Shunde KEDA Ceramic Machinery Co., Ltd.

KEDA (Anhui) Industrial Refers to KEDA (Anhui) Industrial Co., Ltd.

KEDA (Anhui) Clean Energy Refers to KEDA (Anhui) Clean Energy Co., Ltd.

KEDA Stone Refers to Foshan KEDA Stone Machinery Co., Ltd.

KEDA Hong Kong Refers to KEDA Industrial (Hong Kong) Limited

Henglitai Company Refers to Foshan Henglitai Machinery Co., Ltd.

Suremaker Company Refers to Wuhu Suremaker Machinery Co., Ltd., Wuhu KEDA Suremaker

Co., Ltd.

KEDA Hydraulics Refers to Foshan KEDA Hydraulic Machinery Co., Ltd.

Xincheng Investment, Anhui

Xincheng Investment Refers to Anhui Xincheng Investment Co., Ltd.

Anhui Xincheng Financing Refers to Anhui Xincheng Financing and Leasing Co., Ltd.

Guangdong Xincheng Financing Refers to Guangdong Xincheng Financing and Leasing Co., Ltd.

Xincheng International Refers to Xincheng International Financing and Leasing Co., Ltd.

Tianjiang Pharmaceutical Refers to Jiangyin Tianjiang Pharmaceutical Co., Ltd.

Changsha Aer Refers to Changsha Aer Compressor Co., Ltd.

Anhui Aer Refers to Anhui KEDA Aer Compressor Co., Ltd.

Guangdong Taiwei Refers to Guangdong Taiwei Digital Ceramics Printing Co., Ltd.

KEDA Dongda Refers toHenan Dongda Tailong Metallurgy Science& Technology Co.,

Ltd., Henan KEDA Dongda International Engineering Co., Ltd.

Dongda Science & Technology Refers toNortheast University Science & Technology Industrial Group

Co., Ltd.

KEDA (Shenyang) Clean Energy Refers to KEDA (Shenyang) Clean Energy Gas Co., Ltd.

Suremaker Engineering Co., Ltd. Refers to KEDA (Maanshan) Suremaker Engineering Co., Ltd.

Do Better Company Refers to Foshan Do Better Machinery Co., Ltd.

Jiangsu Kehang Refers toJiangsu Kehang Environmental Protection Science& Technology

Co., Ltd.

Ningxia Kehang Refers to Ningxia Kehang Environmental Protection Engineering Co., Ltd.

KEDA Clean Energy New Materials Refers to Anhui KEDA Clean Energy New Materials Co., Ltd.

Zhangzhou Juming Refers to Zhangzhou Juming Graphite Co., Ltd.

SRC, CSRC Refers to China Securities Regulatory Commission

Zhongxi CPA Firm Refers to Zhongxi CPA Firm (Special Ordinary Partnership)

Phase-II stock option incentive Refers to Phase-II Stock Option Incentive Plan of KEDA Clean Energy

Co., Ltd.

yuan, 10 thousand yuan, 100 million

yuan Refers to RMB yuan, RMB 10 thousand yuan, RMB 100 million yuan

1Annual Report 2015

Section III Main Financial IndexesSection III Main Financial Indexes

Annual Report 2015 13Annual Report 201512

I. Corporate Information

Company name in Chinese 广东科达洁能股份有限公司Abbreviated company name in Chinese 科达洁能Company name in foreign language Keda Clean Energy Co., Ltd.

Abbreviated company name in foreign language KEDA

Company’s legal representative Wu Muhai

II. Contact and liaison

Secretary of the Board of Directors Representative of securities

Name Zhu Yafeng Feng Xin

Liaison address

No.1, West Huanzhen Road, Guanglong

Industrial Park, Chencun Town, Shunde

District, Foshan City, Guangdong Province

No.1, West Huanzhen Road, Guanglong

Industrial Park, Chencun Town, Shunde

District, Foshan City, Guangdong Province

Tel +86-757-23833869 +86-757-23833869

Fax +86-757-23833869 +86-757-23833869

Email [email protected] [email protected]

III. Basic information

The Company’s registered address

No.1, West Huanzhen Road, Guanglong Industrial Park,

Chencun Town, Shunde District, Foshan City, Guangdong

Province

Postal code of the Company’s registered address 528313

The Company’s office address

No.1, West Huanzhen Road, Guanglong Industrial Park,

Chencun Town, Shunde District, Foshan City, Guangdong

Province

Postal code of the Company’s office address 528313

The Company’s website http: //www.kedachina.com.cn

Email [email protected]

IV. Information disclosure and placement location

Media for information disclosure appointed by the

Company Shanghai Securities News, Securities Times

Website of China Securities Regulatory Commission for

publishing annual report www.sse.com.cn

Placement location for the Company’s annual report The Company, Shanghai Stock Exchange

V. Information of company stock

Information of Company Stock

Type of stock Listing stock exchange Abbreviated stock

name Stock code

Abbreviated name of

stock before change

Share A Shanghai Stock Exchange KEDA Clean Energy 600499 KEDA Industrial

VI. Other related information

CPA Firm engaged

by the Company

(domestic)

Name Zhongxi CPA Firm (special general partnership)

Office address 11F, Block A, Xincheng Wenhua Mansion, No.11,

Chongwenmenwai Street, Beijing City

Names of signing CPA Wang Huishuan, Su Zhijun

Financial consultant

exercising supervision

duties in the reporting

period

Name Southwest Securities Co., Ltd.

Office address 4F, Block A, International Enterprise Mansion, No.35,

Financial Street, Xicheng District, Beijing City

Names of signing financial

consultants Tong Xing, Wang Xi

Supervision period January 13, 2014 to December 31, 2015

VII. Main accounting data and financial indexes in the last 3 years

(I) Main accounting data Unit: 10 thousand yuan, Currency: RMB

Main accounting data Year 2015 Year 2014

Increment or

decrement

compared with the

same period last

year (%)

Year 2013

Business revenue 359,368.43 446,587.59 -19.53 381,189.64

Net profit attributed to shareholders of listing

company 54,131.76 44,610.47 21.34 37,020.62


companies after recurring profits and losses

deducted

400.49 40,490.09 -99.01 34,571.89

Net cash amount from business activities 56,493.88 -28,425.79 298.74 294.23

The end of

year 2015

The end of

year 2014

Increment or

decrement

compared with the

same period of the

last year (%)

The end of

year 2013

Net assets attributed to shareholders of listing

companies 410,826.93 361,527.56 13.64 287,934.04

Total assets 842,057.19 757,676.84 11.14 642,650.29

Total share capital at the end of the period 70,573.22 69,722.72 1.22 66,624.87

Section III Main Financial Indexes

Annual Report 201514

(II) Main financial indexes

Main financial indexes Year 2015 Year 2014

Increment or decrement

compared with the same

period of the last year (%)

Year 2013

Basic earnings per share (yuan/share) 0.771 0.647 19.17 0.560

Diluted earnings per share (yuan/share) 0.771 0.638 20.85 0.552

Basic earnings per share after non-recurring

profits and losses deducted (yuan/share) 0.006 0.587 -98.98 0.523

Weighted average net asset yield (%) 14.04 13.28 Increasing by 0.76% 13.89

Weighted average net asset yield after non-

recurring profits and losses deducted (%) 0.10 12.05 -11.95 12.97

Description of main accounting data and financial indexes 3 years before the end of the reporting period

During the reporting period, the Company accrued bad debt provision of 133.7063 million yuan, goodwill

depreciation provision of 65.4079 million yuan and disposed of fixed assets of 56.4011 million yuan, and net profit

attributed to shareholders of listing company after recurring profits and losses is decreased significantly compared with

the same period of the last year.

VIII. Main financial data of the year 2015 in quarters Unit: 10 thousand yuan, currency: RMB

1st quarter

(January to

March)

2nd quarter

(April to June)

3rd quarter

(July to

September)

4th quarter

(October to

December)

Business revenue 103,541.79 107,694.64 69,189.82 78,942.18


company 13,213.97 13,721.46 33,545.58 -6,349.25


company after recurring profits and losses deducted 11,729.46 11,608.46 2,062.17 -24,999.60

Net cash amount from business activities 7,108.49 23,122.69 18,669.52 7,593.18

Section IV Profile of company business

15Annual Report 2015

I. Description of main business, operating mode and industrial details of the Company during the reporting

period

The Company main business includes building material machinery, clean energy etc.

1. Building material machinery includes ceramics machinery, bricks machinery, stone machinery etc.

Since foundation, the Company researched and developed the first ceramics squaring & chamfering machine,

calibrating machine, polishing machine, polishing tile production line, large-tonnage press etc. in China, and boosted

the process of domestic ceramics machinery replacement of imported equipment from Italy. At present, the imported

ceramics machinery market share in China is less than 10%, and the Company’s ceramics machinery market share

is more than 30% of domestic market. Of which, market share of press and polishing machine are more than 80%.

Meanwhile, the Company is the first AAC slab equipment supplier in China, and one of several companies master key

technology of solid stone waste utilization in the world, with outstanding competitive strength.

The Company’s building material machinery business is independently operated by several operating units. At

present, there are 14 sales zones in China, 4 sales zones overseas and 2 overseas subsidiaries, implement marketing

with the sales mode including domestic direct sales, overseas “direct sales+ agency”, “joint venture for plant+ complete

plant sales”, and the operating mode of “production subject to sales”, and expand the overseas market with help of

financing and leasing companies.

2. The clean energy business includes clean coal gasification, fume control, manufacturing and engineering

business etc.

With the clean coal gasification system, the Company provides customers with the competitive coal-based clean

coal gas solutions. At present, in the domestic industrial fuel field, the solid bed coal gas generator with low conversion

efficiency and serious exhaust gas is still used. However, with intensified environmental protection supervision and new

technology, the Company sees sustainable market demand growth. Nowadays, the Company’s clean coal gasification

system is promoted in the aluminum oxide industry and is expanded towards ceramics, carbon, coking, special steel

and other fields. The Company’s fume control meets low-emission requirements of thermal power industry, and is

advantageous in building material and other industrial fields, and will be benefited from pollutant control from thermal

power to industrial fields.

The Company’s clean energy environmental protection business is operated by direct sales and bidding. The

production and operation mode of “production subject to sales, and purchasing subject to production” is adopted, and

the shareholding companies with EPC qualification are in charge of designing and contracting, and the financial services

from financing and leasing companies provide customers with complete solutions.

II. Analysis of core competitive strength in the reporting period

1. Strategic positioning of the conventional advantageous industry follows up the trend of times

During the reporting period, in terms of the Company’s advantageous building material machinery business, with

the help of incentive policy “The Belt, and The Road” by the central government, the Company reinforces overall overseas

sales and service, initiates the “overseas joint venture for plant+ complete plant sales” for areas with poor marketing, and

accelerates construction of complete production line as modal and drives model effects. During the reporting period, the

Company signs contracts with African countries on building ceramics producers by joint venture, marking that milestone

progress made for African market as the first access market.

2. New clean energy and environmental protection business reinforces business collaboration and

integration

During the reporting period, the Company integrated Jiangsu Kehang Environmental Protection Science & Technology

Co., Ltd. to advance the “front-end clean production+ back-end control” collaboration effect and cross sales for industrial

enterprises. At present, the Company is capable of providing customers with complete solutions involving EPC engineering

design, production and installation, general contracting and financing and leasing for environmental protection control;

meanwhile, through effective resource sharing and complementary advantages of operators, the Company establishes a

business system with clear labor division and closely collaborated, and the integration advantages are evident.

Section V The Management’s Discussion and AnalysisSection V The Management’s Discussion and Analysis


I. The Management’s discussion and analysis

In the year 2015, the world’s economic environment is complicated, and domestic economic growth is feeble. In

the lower-reaches industry of the Company, operation rate of domestic building material and ceramics enterprises was

dropped to 70%, and prices of aluminum oxide was decreased significantly. The Company’s major business challenged

serious domestic economic situations, and total annual performance is lower than the objective determined at the

beginning of the year.

During the reporting period, the Company sold the equity of Tianjiang Pharmaceutics, recovered fund and created

slack financial environment for focusing on “green solution, greener life”; based on principles of stability and prudence,

partial asset depreciation reserves were written off and accrued in the year, and the Company’s overall asset quality was

improved; in terms of key business, business volume and expansion of ceramics machinery made progress; in terms of

clean energy, the clean coal gasification technology passed national achievement appraisal by the Ministry of Industry

and Information of China, and first set of low-pressure powder coal gas fluid bed gasifier put into service; through

integrating Jiangsu Kehang Environmental Protection, the collaboration of “front-end clean production+ back-end control”

for industrial enterprises was shaped; in terms of the Company’s internal risk control and internal management, the

Company established office of the Board of Directors to reinforce process control over the holding subsidiaries and lower

management risks.

II. Major business in the reporting period

During the reporting period, the Company attained major business revenue of 3593.6843 million yuan, a drop

of 19.53% compared with the same period of the last year, and attained overseas business income of 737.6058

million yuan, increasing by 32.16% compared with the same period of the last year. The Company sold 9.67% equity

of Jiangyin Tianjiang Pharmaceutical at the price of 924.1460 million yuan, and realized profit of 654.4674 million

yuan in the reporting period, increasing by 42.54% compared with the same period of the last year; the Company

realized net profit of 531.7890 million yuan, increasing by 24.19% compared with the same period last year; and

net profit attributed to the parent company is 541.3176 million yuan, increasing by 21.34% compared with the same

period of the last year.

(I) Analysis of major business

Analysis of Change of Items in Profit Statement and Cash Flow Statement Unit: 10 thousand yuan, currency: RMB

Description Amount of the

period

Amount of the same

period last year

Ratio of

change (%)

Business revenue 359,368.43 446,587.59 -19.53

Business cost 277,606.24 340,371.70 -18.44

Sales expenses 20,740.26 20,823.19 -0.40

Overhead 40,668.12 35,689.21 13.95

Financial costs 2,969.23 2,416.64 22.87

Net cash amount from business activities 56,493.88 -28,425.79 298.74

Net cash amount from investment activities 76,616.69 -31,628.21 342.24

Net cash amount from fund raising activities -101,246.06 42,912.12 -335.94

R & D expenditures 16,700.05 18,313.40 -8.81

1. Analysis of revenue and cost

(1).Major business subject to industry, product and area Unit: 10 thousand yuan, currency: RMB

Details of major business subject to product

Subject to product Business

revenue

Business

cost

Gross

profit rate

(%)

Business

revenue

increased or

decreased

compared with

the last year (%)

Business cost

increased or

decreased

compared with

the last year

(%)

Gross profit

rate increased

or decreased

compared with

the last year

(%)

Building material machinery 244,902.59 190,437.38 22.24 -29.29 -26.62Decreased by

2.83%

Clean energy equipment 84,903.60 60,345.63 28.92 24.70 23.70Increased by

0.57%

Clean energy service 10,721.02 20,115.39 -87.63 -5.08 -15.54Increased by

23.24%

Financing and leasing 15,565.20 4,250.06 72.70 -6.40 -22.62Increased by

5.72%

Other equipment 2,789.18 2,044.34 26.70 -29.65 -23.08Decreased by

6.26%

Major business subject to areas

Subject to area Business

revenue

Business

costs

Gross

profit rate

(%)

Business

revenue

increased or

decreased

compared with

the last year (%)

Business cost

increased or

decreased

compared with

the last year

(%)

Gross profit

rate increased

or decreased

compared with

the last year

(%)

Domestic 285,121.01 225,020.62 21.08 -26.99 -25.33Decreased by

1.76%

Overseas 73,760.58 52,172.18 29.27 32.16 33.99Decreased by

0.96%

Description of major business subject to industry, product and area (1) Analysis of factors driving change of business revenue 1. In the year 2015, the building material machinery business attained business revenue of 2.449 billion yuan, a drop

of 29.29%, mainly caused by feeble ceramics industry, and poor demanding on building material machinery in China. 2. In the year 2015, the clean and environmental protection products attained business revenue of 849 million

yuan, increasing by 24.70% compared with the same period of the last year, mainly caused by merging Jiangsu Kehang

Environmental Protection Science& Technology Co., Ltd.



3. In the year 2015, the financing and

leasing business attained business revenue of

156 million yuan, a drop of 6.40% compared

with the same period of the last year.

4. In the year 2015, the clean energy

service attained business revenue of 107

million yuan, a drop of 5.08% compared with

the same period of the last year.

(2) Analysis on influences of new

products and new business

In August, 2015, the Company acquired

72% equity of Kehang Environmental

Protection. The Company’s business

expanded to smoke control. During the

reporting period, consolidated statement

revenue of Kehang Environmental Protection was 211 million yuan.

(3) Information of main customers

Sales of the Company’s top five customers is 623.4293 million yuan (tax excluded), accounting for 17.35% of total

sales revenue.

(2). Analysis of production and sales volumes

Major products Unit Production

volume

Sales

volume Stock

Production

volume

compared with

the last year (%)

Sales volume

increased or

decreased compared

with the last year (%)

Stock increased

or decreased

compared with

the last year (%)

Press Set 411 424 174 -34.66 -33.65 -6.95

Polishing line PCS 347 348 12 19.66 21.25 7.69

Kiln Set 29 29 31.82 31.82

AAC production line Set 14 15 5 -61.11 -57.14 -16.66

Description of production and sales

For the Company’s business beyond building material machinery is various and models are quietly different, the

production and sales volumes cannot be used to identify.

(3). Form of cost analysis Currency: RMB Unit: 10 thousand yuan

Details subject to products

Subject to

products Direct compositions

Amount in

the period

Ratio of

total cost in

the period

(%)

Amount in the

same period

of the last

period

Rate of total

cost in the

same period

of the last year

(%)

Rate of change

of amount

compared with

the last period

(%)

Remarks

Building material

machinery

Direct material cost 161,548.03 84.83 223,110.09 85.97 -27.59

Direct labor costs 7,660.62 4.02 8,258.59 3.18 -7.24

Manufacturing costs 17,712.93 9.30 24,020.51 9.26 -26.26

Depreciation 3,515.80 1.85 4,139.76 1.60 -15.07

Subtotal 190,437.38 100.00 259,528.95 100.00 -26.62

Clean energy

equipment

Direct material cost 51,257.88 84.94 40,298.42 82.61 27.20

Direct labor costs 1,827.04 3.03 1,825.52 3.74 0.08

Manufacturing costs 6,523.22 10.81 5,803.74 11.90 12.40

Depreciation 737.49 1.22 855.78 1.75 -13.82

Subtotal 60,345.63 100.00 48,783.46 100.00 23.70

Details subject to products

Subject to

products Direct compositions

Amount in

the period

Ratio of

total cost in

the period

(%)

Amount in the

same period

of the last

period

Rate of total

cost in the

same period

of the last year

(%)

Rate of change

of amount

compared with

the last period

(%)

Remarks

Clean energy

service

Direct material cost 9,607.76 47.76 15,701.03 65.92 -38.81

Direct labor costs 567.65 2.82 709.24 2.98 -19.96

Manufacturing costs 4,952.14 24.62 4,282.67 17.98 15.63

Depreciation 4,987.84 24.80 3,123.92 13.12 59.67

Subtotal 20,115.39 100.00 23,816.86 100.00 -15.54

Miscellaneous

Direct material cost 988.68 48.36 1,259.63 47.39 -21.51

Direct labor costs 465.07 22.75 494.84 18.62 -6.02

Manufacturing costs 471.22 23.05 768.50 28.92 -38.68

Depreciation 119.36 5.84 134.79 5.07 -11.45

Subtotal 2,044.33 100.00 2,657.76 100.00 -23.08

Financing and

leasing Interest 4,250.06 100.00 5,492.38 100.00 -22.62

2. Costs Unit: 10 thousand yuan

Description Year 2015 Year 2014 Increased or decreased by %

Sales cost 20,740.26 20,823.19 -0.40

Overhead 40,668.12 35,689.21 13.95

Financial costs 2,969.23 2,416.64 22.87

3. R & D expenses Details of R & D expenses

Unit: 10 thousand yuan

Expenditure R & D expenses in the period 16,700.05

Capitalized R & D expenditures in the period 0

R & D expenditures in total 16,700.05

Ratio of total R & D expenditure to total revenue (%) 4.65

Quantity of R & D staff of the Company 682

Ratio of R & D staff to total number of company staff (%) 14.78

Ratio of R & D expenses capitalization (%) 0



4. Cash flowUnit: 10 thousand yuan, currency: RMB

Year 2015 Year 2014Increment or

decrement Increased or

decreased by %

Refunding of tax received 6,007.72 2,893.96 3,113.77 107.60

Other cash received related to business activities 20,029.58 5,050.93 14,978.65 296.55

Cash received from recovering investment 93,137.83 0 93,137.83

Net cash amount recovered from disposal of fixed assets, intangible assets and other long-term assets

187.54 10.21 177.33 1,737.61

Other cash received related to investment activities 10,700.00 0 10,700.00

Net cash amount paid by subsidiaries and other business organizations

15,920.92 8,034.20 7,886.72 98.16

Cash received from absorbing investment 9,985.22 19,321.24 -9,336.02 -48.32

Other cash received related to fund raising activities

18,964.33 11,451.31 7,513.01 65.61

Cash received from repaying debts 288,666.14 122,570.41 166,095.73 135.51

(1) The received tax refunding is increased by 107.60% compared with the same period of the last year, mainly caused by tax rebating received in the period.

(2) Other cash received related to business activities is increased by 296.55% compared with the same period of the last year, mainly caused by sharp increase of government subsidy received, and Jiangsu Kehang received accounts of 60.70 million yuan from Jiangsu Kehang Environmental Protection Group Co., Ltd. and Ningxia Kehang received accounts of 20 million yuan from Jiangsu Kehang Environmental Protection Group Co., Ltd.

(3) Cash received from recovering investment is 931.3783 million yuan, mainly caused by receiving the equity transferring amount of Tianjiang Pharmaceutical 924.1460 million yuan.

(4) Net cash amount received from disposing of fixed assets, intangible assets and other long-term assets is increased by 1,737.61% compared with the same period of the last year, mainly caused by more cash received from disposal of fixed assets in the period.

(5) Other cash received related to investment is 107.00 million yuan, and is from redemption of the Company’s bank financing products.

(6) Cash received from payment by subsidiaries and other operators is 159.2092 million yuan, the net cash amount paid for acquiring Jiangsu Kehang Environmental Protection Science& Technology is 151.3730 million yuan, and the net cash amount paid for acquiring Zhangzhou Juming Graphite Co., Ltd. is 7.8362 million yuan.

(7) Cash received from absorbing investment is 99.8522 million yuan, 80.2022 million yuan of which is the contribution by the staff exercising rights from phase-II stock option incentive; 10 million yuan of which is minor shareholders’ amount for increasing capital from Do Better Company; and 9.15 million yuan of which is minor shareholders’ amount for increasing capital received from KEDA Hydraulics.

(8) Other cash received related to raising activities is increased by 65.61% compared with the same period last year, mainly caused sharp increasing of security recovered and redemption of fixed deposit.

(9) Cash paid for debt is increased by 135.51% compared with the same period of the last year, mainly caused by the Company’s repaying bank loan more than other periods.

(II) Description of significant profit changes by non-major business

√ Applicable □ Not applicable

In October, 2015, for the Company sold 9.6732% equity of Tianjiang Pharmaceutical to China TCM Co., Ltd., the

investment earnings 664.1776 million yuan was confirmed, and net profit of 529.5926 million yuan was increased in the

period after the income tax was deducted.

(III) Analysis of assets and liabilities

Information of assets and liabilities Unit: 10 thousand yuan

Item

Amount at

the end of

the period

Ratio of amount

at the end of

the period to

total assets (%)

Amount

at the end

of the last

period

Ratio of

amount at the

end of the last

period to total

assets (%)

Ratio of amount at

the end of the period

compared with that

at the end of the last

period (%)

Monetary fund 72,904.49 8.66 34,787.72 4.59 109.57

Notes receivable 14,748.97 1.75 13,162.61 1.74 12.05

Accounts receivable 110,482.34 13.12 75,403.41 9.95 46.52

Accounts prepaid 21,048.65 2.50 12,812.80 1.69 64.28

Other receivables 13,597.39 1.61 3,865.37 0.51 251.77

Stock 131,117.17 15.57 121,255.32 16.00 8.13

Non-current assets due in one year 113,634.10 13.49 127,900.22 16.88 -11.15

Other current assets 13,931.47 1.65 23,213.31 3.06 -39.99

Long-term accounts receivales 38,042.85 4.52 46,900.05 6.19 -18.89

Long-term equity investment 50.45 0.01 21,814.76 2.88 -99.77

Fixed assets 190,833.51 22.66 163,705.38 21.61 16.57

Projects under construction 6,193.31 0.74 12,192.40 1.61 -49.20

Intangible assets 44,750.73 5.31 33,524.11 4.42 33.49

Goodwill 64,827.57 7.70 63,808.68 8.42 1.60

Deferred income tax assets 5,894.19 0.70 3,330.69 0.44 76.97

Total assets 842,057.19 100.00 757,676.84 100.00 11.14

Short-term loan 35,375.53 8.77 80,663.44 21.60 -56.14

Notes payable 43,018.41 10.67 37,380.88 10.01 15.08

Accounts payable 137,724.84 34.15 85,052.62 22.78 61.93

Accounts pre-received 68,150.81 16.90 56,955.07 15.25 19.66

Payroll payable 7,397.82 1.83 6,752.04 1.81 9.56

Tax payable 12,548.48 3.11 4,625.19 1.24 171.31

Other accounts payable 8,781.14 2.18 3,383.56 0.91 159.52

Non-current liabilities due in 1 year 24,659.74 6.11 58,911.26 15.78 -58.14

Other current liabilities 10,599.00 2.63

Long-term loan 36,621.31 9.08 27,864.48 7.46 31.43

Estimated liabilities 101.66 0.03 133.70 0.04 -23.97

Deferred income 6,940.50 1.72 3,095.00 0.83 124.25

Deferred income tax liabilities 2,127.97 0.53 1,129.54 0.30 88.39

Other non-current liabilities 9,235.57 2.29 7,440.92 1.99 24.12

Liabilities in total 403,282.78 100.00 373,387.71 100.00 5.67

Notes:

(1) Receivable at the end of the period is increased by 46.52% compared with that at the beginning of the period,

mainly caused by merging Jiangsu Kehang.

(2) Amount of pre-paid accounts at the end of the period is increased by 64.28% compared with the amount at the

beginning of the period, mainly caused by merging Jiangsu Kehang.



(3) Other receivables at the end of the period is

increased by 251.77% compared with the amount at

the beginning of the period, mainly caused by subsidiary

Shenyang KEDA Clean Energy lending 30.0701 million

yuan to Liaoning Faku Economic and Development Zone

Management Committee, and Jiangsu Kehang’s lending 35

million yuan to Jiangsu Yanbu Construction Group Co., Ltd.,

and the parent company’s export tax rebat 20.0057 million

yuan in the period.

(4) Amount of other current assets at the end of the

period is decreased by 39.99% compared with the amount at

the beginning of the period, mainly caused by redemption of

the bank’s financing products when due.

(5) Amount of long-term equity investment is decreased

by 99.77% compared with the amount at the beginning of the period, mainly caused by the Company’s disposal of

9.6732% equity of Tianjiang Pharmaceutical.

(6) Amount of projects under construction is decreased by 49.20% compared with theamount at the beginning of

the period, mainly caused by completion of Sanshui Base R & D Building of Henglitai Company and KEDA (Anhui) Clean

Energy Workshop which are carried forward into fixed assets.

(7) Amount of intangible assets at the end of the period is increased by 33.49% compared with the amount at the


(8) Amount of deferred income tax assets is increased by 76.97% compared with the amount at the beginning of

the period, mainly caused by more asset depreciation reserve accrued in the period.

(9) Payable at the end of the period is increased by 61.93% compared with the amount at the beginning of the

period, mainly caused by merging Jiangsu Kehang.

(10) The tax payable at the end of the period is increased by 171.31% compared with the amount at the

beginning of the period, mainly caused by sharply increased corporate income tax from transferring equity of Tianjiang

Pharmaceutical.

(11) Amount of Other accounts payable at the end of the period is increased by 159.52% compared with that at the

beginning of the period, mainly caused by merging Jiangsu Kehang and Zhangzhou Juming.

(12) Amount of non-current liabilities due in 1 year at the end of the period is decreased by 58.41% compared with

that at the beginning of the period, mainly caused by the Company’s repaying bank loan.

(13) Amount of other current liabilities at the end of the period is increased by 105.99 million yuan compared with

the amount at the beginning of the period, mainly caused by the Company’s issuing short-term financing securities (15

KEDA Clean Energy CP001) on January 19, 2015, with book value of the securities 100 million yuan and interest rate of

5.99%, mainly used to repay bank loan, improve financing structure and supplement current funds.

(14) The balance of long-term loan at the end of the period is increased by 31.43% compared with that at the

beginning of the period, mainly caused by the parent company’s increased credit loan at Export and Import Bank of

China.

(15) Deferred income at the end of the period is increased by 124.25% compared with the amount at the beginning of

the period, mainly caused by the subsidiary Shenyang KEDA Clean Energy granted 33 million yuan by Liaoning Faku Economic

and Development Zone Management Committee for cycle reconstruction pilot operation and the subsidiary Henglitai Company

granted 15 million yuan by Leping Economic Promotion Bureau of Sanshui District for enterprise support.

(16) The deferred income tax liabilities at the end of the period is increased by 88.39% compared with that at the


(III) Analysis of main shareholding and joint stock companies Unit: 10 thousand yuan, currency: RMB

Company name Nature of

business

Registered

capital

The Company’s

shareholding

ratio(%)

Total

assets Net assets Net profit

KEDA (Anhui) Industrial

Co., Ltd.

Manufacturing

industry 68,000.00 100.00 98,605.54 73,495.86 -4,055.04

KEDA (Anhui) Clean

Energy Co., Ltd.

Manufacturing

industry4,460.00 68.44 83,531.27 52,619.25 5,343.31

Shenyang KEDA Clean

Energy Gas Co., Ltd.

Manufacturing

industry40,000.00 82.50 108,426.85 3,866.00 -11,663.18

Foshan Henglitai

Machinery Co., Ltd.

Manufacturing

industry2,560.00 100.00 84,345.64 53,057.35 8,981.93

Henan KEDA Dongda

International Engineering

Co., Ltd.

Manufacturing

industry5,000.00 100.00 37,142.17 15,520.66 4,520.95

III. Discussion and analysis on the Company’s development

in the future

(I) Industrial competition layout and development trend

Building material machinery business: during the reporting

period, China is under the transitional period from high-speed

growth to medium and high-speed growth. Affected by this,

the Company’s main lower-reaches industry-building ceramic

industry experienced production drop for the first time in the

new century, the market has relatively low requirements on the

conventional building material products, and the building material

machinery industry also fell down. Nevertheless, with more

inventory equipment enters update cycle and possible rebounding

of macroscopic economy, domestic business of the building

material machinery is expected to enter stable development

stage. Unlike the domestic market, the overseas market still

has high requirements on building material products. In the year

2015, export of building and hygiene products is 13 billion USD,

increasing by 12.1% correspondingly; meanwhile, supported

by development philosophy of “The Belt, and The Road” and

international production capacity cooperation, the building material

industry opened the strategic step of “going global”. As a leading

enterprise of domestic building material machinery, the Company

faces extremely excellent historical challenges in overseas market.



Clean energy environmental protection business: in the year 2015, clean and efficient utilization and exhaust

gas control in industrial field were concerned by government authorities. With improvement of economic efficiency and

adaptability in the field, the Company’s clean coal gasification business and smoke control business will meet better

development opportunities and market drive.

(II) Corporate development strategy

Under the conditions of atmosphere pollution of China to be improved, the Company continues to respond the

call of energy saving and emission reduction by the government, closely follows the trend of efficient utilization of

coal, accelerates industrial distribution of clean energy and environmental protection business; adheres to technology

innovation, continuously perfects and optimizes business operation, solidifies core competitiveness and keeps leading

position in the industry; surrounded by “The Belt, and The Road” development strategy, the Company seeks the

cooperation opportunity of “going global” for building material industry, seeks advantageous overseas cooperation

partners, arranges overseas emerging market and increases the Company’s international business share; besides, the

Company sees the energy saving and environmental protection industry with opening attitude, enters the emerging

industry when appropriate, and develops new profit growth points.

(III) Business plan

The Company’s business objective in 2016 is “keep and increase domestic business, and increase overseas

business sharply”, and total sales revenue is 5.5 billion yuan (tax included).

The business plan does not constitute the Company’s performance commitment on investors, and the investors are

recommended to notice investment risks.

(IV) Possible risks

1. Risk of increased overdue amount in receivables

According to characteristics of large machinery and equipment and outfit industry, the Company’s partial business

is sold through financing and leasing. In recent years, affected by overall domestic economic situations, the Company’s

partial lower-reaches customers tighten capital chain. Although various measures preventing risks have been adopted,

some customers are still overdue, and the risk of receivables overdue is increased.

2. Risk of technology research and development

The Company knows building ceramics machinery, new wall material machinery and clean coal gasification system

and other core technologies through absorption and independent innovation, and has matured R & D modes. In the

new product development field, the Company provides R & D expenditures. Due to long cycle of new product and new

technology R & D, technical stability and marketing of new products are still uncertain; therefore, R & D risks of new

products and new technologies still exist.

3. Risk of goodwill depreciation

In recent years, the Company acquired many companies by asset reconstruction and capital increasing. Under

down macroscopic economic conditions, the acquired companies develop than expected. Till the end of the reporting

period, the Company’s goodwill balance is 648 million yuan. In the future, if the acquired subsidiaries do not operate well

and cannot be changed, the Company accrues the risk of goodwill depreciation.

4. Risk of overseas investment

Adapting to the national “The Belt, and The Road” development strategy and combined with the Company’s

development advantages, except for the conventional equipment sales mode, the Company develops the overseas

market actively. During the reporting period, the Company launches the “joint venture plant+ complete production line

sales”. At present, many African joint stock subsidiaries have been established. The Company establishes subsidiaries in

overseas countries, and may involve overseas business and management risks due to culture, customs, politics, law and

natural environment in different countries and regions; meanwhile, factors like more currencies and change of exchange

rate may depreciate earnings and affect fund recovery.

IV. Details and causes that the Company’s failure to disclose due to being not applicable to rules or special

causes

□ Applicable √ Not applicable

Section VI Important Notice Section VI Important Notice


I. Proposal of profit distribution of ordinary shares or capital public reserve to increase shares

(I) Drafting, executing or adjusting the cash dividend policy

During the reporting period, the Company implemented the profit distribution plan for the year 2014: with

697,227,161 shares as the base, cash dividend 2.00 yuan (tax included) is distributed to all shareholders for each 10

shares, and cash dividend 139,445,432.20 yuan is distributed, accounting for 31.26% of profits of the Company to

be distributed. The Company’s profit distribution plan and distribution procedure are in conformity with the Articles of

Association of the Company and resolutions adopted by the Shareholders’ Conference. The Company’s independent

director issued independent opinions on the Company’s profit distribution, and the Company provided opportunities for

minority shareholders to express their opinions and requests and safeguard the minority shareholders’ equities.

(II) Profit distribution plan or proposal for ordinary shares and plan or proposal for public capital reserve

transferred to increase capital for the Company in the past 3 years (including the reporting period)

Unit: yuan, currency: RMB

Year for

dividend

Bonus

shares

for each

10 shares

(share)

Dividend

distributed

for each

10 shares

(yuan) (tax

included)

Transferred

to increase

capital

for each

10 shares

(share)

Amount of cash

dividend (tax

included)

Net profit

attributed to

shareholders

of listing

companies in

the consolidated

statement for

dividend year

Rate of net

profit attributed

to shareholders

of listing

companies

in the

consolidated

statements (%)

Year 2015 0 2.00 10 141,146,432.20 541,317,578.26 26.07

Year 2014 0 2.00 0 139,445,432.20 446,104,686.59 31.26

Year 2013 0 1.70 0 117,041,967.37 370,206,247.63 31.62

II. Details of appoint or removing CPA FirmsUnit: 10 thousand yuan, currency: RMB

Appoint

Names of domestic CPA firm Zhongxi CPA Firm (special general partnership)

Remuneration of domestic CPA firm 60

Number of years of audit of domestic CPA firm 15

Name Remuneration

CPA Firm for internal control and audit Zhongxi CPA Firm (special general partnership) 25

Financial consultant Southwest Securities Co., Ltd. 0


Section VII Change of ordinary shares and details of shareholders Section VII Change of ordinary shares and details of shareholders

I. Change of share capital of ordinary shares

(I) Change of shares of ordinary shares

1. Details of shares of ordinary shares Unit: share

Before the change This increment or decrement (+,–) After the change

Quantity Ratio

(%)

New

shares

issued

Bonus

share

Public

reserve fund

transferred

to shares

Others Subtotal Quantity Ratio

(%)

I. Shares with restrictive

sales conditions 41,888,302 6.008 -24,892,841 -24,892,841 16,995,461 2.408

1.State shareholding

2.State-owned juristic person

shareholding 1,699,546 0.244 1,699,546 0.241

3.Other domestic capital

shareholding40,188,756 5.764 -24,892,841 -24,892,841 15,295,915 2.167

Wherein: domestic non-

state-owned juristic person

shareholding

5,238,000 0.751 -5,238,000 -5,238,000 0 0

Domestic natural person

shareholding 34,950,756 5.013 -19,654,841 -19,654,841 15,295,915 2.167

4.Foreign capital shareholding

Wherein: overseas juristic

person shareholding

Overseas natural person

shareholding

II. Circulating shares without

restrictive sales conditions 655,338,859 93.992 8,505,000 24,892,841 33,397,841 688,736,700 97.592

1.RMB ordinary shares 655,338,859 93.992 8,505,000 24,892,841 33,397,841 688,736,700 97.592

2.Foreign capital share listed

domestically

3.Foreign capital share listed

overseas

4.Miscellaneous

III. Total number of ordinary

shares 697,227,161 100.00 8,505,000 0 8,505,000 705,732,161 100.00

II. Details of shareholders

(I) Total number of shareholders

Total number of shareholders of ordinary shares till the end of the reporting period (number of

shareholders) 37,351

Total number of shareholders of ordinary shares till the end of the last month before disclosure of the

annual report (number of shareholders) 44,161

(II) Details of shareholding of the top 10 shareholders and top 10 circulating shareholders (or shareholders

without restrictive sales conditions) before the end of the reporting period Unit: share

Shareholding of the top 10 shareholders

Full name of shareholders

(full name)

Increment or

decrement in

the reporting

period

Quantity of

shareholding

at the end of

the period

Ratio(%)

Quantity of

shares with

restrictive sales

conditions

Pledge or freezing

Nature of

shareholders Status of

shares Quantity

Lu Qin 0 105,991,667 15.02 0 None 0Domestic

natural person

Bian Cheng 1,365,307 48,999,799 6.94 0 Pledged 4,300,000Domestic

natural person

Chen Jize 10,911,810 22,824,500 3.23 0 UnknownDomestic

natural person

Hui Tianze Investment Co., Ltd. 9,619,021 9,619,021 1.36 0 UnknownDomestic

natural person

Chen Xian 2,973,556 8,129,132 1.15 0 UnknownDomestic

natural person

Shen Xiaohe 0 6,486,098 0.92 0 Pledged 2,253,000Domestic

natural person

The People’s Insurance

Company (Group) of China

Limited-conventional-ordinary

insurance product-008C-

CT001 Hu

6,076,200 6,076,200 0.86 0 Unknown Others

China Resources Shenguotou

Trust Co., Ltd.-Runjin No. 35

collective fund trust plan

5,699,700 5,699,700 0.81 0 Unknown Others

Shao Xiuhong 5,200,000 5,200,000 0.74 0 UnknownDomestic

natural person

Xu Shunwu -340,300 4,613,410 0.65 0 UnknownDomestic

natural person

Details of top 10 shareholders without restrictive sales conditions

Shareholders’ full name Quantity of circulating shares

without restrictive sales conditions

Type and quantity of shares

Type Quantity

Lu Qin 105,991,667 RMB ordinary shares 105,991,667

Bian Cheng 48,999,799 RMB ordinary shares 48,999,799

Chen Jize 22,824,500 RMB ordinary shares 22,824,500

Huitianze Investment Co., Ltd. 9,619,021 RMB ordinary shares 9,619,021

Chen Xian 8,129,132 RMB ordinary shares 8,129,132

Shen Xiaohe 6,486,098 RMB ordinary shares 6,486,098

The People’s Insurance Company (Group) of China

Limited-conventional-ordinary insurance product-

008C-CT001 Hu

6,076,200 RMB ordinary shares 6,076,200

China Resources Shenguotou Trust Co., Ltd.-Runjin

No. 35 collective fund trust plan5,699,700 RMB ordinary shares 5,699,700

Shao Xiuhong 5,200,000 RMB ordinary shares 5,200,000

Xu Shunwu 4,613,410 RMB ordinary shares 4,613,410

Description of relationship of

the above shareholders or

acting in concert

Of the above shareholders, the 1st majority shareholder and the 2nd majority shareholder are not of correlated

relation or of persons acting in concert, and the remaining shareholders of correlated relation or persons acting in

concert are unknown.


Section VII Change of ordinary shares and details of shareholders

Number of shares and restrictive sales conditions of the top 10 shareholders Unit: shares

S/N

Name of shareholders

with shares of restrictive

sales conditions

Number of shares

with restrictive

sales conditions

Details of shares with restrictive sales

conditions on market Restrictive sales

conditions Time available for

sales on market

Newly added

number of shares

available on market

1 Lv Dingxiong 4,078,910 February 26, 2017 0

Not permitted to transfer

within 36 months after

stock right registration

2 Cui Decheng 3,569,047 February 26, 2017 0




3

Northeast University

Science & Technology

Group Co., Ltd.

1,699,546 February 26, 2017 0




4 Wang Xiuwen 679,818 February 26, 2017 0




5 Zhao Pengxi 509,864 February 26, 2017 0




6 Li Zhigang 509,864 February 26, 2017 0




7 Mao Jihong 339,909 February 26, 2017 0




8 Luo Li 339,909 February 26, 2017 0




9 Li Baolin 339,909 February 26, 2017 0




10 Xing Guochun 339,909 February 26, 2017 0




11 Wu Youwei 339,909 February 26, 2017 0




12 Yang Qinchen 339,909 February 26, 2017 0




13 Wang Xingming 339,909 February 26, 2017 0




Description of relations of the

above shareholders or the

persons acting in concrete

Of the above shareholders, Lv Dingxiong and Mao Jihong are conjugal relationship, and Lv Dingxiong

and Mao Jihong are persons acting in concert. Other shareholders are not of correlated relations or do

not constitute the persons acting in concert specified in the Management for Information Disclosure of

Shareholding Information Change of Shareholders of Listing Company.


Section VIII Details of directors, supervisors, senior management and staff

I. Details of shareholding change and remuneration

(I) Details of change of appointed and removed directors, supervisors and senior management and

remunerations during the reporting period

√ Applicable □ Not Applicable Unit: share

Name Title (Notes) Sex Age Effective date Expiry date

Bian Cheng President Male 52 2015-08-20 2018-09-05

Wu Muhai Director Male 43 2015-08-20 2018-09-05

Wu Zhen Director Male 54 2015-08-20 2018-09-05

Liu Xin Director Male 48 2015-09-06 2018-09-05

Hao Laichun Director Male 72 2015-09-06 2018-09-05

Shen Xiaohe Director Male 49 2015-08-20 2018-09-05

Hao Jiming Independent director Male 70 2015-09-06 2018-09-05

Luo Jianhua Independent director Male 52 2015-09-06 2018-09-05

Chen Xiongyi Independent director Male 63 2015-09-06 2018-09-05

Zhu Yafeng Vice President, Secretary of the

Board of Directors Male 34 2015-08-20 2018-09-05

Zeng Fei Vice President, Financial Principal Male 40 2015-08-20 2018-09-05

Zhou Peng Vice President Male 53 2015-08-20 2018-09-05

Fu Qingju The Chairman of the Board of

Supervisors Female 47 2015-08-20 2018-09-05

Song Yibo Supervisor Male 43 2015-08-20 2018-09-05

Yang Shali Supervisor Female 51 2015-08-20 2018-09-05

Tan Dengping Director Male 51 2012-08-20 2015-05-13

Xu Jianqing Director Male 51 2012-08-20 2015-09-05

Lan Hailin Independent director Male 56 2012-08-20 2015-09-05

Huang Zhiwei Independent director Male 77 2012-08-20 2015-09-05

Liu Peilian Independent director Female 62 2012-08-20 2015-09-05

Total / / / / /

II. Details of parent companies and main subsidiaries

(I) Details of the staff

Quantity of on-duty staff of the parent company 2,004

Quantity of on-duty staff of main subsidiaries 2,611

Total quantity of on-duty staff 4,615

Quantity of the retired to be covered by the parent company and main

subsidiaries

Professional compositions

Types of professional composition Quantity of professional composition

Production staff 2,076

Sales staff 182

Technical staff 1,260

Financial staff 94

Administration staff 1,003

Total 4,615


Section VIII Details of directors, supervisors, senior management and staff

Education

Types of education Quantity (persons)

Postgraduate and above 164

Undergraduate 983

Junior college 985

Secondary technical school and below 2,483

Total 4,615

(II) Remuneration policy

According to industrial and job features, the Company provides diverse and competitive remunerations such as

monthly salary, annual salary, commissioning, time-based and piece-based salary. Through implementing periodic

performance assessment and combined with the Company’s development, the Company drafts and adjusts remuneration

policy scientifically, mobilizes the staff activity and keeps the team stability. To ensure long-term incentive for the

management, technicians and key business staff, after Phase-I stock option incentive, the Company launched Phase-

II stock option incentive plan in 2012 to keep continuity of stock option incentive, mobilize the managers and key staff’s

activity, effectively attract and retain excellent managers and key business staff, and realize consistency of interests of

shareholders, the Company and the managers.

Section IX Financial Report


I. Audit report


Audit Report Z.X.S.Z.[2016] No.0705

To all shareholders of KEDA Clean Energy Co., Ltd.:

We have audited financial statements of KEDA Clean Energy Co., Ltd. (hereinafter referred to as “KEDA Clean

Energy”), including consolidated asset balance sheet and balance sheet dated on December 31, 2015, consolidated profit

statement and profit statement, consolidated cash statement and cash statement, consolidated statement of change in

shareholders’ equity and statement of change in shareholders’ equity of year 2015 and annotations to financial statements.

I. The Management’s responsibility for financial statements

Preparing and fairly listing financial statements are responsibilities of the management of KEDA Clean Energy, and

such responsibilities include: (1) preparing financial statements in accordance with the corporate accounting code, and

making it reflect fairly; (2) designing, executing and maintaining necessary internal control to make the financial statements

free of key errors by embezzlement or errors.

II. CPA’s responsibilities

Our responsibilities are to issue audit opinions on the financial statements based on audit. We executed audit in

accordance with rules and regulations of audit code of CPA of China. The audit code of CPA of China requires us to

observe occupational morality code of CPA of China, and plan and execute audit to reasonably ensure that there is no

key error statement in the financial statement.

The audit involves implementing audit procedures to obtain amounts of relevant financial statements and audit

evidences to be disclosed. The chosen audit procedures are subject to CPA’s judgment, including assessment on key

error risks of the financial statements by embezzlement or error. When risk assessment is conducted, CPA considers

internal control related to financial statement preparation and fair listing to design proper audit procedures. The audit

also includes properness of accounting policy selected by the management and properness of accounting estimate, and

assessing general listing of financial statements.

We believe that, the audit evidences acquired are sufficient and proper, and lay a foundation for issuing audit

opinions.

III. Audit opinions

We hold the opinion that, the financial statements of KEDA Clean Energy are prepared in accordance with the

corporate accounting codes in key aspects, fairly reflecting financial conditions of KEDA Clean Energy on December 31,

2015, and business achievements and cash flow of the year 2015.

ZX CPA Firm (special general partnership) CPA of China:

Beijing, China

CPA of China:

April 28, 2016

Section IX Financial ReportSection IX Financial Report


Consolidated Balance Sheet (continue)

December 31, 2015Prepared by: KEDA Clean Energy Co., Ltd. Unit: yuan, currency: RMB

Item Annotations Closing balance Opening balance

Current liabilities:

Short-term loan VII.16 353,755,304.37 806,634,400.00

Loan from the central bank

Deposit-taking and inter-bank deposit

Borrowing fund

Financial liabilities measured with fair value and

changes accounted into current profits and losses

Derivative financial liabilities

Notes payable VII.17 430,184,109.88 373,808,839.79

Accounts payable VII.18 1,377,248,393.38 850,526,171.84

Accounts pre-received VII.19 681,508,078.97 569,550,679.36

Sell buyback financial assets

Handling charges and commission payable

Payroll payable VII.20 73,978,245.48 67,520,396.22

Tax payables VII.21 125,484,813.02 46,251,912.44

Interest payable

Dividend payable

Other payables VII.22 87,811,359.23 33,835,598.11

Reinsurance accounts payable

Insurance contract provision

Amount of selling and buying securities as agent

Amount of selling securities as agent

Classified as held-to-sale liabilities

Non-current liabilities due in 1 year VII.23 246,597,416.22 589,112,602.08

Other current liabilities VII.24 105,990,000.00

Current liabilities in total 3,482,557,720.55 3,337,240,599.84

Non-current liabilities:

Long-term loan VII.25 366,213,094.45 278,644,825.15

Bonds payable

Wherein: priority share

Perpetual liabilities

Long-term payables

Long-term Payroll payable

Special payables

Estimated liabilities VII.26 1,016,584.28 1,337,032.46

Deferred earnings VII.27 69,405,000.00 30,950,000.00

Deferred income tax liabilities 21,279,713.91 11,295,406.92

Other non-current liabilities VII.28 92,355,735.34 74,409,247.24

Non-current liabilities in total 550,270,127.98 396,636,511.77

Liabilities in total 4,032,827,848.53 3,733,877,111.61

Legal representative: Principal in charge of accounting: Principal of accounting organization:

Wu Muhai Zeng Fei Zeng Fei

II. Financial statements

Consolidated Balance Sheet



Current assets:

Monetary fund VII.1 729,044,894.44 347,877,207.15

Settlement fund

Lending fund

Financial assets measured with fair value and changes accounted into current profits and losses

Derivative financial assets

Notes receivable VII. 2 147,489,721.64 131,626,100.76

Accounts receivables VII.3 1,104,823,386.52 754,034,108.28

Accounts prepaid VII.4 210,486,474.33 128,128,041.36

Premium receivable

Reinsurance accounts receivables

Reinsurance contract provision receivable

Interest receivable

Dividend receivable

Other receivables VII. 5 135,973,904.93 38,653,715.75

Buy buyback financial assets

Stock VII.6 1,311,171,735.45 1,212,553,196.33

Classified as held-to-sale assets

Non-current assets due in 1 year VII.7 1,136,341,034.72 1,279,002,174.13

Other current assets VII.8 139,314,656.82 232,133,109.50

Current assets in total 4,914,645,808.85 4,124,007,653.26

Non-current assets:

Issue loan and advanced payment

Available-for-sale financial assets

Held-to-maturity investment

Long-term receivables VII.9 380,428,530.53 469,000,529.24

Long-term equity investment VII.10 504,484.95 218,147,610.24

Investment property

Fixed assets VII.11 1,908,335,145.27 1,637,053,848.84

Projects under construction VII.12 61,933,091.40 121,923,962.47

Project materials

Fixed assets clearing

Production biological assets

Oil and gas assets

Intangible expenditures VII.13 447,507,250.20 335,241,051.74

Development expenditures

Goodwill VII.14 648,275,725.52 638,086,820.66

Long-term costs to be amortized

Deferred income tax assets VII.15 58,941,908.57 33,306,946.67

Other non-current assets

Non-current assets in total 3,505,926,136.44 3,452,760,769.86

Assets in total 8,420,571,945.29 7,576,768,423.12





Balance Sheet of Parent Company

December 31, 2015Prepared by: KEDA Clean Energy Co., Ltd. Unit: yuan, Currency: RMB


Current assets:

Monetary fund 180,452,600.34 90,325,902.70

Financial assets measured with fair value with changes accounted into current profits and losses

Derivative financial assets

Notes receivable 23,527,800.00 36,615,781.17

Accounts receivable XVI. 1 306,325,046.65 408,169,317.47

Accounts pre-paid 36,030,392.86 22,886,571.04

Interest receivable

Dividend receivable

Other receivable XVI.2 1,398,191,988.96 383,113,956.31

Stock 588,738,652.50 494,403,704.77

Classified as held-to-sale assets

Non-current assets due in 1 year

Other current assets 24,182,184.66 114,995,195.05

Current assets in total 2,557,448,665.97 1,550,510,428.51

Non-current assets:

Available-for-sale financial assets

Held-to-maturity investment

Long-term receivables

Long-term equity investment XVI.3 2,462,394,967.03 2,949,036,242.32

Investment property

Fixed assets 267,213,478.71 277,596,645.07

Projects under construction 1,669,251.45 13,469,654.50

Project materials

Fixed assets clearing

Productive biological assets

Oil and gas assets

Intangible assets 43,271,571.66 45,754,882.86

Development expenditures

Goodwill

Long-term costs to be amortized

Deferred income tax assets 3,221,828.28 3,887,153.48

Other non-current assets

Non-current assets in total 2,777,771,097.13 3,289,744,578.23

Assets in total 5,335,219,763.10 4,840,255,006.74



Consolidated Balance Sheet (continue)



Owner’s equity

Share capital VII.29 705,732,161.00 697,227,161.00

Other equity instruments

Of them: preferred shares

Perpetual liabilities

Capital public reserve VII.30 1,211,095,761.66 1,124,532,368.37

Minus: treasury share

Other comprehensive earnings VII.31 995,346.55 4,942,261.95

Special provision

Surplus reserve VII. 32 255,470,015.90 230,592,948.80

General risk provision

Undistributed profit VII.33 1,934,975,969.16 1,557,980,890.20

Equity attributed to parent company’ owner in

total 4,108,269,254.27 3,615,275,630.32

Minority shareholders’ equity 279,474,842.49 227,615,681.19

Owner’s equity in total 4,387,744,096.76 3,842,891,311.51

Liabilities and owner’s equity in total 8,420,571,945.29 7,576,768,423.12





Balance Sheet of Parent Company (continue)

December 31, 2015Prepared by: KEDA Clean Energy Co., Ltd. Unit: yuan, Currency: RMB


Current liabilities:

Short-term loan 152,780,400.00 344,310,400.00

Financial liabilities measured at fair value with changes accounted into current profits and losses

Derivative financial liabilities

Notes payable 143,050,233.01 237,207,761.75

Accounts payable 454,491,640.74 329,265,442.13

Accounts pre-received 279,516,806.85 215,864,219.53

Payroll payable 38,167,825.33 33,681,697.50

Taxes payable 79,441,336.48 11,419,218.16

Interest payable

Dividend payable

Other payables 214,367,804.59 119,101,509.56

Classified as held-to-sale liabilities

Non-current liabilities within 1 year

Other current liabilities 105,990,000.00

Current liabilities in total: 1,467,806,047.00 1,290,850,248.63

Non-current liabilities:

Long-term loan 180,000,000.00 60,000,000.00

Bonds payable


Perpetual debts

Long-term payables

Long-term Payroll payable

Special payables

Estimated liabilities

Deferred earnings 5,205,000.00 6,450,000.00

Deferred income tax liabilities

Other non-current liabilities 50,376,332.67 52,410,000.00

Non-current liabilities in total 235,581,332.67 118,860,000.00

Liabilities in total 1,703,387,379.67 1,409,710,248.63

Owner’s equity:

Share capital 705,732,161.00 697,227,161.00

Other equity instruments


Perpetual debt

Capital public reserve 1,277,817,512.49 1,194,360,126.03

Minus: stock share

Other comprehensive earnings

Special provision

Surplus reserve 248,462,972.87 223,585,905.77

Undistributed profit 1,399,819,737.07 1,315,371,565.31

Owner’s equity in total 3,631,832,383.43 3,430,544,758.11

Liabilities and owner’s equity in total 5,335,219,763.10 4,840,255,006.74



Consolidated Profit Statement

January to December, 2015Prepared by: KEDA Clean Energy Co., Ltd. Unit: yuan, Currency: RMB

Item Annotation Amount occurred

this period

Amount occurred

last period

I. Total business revenue 3,593,684,258.82 4,465,875,887.35

Wherein: business revenue VII.34 3,593,684,258.82 4,465,875,887.35

Interest income

Premium earned

Handling charge and commission income

II. Total business revenue 3,647,569,513.91 4,071,289,290.40

Wherein: operation cost VII.34 2,776,062,370.08 3,403,716,998.95

Interest expenditures

Handling charge and commission expenditures

Surrender value

Net amount of indemnity expenditures

Net amount of withdrawing insurance contract provision

Policy dividend expenditure

Reinsurance costs

Business taxes and extra VII 35 28,616,719.21 29,078,509.69

Sales expense VII 36 207,402,622.04 208,231,880.82

Overhead VII 37 406,681,235.74 356,892,103.03

Financial costs VII 38 29,692,297.40 24,166,382.18

Asset impairment losses VII 39 199,114,269.44 49,203,415.73

Add: earnings from change of fair value (losses marked with “-”)

Investment earnings (losses marked with “-”) VII 40 708,352,619.78 64,554,745.88

Wherein: earnings from investment on joint ventures and cooperative 50,019,378.05 64,718,670.43

Earnings from exchange and remittance (losses marked with “-”)

III. Business profits (losses marked with “-”) 654,467,364.69 459,141,342.83

Add: non-business income VII 41 88,982,120.85 57,598,985.02

Wherein: gains from disposal of non-current assets 3,249,907.50 522,596.81

Minus: non-business expenditures VII 42 84,412,206.23 4,428,388.75

Wherein: losses from disposal of non-current assets 56,401,117.35 1,927,113.49

IV. Total profit (total losses marked with “-”) 659,037,279.31 512,311,939.10

Minus: income tax costs VII 43 127,248,264.20 84,105,990.66

V. Net profit (net losses marked with “-”) 531,789,015.11 428,205,948.44

Net profits attributed to parent company’s owners 541,317,578.26 446,104,686.59

Minority shareholders’ profits and losses -9,528,563.15 -17,898,738.15

VI. After-tax net amount of other comprehensive earnings -3,946,915.40 1,016,140.91

After-tax net amount of other comprehensive earnings attributed to parent company’s owner -3,946,915.40 1,016,140.91

(I)Other comprehensive earnings not reclassified as profits and losses

1. Changes of net liabilities or net assets from re-measuring or re-defining benefit plan

2. Shares of other comprehensive earnings of the invested unit not reclassified as

profits and losses under equity law

(II)Other comprehensive earnings reclassified as profits and losses -3,946,915.40 1,016,140.91

1.Shares of other comprehensive proceeds of the invested unit reclassified as profits

and losses under equity law

2. Profits and losses from change of fair value of available-for-sale financial assets

3. Profits and losses from held-to-maturity reclassified available-for-sale financial assets

4. Effective part of profits and losses from cash flow hedging

5. Difference from conversion of financial statements in foreign currency -3,946,915.40 1,016,140.91

6. Others

After-tax net amount of other comprehensive earnings attributed to minority shareholders

VII.Total comprehensive earnings 527,842,099.71 429,222,089.35

Total earnings attributed to parent company’s owners 537,370,662.86 447,120,827.50

Total earnings attributed to minority shareholders -9,528,563.15 -17,898,738.15

VIII.Earnings per share

(I)Basic earnings per share (yuan/share) 0.771 0.647

(II)Diluted earnings per share (yuan/share) 0.771 0.638





Profit Statement of Parent Company


Item Annotation Amount occurred

in this period

Amount occurred

in the last period

I. Business revenue XVI.4 1,773,711,936.37 2,005,205,016.65

Minus: business cost XVI.4 1,460,896,453.47 1,614,018,645.82

Business tax and extra 10,237,959.34 10,528,042.16

Sales cost 118,717,215.61 111,437,728.55

Overhead 152,641,788.44 110,119,094.32

Financial costs 17,677,353.79 12,366,508.51

Asset impairment losses 13,879,994.86 7,617,419.22

Add: earnings from change of fair value (losses marked with “-”)

Investment earnings (losses marked with “-”) 317,553,938.92 239,718,670.43

Wherein: earnings from investment on joint ventures and

cooperative50,019,378.05 64,718,670.43

II. Business profits (losses marked with “-”) 317,215,109.78 378,836,248.50

Add: non-business income 13,905,556.20 10,278,120.42

Wherein: gains from disposal of non-current assets 191,962.71 3,153.00

Minus: non-business expenditures 693,518.66 1,022,469.07

Wherein: losses from disposal of non-current assets 394,847.91 17,551.76

III. Total profit (total losses marked with “-”) 330,427,147.32 388,091,899.85

Minus: income tax costs 81,656,476.26 11,246,123.06

IV. Net profit (net losses marked with “-”) 248,770,671.06 376,845,776.79

V. After-tax net amount of other comprehensive earnings

(I)Other comprehensive earnings not reclassified as profits and losses

1. Changes of net liabilities or net assets from re-measuring or

re-defining benefit plan

2. Shares of other comprehensive earnings of the invested unit not

reclassified as profits and losses under equity law

(II)Other comprehensive earnings reclassified as profits and losses

1. Shares of other comprehensive proceeds of the invested unit

reclassified as profits and losses under equity law

2. Profits and losses from change of fair value of available-for-sale

financial assets

3. Profits and losses from held-to-maturity reclassified available-for-

sale financial assets

4. Effective part of profits and losses from cash flow hedging

5. Difference from conversion of financial statements in foreign

currency

6. Others

VI. Total comprehensive earnings

VII.Earnings per share

(I)Basic earnings per share (yuan/share)

(II)Diluted earnings per share (yuan/share)



Consolidated Cash Flow Statement


Item Annotation Amount occurred in

the current period

Amount occurred in

the last period

I. Cash flow from business activities

Cash received from selling commodity and providing labors 3,406,877,146.13 3,657,089,301.59

Net increment from client deposit and inter-bank deposit

Net increment from loan of the central bank

Net increment from borrowed funds of other financial institutions

Cash received from premium of original insurance contracts

Net cash amount received from reinsurance business

Net increment from the insured’ deposit and investment

Net increment from disposal of financial values measured at fair value and changes into current

profits and losses

Cash received from interest, handling charge and commission

Net increment from borrowing funds

Net increment from buyback business

Tax return received 60,077,240.93 28,939,586.74

Other cash received related to business activities VII.44 200,295,752.36 50,509,251.64

Business activities cash inflow subtotal 3,667,250,139.42 3,736,538,139.97

Cash paid for buying commodity and receiving labor 2,195,178,513.23 3,044,684,353.23

Net increment from clients’ goods payment and advanced payment

Net increment from depositing with the central bank and inter-bank deposit

Cash paid to indemnity of the original insurance contract

Cash paid for interest, handling charge and commissioning

Cash paid for policy dividend

Cash paid to and for the staff 411,677,907.33 410,526,949.22

Taxes paid 261,685,604.53 327,650,049.76

Other cash paid related to business activities VII.44 233,769,309.54 237,934,694.05

Business activities cash outflow subtotal 3,102,311,334.63 4,020,796,046.26

Net cash amount from business activities 564,938,804.79 -284,257,906.29

II. Cash flow from investment activities

Cash received from recovering investment 931,378,336.36

Cash received from acquiring investment earnings 12,473,239.08

Net cash amount from disposal of fixed assets, intangible assets and other long-term assets 1,875,386.79 102,056.00

Net cash amount from disposal of subsidiaries and other operators 899,903.58

Other cash received related to investment activities VII.44 107,000,000.00

Investment activities cash inflow subtotal 1,040,253,723.15 13,475,198.66

Cash paid for purchasing fixed assets, intangible assets and other long-term assets 112,975,730.17 123,079,960.55

Cash paid for investment 1,901,850.00 19,335,381.69

Net increment from pledge loan

Net cash amount paid by subsidiaries and other operators 159,209,218.93 80,341,994.14

Other cash paid related to investment activities 107,000,000.00

Investment activities cash outflow subtotal 274,086,799.10 329,757,336.38

Net cash amount from investment activities 766,166,924.05 -316,282,137.72

III. Cash flow from raising activities

Cash received from deposit taking 99,852,150.00 193,212,350.00

Wherein: cash received from subsidiaries’ taking minority shareholders’ investment 19,150,000.00

Cash received from loan 1,869,703,754.37 1,716,238,238.82

Cash received from issuing bonds 99,600,000.00

Other cash received related to raising activities VII.44 189,643,262.13 114,513,121.24

Fund raising activities cash inflow subtotal 2,258,799,166.50 2,023,963,710.06

Cash paid for repaying debt 2,886,661,409.92 1,225,704,067.06

Cash paid for distributing dividend, profit or repaying interest 223,391,761.67 209,319,363.13

Wherein: dividend and profit paid to minority shareholders by subsidiaries

Other cash paid related to raising activities VII.44 161,206,576.76 159,819,097.31

Fund raising activities cash outflow subtotal 3,271,259,748.35 1,594,842,527.50

Net cash amount from raising activities -1,012,460,581.85 429,121,182.56

IV. Influences on cash and cash equivalent by change of exchange rate 9,463,887.48 3,948,180.14

V. Net increment of cash and cash equivalent 328,109,034.47 -167,470,681.31

Add: cash and cash equivalent balance at the beginning of the period 257,948,223.08 425,418,904.39

VI. Cash and cash equivalent balance at the end of the period 586,057,257.55 257,948,223.08





Cash Flow Statement of Parent Company


Item AnnotationAmount occurred

in this period

Amount occurred

in the last period

I. Cash flow from business activities

Cash received from selling commodity and providing labor s 2,100,163,055.72 2,040,866,686.77

Tax received from rebating 41,421,150.31 12,519,190.03

Cash received related to business activities 490,018,493.41 112,560,896.77

Business activities cash inflow subtotal 2,631,602,699.44 2,165,946,773.57

Cash paid for buying commodity and receiving labor 1,371,769,078.71 1,406,838,386.43

Cash paid for and to the staff 191,353,504.52 190,950,970.92

Taxes paid 61,338,861.48 73,760,843.41

Other cash paid related to business activities 1,761,274,118.81 426,714,515.98

Business activities cash outflow subtotal 3,385,735,563.52 2,098,264,716.74

Net cash flow amount from business activities -754,132,864.08 67,682,056.83

II. Cash flow from investment activities

Cash received from recovering investment 931,378,336.36 19,151,100.00

Cash received from acquiring investment earnings 20,000,000.00 187,473,239.08

Net cash amount recovered from disposal of fixed assets,

intangible assets and other long-term assets248,107.40 930.00

Net cash amount form disposal of subsidiaries and other operators 79,456,970.70 900,000.00

Other cash received related to investment activities 100,000,000.00

Investment activities cash inflow subtotal 1,131,083,414.46 207,525,269.08

Cash paid for purchasing fixed assets, intangible assets and other

long-term assets 7,422,110.33 33,667,212.51

Cash paid for investment 244,601,850.00 411,335,381.69

Net cash amount received paid by subsidiaries and other

operators

Other cash paid related to investment activities 100,000,000.00

Investment activities cash outflow subtotal 252,023,960.33 545,002,594.20

Net cash amount from investment activities 879,059,454.13 -337,477,325.12

III. Cash flow received from raising activities

Cash received from absorbing investment 80,202,150.00 193,212,350.00

Cash received from borrowing 573,728,850.00 547,334,626.34

Cash received from issuing bonds 99,600,000.00

Other cash received related to raising activities 41,878,527.61 17,017,546.80

Raising activities cash inflow subtotal 795,409,527.61 757,564,523.14

Cash repaid for debt 635,841,705.75 370,115,890.00

Cash paid for dividend and profit distribution or repaying interest 158,739,658.00 132,765,611.80

Cash paid related to raising activities 30,983,008.36 32,577,182.95

Cash outflow subtotal for fund raising 825,564,372.11 535,458,684.75

Net amount of cash flow from fund raising activities -30,154,844.50 222,105,838.39

IV. Influences on cash and cash equivalent by change of

exchange rate 6,250,471.34 3,167,668.59

V. Net increment of cash and cash equivalent 101,022,216.89 -44,521,761.31

Add: cash and cash equivalent balance at the beginning of the

period 51,230,266.55 95,752,027.86

V. Cash and cash equivalent balance at the end of the period 152,252,483.44 51,230,266.55



Co

nso

lidat

ed S

tate

men

t o

f C

han

ge

in O

wn

er’s

Eq

uit

y

Jan

uar

y to

Dec

emb

er,

2015

Pre

par

ed b

y: K

ED

A C

lean

Ene

rgy

Co.

, Lt

d.

U

nit:

yua

n, C

urre

ncy:

RM

B

Item

This

per

iod

Ow

ner’s

equ

ity a

ttrib

uted

to p

aren

t com

pany

M

inor

ity

shar

ehol

ders

’ eq

uity

Ow

ner’s

equ

ity in

to

tal

Shar

e ca

pita

l O

ther

equ

ity in

stru

men

ts

Capi

tal p

ublic

re

serv

e

Min

us:

stoc

k sh

are

Oth

er

com

preh

ensi

ve

rese

rve

Spec

ial

rese

rve

Surp

lus

publ

ic

rese

rve

Gen

eral

ris

k pr

ovis

ion

Undi

strib

uted

pr

ofit

Prio

rity

shar

ePe

rpet

ual

debt

Oth

ers

I. Ba

lanc

e at

the

end

of th

e la

st y

ear

697,

227,

161.

001,

124,

532,

368.

374,

942,

261.

9523

0,59

2,94

8.80

1,55

7,98

0,89

0.20

227,

615,

681.

193,

842,

891,

311.

51

Add:

cha

nge

of a

ccou

nting

pol

icy

Co

rrect

ion

of p

revio

us e

rrors

Ente

rpris

e m

ergi

ng u

nder

the

sam

e co

ntro

l

Ot

hers

II.

Bal

ance

at t

he b

egin

ning

of t

he y

ear

697,

227,

161.

001,

124,

532,

368.

374,

942,

261.

9523

0,59

2,94

8.80

1,55

7,98

0,89

0.20

227,

615,

681.

193,

842,

891,

311.

51

III. I

ncre

men

t or d

ecre

men

t of t

his

perio

d (d

ecre

men

t mar

ked

with

“-”

) 8,

505,

000.

0086

,563

,393

.29

-3,9

46,9

15.4

024

,877

,067

.10

376,

995,

078.

9651

,859

,161

.30

544,

852,

785.

25

(I)Tot

al am

ount

of c

ompr

ehen

sive

earn

ings

-3,9

46,9

15.4

054

1,31

7,57

8.26

-9,5

28,5

63.1

552

7,84

2,09

9.71

(II)Ow

ner’s

incr

ease

d an

d de

crea

sed

capi

tal

8,50

5,00

0.00

86,5

63,3

93.2

9

61

,387

,724

.45

156,

456,

117.

741.

Ord

inary

sha

res

inves

ted

by s

hare

hold

ers

8,50

5,00

0.00

71,6

97,1

50.0

0

19

,150

,000

.00

99,3

52,1

50.0

02.

Cap

ital in

vest

ed b

y ot

her e

quity

inst

rum

ent h

olde

rs

3. A

mou

nt o

f sha

re p

aym

ent a

ccou

nted

into

own

er’s

eq

uity

4. O

ther

s 14

,866

,243

.29

42,2

37,7

24.4

557

,103

,967

.74

(II)Pr

ofit d

istrib

utio

n 24

,877

,067

.10

-164

,322

,499

.30

-139

,445

,432

.20

1. W

ithdr

aw S

urpl

us re

serv

e 24

,877

,067

.10

-24,

877,

067.

102.

With

draw

gen

eral

risk

prov

ision

3.

Dist

ribut

ion

to a

ll own

ers

(or s

hare

hold

ers)

-139

,445

,432

.20

-139

,445

,432

.20

4. O

ther

s (IV

)Inte

rnal

carry

ing-fo

rwar

d ins

ide

owne

r’s e

quity

1.

Cap

ital p

ublic

rese

rve

to in

crea

se c

apita

l (or c

apita

l sh

are)

2.

Sur

plus

pub

lic re

serv

e to

incr

ease

cap

ital (o

r cap

ital

shar

e)

3. S

urpl

us p

ublic

rese

rve

to c

ompe

nsat

e lo

sses

4.

Oth

ers

(V) S

pecia

l pro

visio

n 1.

Am

ount

with

draw

n th

is pe

riod

2. A

mou

nt u

sed

this

perio

d (V

I)Oth

ers

IV. B

alan

ce a

t the

end

of t

he p

erio

d 70

5,73

2,16

1.00

1,21

1,09

5,76

1.66

995,

346.

5525

5,47

0,01

5.90

1,93

4,97

5,96

9.16

279,

474,

842.

494,

387,

744,

096.

76

Leg

al r

epre

sen

tati

ve:W

u M

uh

ai

Pri

nci

pal

in c

har

ge

of

acco

un

tin

g:Z

eng

Fei

P

rin

cip

al o

f ac

cou

nti

ng

org

aniz

atio

n:

Zen

g F

ei



Co

nso

lidat

ed S

tate

men

t o

f C

han

ge

in O

wn

er’s

Eq

uit

y (c

on

tin

ue)

Jan

uar

y to

Dec

emb

er,

2015

Pre

par

ed b

y: K

ED

A C

lean

Ene

rgy

Co.

, Lt

d.

U

nit:

yua

n, C

urre

ncy:

RM

B

Item

Last

per

iod

Ow

ner’s

equ

ity a

ttrib

uted

to p

aren

t com

pani

es

Min

ority

sh

areh

olde

rs’

equi

ty

Ow

ner’s

equ

ity in

to

tal

Shar

e ca

pita

l O

ther

equ

ity in

stru

men

tsCa

pita

l res

erve

M

inus

: st

ock

shar

e

Oth

er

com

preh

ensi

ve

earn

ings

Spec

ial

prov

isio

nSu

rplu

s re

serv

e G

ener

al

risk

prov

isio

n

Undi

strib

uted

pr

ofit

Prio

rity

shar

e Pe

rpet

ual

shar

e O

ther

s

I. Ba

lanc

e at

the

end

of th

e la

st y

ear

666,

248,

700.

0074

9,65

4,45

0.47

3,92

6,12

1.04

192,

908,

371.

121,

266,

602,

748.

6624

1,07

8,19

3.49

3,12

0,41

8,58

4.78

Add:

cha

nge

of a

ccou

nting

pol

icyCo

rrect

ion

of p

revio

us e

rrors

Ente

rpris

e m

ergi

ng u

nder

the

sam

e co

ntro

l Ot

hers

II.

Bal

ance

at t

he b

egin

ning

of t

he y

ear

666,

248,

700.

0074

9,65

4,45

0.47

3,92

6,12

1.04

192,

908,

371.

121,

266,

602,

748.

6624

1,07

8,19

3.49

3,12

0,41

8,58

4.78

III. I

ncre

men

t or d

ecre

men

t of t

his

perio

d (d

ecre

men

t mar

ked

with

“-”

) 30

,978

,461

.00

374,

877,

917.

901,

016,

140.

9137

,684

,577

.68

291,

378,

141.

54-1

3,46

2,51

2.30

722,

472,

726.

73

(I)Tot

al am

ount

of c

ompr

ehen

sive

earn

ings

1,01

6,14

0.91

446,

104,

686.

59-1

7,89

8,73

8.15

429,

222,

089.

35(II)

Owne

r’s in

crea

sed

and

decr

ease

d ca

pita

l 30

,978

,461

.00

374,

877,

917.

904,

436,

225.

8541

0,29

2,60

4.75

1. O

rdina

ry s

hare

s inv

este

d by

sha

reho

lder

s 30

,978

,461

.00

379,

174,

882.

00-8

,891

,800

.00

401,

261,

543.

002.

Cap

ital in

vest

ed b

y ot

her e

quity

inst

rum

ent h

olde

rs

3. A

mou

nt o

f sha

re p

aym

ent a

ccou

nted

into

own

er’s

eq

uity

18,2

64,9

47.8

3

18

,264

,947

.83

4. O

ther

s -2

2,56

1,91

1.93

13,3

28,0

25.8

5-9

,233

,886

.08

(II)Pr

ofit d

istrib

utio

n 37

,684

,577

.68

-154

,726

,545

.05

-117

,041

,967

.37

1. W

ithdr

aw S

urpl

us re

serv

e 37

,684

,577

.68

-37,

684,

577.

682.

With

draw

gen

eral

risk

prov

ision

3.

Dist

ribut

ion

to a

ll own

ers

(or s

hare

hold

ers)

-117

,041

,967

.37

-117

,041

,967

.37

4. O

ther

s (IV

)Inte

rnal

carry

ing-fo

rwar

d ins

ide

owne

r’s e

quity

1.

Cap

ital p

ublic

rese

rve

to in

crea

se c

apita

l (or c

apita

l sh

are)

2.

Sur

plus

pub

lic re

serv

e to

incr

ease

cap

ital (o

r ca

pita

l sha

re)

3. S

urpl

us p

ublic

rese

rve

to c

ompe

nsat

e lo

sses

4.

Oth

ers

(V) S

pecia

l pro

visio

n 1.

Am

ount

with

draw

n th

is pe

riod

2. A

mou

nt u

sed

this

perio

d (V

I)Oth

ers

IV. B

alan

ce a

t the

end

of t

he p

erio

d 69

7,22

7,16

1.00

1,12

4,53

2,36

8.37

4,94

2,26

1.95

230,

592,

948.

801,

557,

980,

890.

2022

7,61

5,68

1.19

3,84

2,89

1,31

1.51

Leg

al r

epre

sen

tati

ve:W

u M

uh

ai

Pri

nci

pal

in c

har

ge

of

acco

un

tin

g:Z

eng

Fei

P

rin

cip

al o

f ac

cou

nti

ng

org

aniz

atio

n:

Zen

g F

ei

Sta

tem

ent

of

Ch

ang

e in

Ow

ner

’s E

qu

ity

for

Par

ent

Co

mp

any

Jan

uar

y to

Dec

emb

er,

2015

Pre

par

ed b

y: K

ED

A C

lean

Ene

rgy

Co.

, Lt

d.

U

nit:

yua

n, C

urre

ncy:

RM

B

Item

This

per

iod

Shar

e ca

pita

l

Oth

er e

quity

inst

rum

ents

Cap

ital r

eser

ve

Min

us:

stoc

k

shar

e

Oth

er

com

preh

ensi

ve

earn

ings

Spec

ial

prov

isio

n Su

rplu

s re

serv

e U

ndis

tribu

ted

profi

t

Ow

ner’s

equ

ity in

tota

l Pr

iorit

y

shar

e

Perp

etua

l

debt

Oth

ers

I. Ba

lanc

e at

the

end

of th

e la

st y

ear

697,

227,

161.

001,

194,

360,

126.

0322

3,58

5,90

5.77

1,31

5,37

1,56

5.31

3,43

0,54

4,75

8.11

Add:

cha

nge

of a

ccou

ntin

g po

licy

Corre

ctio

n of

pre

vious

erro

rs

Oth

ers

II. B

alan

ce a

t the

beg

inni

ng o

f the

yea

r69

7,22

7,16

1.00

1,19

4,36

0,12

6.03

223,

585,

905.

771,

315,

371,

565.

313,

430,

544,

758.

11

III. I

ncre

men

t or d

ecre

men

t of t

his

perio

d (d

ecre

men

t

mar

ked

with

“-”

) 8,

505,

000.

0083

,457

,386

.46

24,8

77,0

67.1

084

,448

,171

.76

201,

287,

625.

32

(I)To

tal a

mou

nt o

f com

preh

ensiv

e ea

rnin

gs24

8,77

0,67

1.06

248,

770,

671.

06

(II)O

wne

r’s in

crea

sed

and

decr

ease

d ca

pita

8,50

5,00

0.00

83,4

57,3

86.4

691

,962

,386

.46

1. O

rdin

ary

shar

es in

vest

ed b

y sh

areh

olde

rs

8,50

5,00

0.00

71,6

97,1

50.0

080

,202

,150

.00

2. C

apita

l inve

sted

by

othe

r equ

ity in

stru

men

t hol

ders

3. A

mou

nt o

f sha

re p

aym

ent a

ccou

nted

into

ow

ner’s

equi

ty

4. O

ther

s 11

,760

,236

.46

11,7

60,2

36.4

6

(III)

Profi

t dist

ribut

ion

24,8

77,0

67.1

0-1

64,3

22,4

99.3

0-1

39,4

45,4

32.2

0

1. W

ithdr

aw S

urpl

us re

serv

e 24

,877

,067

.10

-24,

877,

067.

10

2. W

ithdr

aw g

ener

al ri

sk p

rovis

ion

-139

,445

,432

.20

-139

,445

,432

.20

3. D

istrib

utio

n to

all o

wne

rs (o

r sha

reho

lder

s)

(IV)In

tern

al c

arry

ing-

forw

ard

insid

e ow

ner’s

equ

ity

1. C

apita

l pub

lic re

serv

e to

incr

ease

cap

ital (

or c

apita

l

shar

e)

2. S

urpl

us p

ublic

rese

rve

to in

crea

se c

apita

l (or

cap

ital

shar

e)

3. S

urpl

us p

ublic

rese

rve

to c

ompe

nsat

e lo

sses

4. O

ther

s

(V) S

peci

al p

rovis

ion

1. A

mou

nt w

ithdr

awn

this

perio

d

2. A

mou

nt u

sed

this

perio

d

(VI)O

ther

s

IV. B

alan

ce a

t the

end

of t

he p

erio

d 70

5,73

2,16

1.00

1,27

7,81

7,51

2.49

248,

462,

972.

871,

399,

819,

737.

073,

631,

832,

383.

43

Leg

al r

epre

sen

tati

ve:W

u M

uh

ai

Pri

nci

pal

in c

har

ge

of

acco

un

tin

g:Z

eng

Fei

P

rin

cip

al o

f ac

cou

nti

ng

org

aniz

atio

n:

Zen

g F

ei



Sta

tem

ent

of

Ch

ang

e in

Ow

ner

’s E

qu

ity

for

Par

ent

Co

mp

any

(co

nti

nu

e)

Jan

uar

y to

Dec

emb

er,

2015

Pre

par

ed b

y: K

ED

A C

lean

Ene

rgy

Co.

, Lt

d.

U

nit:

yua

n, C

urre

ncy:

RM

B

Item

Last

per

iod

Shar

e ca

pita

l

Oth

er e

quity

inst

rum

ents

Cap

ital p

ubC

apita

l

rese

rve

Min

us:

stoc

k

shar

e

Oth

er

com

preh

ensi

ve

earn

ings

Spec

ial

prov

isio

n Su

rplu

s re

serv

e U

ndis

tribu

ted

profi

tPr

iorit

y

shar

e

Perp

etua

l

debt

Oth

ers

I. Ba

lanc

e at

the

end

of th

e la

st y

ear

666,

248,

700.

0079

6,92

0,29

6.20

185,

901,

328.

091,

093,

252,

333.

572,

742,

322,

657.

86

Add:

cha

nge

of a

ccou

ntin

g po

licy

Corre

ctio

n of

pre

vious

erro

rs

Oth

ers

II. B

alan

ce a

t the

beg

inni

ng o

f the

yea

r66

6,24

8,70

0.00

796,

920,

296.

2018

5,90

1,32

8.09

1,09

3,25

2,33

3.57

2,74

2,32

2,65

7.86

III. I

ncre

men

t or d

ecre

men

t of t

his

perio

d (d

ecre

men

t

mar

ked

with

“-”

) 30

,978

,461

.00

397,

439,

829.

8337

,684

,577

.68

222,

119,

231.

7468

8,22

2,10

0.25

(I)To

tal a

mou

nt o

f com

preh

ensiv

e ea

rnin

gs

37

6,84

5,77

6.79

376,

845,

776.

79

(II)O

wne

r’s in

crea

sed

and

decr

ease

d ca

pita

30,9

78,4

61.0

039

7,43

9,82

9.83

428,

418,

290.

83

1. O

rdin

ary

shar

es in

vest

ed b

y sh

areh

olde

rs

30,9

78,4

61.0

037

9,17

4,88

2.00

410,

153,

343.

00

2. C

apita

l inve

sted

by

othe

r equ

ity in

stru

men

t hol

ders

3. A

mou

nt o

f sha

re p

aym

ent a

ccou

nted

into

ow

ner’s

eq

uity

18

,264

,947

.83

18,2

64,9

47.8

3

4. O

ther

s

(III)

Profi

t dist

ribut

ion

37,6

84,5

77.6

8-1

54,7

26,5

45.0

5-1

17,0

41,9

67.3

7

1. W

ithdr

aw S

urpl

us re

serv

e

37

,684

,577

.68

-37,

684,

577.

68

2. W

ithdr

aw g

ener

al ri

sk p

rovis

ion

-117

,041

,967

.37

-117

,041

,967

.37

3. D

istrib

utio

n to

all o

wne

rs (o

r sha

reho

lder

s)

(IV)In

tern

al c

arry

ing-

forw

ard

insid

e ow

ner’s

equ

ity

1. C

apita

l pub

lic re

serv

e to

incr

ease

cap

ital (

or c

apita

l sh

are)

2. S

urpl

us p

ublic

rese

rve

to in

crea

se c

apita

l (or

cap

ital

shar

e)

3. S

urpl

us p

ublic

rese

rve

to c

ompe

nsat

e lo

sses

4. O

ther

s

(V) S

peci

al p

rovis

ion

1. A

mou

nt w

ithdr

awn

this

perio

d

2. A

mou

nt u

sed

this

perio

d

(VI)O

ther

s

IV. B

alan

ce a

t the

end

of t

he p

erio

d 69

7,22

7,16

1.00

1,19

4,36

0,12

6.03

223,

585,

905.

771,

315,

371,

565.

313,

430,

544,

758.

11

Leg

al r

epre

sen

tati

ve:W

u M

uh

ai

Pri

nci

pal

in c

har

ge

of

acco

un

tin

g:Z

eng

Fei

P

rin

cip

al o

f ac

cou

nti

ng

org

aniz

atio

n:

Zen

g F

ei



III. Corporate Profile

1. Corporate profile

Date of establishment of the Company: December 11, 1992, registered address: No.1, West Huanzhen Road,

Guanglong Industrial Park, Chencun Town, Shunde District, Foshan City, Guangdong Province, headquarters address:

No.1, West Huanzhen Road, Guanglong Industrial Park, Chencun Town, Shunde District, Foshan City, Guangdong

Province, and the Company’s legal representative: Wu Muhai. Approved by China Securities Regulatory Commission

(CSRC) on September 18, 2002, the Company issued RMB ordinary share 20 million shares to the public for the first

time, and was listed at Shanghai Stock Exchange on October 10, 2002. At present, the registered capital is RMB

705,732,161.00 yuan.

The Company’s business scope: manufacturing of building material machinery for ceramics, stone, wall material,

energy saving and environmental protection materials, research, development and manufacturing of automation

technology and outfit; sales of: electromechanical product parts, grinding wheel and grinding apparatus, grinding

materials and ceramics products; research, development, manufacturing and sales of machinery and equipment

and automation technology and outfit related to clean energy; manufacturing and sales of clean coal gas and steam;

information and technology service, software development and sales, system integration, hardware equipment leasing

and sales, and network technical consultation service; operating export and production for products and relevant

technologies used by the enterprise and member enterprises, and raw and auxiliary materials, machinery and equipment,

instrument and meters, parts and relevant technology import required for scientific research (except for commodities

restricted or prevented from import or export by the state government); operating processing with incoming materials and

“assembling with supplied parts, processing with supplied materials and samples, and compensation trade” (specifics in

accordance with [2000] W.J.M.F.Z.S.Z.H. No.3250)

Industry of the Company: special equipment manufacturing industry.

The Company’s main products: building material machinery, clean gasification outfit, terminal smoke control outfit,

high-end parts and other outfits.

2. Scope of consolidated financial statement

The scope of consolidation of the Company’s consolidated financial statement is determined based on control, all

controlled subsidiaries are accepted in the scope of consolidation of the consolidated financial statements, and newly

accepted subsidiaries, structural entities or business entities formed in other forms are listed as follows:

Name Acquired via

Jiangsu Kehang Environmental Protection Science & Technology Co., Ltd. Merging not under the same control

Ningxia Kehang Environmental Protection Engineering Co., Ltd. Merging not under the same control

Anhui KEDA Clean Energy New Materials Co., Ltd. Merging of newly established enterprise

Zhangzhou Juming Graphite Co., Ltd. Merging not under the same control

Refer to the Annotation “Equities in subsidiaries” on details of subsidiaries accepted in the consolidated financial

statements; refer to “Change of scope of consolidation” on change of scope of consolidation.

The financial statement is approved and submitted by the Board of Directors on April 28, 2016.

IV. Basis for financial statement preparation

1. Basis for preparation

The Company’s financial statements are prepared based on the assumption of going concern. According to

occurring trades and events, Enterprise Accounting Code-Basic Code issued by the Ministry of Finance, specific

accounting codes, application guide of enterprise accounting code, interpretation of enterprise accounting code and

relevant rules and regulations (hereinafter referred to as “enterprise accounting codes), and No.15 of Information

Disclosure Prepared by Companies Issuing Securities in Public-General Provisions of Financial Statements by China

Securities Regulatory Commission (revised in 2014), the state is prepared.

2. Going concern

The Company is capable of going concern for at least 12 months from the end of the reporting period, and does not

involve key events without affecting going concern.



Where the Buyer realizes merging of enterprises not under the same control through several transactions where are of

“package deal”, the Company regards the transactions as one transaction to obtain control right for accounting processing.

Where not of “package deal”, in individual financial statements, the sum of book value of equity investment of the bought

party held before the date of buying and the newly added investment costs on the date of buying is regarded as the initial

investment costs computed according to the cost method; as for other comprehensive earnings confirmed according to

the equity method for the equity investment of the bought party held, when such investment is disposed of, accounting is

processed on the same basis that the invested body’s disposal of relevant assets or liabilities, the owner’s equity confirmed

due to change of the owner’s equity except for net profits and losses, other comprehensive earnings and profit distribution

for the invested party, when such investment is disposed of, it is transferred into current profits and losses of the disposal

period. Of them, the remaining equity after the disposal is accounted in accordance with the cost method or the equity

method as described in the long-term investment code, other comprehensive earnings and other owner’s equity are carried

forward proportionally; where the remaining equity after the disposal is accounted according to the financial instrument

confirmation and measurement code, other comprehensive earnings and other owner’s equity are fully carried forward.

Where the equity investment held before the date of buying is accounted and processed in accordance with the

financial instrument confirmation and measurement code, the sum of fair value of the equity investment and the newly

increased investment cost is regarded as initial investment cost computed with the cost method, and the difference

between fair value of the original equity and cumulative change of fair value of other comprehensive earnings are

transferred into current profits and losses according to the cost method.

6. Preparation method of consolidated financial statements

(1) Principle for determination of scope of consolidated financial statement

The scope of consolidation in the consolidated financial statement is determined based on control. The control

refers to the Company’s power over the invested party, is paid through participating in relevant activities of the

invested party, and capable of affecting the amount paid by applying the power over the invested party. The scope of

consolidation includes the Company and all subsidiaries. The subsidiaries refer to the entities controlled by the Company.

Once relevant factors and conditions result in changes of relevant elements defined by the above control, the

Company appraises again.

(2) Methods for preparing the consolidated financial statements

Based on financial statements of the Company and subsidiaries, according to relevant data, the entire group

regarded as one accounting entity, with reference to confirmation, measurement and listing requirements of relevant

enterprise accounting codes and the same accounting policy and accounting period, the Company reflects overall

financial conditions, business achievement and cash flow of the Group. The merging procedures include: merging

assets, liabilities, owner’s equity, revenue, costs and cash flow of parent company and subsidiaries; offsetting the parent

company’s long-term equity investment on subsidiaries and the parent company’s share in the subsidiaries’ owner equity;

offsetting influences of internal transactions between parent company and subsidiaries and between subsidiaries. Where

internal transactions show that relevant assets are depreciated, such losses are confirmed in full amount; and special

transactions are adjusted in view of enterprise group.

The share of subsidiaries’ owner equity not of the parent company is listed in the “minority shareholders’ equity” in

the owner’s equity of consolidated balance sheet as minority shareholders’ equity.

The share of minority shareholders’ equity in current net profits and losses of subsidiaries is listed in “minority

shareholders’ profits and losses” in net profit of consolidated profit statement. The share of minority shareholders’

equity in current comprehensive proceeds of subsidiaries is listed in “total comprehensive earnings attributed to minority

shareholders” in total comprehensive earnings of the consolidated profit statement.

Where current losses borne by minority shareholders of subsidiaries exceed the share of owner’s equity of the

subsidiary at the beginning of the period, the balance still offsets minority shareholders’ equity.

The unrealized internal transaction profits and losses from subsidiaries’ selling assets are offset with “net profit

attributed to parent company’s owner”. The unrealized internal transaction profits and losses from subsidiaries’ selling

assets to the parent company are offset between “net profit attributed to parent company’s owner” and “minority

shareholders’ profits and losses” according to the parent company’s allocation ratio towards subsidiaries. The unrealized

internal transaction profits and losses from selling assets between subsidiaries are offset between “net profit attributed to

parent company’s owner” and “minority shareholders’ profits and losses” against the seller subsidiary.

V. Key accounting policy and accounting estimate

1. Declaration on being in conformity with enterprise accounting code

The financial statements prepared by the Company are in conformity with requirements of the enterprise accounting

code, and reflect the Company’s financial conditions, business achievements, change of shareholders’ equity and cash

flow completely and authentically.

2. Accounting period

The Company’s accounting period is from solar calendar January 1 to December 31.

3. Business period

The Company’s business period is 12 months.

4. Standard currency for accounting

RMB is the currency of main economic environment where the Company is located. The Company takes RMB as

the standard currency for accounting, and the currency adopted by the Company for preparing the statement is RMB.

5. Accounting process of merging of enterprise under the same control and not under the same control

(1) Merging of enterprises under the same control

Where enterprises involving merging before and after the merging are ultimately controlled by the same party or the

same multiple parties and the control is not temporary, it is regarded as merging of enterprise under the same control.

The date of merging is the date that the merging party acquires control over the merged party.

As for assets and liabilities acquired in enterprise merging, the book value of the consolidated financial statements

of the merged party on the date of merging is measured. Where accounting policies of the merged parties are not

consistent with those of the Company, the merging party adjusts according to the Company’s accounting policy on the

date of merging, and the book value after the adjustment shall be confirmed.

As for difference between book value of net assets acquired in the merging and book value of the merging

consideration paid (or total amount of book value of shares issued), the share capital premium in the capital public reserve

is adjusted; where the share capital premium in the capital public reserve is insufficient to offset, the retained earnings is

adjusted.

Direct relevant costs occurred for enterprise merging, including audit fee, appraisal fee, legal service fee etc. are

accounted into current profits and losses when occurred.

(2) Merging of enterprises not under the same control

Where the parties involving merging are not ultimately controlled by the same party or the same multiple parties

before and after the merging, it is regarded as merging not under the same control.

The buyer’s paid assets, occurred or borne liabilities for merging of enterprises on the date of merging on the date of

buying are measured with fair value. The difference between fair value and the book value is accounted into current profits

and losses. The buyer allocates the costs of merging on the date of buying, and identifies fair values of identifiable assets,

liabilities and contingent liabilities of the bought party on the date of buying. The difference that the cost of merging more

than the fair value of identifiable net assets is confirmed as goodwill.; the difference that the cost of merging is less than the

fair value of identifiable net assets of the bought party is accounted into current profits and losses after reviewing.

Where the deductible temporary difference of the bought party acquired in merging of enterprise is not in conformity

with the confirmation conditions for deferred income tax assets on the date of buying, confirmation is not made. Within

12 months after the date of buying, if new or further information shows that relevant situations on the date of buying

exist and the economic benefits from the deductible temporary difference on the date of buying will be realized, relevant

deferred income tax assets are confirmed, the goodwill is reduced; where the goodwill is insufficient, the difference is

confirmed as current profits and losses; except for the above, the deferred income tax assets related to merging of

enterprises are accounted to current profits and losses.

As for merging of enterprises not under the same control, the buyer’s occurred audit, legal service, appraisal and

consultation and other brokerage fee and other relevant overheads for merging of enterprises are accounted into current

profits and losses when occurred; the transaction costs of equity securities or debt securities issued by the Buyer for

consideration of merging are accounted into initial confirmation amount of the equity securities or debt securities.



into joint operation and joint venture. The joint operation refers to the joint operation arrangement that the Company is

entitled to assets related to the arrangement and bears liabilities related to the arrangement. The joint venture refers to the

joint operation arrangement the Company is only entitled to net assets of the arrangement.

The Company’s investment on joint venture is computed according to the equity method. Refer to 14 of Annotation V.

The Company confirms the following items related to interests in joint operation, and applies accounting processing

in accordance with relevant enterprise accounting codes:

(1) Confirm separately held assets, and jointly held assets according to shares;

(2) Confirm separately undertaken liabilities, and jointly undertaken liabilities according to shares;

(3) Confirm income of shares sold jointly operated;

(4) Confirm income from sales according to shares;

(5) Confirm separately incurred costs, and costs of joint operation according to shares.

8. Standard for determination of cash and cash equivalents

When the cash flow statement is prepared, the cash on hand and deposit used to pay from time to time are

confirmed as cash. Cash equivalent refers to investment with short holding period (due within 3 months from buying), high

flexibility and easily converted into known amount and investment with low risks of value change.

9. Foreign currency business and foreign currency statement conversion

(1) Conversion of foreign currency business

In terms of foreign currency business, the spot exchange rate on the date of transaction is used as conversion

exchange rate, and the amount of foreign currency is converted into RMB and accounted.

Balance of monetary items in foreign currency is converted and computed on the date of balance sheet, and

the difference from conversion, except for the difference from special borrowing in foreign currency in conformity with

capitalization conditions processed in accordance with the principle of borrowing cost capitalization, is accounted into

current profits and losses. The non-monetary items in foreign currency measured with history cost are still converted and

computed in accordance with the spot exchange rate on the date of transaction, and the amount of standard currency for

accounting will not be changed. The non-monetary items in foreign currency measured with fair value are computed and

converted in accordance with the spot exchange rate on the date of determination of fair value, and the difference from

conversion arising herefrom is accounted into current profits and losses or other comprehensive earnings.

(2) Conversion of foreign currency statement

The assets and liabilities in the balance sheet are computed and converted in accordance with the spot exchange

rate on the date of balance sheet; in addition to “undistributed profit” in the owner’s equity, other items are computed

and converted in accordance with the spot exchange rate when occurred. The income and cost of profit statement are

computed and converted in accordance with the spot exchange rate on the date of transaction. The difference of foreign

currency financial statement from the above conversion is separately listed in “difference from conversion of foreign

currency statement” in other comprehensive earnings.

When disposing of overseas business, the difference from conversion of foreign currency statement listed in other

comprehensive earnings of balance sheet and related to overseas business is transferred from other comprehensive

earnings to the current profits and losses of disposal; when disposing of partial overseas business, the difference of

foreign currency statement for the part disposed of and is transferred to the current profits and losses for disposal.

10. Financial instruments

Financial instruments include financial assets, financial liabilities and equity instruments.

(1) Classification of financial instruments

According to objectives of holding financial assets and undertaking financial liabilities, the management classifies:

financial assets or financial liabilities measured with fair value and changes into current profits and losses, including

transaction financial assets or financial liabilities and financial assets or financial liabilities measured with fair value and

changes accounted into current profits and losses; held-to-maturity investment; receivables; held-to-maturity financial

assets; and other financial liabilities.

As for newly added subsidiaries and business for merging of enterprises under the same control during the reporting

period, when the consolidated balance statements are prepared, the Company adjusts and consolidates opening amount

of the balance sheet. Revenue, cost and profit of the subsidiaries and business consolidation from the beginning to the

end of the period are taken into the consolidated profit statement, the cash flow is taken into the consolidated cash flow

statement, relevant items of the comparative statement are adjusted, deemed that the reporting entity after the merging

exists from the ultimate controlling party’s control.

As for newly added subsidiaries and business for merging of enterprises or other means not under the same control

during the reporting period, when the consolidated balance sheets are prepared, the Company does not adjust opening

amount of balance sheet, and revenue, cost, profit and cash flow of the subsidiary and from the date of buying to the end

of the reporting period are taken into the consolidated profit statement and the consolidated cash flow statement.

When disposing of subsidiaries and business during the reporting period and preparing the consolidated balance

sheet, the Company does not adjust opening amount of the consolidated balance sheet, revenue, cost and profit of the

subsidiary and from the beginning of the business to the date of disposal are taken into the consolidated profit statement,

and cash flow is taken into the consolidated cash flow statement.

When the parent company buys stock right of the subsidiary owned by minority shareholders of the subsidiary,

in the consolidated financial statements, the Capital reserve (capital premium or share capital premium) is adjusted

according to the difference between the long-term equity investment from buying the minority shareholders; equity and

the net asset share computed from the date of buying or the date of merging according to the newly added shareholding

ratio; where the public capital reserve fund is insufficient, the retained earnings is adjusted.

Where merging of enterprises realized by several transactions and steps and is not of “package deal”, on the date

of obtaining the control, as for the long-term equity investment owned by the merging party before the merging, relevant

profits and losses, other comprehensive earnings and change of owner’s equity are confirmed between the date of

obtaining and the later of date of the merging party and the merged party ultimately under the control of the same party

and the date of merging, and are used to offset the opening retained earnings or the current profits and losses during the

comparative statement periods.

Where enterprises not under the same control are merged through several transactions and steps which are not of

“package deal”, in the consolidated financial statements, as for equity of the bought party before the date of buying, the

equity is re-measured at fair value on the date of buying, and the difference between the fair value and the book value is

accounted into current profits and losses; where the equity of the bought party before the date of buying involves other

comprehensive earnings under the equity method, other comprehensive earnings related herewith is converted into the

current profits and losses on the date of purchasing, except for the other comprehensive earnings from change of net

liabilities or assets by the invested party’s redefining benefit plan.

Where the parent company disposes of long-term equity investment on subsidiaries without losing the control, in the

consolidated financial statements, the Capital reserve (capital premium or share capital premium) is adjusted according to

the difference between the disposal price and the net asset share computed on the date of buying or merging from disposal

of the long-term equity investment; where the Capital reserve is insufficient to offset, the retained earnings is adjusted.

Where losing control over the invested party arising from disposal of partial equity, when the consolidated financial

statement is prepared, the remaining equity is re-measured according to fair value on the date that the control is lost. The

difference that the sum of consideration from disposal of the equity and fair value of the remaining equity minus the share

of net assets of subsidiaries from the date of buying or the date of merging is accounted into current profits and losses

when the control is lost, and goodwill is offset correspondingly. Other comprehensive earnings related to the former

subsidiaries’ equity investment is converted into current investment profits and losses when the control is lost.

Where the control is lost through several transactions and steps, if disposal of subsidiaries’ equity investment until

the control lost is of package deal, the transactions are accounted and processed as one transaction which disposes of

subsidiaries’ equity investment and loses control; however, the difference between disposal price and net asset share

of the subsidiary from disposal of investment is confirmed as other comprehensive earnings in the consolidated financial

statements, and is converted into current profits and losses when the control is lost.

7. Accounting processing for joint venture arrangement and joint operation

The joint venture arrangement refers to one arrangement commonly controlled by two or more participants.

According to rights and obligations in the joint venture arrangement, the Company classifies joint venture arrangement



When judging the financial asset transfer satisfies conditions for termination of the financial assets, the principle of

substance superior to form is adopted. Where the Company classifies financial assets transfer into complete financial

assets transfer and partial financial assets transfer to meet conditions for confirmation, the difference between book value

of the transferred financial assets, and the sum of consideration received from transfer and cumulative amount of change

of fair value formerly accounted into other comprehensive earnings is accounted into current profits and losses. Where

partial financial assets transfer satisfies the confirmation conditions of termination, the book value of the transferred

financial assets is amortized according to relative fair value between termination confirmation and not termination

confirmation, and difference between the sum of consideration received form transfer and cumulative amount of fair value

of formerly accounted into other comprehensive earnings amortized to the termination confirmation and the amortized

book value is accounted into current profits and losses.

Where the financial asset transfer does not satisfy the termination confirmation conditions, continue to confirm the

financial assets, and the consideration received is confirmed as one financial liabilities.

(4) Conditions for termination confirmation of financial liabilities

Where present obligations of financial liabilities have been completely or partially released, the financial liabilities or

any part here are confirmed for termination; if the Company signs agreement with creditors and the Company undertakes

new financial liabilities with the existing financial liabilities, and terms and conditions of the new financial liabilities and the

existing financial liabilities are different, the existing financial liabilities are confirmed for termination, and the new financial

liabilities are confirmed for termination.

Where complete or partial terms and conditions of the existing financial liabilities are substantially modified, the

existing financial liabilities are confirmed for termination, and the financial liabilities after terms and conditions after

modifying are confirmed as one new financial liabilities.

When the financial liabilities are completely or partially confirmed for termination, the difference between the book

value for the financial liabilities confirmed for termination and the consideration paid (including the transferred-out non-

cash assets or the undertaken new financial liabilities) is accounted into current profits and losses.

Where partial financial liabilities are bought back, based on relative fair value between the continuing confirmation

and the terminated confirmation on the date of buyback, complete book value of the financial liabilities is assigned. The

difference between the book value assigned to the termination and the consideration paid (including transferred-out non-

cash assets or undertaken new financial liabilities) is accounted into current profits and losses.

(5) Determination of fair values of financial assets and financial liabilities

As for financial instruments with active market, the fair value is determined in accordance with quotation on active

market. As for financial instruments without active market, the appraisal technology is used to determine the fair value.

When appraisal is conducted, the Company adopts the appraisal technology applicable under current situations with

sufficient utilizable data and other information, selects input values the same with assets or liabilities features in relevant

assets or liabilities transaction by market participants, and use the observable input values in priority. The non-observable

input values are used when the observable input values cannot be obtained or unfeasible.

(6) Depreciation of financial assets (exclusive of receivables)

Except financial assets measured with fair value and changes accounted into current profits and losses, book value

of the financial assets is checked on the date of balance sheet. If objective evidences show that some financial assets

have been depreciated, the depreciation reserve is accrued.

① Depreciation of held-to-maturity investment, goods payment and receivables

The book value of financial assets measured with costs or amortized costs is written down to present value of the

future cash flow, and the written-down amount is confirmed as depreciation losses and is accounted into current profits

and losses. After depreciation losses are confirmed for financial assets, if objective evidences show that values of the

financial values have been recovered, which is related to events after the losses, the originally confirmed depreciation

losses are recovered, and the book value of financial assets after the depreciation losses have been recovered is no more

than the amortized costs of the financial assets on the date of recovery without depreciation reserve accrual.

② Depreciation of available-for-sale financial assets

Combined with relevant comprehensive factors, if drop of fair value of the available-for-sale equity instrument

investment is serious or is not temporary, the available-for-sale financial assets are depreciated, and the cumulative

losses from dropping of failure value of originally accounted into other comprehensive earnings are transferred out and

(2) Confirmation basis and measurement method of financial instruments

① Financial assets (financial liabilities) measured with fair value and changes into current profits and losses

When acquired, the fair value (the declared but not issued cash dividend or the bond interest due but not withdrawn

deducted) is taken as initially confirmed amount, and relevant transaction costs are accounted into current profits and

losses.

Interest or cash dividend acquired during the holding period is confirmed as interest earnings, and change of fair

value is accounted into current profits and losses.

When disposed of, the difference between fair value and the initial accounting amount is confirmed as investment

earnings, and profits and losses from change of fair value is adjusted.

② Held-to-maturity investment

When acquired, the sum of fair value (bond interest due but not withdrawn deducted) and relevant transaction costs

are taken as initially confirmed amount.

During the holding period, interest income is computed according to amortization costs and actual interest rate.

The actual interest rate is determined when acquired, and remains in the estimated holding period or applicable shorter

period.

When disposed of, the difference between the price acquired and the book value of the investment is accounted

into investment earnings.

As for held-to-maturity investment sold or reclassified before the due date, the remaining part of the investment is

reclassified as available-for-sale financial assets, and any financial assets will not be classified as held-to-maturity in the

accounting period or the following 2 complete accounting years, except: the date of selling or reclassifying is closer to

the due date or redemption date of the investment (such as within 3 months when due), and change of market interest

rate has no significant influences on fair value of the investment; according to the periodic repayment or repayment in

advance as described in the Contract, almost all initial principals of the investment have been recovered, and the remains

is sold or reclassified; the selling or reclassifying is caused by standalone events beyond the control of the enterprise, not

reoccurring or difficult to be expected.

③ Receivables

The receivable creditor’s right from selling commodity or providing labor, and the creditor’s right of debt instruments

of enterprises not including the creditor’s right with quotation on active market, including receivables and other

receivables, and the price in the contract or agreement receivable from the purchaser is taken as the initially confirmed

amount; if the nature of financing exists, the present value is used to confirm.

When recovered or disposed of, the difference between the price acquired and the book value of the receivable is

accounted into current profits and losses.

④ Available-for-sale financial assets

When acquired, the sum of fair value (cash dividend declared but not issued or the bond interest due but not

withdrawn) and relevant transaction costs are taken as the initially confirmed amount.

The interest or cash dividend acquired during the holding period is confirmed as investment earnings. At the end of

the period, it is measured with fair value and changes of the fair value are accounted into other comprehensive earnings.

As for equity investment without control, common control over or significant influences on the invested party, without

quotation on active market and fair value not measured reliably, the equity investment is listed as available-for-sale

financial assets, and is subsequently measured according to costs.

When disposed of, the difference between the price acquired and the book value of the financial assets is

accounted into investment profits and losses; meanwhile, the disposal amount of cumulative amount from change of fair

value of other comprehensive earnings is transferred out and accounted into investment profits and losses.

⑤ Other financial liabilities

The sum of fair value and relevant transaction acts is taken as initially confirmed amount. Subsequent measurement

is carried out based on amortization costs.

(3) Confirmation basis and measurement methods of financial assets transfer

When financial assets are transferred, if almost all risks and remunerations on title of the financial assets have been

transferred to the transferred party, termination of the financial assets is confirmed; if almost all risks and remuneration of

title of the financial assets are retained, termination of the financial assets is not confirmed.



Of the combination, the non-performing debt is accrued according to the debt age analysis method.


Debt age Accrual ratio of receivables (%) Accrual ratio of other receivables (%)

Within 1 year (included) 5 5

1-2 years 20 20

2-3 years 20 20

More than 3 years 50 50

Of the combinations, non-performing debt reserve is accrued according to the balance percentage method:


Combination Accrual ratio of receivables (%) Accrual ratio of other receivables (%)

Financing and leasing equipment

accounts receivable

20% of amount more than 1 month

overdue

Of the combinations, non-performing debt reserve is accrued according to other methods:


Combination Accrual ratio of receivables (%) Accrual ratio of other receivables (%)

Goods payment of subsidiaries 0 0

Refunding of tax 0 0

Bidding security 0 0

Current accounts of subsidiaries 0 0

(3).Receivables with insignificant single amount and non-performing debt reserve accrued separately

Causes for accruing non-performing debt reserve separately Insignificant single amount but the debt age analysis

method cannot reflect the risk features.

Accrual method of non-performing debt

The non-performing debt reserve is accrued in

accordance with the difference that the cash flow

present value in the future lower than the book value.

12. Stock

(1) Classification of stock

Stock is classified into six categories such as raw materials, low-value consumables, packages, goods in process,

finished products and shipped commodity.

(2) Pricing of stock

The stock is initially measured with the cost of acquiring, including purchasing cost, processing cost and other

costs. Pricing of withdrawing raw materials and shipping commodity is measured with the weighted average method;

(3) Basis for determination of realizable net value of inventory and accrual method of Stock revaluation reserve

At the end of the period, after the stock has been checked, the Stock revaluation reserve is accrued or adjusted in

accordance with the inventory cost and realizable net value, which is lower.

As for commodity stocks such as finished product, stock commodity and materials directly used for selling, in the

process of regular production and operation, the realizable net value is determined in accordance with estimated sales

price of the stock minus the estimated Sales expenseand relevant taxes; as for material stock to be processed, in regular

production and operation, the realizable net value is determined in accordance with estimated sales cost minus the

occurred costs, estimated sales cost and relevant taxes; realizable net value of stock held for executing sales contract or

labor contract is computed in accordance with the contract price; if the stock quantity is more than the quantity ordered

in the sales contract, net realizable value of stock beyond the quantity in the contract is computed in accordance with the

general sales price.

Stock revaluation reserve is accrued for single stock items at the end of the period; as for stock with excessive

quantity and low price, the stock accrual reserve is accrued according to types of the stock; as for stock related to

are accounted into current profits and losses. The transferred-out cumulative losses are the initial cost for acquiring

the assets minus the principal recovered, the amortized amount, current fair value and depreciation losses formerly

accounted into profits and losses. After depreciation losses have been confirmed, if objective evidences show that value

of the financial assets have been recovered and it is objectively related to events after the losses, the formerly confirmed

depreciation losses are recovered and confirmed as other comprehensive earnings, and depreciation losses of the

available-for-sale debt instruments are recovered and accounted into current profits and losses.

Depreciation losses of equity instrument investment without quotation on active market and its fair value not

measured reliably, or the derivative financial assets related to the equity instruments and settled through delivering the

equity instruments will not be recovered.

11. Receivables

(1). Receivable with single significant amount and non-performing debt accrued separately

Judgment basis or amount standard for

single significant amount Receivable of more than 3 million yuan as closing balance

Accrual method for single significant

amount and single non-performing debt

If objective evidences show that depreciation occurs, according to

the difference that present value of the future cash flow lower than the

book value, separate depreciation testing shall be carried out, and non-

performing debt reserve is accrued.

(2). Receivables with non-performing debt accrued according to credit risk feature combination

As for receivable with insignificant amount, the non-depreciated receivables after testing shall be classified into

several combinations based on credit risk features, based on actual loss rates of receivable account combination of the

same or similar credit risk features in the past and combined with current situations, the ratio of non-performing debt

reserve is accrued as follows. The basis for determination of combinations:

Combination Basis

Accounts receivable

Accounts of financing and leasing equipment receivables Type of sales contract

Subsidiaries’ goods payment Type of sales contract

Other ordinary customers Type of sales contract

Other receivables

Refunding of tax Nature of receivables

Bidding security Nature of receivables

Current accounts of subsidiaries Nature of receivables

Other current accounts Nature of receivables

Collective accrual of non-performing debt reserve based on portfolio

Portfolio Withdrawal method

Receivables

Accounts of financing and leasing equipment receivables overdue Balance percentage method

Goods payment of subsidiaries Other methods

Other ordinary clients Debt age analysis method

Other receivables

Refunding of tax Other methods

Bidding security Other methods

Current accounts of subsidiaries Other methods

Other current accounts Debt age analysis method



② Long-term equity investment acquired via other forms

As for the long-term equity investment acquired through cash payment, the actually paid price is taken as the initial

investment costs. The initial investment costs include costs, taxes and other necessary expenditures directly related to

acquiring the long-term equity investment.

As for the long-term equity investment acquired through issuing equity securities, fair value of the issued equity

securities is taken as the initial investment cost.

Under the prerequisites of the non-monetary asset swap with business nature or fair value of the swap-in and swap-

out assets reliably measured, as for the swap-in long-term equity investment of non-monetary assets, fair value of the

swap-out asset is determined as the initial investment cost, unless definitive evidences show that fair value of the swap-

in assets is more reliable; as for non-monetary asset swap not satisfying the above prerequisites, the book value of swap-

out asset and the payable taxes are used as the initial investment cost of the long-term equity investment.

As for long-term equity investment acquired through debt reconstruction, the initial investment cost is determined

according to the fair value.

(2) Subsequent measurement and profit and losses confirmation of long-term equity investment

The Company applies the cost method to computing the long-term equity investment of the invested body

controlled by the Company.

The long-term equity investment computed in accordance with the cost method is priced based on the initial

investment costs. If investment is added or recovered, cost of the long-term equity investment is adjusted. Cash dividend

or profit declared and issued by the invested body is confirmed as current profits and losses.

The long-term equity investment for joint venture and cooperative enterprise is computed in accordance with

the equity method. When the initial investment cost is more than the investment, the difference of fair value shares of

identifiable net assets of the invested body is vested, and initial investment cost of the long-term equity investment is not

adjusted; when the initial investment cost is less than the investment, the difference of fair value shares of identifiable net

assets of the invested body is vested and is accounted into current profits and losses, and costs of the long-term equity

investment are adjusted.

After acquiring the long-term equity investment, the Company confirms investment earnings and other

comprehensive earnings in accordance with shares of net profits and losses and other comprehensive earnings realized

by the invested body to be vested or undertaken, and book value of the long-term equity investment is adjusted; the

Company reduces book value of the long-term equity investment in accordance with the portion of profit or cash dividend

declared and issued by the invested body; the Company adjusts book value of the long-term equity investment and

accounts it into owner’s equity against changes of owner’s equity of the invested body except net profits and losses,

other comprehensive earnings and profit distribution.

When confirming shares of net profits and losses of the invested body, based on fair value of identifiable net assets

of the invested body when the investment is acquired, the Company adjusts net profit of the invested body and confirm.

Where the accounting policy and accounting period adopted by the invested body are not the same with those of

the Company, the financial statements of the invested body are adjusted in accordance with the Company’s accounting

policy and accounting period, and the investment earnings and other comprehensive earnings are confirmed hereby.

As for net losses of the invested body confirmed, the Company writes down book value of the long-term equity

investment and long-term equity substantially constituting net investment on the invested body to zero as limit, unless the

Company assumes obligations of extra losses.

Where the invested body realizes net profits in the future, after the earnings share compensate unconfirmed loss

shares, the Company recovers and confirms the earnings share.

When the Company confirms net profits and losses of the invested body to be vested or undertaken, the profits and

losses of unrealized internal transactions with cooperative enterprises and joint ventures shall be offset in accordance with

the part attributed to the Company based on the shares, and the investment earnings are confirmed hereby.

As for losses of unrealized internal transactions between the Company and the invested body, where the losses are

of Asset impairment losses in accordance with the Enterprise Accounting Code No.8-Asset Depreciation, the transaction

losses in full amount are confirmed.

Where the Company applies significant influences on the invested body or applies common control over the

invested body because of increasing investment and other causes but does not constitute control, the fair value of equity

products series produced and sold in the same area, with the same or similar use or objective and not easily identified

from other items, the Stock revaluation reserve is accrued in combination.

(4) Inventory system of the stock

The perpetual inventory system is adopted.

(5) Amortization methods of low-value consumables and packages

① One-off charge-off method is applied to low-value consumables.

② One-off charge-off method is applied to packages.

13. Classified as available-for-sale assets

Compositions of the enterprise (or non-current assets, the same below) satisfying the following conditions

simultaneously are confirmed as available-for-sale assets: the compositions can be sold under the existing conditions

and in accordance with ordinary terms and conditions for sales of such assets; the enterprise has made resolutions on

disposal of the compositions, if approval by shareholders is needed, and approval by shareholders’ assembly or the

competent power body is required; the enterprise has signed an irrevocable transfer agreement with the transferred party;

and the transfer will be finished in one year.

14. Long-term equity investment

The long-term equity investment refers to the long-term equity investment that the Company’s controlling, jointly

controlling or applying significant influences on the invested body. As for long-term equity investment not controlling, joint

controlling or applying significant influences on the invested body, the Company takes it as available-for-sale financial

assets or the financial assets measured with fair value with changes accounted into current profits and losses. Refer to

Annotation IV. 10 “Financial Instruments” in the accounting policy.

Common control refers to control co-owned over some arrangement by the Company in accordance with relevant

rules and regulations, and relevant activities of the arrangement shall be determined with consent obtained from the other

party sharing the control. Significant influences refer to the power that the Company has the power to make decisions on

financial and operational policy of the invested body, and cannot constitute common control or control with other parties.

(1) Determination of initial cost of long-term equity investment

① Long-term equity investment by enterprise merging

Merging of enterprises under the same control: where the Company pays cash, transfers non-cash assets or

undertake liabilities and issues equity securities as the merging consideration, on the date of merging, the share of

book value in the consolidated financial statement of the ultimate control party of the merged party is used as the initial

investment cost of the long-term equity investment. The Capital reserve (capital premium or share capital premium) is

adjusted in accordance with the difference between the initial investment cost and the merging consideration paid of the

long-term equity investment; where the Capital reserve (capital premium or share capital premium) is insufficient to offset,

the retained earnings is adjusted. Where the merging party takes the issued equity bonds as the merging consideration,

total book value of the issued shares as share capital, the Capital reserve (capital premium or share capital premium) is

adjusted in accordance with the difference between initial investment cost of the long-term equity investment and total

book value of the issued shares; where the Capital reserve (capital premium or share capital premium) is insufficient to

offset, the retained earnings is adjusted.

Merging of enterprises not under the same control: the Company takes the merging cost determined on the date

of purchasing as the initial investment cost of the long-term equity investment. The merging cost is the purchaser’s

paid assets, occurred or undertaken liabilities and fair value of the issued equity securities to obtain control over the

purchased party on the date of merging. The purchaser takes transaction costs of equity securities or debt securities

issued as merging consideration and accounts into initially confirmed amount of equity securities or debt securities. As for

merging of enterprises not under the same control merged by several transactions and steps, the sum of book value of

the purchased party’s equity investment before the date of purchasing and the newly increased investment on the date of

purchasing is taken as initial investment cost of the investment. The Company takes contingent consideration described

in the merging contract as a part of transferred consideration in enterprise merging, and accounts fair value into merging

cost of the enterprise on the date of purchasing.

Audit, legal service, appraisal, consultation and other brokerage services and other relevant overheads occurred by

the merging party or the purchaser for enterprise merging are accounted into current profits and losses when occurred.



Type Depreciation method Depreciation

term (years)

Ratio of remaining

value (%)

Annual depreciation

rate (%)

Building and property Straight-line method 20-40 5.00 2.40-4.80

Machines and equipment Straight-line method 8-15 5.00 6.33-11.88

Electronic equipment Straight-line method 5 5.00 19.00

Transporting equipment Straight-line method 3-8 5.00 11.87-31.7

Other equipment Straight-line method 2 None 50.00

(3). Depreciation testing of fixed assets and accrual method of depreciation reserve

Refer to Annotation V 20 “Long-term asset depreciation” on depreciation testing method of fixed assets and accrual

methods of depreciation reserve.

(4). Evidence confirmation, pricing and depreciation methods of fixed assets leased with financing

Where terms and conditions of the leasing agreement signed by the Company and the lessor satisfy one of the

following conditions, the leased assets with financing are confirmed:

① Upon expiry of the leasing period, ownership of the leased assets belongs to the Company;

② The Company has the option to purchase the assets, and the purchasing price is much lower than the fair value

of the asset when the option is exercised;

③ The leasing period accounts for most of service life of the leased assets;

④ The minimum present value of leasing payment from the date of leasing does not vary a lot from fair value of the

assets.

From the date of leasing, fair value of the leased assets or the minimum present value of leasing payment is taken

as the accounting value of the leased assets, which is lower, the minimum present value of leasing payment is taken as

accounting value of long-term payable, and the difference is taken as unconfirmed financing costs.

As for fixed assets leased through financing and leasing, where ownership of the leased assets can be obtained

upon expiry of the leasing period as appropriately, depreciation is accrued in the usable period of the leased assets;

where ownership of the leased assets cannot be obtained upon expiry of the leasing period, depreciation is accrued in the

leasing period or the usable period of the leasing period, which is shorter.

17. Projects under construction

Projects under construction are computed according to the established projects.

Costs of projects under construction are determined in accordance with the actual project expenditures, including

expenditures during the period of construction, borrowing costs of capitalization before the project reaches the usable

conditions and other relevant costs. After reaching the usable conditions, the projects under construction are converted

into fixed assets.

Refer to Annotation V. 20 “Long-term asset depreciation” on depreciation testing methods and depreciation reserve

accrual for projects under construction.

18. Borrowing costs

(1) Principle for confirmation of capitalization of borrowing costs

The borrowing costs include borrowing interest, amortization of depreciation or premium, auxiliary expenses and

balance of exchange from foreign currency borrowing etc.

The Company’s borrowing costs, where directly attributed to asset building or production qualified for capitalization,

shall be capitalized and accounted into relevant asset costs; other borrowing costs are confirmed as costs according to

amount occurred and are accounted into current profits and losses.

The assets qualified for capitalization refer to pre-determined usable or sellable fixed assets, investment property

and stock after very long building or production activities.

Borrowing costs are capitalized when the following conditions are satisfied simultaneously:

① Asset expenses occurred, including cash paid, non-cash assets transferred or expenses assumed for bearing

interest-bearing debts for building or producing assets qualified for capitalization;

② Borrowing costs occurred;

③The necessary building or production activities enabling assets to reach usable or sellable conditions have

commenced.

investment held in accordance with the Enterprise Accounting Code No.22-Confirmation and Measurement of Financial

Instruments with the cost of newly increased investment is used as the initial investment cost computed in accordance

with the equity method. Where the formerly held equity investment is classified as available-for-sale financial assets, the

difference between the book value and the fair value, and changes of cumulative fair value formerly accounted into other

comprehensive earnings are accounted into current profits and losses computed with the equity method.

Where the Company loses common control over or applies significant influences on the invested body because

of disposing of partial equity investment, the remaining equity after the disposal is computed in accordance with

the Enterprise Accounting Code No.22-Confirmation and Measurement of Financial Instruments, and the difference

between fair value on the date of losing common control or being affected by significant influences and the book value

is accounted into current profits and losses. As for other comprehensive earnings confirmed for the former equity

investment in accordance with the equity method, when computing with the equity method is terminated, the basis the

same with the assets or liabilities disposed of by the invested body is used for accounting and processing.

Where the Company loses control over the invested body because of disposing of partial equity investment, when

preparing individual financial statements, where the remaining equity after the disposal applies common control over or

significant influences on the invested body, the equity method is used to compute, and the remaining equity is adjusted

according to the equity method when acquired; where the remaining equity cannot apply common control over or

significant influences on the invested body, accounting and process are conducted in accordance with the Enterprise

Accounting Code No.22-Confirmation and Measurement of Financial Instruments.

As for disposal of long-term equity investment, the difference between book value and the price acquired is

accounted into current profits and losses. As for long-term equity investment computed according to the equity method,

when such investment is disposed of, with the same basis of assets or liabilities of the invested body, the part originally

accounted into other comprehensive earnings based on corresponding ratio shall be accounted and processed.

15. Investment property

The Company’s investment property includes leased land use right, land use right held and to be transferred after

value is added and leased buildings. When the Company can acquire rent income or value-added proceeds related to the

investment property and cost of the investment property can be measured reliably, the Company confirms according to

actual expenditures of purchasing or building.

The Company adopts cost mode for following-up measurement for subsequent expenditures of the investment

property. As for investment property, depreciation or amortization is accrued according to accounting policy of fixed

assets or intangible assets of the Company. When the Company changes application of investment property, if it is for

self-use, relevant investment property is transferred into other assets.

Refer to Annotation V 20 “Long-term Asset Depreciation” on depreciation testing and depreciation reserve accrual

of the investment property.

16. Fixed assets

(1). Confirmation conditions

Fixed assets refer to tangible assets held for producing commodity, providing labor, leasing or business

management with service life of more than one accounting year. The fixed assets include: property and building,

machines and equipment, electronic equipment, transporting equipment and other equipment. The fixed assets are

confirmed when the following conditions are satisfied:①Economic benefits related to the fixed assets probably flow into

the enterprise;②The cost of the fixed assets can be measured reliably.

(2). Depreciation method

Depreciation of fixed assets is accrued according to the Straight-line method, and depreciation rate is determined

according to fixed asset types, estimated service life and estimated net remaining value rate. If compositions of the

fixed assets are different or provide enterprises with economic benefits in various forms, different depreciation rates or

depreciation methods are selected, and depreciations are accrued.



② Subsequent measurement

The service life is analyzed and judged when intangible assets are acquired.

As for intangible with limited service life, the intangible assets are amortized with the linearity method with the period

of benefiting the enterprise; where the period of benefiting the enterprise by the intangible assets cannot be estimated,

the intangible assets are deemed as assets with uncertain service life and will not be amortized.

(2) Estimate of service life of intangible assets with limited service life

Type Number of years of amortization (years)

Land use right 50

Trademark right 10

Patent right 10

Non-patented technology 5

Application software 5

At the end of each period, service life and amortization method of intangible assets with limited service life are

double checked.

(3) Standards for classifying research stage and development stage of internal research and development

projects

Expenses of internal research and development are classified into expenses of the research stage and expenses of

the development stage.

Research stage: unique and planning survey and research activities for acquiring and understanding new science or

technical knowledge.

Development stage: before commercial production or use, the research achievements or other knowledge is applied

a program or design to produce new or substantially improved materials, devices and products etc.

(4) Standards for expenses of development stage qualified for capitalizing

Expenses of development stage of internal research and development projects are confirmed as intangible

expenses when the following conditions are satisfied:

① Completing the intangible assets to make it technically feasible in terms of use or sales;

② The intention of completing the intangible assets for use or sales;

③ The modes of producing economic benefits by the intangible assets, including proving the products by the

intangible assets marketable or the intangible assets marketable, or usefulness of the intangible assets if used internally;

④ Sufficient technical, financial resources and other resources support to complete development of the intangible

assets, and be capable of using or selling the intangible assets;

⑤ Expenses attributed to development stage of the intangible assets are reliably measured.

Expenses of the development stage, where not satisfying the above conditions, are accounted into current profits

and losses when occurred. Expenses of the research stage are accounted into current profits and losses when occurred.

(5) Refer to Annotation V. 20 “Long-term asset depreciation” on depreciation testing and depreciation

reserve accrual of the intangible assets.

20. Long-term assets depreciation

On each date of balance sheet, judge whether the long-term equity investment, investment property measured

with cost mode, fixed assets and project under construction , biological assets measured with cost mode and intangible

assets with definite service life of oil and gas are depreciated or not. Where depreciation exists, estimate the amount

recoverable, when the amount recoverable is lower than the book value, book value of the asset is written down to the

amount recoverable, the amount written down is confirmed as corresponding depreciation losses and is accounted into

current profits and losses, and corresponding depreciation reserve is accrued.

Estimate of amount recoverable of the assets is determined in accordance with the net amount that fair value

minus the disposal cost, or the present value of cash flow in the future, which is higher. The enterprise estimates amount

recoverable based on single asset. Under the conditions of being difficult to estimate amount recoverable of single asset,

the enterprise estimates the amount recoverable of asset portfolio which the asset belongs to.

(2) Capitalization period of borrowing costs

The capitalization period refers to the period starting from capitalizing to stop capitalizing, and the period of

borrowing cost suspension is excluded.

When assets built or produced qualified for capitalizing reach the pre-determined usable or sellable conditions,

capitalization of the borrowing costs is stopped.

When partial projects of assets built or produced qualified for capitalization are completed and can be used

separately, capitalization of borrowing costs of the assets is stopped.

Where the parts of building or producing the assets are completed respectively and can be used or sold after

complete completion, capitalization of borrowing costs is stopped when the assets are completed completely.

(3) The period of suspending capitalization of borrowing costs

Where assets qualified for capitalization are interrupted unusually in the process of building or producing and the

interruption is more than 3 months, capitalization of borrowing costs is suspended; if such suspension is the required

procedures for the assets built or produced qualified for capitalization to reach the pre-determined usable conditions

or sellable conditions, continue capitalizing of borrowing costs. The borrowing costs during the interruption period are

confirmed as current profits and losses until building or producing of assets resumes, and continue capitalizing.

(4) Computing amount of capitalizing amount of borrowing costs

As for special borrowing borrowed for building or producing assets qualified for capitalizing, the amount that the

actually amount and its auxiliary expenses occurred in the current period minus the interest income or investment earnings

from temporary investment for the unused borrowed fund is used to determine capitalizing amount of borrowing costs.

As for general borrowing occupied for building or producing assets qualified for capitalization, amount of interest of

general borrowing to be capitalization is determined in accordance with the weighted average value that the cumulative

asset expenses more than the special borrowing multiplying by capitalization rate of general borrowing. The capitalizing

rate is determined in accordance with weighted average interest rate of general borrowing.

Where there is depreciation or premium of borrowing, depreciation or premium amount to be amortized in each

accounting period is determined according to the actual interest rate method, and amount of interest in each period is

adjusted.

19. Intangible assets

(1) Pricing of intangible assets

① The intangible assets are initially measured according to costs

The costs of purchasing intangible assets include purchasing price, relevant costs and other expenses directly

attributed to the assets to realize the pre-determined application. Where the price of purchasing intangible assets is

paid in delay out of the regular credit conditions and is of nature of financing, the cost of intangible assets is determined

according to present value of the purchasing price.

As for intangible assets acquired from the debtors to pay the debt in debt reconstruction, fair value of the intangible

assets is determined as accounting value, and the difference between book value of the reconstruction debt and the fair

value of the intangible assets used to pay the debt is accounted into current profits and losses.

Under the prerequisite of the non-monetary asset swap of business nature and fair value of swap-in or swap-out

assets measured reliably, accounting value of the non-monetary swap-in intangible assets is determined according to fair

value of the swap-out assets, unless definitive evidences show that fair value of the swap-in assets is more reliable; as for

non-monetary asset swap not satisfying the above prerequisites, book value of swap-out assets and payable taxes are

taken as cost of the swap-in intangible assets and is not confirmed as profits and losses.

Accounting value of the intangible assets acquired from assimilation and merging of enterprises under the same

control is determined according to book value of the merged party; accounting value of the intangible assets acquired

from assimilation and merging of enterprises not under the same control is determined according to fair value.

As for internal independently developed intangible assets, the costs include: materials consumed for developing

the intangible assets, labor costs, registration fees, amortization of patent right and franchised right used in the process

of development, interest cost satisfying capitalization conditions, and other direct costs enabling the intangible assets to

reach the pre-determined application.



assets refers to present value of economic benefits acquired from the amount deposited refunded or reduced from the

defined benefit plan.

At the end of the reporting period, service costs of the staff remuneration costs produced in the defined benefit

plan and the net amount of interest of net liabilities or net assets in the defined benefit plan are accounted into current

losses and profits or asset costs; changes of net liabilities or net assets of the defined benefit plan is re-measured and is

accounted into other comprehensive earnings, will not be recovered to profits and losses in the following-up accounting

period and can be transferred within the scope of equity.

Under the defined benefit plan, the past service costs are confirmed as current costs on the date of confirmation of

reconstruction costs or resignation material benefits for modifying the defined benefit plan, which is earlier.

The enterprise confirms settlement gains or losses in the defined benefit plan settlement. The gains or losses are the

differences of obligatory present value and settlement price of the defined benefit plan on the date of settlement.

(3) Accounting processing of dismissal material benefits

The liabilities of staff remuneration from the resignation material benefits are confirmed under the following two

circumstances, which is earlier, and are accounted into current profits and losses;

When the Enterprise cannot cancel the provided dismissal material benefits because of canceling the labor relations

or the cutoff suggestions;

When the Enterprise confirms relevant costs related to reconstruction of resignation material benefits.

Where the dismissal material benefits will be completely paid within 12 months after expiry of the annual reporting

period, relevant provisions on short-term remuneration are applied; where the dismissal material benefits cannot be paid

within 12 months after expiry of the annual reporting period, relevant provisions on long-term material benefits are applied.

(4) Accounting processing of other long-term staff remuneration

In terms of other long-term staff material benefits, where the defined contribution plan conditions are satisfied, the

clause 2 above is applied. Where the defined contribution plan is not satisfied, relevant provisions on the defined benefit

plan are applied, and net liabilities or net assets of other long-term staff material benefits are confirmed or measured.

At the end of the reporting period, service cost, net amount of net liabilities or net assets in the long-term staff material

benefits, and total net amount from change of re-measurement of net liabilities or net assets of the long-term staff

material benefits is accounted into current profits or losses or relevant assets costs.

23. Estimated liabilities

The actual obligations assumed by the Company because of providing guarantee, litigation, product quality assurance

and loss contract and other contingencies and exercising the obligations may result in economic benefits flowing out of

the Company and when the amount of the obligation can be measured reliably, the Company confirms such obligations as

estimated liabilities. The Company performs initial measurement of estimated liabilities according to the optimal estimate for

performing the actual obligations, and checks book value of the estimated liabilities on the date of balance sheet.

24. Payment of shares

(1) Type and accounting process of payment of shares

The payment of shares is the equity instruments granted or the transaction of liabilities based on the equity

instruments to acquire the staff’s service for the Company. The payment of shares is the payment of shares settled with

equity and the payment of shares settled with cash.

① Payment of shares with equity settlement

The stock option plan is the payment of shares settled with equity exchange for services provided by the staff,

and is measured with fair value of the equity instruments granted to the staff on the date of granting. The options are

exercised when services complete the waiting period or reach the specified conditions, the optimal estimate of the

exercisable equity instruments within the waiting period is taken as the basis, and fair value of the equity instruments is

accounted into relevant costs for the service acquired and the corresponding public reserve fund is added.

② Payment of shares with cash settlement

The stock value-added plan is the payment of shares settled with cash, and is measured with fair value of liabilities

determined in accordance with quantity of stock assumed by the Company. The payment of shares can be exercised

after the services complete the waiting period or satisfy the performance conditions. On each date of balance sheet within

the waiting period, based on optimal estimate of exercisable options, according to fair value of liabilities assumed by the

After the asset depreciation loss have been confirmed, depreciation or amortization costs of the depreciated assets

are adjusted in the future. In the remaining service life of the assets, book value of the assets is amortized systematically.

As for intangible assets with uncertain service life, intangible assets not reaching the usable conditions and goodwill

by merging, depreciation testing shall be carried out at the end of each year.

In terms of goodwill depreciation testing, the book value of goodwill from enterprise emerging is amortized to

relevant asset portfolio with reasonable methods; where the book value cannot be amortized to relevant asset portfolio,

the book value is amortized to relevant asset portfolio combinations. When book value of goodwill is amortized to relevant

asset portfolio or asset portfolio combination, amortization is made according to ratio of fair value of asset portfolio or

asset portfolio combination to total fair value of relevant asset portfolio or asset portfolio combination. Where fair value

cannot be measured reliably, amortization is made in accordance with ratio of book value of asset portfolio or asset

portfolio combination to total book value of relevant asset portfolio or asset portfolio combination.

When depreciation testing is carried out for asset portfolio or asset portfolio combination including goodwill, where

the asset portfolio or asset portfolio related to goodwill is depreciated, depreciation testing is made for asset portfolio or

asset portfolio combination exclusive of goodwill, amount recoverable is computed, comparison is made with the book

value, and corresponding depreciation losses are confirmed. Depreciation testing is made for asset portfolio or asset

portfolio combination including goodwill, book value (including book value of the amortized goodwill) of relevant asset

portfolio or asset portfolio combination and the amount recoverable are compared, if amount recoverable of relevant

asset portfolio or portfolio combination is lower than the book value, and depreciation losses of goodwill is confirmed.

Once the above Asset impairment losses have been confirmed, the amount of recovering the value will not be

recovered in the future.

21. Long-term costs to be amortized

As for costs occurred to be assumed in the period and future with period of amortization more than 1 year, including

improvement expenses for leased fixed assets for business, the costs are amortized as long-term costs to be amortized

according to the beneficial period. Where the long-term costs to be amortized cannot benefit the following accounting

years, the remaining values not amortized are transferred into current profits and losses.

22. Staff remuneration

The staff remuneration refers to various remuneration or compensation provided to obtain services provided by

the staff or canceling the labor relations, including short-term remuneration, post-resignation material benefits, dismiss

material benefits and other long-term staff material benefits.

(1) Accounting processing of short-term remuneration

During the accounting period that the staff serves the Company, the actually occurred short-term remuneration is

confirmed as liabilities, and is accounted into current profits or losses and relevant asset costs.

(2) Accounting processing of post-resignation material benefits

The post-resignation material benefits plan is classified into defined contribution plan and defined benefit plan.

During the period that the staff provides services to the Company, the amount deposited computed in accordance

with the defined contribution plan is confirmed as liabilities and is accounted into current profits or losses or relevant asset

costs. In accordance with the defined contribution plan, where all amount deposited will not be paid within 12 months

after expiry of the annual report period which the staff provide service, in accordance with market earnings rate of national

debt or high-quality corporate bonds on active market matching the defined benefit plan on the date of balance sheet, all

amount to be deposited is used to measure the staff remuneration with the discounted cash flow.

The Company discounts obligations of all defined benefit plans in accordance with the market earnings rate of

national debt or high-quality corporate bonds on active market corresponding to the defined benefit plan period and

currency on the date of balance sheet, including obligations of payment within 12 months after expiry of annual reporting

period which the staff provides service.

Where there is asset in the defined benefit plan, deficit or surplus that the obligatory present value of the defined

benefit plan minus fair value of the defined benefit plan is confirmed as net liabilities or net assets of the defined benefit

plan. Where there is surplus in the defined benefit plan, the enterprise measures net assets of the defined benefit plan

with the surplus of the defined benefit plan and the upper limit of assets, which is lower. Of them, the upper limit of the



(3) Transferring use right of assets

Interest income of the Company’s cash assets by others is determined in accordance with time and actual interest

rate of the cash used; as for the Company’s non-monetary assets used by the Company, the occurred use fee is

determined in accordance with the charging time and methods in accordance with relevant contracts and agreements.

(4) Building contract

On the date of balance sheet, where the result of building contract can be estimated reliably, contract income and

contract costs are confirmed in accordance with the completion percentage. The Company confirms completion progress

in accordance with the ratio of contract costs occurred to total contract cost. Where the result of building contract cannot

be estimated reliably and the contract cost can be recovered, the income of contract is confirmed in accordance with the

actually recovered cost and the contract costs are confirmed as contract costs in the period of occurrence; where the

contract costs cannot be recovered, contract costs are confirmed immediately when occurred and cannot be confirmed

as income of contract.

26. Government subsidy

The government subsidy is classified into government subsidy related to assets and government subsidy related to

earnings.

(1) Judgment basis and accounting processing of government subsidy related to assets

The government subsidy acquired by the Company for building or forming long-term asset is of government subsidy

related to assets.

The government subsidy related to assets is confirmed as deferred earnings, is allocated within service life of the

assets and accounted into current profits and losses.

(2) Judgment basis and accounting process of government subsidy related to earnings

The government subsidy except the government subsidy related to assets is the government subsidy related to

earnings. The government subsidy related to earnings are processed as follows:

① Where the government subsidy is used to compensate the Company’s expenses or losses in the future, the

government subsidy is confirmed as deferred earnings, and is accounted into current profits and losses in the period of

confirming relevant expenses.

② Where the government subsidy is used to compensate relevant costs or expenses occurred of the Company, the

government subsidy is accounted into current profits and losses.

The government subsidy is confirmed and measured in accordance with the actual amount received. Only definitive

evidences show that the subsidy is appropriated according to the quota standard and definitive evidences show that it

satisfies relevant terms and conditions on financial support and the financial support fund can be received, confirmation

and measurement are conducted in accordance with the amount receivable.

27. Deferred income tax assets/deferred income tax liabilities

The difference between book value of assets and liabilities and the taxing basis, and the temporary difference from

difference the book value of the taxing basis and the difference between the taxing basis for assets and liabilities not

confirmed are confirmed as deferred income tax assets and deferred income tax liabilities according to the assets and

liabilities methods.

Under general conditions, all temporary differences are confirmed as relevant deferred income tax. As for deductible

temporary difference, limited by the taxable income tax used to deduct the deductible temporary difference, relevant

income tax assets are confirmed. Besides, temporary difference related to initial confirmation of assets or liabilities related

to initial confirmation of goodwill and not affecting accounting profit and taxable income amount (or deductible losses) in

transaction are not confirmed as relevant deferred income tax assets or liabilities.

As for deductible losses and tax reduction carried forward to the following years, the corresponding deferred income

tax assets are confirmed limited by the taxable income amount to deduct deductible losses and taxes in the future.

Confirm deferred income tax liabilities from taxable temporary difference related to subsidiaries, joint venture and

cooperative enterprise, unless the Company controls the time of recovery of the temporary difference, and the temporary

difference will not be recovered in the foreseeable future. As for deductible temporary difference related to subsidiaries,

joint venture and cooperative enterprise, only when the temporary difference can be recovered from the foreseeable

Company, services acquired in the current period are accounted into costs or expenses, and corresponding liabilities are

added. On each date of balance sheet and each date of settlement before debt settlement, fair value of the liabilities are

re-measured, and the changes are accounted into current profits and losses.

(2) Determination of fair value of equity instruments

As for shares granted to the staff, the fair value is measured in accordance with market price of the company

shares, and adjustments are made in accordance with terms and conditions of the shares granted (exclusive of optional

conditions out of market conditions).

As for stock option granted to the staff, fair value of options are granted in accordance with the option pricing model.

(3) Confirm basis for optimal estimate of the exercisable equity instruments

On each date of balance sheet within the waiting period, make optimal estimate according to change of number

of staff qualified for exercising options and other subsequent information and modify quantity of exercisable equity

instruments.

(4) Processing of modifying and terminating the share payment plan

If the modification of the share payment plan increases fair value of the equity instruments granted, confirm

increasing of services acquired according to increasing of fair value of the equity instruments.

If increasing of the share payment increases quantity of equity instruments granted, the increased fair value of equity

instruments is confirmed as increasing of service acquired.

If the option exercising conditions are modified advantageous to the staff, such as lessening waiting period,

changing or modifying performance period (not market conditions), the Company considers the option exercising

conditions after disposing of the option exercising conditions.

If terms and conditions are modified by decreasing total amount of fair value by share payment or other forms

disadvantageous to the staff, accounting processing is applied to the service acquired as if no change occurs, unless

equity instruments granted have been cancelled completely or partially.

If the equity instruments granted are cancelled during the waiting period, the cancelled equity instruments granted

can be used as accelerated option exercising, amount confirmed in the remaining waiting period is immediately accounted

into current profits and losses, and Capital reserve is confirmed. Where the staff or other parties selects the non-exercisable

conditions but not satisfied during the waiting period, cancellation of the equity instrument granted is taken.

25. Income

(1) Sales of commodity

When commodities sold by the Company satisfy the following conditions, sales income is confirmed in accordance with

the amount of contract or agreement price received or to be received from the purchaser:①Main risks and remunerations

of the commodity risks are transferred to the purchaser;②Not retaining continuing management related to the title and not

applying effective control over the commodity sold;③The amount of income can be measured reliably; ④Relevant economic

benefits may flow into the enterprise; ⑤relevant occurred costs or costs to occur can be measured reliably.

According to requirements of the above principles, the Company selects different conditions to confirm income

based on various sales forms and characteristics:

① A single piece of equipment, delivered in accordance with the Contract, and the Company confirms income after

issuing invoice (as for a single piece of equipment sold to other countries, the Company confirms income after customs

clearance is completed and special invoice for export has been issued).

② Income of project is confirmed in accordance with the project progress.

③ Income of clean gas is confirmed in accordance with gas supply volume.

(2) Supply of labors

Where the result of labor supplied on the date of balance sheet can be estimated reliably, the income of labor

supplied is confirmed in accordance with the completion percentage. The Company confirms completion progress of

the labor supplied according to the ratio of occurred cost to total cost. Where the result of labor supplied on the date

of balance sheet cannot be estimated reliably and the occurred labor costs can be compensated, the labor income is

confirmed in accordance with the occurred labor cost, and is carried forwards into labor cost with the same amount;

where the occurred labor costs cannot be compensated, the occurred labor costs are accounted into current profits and

losses, and the income of labor cannot be confirmed.



The unrealized financing earnings is confirmed as the current financing revenue with the actual interest rate method

during the leasing period. Or the rent is accounted into current profits and losses when occurred.

29. Other key accounting policy and accounting estimate

(1) Business termination

Business termination refers to a composition disposed of by the Company, classified as sell-waiting and individually

identified in operating and preparing the financial statement when one of the following conditions is satisfied: ①The

composition represents an independent main business or main business area;②The composition is a part of an

independent main business or a business area;③The composition is the subsidiary acquired for re-sales.

Refer to Annotation IV. 13 “Classified as Sell-waiting Assets” of Annotation on accounting process of business

termination.

(2) Debt reconstruction

As the debt reconstruction for the creditor’s recording the debtors’ repaying the debt, the difference between book

value of the reconstructed creditor’s right and the cash received is accounted into current profits and losses/where the

debt is liquidated not with cash assets, the difference between book value of the reconstructed creditor’s right and the

fair value of non-cash assets received is accounted into current profits and losses. Where the depreciation reserve is

accrued for the reconstructed creditor’s right, the above difference is used to offset the accrued depreciation reserve;

where insufficient, it is accounted into current profits and losses.

(3) Non-monetary asset swap

If the non-monetary asset swap is of business nature and fair value of the swap-in or swap-out assets can be

measured reliably, fair value of the swap-out assets (except definitive evidences show that fair value of the swap-in asset

is more reliable) and relevant taxes payable are taken as cost of swap-in costs, and the difference between the fair value

and the book value of the swap-out assets is accounted into current profits and losses. If the non-monetary asset swap

does not satisfy the above conditions, the book value of the swap-out assets and relevant taxes payable are taken as

costs of swap-in assets and profits and losses are not confirmed.

30. Change of significant accounting policy and accounting estimate

(1). Change of significant accounting policy

□Applicable √Not applicable

The Company does not involve change of accounting policy in the reporting period.

(2). Change of significant accounting estimate


The Company does not involve change of accounting policy in the reporting period.

VI. Tax

1. Main tax types and tax rate

Tax types Taxing basis Tax rate

VAT Taxable income 13%、17%

Business tax Taxable income 5%

Urban maintenance and construction tax Taxable turnover tax 7%

Education fee extra Taxable turnover tax 3%

Local education fee extra Taxable turnover tax 2%

Dike fee Taxable income 0.72‰

Corporate income tax Taxable corporate income 15%、25%

future and can be used to deduct taxable income amount of the deductible temporary difference in the future, the

deferred income tax assets are confirmed. On the date of balance sheet, as for the deferred income tax assets and the

income tax liabilities, according to the law of tax, the applicable rate in the period of recovering assets or liquidating

liabilities shall be applied.

Except other comprehensive earnings directly accounted or current income tax related to transaction and events of

shareholders’ equity and deferred income tax accounted into other comprehensive earnings or shareholders’ equity, and

the book value of goodwill adjusted from deferred income tax from enterprise merging, other current income taxes and

deferred income taxes or costs are accounted into current profits and losses.

On the date of balance sheet, book value of the income tax assets is reviewed. If sufficient taxable amount cannot

be obtained to deduct interests of the deferred income tax assets, write down book value of the deferred income tax

assets. When the sufficient taxable income amount can be obtained, the written-down amount can be recovered.

When given the statutory right of settling with net amount and intended to settle with net amount or acquire assets

or liquidate liabilities, the Company’s current income tax assets and current income tax liabilities are listed with the net

amount after deduction.

When given the statutory right of settling the current income tax assets and current income tax liabilities with net

amount, and the deferred income tax assets and the deferred income tax liabilities are income taxes levied by the same

tax levying authorities against the same taxpayers or against different taxpayers, within each key recovery period of

deferred income tax assets and liabilities, when the taxpayers intend to settle the current income tax assets or liabilities or

acquire assets and liabilities simultaneously, the deferred income tax assets and deferred income tax liabilities are listed

with the net amount after deduction.

28. Leasing

The financing leasing is the leasing transferring all risks and remunerations related to the asset ownership, and the

ownership may be transferred or not transferred finally. Other leasing except the financing leasing is operation leasing.

(1) The Company records business leasing as lessee

Rent expenses of business leasing is accounted into relevant asset costs or current profits and losses in

accordance with the straight-line method in the period of leasing. The initial direct costs are directly accounted into

current profits and losses, or the rent is accounted into current profits and losses when occurred.

(2) The Company records business leasing as lessor

Rent income of business leasing is confirmed as current profits and losses in accordance with the straight-line

method. The initial direct costs with significant amount are capitalized when occurred, and are accounted into current

profits and losses in accordance with the basis of rent confirmation in the leasing period; initial direct costs with

insignificant amount are accounted into current profits or losses when occurred; or accounted into current profits and

losses when occurred.

(3) The Company records financing leasing as lessee

On the date of commencement of the leasing period, fair value of the leasing assets or the minimum present value of

leasing payment is taken as accounting value of the leased assets, which is lower, the minimum leasing payment is taken

as accounting value of the long-term payables, and the difference is taken as not confirmed financial costs. Besides,

the initial direct costs occurred in leasing negotiation and leasing contract signing and attributed to the leasing project

are accounted into values of the leased assets. The balance that the minimum leasing payment minus the not confirmed

financing costs is listed as long-term liabilities and long-term liabilities due in 1 year.

As for the not confirmed financial costs, the actual interest rate method is used to confirm the current financing

costs with the interest rate methods. The rent is accounted into current profits and losses when occurred.

(4) The Company records financing leasing as lessor

On the date of commencement of leasing, the sum of the minimum leasing payment and the initial direct cost is

taken as accounting value of the financing leasing payment receivable, and unguaranteed remaining value is recorded;

the difference between the sum of minimum leasing receivable, initial direct cost and unguaranteed remaining value

and the sum of the present value is confirmed as not realized financing earnings. The balance that the financing leasing

payment receivable minus the not realized financing earnings is listed as long-term receivables and non-current assets

due in one year.



VII. Annotation to items of consolidated financial statements

1. Monetary fund Unit: yuan, currency: RMB

Item Closing balance Opening balance

Cash on hand 1,398,467.47 1,028,897.06

Bank deposit 584,658,790.08 256,919,326.02

Other monetary fund 142,987,636.89 89,928,984.07

Total 729,044,894.44 347,877,207.15

Wherein: total amount deposited in overseas countries 4,837,560.41 22,520,349.93

Remarks: Closing balance of other monetary fund includes acceptance draft security of 120,091,111.36 yuan, guarantee security of 14,564,525.53 yuan, equipment mortgage security of 3,336,000.00 yuan, and the Buyer’s credit loan security of 4,996,000.00 yuan.

2. Instruments receivables (1) Classifying list of notes receivable√Applicable □Not applicable



Bank acceptance instruments 141,247,442.11 131,626,100.76

Commercial acceptance instruments 6,242,279.53

Total 147,489,721.64 131,626,100.76

(2) Instruments receivables endorsed or discounted by the Company but undue in the balance sheet at the end of the period

√Applicable □Not applicableUnit: yuan, currency: RMB

Item Amount terminated for confirmation

at the end of the period

Amount not terminated for

confirmation at the end of the period

Bank acceptance instruments 404,076,805.08

Commercial acceptance instruments

Total 404,076,805.08

3. Receivables (1) Classifying disclosure of receivables


Category

Closing balance Opening balance

Book balance Non-performing debt reserve

Book value


Book valueAmount

Ratio

(%)Amount

Accrual

ratio(%)Amount

Ratio

(%)Amount

Accrual

ratio(%)

Receivables with significant single amount and non-performing debt reserve accrued

98,040,134.28 7.23 98,040,134.28 100.00 3,680,000.00 0.42 3,680,000.00 100.00

Financing and leasing equipment receivable overdue

141,636,182.24 10.45 28,327,236.45 20.00 113,308,945.79 106,830,202.50 12.22 21,366,040.50 20.00 85,464,162.00

Receivables with non-performing debt reserve accrued according to credit risk feature portfolio

1,093,441,801.02 80.66 101,927,360.29 9.32 991,514,440.73 746,709,036.88 85.41 78,139,090.60 10.46 668,569,946.28

Receivables with

insignificant single

amount and non-

performing debt reserve

accrued

22,523,624.04 1.66 22,523,624.04 100.00 17,017,256.78 1.95 17,017,256.78 100.00

Total 1,355,641,741.58 100.00 250,818,355.06 18.50 1,104,823,386.52 874,236,496.16 100.00 120,202,387.88 13.75 754,034,108.28

Where taxpayers with different corporate income tax rates exist, provide details.

√Applicable □Not applicable

Taxpayer Tax rate

KEDA Clean Energy Co., Ltd. 15%

KEDA (Anhui) Industrial Co., Ltd. 15%

KEDA (Anhui) Clean Energy Co., Ltd. 15%

Foshan Henglitai Machinery Co., Ltd. 15%

Wuhu KEDA Suremaker Co., Ltd. 15%

Foshan KEDA Hydraulic Machinery Co., Ltd. 15%

Henan KEDA Dongda International Engineering Co., Ltd. 15%

Jiangsu Kehang Environmental Protection Science & Technology Co., Ltd. 15%

Foshan KEDA Stone Machinery Co., Ltd. 25%

Anhui KEDA Aer Compressor Co., Ltd. 25%

Changsha Aer Compressor Co., Ltd. 25%

Emeishan KEDA Clean Energy Co., Ltd. 25%

Shenyang KEDA Clean Energy Gas Co., Ltd. 25%

Linyi KEDA Clean Energy Co., Ltd. 25%

Foshan Do Better Machinery Co., Ltd. 25%

Foshan Henglitai Labor Dispatching Co., Ltd. 25%

Maanshan KEDA Xinmingfeng Engineering Co., Ltd. 25%

Anhui Jiufu New Wall Materials Co., Ltd. 25%

Anhui Xincheng Investment Co., Ltd. 25%

Guangdong Xincheng Financing and Leasing Co.. Ltd. 25%

Anhui Xincheng Financing and Leasing Co., Ltd. 25%

Ningxia Kehang Environmental Protection Engineering Co., Ltd. 25%

Anhui KEDA Clean Energy New Materials Co., Ltd. 25%

Zhangzhou Juming Graphite Co., Ltd. 25%

2. Tax preferences

KEDA Clean Energy Co., Ltd. (certificate No. : GR201444000454) and Foshan Henglitai Machinery Co., Ltd.

(certificate No.: GR201444000257) were certified as hi-tech enterprises of Guangdong Province for 2014, with corporate

income tax rate of 15%.

KEDA (Anhui) Industrial Co., Ltd. (certificate No.: GR201534000004) was certified as hi-tech enterprise of Anhui

Province for 2014, with corporate income tax rate of 15%.

KEDA (Anhui) Clean Energy Co., Ltd. (certificate No.: GF201334000072) was certified as hi-tech enterprise of Anhui

Province for 2013, with corporate income tax rate of 15%.

Wuhu KEDA Suremaker Co., Ltd. was certified as hi-tech enterprise of Anhui Province for 2015 (certificate No.:

GR201534000376), with corporate income tax rate of 15%.

Foshan KEDA Hydraulic Machinery Co., Ltd. was certified as the 2nd lot of hi-tech enterprise of Guangdong

Province for 2013 (certificate No.: GR201344000624), with corporate income tax rate of 15%.

Henan KEDA Dongda International Engineering Co., Ltd. was certified as hi-tech enterprise of Henan Province for

2015 (certificate No.: GF201541000086), with corporate income tax rate of 15%.

Jiangsu Kehang Environmental Protection Science & Technology Co., Ltd. was certified as hi-tech enterprise of

Jiangsu Province for 2014 (certificate No.: GR201432002192), with corporate income tax rate of 15%.



Details of writing-off significant receivables


Client Nature of receivable

Amount written off

Cause of writing-off

Writing-off procedures performed

Whether caused by related transactions

Client AGoods payment

6,581,974.38 UnrecoverableNon-performing debt writing-off approval procedure

No

Client BGoods payment


No

Client CGoods payment


No

Client DGoods payment


No

Client EGoods payment


No

Client FGoods payment


No

Client GGoods payment

541,722.04 UnrecoverableNon-performing debt writing-off approval procedure

No

Client HGoods payment


No

Client IGoods payment


No

Client JGoods payment


No

Client KGoods payment

360,000.00 Unrecoverable Non-performing debt writing-off approval procedure

No

Total / 16,336,632.55 / / /

(4) Receivables of top 5 debtors according to closing balance

Client Relations with the company Amount owe (yuan) Rate of total receivables (%)

Client 1 Non-related party 93,990,000.00 6.93





Total 317,184,637.28 23.40

Remarks 1: Of the receivables, there is no shareholders’ own with 5% or more voting shares of the Company;

Remarks 2: Closing balance of receivable is increased by 46.52% than the opening balance, mainly caused by merging Jiangsu

Kehang Environmental Protection Science & Technology Co., Ltd.

4. Accounts prepaid (1) Listing of accounts prepaid according to debt age


Debt age Closing balance Opening balance

Amount Ratio(%) Amount Ratio(%)

Within 1 year 179,036,961.81 85.06 108,004,997.94 84.29

1 to 2 years 23,640,627.18 11.23 16,009,561.34 12.49

2 to 3 years 4,024,798.28 1.91 2,391,957.66 1.87

More than 3 years 3,784,087.06 1.80 1,721,524.42 1.35

Total 210,486,474.33 100.00 128,128,041.36 100.00

Receivables with single significant amount with non-performing debt reserve accrued separately


Receivable (for each client)

Closing balance

Receivable Non-performing

debt reserve

Accrual

ratio(%) Cause of accrual

Client A 33,661,733.88 33,661,733.88 100.00 Client’s insolvency

Client B 24,728,412.18 24,728,412.18 100.00 Client’s insolvency

Client C 23,533,759.06 23,533,759.06 100.00 Client’s filing bankruptcy

Client D 9,501,666.85 9,501,666.85 100.00 Client insolvency

Client E 3,480,000.00 3,480,000.00 100.00 Client’s filing bankruptcy

Client F 3,134,562.31 3,134,562.31 100.00 Client insolvency

Total 98,040,134.28 98,040,134.28 / /

In the combination, receivables with non-performing debt accrued according to the debt age analysis method:


Debt age

Closing balance

Accounts

receivable

Non-performing

debt reserve

Accrual ratio

(%)

Within 1 year 860,717,402.50 43,035,870.13 5.00

1 to 2 years 142,511,931.82 28,502,386.36 20.00

2 to 3 years 49,057,098.46 9,811,419.69 20.00

More than 3 years 41,155,368.24 20,577,684.11 50.00

Total 1,093,441,801.02 101,927,360.29

In the combination, receivables with non-performing debt reserve accrued with balance percentage method:


Balance percentage

Closing balance

Receivables Non-performing

debt reserve

Accrual ratio

(%)

Financing and leasing companies 141,636,182.24 28,327,236.45 20.00

Total 141,636,182.24 28,327,236.45

(2) Details of accrued, recovered or carried back in this period

Non-performing debt reserve in this period is 132,943,964.54 yuan; and non-performing debt reserve recovered or

carried back in this period is 0.

(3) Details of receivables written off in this period


Item Amount written off

Receivables actually written off 23,670,373.56



In the combination, other receivables with non-performing debt reserve accrued in accordance with the debt age

analysis method:


Debt age Closing balance

Other receivables Non-performing

debt reserve Accrual ratio

(%)

Within 1 year 59,692,094.14 2,984,604.71 5.00

1 to 2 years 11,994,181.66 2,398,836.33 20.00

2 to 3 years 2,571,658.93 514,331.79 20.00

More than 3 years 4,652,373.20 2,326,186.60 50.00

Total 78,910,307.93 8,223,959.43

Of combinations, other receivables with non-performing debt reserve accrued with other methods:


Portfolio Book balance (yuan) Non-performing debt reserve

Bidding security 4,382,000.00

Export rebate 25,905,556.43

Total 30,287,556.43

(2) Details of non-performing debt reserve accrued, recovered or carried back in this period Non-performing debt reserve accrued in this period is 762,379.92 yuan; and the non-performing debt reserve

recovered or carried back in this period is 0. (3) Details of other receivables of the top 5 debtors for closing balance √Applicable □Not applicable


Company Nature of fund Closing

balanceDebt age

Rate of total closing

balance of other

receivables (%)

Closing balance

of non-performing

debt reserve

Jiangsu Yanfu Construction Group Co., Ltd.

Current accounts

35,000,000.00

Within 1 year1 to 2 years

24.24

Liaoning Faku Economic Development Zone Management Committee

Current accounts

30,070,075.28Within 1 year

20.83 1,503,503.76

Company A with current accounts

Export rebate 20,005,724.27Within 1 year

13.86

Company B with current accounts

Export rebate 5,899,832.16Within 1 year

4.09

Company C with current accounts

Current accounts

3,600,000.001 to 2 years

2.49 720,000.00

Total / 94,575,631.71 / 65.51 2,223,503.76

Remarks 1: Of other receivables, there is no arrears by shareholders with 5% or more voting shares of the Company.

Remarks 2: Other receivables with single significant amount with non-performing debt reserve accrued 35 million yuan is caused

by merging Jiangsu Kehang Environmental Protection Science & Technology Co., Ltd. The Company’s former

shareholder Liu Huaiping provided guarantee for loan to Jiangsu Yanfu Construction Group Co., Ltd. with self-owned

land of Jiangsu Zhongke Energy Conservation and Environmental Protection Technology Co., Ltd. (certificate No.:

T.H.G.Y. (2010) No.601757), workshop (certificate No.: Y.Q.F.Z.H.Q.N.Z. No.007979) and equipment.

Remarks 3: Closing balance of other receivables is increased by 251.77% compared with the opening balance, mainly caused

by the subsidiary Shenyang KEDA Clean Energy’s lending 30.0701 million yuan to Liaoning Faku Economic

Development Zone Management Committee, Jiangsu Kehang’s lending 35.0000 million yuan to Jiangsu Yanfu

Construction Group Co., Ltd. and the parent company’s newly increased export rebate of 20.0057 million yuan.

(2) Accounts prepaid of the top 5 prepaying entities for closing balance

Debtor Relation with

the Company

Amount owe

(yuan)

Rate of total accounts

prepaid (%) Causes for not settled

Supplier ANon-related

party 13,000,000.00 6.18 Within delivery period of the Contract

Supplier BNon-related

party11,068,550.00 5.26 Within delivery period of the Contract

Supplier CNon-related


Supplier DNon-related


Supplier ENon-related


Total 53,581,109.93 25.46

Remarks 1: Closing balance of accounts prepaid does not include owe by shareholders with 5% or more voting shares of the

Company.

Remarks 2: Closing balance of accounts pre-paid is increased by 64.28% compared with the opening balance, mainly caused by

merging Jiangsu Kehang Environmental Protection Science & Technology Co., Ltd.

5. Other receivables

(1) Disclosure of classification of other receivables Unit: yuan, currency: RMB

Category



Book value


Book valueAmount

Ratio

(%)Amount

Accrual

ratio (%)Amount

Ratio

(%)Amount

Accrual

ratio

(%)


35,000,000.00 24.24

Export rebate 25,905,556.43 17.94 25,905,556.43 662,787.24 1.43 662,787.24

Bidding security 4,382,000.00 3.04 4,382,000.00 3,412,500.00 7.37 3,412,500.00

Other receivables with non-performing debt reserve accrued according to credit risk feature portfolio

78,910,307.93 54.66 8,223,959.43 10.42 70,686,348.50 40,720,008.02 87.96 6,141,579.51 15.08 34,578,428.51

Receivables with insignificant single amount and non-performing debt reserve accrued

180,000.00 0.12 180,000.00 100.00 1,500,000.00 3.24 1,500,000.00 100.00

Total 144,377,864.36 100.00 8,403,959.43 5.82 135,973,904.93 46,295,295.26 100.00 7,641,579.51 16.51 38,653,715.75

Other receivables with single significant amount with non-performing debt reserve accrued at the end of the period


Other receivables (Subject to Company)

Closing balance

Other

receivables

Non-performing

debt reserve

Ratio of

accrual

Cause of

accrual

Jiangsu Yanfu Construction Group Co., Ltd. 35,000,000.00 Refer to

Remarks 2

Total 35,000,000.00 / /



9. Long-term receivables


(1) Long-term receivables: Unit: yuan, currency: RMB

Item

Closing balance Opening balanceRange of

discounting

rateBook balance

Non-

performing

debt reserve

Book value Book balance

Non-

performing

debt reserve

Book value

Financing and

leasing payment 380,428,530.53 380,428,530.53 469,000,529.24 469,000,529.24

Wherein: unrealized

financial earnings 19,919,480.99 19,919,480.99 33,855,004.74 33,855,004.74

Total 380,428,530.53 380,428,530.53 469,000,529.24 469,000,529.24

10. Long-term equity investment:


Invested partyOpening

balance

Change from increasing or decreasing during the period

Closing

balance

Closing

balance of

depreciation

reserve

Investment

increased

Investment

decreased

Gains and

losses

confirmed

under the

equity law

Other

comprehensive

earning

adjustment

Other

equity

changes

Cash

dividend

or profit

declared or

issued

Depreciation

reserve

accrued

Others

I. Joint venture

II. Cooperative

enterprise

Jiangyin Tianjiang

Pharmaceutical Co., Ltd. 209,889,585.21 259,968,376.83 50,078,791.62

Guangdong Taiwei Digital

Ceramics Printing Co.,

Ltd.

8,258,025.03 7,694,126.51 -59,413.57 504,484.95

Subtotal 218,147,610.24 267,662,503.34 50,019,378.05 504,484.95

Total 218,147,610.24 267,662,503.34 50,019,378.05 504,484.95

Remarks: In accordance with the Agreement on Transfer of Equity of Jiangyin Tianjiang Pharmaceutical Co., Ltd. signed with

China TCM Co., Ltd. on December 31, 2014, the Company sold 9.6732% equity of Jiangyin Tianjiang Pharmaceutical

Co., Ltd. to China TCM Co., Ltd., and the procedure for change at the administration for industry and commerce was

completed on October 30, 2015.

11. Fixed assets

(1) Particulars of fixed assets Unit: yuan, currency: RMB

ItemProperty and

building

Machines and

equipment

Transport

tools

Office

equipment Total

I. Original book value

1.Opening balance 948,744,269.45 1,161,253,845.13 25,743,209.67 40,100,715.89 2,175,842,040.14

2.Increment in this period 284,057,326.60 204,986,016.42 9,217,264.95 18,146,598.97 516,407,206.94

(1)Purchasing 7,254,953.35 30,650,252.81 3,655,181.60 2,997,163.44 44,557,551.20

(2)Transfer from projects under

construction 62,809,695.14 86,790,559.41 5,554,466.39 155,154,720.94

(3)Increment from enterprise

merging 213,992,678.11 87,545,204.20 5,562,083.35 9,594,969.14 316,694,934.80

3.Decrement in this period 6,146,919.79 93,641,014.81 4,835,382.78 4,333,159.10 108,956,476.48

(1)Disposal or scrapping 6,146,919.79 93,641,014.81 4,835,382.78 4,333,159.10 108,956,476.48

4.Closing balance 1,226,654,676.26 1,272,598,846.74 30,125,091.84 53,914,155.76 2,583,292,770.60

6. Stock

(1) Classification of stock Unit: yuan, currency: RMB

Item


Book value Depreciation

reserveBook value Book value

Depreciation

reserveBook value

Raw materials 209,163,792.09 209,163,792.09 194,348,627.87 442,792.19 193,905,835.68

Goods in process 745,263,004.26 745,263,004.26 678,791,340.52 678,791,340.52

Stock commodity 325,828,170.32 325,828,170.32 319,339,491.00 1,191,437.45 318,148,053.55

Commodity shipped 30,916,768.78 30,916,768.78 21,707,966.58 21,707,966.58

Consumable biological

assets

Total 1,311,171,735.45 1,311,171,735.45 1,214,187,425.97 1,634,229.64 1,212,553,196.33

(2) Stock revaluation reserve Unit: yuan, currency: RMB

Item

Opening

balance

Increment in

this period

Decrement in

this period

Closing

balanceAccrued Others

Carried back

or written off Others

Raw materials 442,792.19 442,792.19

Goods in process

Stock commodity 1,191,437.45 1,191,437.45

Commodity shipped

Total 1,634,229.64 1,634,229.64

Remarks: Stock revaluation reserve is decreased in this period, caused by deregistration of Anhui Jiufu New Wall Materials Co.,

Ltd. and the accrued stock depreciation losses are written-off.

7. Non-current assets due in 1 year Unit: yuan, currency: RMB


Financing and leasing 1,136,341,034.72 1,279,002,174.13

Wherein: earnings of financing and leasing not realized 63,045,595.58 99,414,289.82

Total 1,136,341,034.72 1,279,002,174.13

8. Other current assets Unit: yuan, currency: RMB


Input tax of value-added tax to be deducted 139,314,656.82 125,133,109.50

Financing products by bank 107,000,000.00

Total 139,314,656.82 232,133,109.50

Remarks: Closing balance of other current assets is decreased by 39.99% than the opening balance 39.99%, mainly caused by

the bank financing products due and redemption.



(2) Change of key projects under construction in this period

√ Applicable □ Not applicable Unit: yuan, currency: RMB

Project Budget Opening

balance

Amount

increased in

this period

Amount

transferred into

fixed assets in

this period

Other

decrement

in this

period

Closing

balance

Ratio of

cumulative

investment

to budget

(%)

Project

progress

(%)

Cumulative

amount of

interest

capitalization

Wherein:

amount of

interest

capitalization

in this period

Interest

capitalization

rate in this

period (%)

Fund

source

R & D Building of

Sanshui Base of

Henglitai

35,000,000.00 30,161,683.68 9,443,574.10 39,605,257.78 120.47 100.00

Anhui Xincheng

Mansion 50,000,000.00 33,697,305.87 14,599,013.91 199,726.00 48,096,593.78 96.59 96.59

Total 85,000,000.00 63,858,989.55 24,042,588.01 39,804,983.78 48,096,593.78 / / / /

13. Intangible assets

(1) Information of intangible assets Unit: yuan, currency: RMB

Item Land use right Application

software Patent right

Trademark

right

Non-patented

technology Total

I. Original book value

1.Opening balance 328,257,274.49 15,395,935.99 47,987,600.00 1,639,800.00 4,500,000.00 397,780,610.48

2.Increment in this period 114,259,080.52 758,324.79 18,608,457.27 133,625,862.58

(1)Purchasing 37,002,468.80 153,846.16 37,156,314.96

(2)Increment from enterprise merging 77,256,611.72 604,478.63 18,608,457.27 96,469,547.62

3.Decrement in this period

(1)Disposal

4.Closing balance 442,516,355.01 16,154,260.78 66,596,057.27 1,639,800.00 4,500,000.00 531,406,473.06

II. Cumulative amortization

1.Opening balance 37,481,401.71 11,199,527.53 12,055,424.49 903,205.01 900,000.00 62,539,558.74

2.Increment in this period 9,214,535.32 1,809,804.18 6,577,482.98 157,841.64 3,600,000.00 21,359,664.12

(1)Accrual 6,652,344.02 1,625,681.39 5,647,344.26 157,841.64 3,600,000.00 17,683,211.31

(2)Increment from enterprise merging 2,562,191.30 184,122.79 930,138.72 3,676,452.81


4.Closing balance 46,695,937.03 13,009,331.71 18,632,907.47 1,061,046.65 4,500,000.00 83,899,222.86

III. Depreciation reserve

1.Opening balance

2.Increment in this period

(1)Accrual


(1)Disposal

4.Closing balance

IV. Book value

1.Closing book value 395,820,417.98 3,144,929.07 47,963,149.80 578,753.35 447,507,250.20

2.Closing book value 290,775,872.78 4,196,408.46 35,932,175.51 736,594.99 3,600,000.00 335,241,051.74

ItemProperty and

building

Machines and

equipment

Transport

tools

Office

equipment Total

II. Cumulative depreciation

1.Opening balance 192,578,725.59 305,667,327.30 16,826,884.20 23,715,254.21 538,788,191.30

2.Increment in this period 71,759,573.46 91,871,707.75 7,520,712.06 12,067,203.29 183,219,196.56

(1)Accrual 43,132,421.84 76,718,622.56 3,678,695.92 5,530,577.08 129,060,317.40

(2)Increasing from enterprise

merging 28,627,151.62 15,153,085.19 3,842,016.14 6,536,626.21 54,158,879.16

3.Amount decreased in this period 4,506,591.67 34,937,422.60 4,196,499.92 3,409,248.34 47,049,762.53

(1)Disposal or scrapping 4,506,591.67 34,937,422.60 4,196,499.92 3,409,248.34 47,049,762.53

4.Closing balance 259,831,707.38 362,601,612.45 20,151,096.34 32,373,209.16 674,957,625.33

III. Depreciation reserve

1.Opening balance

2.Increment in this period


4.Closing balance

IV. Book value

1.Closing book value 966,822,968.88 909,997,234.29 9,973,995.50 21,540,946.60 1,908,335,145.27

2.Opening book value 756,165,543.86 855,586,517.83 8,916,325.47 16,385,461.68 1,637,053,848.84

12. Projects under construction


(1) Projects under construction Unit: yuan, currency: RMB

Item


Book balanceDepreciation

reserve Book value Book balance

Depreciation

reserve Book value

Equipment and installation 8,330,699.02 8,330,699.02 19,784,748.21 19,784,748.21

Reconstruction of workshop

of KEDA (Anhui) Industrial

Plant

8,543,439.40 8,543,439.40

Property and building of

Shenyang KEDA Clean

Energy

893,680.00 893,680.00

Xianyong Workshop of

Guanglong of KEDA

Industrial Plant

3,652,085.37 3,652,085.37

R & D Building of Sanshui

Base of Henglitai 30,161,683.68 30,161,683.68

Artificial stone engineering

and experimenting center 8,000,136.34 8,000,136.34

Anhui Xincheng Mansion 48,096,593.78 48,096,593.78 33,697,305.87 33,697,305.87

Workshop of KEDA (Anhui)

Clean Energy 5,537,235.50 5,537,235.50

Other sporadic projects 5,505,798.60 5,505,798.60 11,653,648.10 11,653,648.10

Total 61,933,091.40 61,933,091.40 121,923,962.47 121,923,962.47



(2) Deferred income tax liabilities not deducted


Item


Taxable temporary

difference

Deferred income

tax liabilities

Taxable temporary

difference

Deferred income

tax liabilities

Increased value of asset

appraisal of Henglitai 24,533,351.52 3,680,002.70 26,775,170.96 4,016,275.62


appraisal of Xinmingfeng27,868,006.86 4,180,201.03 31,460,916.63 4,730,570.88


appraisal of Dongda

Tailong

15,005,582.69 2,250,837.41 16,990,402.77 2,548,560.42

Increased value of Jiangsu

Kehang 70,672,951.39 11,168,672.77

Total 138,079,892.46 21,279,713.91 75,226,490.36 11,295,406.92

□ Applicable √ Not applicable

(3) Details of deferred income tax assets not confirmed



Deductible losses 462,446,121.47 278,172,505.14

Total 462,446,121.47 278,172,505.14

(4) Deductible losses of deferred income taxes not confirmed will be due in the following years


Year Closing amount Opening amount Remarks

Year 2016 9,275,793.04 9,275,793.04

Year 2017 20,430,516.42 24,604,354.69

Year 2018 85,428,494.73 88,091,772.15

Year 2019 149,440,703.15 156,200,585.26

Year 2020 197,870,614.13

Total 462,446,121.47 278,172,505.14 /

16. Short-term loan


(1) Classification of short-term loan Unit: yuan, currency: RMB


Guaranteed loan 200,974,904.37 462,324,000.00

Credit loan 152,780,400.00 344,310,400.00

Total 353,755,304.37 806,634,400.00

14. Goodwill


(1) Original book value of goodwill Unit: yuan, currency: RMB

Invested party or goodwill description Opening

balance

Increment in this period Decrement in this periodClosing balance

Enterprise merging Others Disposal Others

Foshan Henglitai Machinery Co., Ltd. 187,915,447.25 187,915,447.25

Anhui KEDA Xinmmingfeng Industrial Co., Ltd. 189,095,543.17 189,095,543.17

Changsha Aer Compressor Co., Ltd. 18,823,759.31 18,823,759.31

Henan KEDA Dongda Engineering Co., Ltd. 232,664,477.89 232,664,477.89

Foshan Do Better Machinery Co., Ltd. 14,811,525.16 14,811,525.16

Jiangsu Kehang Environmental Protection Co., Ltd. 75,596,829.84 75,596,829.84

Total 643,310,752.78 75,596,829.84 718,907,582.62

(2) Impairment of Goodwill Unit: yuan, currency: RMB

Invested party or goodwill descriptionOpening

balance

Increment in this period Decrement in this period Closing balance

Accrual Disposal

Changsha Aer Compressor Co., Ltd. 5,223,932.12 5,223,932.12

Wuhu KEDA Suremaker Co., Ltd. 65,407,924.98 65,407,924.98

Total 5,223,932.12 65,407,924.98 70,631,857.10

When depreciation testing is carried out for goodwill, according to profit forecast for the asset portfolio in the future,

the corporate free cash model of the earnings discount method is adopted.

All shareholders’ equity value＝overall corporate value-value of interest-bearing debt

Overall corporate value＝business asset value + overage asset value +non-business assets value

Business assets value (Free cash flow of enterprise) =after-tax net profit + depreciation and amortization+ interest

expenses (after deduction of tax influences)-capital expenses-increment of operation capital.

This appraisal reflects after-tax interest rate of relevant asset portfolio for specific risk 11.5% as discounting rate,

and the discounting rate is determined in accordance with the weighted average asset cost appraisal model.

At the end of the reporting period, through testing, goodwill depreciation of 65,407,924.98 yuan is accrued for

Xinmingfeng Company, and Nanjing Ruixingbo Asset Appraisal Co., Ltd. appraised recoverable amount of the asset

portfolio and issued the appraisal report of R.X.B (2016) No.107 on March 31, 2015. No depreciation was found in testing

for other companies.

15. Deferred income tax assets/deferred income tax liabilities

(1) Deferred income tax assets not deducted


Item


Taxable temporary

difference

Deferred income

assets

Taxable temporary

difference

Deferred income

assets

Asset depreciation reserve 259,222,314.49 50,881,689.67 127,838,967.39 19,822,602.81

Profits not realized in

internal transactions 20,598,875.58 5,149,718.90 22,163,347.26 5,540,836.82

Deductible losses 31,774,028.16 7,943,507.04

Government subsidy 17,350,000.00 2,910,500.00

Total 297,171,190.07 58,941,908.57 181,776,342.81 33,306,946.67



18. Payables

(1) Listing of payables

√ Applicable □ Not applicableUnit: yuan, currency: RMB


Within 1 year 1,220,258,038.25 729,062,985.65

1 to 2 years 107,239,208.12 67,691,466.35

2 to 3 years 27,210,348.49 36,718,904.62

More than 3 years 22,540,798.52 17,052,815.22

Total 1,377,248,393.38 850,526,171.84

(2) Significant payables with debt age of more than 1 year


Item Closing balanceCause for not repaid or

carried forward

Supplier F 2,848,657.60 Within credit period

Supplier G 6,725,820.17 Within credit period

Supplier H 3,151,781.20 Within credit period

Supplier I 2,810,127.87 Within credit period

Total 15,536,386.84 /

Remarks: Closing balance of payable is increased by 61.93% compared with the opening balance, caused by merging Jiangsu

Kehang.

19. Accounts pre-receivables

(1) Listing of accounts pre-receivables



Within 1 year 583,676,460.56 463,368,541.79

1 to 2 years 52,631,431.90 55,253,420.03

2 to 3 years 11,520,329.13 29,449,915.84

More than 3 years 33,679,857.38 21,478,801.70

Total 681,508,078.97 569,550,679.36

(2) Significant accounts pre-receivable with debt age of more than 1 year


Item Closing balance Cause for not repaid or carried forward

Client L 7,919,212.00 Project suspended

Client M 7,439,200.00 Project in progress, not reaching settlement conditions

Total 15,358,412.00 /

Remarks: details of the guaranteed loan are described as follows:

Borrower Guarantor Mode of

guarantee Currency

Amount

in original

currency

Amount

converted into

RMB

Foshan Do Better Machinery Co., Ltd. KEDA Clean

Energy Co., Ltd.

Security

bond RMB 15,000,000.00 15,000,000.00

Anhui Xincheng Financing and Leasing

Co., Ltd.

KEDA Clean

Energy Co., Ltd.

Security

bondRMB 73,500,000.00 73,500,000.00

Jiangsu Kehang Environmental Protection

Science & Technology Co., Ltd.

KEDA Clean

Energy Co., Ltd.

Security

bondRMB 50,000,000.00 50,000,000.00

Xincheng International (Hong Kong) Co.,

Ltd.

KEDA Clean

Energy Co., Ltd.

Security

bondUSD 9,800,000.00 62,474,904.37

Total 200,974,904.37

17. Notes payable


Type Closing balance Opening balance

Commercial acceptance draft

Bank acceptance draft 430,184,109.88 373,808,839.79

Total 430,184,109.88 373,808,839.79

Total amount of instruments due but not paid at the end of the period is 0.

Remarks 1: Amount of bank acceptance drafted issued by the parent company and subsidiaries: Unit: yuan, currency: RMB

Company name Amount of bank acceptance draft

issued at the end of the period

KEDA Clean Energy Co., Ltd. 143,050,233.01

Wuhu KEDA Suremaker Co., Ltd. 10,500,000.00

KEDA (Anhui) Clean Energy Co., Ltd. 66,900,000.00

KEDA (Anhui) Industrial Co., Ltd. 10,000,000.00

Foshan Henglitai Machinery Co., Ltd. 9,640,000.00

Henan KEDA Dongda International Engineering Co., Ltd. 17,473,160.00

Jiangsu Kehang Environmental Protection Co., Ltd. 102,120,716.87

Ningxia Kehang Environmental Protection Engineering Co., Ltd. 32,000,000.00

Anhui Xincheng Financing and Leasing Co., Ltd. 38,500,000.00

Total 430,184,109.88

Remarks 2: The notes payable at the end of period will be due from January to June, 2016.

Remarks 3: The amount issued by Jiangsu Kehang Environmental Protection Science & Technology Co., Ltd. is 102.1207 million

yuan, 15 million of which is guaranteed by Jiangsu Longda Building Material Environmental Protection Co., Ltd.,

20 million of which is guaranteed by Yancheng Environmental Protection Development and Investment Co., Ltd.,

and 8.40 million yuan of which is guaranteed by Jiangsu Yanfu Construction Group Co., Ltd. and three individual

properties by mortgage.

Remarks 4: The amount issued by Ningxia Kehang Environmental Protection Engineering Co., Ltd. is 32 million yuan, 16 million of

which is guaranteed by self-built workshop of Jiangsu Kehang Environmental Protection Science & Technology Co.,

Ltd., and Ningxia Kehang Environmental Protection Science & Technology Co., Ltd.



Remarks: Closing balance of tax payable is increased by 171.31% compared with opening balance, mainly caused by the

Company’s disposal of 9.6732% equity of Tianjiang Pharmaceutical, investment earnings of 664.1776 million yuan is

confirmed, and the corporate income tax is increased significantly.

22. Other payables

(1) List of other payables according to nature of fund



Within 1 year 79,436,511.95 20,992,504.99

1 to 2 years 5,327,698.51 8,420,295.38

2 to 3 years 1,626,554.95 2,419,205.65

More than 3 years 1,420,593.82 2,003,592.09

Total 87,811,359.23 33,835,598.11

Remarks: Closing balance of other receivables is increased by 159.52% compared with opening balance, mainly caused by

merging Jiangsu Kehang Environmental Protection Science & Technology Co., Ltd., and Zhangzhou Juming Graphite

Co., Ltd.

23. Non-current liabilities due in 1 year



Long-term loan due in 1 year 246,597,416.22 589,112,602.08

Total 246,597,416.22 589,112,602.08

Notes:

Remarks 1: Details of long-term loan due in 1 year Unit: yuan Currency: RMB


Pledge loan 5,000,000.00

Warranted loan 246,597,416.22 584,112,602.08

Credit loan

Total 246,597,416.22 589,112,602.08

Remarks 2: Details of warranted borrowing are described as follows: Unit: yuan Currency: RMB


guaranteeCurrency

Amount

in original

currency

Amount

converted into

RMB

Shenyang KEDA Clean


KEDA Clean Energy Co., Ltd.,

Shenyang Gas Co., Ltd.

Warranted

guaranteeRMB 72,499,999.60 72,499,999.60

Guangdong Xincheng

Financing and Leasing Co.,

Ltd.

KEDA Clean Energy Co., Ltd.Warranted

guaranteeRMB 8,000,000.00 8,000,000.00

Anhui Xincheng Financing

and Leasing Co., Ltd. KEDA Clean Energy Co., Ltd.

Warranted

guaranteeRMB 166,097,416.62 166,097,416.62

Total 246,597,416.22

20. Payroll payable (1) Listing of Payroll payable: √ Applicable □ Not applicable


Item Opening balance

Increment this period

Decrement this period

Closing balance

I. Short-term remuneration 67,520,396.22 399,851,906.60 393,394,057.34 73,978,245.48

II. Post-resignation material benefits- defined contribution plan

21,642,858.08 21,642,858.08

III. Dismissal material benefits 3,978,670.04 3,978,670.04

IV. Other material benefits due in one year

Total 67,520,396.22 425,473,434.72 419,015,585.46 73,978,245.48

(2) Listing of short-term remunreations: √ Applicable □ Not applicable


Item Opening balance



Closing balance

I. Salary, bonus, allowance and subsidy 67,520,396.22 344,978,002.29 338,520,153.03 73,978,245.48

II. Staff’s material benefits 29,872,596.20 29,872,596.20

III. Social premium 13,376,349.90 13,376,349.90

Wherein: medical treatment premium 10,639,846.85 10,639,846.85

Work-related injury premium 1,568,399.26 1,568,399.26

Birth premium 1,168,103.79 1,168,103.79

IV. Housing fund 10,492,551.70 10,492,551.70

V. Labor union expenses and staff education expenses

1,132,406.51 1,132,406.51

Total 67,520,396.22 399,851,906.60 393,394,057.34 73,978,245.48

(3) Listing of defined contribution plan√ Applicable □ Not applicable


ItemOpening balance



Closing balance

1. Basic endowment insurance 20,613,704.48 20,613,704.48

2. Unemployment premium 1,029,153.60 1,029,153.60

Total 21,642,858.08 21,642,858.08

21. Taxes payable Unit: yuan, currency: RMB


VAT 14,767,753.09 9,098,132.95

Business tax 30,796.82 64,980.49

Corporate income tax 99,640,213.89 25,392,046.69

Individual income tax 842,085.81 798,230.82

Urban maintenance and construction tax 1,098,426.62 1,466,270.79

Property tax 3,070,246.34 4,479,631.59

Land use tax 5,010,427.55 3,561,300.19

Education fee extra 788,830.37 1,071,399.30

Dike fee 180,283.83 265,219.52

Stamp tax 55,748.70 54,700.10

Total 125,484,813.02 46,251,912.44



Projects involving government subsidy: Unit: yuan, currency: RMB

Projects with liabilities Opening

balance

Newly

increased

subsidy in this

period

Amount

accounted into

non-business

income in this

period

Other

changes

Closing

balance

Related to

assets/related

to earnings

Supporting fund for construction of manufacturing

base of clean coal gas of Newpower appropriated by

Anhui Energy Bureau

24,500,000.00 3,500,000.00 21,000,000.00Related to

assets

Reconstruction of technology reconstruction of

ceramics thin plate of large sizes 2,040,000.00 510,000.00 1,530,000.00

Related to

assets

Technical reconstruction of complete outfit of

new energy saving environmental protection wall

materials

4,410,000.00 735,000.00 3,675,000.00Related to

assets

Special fund support for circularization

reconstruction pilot 33,000,000.00 3,300,000.00 29,700,000.00

Related to

assets

Industrial support fund of Henglitai 15,000,000.00 1,500,000.00 13,500,000.00Related to

assets

Total 30,950,000.00 48,000,000.00 9,545,000.00 69,405,000.00 /

Remarks: Closing balance of deferred earnings is increased by 124.25% than opening balance, mainly caused by the subsidiary

Shenyang KEDA Clean Energy receiving special subsidy for circularization reconstruction pilot 33 million yuan granted

by Liaoning Faku Economic Development Zone Management Committee, and the subsidiary Henglitai Company

receiving supporting fund 15 million yuan granted by Leping Economic Promotion Bureau of Sanshui District.

28. Other non-current liabilities Unit: yuan, currency: RMB


Technology reconstruction of production base of high-pressure plunger

pump with capacity of 50 thousand sets 23,800,000.00 23,800,000.00

Environmental protection investment projects of Shenyang KEDA Clean

Energy 7,653,890.27 9,449,247.24

Application of IOT technology in industrialization of building material outfit 6,800,000.00 6,800,000.00

R & D of forming technology and complete equipment of extrusion of

semi-solid inner cavity 5,510,000.00 5,510,000.00

Comprehensive utilization of iron tailings 5,000,000.00

Innovation capability construction of technology center 5,000,000.00 5,000,000.00

Revitalizing and technical reconstruction by the National Development and

Reform Committee and the Ministry of Industry and Information 520,000.00 3,020,000.00

Reconstruction of production technology of complete equipment of clean

coal gasification 3,000,000.00 3,000,000.00

Key laboratory of energy saving and environmental protection enterprises

for ceramics machinery of Guangdong Province 2,000,000.00 2,000,000.00

Technical reconstruction of engineering experiment center of artificial

stone works 1,500,000.00 1,500,000.00

Development and application of daily ceramics and other static pressure

equipment and digitalized control technology 1,000,000.00 1,000,000.00

Key technology R & D and application of numerical ceramics roller kiln 1,000,000.00

Income from differential electricity charges of Guangdong Province 1,000,000.00

Construction of 0×20KNm3/h KEDA clean powder coal gasification and

comprehensive supporting facilities 900,000.00 1,000,000.00

Construction of cloud computing platform 900,000.00

24. Other current liabilities Unit: yuan, currency: RMB


Short-term payable bonds 105,990,000.00

Total 105,990,000.00

Remarks: The Company issued 1st lot of short-term financing bonds with value of 100 million yuan and duration of 365 days on

January 19, 2015 (15 KEDA Clean Energy CP001), with total book value of bond 100 million yuan, nominal interest

rate of 5.99%, and it is mainly used to repay the bank loan, improve financing structure and supplement current funds.

25. Long-term loan


(1) Classification of long-term loan Unit: yuan, currency: RMB


Warranted loan 177,213,094.45 218,644,825.15

Credit loan 189,000,000.00 60,000,000.00

Total 366,213,094.45 278,644,825.15

Remarks 1: Details of the warranted loan are set out as follows:


guarantee Currency

Amount

of original

currency

Amount

accounted into

RMB

Shenyang KEDA Clean


KEDA Clean Energy Co., Ltd.,

Shenyang Gas Co., Ltd.

Warranted

guarantee RMB 17,916,668.11 17,916,668.11


and Leasing Co., Ltd. KEDA Clean Energy Co., Ltd.

Warranted

guarantee RMB 159,296,426.34 159,296,426.34

Total 177,213,094.45 177,213,094.45

Remarks 2 ： Closing balance of the long-term loan is increased by 31.43% compared with opening balance, caused by the parent

company’s credit loan increased at Import & Export Bank of China.

26. Estimated liabilities


Item Opening balance Closing balance Cause

Product quality assurance 1,337,032.46 1,016,584.28 Warranty costs pre-withdrawn

Total 1,337,032.46 1,016,584.28 /

Remarks: The forecast liabilities are the warranty costs pre-withdrawn by the subsidiary KEDA (Anhui) Clean Energy Co., Ltd.

27. Deferred earnings


ItemOpening

balance

Increment in

this period

Decrement in

this period

Closing

balanceCause

Government

subsidy 30,950,000.00 48,000,000.00 9,545,000.00 69,405,000.00

Special fund granted

by the government

Total 30,950,000.00 48,000,000.00 9,545,000.00 69,405,000.00 /



29. Share capital


Opening

balance

Increment or decrement in this period(+, -)

Closing

balanceNew shares

issued

Share

bonus

Public reserve

fund converted

into shares

Others Subtotal

Total number of shares 697,227,161.00 8,505,000.00 8,505,000.00 705,732,161.00

Remarks: The capital share increased by 8,505,000.00 yuan in this period is caused by the 3rd time of option exercising of 8.505

million shares in accordance with the Incentive Plan of Phase-2 Stock Option of the Company on May 19, 2015.

Private placement raised 80,202,150.00 yuan, including share capital of 8,505,000.00 yuan, and share premium of

71,697,150.00 yuan.

30. Capital reserve


Item Opening balance Increment Decrement in

this period Closing balance

Capital premium (share

capital premium) 1,016,783,356.41 107,142,733.59 224,369.08 1,123,701,720.92

Other Capital reserve 107,749,011.96 11,760,236.46 32,115,207.68 87,394,040.74

Total 1,124,532,368.37 118,902,970.05 32,339,576.76 1,211,095,761.66

Remarks 1: Capital reserve-capital premium increased in this period: 103,812,357.68 yuan includes premium 71,697,150.00 yuan

that exercising of the 8.50 million shares of stock option for the 3rd time for private placement in Phase-II Stock Option

Incentive Plan by the Company on May 19, 2015, and 32,115,207.68 yuan carried forward to other Capital reserve by

former share payment; additional 3,330,375.91 yuan is caused by adjustment of Capital reserve by increasing capital

for Foshan KEDA Hydraulic Co., Ltd. deregistering Emeishan KEDA Clean Energy Co., Ltd., and increasing capital for

Foshan Do Better Machinery Co., Ltd. by Foshan Henglitai Machinery Co., Ltd.

Remarks 2: Capital public reserve-share capital premium decreased by 224,369.08 yuan caused by the Company’s acquiring

minority equity of the subsidiary Changsha Aer Compressor Co., Ltd.

Remarks 3: Capital public reserve-increased in this period 11,760,236.46 yuan, caused by the 37th Conference of the 4th Session

of Board of Director and the 1st extraordinary general meeting of the Company in 2012 passed the Phase-II Stock

Option Incentive Plan (Draft Revision). According to relevant rules and regulations in Enterprise Accounting Code

No.11-Payment of Shares, costs of the stock option during the waiting period are accounted into Capital reserve.

Refer to Annotation XII on computation.

Remarks 4: Capital public reserve-others, decreased by 32,115,207.68 yuan in this period, caused by the 37th Conference of the

4th Session of Board of Director and the 1st extraordinary general meeting of the Company in 2012 passed the Phase-

II Stock Option Incentive Plan (Draft Revision). According to relevant rules and regulations in Enterprise Accounting

Code No.11-Payment of Shares, the stock option is carried forward to the amount formerly accounted into other

Capital reserve when the stock option is exercised.


Research and industrialization of production technology and outfit for thin

ceramics brick 800,000.00 800,000.00

R & D, promotion and application of clean coal gasification technology

and outfit 600,000.00 600,000.00

R & D, promotion and application of efficient and energy full-automatic

polishing production line 600,000.00

Key technology R & D of powder coal gasification based on fly ash

gradient utilization 500,000.00

Demonstration project of a new generation of numerical control machinery

of Guangdong Province 400,000.00

Performance construction project of engineering technology R & D Center

of Guangdong Province 400,000.00 400,000.00

Special fund support for modal demonstration of intellectual property

rights of Guangdong Province 300,000.00 300,000.00

Experiment center of powder press 100,000.00 200,000.00

Multifunctional hydraulic axial plunger pump 200,000.00 200,000.00

Research of industrial standard of roller kiln firing kiln 150,000.00 150,000.00

New low-tonnage ceramics brick press 130,000.00 130,000.00

Project of combination of industry and information 100,000.00 100,000.00

Work expenses for doctors for scientific research projects 16,332.67 50,000.00

R & D and industrialization of embedding numerical control deep ceramic

processing machinery and outfit 1,500,000.00

Research, manufacturing and industrialization of hi-end intelligent bi-

directional pressurized fire bricks automatic hydraulic machine 2,500,000.00

Industrialization project of nitration technology and complete equipment of

industrial kiln 5,000,000.00

R & D and industrialization project of complete steel slag grinding

equipment 3,000,000.00

NOX high-temperature and low-cost material reduction and technical

model project of cement kiln1,510,000.00

R & D and industrialization of solution and complete set of NOX emission

reduction of cement kiln 3,000,000.00

SNCR denitration pilot scale test and model project research of tail smoke

of cement kiln 410,000.00

R & D of completion solution and complete equipment for NOX emission

reduction of glass melting kiln 1,200,000.00

Leader talent project of Jiangsu Kehang 150,000.00

Manufacturing of completion equipment for desulfurization and denitration

of smoke removed of dust 1,800,000.00

Subsidy for infrastructure construction of Ningxia Kehang 5,120,512.40

R & D and industrialization project of desulfurization and denitration of

smoke removed of dust 5,085,000.00

New 2-sectional bi-directional flow electrolyte smoke purification

technology 500,000.00

Key technology for energy conservation and environmental protection

high-temperature circular fluidization bed 500,000.00

Innovation fund of KEDA Dongda 600,000.00

Total 92,355,735.34 74,409,247.24



34. Business income and business cost Unit: yuan, currency: RMB

Item Amount in this period Amount last periodIncome Cost Income Cost

Main business 3,588,815,903.50 2,771,927,950.31 4,463,356,668.01 3,402,793,993.62

Other business 4,868,355.32 4,134,419.77 2,519,219.34 923,005.33

Total 3,593,684,258.82 2,776,062,370.08 4,465,875,887.35 3,403,716,998.95

Main products (subject to products) Unit: yuan Currency: RMB

Product description Amount in this period Amount in last period

Business revenue Business cost Business revenue Business cost

Building material machinery

2,449,025,910.54 1,904,373,795.52 3,463,596,746.83 2,595,289,545.52

Cleaning and environmental protection equipment

849,036,041.39 603,456,318.84 680,875,417.10 487,834,590.35

Cleaning energy service 107,210,225.98 201,153,890.54 112,949,775.33 238,168,551.75

Financing and leasing 155,651,974.21 42,500,609.98 166,287,273.63 54,923,752.48

Other equipment 27,891,751.38 20,443,335.43 39,647,455.12 26,577,553.52

Total 3,588,815,903.50 2,771,927,950.31 4,463,356,668.01 3,402,793,993.62

Main business (subject to areas) Unit: yuan Currency: RMB

Area Amount in this period Amount last period

Business income Business cost Business income Business cost

Domestic 2,851,210,134.05 2,250,206,196.15 3,905,253,296.77 3,013,407,341.94

Overseas 737,605,769.45 521,721,754.16 558,103,371.24 389,386,651.68

Total 3,588,815,903.50 2,771,927,950.31 4,463,356,668.01 3,402,793,993.62

Remarks: Total sales of the top customers is 623.4293 million yuan (tax excluded), accounting for 17.35% of sales revenue.

35. Business tax and extra Unit: yuan, currency: RMB

Item Amount in this period Amount in last period

Business tax 2,923,985.44 780,105.02

Urban maintenance and cost tax 13,414,504.85 15,064,199.22

Education fee extra 9,729,649.04 10,965,748.47

Dike fee 2,548,579.88 2,268,456.98

Total 28,616,719.21 29,078,509.69

36. Sales expenseUnit: yuan, Currency: RMB


Staff remuneration 78,491,755.07 83,122,402.71

Traveling expenses 25,546,446.26 28,370,055.60

Transport expenses 31,773,469.54 30,097,062.18

Entertainment expenses 6,031,004.91 6,040,768.73

Ad. and business publicity expenses 7,595,632.26 10,524,522.32

After-sales service fee 23,189,023.74 20,004,983.27

Others 34,775,290.26 30,072,086.01

Total 207,402,622.04 208,231,880.82

31. Other comprehensive earnings


ItemOpening

balance

Amount occurred in the period

Closing

balance

Before-

tax amount

occurred in

the current

period

Minus: amount

accounted

into other

comprehensive

earnings in previous

periods and

transferred into

gains and losses in

the current period

Minus:

income

tax

expenses

After-tax

attributed to

the parent

company

After-tax

attributed

to minority

shareholders

I. Other comprehensive earnings not reclassified into gains or

losses in the future

Wherein: changes from re-computing and re-defining net liabilities and

net assets of the defined benefit plan

Share of other comprehensive earnings not reclassified into gains or

losses for the invested party under the equity law

II. Other comprehensive earnings reclassified into gains or losses

in the future 4,942,261.95 -3,946,915.40 -3,946,915.40 995,346.55

Wherein: share of other comprehensive earnings reclassified into gains

or losses for the invested party under the equity law

Gains or losses from change of fair value of available-for-sale financial

assets

Gains or losses for held-to-maturity reclassified into available-for-sale

financial assets

Effective portion from gains or losses of cash flow hedging

Difference from conversion of foreign currency financial statements 4,942,261.95 -3,946,915.40 -3,946,915.40 995,346.55

Other comprehensive earnings in total 4,942,261.95 -3,946,915.40 -3,946,915.40 995,346.55

32. Surplus reserve Unit: yuan, currency: RMB

Item Opening balanceIncrement in this

period

Decrement in


Statutory Surplus reserve 220,424,735.10 24,877,067.10 245,301,802.20

Discretionary Surplus

reserve 10,168,213.70 10,168,213.70

Total 230,592,948.80 24,877,067.10 255,470,015.90

33. Undistributed profits Unit: yuan, currency: RMB

Item The current period The last period

Adjust undistributed profit at the end of the last period 1,557,980,890.20 1,266,602,748.66

Adjust total undistributed profit at the beginning of the period

(increment marked with +, decrement marked with -).

Undistributed profit at the beginning of the period after adjustment 1,557,980,890.20 1,266,602,748.66

Add: net profit attributed to parent company’s owners in the period 541,317,578.26 446,104,686.59

Minus: withdraw statutory Surplus reserve 24,877,067.10 37,684,577.68

Withdraw discretionary Surplus reserve

Withdraw general risk reserve

Dividend of ordinary shares payable 139,445,432.20 117,041,967.37

Dividend of ordinary shares converted into capital share

Undistributed profit at the end of the period 1,934,975,969.16 1,557,980,890.20



40. Investment earnings



Earnings of long-term equity investment computed according to the equity method

50,019,378.05 64,718,670.43

Earnings of investment from disposal of long-term equity investment

658,333,241.73 -163,924.55

Earnings of investment of financial assets measured with fair value and changes accounted into current profits and losses during the holding period

Earnings of investment from disposal of financial assets measured with fair value and changes accounted into current profits and losses

Earnings of investment of held-to-maturity during the holding period

Earnings of investment acquired from available-for-sale financial assets

Earnings of investment from disposal of available-for-sale financial assets

After losing the control, gains from re-measurement of fair value of remaining equity

Total 708,352,619.78 64,554,745.88

Remarks 1: Earnings of long-term equity investment computed with the equity method Unit: yuan Currency: RMB

Invested party Amount in this period Amount last period

Jiangyin Tianjiang Pharmaceutical Co., Ltd. 50,078,791.62 65,286,176.13

Guangdong Taiwei Digital Ceramics Printing Co., Ltd. -59,413.57 -567,505.70

Total 50,019,378.05 64,718,670.43

Remarks 2: Earnings of investment from disposal of long-term equity investment

Invested party Amount in this period

Jiangyin Tianjiang Pharmaceutical Co., Ltd. 664,177,590.17

Linyi KEDA Clean Energy Co., Ltd. -3,590,718.98

Emeishan KEDA Clean Energy Co., Ltd. -2,253,629.46

Total 658,333,241.73

41. Non-business revenue Unit: yuan, currency: RMB

Item Amount in this

period

Amount last

period

Amount accounted into non-recurring

gains and losses in current period

Gains from disposal of non-current assets in total 3,249,907.50 522,596.81 3,249,907.50

Wherein: gains from disposal of fixed assets 3,249,907.50 522,596.81 3,249,907.50

Gains from disposal of intangible assets

Gains from debt reconstruction

Government subsidy 78,313,724.07 51,560,369.40 78,313,724.07

Fine income 1,189,305.31 2,105,118.35 1,189,305.31

Late fee

Others 6,229,183.97 3,410,900.46 6,229,183.97

Total 88,982,120.85 57,598,985.02 88,982,120.85

37. Overhead Unit: yuan, Currency: RMB


Staff remuneration 79,034,681.90 72,476,802.25

Office expenses 12,485,081.58 14,638,190.20

Water and electricity charges 7,829,049.84 6,445,428.52


Audit and consultancy fee 12,728,965.13 10,416,033.52

Tax 21,088,273.81 23,088,551.23

Depreciation and rent 43,782,826.79 40,715,467.26

Labor premiums 14,652,094.57 13,444,973.13

Amortization of intangible assets 18,368,016.89 11,674,402.17

R & D expenses of new products 136,758,946.23 107,785,398.24

Stock incentive fee 11,760,236.46 18,264,947.83

Others 38,180,732.94 29,417,151.82

Total 406,681,235.74 356,892,103.03

38. Financial costs Unit: yuan, currency: RMB


Interest expenses 42,452,058.08 29,539,532.65

Minus: interest income -7,925,772.39 -6,985,111.51

Exchange gains and losses -9,856,798.53 -2,023,117.20

Handling charge 5,022,810.24 3,635,078.24

Total 29,692,297.40 24,166,382.18

39. Asset impairment losses



I. Non-performing debt losses 133,706,344.46 42,345,253.97

II. Stock depreciation losses 1,634,229.64

III. Losses from depreciation of available-for-sale financial

assets

IV. Losses from depreciation of held-to-maturity investment

V. Losses from depreciation of long-term equity investment

VI. Losses from depreciation of investment property

VII. Losses from depreciation of fixed assets

VIII. Losses from depreciation of project materials

IX. Losses from depreciation of projects under construction

X. Losses from depreciation of productive biological assets

XI. Losses from depreciation of oil and gas assets

XII. Losses from depreciation of intangible assets

XIII. Losses from depreciation of goodwill 65,407,924.98 5,223,932.12

XIV. Others

Total 199,114,269.44 49,203,415.73



Remarks: The non-business expenses in this period is increased by 1,806.16% compared with the amount in the last period,

mainly caused by losses from disposal of Emeishan KEDA Clean Energy Co., Ltd., Linyi KEDA Clean Energy Co., Ltd.

and Anhui Jiufu New Wall Material Co., Ltd.

43. Income tax expenses

(1) List of income tax expenses Unit: yuan, currency: RMB

Item Amount in this period Amount last period

Current income tax expenses 148,368,778.12 95,655,230.81

Deferred income tax expenses -21,120,513.92 -11,549,240.15

Total 127,248,264.20 84,105,990.66

(2) Adjustment process of accounting profit and income tax expenses: Unit: yuan, currency: RMB

Item Amount in this period

Total profit 659,037,279.31

Income tax expenses computed in accordance with statutory/applicable tax rate 98,855,591.90

Influences by different tax rate applied to subsidiaries 1,496,486.58

Influences by adjustment of income tax in previous periods 1,469,039.56

Influences by non-taxable income -31,907,093.45

Influences by non-deductible costs, expenses and losses 12,481,473.10

Influences by deductible losses of deferred income tax assets not confirmed before use

Influences by deductible temporary difference or deductible losses of the current deferred

income tax assets not confirmed 49,885,678.76

Change of balance of opening deferred income tax assets/liabilities by adjustment of tax

rate

Influences by deduction of R & D expenses -5,032,912.25

Subsidiaries pay the current income tax expenses according to quota

Income tax expenses 127,248,264.20

44. Items of cash flow statement

(1).Cash received related to business activities: Unit: yuan, currency: RMB


Government subsidy 95,978,558.32 42,584,019.44

Interest income 7,925,772.39 5,993,625.18

Others 96,391,421.65 1,931,607.02

Total 200,295,752.36 50,509,251.64

Remarks: Other cash received related to business activities in this period is increased by 296.55% compared with the last

period, mainly caused by significant increasing of government subsidy received, the current accounts 60.70 million

yuan from Jiangsu Kehang Environmental Protection Co., Ltd., and the current account 20.00 million yuan from

Ningxia Kehang Environmental Protection Group.

Government subsidy accounted into current profits and losses


Subsidized projects Amount occurred

in this period

Amount occurred

in last period

Related to assets/

related to earnings

Complete outfit and technology reconstruction for new energy conservation and environmental protection wall materials of KEDA Clean Energy

735,000.00 2,940,000.00 Related to assets

Large aluminum alloy extrusion and casting outfit and research project of KEDA Clean Energy

2,600,000.00 Related to earnings

Corporate support fund of Henglitai Headquarters 3,701,908.64 Related to earnings

R & D support for technical reconstruction of production equipment of large-sized ceramics thin plate of KEDA Clean Energy

510,000.00 510,000.00 Related to assets

R & D support for Newpower clean coal gasification system of KEDA (Anhui) Clean Energy

3,500,000.00 3,500,000.00 Related to assets

Special fund support for circularization reconstruction pilot of Shenyang City 3,300,000.00 Related to assets

Corporate support fund by economic promotion bureau of Leping Town, Sanshui District for Henglitai

1,500,000.00 Related to assets

Gas environmental protection and investment project of Shenyang KEDA Clean Energy

850,432.25 Related to assets

Corporate support fund of Maanshan Economic and Technology Development Zone

23,341,924.05 25,397,213.80 Related to earnings

Comprehensive utilization projects of iron tailings 5,000,000.00 Related to earnings

Special fund for supporting corporate’s merging and acquiring international famous brands and promoting foreign trade upgrading


Quality award of provincial government of Guangdong Province 2,000,000.00 Related to earnings

Financial bonus by KEDA (Anhui) Industrial 3,290,000.00 Related to earnings

Government subsidy for technical reconstruction of high-end intelligence ceramics brick press


Income from differential electricity price of KEDA Clean Energy 1,000,000.00 Related to earnings

Special fund of treasury of Shunde District of Foshan City 4,627,418.00 Related to earnings

Key technology R & D, and application of digitalized ceramics roller kilin 1,000,000.00 Related to earnings

Industrial support fund of Wuhu KEDA 6,227,700.00 4,403,740.00 Related to earnings

Provincial support fund for advanced outfit and equipment manufacturing industry at West Zhujiang Bank in 2015


Advanced outfit project for hi-tech new wall materials 1,000,000.00 Related to earnings

Award fund of government of Yancheng City 1,478,200.00 Related to earnings

Special fund for advanced outfit manufacturing industry development of Sanshui District of Foshan City


Environmental Protection Subsidy of Shenyang Environmental Protection Department


Corporate support award fund of Sanshui District of Foshan City 2,096,073.98 Related to earnings

Other financial bonus 6,211,975.79 7,332,506.96 Related to earnings

Total 78,313,724.07 51,560,369.40 /

42. Non-business expenses Unit: yuan, currency: RMB

Item Amount in this

period

Amount last

period

Amount accounted into current

non-recurring gains and losses

Total losses from disposal of non-current assets 56,401,117.35 1,927,113.49 56,401,117.35

Wherein: losses from disposal of fixed assets 56,401,117.35 1,927,113.49 56,401,117.35

Losses from disposal of intangible assets

External donation 338,511.12 525,000.00 338,511.12

Late fee and fine 391,504.28 848,807.78 391,504.28

Others 27,281,073.48 1,127,467.48 27,281,073.48

Total 84,412,206.23 4,428,388.75 84,412,206.23



45. Additional data of cash flow statement

(1) Additional data of cash flow statementUnit: yuan, Currency: RMB

Additional data Amount in periodAmount in the

last period

1. Net profits adjusted to cash flow of business activities

Net profit 531,789,015.11 428,205,948.44

Add: asset depreciation reserve 199,114,269.44 49,203,415.73

Fixed asset depreciation, oil and gas assets depreciation and productive

biological asset depreciation 129,060,317.40 113,322,473.20

Amortization of intangible assets 17,683,211.31 13,844,084.35

Amortization of long-term costs to be amortized

Losses from disposal of fixed assets, intangible assets and other long-term assets

(profits marked with “-”) 53,151,209.85 1,404,516.68

Losses from scrapping of fixed assets (profits marked with “-”)

Losses from change of fair value (profits marked with “-”)

Financial costs (profits marked with “-”) 75,095,869.53 72,639,633.79

Investment losses (earnings marked with “-”) -708,352,619.78 -64,554,745.88

Decreasing of deferred income tax assets (increasing marked with “-”) -19,666,200.77 -10,750,685.45

Increasing of deferred income tax liabilities (decreasing marked with “-”) -1,454,313.15 -798,554.70

Decreasing of stock (increasing marked with “-”) 1,845,446.74 -4,779,165.02

Decreasing of business receivables (increasing marked with “-”) -135,212,519.63 -514,580,642.75

Increasing of business payables (decreasing marked with “-”) 410,124,882.28 -385,679,132.51

Others 11,760,236.46 18,264,947.83

Net amount of cash flow from business activities 564,938,804.79 -284,257,906.29

2. Significant investment and raising activities not involving cash deposit and

withdrawal:

Debt converted into capital

Convertible corporate bonds due in 1 year

Leased financial assets through leasing

3. Net change of cash and cash equivalent:

Closing balance of cash 586,057,257.55 257,948,223.08

Minus: opening balance of cash 257,948,223.08 425,418,904.39

Add: closing balance of cash equivalent

Minus: opening balance of cash equivalent

Net increment of cash and cash equivalent 328,109,034.47 -167,470,681.31

(2) Net cash amount paid for acquiring subsidiaries in this period

√ Applicable □ Not applicableUnit: yuan, Currency: RMB

Amount

Cash or cash equivalent for enterprise merging paid in this period 195,850,000.00

Wherein: cash paid for merging and acquiring Jiangsu Kehang Environmental Protection

Science & Technology Co., Ltd. 180,000,000.00

Cash paid for merging and acquiring Zhangzhou Juming Graphite Co., Ltd. 15,850,000.00

Minus: cash and cash equivalent held by subsidiaries on the date of acquiring 36,640,781.07

Wherein: cash held by Jiangsu Kehang Environmental Protection Science & Technology

Co., Ltd. on the date of acquiring 28,626,983.26

Cash paid for merging and acquiring Zhangzhou Juming Graphite Co., Ltd. 8,013,797.81

Add: cash or cash equivalent paid in this period for enterprise merging in past periods

Net cash amount paid for acquiring subsidiaries 159,209,218.93

Notes:

(2).Other cash paid related to business activities: Unit: yuan, Currency: RMB


Office fees 18,326,385.11 15,500,934.70

Water and electricity charges 48,439,718.40 56,108,640.06


Automobile fees 7,804,422.03 8,517,201.44

Transport costs 34,368,572.28 35,845,943.44

Entertainment expenses 11,592,971.37 10,887,350.87

Rent 5,812,206.71 4,097,270.60

Repair costs 24,740,694.42 27,433,523.49

Ad. costs and business publicity costs 3,197,858.21 3,779,072.36

Audit and consultancy costs 12,333,581.59 10,570,933.52

Forestation and environmental protection costs 5,975,045.93 2,527,197.08

Securities costs 1,340,159.26 2,391,652.24

Others 18,622,929.98 16,904,578.94

Total 233,769,309.54 237,934,694.05

(3).Other cash received related to investment activities Unit: yuan, Currency: RMB


Short-term financing products by bank 107,000,000.00

Total 107,000,000.00

Remarks: Other cash received related to investment activities is the cash received from redemption of due bank financing

products.

(4).Other cash received related to fund raising activities Unit: yuan, Currency: RMB


Acceptance draft security 89,556,931.12 61,744,749.74

Bid security 28,591,429.41 11,506,026.90

Equipment mortgage security 10,457,000.00 2,980,000.00

The Buyer’s credit loan security 50,037,901.60 34,282,344.60

Fixed deposit receipt 11,000,000.00 4,000,000.00

Total 189,643,262.13 114,513,121.24

(5).Other cash paid related to fund raising activities Unit: yuan, Currency: RMB


Acceptance draft security 99,547,079.52 81,918,753.43

Bid security 25,463,397.24 17,596,715.88

Equipment mortgage security 16,773,000.00

The Buyer’s credit loan security 36,196,100.00 34,420,728.00

Cash paid to minority shareholders due to capital reduction

by the subsidiary Changsha Aer Company 9,109,900.00

Total 161,206,576.76 159,819,097.31



(2) Description of overseas business entities, including key overseas business entities, the main overseas business location, standard currency for accounting and basis for selection shall be disclosed, and the cause shall be disclosed if the standard currency for accounting has been changed.


VIII. Change of scope of merging 1. Merging of enterprises not under the same control √ Applicable □ Not applicable(1). Merging of enterprise not under the same control occurred in this period √ Applicable □ Not applicable

Unit: 10 thousand yuan Currency: RMB

The purchased party

Date of

equity

acquired

Cost of

equity

acquired

Ratio of

equity

acquired

(%)

Equity

acquired

via

Date of

purchasing

Basis for determination of date

of purchasing

Revenue of the

purchased party from

the date of purchasing

to the end of the period

Net profit of the

purchased party from

the date of purchasing

to the end of the period

Jiangsu Kehang Environmental

Protection Science & Technology

Co., Ltd.

2015-09-23 18,000.00 72.00 Cash 2015-09-23

Registration for change at the

administration for industry and

commerce completed

21,099.34 3,265.35

Zhangzhou Juming Graphite Co.,

Ltd. 2015-11-25 2,280.00 100.00 Cash 2015-11-25

Registration for change at the

administration for industry and

commerce completed

316.16 -61.78

(2) Merging cost and goodwill √ Applicable □ Not applicable


Merging costs


Protection Science &

Technology Co., Ltd.

Zhangzhou Juming

Graphite Co., Ltd.

-Cash 18,000.00 2,280.00

-Fair value of non-cash assets

-Fair value of debts issued or assumed

-Fair value of equity securities issued

-Fair value of contingent consideration

-Fair value of equity held before the date of purchasing on the date of

purchasing

-Others

Merging cost in total 18,000.00 2,280.00

Minus: the share of fair value of identifiable net assets acquired 10,440.32 2,274.79

The amount that the goodwill/merging cost less than fair value of identifiable net assets 7,559.68 5.21

(3) Identifiable assets and liabilities of the purchased party on the date of purchasing √ Applicable □ Not applicable


Jiangsu Kehang Environmental Protection Science & Technology Co., Ltd.

Fair value on the date of buying Book value on the date of buying

Assets 89,393.03 82,151.07

Monetary fund 11,012.80 11,012.80

Accounts receivable 18,560.03 18,560.03

Instrument receivables 330.95 330.95

Accounts prepaid 9,122.94 9,122.94

Other receivables 7,071.66 7,071.66

Stock 9,061.18 9,061.18

Fixed assets 23,804.73 21,151.15

Intangible assets 9,831.86 5,243.48

Deferred income tax assets 596.88 596.88

(3) Composition of cash and cash equivalent Unit: yuan, Currency: RMB


I. Cash 586,057,257.55 257,948,223.08

Wherein: cash on hand 1,398,467.47 1,028,897.06

Bank deposit used to pay from time to time 584,658,790.08 256,919,326.02

Other monetary fund used for payment from time to

tome

Amount deposited with the central bank for payment

Inter-bank deposit

Inter-bank offers

II. Cash equivalent

Wherein: bond investment due in 3 months

III. Cash and cash equivalent balance at the end of the perod 586,057,257.55 257,948,223.08

46. Assets with restricted title or use right


Item Book value at the

end of the period

Cause for

restriction

Monetary fund 142,987,636.89 Used for pledging

Total 142,987,636.89 /

47. Foreign currency monetary items


(1) Foreign currency monetary items: Unit: yuan

Item Foreign currency balance


Exchange rate

for conversion

Balance converted into RMB


Monetary fund

Wherein: USD 1,178,031.28 6.50320 7,660,973.02

Euro 23,535.29 7.04830 165,883.78

HKD 218,869.07 0.83906 183,644.28

Accounts receivable

Wherein: USD 30,307,661.63 6.50320 197,096,785.11

Euro

HKD

Short-term loan

Wherein: USD 19,300,000.00 6.50320 125,511,760.00

Payables -

Wherein: USD 11,089,338.64 6.50320 72,116,187.04

Euro 17,000.00 7.04830 119,821.10

Accounts pre-received -

Wherein: USD 16,310,155.25 6.50320 106,068,201.62

Euro 1,021,621.50 7.04830 7,200,694.82

Other payables

Wherein: USD 2,089,636.62 6.50320 13,589,324.87

Accounts prepaid -

Wherein: USD 1,072,263.00 6.50320 6,973,140.74



IX. Equities in other entities

1. Equities in subsidiaries


(1).Composition of enterprise group

Full name of subsidiary Location of business Location of registration Nature of

business

Shareholding ratio (%)Acquired through

Direct Indirect

Foshan KEDA Stone Machinery

Co., Ltd.

Guanglong Industrial Park, Chencun

Town, Shunde District, Foshan City


Town, Shunde District, Foshan City

Manufacturing

industry 100.00 Established

KEDA (Anhui) Industrial Co., Ltd.

Maanshan Economic and

Technological Development Zone,

Anhui Province



Anhui Province

Manufacturing

industry100.00 Established

Maanshan KEDA Xinmingfeng

Engineering Co., Ltd.



Anhui Province



Anhui Province

Manufacturing


KEDA (Anhui) Clean Energy Co.,

Ltd.



Anhui Province



Anhui Province

Manufacturing


Shenyang KEDA Clean Energy

Gas Co., Ltd.

Liaoning Faku Economic Development

Zone

Liaoning Faku Economic Development

Zone

Manufacturing


Foshan KEDA Hydraulic Machinery

Co., Ltd. Dadu Village Committee Industrial Park

Dadu Village Committee Industrial

Park

Manufacturing


Foshan Henglitai Machinery Co.,

Ltd.

Sanshui Central Science & Technology

Park of Foshan City

Sanshui Central Science &

Technology Park of Foshan City

Manufacturing

industry100.00

Merging of enterprises not

under the same control

Foshan Henglitai Labor

Dispatching Co., Ltd. Shancheng District, Foshan City Shancheng District, Foshan City

Manufacturing

industry100.00



Anhui Xincheng Investment Co.,

Ltd.

Maanshan Economic Technology

Development Zone


Development Zone

Commercial

service

industry

100.00 Established

Anhui KEDA Suremaker Co., Ltd. Wuhu Machinery Industrial Park of

Anhui Province

Wuhu Machinery Industrial Park of

Anhui Province

Manufacturing

industry100.00



Changsha Aer Compressor Co.,

Ltd.

Changsha Economic Technology

Development Zone of Hunan Province

Changsha Economic Technology

Development Zone of Hunan Province

Manufacturing

industry76.49



Anhui KEDA Aer Compressor Co.,

Ltd.


Development Zone


Development Zone

Manufacturing


Henan KEDA Dongda International

Engineering Co., Ltd. West Jianshe Road, Zhengzhou City West Jianshe Road, Zhengzhou City

Manufacturing

industry100.00



Foshan Do Better Machinery Co.,

Ltd. Sanshui District, Foshan City Sanshui District, Foshan City

Manufacturing

industry50.76



KEDA Industrial(Hong Kong) Co.,

Ltd. Hong Kong Hong Kong

Import and

export trade 100.00 Established

Guangdong Xincheng Financing

Leasing Co., Ltd. Shunde District, Foshan City Shunde District, Foshan City

Commercial

service

industry

52.73 47.27 Established

Anhui Kecheng Financing and

Leasing Co., Ltd.


Development Zone


Development Zone

Commercial

service

industry

52.73 47.27 Established


Protection Science & Technology

Co., Ltd.

Yancheng Environmental Protection

Science & Technology Town of Jiangsu

Province


Science & Technology Town of

Jiangsu Province

Manufacturing

industry72.00



Ningxia KEHANG Environmental

Protection Engineering Co., Ltd. Pingluo, Ningxia Pingluo, Ningxia

Manufacturing

industry100.00



Beijing KEHANG Environmental

Protection Technology Research

Institute Co., Ltd.

Beijing City Beijing City Manufacturing

industry100.00



Anhui KEDA Clean Energy New

Materials Co., Ltd.



Anhui Province



Anhui Province

Manufacturing

industry 92.00 Establishment

Zhangzhou Juming Graphite Co.,

Ltd.

Chuanchang Town, Nanjing County,

Fujian Province


Fujian Province

Manufacturing

industry 100.00



Jiangsu Kehang Environmental Protection Science & Technology Co., Ltd.

Fair value on the date of buying Book value on the date of buying

Liabilities: 74,892.59 73,748.73

Short-term loan 20,635.00 20,635.00

Notes payable 15,135.87 15,135.87

Accounts payable 16,762.45 16,762.45

Accounts pre-received 7,487.61 7,487.61

Payroll payable 592.44 592.44

Tax payable 183.66 183.66

Other payables 3,043.70 3,043.70

Long-term loan 9,400.00 9,400.00

Deferred earnings 508.00 508.00

Deferred income tax liabilities 1,143.86

Net assets 14,500.44 8,402.34

Minus: minority shareholders’ equity

4,060.12 2,352.66

Net assets acquired 10,440.32 6,049.68

Unit: 10 thousand yuan, currency: RMB

Zhangzhou Juming Graphite Co., Ltd. Fair value on the date

of purchasing Book value on the date of

purchasing

Assets: 5,382.53 5,382.53

Monetary fund 801.38 801.38

Receivables 987.71 987.71

Accounts prepaid 41.32 41.32

Other receivables 85.23 85.23

Stock 970.81 970.81

Fixed assets 2,448.87 2,448.87

Intangible assets 47.21 47.21

Liabilities: 3,107.74 3,107.74

Short-term loan 529.43 529.43

Payables 618.37 618.37

Accounts pre-received 59.22 59.22

Payroll payable 21.06 21.06

Tax payable 18.41 18.41

Other payables 1,861.25 1,861.25

Net assets 2,274.79 2,274.79

Minus: minority shareholders’ equity

Net assets acquired 2,274.79 2,274.79

2. Change of scope of merging by other causes

Describe changes of scope of merging by other causes (such as: newly established subsidiaries and liquidating

subsidiaries) and related conditions.Unit: 10 thousand yuan Currency: RMB

Name of subsidiaries Causes for not listed in the

scope of mergingDate of

deregistration Net profit in this period

Emeishan Keda Clean Energy Co., Ltd. Deregistered 2015/12/24 -3,237.71

Linyi KEDA Clean Energy Co., Ltd. Deregistered 2015/04/22 -2,333.37

Anhui Jiufu New Wall Materials Co., Ltd. Deregistered 2015/12/09 -3,138.50



③ On July 31, 2015, the Company purchased equity of 0.15% held by Liu Zhantang of Foshan Keda Hydraulic

Machinery Co., Ltd. at the price of 343 hundred yuan; on October 12, 2015, the Company purchased equity of 0.15%

held by Yang Beibei of Foshan Keda Hydraulic Machinery Co., Ltd. at the price of 345 hundred yuan; on November 24,

2015, according to capital verification by Foshan Zhixin CPA Firm (capital verification report: ZXYZ (2015) No. N1020), the

Company and minority shareholders increased capital to Foshan KEDA Hydraulic Machinery; Co., Ltd. with 18.60 million

yuan and 9.15 million yuan. After the capital increasing, the Company’s shareholding ratio at KEDA Hydraulic is increased

from 51.00% of 58.85%.

(2) Influences on minority shareholders’ equity and owner’s equity attributed to the parent company by the

transaction Unit: 10 thousand yuan Currency: RMB

Foshan Do

Better Co.,

Ltd.

Foshan KEDA

Hydraulic

Machinery Co., Ltd.

Changsha Aer

Compressor

Co., Ltd.

Purchasing cost/disposal consideration 600.00 1,860.00 183.31

- Cash 600.00 1,860.00 183.31

- Fair value of non-cash assets

Purchasing cost/disposal consideration in total 600.00 1,860.00 183.31

Minus: shares of net assets of subsidiaries computed

according to equity ratio acquired/disposed of704.17 1,863.51 160.87

Difference -104.17 -3.51 22.44

Wherein: adjustment Capital reserve 104.17 3.51 -22.44

Adjust surplus Capital reserve

Adjust undistributed profits

3. Equity in joint venture or cooperative enterprise


(1).Financial information summary of insignificant joint venture or cooperative enterprise Unit: 10 thousand yuan Currency: RMB

Closing balance/

Amount in this period

Opening balance/

Amount last period

Joint venture

Investment book value in total: 50.45 825.80

Total amount computed in accordance with the shareholding ratios:

- Net profit -14.85 -141.88

- Other comprehensive earnings

- Total comprehensive earnings -14.85 -141.88

X. Risks related to financial instruments


(I) Contents and policies of risk management

The Company’s main financial instruments include receivables, payables and bank loan etc. Risks related to these

financial instruments and risk management policy adopted by the Company to lower these risks are described as follows. The

Company’s management manages and monitors risk exposures and ensures that the risks are controlled within limit scope.

1.Market risks

(1) Interest rate risks-risks of change of fair value. The risk from change of fair value of financial instruments by

change of interest rate is from short-term loan with fixed interest rate. For the loan with fixed interest rate is short-term

loan; therefore, the Company holds the opinion that, fair interest rate risk is not significant. The Company does not have

interest rate hedging policy.

(2) Significant non-fully-owned subsidiaries Unit: 10 thousand yuan Currency: RMB

Names of subsidiaries

Shareholding

ratio of

minority

shareholders

(%)

Profits and

losses attributed

to minority

shareholders in

this period

Dividend declared

and issued

to minority

shareholders in

this period

Balance of

minority

shareholders’

equity at the end

of the period

Shenyang KEDA Clean Energy Gas

Co., Ltd. 17.50 -2,041.06 676.55

KEDA (Anhui) Clean Energy Co., Ltd. 31.56 1,686.35 16,606.63


Protection Science & Technology Co.,

Ltd.

28.00 914.30 4,974.42

(3) Main financial information of significant and non-fully-owned subsidiaries Unit: 10 thousand yuan Currency: RMB

Names of

subsidiaries


Current

assets

Non-current

assets

Assets in

total

Current

liabilities

Non-current

liabilities

Liabilities in

total

Current

assets

Non-current

assets

Assets in

total

Current

liabilities

Non-current

liabilities

Liabilities

in total

Shenyang KEDA

Clean Energy

Gas Co., Ltd.

24,466.53 83,960.32 108,426.85 98,943.80 5,617.06 104,560.86 19,601.40 81,681.00 101,282.40 75,616.62 10,136.60 85,753.22

KEDA (Anhui)

Clean Energy

Co., Ltd.

65,782.41 17,748.86 83,531.27 28,710.36 2,201.66 30,912.02 56,443.14 20,590.87 77,034.01 27,174.38 2,583.70 29,758.08

Jiangsu Kehang

Environmental

Protection

Science &

Technology Co.,

Ltd.

60,118.24 33,326.28 93,444.52 71,434.31 4,244.42 75,678.73 55,159.57 34,233.46 89,393.03 61,733.73 13,158.86 74,892.59

Names of subsidiaries

Amount in this period Amount last period

Business

revenue Net profit

Total

amount of

comprehensive

earnings

Cash flow

of business

activities

Business

revenue Net profit

Total

amount of

comprehensive

earnings

Cash flow

of business

activities

Shenyang KEDA Clean Energy

Gas Co., Ltd. 10,721.02 -11,663.18 -11,663.18 34,483.23 10,660.65 -15,092.49 -15,092.49 16,741.29

KEDA (Anhui) Clean Energy

Co., Ltd. 33,886.14 5,343.31 5,343.31 3,204.39 44,567.75 2,947.95 2,947.95 -14,366.85


Protection Science &


21,099.34 3,265.35 3,265.35 23,555.99

2. Transaction of change of owner’s equity of subsidiaries and still controlling subsidiaries


(1) Description of change of owner’s equity shares of subsidiaries

① In January, 2015, Foshan Do Better Machinery Co., Ltd. increased capital of 16 million yuan, wherein, Henglitai

Company increased capital of 6 million yuan, and after capital increasing was completed, and the shareholding ratio was

increased from 55% to 50.7585%.

② In May, 2015, the Company purchased equity of 3.06% held by Li Xu of Changsha Aer Compressor Co., Ltd. at

the price of 1.8331 million yuan.



Continued:

Item

Opening balance

Book value Total amount Within 1 year 1-3 yearsMore than

3 years

Monetary fund 347,877,207.15 347,877,207.15 347,877,207.15

Accounts receivables 754,034,108.28 754,034,108.28 520,740,176.64 214,928,237.72 18,185,082.02

Accounts prepaid 128,128,041.36 128,128,041.36 108,004,997.94 18,401,519.00 1,721,524.42

Other receivables 38,653,715.75 38,653,715.75 27,944,341.76 7,765,414.00 2,943,959.99

Non-current assets due

in 1 year 1,279,002,174.13 1,279,002,174.13 1,279,002,174.13

Long-term receivables 469,000,529.24 469,000,529.24 469,000,529.24

Subtotal 3,016,695,775.91 3,016,695,775.91 2,283,568,897.62 710,095,699.96 22,850,566.43

Bank loan 1,674,391,827.23 1,674,391,827.23 1,395,747,002.08 278,644,825.15

Notes payable 373,808,839.79 373,808,839.79 373,808,839.79

Accounts payable 850,526,171.84 850,526,171.84 729,062,985.65 104,410,370.97 17,052,815.22

Other payables 33,835,598.11 33,835,598.11 20,992,504.99 10,839,501.03 2,003,592.09

Subtotal 2,932,562,436.97 2,932,562,436.97 2,519,611,332.51 393,894,697.15 19,056,407.31

4. Breaching risks

The Company’s credit standing is AA, and the Company has not involve any overdue repayment in the past several

years.

XI. Related parties and related transactions

1. Details of subsidiaries of the enterprise

Refer to annotations on details of subsidiaries of the enterprise. Unit: 10 thousand yuan, currency: RMB

Full name of subsidiaries Enterprise

typeLocation of registration

Legal

representative

Nature of

business

Registered

capital

Shareholding

ratio (%)

Voting

right

ratio(%)

Organization code

Foshan KEDA Stone

Machinery Co., Ltd.

Company

limited


Town, Shunde District, Foshan City Xie Cheng

Manufacturing

industry1,695.00 100.00 100.00 74997519-2

KEDA (Anhui) IndustrialCo.,

Ltd.

Company

limited

Maanshan Economic and Technical

Development Zone of Anhui Province Chen Xinjiang

Manufacturing

industry68,000.00 100.00 100.00 67589409-X

Maanshan KEDA

Xinmingfeng Engineering

Co., Ltd.

Company

limited


Development Zone of Anhui ProvinceXu Jianshe

Manufacturing

industry500.00 100.00 100.00 55016683-0


Co., Ltd.

Joint-stock

company


Development Zone of Anhui ProvinceLiu Xin

Manufacturing

industry4,460.00 68.44 68.44 66150396-7


Gas Co., Ltd.

Company

limited

Liaoning Faku Economic

Development Zone Zhou Zubing

Manufacturing

industry40,000.00 82.50 82.50 55079226-8

Foshan KEDA Hydraulic

Machinery Co., Ltd.

Company

limited

Dadu Village Committee Industrial

Park of Chencun Town, Shunde

District, Foshan City

Yang JunManufacturing

industry3,850.00 58.85 58.85 56829058-1

Foshan Henglitai Machinery

Co., Ltd.

Company

limited

Sanshui Central Science &

Technology Industrial Zone of

Foshan City

Yang Xuexian Manufacturing

industry2,560.00 100.00 100.00 71239366-6

Foshan Henglitai Labor

Dispatching Co., Ltd.

Company

limitedShancheng District, Foshan City Chen Yulan

Service

industry200.00 100.00 100.00 58295434-8

Anhui Xincheng Investment

Co., Ltd.

Company

limited


Development Zone Zhou Hehua

Commercial

service

industry

11,400.00 100.00 100.00 69867403-0

Anhui KEDA Xinmingfeng

IndustrialCo., Ltd.

Company

limited

Wuhu Machinery Industrial Park of

Anhui Province Shen Xiaohe

Manufacturing

industry2,000.00 100.00 100.00 66624276-X

Changsha Aer Compressor

Co., Ltd.

Company

limited

Changsha Economic and Technical

Development Zone of Hu’nan

Province

Zeng FeiManufacturing

industry2,608.00 76.49 76.49 75582796-2

(2) Interest rate risk-risk from change of cash flow. The risks related to change of cash flow of the financial

instruments by change of interest rate is mainly related to short-term loan and long-term loan with floating interest rate.

The Company’s policy is to maintain floating interest rate of these loans to eliminate risks from change of fair value of

interest rate.

2.Credit risks

Maximum credit risk exposure probably resulting in the Company’s financial losses is mainly caused the contract

parties’ failure to perform obligations, and losses are occurred to the Company’s financial assets.

Financial assets in the consolidated statement includes receivables. To lower credit risks, the Company establishes

a team to determine credit line, execute credit approval and other monitoring procedures to ensure that necessary

measures are adopted to recover creditor’s right overdue. Besides, on each date of balance sheet, the Company checks

recovery of each recoverable to ensure that the non-recovered amount is accrued for non-performing debt reserve.

3.Fluidity risks

The Company’s management properly monitors cash and cash equivalent to meet the Company’s business

requirements and lower influences on cash flow fluctuation.

The Company’s fund management department monitors the Company’s short-term and long-term fund

requirements and maintain sufficient fund reserves. Meanwhile, continue to monitoring whether they are in conformity with

the loan agreement, and obtain commitment on sufficient spare fund from financial institutes to meet short-term and long-

term fund requirements.

In summary, the Company’s management holds the opinion that, the fluidity risks assumed by the Company has

been lowered much, and do not constitute significant influences on business and financial statements. The financial

statements are prepared on the assumption of going concern.

Till December 31, 2015, the Company’s financial assets and financial assets are listed on dates with the

undiscounted contract cash flow.

Item

Closing balance

Book value Total amount Within 1 year 1-3 yearsMore than

3 years

Monetary fund 729,044,894.44 729,044,894.44 729,044,894.44

Accounts receivables 1,104,823,386.52 1,104,823,386.52 930,990,478.16 153,255,224.23 20,577,684.13

Accounts prepaid 210,486,474.33 210,486,474.33 179,036,961.81 27,665,425.46 3,784,087.06

Other receivables 135,973,904.93 135,973,904.93 120,597,650.57 13,050,067.76 2,326,186.60

Non-current assets due

in 1 year 1,136,341,034.72 1,136,341,034.72 1,136,341,034.72

Long-term receivables 380,428,530.53 380,428,530.53 380,428,530.53

Subtotal 3,697,098,225.47 3,697,098,225.47 3,096,011,019.70 574,399,247.98 26,687,957.79

Bank loan 966,565,815.04 966,565,815.04 600,352,720.59 366,213,094.45

Notes payable 430,184,109.88 430,184,109.88 430,184,109.88

Accounts payable 1,377,248,393.38 1,377,248,393.38 1,220,258,038.25 134,449,556.61 22,540,798.52

Other payables 87,811,359.23 87,811,359.23 79,436,511.95 6,954,253.46 1,420,593.82

Other current liabilities 105,990,000.00 105,990,000.00 105,990,000.00

Subtotal 2,967,799,677.53 2,967,799,677.53 2,436,221,380.67 507,616,904.52 23,961,392.34



4. Details of related transactions

(1) Related transactions of purchasing and selling commodities, and offering and receiving labors


(2) Details of related consigned management/contracting and consigned management/contracting


(3) Details of related leasing


(4) Details of related guarantee


The Company acts as guarantor. Unit: 10 thousand yuan Currency: RMB

Guaranteed party Amount

guaranteed

Commencement

date of guarantee

Due date of

guarantee

Guarantee

expired or not

Anhui Xincheng Financing and Leasing Co., Ltd. 7,350.00 2015/6/29 2016/8/2 No

Anhui Xincheng Financing and Leasing Co., Ltd. 36,389.38 2015/10/27 2018/9/5 No

Foshan Do Better Machinery Co., Ltd. 1,500.00 2015/9/1 2016/9/1 No

Guangdong Xincheng Financing and Leasing

Co., Ltd. 800.00 2014/8/25 2016/4/4 No

Shenyang KEDA Clean Energy Gas. Co., Ltd. 2,112.50 2011/12/1 2016/2/19 No

Shenyang KEDA Clean Energy Gas. Co., Ltd. 5,791.67 2012/2/3 2017/2/2 No

KEDA (Anhui) Industrial Co., Ltd. 1,000.00 2015/12/8 2016/6/4 No

KEDA (Anhui) Clean Energy Co., Ltd. 6,690.00 2015/7/29 2016/6/25 No

Foshan Henglitai Machinery Co., Ltd. 964.00 2015/7/29 2016/6/25 No


Science & Technology Co., Ltd. 5,000.00 2015/11/13 2016/1/30 No

Unit: 10 thousand currency: USD

Guarantee party Amount

guaranteed

Commencement

date of guarantee

Due date of

guarantee

Guarantee

expired or not

Xincheng International (Hong Kong) Co., Ltd. 480.00 2015/9/2 2016/8/26 No

Xincheng International (Hong Kong) Co., Ltd. 500.00 2015/9/25 2016/9/14 No

(5) Interbank borrowing and lending of related parties


(6) Details of asset transfer and debt reconstruction of related parties


(7) Remuneration of key management staff

√ Applicable □ Not applicableUnit: 10 thousand yuan Currency: RMB


Remunerations of key managers 810.23 757.00

5. Receivables and receivables of related parties


(1) Payables Unit: 10 thousand yuan Currency: RMB

Item Related parties Closing book

balance

Opening book

balance

Accounts payable Guangdong Taiwei Digital Ceramics Printing Co., Ltd. 0 190.57

Other payables Guangdong Taiwei Digital Ceramics Printing Co., Ltd. 0 500.00

Full name of subsidiaries Enterprise

typeLocation of registration

Legal

representative

Nature of

business

Registered

capital

Shareholding

ratio (%)

Voting

right

ratio(%)

Organization code

Anhui KEDA Aer

Compressor Co., Ltd.

Company

limited


Development ZoneZeng Fei

Manufacturing

industry2,000.00 100.00 100.00 07670846-X

Henan KEDA Dongda

International Engineering

Co., Ltd.

Company

limitedWest Jianshe Road, Zhengzhou City Zhao Pengxi

Manufacturing

industry5,000.00 100.00 100.00 70678565-5

Foshan Do Better Machinery

Co., Ltd.

Company

limitedSanshui District, Foshan City Hu Jianguo

Manufacturing

industry396.00 50.76 50.76 66496659-6

Jiangsu Kehang

Environmental Protection

Science & Technology Co.,

Ltd.

Company

limited


Science & Technology Town of

Jiangsu Province

Liu HuaipingManufacturing

industry8,937.00 72.00 72.00 60861122-01

Ningxia Kehang


Engineering Co., Ltd.

Company

limitedPingluo, Ningxia Liu Huaiping

Manufacturing

industry5,000.00 100.00 100.00 57486843-01

Beijing Kehang


Technical Research Institute

Co., Ltd.

Company

limitedBeijing Liu Tongquan

Manufacturing

industry100.00 100.00 100.00 39988018-4

Anhui KEDA Clean Energy

New Materials Co., Ltd.

Company

limited

Dangtu Economic Development

Zone, Maanshan City, Anhui

Province

Hao LaichunManufacturing

industry1,000.00 92.00 92.00 91340521355187820D

Zhangzhou Juming Graphite

Co., Ltd.

Company

limited


Fujian Province Wu Jianyun

Manufacturing

industry1,649.93 100.00 100.00 91350627717396444C

Unit: 10 thousand Currency: USD

Full name of subsidiaries Enterprise type Location of registration Legal

representative

Nature of

business

Registered

capital

Shareholding

ratio(%)

Voting

right

ratio (%)

KEDA Industrial(Hong Kong)

Co., Ltd. Company limited Hong Kong Bian Cheng

Import and

export trade 1,000.00 100.00 100.00

Guangdong Xincheng

Financing and Leasing Co.,

Ltd.

Company limited Shunde District, Foshan City Zhou Hehua

Commercial

service

industry

2,700.00 100.00 100.00


and Leasing Co., Ltd. Company limited


Technical Development Zone Zhou Hehua

Commercial

service

industry

3,500.00 100.00 100.00

2. Details of joint venture and cooperative enterprise

Refer to annotation on key joint venture or cooperative enterprise of the enterprise. Unit: 10 thousand yuan Currency: RMB

Invested party Enterprise

type

Location of

registration

Legal

representative

Nature of

business

Registered

capital

Shareholding

ratio of the

enterprise

(%)

Voting share ratio

of the enterprise

at the invested

party (%)

Organization

code

II. Joint venture

Guangdong Taiwei

Digital Ceramics

Printing Co., Ltd.

Company

limited

Foshan,

Guangdong

Province

Xu Lei Manufacturing

industry2,000.00 40.00 40.00 59405878-6

3. Details of other related parties




According to relevant rules and regulations on determination of fair value in Enterprise Accounting Code No.22-

Confirmation and Measurement of Financial Instruments, the Company selected Black-Scholes Model and the closing

price of KEDA Industrial on date of granting (March 8, 2012) to measure fair value of stock options of the Company.

(1) Stock option exercising price (X): the stock option price in the plan is 10.03 yuan.

(2) Price of date of granting: (S) ：10.90 yuan.

(3) Effective period (T): effective period of stock option exercising is computed in accordance with the middle-point

methods, namely (period of option determination+ survival period)/2, and the results are 1.5 years, 2.5 years, 3.5 years

and 4.5 years.

(4) History fluctuation rat ( ): the value is 38.67% (Notes: history fluctuation rate 180 transaction dates before the

date of granting).

(5) Risk-free earnings rate (r): the nominal annual interest rate of the interest-bearing (Phase-III) national debt issued

on February 16, 2012 was used to replace the risk-free interest rate.

According to the above parameters, total theoretical amount corresponding to 36.30 million shares of stock option

in the equity incentive plan was 128.4608 million yuan, which would be amortized within 48 months. The Company

finished authorization on March 8, 2012, and the amortization costs from 2012 to 2016 is: Unit: 10 thousand yuan

Year 2012 2013 2014 2015 2016 Total

Amount influenced 5,050.97 4,055.54 2,399.98 1,176.02 163.57 12,846.08

According to Article 19 of Chapter 7 of Phase-II Stock Option Incentive Plan (Draft Revision): in case of dividend

payout, Capital reserve transferred to shares, stock dividend bonus, stock division and stock allocation involving KEDA

Industrial before stock options are exercised, the price for exercising stock options is adjusted correspondingly.

Reviewed and adopted by the Company’s shareholder’s conference for the year 2011, the profit distribution plan for

the year 2011 is described as follows: total share capital at the end of the year 632,011,700 as the base, cash dividend

1.00 yuan (tax included) per 10 shares is distributed to all shareholders. Therefore, after the profit distribution for the

year 2011, the stock option exercising price after the stock option incentive plan=stock option price before adjustment-

dividend distributed for each share =10.03-0.10=9.93 (yuan).













2 yuan (tax included) per 10 shares is distributed to all shareholders. Therefore, after the profit distribution for the year

2014, the stock option exercising price after the stock option incentive plan=stock option price before adjustment-


XII. Payment of shares

1. Summary of payment of shares

√ Applicable □ Not applicableUnit: share, currency: RMB

Total amount of equity instruments granted by the

Company in this period 0

Total amount of equity instruments exercised by the

Company in this period8,505,000

Total amount of equity instruments invalidated for the

Company in this period0

Scope of exercisable price range of stock option

issued externally by the Company at the end of the

period and remaining period of the contract hereof

On May 29, 2015, the Company implemented the profit distribution plan

for the year 2014: total number of share capital 697,227,161 shares as

the base, and cash dividend of 2.00 yuan (tax included) per 10 shares

was distributed to all shareholders. After the plan was implemented, the

Company’s stock option exercising price was adjusted to 4.93 yuan.

Scope of exercisable price range of other equities

issued externally by the Company at the end of the

period and remaining period of the contract hereof

2. Payment of equity settled with equity Unit: 10 thousand yuan Currency: RMB

Method for determination of fair value of equity

instruments on the date of granting

In accordance with relevant rules and regulations on

determination of fair value in Enterprise Accounting Code No.22-

Confirmation and Measurement of Financial Instruments, the

Company selected Black-Scholes Model to determine fair value

of the stock option incentive plan on the date of granting.

Cumulative amount with share payment of equity

settlement and accounted into Capital reserve 12,109.03

Total costs confirmed for share payment of equity

settlement in this period 1,176.02

Filed by China Securities Regulatory Commission without objection, the 37th Conference of the 4th Session of the Board

of Directors on February 20, 2012 and the 1st extraordinary general meeting of the year 2012 on March 7, 2013 reviewed

and passed the Phase-II Stock Option Incentive Plan (Draft Revision). According to this incentive plan, 39.96 million shares

of stock options were granted to the incented objects, the stock option exercising price was 10.03 yuan, and effective

period of the stock option is 5 years after being granted. Within one year after being granted, the incented objects satisfying

the granting conditions can exercise the stock option. The incented object exercises the stock option granted in 4 phases

from the next date of transaction upon expiry of one year after being granted, and the incented object exercises the stock

options at the rate of 25% year by year. On March 8, 2012, the 38th Conference of the 4th Session of the Board of Directors

of the Company reviewed and passed the Proposal on Determination of Date of Granting of Phase-II Stock Option Incentive

Plan, and determined that the date of granting of Phase-II Stock Option Incentive Plan was March 8, 2012.

The 7th Conference of the 5th Session of Board of Director reviewed and passed the Proposal on Adjustment of

Quantity of Stock Option of Phase-II Stock Option Incentive Plan of the Company. Due to resignation of the staff Duan

Gaofeng etc. with 36 persons, exercising of 3.96 million shares of stock option was cancelled, quantity of incented object

was adjusted from 359 persons to 323 persons, and the stock option quantity was adjusted from 39.66 million shares to

35.70 million shares .

The 23rd Conference of the 5th Session of the Board of Directors of the Company reviewed and passed the Proposal

on Adjustment of Stock Option Exercising Price and Quantity of Phase-II Stock Option Incentive Plan. Due to resignation

of 6 persons such as resignation and death of Meng Chen because of illness, the exercising of 1.02 million shares of stock

option was cancelled. The quantity of incented objects of the Company was adjusted from 323 to 306 persons, and total

number of stock option not exercised was adjusted from 26.7750 million shares to 25.7550 million shares.



XV. Other key events

1. Correction of accounting errors in last period


2. Debt reconstruction


3. Asset swap


4. Annuity plan


5. Business termination


6. Partial information


7. Key transactions and events with influences on investor’s decision-making

None.

XVI. Annotation to main items of financial statements of parent company

1. Receivables

(1) Disclosure of classification of receivables: Unit: yuan, currency: RMB

Type



Book value


Book valueAmount

Accrual

ratio

(%)

Amount Accrual

ratio (%)Amount

Accrual

ratio

(%)

Amount

Accrual

ratio

(%)


Goods payment of subsidiaries

219,167,711.94 67.14 219,167,711.94 256,523,428.38 59.22 256,523,428.38


102,986,752.53 31.55 15,829,417.82 15.37 87,157,334.71 169,588,500.14 39.15 17,942,611.05 10.58 151,645,889.09


4,290,345.90 1.31 4,290,345.90 100.00 7,101,416.38 1.64 7,101,416.38 100.00

Total 326,444,810.37 100.00 20,119,763.72 6.16 306,325,046.65 433,213,344.90 100.00 25,044,027.43 5.78 408,169,317.47

Receivables with single significant amount with non-performing debt reserve accrued separately at the end of the

period:


XIII. Commitment and contingency

1. Key commitments


2. Contingencies


Key contingencies on the date of balance sheet

The Company cooperates with banks to sell products with equipment mortgage loan, the purchaser applies

for mortgage loan at the bank with the purchased equipment, the mortgage loan contract is no more than 70% of

goods payment, with maximum duration of 2 years, the security is deposited according to certain ratio, and is reduced

correspondingly with the loan.

During the reporting period, the Company’s sales through mortgage is 11.7960 million yuan. Till December 31,

2015, the client mortgage balance obliged and committed by the Company is 10.2190 million yuan, and overdue loan

balance is 1.08 million yuan.

XIV. Post balance sheet events

1. Key non-adjustments


2. Profit distribution


1. According to resolution of the 8th conference of the 6th Board of Directors held on June, 2016, the proposal of

profit plan and capita public reserve fund transferred to increase capital share for the year 2015 was passed: (1) the

profit distribution proposal: with total number of share capital 705,732,161.00 as the base, cash dividend 2.00 yuan (tax

included) for each 10 shares is distributed to all shareholders, and cash of 141,146,432.20 yuan is distributed. (2) The

proposal of Capital reserve transferred to increase capital: with total number of share capital 705,732,161.00 shares as

base, each 10 shares are used to increase additional 10 shares by capital transfer. The above resolutions shall be subject

to approval by the Shareholder’s Conference.

3. Post balance sheet events

During the reporting period, due to asset reconstruction under planning, the Company’s stock was suspended from

June 10, 2015 to October 25, 2015. The Company planned to issue stock to purchase assets exchange for minority

shareholders’ equity of KEDA (Anhui) Clean Energy and introduce strategic investors through supporting financing. On

December 10, 2015, the 5th Conference of the 6th Session of Board of Directors of the Company reviewed and passed the

Proposal on KEDA Clean Energy Co., Ltd. to Issue Shares, Purchase Assets and Raise Supporting Funds and Related

Transactions (Draft) and Summary; on December 28, 2015, the 3rd extraordinary general meeting of the year 2015 for

the Company reviewed and passed the Proposal on KEDA Clean Energy Co., Ltd. to Issue Shares, Purchase Assets and

Raise Supporting Funds; on December 30, 2015, the Company submitted the asset reconstruction materials to China

Securities Regulatory Commission for approval.

Greatly affected by fluctuation of stock A market, the Company’s stock price dropped down sharply. The parties

involving the reconstruction transactions had serious divergence over the reconstruction proposal, through several

times of communication, and the Company determined to terminate the asset reconstruction. On March 16, 2016,

the 7th Conference of the 6th Session of the Company reviewed and passed the Proposal on Termination of Asset

Reconstruction and Cancellation of the Reconstruction Application Document; on April 1, 2016, the Company convoked

the 1st extraordinary general meeting to pass the proposal, and submitted the Application on Cancellation of Asset

Reconstruction of Guangdong KEDA Clean Energy Co., Ltd to China Securities Regulatory Commission.; on April 26,

2016, China Securities Regulatory Commission issued the Notice on Termination of Review as Administration License

by China Securities Regulatory Commission ([2016] No.273). According to the Procedures of Administrative Licenses by

China Securities Regulatory Commission, China Securities Regulatory Commission terminates review of the Company’s

administrative license.



(4) Receivables of the top 5 debtors for closing balance

Company Relations with the

Company Amount Debt age

Rate of total

receivables %

Anhui Xincheng Financing and

Leasing Co., Ltd. Fully-owned subsidiary 129,088,928.00 Within 1 year 39.54

KEDA Industrial (Hong Kong)

Limited Fully-owned subsidiary 73,577,808.92 Within 1 year 22.54

KEDA (Anhui) Industrial Co., Ltd. Fully-owned subsidiary 16,500,975.02 Within 1 year 5.05

Client 6 Non-related party 4,920,049.97 1 to 2 years 1.51

Client 7 Non-related party 4,813,800.00 Within 1 year 1.47

Total 228,901,561.91 70.12

2. Other receivables

(1) Disclosure of other receivables: Unit: yuan, currency: RMB

Category



Book value


Book valueAmount

Ratio

(%)Amount

Accrual

ratio(%)Amount

Ratio

(%)Amount

Accrual

ratio(%)


Current accounts of related parties

1,370,530,267.05 97.93 1,370,530,267.05 372,519,703.38 97.01 372,519,703.38

Export rebating 20,005,724.27 1.43 20,005,724.27


9,015,089.09 0.64 1,359,091.45 15.08 7,655,997.64 11,474,582.03 2.99 880,329.10 7.67 10,594,252.93


Total 1,399,551,080.41 100.00 1,359,091.45 0.10 1,398,191,988.96 383,994,285.41 100.00 880,329.1 0.23 383,113,956.31

In the combination, other receivables with non-performing debt reserve accrued according to the debt age analysis

method:


Debt age

Closing balance

Other

receivables

Non-performing

debt reserve Accrual ratio(%)

Within 1 year 3,613,709.09 180,685.45 5.00

1 to 2 years 4,504,280.00 900,856.00 20.00

2 to 3 years 570,000.00 114,000.00 20.00

More than 3 years 327,100.00 163,550.00 50.00

Total 9,015,089.09 1,359,091.45

In the combination, receivables with non-performing debt reserve accrued according to the debt age analysis method:


Debt age

Closing balance

Accounts

receivable

Non-performing

debt reserve Accrual ratio(%)

Within 1 year 46,508,147.39 2,325,407.37 5.00

1 to 2 years 41,539,136.31 8,307,827.26 20.00

2 to 3 years 7,578,504.07 1,515,700.81 20.00

More than 3 years 7,360,964.76 3,680,482.38 50.00

Total 102,986,752.53 15,829,417.82

In the combination, receivables with non-performing debt reserve accrued according to the balance percentage

method:


In the combination, receivables with non-performing debt reserve accrued according to other methods:

Portfolio Book value Non-performing debt reserve

Goods payment of subsidiaries 219,167,711.94

Total 219,167,711.94

(2) Details of non-performing debt reserve accrued, recovered or carried back in this period:

Non-performing debt reserve accrued in this period is 13,401,232.51 yuan, and the non-performing debt amount

recovered or carried back in this period is 0.

Significant amount recovered or carried back for non-performing debt reserve in this period:


(3) Receivables written off in this period


Item Amount written-off

Receivables written off 18,325,496.22

Details of writing-off of key receivables:


Client Nature of

receivable

Amount

written off

Cause of

writing-off

Writing-off procedures

performed

Caused by related

transactions

Client A Goods payment 6,581,974.38 Unrecoverable Non-performing writing-

off approval processNo

Client B Goods payment 2,434,631.64 UnrecoverableNon-performing writing-


Client C Goods payment 1,767,884.10 UnrecoverableNon-performing writing-


Client D Goods payment 1,193,846.50 UnrecoverableNon-performing writing-


Client E Goods payment 1,187,820.00 UnrecoverableNon-performing writing-


Client F Goods payment 1,058,827.00 UnrecoverableNon-performing writing-

off approval process No

Total / 14,224,983.62 / / /



(1) Investment on subsidiaries


Invested party Opening balanceIncrement in

this period

Decrement in


Accrued

depreciation

reserve in

this period

Closing

balance of

depreciation

reserve

Foshan Shida Stone Machinery Co., Ltd. 34,651,224.26 34,651,224.26

KEDA Industrial (Hong Kong) Limited 66,946,000.00 66,946,000.00

KEDA (Anhui) Industrial Co., Ltd. 680,000,000.00 680,000,000.00

KEDA (Anhui) Clean Energy Co. Ltd. 232,909,800.00 232,909,800.00

Foshan KEDA Hydraulic Machinery Co.,

Ltd. 10,200,000.00 18,668,750.00 28,868,750.00

Shenyang KEDA Clean Energy Gas Co.,

Ltd330,000,000.00 330,000,000.00

Foshan Henglitai Machinery Co., Ltd. 682,954,365.00 682,954,365.00

Anhui Xincheng Investment Co., Ltd. 129,954,830.85 129,954,830.85

Changsha Aer Compressor Co., Ltd. 62,831,418.97 1,833,100.00 64,664,518.97

Henan KEDA Dongda International

Engineering Co., Ltd. 360,940,993.00 360,940,993.00


Science & Technology Co., Ltd. 180,000,000.00 180,000,000.00

Anhui Jiufu New Wall Materials Co., Ltd. 98,000,000.00 98,000,000.00

Emeishan KEDA Clean Energy Co., Ltd. 41,500,000.00 41,500,000.00

Linyi KEDA Clean Energy Co., Ltd. 26,600,000.00 26,600,000.00

Total 2,730,888,632.08 227,101,850.00 496,100,000.00 2,461,890,482.08

(2) Investment on joint venture and cooperative enterprise


Invested partyOpening

balance

Change from increasing or decreasing in this period

Closing

balance

Closing

balance of

depreciation

reserve

Investment

increased

Investment

decreased

Investment

gains and

losses

confirmed

under equity

law

Adjustment

of other

comprehensive

earnings

Change

of other

equity

Cash

dividend

or profit

declared

and issued

Accruing

depreciation

reserve

Others

I. Joint venture

II, Cooperative

enterprises

Jiangyin Tianjiang

Pharmaceutical

Co., Ltd.

209,889,585.21 259,968,376.83 50,078,791.62

Guangdong

Taiwei Digital

Ceramics Printing

Co., Ltd.

8,258,025.03 7,694,126.51 -59,413.57 504,484.95

Subtotal 218,147,610.24 267,662,503.34 50,019,378.05 504,484.95

Total 218,147,610.24 267,662,503.34 50,019,378.05 504,484.95

In the combination, other receivable with non-performing debt reserve with other methods:

Portfolio Book value Non-performing debt reserve

Current accounts of related parties 1,370,530,267.05

Export rebating 20,005,724.27

Total 1,390,535,991.32

(2) Details of non-performing debt reserve accrued, recovered or carried back in the period:

Non-performing debt reserve accrued in this period is 478,762.35 yuan; non-performing debt reserve recovered or

carried back in this period is 0.

Key amount carried back or recovered for non-performing debt reserve in this period:


(3)Other receivables of the top 5 debtors for the closing balance:


Company Nature of fund Closing balance Debt age

Ratio of closing

balance

to other

receivables (%)

Closing

balance of non-

performing debt

reserve

Shenyang KEDA Clean


Current accounts

with subsidiaries 828,480,000.00

Within 1 year,

1 to 2 years 59.20


and Leasing Co., Ltd.

Current accounts

with subsidiaries349,252,528.02 Within 1 year 24.96

KEDA (Anhui) Industrial

Co., Ltd.

Current accounts


Anhui Xincheng Investment

Co., Ltd.

Current accounts

with subsidiaries55,000,000.00 1 to 2 years 3.93

Jiangsu Kehang

Environmental Science &


Current accounts


Total / 1,367,732,528.02 / 97.73

3. Long-term equity investment


Item


Book balance Depreciation

reserve Book value Book balance

Depreciation

reserve Book value

Investment on subsidiaries 2,461,890,482.08 2,461,890,482.08 2,730,888,632.08 2,730,888,632.08

Investment on joint venture

and cooperative enterprise 504,484.95 504,484.95 218,147,610.24 218,147,610.24

Total 2,462,394,967.03 2,462,394,967.03 2,949,036,242.32 2,949,036,242.32



(3) Investment earnings from disposal of long-term equity investment:


Jiangyin Tianjiang Pharmaceutical Co., Ltd. 664,177,590.17

Emeishan KEDA Clean Energy Co., Ltd. -41,500,000.00

Linyi KEDA Clean Energy Co., Ltd. -26,600,000.00

Anhui Jiufu New Wall Material Co., Ltd. -64,322,786.99

Shenyang KEDA Clean Energy Gas Co., Ltd. -284,220,242.31

Total 247,534,560.87

XVII. Additional data

1. Statement of non-recurring profits or losses in the current period Unit: yuan, currency: RMB

Item Amount

Gains or losses from disposal of non-current assets 581,119,655.21

Tax rebate or exemption because of overriding approval or being without official approval

documents

Government subsidy accounted into current profits and losses (except for the government

subsidy closely related to enterprise business, and in accordance with the generalized quota or

standard by the government)

78,313,724.07

Fund occupation fee not charged by financial enterprises accounted into current profits and

losses

Earnings from investment cost from acquiring subsidiaries, joint enterprise and cooperative

enterprise less than fair value of identifiable net assets of the invested party

Profits and losses of non-monetary asset swap

Profits and losses from assets invested or managed by others consigned

Asset depreciation reserves accrued due to factors beyond control, such as natural disaster

Profits and losses from debt reconstruction

Enterprise reconstruction fees, such as staff settlement expenses and reconstruction costs

Profits and losses from unfair transactions with price more than the fair value

Current net profits and losses of subsidiaries from beginning of the period of the date of

merging from merging of enterprises under the same control

Profits and losses from contingent events not related to the Company regular business

Except effective hedging business related to the Company’s regular business, profits and

losses from change of fair value of transaction financial assets and transaction financial

liabilities, and earnings of investment from disposal of transaction financial assets, transaction

financial liabilities and available-for-sale financial assets

Carrying back of receivable depreciation reserve with separate depreciation testing

Profits and losses from externally consigned loan

Profits and losses from change of fair value of subsequently measured investment property in

mode of fair value

According to tax, accounting and other legal requirements, the current profits and losses are

adjusted in lump sum to adjust influences on the current profits and losses

Income of trustee fee from cosigned business

Non-business income and expense beyond the above 3,469,777.07

Profits and losses in conformity with definitions of non-recurring profits and losses

Influential amount of income tax -132,290,054.16

Influential amount of minority shareholders’ equity 6,699,573.86

Total 537,312,676.05

4. Business income and business cost: Unit: yuan, currency: RMB


Income Cost Income Cost

Main business 1,770,882,293.78 1,457,952,249.74 2,003,919,051.51 1,613,342,571.66

Other business 2,829,642.59 2,944,203.73 1,285,965.14 676,074.16

Total 1,773,711,936.37 1,460,896,453.47 2,005,205,016.65 1,614,018,645.82

5. Investment earnings


Item Amount in this

period

Amount last

period

Earnings of long-term equity investment computed in accordance with the cost

method 20,000,000.00 175,000,000.00

Earnings of long-term equity investment computed in accordance with the equity

method50,019,378.05 64,718,670.43

Earnings of investment from disposal of long-term equity investment 247,534,560.87

Earnings of investment of financial assets during the holding period measured with

fair value with changes accounted into current gains and losses

Earnings of investment from disposal of financial assets measured with fair value

and changes accounted into current gains and losses

Earnings of investment of the held-to-maturity investment in the holding period

Earnings of investment of available-for-sale financial assets during the holding

period

Earnings of investment from disposal of available-for-sale financial assets

After losing the control, gains from remaining equity re-measured with fair value

Total 317,553,938.92 239,718,670.43

(1) Earnings of long-term equity investment computed according to the cost method:

Item Amount in this

period

Amount last

period

Foshan Henglitai Machinery Co., Ltd. 100,000,000.00

Foshan KEDA Stone Co., Ltd. 45,000,000.00

Henan KEDA Dongda International Engineering Co., Ltd. 20,000,000.00 30,000,000.00

Total 20,000,000.00 175,000,000.00

(2) Long-term equity investment earnings computed according to the equity law:

Item Amount in this

period

Amount last

period

Jiangyin Tianjiang Pharmaceutical Co., Ltd. 50,078,791.62 65,286,176.13

Guangdong Taiwei Digital Ceramics Printing Co., Ltd. -59,413.57 -567,505.70

Total 50,019,378.05 64,718,670.43



2. Earnings rate of net assets and earnings per share

Profit during the reporting period

Weighted

average net asset

earnings rate (%)

Earnings per share

Basic

earnings per

share

Diluted

earnings per

share

Net profit attributed to ordinary shareholders of the

Company 14.04 0.771 0.771

Net profits attributed to shareholders of ordinary shares of

the Company after non-recurring gains and losses deducted 0.10 0.006 0.006

Legal representative:

Date of approval and submitted by the Board of Directors: April 29, 2016

KEDA Clean Energy Co., Ltd.

important notice - 广东科达洁能股份有限公司- · important notice i. board of directors,...

Documents