Annual and Transition Report (foreign Private Issuer) (20-f)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

¨	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the Transition period from to

Commission file number: 001-12126

CHINA ENTERPRISES LIMITED

(Exact Name of Registrant as Specified in its Charter)

Bermuda

(Jurisdiction of Incorporation or Organization)

25th Floor, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong

(Address of Principal Executive Office)

Telephone: (852) 3151-0300 Fax: (852) 2542-0298

(Name, Telephone, E-mail/and/or Facsimile Number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:


Title of Each Class		Name of Each Exchange on Which Registered
N/A		N/A

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Common stock, par value $0.01 per share

(Title of Class)

Securities for which there is a reporting obligation pursuant to section l5(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Annual Report.

Common Stock: 9,017,310 shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Act. ¨ Yes x No

If this is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ¨ Yes x No

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required file such reports), and (2) has been subject to such filing requirements for the past 90 days. ¨ Yes x No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (check one):


Large accelerated filer ¨		Accelerated filer ¨		Non-accelerated filer x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP x

International Financial Reporting Standards as issued

by the International Accounting Standards Board ¨

Other ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ¨ Item 17 ¨ Item 18

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

TABLE OF CONTENTS


PART I

Item 1 Identity of Directors, Senior Management and Advisers			4

Item 2 Offer Statistics and Expected Timetable			4

Item 3 Key Information			4

Item 4 Information on the Company			12

Item 5 Operating and Financial Review and Prospects			15

Item 6 Directors, Senior Management and Employees			18

Item 7 Major Shareholders and Related Party Transactions			21

Item 8 Financial Information			23

Item 9 The Listing			24

Item 10 Additional Information			25

Item 11 Quantitative and Qualitative Disclosure about Market Risk			30

Item 12 Description of Securities Other than Equity Securities			31

PART II

Item 13 Defaults, Dividend Arrearages and Delinquencies			32

Item 14 Material Modifications to the Rights of Security Holders and Use of Proceeds			32

Item 15 Controls and Procedures			32

Item 16A Audit Committee Financial Expert			33

Item 16B Code of Ethics			33

Item 16C Principal Accountant Fees and Services			33

Item 16D Exemptions from the Listing Standards for Audit Committees			34

Item 16E Purchases of Equity Securities by the Issuer and Affiliated Purchasers			34

Item 16F Change in Registrant’s Certifying Accountant			34

Item 16G Corporate Governance			34

PART III

Item 17 Financial Statements			34

Item 18 Financial Statements			34

Item 19 Exhibits

Exhibit 8
Exhibit 12(1)
Exhibit 12(2)
Exhibit 13(1)
Exhibit 13(2)
Exhibit 14(1)

PART I

This Annual Report for China Enterprises Limited (referred to in this report as the “Company” or “we” and which terms shall include, when the context so requires, the subsidiaries of the Company during the applicable period) should be read in conjunction with the consolidated financial statements and accompanying notes included in this report.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F for the year ended December 31, 2014 contains certain forward-looking statements within the meaning of Section 21E of the Securities Act of 1934, as amended. These forward-looking statements are, by their nature, subject to significant risks and uncertainties, and include, without limitation, statements relating to:

•

our business, operating and expansion strategy;

•

our ability to finance our business strategy;

•

our future business conditions and financial results; and

•

future developments in the economic and political environment in China.

The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “may” and similar expressions, as they relate to us, are intended to identify certain of such forward-looking statements. We do not intend to update these forward-looking statements except as required by the U.S. securities laws.

These forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. They are based upon various assumptions, many of which are based, in turn, upon further assumptions, including, without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond the Company’s control, there can be no assurance that the company will achieve or accomplish these expectations or beliefs.

In addition to the factors and matters discussed elsewhere herein, there are a number of important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward-looking statements, including, without limitation, the strength of world economies and currencies, general market conditions, changes in general domestic and international political conditions, and other matters described in the “Risk Factors” included in this Annual Report or otherwise described in the reports the Company files with the Securities and Exchange Commission.

EXCHANGE RATE INFORMATION

Unless otherwise specified, all references in this document to “U.S. Dollars”, “Dollars”, “US$” or “$” are to United States dollars; all references to “Renminbi” or “Rmb” are to Renminbi, which is the legal tender currency of the People’s Republic of China, or the “PRC” or “China”; and all references to “HK$” are to Hong Kong dollars, which is the legal tender currency of the Hong Kong Special Administrative Region, or “Hong Kong”. Where made for the convenience of the reader, conversions of amounts from Renminbi to U.S. Dollars have been made in this document at US$1.00 to Rmb6.2046, the noon buying rate from the Federal Reserve Bank of New York on December 31, 2014. No representation is made that the Renminbi amounts could have been, or could be, converted into U.S. Dollars at that or at any other rate. See section “Exchange Rate Information” under “Item 3. Key Information” in this Annual Report for more details on the exchange rate between Renminbi and US Dollars.

References and statements contained in this document regarding China do not apply to Taiwan or the Republic of China.

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.

KEY INFORMATION

A. SELECTED FINANCIAL DATA

The following table represents the selected consolidated financial information of the Company as of and for the years ended December 31, 2010, 2011, 2012, 2013 and 2014. The Consolidated Statements of Operations Data for each of the three years in the period ended December 31, 2014 and the Consolidated Balance Sheets Data as of December 31, 2013 and 2014 has been derived from the audited consolidated financial statements, or the “Consolidated Financial Statements”, included in Item 17 “Financial Statements” of this Annual Report. The Consolidated Statements of Operations Data for the years ended December 31, 2010 and 2011 and the Consolidated Balance Sheets Data as of December 31, 2010, 2011 and 2012, as set forth below, have been derived from audited consolidated financial statements not included in this Annual Report. The Consolidated Financial Statements have been prepared in conformity with generally accepted accounting principles in the United States, or U.S. GAAP. The selected financial information should be read in conjunction with, and is qualified in its entirety by reference to, the respective consolidated financial statements and their accompanying notes.

Selected Consolidated Financial Information of the Company

(Amounts in thousands, except number of shares, their par values and per share data)


	Year ended December 31,
	2010			2011 (b)			2012			2013			2014
	Rmb			Rmb			Rmb			Rmb			Rmb			US$
Consolidated Statements of Operations Data:
Revenues		—			—			—			—			—			—
Loss from operations		(3,316	)		(4,186	)		(1,708	)		(1,762	)		(2,148	)		(346	)
Net (loss) income		168,029			(274,955	)		2,931			9,938			(2,490	)		(402	)
Basic and diluted (loss) earnings per common share (a)		18.63			(30.49	)		0.33			1.10			(0.28	)		(0.04	)
Weighted-average number of common share outstanding (a)		9,017,310			9,017,310			9,017,310			9,017,310			9,017,310			9,017,310
Consolidated Balance Sheets Data :
Total assets		1,076,077			721,172			701,312			632,879			639,607			103,085
Shareholders’ equity/Net assets		877,567			597,752			597,135			599,897			607,358			97,888
Common stock — par value US$0.01 per share		770			770			770			770			770			124

Notes:

(a)

The calculation of basic and diluted (loss) earnings per common share from 2010 to 2014 is based on the weighted-average number of shares of common stock outstanding during each of the years ended December 31, 2010 to 2014. The number of shares of common stock outstanding for 2010 to 2014 was 9,017,310. There were no dilutive securities issued or outstanding for any of the periods presented.

(b)	In November 2011, the Company disposed of all of its interest in Hangzhou Zhongce Rubber Co., Ltd or Hangzhou Zhongce and it ceased to be an equity method affiliate of the Company thereafter.

Exchange Rate Information

The Consolidated Financial Statements are published and denominated in Renminbi. Where made for the convenience of the reader, conversion of amounts from Renminbi to U.S. Dollars has been made in this document at US$1.00 to Rmb6.2046, the noon buying rate certified by the Federal Reserve Bank of New York on December 31, 2014. For the purpose of this Annual Report, the latest practicable date with respect to share and certain exchange rate information is November 30, 2015. As of November 30, 2015, the noon buying rate certified by the Federal Reserve Bank of New York was US$1.00 to Rmb6.3883. No representation is made that the Renminbi amounts could have been, or could be, converted into U.S. Dollars at that or at any other rate.

The following table sets forth the average unified exchange rates for each of the years ended December 31, 2010, 2011, 2012, 2013 and 2014:

Year Ended December 31,

2010

2011

2012

2013

2014

(Rmb equivalent of US$1.00)

Rmb

At unified exchange rate

- average rate calculated by using the average of the exchange rates on the last day of each month during each period.

6.76

6.45

6.31

6.14

6.17

The following table sets forth the high and low exchange rates for each month during the previous six months:


	At Unified Exchange Rate
(Rmb equivalent of US$1.00)	High		Low
November 30, 2015		6.39		6.32
October 31, 2015		6.36		6.32
September 30, 2015		6.38		6.35
August 31, 2015		6.41		6.21
July 31, 2015		6.21		6.20
June 30, 2015		6.21		6.20

B. CAPITALIZATION AND INDEBTEDNESS

Not applicable.

C. REASONS FOR THE OFFER AND PROCEEDS

Not applicable.

D. RISK FACTORS

Investing in our shares involves various risks, including the risks described below. You should carefully consider the following risks and the other information contained in this Annual Report before investing in our shares. Additional risks not currently known to us or that we currently believe are immaterial also may impair our business operations, financial condition and our liquidity.

Risks Related to Our Business

AS A RESULT OF CHANGES IN THE COMPANY’S ASSETS AND SOURCES OF INCOME, THE COMPANY MAY BE AN INVESTMENT COMPANY FOR PURPOSES OF THE UNITED STATES INVESTMENT COMPANY ACT OF 1940

While the Company believes that in the past, through its subsidiaries and affiliates, it has actively engaged in operating businesses and did not meet the definition of an investment company for purposes of the United States Investment Company Act of 1940, or the 1940 Act, depending on the composition and valuation of the Company’s assets and the sources of the Company’s income from time to time, including after the consummation of the transactions during 2012 to 2015 described in Item 4.A., History and Development of the Company, the Company may fall within the technical definition of the term “investment company” for purposes of the 1940 Act. The Company is not registered, nor is it eligible to register under the 1940 Act. As a result, if the Company is deemed to be an investment company under the 1940 Act, the Company’s operations and results may be negatively impacted, including among other possible effects, so long as the Company is an investment company, it would neither be able to raise capital through the offer and sale of its securities in the United States nor to conduct business in the United States. The Company may be unable to continue operating as it currently does and might need to acquire or sell assets that it would not otherwise acquire or sell in order to avoid continuing to be deemed an “investment company” as defined under the 1940 Act.

THE COMPANY MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT ITS BUSINESS STRATEGY, IN WHICH CASE ITS BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION WOULD SUFFER

In November 2011, the Company disposed of all of its interest in Hangzhou Zhongce and it ceased to be an equity method affiliate of the Company. In addition, all of the subsidiaries of the Company were inactive during fiscal years 2013 and 2014. Despite the Company’s efforts to identify new investments, it has had limited success in doing so and, if it does identify new investments, it may not be able to consummate them. Even if the Company successfully identifies and consummates new investments, the acquisition of new businesses and business lines carries substantial risk and uncertainties. Depending on the specific acquisition, there may be risks relating to the acquired business itself, risks relating to the industry in which the business operates and risks relating to the Company itself.

THE COMPANY MAY NOT BE ABLE TO FINANCE ACQUISITIONS, STRATEGIC INVESTMENTS OR OTHER EXPANSIONS OR MAY INCUR FINANCIAL OBLIGATIONS OR LIABILITIES IN CONNECTION WITH ANY ACQUISITION OR EXPANSION

Although as of December 31, 2014, the Company had a strong cash position, the Company may experience difficulty in funding acquisitions, investments or expansion. The Company may fund any such activities through bank loans or other debt financing and could incur an increase in debt or other liabilities in connection with any acquisitions, strategic investments or other expansions.

FUTURE ACQUISITIONS OR STRATEGIC INVESTMENTS MAY NOT BE SUCCESSFUL AND MAY HARM OUR OPERATING RESULTS

Selective acquisitions or strategic investments form a large part of our strategy to further expand our business. If we are presented with appropriate opportunities, we may acquire or invest in other companies, ventures or businesses. Future acquisitions and the subsequent integration of new companies into ours would require significant attention from our management. Potential problems encountered by each organization during mergers and acquisitions would be unique, posing additional risks to the company. Future acquisitions or investments would expose us to potential risks, including risks associated with the assimilation of new operations, and could have a material adverse effect on our business and financial results because of possible charges for purchased technology, restructuring or impairment charges related to goodwill or amortization expenses associated with intangible assets; potential increases in our expenses and working capital requirements and the incurrence of debt and contingent liabilities; diversion or our capital and management’s attention to other business concerns; risks of entering markets or geographic areas in which we have limited prior experience; or potential loss of key employees of acquired organizations or inability to hire key employees necessary for expansion.

DIVERSIFICATION MAY RESULT IN LOWERED RESPONSIVENESS TO CYCLICAL CHANGES OF DIFFERENT BUSINESSES

Any diversification of the Company’s businesses, including through any investments in other businesses will result in assets, resources and management being committed or allocated to businesses in different fields. As a result, the Company’s flexibility in responding to seasonal changes or periodic fluctuations in the business cycle in a particular business operation may be limited.

THE COMPANY BELIEVES IT WAS CLASSIFIED AS A “PASSIVE FOREIGN INVESTMENT COMPANY” WHICH COULD HAVE A NEGATIVE IMPACT ON U.S. HOLDERS

U.S. investors in the Company’s common stock should be aware that the Company believes it was classified as a PFIC during the tax year ended December 31, 2014, and based on current business plans and financial expectations, the Company believes that it may be a PFIC in subsequent tax years. If the Company is a PFIC for any year during a U.S. shareholder’s holding period, then such U.S. shareholder generally will be required to treat any gain realized upon a disposition of the Company’s common stock, or any so-called “excess distribution” received on such common stock, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes a timely and effective “qualified electing fund” election (“QEF Election”) with respect to such common stock. A U.S. shareholder who makes a QEF Election generally must report on a current basis its share of the Company’s net capital gain and ordinary earnings for any year in which the Company is a PFIC, whether or not the Company distributes any amounts to its shareholders. However, U.S. shareholders should be aware that the Company did not satisfy record keeping requirements that apply to a qualified electing fund for its tax year ended December 31, 2014 and there can be no assurance that the Company will in the future satisfy record keeping requirements that apply to a qualified electing fund, or that the Company will supply U.S. shareholders with information that such U.S. shareholders are required to report under the QEF Election rules, in the event that the Company is a PFIC and a U.S. shareholder wishes to make a QEF Election. Thus, U.S. shareholders may not be able to make a QEF Election with respect to their Company common stock. This paragraph is qualified in its entirety by the discussion below under the heading “Taxation — Certain Material United States Federal Income Tax Consequences.” Each U.S. shareholder should consult its own tax advisor regarding the PFIC rules and the U.S. federal income tax consequences of the acquisition, ownership, and disposition of the Company’s common stock.

CHANGES IN ACCOUNTING STANDARDS AND TAXATION REQUIREMENTS COULD AFFECT OUR FINANCIAL RESULTS

New accounting standards or pronouncements that may become applicable to us from time to time, or changes in the interpretation of existing standards and pronouncements, could have a significant effect on our reported results for the affected periods. We also expect to become subject to income tax in jurisdictions in which we expect to commence generating revenues. Increases in income tax rates could reduce our after-tax income from affected jurisdictions, while increases in indirect taxes could affect our financial results.

FAILURE OF INFORMATION TECHNOLOGY COULD HAVE A NEGATIVE IMPACT ON OUR OPERATIONS

Growing standardization, more reliance on global systems, information technology services and increased regulations lead to a risk that our information technology systems may fail. This could affect the Company’s operational performance and financial position.

OUR OPERATIONS, ASSETS AND STAFF CAN BE EXPOSED TO RISKS RELATED TO EVENTS OF AN EXCEPTIONAL NATURE

The Company, including its assets and staff, could be exposed to risks related to events of an exceptional nature such as, but not limited to, severe weather, natural disasters, terrorist attacks, political unrest and accidents. Such events could have a significant effect on our financial condition, results of operations and cash flows.

FAILURE TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROLS OVER FINANCIAL REPORTING COULD HAVE A MATERIAL ADVERSE EFFECT ON THE ACCURACY IN REPORTING OUR FINANCIAL RESULTS OR PREVENTING FRAUD

Undetected internal control weaknesses or controls that function ineffectively represent a risk of loss or financial misstatement. Internal control over financial reporting may not prevent or detect misstatements because of inherent limitations, including the possibility of human error, the circumvention or overriding of controls or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If the Company fails to maintain the adequacy of its internal controls, including any failure to implement required new or improved controls, or if it experiences difficulties in the implementation of internal controls, the Company’s business and operating results could be harmed, and it could fail to meet its reporting obligations.

We are subject to reporting obligations under the U.S. securities laws. The Securities and Exchange Commission, or the SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, adopted rules requiring every public company to include a management report on such company’s internal control over financial reporting in its Annual Report that contains management’s assessment of the effectiveness of the Company’s internal control over financial reporting.

Moreover, effective internal controls are necessary for us to produce reliable financial reports and are important in helping prevent financial fraud. If we are not able to provide reliable financial reports on a timely basis or prevent financial fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our stock could drop significantly.

Risks Related to Doing Business in China

THE COMPANY’S BUSINESS FOCUS ON THE GREATER CHINA REGION SUBJECTS THE COMPANY AND ITS BUSINESS TO THE POLITICAL, ECONOMIC AND OTHER DEVELOPMENTS IN THE REGION

As a result of the Company’s traditional business focus on the Greater China Region, the Company’s business and its financial and operating results may be affected by significant political, economic, social and cultural developments in the region. A substantial portion of the Company’s investment opportunities, major businesses of which are located in China, these businesses are dependent in large part on the performance of the Chinese economy and Chinese government policy. As a result, the future financial condition and results of operations of the Company could be adversely affected by slowdowns in the Chinese economy, Chinese macroeconomic policies that de-emphasize the development of industries that utilize products or services of the Company or other governmental policies, including changes in laws, regulations or the interpretation thereof; confiscatory taxation; restrictions on currency conversion, imports or sources of supplies; or the expropriation or nationalization of private enterprises. Any measures or actions taken by the Chinese government to control industries that utilize products or services of the Company could restrict their business operations and adversely affect the financial positions of the Company.

Although the Company believes that the economic reforms and macroeconomic policies and measures adopted by the Chinese government will continue to have a positive effect on economic development in China and that the Company will continue to benefit from these policies and measures, there is no assurance that the government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting China’s political, economic and social life.

In addition, the Company’s financial results are significantly dependent on the economy in the region. The economy of the Greater China Region differs significantly from the economies of the United States and Western Europe in such respects as structure, level of development, growth rate, capital reinvestment, resource allocation, self-sufficiency, rate of inflation and balance of payments position, among others. Furthermore, the recent global economic downturn has had a significant impact on the region’s economic growth as it is primarily an export-oriented economy. Future adverse economic factors or changes in the policies of the Chinese government could have a material adverse effect on the overall economic growth of China. These developments could adversely affect the financial condition, results of operations and business of the Company by reducing the demand for the products and services of the Company.

As a member of the World Trade Organization, China’s economic activity is expected to become more and more export driven and China’s internal market is expected to see more competition through imports. The expected change in economic activity in China and the Greater China Region and a greater interdependence of the Chinese economy on the general world economy as a result of such changes could also impact the Company’s financial results.

RESTRICTIONS ON FOREIGN CURRENCY EXCHANGE MAY LIMIT OUR ABILITY TO RECEIVE AND USE OUR RESOURCES EFFECTIVELY

Any future restrictions on currency exchanges may limit our ability to use resources generated in Renminbi to fund our business activities outside China or other payments in Hong Kong dollars or other foreign currencies. Although the PRC government introduced regulations in 1996 to allow greater convertibility of the Renminbi for current account transactions, significant restrictions still remain, including primarily the restriction that foreign invested enterprises may only buy, sell or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents. In addition, remittance of foreign currencies abroad and conversion of Renminbi for capital account items, including direct investment and loans, is subject to governmental approval in China, and companies are required to open and maintain separate foreign exchange accounts for capital account items. We cannot be certain that the Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of the Renminbi, especially with respect to foreign exchange transactions.

FLUCTUATIONS IN THE VALUE OF THE RENMINBI COULD NEGATIVELY IMPACT OUR RESULTS OF OPERATIONS

Our reporting currency is the Renminbi as a substantial portion of our investments are denominated in Renminbi. Our remaining assets and liabilities and all of our operating expenses are denominated in Hong Kong dollars. As a result, we may be exposed to foreign exchange risk, and our results of operations may be negatively impacted by fluctuations in the exchange rate of Renminbi against other currencies. As our major assets and liabilities comprise a mixture of items that are denominated in Renminbi and Hong Kong dollars, our business and operating results may be materially affected in the event of a severe increase or decrease in the value of the Renminbi against other currencies.

The value of the Renminbi is subject to changes in China’s governmental policies and to international economic and political developments. Since January 1, 1994, the PRC government has used a unitary managed floating rate system. Under this system, the People’s Bank of China, or PBOC, publishes a daily based exchange rate with reference primarily to the supply and demand of Renminbi against U.S. dollars and other foreign currencies in the market during the previous day. Authorized banks and financial institutions are allowed to quote buy and sell rates for Renminbi within a specified band around the central bank’s daily exchange rate. On March 17, 2014, the PBOC announced that the RMB exchange rate flexibility increased to 2% in order to proceed further with reform of the RMB exchange rate regime. These could result in a further and more significant floatation in the RMB’s value against the U.S. Dollars.

While the international reaction to the Renminbi revaluation has generally been positive, there remains significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in a further and more significant fluctuation of the Renminbi against the U.S. dollar and other currencies.

NATURAL DISASTERS IN THE GREATER CHINA REGION COULD CAUSE SIGNIFICANT DAMAGE TO THE COMPANY’S BUSINESS AND FINANCIAL RESULTS

The Company’s investment opportunities are primarily located in the PRC. During the past several years, the PRC has experienced natural disasters, including floods, fires and earthquakes. A disaster could cause significant damage to the facilities of potential investees, which may not be adequately covered by insurance proceeds and could materially and adversely impact the business of the Company. The disaster relief and assistance in the PRC is not well developed and there can be no assurance that adequate government assistance would be available in the absence of sufficient insurance coverage.

OUR RESULTS COULD BE HARMED IF WE HAVE TO COMPLY WITH NEW ENVIRONMENTAL REGULATIONS

The operations of the Company could create environmentally sensitive waste depending on the nature of the operations of potential investees. The general issue of the disposal of hazardous waste has received increasing attention from Chinese national and local governments and foreign governments and agencies and has been subject to increasing regulation. Currently, relevant Chinese environmental protection laws and regulations impose fines on the discharge of waste materials and empower certain environmental authorities to close any facility that causes serious environmental problems. Although it has not been alleged by Chinese government officials that the Company have violated any current environmental regulations, there is no assurance that the Chinese government will not amend its current environmental protection laws and regulations. Our financial results could be materially and adversely affected if the Company was to increase expenditures to comply with environmental regulations affecting the operations of potential investees.

LEGAL SYSTEM DIFFERENCES BETWEEN THE GREATER CHINA REGION AND THE UNITED STATES OF AMERICA COULD IMPACT INVESTORS

Unlike common law systems in the western world, China has a civil law system based on written statutes and, therefore, decided legal cases are without binding legal effect, although they are often followed by judges as guidance. As the Chinese legal system develops, the promulgation of new laws, changes to existing laws and the preemption of local regulations by national laws may adversely affect the interests of foreign investors.

YOU MAY HAVE DIFFICULTY ENFORCING JUDGMENTS AGAINST US

We are a Bermuda holding company and all of our assets are located outside of the United States. Most of our current business is conducted in Hong Kong and in the PRC. In addition, most of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon these persons. It may also be difficult for you to enforce in U.S. courts judgments on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors whom are not residents in the United States.

OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S AUDIT DOCUMENTATION RELATED TO THEIR AUDIT REPORTS INCLUDED IN THIS ANNUAL REPORT MAY BE LOCATED IN THE PEOPLE’S REPUBLIC OF CHINA. THE PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD CURRENTLY CANNOT INSPECT AUDIT DOCUMENTATION LOCATED IN CHINA AND, AS SUCH, YOU MAY BE DEPRIVED OF THE BENEFITS OF SUCH INSPECTION

Our independent registered public accounting firms that issue the audit reports included in our annual reports filed with the U.S. Securities and Exchange Commission, as auditors of companies that are traded publicly in the United States and a firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”), are required by the laws of the United States to undergo regular inspections by the PCAOB to assess their compliance with the applicable laws of the United States and professional standards. Because the audit documentation relating to our audits are located in the People’s Republic of China, a jurisdiction where the PCAOB, notwithstanding the requirements of U.S. law, is currently unable to conduct inspections without the approval of the Chinese authorities, such auditors, like other independent registered public accounting firms operating in China, are not currently inspected by the PCAOB. In May 2013, the PCAOB announced that it had entered into a Memorandum of Understanding on Enforcement Cooperation with the CSRC and the PRC Ministry of Finance, which establishes a cooperative framework between the parties for the production and exchange of audit documents relevant to investigations undertaken by the PCAOB, the CSRC or the PRC Ministry of Finance in the United States and the PRC, respectively. The PCAOB continues to be in discussions with the CSRC and the PRC Ministry of Finance to permit joint inspections in the PRC of audit firms that are registered with the PCAOB and audit Chinese companies that trade on U.S. exchanges.

Inspections of other firms that the PCAOB has conducted outside of China have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The inability of PCAOB to conduct inspections of independent registered public accounting firms operating in China makes it more difficult to evaluate the effectiveness of our auditors’ audit procedures or quality control procedures. As a result, investors may be deprived of the benefits of PCAOB inspections.

PROCEEDINGS INSTITUTED BY THE SEC AGAINST FIVE PRC-BASED ACCOUNTING FIRMS COULD RESULT IN ADVERSE IMPACT ON OUR BUSINESS AND PRICE OF OUR STOCK.

In late 2012, the SEC commenced administrative proceedings under Rule 102(e) of its Rules of Practice and also under the Sarbanes-Oxley Act of 2002 against the PRC-based units of five accounting firms. The Rule 102(e) proceedings initiated by the SEC relate to these firms’ failure to produce documents, including audit work papers, in response to the request of the SEC pursuant to Section 106 of the Sarbanes-Oxley Act of 2002, as the auditors located in the PRC are not in a position lawfully to produce documents directly to the SEC because of restrictions under PRC law and specific directives issued by the China Securities Regulatory Commission (“CSRC”). The issues raised by the proceedings are not specific to our auditors or to us, but affect equally all audit firms based in China and all China-based businesses with securities listed in the United States.

In January 2014, the administrative judge reached an Initial Decision that the PRC-based units of the “big four” accounting firms should be barred from practicing before the SEC for six months. The decision is neither final nor legally effective unless and until reviewed and approved by the SEC. In February 2014, four of these PRC-based accounting firms appealed to the SEC against this decision. In February 2015, each of the four PRC-based accounting firms agreed to a censure and to pay a fine to the SEC to settle the dispute and avoid suspension of their ability to practice before the SEC. The settlement requires the firms to follow detailed procedures to seek to provide the SEC with access to Chinese firms’ audit documents via the CSRC. If the firms do not follow these procedures, the SEC could impose penalties such as suspensions, or it could restart the administrative proceedings.

In the event that the SEC restarts the administrative proceedings, depending upon the final outcome, public companies in the United States with major PRC operations may find it difficult or impossible to retain auditors in respect of their operations in the PRC, which may result in SEC’s revocation of the registration of their shares under the Exchange Act, including possible delisting. Moreover, although our independent registered public accounting firm was not named as a defendant in the above SEC administrative proceedings, any negative news about the proceedings against these audit firms may erode investor confidence in China-based, US public companies, including us, and the market price of our shares may be adversely affected.

WE MAY FACE UNCERTAINTIES REGARDING INDIRECT TRANSFERS OF EQUITY INTERESTS IN PRC RESIDENT ENTERPRISES BY A NON-RESIDENT ENTERPRISE.

In connection with the EIT Law, the Ministry of Finance of the PRC and the SAT jointly issued, on April 30, 2009, the Notice on Issues Concerning Process of Enterprise Income Tax in Enterprise Restructuring Business, or Circular 59. On December 10, 2009, the SAT issued the Notice on Strengthening the Management on Enterprise Income Tax for Non-resident Enterprises Equity Transfer, or Circular 698. Both Circular 59 and Circular 698 became effective retrospectively on January 1, 2008. By promulgating and implementing these circulars, the PRC tax authorities have strengthened their scrutiny over the direct or indirect transfer of equity interest in a PRC resident enterprise by a non-resident enterprise. For example, Circular 698 specifies that the SAT is entitled to redefine the nature of an equity transfer where offshore vehicles are interposed by abusing corporate structures for tax-avoidance purposes and without reasonable commercial intention. We may pursue acquisitions as one of our growth strategies, and may conduct acquisitions involving complex corporate structures. We cannot be assured that the PRC tax authorities will not, at their discretion, adjust the taxable capital gains of the seller, which may indirectly increase acquisition costs.

On February 3, 2015, the State Administration of Tax issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or Public Notice 7. Public Notice 7 has introduced a new tax regime that is significantly different from that under Circular 698. Public Notice 7 extends its tax jurisdiction to not only indirect transfers set forth under Circular 698 but also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate holding company. In addition, Public Notice 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. Public Notice 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable assets. Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets, may report to the relevant tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may re-characterize such indirect transfer as a direct transfer of the equity interests in the PRC tax resident enterprise and other properties in China. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of up to 10%, for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

We may face uncertainties with respect to the reporting and consequences of private equity financing transactions, share exchange or other transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises, or sale or purchase of shares in other non-PRC resident companies or other taxable assets by us. Our company and other non-resident enterprises in our group may be subject to filing obligations or being taxed if our company and other non-resident enterprises in our group are transferors in such transactions, and may be subject to withholding obligations if our company and other non-resident enterprises in our group are transferees in such transactions, under Circular 698 and Public Notice 7. For the transfer of shares in our company by investors that are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under Circular 698 and Public Notice 7. As a result, we may be required to expend valuable resources to comply with Circular 698 and Public Notice 7 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company and other non-resident enterprises in our group should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

The PRC tax authorities have the discretion under Circular 698 and Public Notice 7 to make adjustments to the taxable capital gains based on the difference between the fair value of the taxable assets transferred and the cost of investment. If the PRC tax authorities make adjustments to the taxable income of the transactions under Circular 698 and Public Notice 7, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of operations.

Risks Related to Our Capital Stock

LIMITED LIQUIDITY IN THE COMPANY’S SECURITIES MAY MAKE IT DIFFICULT TO SELL SHARES

The public trading market for our common stock is limited. Beginning in November 2002, our common stock was traded on the OTC Securities Market. The OTC Securities Market is an inter-dealer, over-the-counter market that provides significantly less liquidity than other markets. As a foreign private issuer whose business is substantially in China and other Asian markets, the Company has less exposure in the U.S. capital markets than comparable U.S. issuers. In addition, the Company has a relatively small public float of its securities. These and other general economic, industry or Company factors may result in low trading volumes or prices of the Company’s securities. Accordingly, shareholders of the Company bear risks regarding the liquidity of the Company’s shares and may not be able to sell shares in desired quantities, at desired times or desired prices, or a combination thereof.

POSSIBLE VOLATILITY OF SHARE PRICES WORLDWIDE MAY HAVE SIGNIFICANT EFFECTS ON THE COMPANY’S SHARE PRICE

The trading price of the Company’s shares has been and may continue to be subject to wide fluctuations. Capital markets worldwide have generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the listed companies themselves. There can be no assurance that trading prices and price earnings ratios previously experienced by the Company’s common shares will be matched and maintained. Broad market and industry factors may adversely affect the market price of shares in the Company, regardless of its operating performance.

ITEM 4.

INFORMATION ON THE COMPANY

A. HISTORY AND DEVELOPMENT OF THE COMPANY

The Company was incorporated as an exempted company under the laws of Bermuda on January 28, 1993. From July 15, 1993 to late 2002, the Company’s shares were listed on the New York Stock Exchange. On November 26, 2002, the Company’s shares began trading on the OTC Securities Marketplace in the United States. The legal name of the Company is “China Enterprises Limited” and the Company is registered in Hong Kong under the commercial name of “China Tire Holdings Limited” due to local company registration considerations. The Company has historically been engaged in tire manufacturing and trading and related businesses.

In 2001, the Company decided to reorganize its operations to improve its financial performance. The Company began to dispose of loss-making subsidiaries and tried to diversify its business. In early 2002, the Company acquired a substantive equity interest of approximately 35% in Rosedale, which allowed it to diversify its business into the travel industry. In fiscal year 2003, the Company further completed its disposals of its loss-making subsidiaries, Yinchuan CSI (Greatwall) Rubber Co., Limited, and the Company’s remaining interests in Double Happiness Tyre Industries Corporation Limited and ceased to account for the results of operations and the assets and liabilities of these subsidiaries from their respective disposal dates.

In order to realize part of its investment, the Company entered into a contract to sell a 25% interest in its subsidiary Hangzhou Zhongce, a PRC company, on June 15, 2003. As a result, the Company reduced its interest in Hangzhou Zhongce from 51% to 26%. The sale was completed in September 2003 and Hangzhou Zhongce became an equity method affiliate of the Group.

During 2006 and 2007, the Company’s interest in its affiliate Rosedale, decreased from 20.36% to 12.77% as a result of dilution caused by capital raising activities of Rosedale and the disposal of Rosedale shares by the Company in the market. As a result of its decreased ownership of Rosedale, the Company began accounting for its remaining interest in Rosedale as trading securities instead of as an interest in an affiliate company as it was in previous years.

The Company, through Manwide Holdings Limited, a then direct wholly-owned subsidiary, entered into a conditional sale and purchase agreement dated June 16, 2004 with an independent third party, Shanghai Jiu Sheng Investment Limited, or Jiu Sheng, for the acquisition and further development of Xiang Zhang Garden, a parcel of land containing a 24-story building under construction located in Shanghai, PRC. In June 2005, the Company commenced legal proceedings against Jiu Sheng, among other things, to demand that Jiu Sheng meet its obligations under the two agreements related to the purchase of Xiang Zhang Garden and petitioned a PRC court for an injunction order to prevent Xiang Zhang Garden from being transferred to the secured creditors of Jiu Sheng and the main contractor. In June 2006, the People’s High Court of the City of Shanghai ruled in favor of the Company and ordered Jiu Sheng to continue fulfilling its obligations under the applicable agreements and to proceed with the transfer of legal title of Xiang Zhang Garden to the Company. The judgment also required Jiu Sheng to pay Rmb5.9 million to the Company as compensation for the breach of the sale and purchase agreements. In August 2006, the Group petitioned the People’s High Court of Shanghai for a court execution order to enforce the June 2006 judgment against Jiu Sheng. In March 2008, the Group entered into a settlement agreement with Jiu Sheng whereby the Company disclaimed its rights in Xiang Zhang Garden in exchange for a payment of Rmb75 million, which was received in April 2008. A gain of Rmb17 million has been recognized in the consolidated statement of operations for the year ended December 31, 2008.

In March 2008, Hanny Holdings Limited (a publicly listed company in Hong Kong), or Hanny, and certain of its subsidiaries entered into conditional sale and purchase agreements with an independent third party whereby it disposed of a 29.2% interest in the Group for cash consideration of approximately Rmb142 million. The sale closed on May 8, 2008. Following this sale, Hanny’s interest in the Company decreased from approximately 55.3% to 26.1% and the Company ceased to be a subsidiary of Hanny.

In April 2008, the Company acquired 100% of the equity interests in Cosmos Regent Ltd, Cyber Generation Limited and Whole Good Limited, all of which are engaged in securities investment, from Hanny Magnetics (B.V.I.) Limited, a wholly owned subsidiary of Hanny. Total consideration for the three companies was Rmb34,417,000, and the amount was settled through the cancellation of obligations from Hanny to the Company.

In April 2008, the Company entered into a Memorandum of Understanding to acquire a certain equity interest in a property investment company for consideration of Rmb150 million. A refundable deposit of Rmb75 million was paid to the third party vendor pursuant to the Memorandum of Understanding during the year ended December 31, 2008 and recorded as a deposit paid for the acquisition of investments for the years ended December 31, 2008 and 2009. The Memorandum of Understanding lapsed in June 2011. The deposit of Rmb67.5 million was refunded to the Company and the remaining Rmb7.5 million was charged as an administrative charge in the year ended December 31, 2011.

In April 2009, X One Holdings Limited, or X One, an affiliate of the Company, was dissolved pursuant to Section 291 of the Hong Kong Companies Ordinance.

In its Report on Form 6-K filed with the Securities and Exchange Committee on November 21, 2011, the Company reported that it had entered into a definitive agreement with CZ Tire Holdings Limited, or CZ. The Agreement provided for the sale of all of the Company’s ownership interests in Hangzhou Zhongce to CZ for Rmb600 million or approximately US$95.33 million in cash. The Company reported the closing of the transaction in its Report on Form 6-K filed with the Securities and Exchange Committee on November 28, 2011.

In its Report on Form 6-K filed with the Securities and Exchange Committee on October 4, 2012, the Company reported that its wholly owned subsidiary, Wealth Faith Limited, or Wealth Faith had entered into a definitive agreement with Fortuneasy Limited, or Fortuneasy. The agreement provides for the purchase by Wealth Faith of 40% of the shares of Million Cube Limited, or Million Cube from Fortuneasy. The total purchase price for the shares being acquired by Wealth Faith is HK$200 million or approximately US$25.6 million. The Company, through Wealth Faith, previously deposited HK$154.8 million or approximately Rmb127.3 million in earnest money with Fortuneasy, which will be applied toward the purchase price. As provided in the agreement, Million Cube has acquired 45% of the issued share capital and corresponding shareholder loans of Paragon Winner Company Limited, or Paragon. Paragon was formed to invest in a joint venture that has developed the Sanya Sun Valley Golf Resort in Yalong Bay, Sanya City, People’s Republic of China and that is seeking to develop a related hotel and resort complex at such resort. The transaction was completed in March 2015.

Following the closing of the transaction and pursuant to the Agreement, the Company has appointed one director to Million Cube’s board of directors, in order to exercise influence over the financial and operating decisions of the golf resort business. The Company has continued to seek new strategic investment opportunities in the PRC, including Hong Kong. Apart from the golf resort business, the Company is also looking at other potential investments and has a long term goal to build a platform of value-added and productive businesses under the strategic direction of the Company whereby it can exercise significant influence over the financial and operating decisions of its investees, and then have a degree of responsibility for the return on its investments.

The Company is a holding company and had interests in a number of subsidiaries as of December 31, 2014. The principal interests of the Company were as follows:

•

Cosmos Regent Ltd, a British Virgin Islands company in which the Company has a 100% interest.

•

Cyber Generation Limited, a British Virgin Islands company in which the Company has a 100% interest.

•

Great Windfall Agents Limited, a British Virgin Islands company in which the Company has a 100% interest.

•

Million Good Limited, a British Virgin Islands company in which the Company has a 100% interest.

•

Orion Tire Corporation, a U.S. corporation in which the Company has a 60% interest.

•

Orion (B.V.I.) Tire Corporation, a British Virgin Islands company in which the Company has a 60% interest.

•

Supreme Solutions Limited, a British Virgin Islands company in which the Company has a 100% interest.

•

Ventures Kingdom Limited, a British Virgin Islands company in which the Company has a 100% interest.

•

Wealth Faith Limited, a British Virgin Islands company in which the Company has a 100% interest.

•

Whole Good Limited, a British Virgin Islands company in which the Company has a 100% interest.

Additional information about the Company is available through the Internet at http://www.chinaenterpriseslimited.com. The principal place of business and the executive offices of the Company are located at 25th Floor, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong and its telephone number is (852) 3151 0300.

B. BUSINESS OVERVIEW

The financial results of the Company were dependent on its equity share of the results from Hangzhou Zhongce, which the Company disposed of in November 2011, as discussed above. All of the subsidiaries of the Company were inactive during fiscal years 2012, 2013 and 2014. The Company is actively seeking new investment opportunities.

Hangzhou Zhongce

Hangzhou Zhongce is incorporated in the People’s Republic of China. Its principal subsidiaries are mainly engaged in the manufacture and sale of rubber tires, tire rubber and carbon powder. Hangzhou Zhongce established Hangzhou Sunrise Rubber Co., Ltd with three other PRC enterprises in 1998 and acquired Hangzhou Fu Chun Jiang Chemical Industrial Co., Ltd in 1999, which manufactures radial tire products and a number of raw materials including tire rubbers and carbon powder. In 2008, Hangzhou Zhongce incorporated a PRC subsidiary Zhongce Rubber Fu Yang Co., Ltd, which is engaged in the manufacture and sale of rubber tires. In September 2003, the Company disposed of a portion of its interest in Hangzhou Zhongce and ceased to consolidate the results of Hangzhou Zhongce and its subsidiaries. As a result of that disposal, the Company held a 26% interest in Hangzhou Zhongce, which was treated as an equity method affiliate of the Company for the years ended December 31, 2009 and 2010 and the first eleven months of 2011. In November 2011, the Company disposed of all of its interest in Hangzhou Zhongce and it ceased to be an equity method affiliate of the Company.

Rosedale

Rosedale is an exempted company incorporated in Bermuda with limited liability. Its shares are listed on the HKSE. Its principal subsidiaries are engaged in the business of hotel operation and trading of securities.

In 2002, the Company diversified into the travel business through an investment in Rosedale. However, following the disposal of a significant portion of its equity interest during fiscal year 2007, the Company’s equity interest in Rosedale decreased to 12.77% and was subsequently reclassified as trading securities of the Company. As of December 31, 2014, the equity interest had further decreased to 7.40%.

C. ORGANIZATIONAL STRUCTURE

As of December 31, 2014, the principal subsidiaries of the Company were:


	Country of Incorporation	Principal Activities		Company’s Ownership Interest
Consolidated Subsidiary				Directly			Indirectly
Cosmos Regent Ltd	BVI		Investment holding		100	%		—
Cyber Generation Limited	BVI		Investment holding		100	%		—
Great Windfall Agents Limited	BVI		Investment holding		100	%		—
Million Good Limited	BVI		Investment holding		100	%		—
Orion Tire Corporation	USA		Investment holding		60	%		—
Orion (B.V.I.) Tire Corporation	BVI		Investment holding		60	%		—
Supreme Solution Limited	BVI		Investment holding		100	%		—
Ventures Kingdom Limited	BVI		Investment holding		100	%		—
Wealth Faith Limited	BVI		Investment holding		100	%		—
Whole Good Limited	BVI		Investment holding		100	%		—

D. PROPERTY, PLANT AND EQUIPMENT

The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton, HM11, Bermuda. Only corporate administrative matters are conducted at this office, through the Company’s agent, MUFG Fund Services (Bermuda) Limited (formerly known as Butterfield Fulcrum Group (Bermuda) Limited.) The Company’s principal executive office is located at 25th Floor, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong. The Company neither owns nor leases property in Bermuda or Hong Kong.

The Company did not incur any principal capital expenditures, investment and divestitures over the last three years ended December 31, 2014.

ITEM 5.

Operating and Financial Review and Prospects

Except for statements of historical facts, this section contains forward-looking statements involving risks and uncertainties. You can identify these statements by forward-looking words including “expect,” “anticipate,” “believe,” “seek,” “estimate,” “intends,” “should” or “may.” Forward-looking statements are not guarantees of our future performance or results and our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the section of this Report entitled Item 3 Key Information — “Risk Factors.” This section should be read along with our Consolidated Financial Statements included as Item 17 of this Report, including the accompanying notes, that are included in this Annual Report on Form 20-F. The following discussion of operating results and the financial review and prospects as well as our consolidated financial statements have been presented and prepared in accordance with U.S. GAAP. The forward-looking statements in this Item 5 are not guarantees of future performance. They involve both risk and uncertainty. Several important factors could cause our actual results to differ materially from those anticipated by these statements. Many of those factors are macroeconomic in nature and are, therefore, beyond the control of our management. Please see the “Risk Factors” in this Annual Report for more details.

A. OPERATING RESULTS

Overview

After disposal of all of its interest in the tire business in 2011 discussed above in “History and Development of the Company,” the Company is still actively looking for new investments. The PRC market continues to be the focus of world industry, and the Company is confident in the PRC market and continues to explore appropriate investment projects to expand its business network in the PRC.

Critical Accounting Policies

The preparation of our financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and judgments that affect our reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and assumptions based upon historical experience and various other factors and circumstances. Management believes that our estimates and assumptions are reasonable under the circumstances; however, actual results may vary from these estimates and assumptions under different future circumstances. The following critical accounting policies affect the more significant judgments and estimates used in the preparation of the Company’s consolidated financial statements. For further discussion of our significant accounting policies, refer to Note 2 — “Summary of Significant Accounting Policies” to the Consolidated Financial Statements included in “Item 17 — Financial Statements” of this Annual Report.

Accounting Estimates

The accounting estimates inherent in the preparation of the consolidated financial statements of the Company mainly include estimates associated with respect to collectability of receivables, impairment of deposits paid for acquisition of investments and available-for-sale securities and valuation allowances of deferred tax assets. The process of determining significant estimates is fact specific and takes into account factors such as historical experience, as well as current and expected economic conditions. Additionally, the Company constantly re-evaluates these significant factors and makes adjustments where facts and circumstances dictate.

Income Taxes

The Company records a valuation allowance to reduce its deferred tax assets to the amount that the Company believes is more likely than not to be realized. In the event the Company determines that it would be able to realize its deferred tax assets in the future in excess of its recorded amount, an adjustment to the deferred tax asset would be made that would increase income in the period such determination was made. Likewise, should the Company determine that it would not be able to realize all or part of its net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.

Results of Operations: Fiscal year ended December 31, 2014 compared with fiscal year ended December 31, 2013

For 2014, the Company recorded consolidated net loss of Rmb2.5 million, or Rmb0.28 loss per share. By comparison, the net profit and the earnings per share in 2013 was Rmb9.9 million and Rmb1.10, respectively.

The Rmb2.1 million loss from operating activities mainly represented the administrative expenses incurred for the year ended December 31, 2014. General and administrative expenses were comprised of expenditures for personnel and administrative functions, including accounting, information technology, human resources, legal and administration. The general and administrative expenses in 2013 were Rmb1.8 million.

Apart from the general and administrative expenses of Rmb2.1 million, components of net loss of Rmb2.5 million for the year ended December 31, 2014 were dividend income of Rmb3.9 million, net realized gain recognized on disposal of securities of Rmb0.9 million, offset by unrealized loss recognized on trading securities of Rmb4.0 million, interest expense of Rmb0.5 million and an exchange loss of Rmb0.7 million.

Apart from the general and administrative expenses of Rmb1.8 million, components of net profit of Rmb9.9 million for the year ended December 31, 2013 were interest income of Rmb0.1 million, unrealized gain recognized on trading securities of Rmb12.2 million, offset by interest expense of Rmb0.5 million and an exchange loss of Rmb0.1 million.

Results of Operations: Fiscal year ended December 31, 2013 compared with fiscal year ended December 31, 2012

For 2013, the Company recorded consolidated net income of Rmb9.9 million, or Rmb1.10 per share. By comparison, the net profit and the earnings per share in 2012 were Rmb2.9 million and Rmb0.33, respectively.

The Rmb1.8 million loss from operating activities represented the administrative expenses incurred for the year ended December 31, 2013. General and administrative expenses were comprised of expenditures for personnel and administrative functions, including accounting, information technology, human resources, legal and administration. The general and administrative expenses in 2012 were Rmb1.7 million.

Apart from the general and administrative expenses of Rmb1.7 million, components of net profit of Rmb2.9 million for the year ended December 31, 2012 were interest income of Rmb0.2 million, realized gain recognized on disposal of securities of Rmb1.3 million and unrealized gain recognized on trading securities of Rmb4.5 million, offset by interest expense of Rmb0.9 million and an exchange loss of Rmb0.5 million.

Impact of Inflation

Inflation and deflation in the PRC and Hong Kong has not had a material effect on our past business.

Impact of Tax Regulations

For the impact of tax regulations on the Company, see Note 6 to the Consolidated Financial Statements of the Company included in “Item 17. Financial Statements”.

B. LIQUIDITY AND CAPITAL RESOURCES

For 2014, cash for financing the operations of the Company was principally obtained through the disposal of trading securities. During 2013 and 2014, the Company still saw a continuation of challenging financial and economic conditions. Although some signs of improvement have started to emerge, the performance of key economies remains uncertain.

The Company’s working capital, calculated as current assets less current liabilities, remained at a similar level in 2014 and 2013 Working capital was Rmb460.3 million as of December 31, 2014 and was Rmb452.0 million as of December 31, 2013.

Over the last few years, cash flow for financing the operations of the Company was primarily obtained from the disposal of trading securities. As at December 31, 2014, the Company still held approximately Rmb50.4 million of marketable securities. In 2014, the Company had net cash provided by operating activities was approximately Rmb0.2 million compared to a net cash used in operating activities approximately Rmb3.2 million in 2013. The operating cash outflows were mainly caused by cash used for general and administrative expense and changes in operating assets and liabilities. The net cash provided by investing activities and used in financing activities in 2014 was approximately Rmb1.9 million and Rmb0.3 million, respectively, compared with Rmb8.3 million provided by investing activities and Rmb70.1 million used in financing activities in 2013. The investing cash inflows were mainly related to proceeds from trading securities in 2014 and advances from related and unrelated parties, investments in and proceeds from trading securities and changes in payables to securities brokers in 2013. The financing cash flows were mainly related to changes in amounts due to related parties.

Other than (i) the settlement of Convertible Notes receivable of Rosedale and accrued interest as described in Item 7 of this Form 20-F; (ii) the investment agreement as described in Item 4 of this Form 20-F; and (iii) the disposal of the Company’s interest in Hangzhou Zhongce as described in Item 4 of this Form 20-F, no transactions, arrangements or other relationships with unconsolidated entities or other persons that are reasonably likely to affect materially the liquidity or the availability of or requirement for capital resources of the Company have been entered into during 2014. In management’s opinion, the Company has sufficient cash and cash equivalents, notes receivable and trading securities to support its working capital for its present requirements.

For the years ended December 31, 2013 and 2014, the Company had no expenditures for property, plant and equipment.

Cash and cash equivalents of the Company increased to Rmb453.0 million at December 31, 2014 from approximately Rmb440.2 million at December 31, 2013, of which Rmb449.2 million (approximately US$72.4 million) were U.S. dollar deposits included in cash and cash equivalents.

There are no material restrictions, including foreign exchange controls, on the ability of the Company’s subsidiaries to transfer funds to the Company in the form of cash dividends, loans, advances or product/material purchases.

For related party information, please see “Item 7. Major Shareholders and Related Party Transactions” in this Annual Report. In the opinion of management, these related party transactions have no material effect on the Company’s liquidity or cash flows.

C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

The Company does not conduct any research and development and does not rely on any patents or licenses.

D. TREND INFORMATION

Following the disposal of its interest in Hangzhou Zhongce in November 2011, the Company continues to position itself as a conglomerate investor in China and anticipates that it will maintain its conservative and cautious investment posture in the coming year and to continue its efforts to explore new investment opportunities.

E. OFF-BALANCE SHEET ARRANGEMENTS

For the year of 2014, the Company did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Additionally, the Company had not undertaken any guarantees as of December 31, 2014.

F. CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

As of December 31, 2013 and 2014, the Company did not have any contractual obligations and commercial commitments.

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. DIRECTORS AND SENIOR MANAGEMENT


Name	Age		Position	Since
Allan Yap		60	Chairman, Chief Executive Officer and Director		2001
Eva Chan Ling		50	Deputy Chairman and Director		2004
Dorothy Law		46	Director		2000
Richard Whittall		56	Independent Director and Audit Committee Member		2000
Lien Kait Long		67	Director		1999
Sin Chi Fai		56	Independent Director and Audit Committee Member		2010
Jimmy Chow Chun Man (resigned on May 15, 2014)		46	Chief Financial Officer		2003
Ken Lau (appointed on May 15, 2014)		44	Chief Financial Officer		2014

There is no family relationship between any director or executive officer listed above and any other director or executive officer listed above. None of the directors or executive officers were elected or appointed pursuant to an arrangement or understanding with any third party.

Biographies of Directors and Senior Management

Dr. Allan Yap, age 60, is the chairman, chief executive officer and a director of the Company. He holds an honorary degree of Doctor of Laws and has over 30 years’ experience in finance, investment and banking. Dr. Yap is the chairman of Hanny and Rosedale Hotel Holdings Limited (“Rosedale”), and an alternate director of Television Broadcasts Limited, and an executive director of Meike International Holdings Limited, all of which are publicly listed companies in Hong Kong. He is also the chairman and chief executive officer of Burcon NutraScience Corporation, a company whose shares are listed on the Toronto Stock Exchange in Canada, NASDAQ Stock Exchange in the United States and the Frankfurt Stock Exchange in Germany. Dr. Yap is an executive chairman of Hanwell Holdings Limited (formerly known as PSC Corporation Limited) and Tat Seng Packaging Group Limited, both are publicly listed companies in Singapore. He was also the chairman of MRI Holdings Limited, which had been deregistered on February 28, 2015. Dr. Yap had been an executive chairman of Intraco Limited, a public listed company in Singapore, and resigned on December 6, 2012. He had also been an executive director of Big Media Group Limited (now known as Neo Telemedia Limited) and See Corporation Limited, all are publicly listed companies in Hong Kong, and resigned on July 20, 2009 and June 13, 2011, respectively. Dr. Yap was appointed as the chairman and chief executive officer of the Company on December 1, 2004.

Ms. Chan Ling, Eva, age 50, is a deputy chairman and a director of the Company. She has over 25 years’ experience in auditing, accounting and finance in both international accounting firms and listed companies. Ms. Chan is a member of the Chartered Accountants in Australia and New Zealand, a fellow member of the Association of Chartered Certified Accountants and also a practicing member of the Hong Kong Institute of Certified Public Accountants. Effective from June 1, 2009, Ms. Chan is the managing director of Rosedale. She was also a director of MRI Holdings Limited. She had been an executive director of China Strategic Holdings Limited, and an independent non-executive director of each of Well Way Group Limited (formerly known as Trasy Gold Ex Limited) and Wonson International Holdings Limited (now known as China Ocean Shipbuilding Industry Group Limited), both are publicly listed companies in Hong Kong, and resigned on June 1, 2014, and June 23, 2014 and August 13, 2008 respectively. Ms. Chan was appointed as deputy chairman of the Company on December 1, 2004.

Ms. Dorothy Law, age 46, is a director of the Company. She received her Bachelor of Commerce and Bachelor of Laws degrees from the University of British Columbia in Canada. Ms. Law is a Barrister and Solicitor licensed to practice law in British Columbia and she has also been admitted as a Solicitor of the High Court of Hong Kong (non-practicing). Ms. Law is Senior Vice President, Legal and Corporate Secretary of Burcon NutraScience Corporation.

Mr. Richard Whittall, age 56, is an independent director and the chairman of the audit committee of the Company. He is a partner in Watershed Capital Partners Inc., an investment banking firm, based in Vancouver, British Columbia, Canada. Mr. Whittall has over 23 years’ experience in investment banking, advising domestic and international companies in the areas of fund raising, mergers, acquisitions, divestitures and strategic business alliances. Mr. Whittall currently serves as a director of a number of public and private companies, including Fortress Paper Ltd, GVIC Communications Corp., Canadian General Investments Limited and Canadian World Fund Limited.

Mr. Lien Kait Long, age 67, is a director of the Company. Mr. Lien holds a bachelor’s degree in commerce and is a fellow member of the Institute of Singapore Chartered Accountants (ISCA) and CPA Australia. He has extensive experience in finance, corporate management and business investment. He has held a number of senior management positions as well as executive directorships in various public and private corporations in Singapore, Hong Kong and China. Mr. Lien currently serves as an independent director on the board of several Singapore and Chinese Companies listed on the Singapore Exchange Securities Trading Limited. He was also a director of MRI Holdings Limited.

Mr. Sin Chi Fai, age 56, is appointed an independent director and an audit committee member of the Company on June 9, 2010. Mr. Sin obtained a diploma in Banking from The Hong Kong Polytechnic (now known as The Hong Kong Polytechnic University). He has over 17 years’ experience in banking field and has over 17 years’ sales and marketing experience in information technology industries. Mr. Sin currently serves as an independent non-executive director of Rosedale and Hanny, both publicly listed companies in Hong Kong. Mr. Sin is also currently a director and shareholder of a Singapore company engaged in the distribution of data storage media and computer-related products throughout Asia. Mr. Sin had been an independent non-executive director, member of the audit committee, and member of the remuneration committee of China Strategic Holdings Limited, and Wonson International Holdings Limited (now known as China Ocean Shipbuilding Industry Group Limited), both publicly listed companies in Hong Kong, and resigned on October 30, 2007 and May 15, 2008 respectively.

Mr. Ken Lau, aged 44, was appointed as the Chief Financial Officer of the Company on May 15, 2014. Mr. Lau is a member of CPA Australia and a certificate holder of American Institute of Certified Public Accountants. He has over 15 years of experience in international accounting and financial reporting in multinational corporations.

B. COMPENSATION

For the year ended December 31, 2014, the aggregate amount of compensation paid by the Company and its subsidiaries to the Company’s directors and executive officers, for service in all capacities, was approximately Rmb667,990 (approximately US$107,660). The grant of bonuses is determined at the discretion of the board of directors. No bonuses were paid in the year 2014 or granted with respect to the year 2014.

The following table summarizes the compensation received by our executive and non-executive directors and senior management for the year 2014.


Name	Total Salary (USD)		Total Salary (Rmb)
Executive Director
Allan Yap		20,000		124,092
Eva Chan Ling		20,000		124,092
Non-Executive Director
Dorothy Law		20,000		124,092
Lien Kait Long		20,000		124,092
Richard Whittall		20,000		124,092
Sin Chi Fai		7,660		47,530

No officer or director received any non-cash compensation in 2014.

C. BOARD PRACTICES

The 2015 annual general meeting of the Company will be held on December 22, 2015, and the shareholders of the Company will be asked to re-elect the directors in the forthcoming annual general meeting of the Company.

No director of the Company has entered into any service contract nor is entitled to any benefits upon termination of employment with the Company.

The audit committee of the board of directors reviews, acts on and reports to the board of directors with respect to various auditing and accounting matters, including the selection of our auditors, the scope of the annual audits, fees to be paid to the auditors, the performance of the auditors and our accounting practices. During the year 2014 and as of the date of this filing, the audit committee of the Company consisted of Mr. Richard Whittall and Mr. Sin Chi Fai.

D. EMPLOYEES

As of December 31, 2012, 2013 and 2014, the Company had no employees.

E. SHARE OWNERSHIP

As of December 31, 2014, none of the Company’s directors, officers or their associates had any personal, family, corporate or other interests in any shares of the Company or any of its associated corporations.

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. MAJOR SHAREHOLDERS

Based on filings on Schedule 13G under the Exchange Act and public announcements/circulars/annual reports of Hanny pursuant to the Listing Rules of HKSE, as of December 31, 2014, the following persons beneficially owned shares representing 5% or more of the issued share capital of the Company:


Name of holder	Number of shares held		Percentage of class
Hanny Holdings Limited (1)		2,610,600		28.95	%
William F. Harnisch (2)		467,175		5.18	%

(1)	On July 30, 2015, Hanny disclosed in its annual report 2014-2015 that it held an equity interest of 28.95% in the issued share capital of the Company as of March 31, 2014 and 2015.

(2)

(a) According to Amendment No. 8 to a report on Schedule 13G/A dated February 13, 2014, the 467,175 shares beneficially owned by William F. Harnisch as of December 31, 2013, representing 5.18% equity interest in the Company, consisting of (A) 79,800 shares beneficially owned individually by Mr. Harnisch; and (B)(i) 218,775 shares beneficially owned by Grenadier Fund; (ii) 116,100 shares beneficially owned by Triumph Fund II L.P.; and (iii) 52,500 shares beneficially owned by Peconic Partners International Fund Ltd., all of which shares Mr. Harnisch may be deemed to beneficially own by virtue of his position as President and Chief Executive Officer of Peconic Partners LLC, the investment adviser to the above-mentioned clients.

(b) According to Amendment No. 9 to a report on Schedule 13G/A dated February 9, 2015, the 467,175 shares beneficially owned by William F. Harnisch as of December 31, 2014, representing 5.18% equity interest in the Company, consisting of (A) 79,800 shares beneficially owned individually by Mr. Harnisch; and (B)(i) 218,775 shares beneficially owned by Grenadier Fund; (ii) 116,100 shares beneficially owned by Triumph Fund II L.P.; and (iii) 52,500 shares beneficially owned by Peconic Partners International Fund Ltd., all of which shares Mr. Harnisch may be deemed to beneficially own by virtue of his position as President and Chief Executive Officer of Peconic Partners LLC, the investment adviser to the above-mentioned clients.

According to the shareholders list provided to the Company by its transfer agent, there were 51 shareholders (representing all issued common stock of 9,017,310 shares) of record of the Company’s common stock as of November 30, 2015.

B. RELATED PARTY TRANSACTIONS

Convertible Notes

On March 23, 2006, Rosedale entered into a subscription agreement with the Company and other subscribers for convertible notes with an aggregate principal amount of HK$1,000 million, of which the Company agreed to subscribe for HK$300 million. The initial conversion price of the convertible notes was HK$0.79 per share, subject to anti-dilutive adjustments. In July 2008, the conversion price was reduced from HK$0.79 per share to HK$0.339 per share as a result of rights issued by Rosedale. Unless previously converted or lapsed or redeemed by Rosedale, Rosedale will redeem the convertible notes on the fifth anniversary from the date of issue of the convertible notes at a redemption amount equal to 110% of the principal amount of the convertible notes outstanding. The Company has the right to convert the whole or any part (in an amount or integral multiple of HK$1 million) of the principal amount of the convertible notes into shares of Rosedale at the then prevailing conversion price.

Subject to certain restrictions intended to facilitate compliance with relevant rules and regulations, each noteholder has the right to exchange all or part (in the amount or integral multiple of HK$10 million) of 50% of the initial principal amount of its convertible notes for shares of any company that is an affiliated company of Rosedale as defined in the Rules Governing the Listing of Securities on the HKSE or a subsidiary of Rosedale that is to be listed on a stock exchange through an initial public offering at the price, subject to anti-dilutive adjustments, at which the such shares are actually issued to the public at the time of the listing on that stock exchange. The decision on whether to list any of its affiliated company or subsidiary in the future is at the sole discretion of the directors of Rosedale. During 2007, the Company converted a total of HK$237 million of convertible notes of Rosedale into ordinary shares at a conversion price of HK$0.79 per share. The Company did not convert any convertible notes of Rosedale in 2009, 2010 and 2011.

In July 2009, Rosedale made a repurchase offer to all Convertible Notes holders to repurchase the Convertible Notes at their full value by issuing its share at HK$0.035 per share (the “Repurchase Offer I”). Rosedale has to fulfill several conditions before the completion of the offer as stated in the Repurchase Offer I agreement. As of November 11, 2009, the Board of Directors of Rosedale determined Rosedale could not fulfill certain of the conditions and the Repurchase Offer I lapsed automatically.

In December 2009, Rosedale made another repurchase offer to all Convertible Notes holders to repurchase the Convertible Notes at a price equal to 80% of the outstanding principal amount of the Convertible Notes (the “Repurchase Offer II”). The Repurchase Offer II is conditional upon fulfillment of several conditions. The Company accepted the Repurchase Offer II in full. However, Rosedale could not fulfill certain of the conditions and the Repurchase Offer II also lapsed automatically.

In February 2010, Rosedale had completed a capital reorganization which involved, among others, consolidation of every twenty (20) of its then issued shares of HK$0.01 each into 1 issued consolidated share of HK$0.20 each. Consequently, the conversion price of the Convertible Notes was adjusted from HK$0.339 to HK$6.780 with effect from February 1, 2010.

In June 2010, Rosedale announced that it proposed to make a repurchase offer to repurchase the Convertible Notes (the “Repurchase Offer III”). The Company did not accept the Repurchase Offer III.

Pursuant to the instrument constituting the Convertible Notes, the conversion price of the Convertible Notes is to be adjusted from HK$6.780 to HK$6.774 (the “Adjustment”) as a result of the issue and allotment of 111,666,000 shares pursuant to the terms of the Repurchase Offer III. Since the Adjustment when aggregated with the 2009 Adjustment is less than 3% of the prevailing conversion price of HK$6.780, pursuant to the terms and conditions of the Notes, the 2009 Adjustment and the Adjustment will not take effect but shall be carried forward and be taken into account in the next subsequent adjustment.

On June 7, 2011, the maturity date of the Convertible Notes, there were a total of HK$63 million, or approximately US$8 million, of Convertible Notes remaining outstanding. All such Convertible Notes, together with accrued interest of HK$10.8 million, or approximately US$1.4 million, have been subsequently fully settled (see Item 8 below).

Other Related Party Transactions

The Company entered into the following related party transactions:


	2013		2014		2014
	Rmb’000		Rmb’000		USD’000
Due from:
CSH and its subsidiaries		87		—		—
GDI and its subsidiaries (“GDI Group”)		2		2		1
Hanny and its subsidiaries (except GDI Group)		312		320		51

		401		322		52

Due to:
CSH and its subsidiaries		287		—		—

		287		—		—

As of December 31, 2013 and 2014, the amounts due from/to related parties were unsecured, non-interest bearing and had no fixed repayment terms.

ITEM 8.

FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See the Consolidated Financial Statements to the Company included in “Item 17. Financial Statements” of this Annual Report.

Dividend Policy

On July 3, 2001, the board of directors of the Company announced that the Company would suspend the declaration and payment of any quarterly dividend until the profitability of the Company and its subsidiaries reached an acceptable level. During 2012, 2013 and 2014, no dividend was declared or paid by the Company. Any future determination to pay a dividend to shareholders of the Company will depend on the Company’s results of operations and financial condition, and other factors deemed relevant by its board of directors.

Since the Company is a holding company, its ability to pay dividends depends substantially on its receipt of distributions from its subsidiaries. Applicable Chinese laws and regulations require that, before a Sino-foreign equity joint venture enterprise (such as each PRC subsidiary) distributes profits to investors, it must: (1) satisfy all tax liabilities; (2) provide for losses in previous years; and (3) make allocations, in proportions determined at the sole discretion of the board of directors, to a general reserve fund and an enterprise expansion fund. During 2012, 2013 and 2014, no distribution of dividends was made from any subsidiary to the Company.

B. SIGNIFICANT CHANGES

The Company did not convert any of the Convertible Notes of Rosedale that it held in 2011. On June 7, 2011, the maturity date of the Convertible Notes, there were a total of HK$63 million, or approximately US$8 million, of Convertible Notes remained outstanding. All such Convertible Notes, together with accrued interest of HK$10.8 million, totaled Rmb59.8 million, have been subsequently fully settled (see below).

On June 30, 2011, the Memorandum of Understanding, dated April 15, 2008, between a direct wholly owned subsidiary of the Company and a third party regarding the acquisition of a certain equity interest in a property investment company, lapsed. The deposit of Rmb67.5 million was refunded to the Company (see below).

On November 28, 2011, the Company sold all of its ownership interests in Hangzhou Zhongce Rubber Company Limited to CZ Tire Holdings Limited, an independent third-party company incorporated in the British Virgin Islands, for a purchase price of Rmb600 million or approximately US$95.3 million. The Company is required to pay an income tax of Rmb79.5 million on the disposal of Hangzhou Zhongce. According to the disposal agreement, CZ Tire Holdings Limited bore the difference of the tax payment in excess of Rmb40 million or approximately US$6.4 million.

On September 28, 2012, the Company reported that its wholly owned subsidiary, Wealth Faith Limited had entered into a definitive agreement with Fortuneasy Limited, a third party. The agreement provides for the purchase by Wealth Faith Limited of 40% of the shares of Million Cube Limited from Fortuneasy Limited. The total purchase price for the shares being acquired by Wealth Faith Limited is HK$200 million or approximately US$25.6 million. The Company, through Wealth Faith Limited, previously deposited HK$154.8 million or approximately Rmb127.3 million in earnest money with Fortuneasy Limited, which will be applied toward the purchase price. The deposits are refundable in full and were funded by the settlement of the Convertible Notes of Rosedale and accrued interest that totaled HK$73.8 million, or approximately Rmb59.8 million (see above), and a refund of deposits paid for acquisition of a property investment company of Rmb67.5 million (see above).

As provided in the agreement, effective on May 31, 2012, Million Cube Limited acquired from ITC Properties Group Limited (“ITC Properties”), a company incorporated in Bermuda and listed on The Stock Exchange of Hong Kong Limited (“HKSE”), 45% of the issued share capital and corresponding shareholder loans of Paragon Winner Company Limited, or Paragon. Paragon was incorporated in the British Virgin Islands and formed to invest in a joint venture that has developed and operated the Sanya Sun Valley Golf Resort in Yalong Bay, Sanya City, the People’s Republic of China which is seeking to develop a related hotel and resort complex at such resort. The transaction was completed in March 2015.

ITEM 9.

THE LISTING

Since November 26, 2002, the Company’s common stock has traded on the OTC Pink Marketplace under the stock symbol “CSHEF”. The OTC Pink Marketplace is a regulated quotation service that displays real-time quotes, last sale prices and volume information in over-the-counter equity securities for companies that are registrants with the SEC. Prior to that, the Company’s common stock traded on the New York Stock Exchange, or NYSE, under the symbol “CSH”. However, the trading was suspended on September 27, 2002 by the NYSE for the failure of the Company to meet the NYSE’s continuing listing standards. Effective December 30, 2002, the common stock of the Company was removed from listing on the NYSE.

The following table sets forth, for the periods indicated, the high and low closing sale prices of the common stock as reported by the OTC Pink Marketplace from January 1, 2010 to December 31, 2014.


Year Ended	High (US$)		Low (US$)
December 31, 2014		0.40		0.15
December 31, 2013		0.80		0.16
December 31, 2012		1.75		0.10
December 31, 2011		0.76		0.04
December 31, 2010		0.19		0.01

The following table sets forth the high and low closing sale prices for the common stock as reported during each of the quarters in the two-year period ended December 31, 2014 and each of the most recent periods.


Quarter Ended	High (US$)		Low (US$)
September 30, 2015		0.25		0.25
June 30, 2015		0.35		0.25
March 31, 2015		0.35		0.20
December 31, 2014		0.36		0.15
September 30, 2014		0.40		0.36
June 30, 2014		0.37		0.27
March 31, 2014		0.37		0.31
December 31, 2013		0.50		0.19
September 30, 2013		0.26		0.16
June 30, 2013		0.74		0.26
March 31, 2013		0.80		0.21
December 31, 2012		0.62		0.25
September 30, 2012		1.10		0.10
June 30, 2012		1.11		1.10
March 31, 2012		1.75		0.85

The following table sets forth the high and low closing sale prices for the common stock as reported during each of the most recent six months.


Month Ended	High (US$)		Low (US$)
November 30, 2015		0.25		0.15
October 31, 2015		0.25		0.25
September 30, 2015		0.25		0.25
August 31, 2015		0.25		0.25
July 31, 2015		0.25		0.25
June 30, 2015		0.35		0.25

ITEM 10.

ADDITIONAL INFORMATION

A. SHARE CAPITAL

Not Applicable

B. MEMORANDUM AND ARTICLES OF ASSOCIATION

For a summary of the Company’s Memorandum and Articles of Association see Item 10 of the Company’s Form 20-F for the year ended 2001 to which specific reference is made.

C. MATERIAL CONTRACTS

None

D. EXCHANGE CONTROLS

Certain Foreign Issuer Considerations

The Company has been designated as a non-resident for exchange control purposes by the Bermuda Monetary Authority, Foreign Exchange Control, whose permission for the issue of shares of common stock of the Company has been obtained. The transfer of shares between persons regarded as resident outside Bermuda for exchange control purposes and the issue of shares to or by such persons may be effected without specific consent under the Exchange Control Act of 1972 and regulations thereunder. Issues and transfers of shares involving any person regarded as resident in Bermuda for exchange control purposes require specific prior approval under the Exchange Control Act of 1972.

There are no limitations on the rights of non-Bermuda owners of the Company’s common stock to hold or vote their shares. Because the Company has been designated as a non-resident for Bermuda exchange control purposes, there are no restrictions on its ability to transfer funds in and out of Bermuda or to pay dividends to United States residents who are holders of the Company’s common stock, other than in respect of local Bermuda currency.

In accordance with Bermuda law, share certificates are only issued in the names of corporations or individuals. In the case of an applicant acting in a special capacity (for example, as an executor or trustee), certificates may, at the request of the applicant, record the capacity in which the applicant is acting. Notwithstanding the recording of any such special capacity, the Company is not bound to investigate or incur any responsibility in respect of the proper administration of any such estate or trust. The Company will take no notice of any trust applicable to any of its shares whether or not it had notice of such trust.

As an exempted company, the Company is exempt from Bermuda laws restricting the percentage of share capital that may be held by non-Bermudan persons, but as an exempted company the Company may not participate in certain business transactions, including: (1) the acquisition or holding of land in Bermuda (except land required for business and held by way of lease or tenancy for terms of not more than 21 years) without the express authorization of the Bermuda legislature; (2) the taking of mortgages on land in Bermuda to secure an amount in excess of US$50,000 without the consent of the Minister of Finance of Bermuda; (3) the acquisition of securities created or issued by, or any interest in, any local company or business, other than certain types of Bermuda government securities or securities of another exempted company, partnership or other corporation resident in Bermuda but incorporated abroad; or (4) the carrying on of business of any kind in Bermuda, except in furtherance of the business of the Company carried on outside Bermuda or under a license granted by the Minister of Finance of Bermuda.

The Bermuda government actively encourages foreign investment in exempted entities like the Company that are based in Bermuda but do not operate in competition with local business. In addition to having no restrictions on the degree of foreign ownership, the Company is subject neither to taxes on its income or dividends nor to any foreign controls in Bermuda. In addition, there is no capital gains tax in Bermuda, and profits can be accumulated by the Company, as required, without limitation.

E. TAXATION

The following discussion is a summary of certain tax consequences of an investment in the Company’s common stock under Bermuda tax laws and United States Federal income tax laws. The discussion does not deal with all possible tax consequences relating to an investment in the common stock and does not purport to deal with the tax consequences applicable to all categories of investors, some of which (such as dealers in securities, insurance companies and tax-exempt entities) may be subject to special rules. In particular, the discussion does not address the tax consequences under State, local and other laws (e.g., non-Bermuda, non-United States Federal tax laws). This discussion is based upon laws and relevant interpretations thereof in effect as of the date of this Annual Report, all of which are subject to change.

Bermuda Taxation

The Company is incorporated in Bermuda. Under current Bermuda law, the Company is not subject to tax on income or capital gains, and no Bermuda withholding tax will be imposed upon payments of dividends by the Company to its shareholders. Furthermore, the Company has received from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act of 1966, as amended, an undertaking that, in the event that Bermuda enacts any legislation imposing any tax computed on profits or income, including any dividend or capital gains withholding tax, or computed on any capital assets appreciation thereof, or any tax in the nature of an estate, duty or inheritance tax, the imposition of such tax will not be applicable to the Company or any of its operations, nor to the shares, debentures or other obligations of the Company, until March 28, 2016. This undertaking does not, however, prevent the imposition of property taxes on Company-owned real property or leasehold interests in Bermuda.

The United States does not have a comprehensive income tax treaty with Bermuda.

As an exempted company, the Company is required to pay to the Bermuda government an annual registration fee calculated on a sliding-scale basis by reference to its assessable capital, that is, its authorized capital plus any share premium.

British Virgin Islands (“BVI”) Taxation

The Company has certain of its subsidiaries incorporated under the laws of the BVI. Pursuant to the rules and regulations of the BVI, these subsidiaries are not subject to any income tax in the BVI.

Under the International Business Companies Act of the BVI, as currently in effect, a holder of common stock who is not a resident of BVI is exempt from BVI income tax on dividends paid with respect to the common stock and all holders of common stock are not liable for BVI income tax on gains realized during that year on sale or disposal of such shares; BVI does not impose a withholding tax on dividends paid by a company incorporated under the International Business Companies Act.

There are no capital gains, gift or inheritance taxes levied by the BVI on companies incorporated under the International Business Companies Act. In addition, the common stock is not subject to transfer taxes, stamp duties or similar charges.

There is no income tax treaty or convention currently in effect between the United States and the BVI.

Certain Material United States Federal Income Tax Consequences

Taxation of Shareholders

The following is a summary of certain material U.S. federal income tax consequences to U.S. holders (as defined below) relating to the purchase, ownership, and disposition of the Company’s common stock. This discussion is based upon current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated thereunder, rulings, pronouncements, judicial decisions, and administrative interpretations of the Internal Revenue Service (the “IRS”), in each case as in effect and publicly available on the date hereof, all of which are subject to change and differing interpretation, possibly on a retroactive basis, at any time by legislative, judicial, or administrative action. We cannot assure you that the IRS will not challenge the conclusions stated below or that a court will not find in the IRS’s favor. No legal opinion from U.S. counsel or ruling from the IRS has been (or will be) sought on any of the matters discussed herein. The discussion set forth below is limited to U.S. holders who hold the Company’s common stock as a capital asset within the meaning of Section 1221 of the Code.

The following discussion does not purport to be a complete analysis of all the potential U.S. federal income tax effects relating to the purchase, ownership, and disposition of the Company’s common stock. Without limiting the generality of the foregoing, this discussion does not address the effect of any rules applicable to U.S. holders that are subject to special treatment under the U.S. federal income tax laws, including, without limitation: traders and dealers in securities or currencies; insurance companies; financial institutions, banks, and thrifts; regulated investment companies, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, and holders of interests in such entities; tax-exempt entities; U.S. persons whose functional currency is not the U.S. dollar; U.S. expatriates; persons who hold the Company’s common stock as part of a straddle, hedge, conversion transaction, or other risk reduction or integrated investment transaction; persons subject to the alternative minimum tax; holders of securities that elect to use a mark-to-market method of accounting for their securities holdings; individual retirement accounts, qualified pension plans, other retirement plans, and tax-deferred accounts; and pass-through entities, including partnerships and Subchapter S corporations, and beneficial owners of interests in such passthrough entities. Finally, this discussion does not address the effect of any: U.S. state or local tax laws, U.S. federal tax laws other than U.S. federal income tax laws, or foreign tax laws.

The following discussion of certain material U.S. federal income tax considerations is for general information only. It is not tax advice. Each prospective investor should consult its own tax advisor regarding the particular U.S. federal, state, local and foreign tax consequences of purchasing, holding, and disposing of the Company’s common stock, including the consequences of any proposed change in applicable laws.

U.S. Holder

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of the Company’s common stock that is for U.S. federal income tax purposes:

•

an individual who is a citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States or who meets the “substantial presence” test under Section 7701(b) of the Code;

•

a corporation or other entity taxable for U.S. federal income tax purposes as a corporation created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;

•

an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

•

a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or if a valid election is in effect under applicable Treasury regulations to treat the trust as a U.S. person.

Passive Foreign Investment Company

The Company generally will be a PFIC if, for a taxable year, (a) 75% or more of the gross income of the Company for such taxable year is passive income or (b) 50% or more of the assets held by the Company either produce passive income or are held for the production of passive income. “Gross income” generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental or outside operations or sources. “Passive income” includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

For purposes of the PFIC income and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another foreign corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other foreign corporation and (b) received directly a proportionate share of the income of such other foreign corporation. If the Company is a PFIC, in addition to the rules discussed below, U.S. Holders generally may be required to file certain information returns with the IRS. The PFIC rules are extremely complex, and U.S. Holders should consult their own U.S. tax advisors concerning the application of the PFIC rules.

The Company believes it was classified as a PFIC during the tax year ended December 31, 2014, and based on current business plans and financial expectations, the Company believes that it may be a PFIC in subsequent tax years. The determination of whether any foreign corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such year and, as a result, cannot be predicted with certainty as of the date of this document.

In any year in which the Company is classified as a PFIC, U.S. Holders are required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require.

Default PFIC Rules Under Section 1291 of the Code

If the Company is a PFIC, the U.S. federal income tax consequences to a U.S. holder of the acquisition, ownership, and disposition of the Company’s common stock will depend on whether such U.S. holder makes an election to treat the Company as a “qualified electing fund” under Section 1295 of the Code (a “QEF Election”), A U.S. holder that does not make a QEF Election will be referred to in this summary as a “Non-Electing U.S. holder.”

A Non-Electing U.S. holder will be subject to the rules of Section 1291 of the Code with respect to any gain on the disposition of the Company’s common stock and any “excess” distribution paid on the Company’s common stock.

Under Section 1291 of the Code, any gain recognized on the sale or other disposition of the Company’s common stock, and any excess distribution paid on such common stock, must be ratably allocated to each day in a Non-Electing U.S. holder’s holding period for such common stock. The amount of any such gain or excess distribution allocated to prior years of such Non-Electing U.S. holder’s holding period will be subject to U.S. federal income tax at the highest tax applicable to ordinary income in each such prior year. A Non-Electing U.S. holder will be required to pay interest on the resulting tax liability for each such prior year, calculated as if such tax liability had been due in each such prior year. The amount of any such gain or excess distribution allocated to the current year of such Non-Electing U.S. holder’s holding period for the Company’s common stock will be treated as ordinary income in the current year (but will not qualify for the preferential dividend rate previously discussed), and no interest charge will be incurred with respect to the resulting tax liability for the current year.

If the Company is a PFIC for any taxable year during which a Non-Electing U.S. holder holds the Company’s common stock, the Company will continue to be treated as a PFIC with respect to such Non-Electing U.S. holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent years. A Non-Electing U.S. holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such common stock were sold on the last day of the last taxable year for which the Company was a PFIC.

QEF Election

A U.S. holder that makes a QEF Election generally will not be subject to the rules of Section 1291 of the Code discussed above. However, a U.S. holder that makes a QEF Election will be subject to U.S. federal income tax annually on such U.S. holder’s pro rata share of (a) “net capital gain” of the Company, which will be taxed as capital gain to such U.S. holder, and (b) the “ordinary earnings” of the Company, which will be taxed as ordinary income to such U.S. holder, regardless of whether such amounts are actually distributed to such U.S. holder by the Company. A U.S. holder that makes a QEF Election may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. In addition, a U.S. holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of the Company’s common stock, as long as the U.S. holder always had a QEF election in effect.

Each U.S. holder should consult its own U.S. tax advisors regarding the advisability of, and procedure for making, a QEF Election. However, U.S. holders should be aware that the Company did not satisfy record keeping requirements that apply to a qualified electing fund for its tax year ended December 31, 2014 and there can be no assurance that the Company will in future satisfy record keeping requirements that apply to a qualified electing fund, or that the Company will supply U.S. holders with information that such U.S. shareholders require to report under the QEF Election rules, in the event that the Company is a PFIC and a U.S. shareholder wishes to make a QEF Election. Thus, U.S. holders may not be able to make a QEF Election with respect to the Company’s common stock.

Distributions on the Company’s Common Stock

Generally, and subject to the discussion above concerning PFICs, a U.S. holder that receives a distribution, including a constructive distribution, with respect to the Company’s common stock will be required to include the amount of such distribution in gross income as a dividend (without reduction for any foreign income tax withheld from such distribution) to the extent of the current or accumulated “earnings and profits” of the Company (as determined under U.S. tax principles). To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated (a) first, as a tax-free return of capital to the extent of a U.S. holder’s tax basis in the Company’s common stock and, (b) thereafter, as gain from the sale or exchange of such common stock. (See more detailed discussion at “Disposition of the Company’s Common Stock” below.) However, the Company may not maintain the calculations of earnings and profits in accordance with U.S. federal income tax principles, and each U.S. holder should therefore assume that any distribution by the Company with respect to the Company’s common stock will constitute ordinary dividend income. Dividends received on the Company’s common stock generally will not be eligible for the “dividends received deduction” or eligible for the preferential tax rates applicable to long-term capital gains for dividends received by individuals.

Disposition of the Company’s Common Stock

Subject to the discussion of the PFIC rules, above, a U.S. holder will recognize gain or loss on the sale or other taxable disposition of the Company’s common stock in an amount equal to the difference, if any, between (a) the amount of cash plus the fair market value of any property received and (b) such U.S. holder’s adjusted basis in the Company’s common stock sold or otherwise disposed of. Any such gain or loss generally will be capital gain or loss, which will be long-term capital gain or loss if the Company’s common stock is held for more than one year.

Although preferential tax rates currently apply to long-term capital gains of a U.S. holder that is an individual, estate, or trust, such preferential tax rates are not available if the Company is a PFIC, unless a “qualified electing fund” (“QEF”) election is timely made, as described above. Deductions for capital losses and net capital losses are subject to limitations.

Foreign Tax Credit

A U.S. holder who pays (whether directly or through withholding) foreign income tax with respect to the Company’s common stock may be entitled, at the election of such U.S. holder, to receive either a deduction or a credit for such foreign income tax paid. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. holder during such year.

The foreign tax credit is subject to complex limitations, including the general limitation that the credit cannot exceed the proportionate share of a U.S. holder’s U.S. federal income tax liability that such U.S. holder’s “foreign source” taxable income bears to such U.S. holder’s worldwide taxable income. Generally, dividends paid by a foreign corporation should be treated as foreign source for this purpose, and gains recognized on the sale of stock of a foreign corporation by a U.S. holder generally should be treated as U.S. source for this purpose.

Receipt of Foreign Currency

The amount of any distribution paid to a U.S. holder in foreign currency, or on the sale, exchange or other taxable disposition of the Company’s common stock, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any U.S. holder who converts or otherwise disposes of the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes.

Unearned Medicare Income Tax

For tax years beginning after December 31, 2014, certain individuals, estates and trusts whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surtax on “net investment income” including, among other things, dividends and net gain from dispositions of property other than property held in a trade or business.

Information Reporting; Backup Withholding Tax

The Foreign Account Tax Compliance Act (“FATCA”) generally requires that individuals that hold certain specified foreign financial assets in excess of $50,000 report such ownership to the IRS using IRS Form 8938. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. U.S. holders may be subject to these reporting requirements unless their Company common stock is held in an account at a domestic financial institution. Penalties for failure to file certain of these information returns are substantial.

Payments of dividends made on, and proceeds arising from certain sales or other taxable dispositions of, the Company’s common stock generally will be subject to information reporting and backup withholding tax, at the rate of 28%, if a U.S. holder (a) fails to furnish such U.S. holder’s U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. holder that it is subject to backup withholding tax. U.S. holders that are corporations generally are excluded from these information reporting and backup withholding tax rules. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. holder furnishes required information to the IRS.

F. DIVIDENDS AND PAYING AGENTS

Not applicable.

G. STATEMENTS BY EXPERTS

Not applicable.

H. DOCUMENTS ON DISPLAY

The Company is subject to certain of the information reporting requirements of the Exchange Act. The Company, as a “foreign private issuer,” is exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and the officers, directors and principal shareholders of the Company are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchase and sale of the Company’s shares. In addition, the Company is not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, the Company does file with the SEC an Annual Report on Form 20-F containing consolidated financial statements audited by an independent accounting firm.

Documents concerning us that are referred to herein may be inspected at the Company’s offices at 25th Floor, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong. You may read and copy any document that the Company files with the SEC at its public reference facilities at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. The SEC also maintains a web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of this web site is http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to fluctuations in interest rates and currency exchange rates primarily with respect to any borrowings it may make and to our operating results. Under its current policies, the Company does not use interest rate derivative instruments to manage exposure to interest rate changes.

Exchange Rate Information

The Consolidated Financial Statements are prepared in Rmb. The financial statements of foreign subsidiaries are translated into Renminbi in accordance with ASC Topic 830, Foreign Currency Matters.

The Hong Kong dollar is tied to and allowed to fluctuate within a narrow range against the value of the U.S. dollar. Historically, there has been no material fluctuation in the exchange rate between the Renminbi and the U.S. dollar and restrictions were set on the flow of Renminbi between the PRC and the United States. Starting on July 21, 2005, the PRC shifted to a managed floating exchange rate regime based on market supply and demand with reference to a basket of other currencies. The Renminbi is no longer pegged to the U.S. dollar.

Fluctuations in the value of foreign currencies cause U.S. dollar translated amounts to change in comparison with previous periods. However, the fluctuation in exchange rates did not have material effect on the financial position of the Company in the past three years.

Foreign Currency Risk

As our major assets and liabilities are comprised of a mixture of items denominated in Renminbi, U.S. dollars and Hong Kong dollars, our business and operating results may be materially affected in the event of a severe increase or decrease in the value of Renminbi against other currencies. If Renminbi appreciates against U.S. dollars/Hong Kong dollars, our operating expenses and net income may be affected depending upon the then composition of our assets and liabilities.

Historically, both Hong Kong dollars and Renminbi were pegged to U.S. dollars. As a result, the exchange rate of U.S. dollars/Hong Kong dollars to Renminbi fluctuated within a narrow range. However, on July 21, 2005, the PBOC adjusted the exchange rate of U.S. dollars to Renminbi from 1:8.27 to 1:8.11, resulting in an approximately 2% appreciation in the value of Renminbi against U.S. dollars. As Hong Kong dollars are pegged to U.S. dollars, such adjustment has effectively resulted in an approximately 2% appreciation in the value of Renminbi against the Hong Kong dollar.

On June 19, 2010, the PBOC released a statement indicating that it would “proceed further with reform of the Renminbi exchange rate regime and increase the Renminbi exchange rate flexibility.” There remains significant international pressure on the PRC government to adopt a substantial liberalization of its currency policy, which could result in a further and more significant appreciation in the Renminbi’s value against the U.S. dollars. On March 17, 2014, the PBOC announced that the Renminbi exchange rate flexibility increased to 2% in order to proceed further with reform of the Renminbi exchange rate regime. These could result in a further and more significant floatation in the Renminbi’s value against the U.S. dollars.

On August 11, 2015, the PBOC has cut the RMB’s reference rate by 1.9 percent, sparking the sharpest fall in the currency since the dollar peg ended a decade ago. The move by the PBOC comes amid growing signs of a deepening slowdown in the mainland economy. The PBOC said that the reference rate move was a one-time adjustment, and it will strengthen the market’s role in the fixing of the rate and promote the convergence of the onshore and offshore rates. The PBOC also said it will keep the currency stable at a reasonable level.

For more details, see “RISK FACTORS — FLUCTUATIONS IN THE VALUE OF THE RENMINBI COULD NEGATIVELY IMPACT OUR RESULTS OF OPERATIONS”.

As of December 31, 2014, the Company had no open forward contracts or option contracts. The Company’s cash and cash equivalents as of December 31, 2014 was Rmb453.0 million of which approximately Rmb449.2 million equivalents (approximately US$72.4 million) were held in U.S. dollar deposits.

Interest Rate Fluctuations

The Company’s interest income is sensitive to change in interest rates. However, the amount of interest income has been immaterial to the Company.

The Company did not have any short-term or long-term debt which bore a floating interest rate as of December 31, 2013 or 2014.

The Company will be exposed to interest rate fluctuations on its cash on hand and any new borrowings under any new loan facility and any change in interest rate could affect its results of operations and cash flows.

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

There has been no material default in the payment of principal or interest or other material default requiring disclosure pursuant to this item. There have been no arrears in the payment of dividends or other material delinquency requiring disclosure pursuant to this item.

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

There has been no material modification to the rights of security holders required to be disclosed pursuant to this item.

ITEM 15.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management of the Company, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e) and 15d-15(e), as of the end of the period covered by this Annual Report on Form 20-F. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of December 31, 2014, the Company’s disclosure controls and procedures are ineffective as they are not sufficient to ensure that the information that the Company is required to disclose in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. The Company is developing a set of procedures and controls that will allow it to meet such time periods specified in the Securities and Exchange Commission rules and forms and to ensure that information required to be disclosed by it in its reports is accumulated and communicated to its management, including the Issuer’s principal executive and principal financial officers, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

The directors and management of the Company are responsible for establishing and maintaining adequate internal control over our financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance, but not absolute assurance, regarding the reliability of financial reporting and the preparation of its published financial statements. Internal control over financial reporting includes policies and procedures that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

Provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with the generally accepted accounting principles;

Provide reasonable assurance that receipts and expenditures are being made only in accordance with the authorizations of management and directors of the Company; and

Provide reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a material effect on our financial statements will be prevented or detected in a timely manner.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurances, but not absolute assurances, with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may decline.

Our management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2014 based on the criteria established in the updated framework in the Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992 and updated in May 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. Based on the assessment, management has concluded that our internal control over financial reporting was ineffective as of December 31, 2014. In making its assessment, management identified a material weakness, similar to prior years, concerning the Company’s internal accounting staff’s lack of understanding of complex accounting issues related to U.S. generally accepted accounting principles (“GAAP”), including accounting for income taxes. In response, external consultants were engaged to perform a number of tasks to prepare specific accounting analysis and necessary corrections were made prior to any public announcements or filings with the SEC. Additionally, as part of its ongoing efforts to address the potential weakness described above, the Company will continue retaining external consultants who have sufficient and appropriate technical skills to help the Company identify and resolve accounting and reporting issues. This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report on Form 20-F.

Except as mentioned above, there have been no changes in the Company’s internal control over financial reporting during the period covered by this Annual Report on Form 20-F that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 16A

AUDIT COMMITTEE FINANCIAL EXPERT

As the Company’s common stock is not currently listed on a U.S. national securities exchange, the Company is not obligated to have an audit committee of the board of directors. The Company has, however, had an Audit Committee for many years and continues to do so. As of December 31, 2014, the Company’s Board of Directors has determined that the two members of the Audit Committee, Mr. Richard Whittall and Mr. Sin Chi Fai, do not qualify as “audit committee financial experts” as defined by Item 401(h) of Regulation S-K adopted pursuant to the Exchange Act. The Company is currently in the process of seeking a qualified financial expert for the audit committee.

ITEM 16B

CODE OF ETHICS

The Company has adopted a Code of Ethics for the Chief Executive and Senior Financial Officers, which applies to the Company’s principal executive officer and to its principal financial and accounting officers. A copy of the Code of Ethics is attached as Exhibit 14.1 to this Annual Report on Form 20-F.

ITEM 16C

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table presents the aggregate fees for services rendered by our principal external auditors for the periods indicated below:


	2013		2014
	US$’000		US$’000
Audit Fees		79		77
Audit-Related Fees		—		—
Tax Fees		—		—
All Other Fees		—		—

Total		79		77

Audit fees means the aggregate fees in each of the fiscal years listed for professional services rendered by our principal auditors for the audit of our annual consolidated financial statements or services that are normally provided by the auditors in connection with statutory and regulatory filings or engagements. Services comprising the fees disclosed under this category also involve principally limited reviews performed on our consolidated financial statements and the audits of the annual financial statements of our subsidiaries and affiliated companies.

Audit-related fees means the aggregate fees in each of the fiscal years listed for assurance and related services by our principal auditors that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees”.

The Audit Committee members are responsible for the review of the quality and performance of external auditors. The Audit Committee has adopted a policy regarding pre-approval of audit and permissible non-audit services provided by our independent auditors. Under the policy, the Audit Committee pre-approves all auditing services. The engagement of Crowe Horwath (HK) CPA Limited as independent registered public accounting firm has been approved by the Audit Committee. If the Audit Committee approves an audit service within the scope of the engagement of the audit service, such audit service is deemed to have been pre-approved.

ITEM 16D

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

As the Company’s common stock is not listed on a U.S. national securities exchange, the information called for by Part II, Item 16D of the Form 20-F is not applicable.

ITEM 16E

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

The Company has not made any repurchases of its equity securities during the period covered by this report.

ITEM 16F

CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G

CORPORATE GOVERNANCE

Not applicable.

PART III

ITEM 17.

FINANCIAL STATEMENTS

See the Index to the Consolidated Financial Statements accompanying this report beginning page F-1.

ITEM 18.

FINANCIAL STATEMENTS

Not applicable.

CHINA ENTERPRISES LIMITED

Report of Independent Registered Public Accounting Firm

and Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CHINA ENTERPRISES LIMITED



Report of Independent Registered Public Accounting Firm			F-1

Consolidated Financial Statements:

Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2012, 2013 and 2014			F-2

Consolidated Balance Sheets as of December 31, 2013 and 2014			F-3

Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2012, 2013 and 2014			F-4

Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2013 and 2014			F-5

Notes to Consolidated Financial Statements			F-6

Report of Independent Registered Public Accounting Firm

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF

CHINA ENTERPRISES LIMITED

We have audited the accompanying consolidated balance sheets of China Enterprises Limited (“Company”) and subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of operations and comprehensive income, shareholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and subsidiaries as of December 31, 2014 and 2013 and the consolidated results of their operations and cash flows for each of the years in the three-year period ended December 31, 2014 in conformity with U.S. generally accepted accounting principles.

Our audits also included the translation of Renminbi (RMB) amounts into United States dollar (US$) amounts and, in our opinion, such translation, where provided, has been made in conformity with the basis stated in Note 2(g) to the consolidated financial statements. Such United States dollar amounts are presented for the convenience of the readers.

/s/ Crowe Horwath (HK) CPA Limited

Hong Kong, China

November 6, 2015

F-1

CHINA ENTERPRISES LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands, except number of shares and per share data)


	Year ended December 31,
	2012			2013			2014			2014
	Rmb			Rmb			Rmb			US$
Operating activities
General and administrative expenses		(1,708	)		(1,762	)		(2,148	)		(346	)
Non-operating income (expenses):
Dividend income		—			—			3,866			623
Interest income		164			145			137			22
Interest expense		(916	)		(534	)		(552	)		(89	)
Net realized gain on investments		1,330			—			919			148
Unrealized gain (loss) on trading securities still held at the balance sheet date		4,541			12,165			(4,045	)		(652	)
Others		10			—			—			—
Exchange loss		(490	)		(76	)		(667	)		(108	)

Profit (loss) before income tax		2,931			9,938			(2,490	)		(402	)
Income tax expense (note 6)		—			—			—			—

Net income (loss)		2,931			9,938			(2,490	)		(402	)

Other comprehensive income, net of tax
Foreign currency translation adjustment		(3,548	)		(14,217	)		11,328			1,826
Available-for-sale investment securities:
Change in unrealized (losses) gains		—			7,041			(1,377	)		(222	)

Net change		(3,548	)		(7,176	)		9,951			1,604

Total comprehensive income (loss)		(617	)		2,762			7,461			1,202

Earnings (loss) per common share
Basic and diluted		0.33			1.10			(0.28	)		(0.04	)

Weighted average number of shares used in the calculation of earnings (loss) per common share
Basic and diluted		9,017,310			9,017,310			9,017,310			9,017,310

See accompanying notes to consolidated financial statements.

F-2

CHINA ENTERPRISES LIMITED

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except number of shares and their par values)


	As of December 31,
	2013			2014			2014
	Rmb			Rmb			US$
ASSETS
Current assets:
Cash and cash equivalents		440,164			452,956			73,003
Prepaid expenses and other current assets		149			149			24
Other receivables (note 3)		7,682			8,527			1,374
Due from related parties (note 11)		401			322			52
Trading securities (notes 4 and 8)		36,569			30,632			4,937

Total current assets		484,965			492,586			79,390
Deposits paid for acquisition of investments (note 5)		127,278			127,278			20,513
Available-for-sale securities (notes 4 and 8)		20,630			19,737			3,181
Other assets		6			6			1

Total assets		632,879			639,607			103,085

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Due to related parties (note 11)		287			—			—
Payables to securities brokers (note 12)		5,328			4,881			786
Accrued liabilities		2,519			2,119			341
Other taxes payable		2,753			2,753			444
Income taxes payable		22,095			22,496			3,626

Total current liabilities		32,982			32,249			5,197

Total liabilities		32,982			32,249			5,197

Commitments and contingencies (note 9)
Shareholders’ equity:
Common stock—par value US$0.01 per share (50,000,000 shares authorized; 9,017,310 shares issued and outstanding(note 7)		770			770			124
Additional paid-in capital		1,000,958			1,000,958			161,325
Accumulated other comprehensive losses		(27,169	)		(17,218	)		(2,775	)
Accumulated deficit		(374,662	)		(377,152	)		(60,786	)

Total shareholders’ equity		599,897			607,358			97,888

Total liabilities and shareholders’ equity		632,879			639,607			103,085

See accompanying notes to consolidated financial statements.

F-3

CHINA ENTERPRISES LIMITED

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Amounts in thousands, except number of shares)


	Common stock		Common stock		Additional paid-in capital		Accumulated other compre- hensive (losses) income			Accumulated deficit			Total
	Number		Rmb		Rmb		Rmb			Rmb			Rmb

Balance at January 1, 2012		9,017,310		770		1,000,958		(16,445	)		(387,531	)		597,752
Net income		—		—		—		—			2,931			2,931
Foreign currency translation adjustment		—		—		—		(3,548	)		—			(3,548	)

Balance at December 31, 2012		9,017,310		770		1,000,958		(19,993	)		(384,600	)		597,135
Net income		—		—		—		—			9,938			9,938
Foreign currency translation adjustment		—		—		—		(14,217	)		—			(14,217	)
Unrealized gain on available-for-sale securities		—		—		—		7,041			—			7,041

Balance at December 31, 2013		9,017,310		770		1,000,958		(27,169	)		(374,662	)		599,897
Net loss		—		—		—		—			(2,490	)		(2,490	)
Foreign currency translation adjustment		—		—		—		11,328			—			11,328
Unrealized loss on available-for-sale securities		—		—		—		(1,377	)		—			(1,377	)

Balance at December 31, 2014		9,017,310		770		1,000,958		(17,218	)		(377,152	)		607,358

Balance at December 31, 2014 (in US$)				124		161,325		(2,775	)		(60,786	)		97,888

See accompanying notes to consolidated financial statements.

F-4

CHINA ENTERPRISES LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)


	Year ended December 31,
	2012			2013			2014			2014
	Rmb			Rmb			Rmb			US$
Cash flows from operating activities:
Net income (loss)		2,931			9,938			(2,490	)		(402	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Net realized loss (gain) on investments		(1,330	)		—			(919	)		(148	)
Unrealized (gain) loss on trading securities still held at the balance sheet date		(4,541	)		(12,165	)		4,045			652
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		130			5			—			—
Other payables		86			(290	)		—			—
Accrued liabilities		(2,106	)		(660	)		(400	)		(64	)

Net cash (used in) provided by operating activities		(4,830	)		(3,172	)		236			38

Cash flows from investing activities:
(Advances to) repayment from an unrelated party		234			6,938			(628	)		(101	)
Decrease in due from related parties		13,260			1,008			88			14
Purchases of trading securities		(4,787	)		—			—			—
Proceeds from trading securities		10,946			—			2,851			459
Increase (decrease) in payables to securities brokers		(14,833	)		385			(447	)		(72	)

Net cash provided by investing activities		4,820			8,331			1,864			300

Cash flows used in financing activities:
Changes in due to related parties		(1,736	)		(70,117	)		(292	)		(47	)

Net cash used in financing activities		(1,736	)		(70,117	)		(292	)		(47	)

Effect of exchange rate change		(4,297	)		(12,429	)		10,984			1,770

Net increase (decrease) in cash and cash equivalents		(6,043	)		(77,387	)		12,792			2,061
Cash and cash equivalents, beginning of year		523,594			517,551			440,164			70,942

Cash and cash equivalents, end of year		517,551			440,164			452,956			73,003

Supplemental schedule of cash flow information:
Income taxes paid		—			—			—			—
Interest paid		916			534			552			89

See accompanying notes to consolidated financial statements.

F-5

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

China Enterprises Limited (the “Company”) was incorporated in Bermuda on January 28, 1993. Its common stock trades on the OTC (Over-the-Counter) Securities Marketplace in the United States of America (the “US”).

China Strategic Holdings Limited (“CSH”), a public company listed on The Stock Exchange of Hong Kong Limited (the “HKSE”), was the Company’s ultimate parent company before its completion of a group reorganization in May 2006 following which the Company became a wholly-owned subsidiary of Group Dragon Investments Limited (“GDI”), a then equity method affiliate of Hanny Holdings Limited (“Hanny”), a public company listed on the HKSE. In June 2006, Hanny acquired a controlling interest in GDI and became the parent company. On December 8, 2006, Hanny became a subsidiary of ITC Corporation Limited (“ITC”), a public company listed on HKSE and, as a result, ITC became the ultimate parent company. On May 18, 2007, Hanny ceased to be a subsidiary of ITC and Hanny became the ultimate parent company until 2008 when Hanny reduced its equity interest in the Company. Following the completion of the distribution of its Hanny shares to its shareholders in November 2010, ITC’s interests in Hanny dropped from 42% to 0.1%. As of December 31, 2014, Hanny held a 28.95% equity interest in the Company. There have been no further changes in the Company’s ownership status.

The accompanying financial statements include the financial statements of the Company and its wholly owned subsidiaries which primarily consist of Million Good Limited (“Million Good”, incorporated in the British Virgin Islands, “BVI”, principally engaged in investment holding), Wealth Faith Limited (“Wealth Faith”, incorporated in the BVI, principally engaged in investment holding), Cosmos Regent Limited (“Cosmos Regent”, incorporated in the BVI, principally engaged in investment holding), Cyber Generation Limited (“Cyber Generation”, incorporated in the BVI, principally engaged in investment holding) and Whole Good Limited (“Whole Good”, incorporated in the BVI, principally engaged in investment holding). The Company and all of its subsidiaries are collectively referred to as the “Group”.

Based in Hong Kong, the Company has historically been engaged in tire manufacturing, trading and related businesses, and actively participated in the management of China-based companies in a variety of industries for strategic operating purposes.

As of January 1, 2010, the Company had a 26% equity interest in Hangzhou Zhongce Rubber Co., Limited (“HZ”, located in Hangzhou, Zhejiang Province, the PRC). HZ and its consolidated subsidiaries (the “PRC entities”) are engaged in the manufacture of rubber tires in the PRC.

On November 28, 2011, the Company sold all of its ownership interests in HZ to CZ Tire Holdings Limited, an independent third party company incorporated in the British Virgin Islands.

F-6

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued

Following the disposal of all of its interest in the tire business in 2011, the Company had no revenue producing businesses and began actively seeking new investment opportunities, including entering into an agreement through its wholly owned subsidiary to purchase a 40% equity interest in Million Cube Limited (“Million Cube”) in 2012. Million Cube has acquired a 45% equity interest and corresponding shareholder loans of Paragon Winner Company Limited (“Paragon”). Paragon was formed to invest in a joint venture that is developing a golf course, hotel and resort complex at Sanya City in the PRC.

The transaction was completed in March 2015 after the Company’s wholly-owned subsidiary had obtained all necessary governmental and other consents. Following the closing of the transaction and pursuant to the Agreement, the Company has the right to appoint one director to Million Cube’s board of directors, in order to exercise influence over the financial and operating decisions of the golf resort business.

The Company has continued to seek new strategic investment opportunities in the PRC, including Hong Kong. Apart from the golf resort business, the Company is also looking at other potential investments and has a long term goal to build a platform of value-added and productive businesses under the strategic direction of the Company whereby it can exercise significant influence over the financial and operating decisions of its investees for financial returns.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)

Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

(b)

Basis of Consolidation

The Company consolidates all entities in which it is the primary beneficiary of variable interests in variable interest entities and entities in which it has a controlling financial interest. The Company did not have a variable interest in any variable interest entity during the periods presented.

The consolidated financial statements include the assets, liabilities, revenue and expenses of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated on consolidation.

F-7

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

(c)

Cash and Cash Equivalents

The Company considers cash on hand, demand deposits with banks with original maturities of three months or less when purchased to be cash and cash equivalents.

(d)

Trading Securities

Trading securities refer to equity securities that are bought and held principally for the purpose of selling them in the near term, and are reported at fair value, with unrealized gains and losses included in earnings. The fair value of the Company’s investments in trading securities is based on the quoted market price on the last business day of the fiscal year.

F-8

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

(e)

Available-for-sale Securities

Available-for-sale securities consist of quoted equity securities that are not designated as trading securities. They are held at fair value with unrealized gains and losses, net of tax, reported in accumulated other comprehensive gain or losses. Any unrealized losses that are deemed other-than-temporary are included in current period earnings and removed from accumulated other comprehensive gain or losses.

Realized gains and losses on investment securities are included in current period earnings. For purposes of computing realized gains and losses, the cost basis of each investment sold is generally based on the average cost method.

The Company regularly evaluates whether the decline in fair value of available-for-sale securities is other-than-temporary and objective evidence of impairment could include:

•

The severity and duration of the fair value decline;

•

Deterioration in the financial condition of the issuer; and

•

Evaluation of the factors that could cause individual securities to have an other-than-temporary impairment.

No such other-than-temporary decline in fair value was recognized during the years ended December 31, 2013 and 2014.

(f)

Income Taxes

Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements and unutilized tax loss carry forwards by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities.

The Company adopted ASC Topic 740, Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides accounting guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

F-9

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

(g)

Foreign Currencies

The functional currency of the Company and its Hong Kong domiciled subsidiaries is Hong Kong dollars. The Company has elected Renminbi as its reporting currency.

Foreign currency transactions are translated into the functional currencies of the Company and its subsidiaries at the applicable exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into functional currencies using the applicable exchange rates prevailing at the respective balance sheet dates. Exchange differences are included in the consolidated statements of operations.

Assets and liabilities of the Company and its subsidiaries domiciled in Hong Kong have been translated into Renminbi at the rates of exchange prevailing at the balance sheet dates and all income and expense items are translated into Renminbi at the average rates of exchange over the year. Exchange differences resulting from the translation have been recorded as a component of comprehensive losses.

The translation of Renminbi amounts into US$ amounts are included solely for the convenience of readers and have been made at US$1.00 = Rmb6.2046, the noon buying rate from the Federal Reserve Bank of New York on December 31, 2014. No representation is made that the Renminbi amounts could have been, or could be, converted into United States dollar at that rate or at any other rate.

(h)

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the year. The Company did not have dilutive potential common shares during fiscal 2012, 2013 and 2014.

(i)

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from those estimates. Significant estimates in these financial statements that are susceptible to change as more information becomes available are collectability of receivables, impairment of deposits paid for acquisition of investments and available-for-sale securities, and valuation allowances for deferred tax assets.

F-10

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

(j)

Financial Instruments

The Company recognizes all derivative instruments on the balance sheet at fair value with changes in fair values reported in the consolidated statements of operations.

The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of its cash and cash equivalents, advances to affiliates, and amounts due from related parties. The Company has reviewed the credit worthiness and financial position of its related parties for credit risks associated with amounts due from them. These entities have good credit standing and the Company does not expect to incur significant losses for uncollected advances from these entities.

(k)

Comprehensive Income

Comprehensive income represents changes in equity resulting from transactions and other events and circumstances from non-owner sources. Comprehensive income consists of net income (loss) and the foreign exchange differences arising from translation to the reporting currency and unrealized gains and losses on available-for-sale securities.

(l)

Recently Issued Accounting Pronouncements

In April 2014, the FASB issued ASU 2014-08 “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)—Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”, which changes the threshold for reporting discontinued operations and adds new disclosures. The new guidance defines a discontinued operation as a disposal that “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.” The standard is required to be adopted by public business entities in annual periods beginning on or after December 15, 2014, and interim periods within those annual periods. Entities may “early adopt” the guidance for new disposals. The Company does not expect ASU 2014-08 to have a significant impact on its consolidated financial statements.

F-11

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

(l)

Recently Issued Accounting Pronouncements - continued

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” which clarifies and improves the principles for recognizing revenue and develops a common revenue standard for United States generally accepted accounting principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) that among other things, improves comparability of revenue recognition practices and provides more useful information to users of financial statements through improved disclosure requirements. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company does not expect ASU 2014-09 to have a significant impact on its revenue recognition.

In June 2014, the FASB issued ASU 2014-12, “Compensation—Stock Compensation (Topic 718)” which provides explicit guidance on the treatment of awards with performance targets that could be achieved after the requisite service period. The amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The Company does not expect that the adoption will have a material impact on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern. This standard requires management to evaluate for each annual and interim reporting period whether it is probable that the reporting entity will not be able to meet its obligations as they become due within one year after the date that the financial statements are issued. If the entity is in such a position, the standard provides for certain disclosures depending on whether or not the entity will be able to successfully mitigate its going concern status. This guideline is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early application is permitted. The Company does not expect that the adoption will have a material impact on its consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810)—Amendments to the Consolidation Analysis”, which provides guidance for reporting entities that are required to evaluate whether they should consolidate certain legal entities. In accordance with ASU 2015-02, all legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Company does not anticipate that this adoption will have a significant impact on its consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

F-12

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

3. OTHER RECEIVABLES

Other receivables as of December 31, 2013 and 2014 represented a short-term advance to an independent third party company which was unsecured, non-interest bearing and had no fixed repayment terms. The amount was settled in full in March 2015.

4. INVESTMENTS


	2013			2014			2014
	Rmb			Rmb			US$
Trading securities:
Adjusted cost		78,291			73,531			11,851
Unrealized gains		4,098			936			151
Unrealized losses		(45,820	)		(43,835	)		(7,065	)

Total at fair value		36,569			30,632			4,937


Equity securities listed in Hong Kong		19,433			11,602			1,870
Equity securities listed in Singapore		17,136			19,030			3,067

Total		36,569			30,632			4,937


Available-for-sale securities:
Equity securities listed in Hong Kong:
Cost		13,697			14,023			2,260
Impairment recognized in earnings		—			—			—

Adjusted amortized cost		13,697			14,023			2,260
Unrealized gains		7,041			5,664			913
Exchange differences		(108	)		50			8

Total at fair value		20,630			19,737			3,181

As of the end of reporting period, the Company considers the declines in market value of its marketable securities in its investment portfolio not to be other than temporary in nature and no impairment is recorded. Fair values were determined using closing prices of each individual security in the investment portfolio. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. No impairment loss was recognized for the years presented.

F-13

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

5. DEPOSITS PAID FOR ACQUISITION OF INVESTMENTS

On April 15, 2008, Wealth Faith, a direct, wholly-owned subsidiary, entered into a Memorandum of Understanding (“MOU”) with a third party for the acquisition of a 10% equity ownership interest in Always Rich Resources Inc. (“Always Rich”), an unrelated investment holding company. Always Rich indirectly holds a partial interest in a property under development and a parcel of land situated in Guangzhou, the PRC.

The total consideration for the acquisition of the interest in Always Rich was Rmb150,000. A deposit of Rmb75,000 was paid to a third party vendor on April 24, 2008.

On June 30, 2011, the MOU lapsed. The deposit of Rmb67,500 was refunded to the Company. Rmb7,500 was charged by the third party as an administrative fee and recorded as an expense of the Company for the year ended December 31, 2011.

F-14

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

5. DEPOSITS PAID FOR ACQUISITION OF INVESTMENTS - continued

On June 1, 2011, the Company, through Wealth Faith, entered into a Memorandum of Understanding under which Wealth Faith will acquire an equity interest from a third party in an investment holding company with the intention of jointly operating a golf and hotel complex in the PRC. Under the Memorandum of Understanding, refundable deposits amounting to HK$154,800 or Rmb127,278 have been paid to the third party. The deposits were funded by the settlement of the Convertible Notes of Rosedale Hotel Holdings Limited (“Rosedale”), which matured on July 7, 2011 and accrued interest that totaled HK$73,800 or Rmb59,778 and a refund of deposits paid for acquisition of a property investment company of Rmb67,500 (see (a) above).

On September 28, 2012, the Company entered into a definitive investment agreement (the “Agreement”) with a third party vendor. The Agreement provides for the purchase by Wealth Faith Limited of 40% of the equity interest in Million Cube Limited (“Million Cube”), a company incorporated in the BVI from the third party vendor at a consideration of HK$200,000 or approximately US$25,600.

The Company, through Wealth Faith, has previously deposited HK$154,800 or Rmb127,278 in earnest money with the third party vendor, which will be applied toward the purchase price. According to the Agreement, the earnest money is refundable in full, without interest, within one month from the date of the receipt of a written notice from the Company if the Company is not satisfied with the conditions precedent as stated in the Agreement. The transaction was completed in March 2015. As of December 31, 2013 and 2014, Million Cube was held 51% by the third party vendor and 49% by a company listed in Singapore, the chairman of which is Dr Allan Yap, the chairman, chief executive director and a director of the Company.

Business of Million Cube

Effective on May 31, 2012, Million Cube acquired from ITC Properties Group Limited, a company incorporated in Bermuda and listed on the HKSE (“ITC Properties”), a 45% equity interest of Paragon Winner Company Limited (“Paragon”). Paragon was incorporated in the BVI and engages in the development and operation of Sanya Sun Valley Golf Resort in Yalong Bay, Sanya City, PRC.

After the completion of Wealth Faith’s purchasing of 40% equity interests in Million Cube, Wealth Faith has a right to appoint one director to Million Cube’s board of directors. With the director’s nomination right and the 40% equity interests in Million Cube, the Company considers that they have significant influence in management decisions of Million Cube. Accordingly, the Company adopts equity method to account for the investment. In addition, since Million Cube has 45% of the issued capital and corresponding shareholder loans of Paragon; the Company, through the investments, effectively held approximately 18% of equity interests in Paragon after the completion of its purchasing of 40% equity interests in Million Cube.

ITC Properties retained a 55% equity interest in Paragon, then reduced its interest to 36.5% in February 2014 and further reduced it to 11% in April 2014.

F-15

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

6. INCOME TAXES

The components of profit (loss) from operations before income tax are as follows:


	Year ended December 31,
	2012		2013		2014			2014
	Rmb		Rmb		Rmb			US$
The PRC		—		—		—			—
All other jurisdictions		2,931		9,938		(2,490	)		(402	)

		2,931		9,938		(2,490	)		(402	)

Income tax expense consists of:

Year ended December 31,

2012

2013

2014

Rmb

US$

Current

—

Deferred

—

Bermuda

The Company was incorporated under the laws of Bermuda and, under current Bermuda law, is not subject to tax on income or on capital gains. The Company has received an undertaking from the Ministry of Finance of Bermuda pursuant to the provisions of the Exempted Undertakings Tax Protection Act, 1966, as amended, that in the event that Bermuda enacts any legislation imposing tax computed on profits or income, including any dividend or capital gains withholding tax, or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax shall not be applicable to the Company or to any of its operations or the shares, debentures or other obligations of the Company until March 28, 2016. This undertaking is not to be construed so as to (i) prevent the application of any such tax or duty on such person as an ordinary resident in Bermuda; or (ii) prevent the application of any tax payable in accordance with the provision of the Land Tax Act, 1967 or otherwise payable in relation to any land leased to the Company in Bermuda.

British Virgin Islands (“BVI”)

The Company has certain of its subsidiaries incorporated under the laws of the BVI. Pursuant to the rules and regulations of the BVI, these subsidiaries are not subject to any income tax in the BVI.

Under the International Business Companies Act of the BVI as currently in effect, a holder of common stock who is not a resident of the BVI is exempt from BVI income tax on dividends paid with respect to the common stock and all holders of common stock are not liable for BVI income tax on gains realized during that year on sale or disposal of such shares; the BVI does not impose a withholding tax on dividends paid by a company incorporated under the International Business Companies Act.

There is no income tax treaty or convention currently in effect between the United States and the BVI.

F-16

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

6. INCOME TAXES - continued

Hong Kong

The Company and certain of its subsidiaries are operating in Hong Kong and their income taxes have been calculated by applying a profits tax rate of 16.5% to the estimated taxable income earned in or derived from Hong Kong.

The tax positions for the years 2007 to 2014 may be subject to examination by the Hong Kong tax authorities.

PRC

The Company adopted the provisions of ASC Topic 740 effective January 1, 2007. The Group has made its assessment of the level of tax authority for each tax position (including the potential application of interest and penalties) based on the technical merits, and has measured the unrecognized tax benefits associated with the tax positions. Based on the evaluation by the Company, it is concluded that there are no significant uncertain tax positions requiring recognition in the financial statements.

The Company has no material unrecognized tax benefit which would favorably affect the effective income tax rate in future periods and does not believe that there will be any significant increases or decreases of unrecognized tax benefits within the next twelve months. The Company classifies interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2013 and 2014, there is no interest and penalties related to uncertain tax positions.

F-17

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

6. INCOME TAXES - continued

According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or its withholding agent. The statute of limitations extends to five years under special circumstances, which are not clearly defined. In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion.

The tax impact of temporary differences gives rise to the following deferred tax asset and liability:


	2013			2014			2014
	Rmb			Rmb			US$
Current deferred tax asset:
Tax losses		20,502			21,230			3,422
Valuation allowances		(20,502	)		(21,230	)		(3,422	)

		—			—			—

Movement in valuation allowance:


	2013			2014		2014
	Rmb			Rmb		US$
At the beginning of the year		21,949			20,502		3,304
Current year movement		(1,447	)		728		118

At the end of the year		20,502			21,230		3,422

The Group has total tax operating loss carry forwards of RMB124,257 and RMB128,664 as of December 31, 2013 and 2014, respectively, which are available for offset against future profits that may be carried forward indefinitely. The valuation allowance refers to the estimated portion of the deferred tax assets that are not “more likely than not” to be realized.

The reconciliation of the effective income tax rate based on profit (loss) from operations before income taxes to the statutory income tax rates in Hong Kong is as follows:


	Year ended December 31,
	2012			2013			2014
Profits tax rate in Hong Kong		16.5	%		16.5	%		16.5	%
Permanent differences relating to non-taxable income and non-deductible expenses		(24.3	%)		(5.4	%)		1.7	%
Change in valuation allowance		7.8	%		(11.1	%)		(18.2	%)

Effective tax rate		—			—			—

F-18

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

7. CAPITAL STOCK

Share Capital

The Company was incorporated with an initial share capital of 1,200,000 shares of Common Stock with a par value of US$0.01 each which was later reclassified to Supervoting Common Stock. On May 14, 1993, the authorized share capital of the Company was further increased from US$12 to US$700 by the creation of 50,000,000 shares of Common Stock of par value US$0.01 each and 18,800,000 shares of Supervoting Common Stock of par value US$0.01 each. As a result, there are 20,000,000 shares of authorized Supervoting Common Stock. 6,000,000 shares of Supervoting Common Stock (including the 1,200,000 shares of Common Stock reclassified to Supervoting Common Stock) were issued to the then ultimate parent company of the Company as consideration for the transfer of two PRC entities to the Company on June 23, 1993.

The Company subsequently redeemed 3,000,000 shares of its outstanding Supervoting Common Stock at their par value of US$0.01 per share and in September 2006, the Company converted the remaining outstanding 3,000,000 shares of Supervoting Common Stock into the same number of shares of Common Stock with a par value of US$0.01 each pursuant to the by-laws of the Company upon receipt of a written notification from the sole holder of Supervoting Common Stock. There was no outstanding Supervoting Common Stock as of December 31, 2013 and 2014.

Capital Stock

Each share of Supervoting Common Stock is entitled to 10 votes whereas each share of Common Stock is entitled to one vote. The Common Stock is identical to the Supervoting Common Stock as to the payment of dividends. Except for the difference in voting rights described above, the Supervoting Common Stock and the Common Stock rank pari passu in all respects.

8. FAIR VALUE MEASUREMENTS

Effective from January 1, 2008, the Company adopted ASC Topic 820 “Fair Value Measurement and Disclosures” for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). ASC Topic 820 defines fair value as the price that would be received to sell the asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and also considers assumptions that market participants would use when pricing the asset or liability.

F-19

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

8. FAIR VALUE MEASUREMENTS - continued

Fair Value Hierarchy

ASC Topic 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC Topic 820 establishes three levels of inputs that may be used to measure fair value:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

F-20

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

8. FAIR VALUE MEASUREMENTS - continued

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 and 2014:


	Quoted prices In Active Market for Identical Assets (Level 1) Rmb		Significant Other Observable Inputs (Level 2) Rmb		Significant Unobservable Inputs (Level 3) Rmb		Balance as of December 31, 2013 Rmb
Current Assets:
Trading securities
- Equity securities listed in Hong Kong
- Hotel operations		2,540		—		—		2,540
- Gaming, entertainment and tourist-related		6,171		—		—		6,171
- Property development and investment		8,824		—		—		8,824
- Others		1,898		—		—		1,898

		19,433		—		—		19,433

- Equity securities listed in Singapore
- Business management and consultancy, and provision of telecommunications and information technology services (through an associate)		17,136		—		—		17,136

		36,569		—		—		36,569

Available-for-sale securities:
- Equity securities listed in Hong Kong
- Hotel operations		20,630		—		—		20,630

Total		57,199		—		—		57,199

F-21

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

8. FAIR VALUE MEASUREMENTS - continued


	Quoted prices In Active Market for Identical Assets (Level 1) Rmb		Significant Other Observable Inputs (Level 2) Rmb		Significant Unobservable Inputs (Level 3) Rmb		Balance as of December 31, 2014 Rmb
Current Assets:
Trading securities
- Equity securities listed in Hong Kong
- Hotel operations		2,429		—		—		2,429
- Gaming, entertainment and tourist-related		3,301		—		—		3,301
- Property development and investment		5,872		—		—		5,872
- Others		—		—		—		—

		11,602		—		—		11,602

- Equity securities listed in Singapore
- Business management and consultancy, and provision of telecommunications and information technology services (through an associate)		19,030		—		—		19,030

		30,632		—		—		30,632

Available-for-sale securities:
- Equity securities listed in Hong Kong
- Hotel operations		19,737		—		—		19,737

Total		50,369		—		—		50,369

F-22

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

9. COMMITMENTS AND CONTINGENCIES

There were no outstanding capital commitments as of December 31, 2013 or 2014.

10. DISTRIBUTION OF PROFIT

(a)

Dividends

The Company did not propose or pay any dividends on the outstanding Common Stock for the years ended December 31, 2012, 2013 and 2014.

(b)

Profit appropriation

As of December 31, 2013 and 2014, the Company had no distributable reserves.

11. RELATED PARTY BALANCES, TRANSACTIONS AND ARRANGEMENTS

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

Other than those disclosed elsewhere in the consolidated financial statements, the Company had the following related party balances:

F-23

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

11. RELATED PARTY BALANCES, TRANSACTIONS AND ARRANGEMENTS - continued

Due from/to Related Parties


	2013		2014		2014
	Rmb		Rmb		US$
Due from:
CSH¹and its subsidiaries		87		—		—
GDI and its subsidiaries (“GDI Group”)		2		2		1
Hanny and its subsidiaries (except GDI Group)
(note 1)		312		320		51

		401		322		52


Due to:
CSH¹and its subsidiaries		287		—		—

¹	Ms Eva Chan Ling is the deputy chairman and a director of the Company. She is also an executive director of CSH until June 1, 2014 and the managing director of Rosedale.

As of December 31, 2013 and 2014, the Company held a 7.4% equity interest of Rosedale, of which 43,325,554 shares and 5,334,870 shares were recorded as available-for-sale securities and trading securities, respectively. Dr. Allan Yap is the chairman, chief executive director and a director of the Company. He is appointed as the chairman of Rosedale with effect from December 30, 2014.

As of December 31, 2013 and 2014, the amounts due from/to related parties were unsecured, non-interest bearing and had no fixed repayment terms.

12. PAYABLES TO SECURITIES BROKERS

As of December 31, 2013 and 2014, the payables to securities brokers were bearing interest at 8% to 11.25% per annum, repayable on demand, and secured by trading and available-for-sale securities (note 13).

F-24

CHINA ENTERPRISES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except number of shares,

per share data and unless otherwise stated)

13. PLEDGE OF ASSETS

As of December 31, 2013 and 2014, trading and available-for-sale securities amounting to Rmb54,769 and Rmb48,045 (US$7,743) are collateralized to secure the security trading margin facilities of the Company.

14. CONCENTRATION OF CREDIT RISK

As of December 31, 2013 and 2014, approximately 99.6% and 99.1% respectively of the Company’s cash is maintained with one bank within Taiwan. To protect the interest of depositors, Taiwan introduced deposit insurance which provides maximum compensation of NT$3,000 (approximately RMB590) per depositor if a bank becomes bankrupt. The Company has not experienced any losses due to the bank failure and monitors the soundness and the credit ratings of the bank on a periodic basis. Thus, the Company believes it is currently not exposed to any material risks on its bank deposits with the bank.

15. MARKET RATE RISK

16. SUBSEQUENT EVENTS

The Company has evaluated all events or transactions that occurred through the date the consolidated financial statements were issued, and has determined that there were no material recognizable nor subsequent events or transactions which would require recognition or disclosure in the consolidated financial statements other than those disclosed elsewhere in the consolidated financial statements.

F-25

ITEM 19.

EXHIBITS

The following exhibits are filed as part of this Annual Report:


Exhibit Number		Description

1		Memorandum and Articles of Association (incorporated by reference to Exhibit 1 to the Company’s Form 20-F for the fiscal year ended December 31, 2001, Document Control Number: 02048962)

4(a)1		Contract dated November 21, 2011 between CZ Tire Holdings Limited and the Company for the sale of the Company’s ownership interest in Hangzhou Zhongce Rubber Company Limited (incorporated by reference to Exhibit 4(a)1 to the Company’s Form 20-F for the fiscal year ended December 31, 2010)

4(a)2		Contract dated September 28, 2012 between Fortuneasy Limited and Wealth Faith Limited, a wholly owned subsidiary of the Company, for the purchase of shares of Million Cube Limited by Wealth Faith Limited (incorporated by reference to Exhibit 4(a)2 to the Company’s Form 20-F for the fiscal year ended December 31, 2010)

8		Subsidiaries of the Company

12(1)		Certification of the CEO of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended

12(2)		Certification of the CFO of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended

13(1)		Certification of the CEO of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

13(2)		Certification of the CFO of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

14(1)		Code of Ethics for Chief Executive and Senior Financial Officers

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

*	Filed herewith

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

China Enterprises Limited

(Registrant)

/s/ Ken Lau

KEN LAU

Chief Financial Officer

Date: December 21, 2015

EXHIBITS INDEX


Exhibit Number		Description

1		Memorandum and Articles of Association (incorporated by reference to Exhibit 1 to the Company’s Form 20-F for the fiscal year ended December 31, 2001, Document Control Number: 02048962)

4(a)1		Contract dated November 21, 2011 between CZ Tire Holdings Limited and the Company for the sale of the Company’s ownership interest in Hangzhou Zhongce Rubber Company Limited (incorporated by reference to Exhibit 4(a)1 to the Company’s Form 20-F for the fiscal year ended December 31, 2010)

4(a)2		Contract dated September 28, 2012 between Fortuneasy Limited and Wealth Faith Limited, a wholly owned subsidiary of the Company, for the purchase of shares of Million Cube Limited by Wealth Faith Limited (incorporated by reference to Exhibit 4(a)2 to the Company’s Form 20-F for the fiscal year ended December 31, 2010)

8		Subsidiaries of the Company

12(1)		Certification of the CEO of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended

12(2)		Certification of the CFO of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended

13(1)		Certification of the CEO of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

13(2)		Certification of the CFO of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

14(1)		Code of Ethics for Chief Executive and Senior Financial Officers

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

*	Filed herewith

Exhibit 8

SUBSIDIARIES OF THE COMPANY


Consolidated Principal Subsidiary		Jurisdiction of Incorporation

Cosmos Regent Ltd		British Virgin Islands

Cyber Generation Limited		British Virgin Islands

Great Windfall Agents Limited		British Virgin Islands

Million Good Limited		British Virgin Islands

Orion Tire Corporation		The United States of America

Orion (B.V.I.) Tire Corporation		British Virgin Islands

Supreme Solutions Limited		British Virgin Islands

Ventures Kingdom Limited		British Virgin Islands

Wealth Faith Limited		British Virgin Islands

Whole Good Limited		British Virgin Islands

Exhibit 12(1)

CERTIFICATIONS

I, Allan Yap, certify that:

1.	I have reviewed this Annual Report on Form 20-F of China Enterprises Limited;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the Annual Report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

5.	The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: December 21, 2015

/s/ Allan Yap

DR. ALLAN YAP

Chief Executive Officer

Exhibit 12(2)

CERTIFICATIONS

I, Ken Lau, certify that:

1.	I have reviewed this Annual Report on Form 20-F of China Enterprises Limited;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: December 21, 2015

/s/ Ken Lau

KEN LAU

Chief Financial Officer

Exhibit 13(1)

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

WITH RESPECT TO THE ANNUAL REPORT ON FORM 20-F

FOR THE YEAR ENDED DECEMBER 31, 2014

OF CHINA ENTERPRISES LIMITED

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of China Enterprises Limited, a Bermuda company (the “Company”), does hereby certify, to the best of such officer’s knowledge, that:

(i) the Report fully complies with the requirements of section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: December 21, 2015

/s/ Dr. Allan Yap

DR. ALLAN YAP

Chief Executive Officer

The certification set forth above is being furnished as an Exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Form 20-F or as a separate disclosure document of the Company or the certifying officer.

Exhibit 13(2)

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

WITH RESPECT TO THE ANNUAL REPORT ON FORM 20-F

FOR THE YEAR ENDED DECEMBER 31, 2014

OF CHINA ENTERPRISES LIMITED

(i) the Report fully complies with the requirements of section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: December 21, 2015

/s/ Ken Lau

KEN LAU

Chief Financial Officer

Exhibit 14(1)

CHINA ENTERPRISES LIMITED

CODE OF ETHICS FOR CHIEF EXECUTIVE AND SENIOR FINANCIAL OFFICERS

China Enterprises Limited (“the Company”) has adopted the following Code of Ethics specifically for its Chief Executive Officer, its Chief Financial Officer and its accounting officer or controller (the “Officers”).

1.	Each Officer shall endeavor to perform his or her duties to the best of his or her knowledge and ability.

2.	Officers shall act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing their independent judgments to be subordinated.

3.	Officers shall respect the confidentiality of information acquired in the course of business, except when authorized or otherwise legally obligated to disclose such information. Officers shall not use confidential information acquired in the course of business for personal advantage.

4.	Officers are responsible for full, fair, accurate, timely and understandable financial disclosure in reports and documents filed by the Company with the Securities and Exchange Commission and in other public communications made by the Company.

Officers are responsible for the Company’s system of internal financial controls, and ensuring that the Company’s accounting records are maintained in accordance with all applicable laws, are proper, supported and classified, and do not contain any false or misleading entries. Officers shall promptly bring to the attention of the Audit Committee any information they may have concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data, or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s financial reporting, disclosures or internal controls.

6.	Officers shall maintain control over and responsibly manage all assets and resources employed or entrusted to the Officer by the Company.

Officers may not compete with the Company and may never let business dealings on behalf of the Company be influenced, or even appear to be influenced, by personal or family interests. Officers shall promptly bring to the attention of the Board of Directors any information they may have concerning any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in the Company’s financial reporting, disclosures or internal controls.

8.	Officers shall proactively promote ethical behavior among employees at the Company and as a responsible partner with industry peers and associates.

9.	Officers shall provide constituents with information that is accurate, complete, objective, relevant, timely and understandable.

10.

The Company is committed to complying with both the letter and the spirit of all applicable laws, rules and regulations. Officers shall promptly bring to the attention of the Board of Directors any information they may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to the Company or its employees or agents. Officers shall promptly bring to the attention of the Board of Directors any information they may have concerning any violation of this Code of Ethics.

The Officers are required to adhere to this Code of Ethics at all times. Only the Board of Directors shall have the authority to amend this Code of Ethics and only the Board of Directors or a designated Board committee may authorize a waiver of any part of this Code of Ethics. Any of the Officers who ignores or violates this Code of Ethics will be subject to corrective action, which may include immediate dismissal.

Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2014 shares
Document And Entity Information [Abstract]
Document Type	20-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Trading Symbol	CSHEF
Entity Registrant Name	CHINA ENTERPRISES LTD
Entity Central Index Key	0000908256
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	9,017,310

Consolidated Statements of Operations and Comprehensive Income ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2014 USD ($) $ / shares shares	Dec. 31, 2014 CNY (¥) ¥ / shares shares	Dec. 31, 2013 CNY (¥) ¥ / shares shares	Dec. 31, 2012 CNY (¥) ¥ / shares shares
Operating activities
General and administrative expenses	$ (346)	¥ (2,148)	¥ (1,762)	¥ (1,708)
Non-operating income (expenses):
Dividend income	623	3,866
Interest income	22	137	145	164
Interest expense	(89)	(552)	(534)	(916)
Net realized gain on investments	148	919		1,330
Unrealized gain (loss) on trading securities still held at the balance sheet date	(652)	(4,045)	12,165	4,541
Others \| ¥				10
Exchange loss	(108)	(667)	(76)	(490)
Profit (loss) before income tax	(402)	(2,490)	9,938	2,931
Income tax expense (note 6)	0	0	0	0
Net income (loss)	(402)	(2,490)	9,938	2,931
Other comprehensive income, net of tax
Foreign currency translation adjustment	1,826	11,328	(14,217)	(3,548)
Available-for-sale investment securities:
Change in unrealized (losses) gains	(222)	(1,377)	7,041
Net change	1,604	9,951	(7,176)	(3,548)
Total comprehensive income (loss)	$ 1,202	¥ 7,461	¥ 2,762	¥ (617)
Earnings (loss) per common share
Basic and diluted \| (per share)	$ (0.04)	¥ (0.28)	¥ 1.10	¥ 0.33
Weighted average number of shares used in the calculation of earnings (loss) per common share
Basic and diluted \| shares	9,017,310	9,017,310	9,017,310	9,017,310

Consolidated Balance Sheets ¥ in Thousands, HKD in Thousands, $ in Thousands	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2013 CNY (¥)
Current assets:
Cash and cash equivalents	$ 73,003	¥ 452,956	¥ 440,164
Prepaid expenses and other current assets	24	149	149
Other receivables (note 3)	1,374	8,527	7,682
Due from related parties (note 11)	52	322	401
Trading securities (notes 4 and 8)	4,937	30,632	36,569
Total current assets	79,390	492,586	484,965
Deposits paid for acquisition of investments (note 5)	20,513	127,278	127,278
Available-for-sale securities (notes 4 and 8)	3,181	19,737	20,630
Other assets	1	6	6
Total assets	103,085	639,607	632,879
Current liabilities:
Due to related parties (note 11)			287
Payables to securities brokers (note 12)	786	4,881	5,328
Accrued liabilities	341	2,119	2,519
Other taxes payable	444	2,753	2,753
Income taxes payable	3,626	22,496	22,095
Total current liabilities	5,197	32,249	32,982
Total liabilities	$ 5,197	¥ 32,249	¥ 32,982
Commitments and contingencies (note 9)
Shareholders' equity:
Common stock-par value US$0.01 per share (50,000,000 shares authorized; 9,017,310 shares issued and outstanding(note 7)	$ 124	¥ 770	¥ 770
Additional paid-in capital	161,325	1,000,958	1,000,958
Accumulated other comprehensive losses	(2,775)	(17,218)	(27,169)
Accumulated deficit	(60,786)	(377,152)	(374,662)
Total shareholders' equity	97,888	607,358	599,897
Total liabilities and shareholders' equity	$ 103,085	¥ 639,607	¥ 632,879

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	9,017,310	9,017,310
Common stock, shares outstanding	9,017,310	9,017,310

Consolidated Statements of Shareholders' Equity ¥ in Thousands, $ in Thousands	USD ($)	CNY (¥)	Common Stock [Member] USD ($) shares	Common Stock [Member] CNY (¥) shares	Additional paid-in capital [Member] USD ($)	Additional paid-in capital [Member] CNY (¥)	Accumulated other compre-hensive (losses) income [Member] USD ($)	Accumulated other compre-hensive (losses) income [Member] CNY (¥)	Accumulated deficit [Member] USD ($)	Accumulated deficit [Member] CNY (¥)
Beginning balance at Dec. 31, 2011		¥ 597,752		¥ 770		¥ 1,000,958		¥ (16,445)		¥ (387,531)
Beginning balance, Shares at Dec. 31, 2011 \| shares			9,017,310	9,017,310
Net income (loss)		2,931								2,931
Foreign currency translation adjustment		(3,548)						(3,548)
Ending balance at Dec. 31, 2012		597,135		¥ 770		1,000,958		(19,993)		(384,600)
Ending balance, Shares at Dec. 31, 2012 \| shares			9,017,310	9,017,310
Net income (loss)		9,938								9,938
Foreign currency translation adjustment		(14,217)						(14,217)
Unrealized gain (loss) on available-for-sale securities		7,041						7,041
Ending balance at Dec. 31, 2013		599,897		¥ 770		1,000,958		(27,169)		(374,662)
Ending balance, Shares at Dec. 31, 2013 \| shares			9,017,310	9,017,310
Net income (loss)	$ (402)	(2,490)								(2,490)
Foreign currency translation adjustment	1,826	11,328						11,328
Unrealized gain (loss) on available-for-sale securities	(222)	(1,377)						(1,377)
Ending balance at Dec. 31, 2014	$ 97,888	¥ 607,358	$ 124	¥ 770	$ 161,325	¥ 1,000,958	$ (2,775)	¥ (17,218)	$ (60,786)	¥ (377,152)
Ending balance, Shares at Dec. 31, 2014 \| shares			9,017,310	9,017,310

Consolidated Statements of Cash Flows ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2013 CNY (¥)	Dec. 31, 2012 CNY (¥)
Cash flows from operating activities:
Net income (loss)	$ (402)	¥ (2,490)	¥ 9,938	¥ 2,931
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Net realized loss (gain) on investments	(148)	(919)		(1,330)
Unrealized (gain) loss on trading securities still held at the balance sheet date	652	4,045	(12,165)	(4,541)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets			5	130
Other payables			(290)	86
Accrued liabilities	(64)	(400)	(660)	(2,106)
Net cash (used in) provided by operating activities	38	236	(3,172)	(4,830)
Cash flows from investing activities:
(Advances to) repayment from an unrelated party	(101)	(628)	6,938	234
Decrease in due from related parties	14	88	1,008	13,260
Purchases of trading securities				(4,787)
Proceeds from trading securities	459	2,851		10,946
Increase (decrease) in payables to securities brokers	(72)	(447)	385	(14,833)
Net cash provided by investing activities	300	1,864	8,331	4,820
Cash flows used in financing activities:
Changes in due to related parties	(47)	(292)	(70,117)	(1,736)
Net cash used in financing activities	(47)	(292)	(70,117)	(1,736)
Effect of exchange rate change	1,770	10,984	(12,429)	(4,297)
Net increase (decrease) in cash and cash equivalents	2,061	12,792	(77,387)	(6,043)
Cash and cash equivalents, beginning of year	70,942	440,164	517,551	523,594
Cash and cash equivalents, end of year	73,003	452,956	440,164	517,551
Supplemental schedule of cash flow information:
Income taxes paid	0	0	0	0
Interest paid	$ 89	¥ 552	¥ 534	¥ 916

Organization and Principal Activities	12 Months Ended
Organization and Principal Activities	Dec. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Principal Activities	1. ORGANIZATION AND PRINCIPAL ACTIVITIES China Enterprises Limited (the “Company”) was incorporated in Bermuda on January 28, 1993. Its common stock trades on the OTC (Over-the-Counter) Securities Marketplace in the United States of America (the “US”). China Strategic Holdings Limited (“CSH”), a public company listed on The Stock Exchange of Hong Kong Limited (the “HKSE”), was the Company’s ultimate parent company before its completion of a group reorganization in May 2006 following which the Company became a wholly-owned subsidiary of Group Dragon Investments Limited (“GDI”), a then equity method affiliate of Hanny Holdings Limited (“Hanny”), a public company listed on the HKSE. In June 2006, Hanny acquired a controlling interest in GDI and became the parent company. On December 8, 2006, Hanny became a subsidiary of ITC Corporation Limited (“ITC”), a public company listed on HKSE and, as a result, ITC became the ultimate parent company. On May 18, 2007, Hanny ceased to be a subsidiary of ITC and Hanny became the ultimate parent company until 2008 when Hanny reduced its equity interest in the Company. Following the completion of the distribution of its Hanny shares to its shareholders in November 2010, ITC’s interests in Hanny dropped from 42% to 0.1%. As of December 31, 2014, Hanny held a 28.95% equity interest in the Company. There have been no further changes in the Company’s ownership status. The accompanying financial statements include the financial statements of the Company and its wholly owned subsidiaries which primarily consist of Million Good Limited (“Million Good”, incorporated in the British Virgin Islands, “BVI”, principally engaged in investment holding), Wealth Faith Limited (“Wealth Faith”, incorporated in the BVI, principally engaged in investment holding), Cosmos Regent Limited (“Cosmos Regent”, incorporated in the BVI, principally engaged in investment holding), Cyber Generation Limited (“Cyber Generation”, incorporated in the BVI, principally engaged in investment holding) and Whole Good Limited (“Whole Good”, incorporated in the BVI, principally engaged in investment holding). The Company and all of its subsidiaries are collectively referred to as the “Group”. Based in Hong Kong, the Company has historically been engaged in tire manufacturing, trading and related businesses, and actively participated in the management of China-based companies in a variety of industries for strategic operating purposes. As of January 1, 2010, the Company had a 26% equity interest in Hangzhou Zhongce Rubber Co., Limited (“HZ”, located in Hangzhou, Zhejiang Province, the PRC). HZ and its consolidated subsidiaries (the “PRC entities”) are engaged in the manufacture of rubber tires in the PRC. On November 28, 2011, the Company sold all of its ownership interests in HZ to CZ Tire Holdings Limited, an independent third party company incorporated in the British Virgin Islands. Following the disposal of all of its interest in the tire business in 2011, the Company had no revenue producing businesses and began actively seeking new investment opportunities, including entering into an agreement through its wholly owned subsidiary to purchase a 40% equity interest in Million Cube Limited (“Million Cube”) in 2012. Million Cube has acquired a 45% equity interest and corresponding shareholder loans of Paragon Winner Company Limited (“Paragon”). Paragon was formed to invest in a joint venture that is developing a golf course, hotel and resort complex at Sanya City in the PRC. The transaction was completed in March 2015 after the Company’s wholly-owned subsidiary had obtained all necessary governmental and other consents. Following the closing of the transaction and pursuant to the Agreement, the Company has the right to appoint one director to Million Cube’s board of directors, in order to exercise influence over the financial and operating decisions of the golf resort business. The Company has continued to seek new strategic investment opportunities in the PRC, including Hong Kong. Apart from the golf resort business, the Company is also looking at other potential investments and has a long term goal to build a platform of value-added and productive businesses under the strategic direction of the Company whereby it can exercise significant influence over the financial and operating decisions of its investees for financial returns.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)

Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

(b)

Basis of Consolidation

(c)

Cash and Cash Equivalents

The Company considers cash on hand, demand deposits with banks with original maturities of three months or less when purchased to be cash and cash equivalents.

(d)

Trading Securities

(e)

Available-for-sale Securities

The Company regularly evaluates whether the decline in fair value of available-for-sale securities is other-than-temporary and objective evidence of impairment could include:

•

The severity and duration of the fair value decline;

•

Deterioration in the financial condition of the issuer; and

•

Evaluation of the factors that could cause individual securities to have an other-than-temporary impairment.

No such other-than-temporary decline in fair value was recognized during the years ended December 31, 2013 and 2014.

(f)

Income Taxes

(g)

Foreign Currencies

The functional currency of the Company and its Hong Kong domiciled subsidiaries is Hong Kong dollars. The Company has elected Renminbi as its reporting currency.

(h)

Earnings (Loss) Per Share

(i)

Use of Estimates

(j)

Financial Instruments

The Company recognizes all derivative instruments on the balance sheet at fair value with changes in fair values reported in the consolidated statements of operations.

(k)

Comprehensive Income

(l)

Recently Issued Accounting Pronouncements

Other Receivables	12 Months Ended
Other Receivables	Dec. 31, 2014
Receivables [Abstract]
Other Receivables	3. OTHER RECEIVABLES Other receivables as of December 31, 2013 and 2014 represented a short-term advance to an independent third party company which was unsecured, non-interest bearing and had no fixed repayment terms. The amount was settled in full in March 2015.

Investments

12 Months Ended

Dec. 31, 2014

Investments Schedule [Abstract]

Investments

4. INVESTMENTS


	2013			2014			2014
	Rmb			Rmb			US$
Trading securities:
Adjusted cost		78,291			73,531			11,851
Unrealized gains		4,098			936			151
Unrealized losses		(45,820	)		(43,835	)		(7,065	)

Total at fair value		36,569			30,632			4,937


Equity securities listed in Hong Kong		19,433			11,602			1,870
Equity securities listed in Singapore		17,136			19,030			3,067

Total		36,569			30,632			4,937


Available-for-sale securities:
Equity securities listed in Hong Kong:
Cost		13,697			14,023			2,260
Impairment recognized in earnings		—			—			—

Adjusted amortized cost		13,697			14,023			2,260
Unrealized gains		7,041			5,664			913
Exchange differences		(108	)		50			8

Total at fair value		20,630			19,737			3,181

Deposits Paid for Acquisition of Investments

12 Months Ended

Dec. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

Deposits Paid for Acquisition of Investments

5. DEPOSITS PAID FOR ACQUISITION OF INVESTMENTS

The total consideration for the acquisition of the interest in Always Rich was Rmb150,000. A deposit of Rmb75,000 was paid to a third party vendor on April 24, 2008.

Business of Million Cube

ITC Properties retained a 55% equity interest in Paragon, then reduced its interest to 36.5% in February 2014 and further reduced it to 11% in April 2014.

Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

6. INCOME TAXES

The components of profit (loss) from operations before income tax are as follows:


	Year ended December 31,
	2012		2013		2014			2014
	Rmb		Rmb		Rmb			US$
The PRC		—		—		—			—
All other jurisdictions		2,931		9,938		(2,490	)		(402	)

		2,931		9,938		(2,490	)		(402	)

Income tax expense consists of:

Year ended December 31,

2012

2013

2014

Rmb

US$

Current

—

Deferred

—

Bermuda

British Virgin Islands (“BVI”)

The Company has certain of its subsidiaries incorporated under the laws of the BVI. Pursuant to the rules and regulations of the BVI, these subsidiaries are not subject to any income tax in the BVI.

There is no income tax treaty or convention currently in effect between the United States and the BVI.

Hong Kong

The tax positions for the years 2007 to 2014 may be subject to examination by the Hong Kong tax authorities.

PRC

The tax impact of temporary differences gives rise to the following deferred tax asset and liability:


	2013			2014			2014
	Rmb			Rmb			US$
Current deferred tax asset:
Tax losses		20,502			21,230			3,422
Valuation allowances		(20,502	)		(21,230	)		(3,422	)

		—			—			—

Movement in valuation allowance:


	2013			2014		2014
	Rmb			Rmb		US$
At the beginning of the year		21,949			20,502		3,304
Current year movement		(1,447	)		728		118

At the end of the year		20,502			21,230		3,422

The reconciliation of the effective income tax rate based on profit (loss) from operations before income taxes to the statutory income tax rates in Hong Kong is as follows:


	Year ended December 31,
	2012			2013			2014
Profits tax rate in Hong Kong		16.5	%		16.5	%		16.5	%
Permanent differences relating to non-taxable income and non-deductible expenses		(24.3	%)		(5.4	%)		1.7	%
Change in valuation allowance		7.8	%		(11.1	%)		(18.2	%)

Effective tax rate		—			—			—

Capital Stock	12 Months Ended
Capital Stock	Dec. 31, 2014
Equity [Abstract]
Capital Stock	7. CAPITAL STOCK Share Capital The Company was incorporated with an initial share capital of 1,200,000 shares of Common Stock with a par value of US$0.01 each which was later reclassified to Supervoting Common Stock. On May 14, 1993, the authorized share capital of the Company was further increased from US$12 to US$700 by the creation of 50,000,000 shares of Common Stock of par value US$0.01 each and 18,800,000 shares of Supervoting Common Stock of par value US$0.01 each. As a result, there are 20,000,000 shares of authorized Supervoting Common Stock. 6,000,000 shares of Supervoting Common Stock (including the 1,200,000 shares of Common Stock reclassified to Supervoting Common Stock) were issued to the then ultimate parent company of the Company as consideration for the transfer of two PRC entities to the Company on June 23, 1993. The Company subsequently redeemed 3,000,000 shares of its outstanding Supervoting Common Stock at their par value of US$0.01 per share and in September 2006, the Company converted the remaining outstanding 3,000,000 shares of Supervoting Common Stock into the same number of shares of Common Stock with a par value of US$0.01 each pursuant to the by-laws of the Company upon receipt of a written notification from the sole holder of Supervoting Common Stock. There was no outstanding Supervoting Common Stock as of December 31, 2013 and 2014. Capital Stock Each share of Supervoting Common Stock is entitled to 10 votes whereas each share of Common Stock is entitled to one vote. The Common Stock is identical to the Supervoting Common Stock as to the payment of dividends. Except for the difference in voting rights described above, the Supervoting Common Stock and the Common Stock rank pari passu in all respects.

Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

8. FAIR VALUE MEASUREMENTS

Fair Value Hierarchy

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 and 2014:


	Quoted prices In Active Market for Identical Assets (Level 1) Rmb		Significant Other Observable Inputs (Level 2) Rmb		Significant Unobservable Inputs (Level 3) Rmb		Balance as of December 31, 2013 Rmb
Current Assets:
Trading securities
- Equity securities listed in Hong Kong
- Hotel operations		2,540		—		—		2,540
- Gaming, entertainment and tourist-related		6,171		—		—		6,171
- Property development and investment		8,824		—		—		8,824
- Others		1,898		—		—		1,898

		19,433		—		—		19,433

- Equity securities listed in Singapore
- Business management and consultancy, and provision of telecommunications and information technology services (through an associate)		17,136		—		—		17,136

		36,569		—		—		36,569

Available-for-sale securities:
- Equity securities listed in Hong Kong
- Hotel operations		20,630		—		—		20,630

Total		57,199		—		—		57,199


	Quoted prices In Active Market for Identical Assets (Level 1) Rmb		Significant Other Observable Inputs (Level 2) Rmb		Significant Unobservable Inputs (Level 3) Rmb		Balance as of December 31, 2014 Rmb
Current Assets:
Trading securities
- Equity securities listed in Hong Kong
- Hotel operations		2,429		—		—		2,429
- Gaming, entertainment and tourist-related		3,301		—		—		3,301
- Property development and investment		5,872		—		—		5,872
- Others		—		—		—		—

		11,602		—		—		11,602

- Equity securities listed in Singapore
- Business management and consultancy, and provision of telecommunications and information technology services (through an associate)		19,030		—		—		19,030

		30,632		—		—		30,632

Available-for-sale securities:
- Equity securities listed in Hong Kong
- Hotel operations		19,737		—		—		19,737

Total		50,369		—		—		50,369

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	9. COMMITMENTS AND CONTINGENCIES There were no outstanding capital commitments as of December 31, 2013 or 2014.

Distribution of Profit

12 Months Ended

Dec. 31, 2014

Text Block [Abstract]

Distribution of Profit

10. DISTRIBUTION OF PROFIT

(a)

Dividends

The Company did not propose or pay any dividends on the outstanding Common Stock for the years ended December 31, 2012, 2013 and 2014.

(b)

Profit appropriation

As of December 31, 2013 and 2014, the Company had no distributable reserves.

Related Party Balances, Transactions and Arrangements

12 Months Ended

Dec. 31, 2014

11. RELATED PARTY BALANCES, TRANSACTIONS AND ARRANGEMENTS

Other than those disclosed elsewhere in the consolidated financial statements, the Company had the following related party balances:

Due from/to Related Parties


	2013		2014		2014
	Rmb		Rmb		US$
Due from:
CSH¹ and its subsidiaries		87		—		—
GDI and its subsidiaries (“GDI Group”)		2		2		1
Hanny and its subsidiaries (except GDI Group)
(note 1)		312		320		51

		401		322		52


Due to:
CSH¹ and its subsidiaries		287		—		—

¹	Ms Eva Chan Ling is the deputy chairman and a director of the Company. She is also an executive director of CSH until June 1, 2014 and the managing director of Rosedale.

As of December 31, 2013 and 2014, the amounts due from/to related parties were unsecured, non-interest bearing and had no fixed repayment terms.

Payables to Securities Brokers	12 Months Ended
Payables to Securities Brokers	Dec. 31, 2014
Brokers and Dealers [Abstract]
Payables to Securities Brokers	12. PAYABLES TO SECURITIES BROKERS As of December 31, 2013 and 2014, the payables to securities brokers were bearing interest at 8% to 11.25% per annum, repayable on demand, and secured by trading and available-for-sale securities (note 13).

Pledge of Assets	12 Months Ended
Pledge of Assets	Dec. 31, 2014
Transfers and Servicing [Abstract]
Pledge of Assets	13. PLEDGE OF ASSETS As of December 31, 2013 and 2014, trading and available-for-sale securities amounting to Rmb54,769 and Rmb48,045 (US$7,743) are collateralized to secure the security trading margin facilities of the Company.

Concentration of Credit Risk	12 Months Ended
Concentration of Credit Risk	Dec. 31, 2014
Risks and Uncertainties [Abstract]
Concentration of Credit Risk	14. CONCENTRATION OF CREDIT RISK As of December 31, 2013 and 2014, approximately 99.6% and 99.1% respectively of the Company’s cash is maintained with one bank within Taiwan. To protect the interest of depositors, Taiwan introduced deposit insurance which provides maximum compensation of NT$3,000 (approximately RMB590) per depositor if a bank becomes bankrupt. The Company has not experienced any losses due to the bank failure and monitors the soundness and the credit ratings of the bank on a periodic basis. Thus, the Company believes it is currently not exposed to any material risks on its bank deposits with the bank.

Market Rate Risk	12 Months Ended
Market Rate Risk	Dec. 31, 2014
Text Block [Abstract]
Market Rate Risk	15. MARKET RATE RISK On August 11, 2015, the PBOC has cut the RMB’s reference rate by 1.9 percent, sparking the sharpest fall in the currency since the dollar peg ended a decade ago. The move by the PBOC comes amid growing signs of a deepening slowdown in the mainland economy. The PBOC said that the reference rate move was a one-time adjustment, and it will strengthen the market’s role in the fixing of the rate and promote the convergence of the onshore and offshore rates. The PBOC also said it will keep the currency stable at a reasonable level.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2014
Subsequent Events [Abstract]
Subsequent Events	16. SUBSEQUENT EVENTS The Company has evaluated all events or transactions that occurred through the date the consolidated financial statements were issued, and has determined that there were no material recognizable nor subsequent events or transactions which would require recognition or disclosure in the consolidated financial statements other than those disclosed elsewhere in the consolidated financial statements.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Basis of Presentation

(a)

Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Basis of Consolidation

(b)

Basis of Consolidation

Cash and Cash Equivalents

(c)

Cash and Cash Equivalents

The Company considers cash on hand, demand deposits with banks with original maturities of three months or less when purchased to be cash and cash equivalents.

Trading Securities

(d)

Trading Securities

Available-for-sale Securities

(e)

Available-for-sale Securities

The Company regularly evaluates whether the decline in fair value of available-for-sale securities is other-than-temporary and objective evidence of impairment could include:

•

The severity and duration of the fair value decline;

•

Deterioration in the financial condition of the issuer; and

•

Evaluation of the factors that could cause individual securities to have an other-than-temporary impairment.

No such other-than-temporary decline in fair value was recognized during the years ended December 31, 2013 and 2014.

Income Taxes

(f)

Income Taxes

Foreign Currencies

(g)

Foreign Currencies

The functional currency of the Company and its Hong Kong domiciled subsidiaries is Hong Kong dollars. The Company has elected Renminbi as its reporting currency.

Earnings (Loss) Per Share

(h)

Earnings (Loss) Per Share

Use of Estimates

(i)

Use of Estimates

Financial Instruments

(j)

Financial Instruments

The Company recognizes all derivative instruments on the balance sheet at fair value with changes in fair values reported in the consolidated statements of operations.

Comprehensive Income

(k)

Comprehensive Income

Recently Issued Accounting Pronouncements

(l)

Recently Issued Accounting Pronouncements

Fair Value Measurements

Fair Value Hierarchy

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Investments (Tables)

12 Months Ended

Dec. 31, 2014

Investments Schedule [Abstract]

Summary of Investments


	2013			2014			2014
	Rmb			Rmb			US$
Trading securities:
Adjusted cost		78,291			73,531			11,851
Unrealized gains		4,098			936			151
Unrealized losses		(45,820	)		(43,835	)		(7,065	)

Total at fair value		36,569			30,632			4,937


Equity securities listed in Hong Kong		19,433			11,602			1,870
Equity securities listed in Singapore		17,136			19,030			3,067

Total		36,569			30,632			4,937


Available-for-sale securities:
Equity securities listed in Hong Kong:
Cost		13,697			14,023			2,260
Impairment recognized in earnings		—			—			—

Adjusted amortized cost		13,697			14,023			2,260
Unrealized gains		7,041			5,664			913
Exchange differences		(108	)		50			8

Total at fair value		20,630			19,737			3,181

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Components of Profit (Loss) from Operations Before Income Tax

The components of profit (loss) from operations before income tax are as follows:


	Year ended December 31,
	2012		2013		2014			2014
	Rmb		Rmb		Rmb			US$
The PRC		—		—		—			—
All other jurisdictions		2,931		9,938		(2,490	)		(402	)

		2,931		9,938		(2,490	)		(402	)

Income tax expense consists of:

Year ended December 31,

2012

2013

2014

Rmb

US$

Current

—

Deferred

—

Schedule of Tax Impact on Deferred Tax Asset and Liability

The tax impact of temporary differences gives rise to the following deferred tax asset and liability:


	2013			2014			2014
	Rmb			Rmb			US$
Current deferred tax asset:
Tax losses		20,502			21,230			3,422
Valuation allowances		(20,502	)		(21,230	)		(3,422	)

		—			—			—

Schedule of Movement in Valuation Allowance

Movement in valuation allowance:


	2013			2014		2014
	Rmb			Rmb		US$
At the beginning of the year		21,949			20,502		3,304
Current year movement		(1,447	)		728		118

At the end of the year		20,502			21,230		3,422

Reconciliation of Effective Income Tax Rate Based on Profit (Loss) from Operations before Income Taxes to Statutory Income Tax Rates

The reconciliation of the effective income tax rate based on profit (loss) from operations before income taxes to the statutory income tax rates in Hong Kong is as follows:


	Year ended December 31,
	2012			2013			2014
Profits tax rate in Hong Kong		16.5	%		16.5	%		16.5	%
Permanent differences relating to non-taxable income and non-deductible expenses		(24.3	%)		(5.4	%)		1.7	%
Change in valuation allowance		7.8	%		(11.1	%)		(18.2	%)

Effective tax rate		—			—			—

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 and 2014:


	Quoted prices In Active Market for Identical Assets (Level 1) Rmb		Significant Other Observable Inputs (Level 2) Rmb		Significant Unobservable Inputs (Level 3) Rmb		Balance as of December 31, 2013 Rmb
Current Assets:
Trading securities
- Equity securities listed in Hong Kong
- Hotel operations		2,540		—		—		2,540
- Gaming, entertainment and tourist-related		6,171		—		—		6,171
- Property development and investment		8,824		—		—		8,824
- Others		1,898		—		—		1,898

		19,433		—		—		19,433

- Equity securities listed in Singapore
- Business management and consultancy, and provision of telecommunications and information technology services (through an associate)		17,136		—		—		17,136

		36,569		—		—		36,569

Available-for-sale securities:
- Equity securities listed in Hong Kong
- Hotel operations		20,630		—		—		20,630

Total		57,199		—		—		57,199


	Quoted prices In Active Market for Identical Assets (Level 1) Rmb		Significant Other Observable Inputs (Level 2) Rmb		Significant Unobservable Inputs (Level 3) Rmb		Balance as of December 31, 2014 Rmb
Current Assets:
Trading securities
- Equity securities listed in Hong Kong
- Hotel operations		2,429		—		—		2,429
- Gaming, entertainment and tourist-related		3,301		—		—		3,301
- Property development and investment		5,872		—		—		5,872
- Others		—		—		—		—

		11,602		—		—		11,602

- Equity securities listed in Singapore
- Business management and consultancy, and provision of telecommunications and information technology services (through an associate)		19,030		—		—		19,030

		30,632		—		—		30,632

Available-for-sale securities:
- Equity securities listed in Hong Kong
- Hotel operations		19,737		—		—		19,737

Total		50,369		—		—		50,369

Related Party Balances, Transactions and Arrangements (Tables)

12 Months Ended

Dec. 31, 2014

Due from/to Related Parties


	2013		2014		2014
	Rmb		Rmb		US$
Due from:
CSH¹ and its subsidiaries		87		—		—
GDI and its subsidiaries (“GDI Group”)		2		2		1
Hanny and its subsidiaries (except GDI Group)
(note 1)		312		320		51

		401		322		52


Due to:
CSH¹ and its subsidiaries		287		—		—

¹	Ms Eva Chan Ling is the deputy chairman and a director of the Company. She is also an executive director of CSH until June 1, 2014 and the managing director of Rosedale.

Organization and Principal Activities - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2014	Apr. 30, 2014	Feb. 28, 2014	Dec. 31, 2012	Sep. 28, 2012	May. 31, 2012	Nov. 30, 2010	Jan. 01, 2010
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Date of incorporation	Jan. 28, 1993
Place of incorporation	Bermuda
HZ [Member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Equity interest percentage								26.00%
Million Cube [Member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Equity interest percentage	51.00%				40.00%
Million Cube [Member] \| Non Complete Agreements [Member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Equity interest percentage				40.00%
Paragon [Member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Equity interest percentage	55.00%	11.00%	36.50%	18.00%		45.00%
Paragon [Member] \| Non Complete Agreements [Member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Equity interest percentage				45.00%
ITC Parent[Member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Equity interest percentage							42.00%
Percentage of ownership interest							0.10%
Hanny Parent [Member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Equity interest percentage	28.95%

Summary of Significant Accounting Policies - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2014 CNY (¥) ¥ / $ shares	Dec. 31, 2013 CNY (¥) shares	Dec. 31, 2012 shares
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents maturity period	The Company considers cash on hand, demand deposits with banks with original maturities of three months or less when purchased to be cash and cash equivalents.
Other-than-temporary losses reclassified into earnings \| ¥	¥ 0	¥ 0
Noon buying rate \| ¥ / $	6.2046
Dilutive potential common shares \| shares	0	0	0

Investments - Summary of Investments (Detail) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2013 CNY (¥)	Dec. 31, 2014 CNY (¥)
Trading securities:
Adjusted cost	$ 11,851		¥ 78,291	¥ 73,531
Unrealized gains	151	¥ 936	4,098
Unrealized losses	(7,065)	¥ (43,835)	(45,820)
Trading securities total at fair value	4,937		36,569	30,632
Equity securities listed in Hong Kong:
Cost	2,260		13,697	14,023
Impairment recognized in earnings	0		0	0
Adjusted amortized cost	2,260		13,697	14,023
Adjusted amortized cost	2,260		13,697	14,023
Unrealized gains	913		7,041	5,664
Exchange differences	8		(108)	50
Total at fair value	3,181		20,630	19,737
Equity securities listed in Hong Kong [Member]
Trading securities:
Trading securities total at fair value	1,870		19,433	11,602
Equity securities listed in Singapore [Member]
Trading securities:
Trading securities total at fair value	$ 3,067		¥ 17,136	¥ 19,030

Investments - Additional Information (Detail)	12 Months Ended
Investments - Additional Information (Detail)	Dec. 31, 2014 CNY (¥)
Investments Schedule [Abstract]
Impairment loss	¥ 0

Deposits Paid for Acquisition of Investments - Additional Information (Detail) ¥ in Thousands, HKD in Thousands, $ in Thousands				12 Months Ended
	Jun. 30, 2011 CNY (¥)	Jun. 01, 2011 CNY (¥)	Jun. 01, 2011 HKD	Dec. 31, 2014 USD ($)	Dec. 31, 2011 CNY (¥)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2014 HKD	Apr. 30, 2014	Feb. 28, 2014	Dec. 31, 2013 CNY (¥)	Dec. 31, 2012	Sep. 28, 2012 USD ($)	Sep. 28, 2012 HKD	May. 31, 2012	Jun. 01, 2011 HKD	Apr. 24, 2008 CNY (¥)	Apr. 15, 2008 CNY (¥)
Deposit Paid for Acquisition of Investments Disclosure [Line Items]
Deposited in earnest money				$ 20,513		¥ 127,278	HKD 154,800			¥ 127,278
Percentage of issued capital				45.00%
Million Cube [Member]
Deposit Paid for Acquisition of Investments Disclosure [Line Items]
Equity interest percentage				51.00%		51.00%	51.00%					40.00%	40.00%
Total consideration for acquisition												$ 25,600	HKD 200,000
Paragon [Member]
Deposit Paid for Acquisition of Investments Disclosure [Line Items]
Equity interest percentage				55.00%		55.00%	55.00%	11.00%	36.50%		18.00%			45.00%
Wealth Faith Wholly Owned Subsidiary [Member]
Deposit Paid for Acquisition of Investments Disclosure [Line Items]
Refundable deposits amount paid		¥ 127,278	HKD 154,800
Debt instrument, maturity date		Jul. 07, 2011	Jul. 07, 2011
Wealth Faith Wholly Owned Subsidiary [Member] \| Settlement of Convertible Notes of Rosedale Plus Accrued Interest [Member]
Deposit Paid for Acquisition of Investments Disclosure [Line Items]
Deposit paid was funded by third party		¥ 59,778													HKD 73,800
Wealth Faith Wholly Owned Subsidiary [Member] \| Refund of Acquisition of a Property Investment Company [Member]
Deposit Paid for Acquisition of Investments Disclosure [Line Items]
Deposit paid was funded by third party	¥ 67,500
Wealth Faith Wholly Owned Subsidiary [Member] \| Always Rich Resources Inc. [Member]
Deposit Paid for Acquisition of Investments Disclosure [Line Items]
Equity interest percentage																	10.00%
Total consideration for acquisition																	¥ 150,000
Deposit paid																¥ 75,000
Deposit refunded	¥ 67,500
Administrative fee					¥ 7,500

Income Taxes - Components of Profit (Loss) from Operations Before Income Tax (Detail) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2013 CNY (¥)	Dec. 31, 2012 CNY (¥)
Income Tax Disclosure [Abstract]
The PRC	$ 0	¥ 0	¥ 0	¥ 0
All other jurisdictions	(402)	(2,490)	9,938	2,931
Profit (loss) before income tax and equity in earnings of equity method affiliates	(402)	(2,490)	9,938	2,931
Current	0	0	0	0
Deferred	0	0	0	0
Income tax expense	$ 0	¥ 0	¥ 0	¥ 0

Income Taxes - Additional Information (Detail) - CNY (¥)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Contingency [Line Items]
Profits tax rate in Hong Kong	16.50%	16.50%	16.50%
Uncertain tax positions, interest and penalties	¥ 0	¥ 0
Tax positions, description	According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or its withholding agent. The statute of limitations extends to five years under special circumstances, which are not clearly defined. In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion.
Operating loss carry forwards	¥ 128,664,000	¥ 124,257,000
Minimum [Member]
Income Tax Contingency [Line Items]
Income tax examination, year	2007
Maximum [Member]
Income Tax Contingency [Line Items]
Income tax examination, year	2014

Income Taxes - Schedule of Tax Impact on Deferred Tax Asset and Liability (Detail) ¥ in Thousands, $ in Thousands	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CNY (¥)	Dec. 31, 2012 CNY (¥)
Current deferred tax asset:
Tax losses	$ 3,422	¥ 21,230		¥ 20,502
Valuation allowances	(3,422)	(21,230)	$ (3,304)	(20,502)	¥ (21,949)
Current deferred tax asset, net	$ 0	¥ 0		¥ 0

Income Taxes - Schedule of Movement in Valuation Allowance (Detail) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2013 CNY (¥)
Valuation Allowance [Abstract]
At the beginning of the year	$ 3,304	¥ 20,502	¥ 21,949
Current year movement	118	728	(1,447)
At the end of the year	$ 3,422	¥ 21,230	¥ 20,502

Income Taxes - Reconciliation of Effective Income Tax Rate Based on Profit (Loss) from Operations before Income Taxes to Statutory Income Tax Rates (Detail)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Profits tax rate in Hong Kong	16.50%	16.50%	16.50%
Permanent differences relating to non-taxable income and non-deductible expenses	1.70%	(5.40%)	(24.30%)
Change in valuation allowance	(18.20%)	(11.10%)	7.80%
Effective tax rate	0.00%	0.00%	0.00%

Capital Stock - Additional Information (Detail)		1 Months Ended	12 Months Ended
Capital Stock - Additional Information (Detail)	Jun. 23, 1993 Entity $ / shares shares	Sep. 30, 2006 $ / shares shares	Dec. 31, 2014 Vote / shares $ / shares shares	Dec. 31, 2013 shares	May. 14, 1993 USD ($) $ / shares shares	Jan. 28, 1993 USD ($) $ / shares shares
Class of Stock [Line Items]
Common stock, shares authorized			50,000,000	50,000,000
Common stock, par value \| $ / shares			$ 0.01
Authorized share capital \| $					$ 700,000	$ 12,000
Common stock, shares issued			9,017,310	9,017,310
Number of PRC entities transferred \| Entity	2
Common stock, shares outstanding			9,017,310	9,017,310
Common Stock voting rights, description			Each share of Supervoting Common Stock is entitled to 10 votes whereas each share of Common Stock is entitled to one vote.
Supervoting Common Stock [Member]
Class of Stock [Line Items]
Common stock, shares authorized					20,000,000	1,200,000
Common stock, par value \| $ / shares	$ 0.01	$ 0.01			$ 0.01	$ 0.01
Common stock, increase in shares authorized					18,800,000
Common stock, shares issued					6,000,000
Common Stock outstanding shares redeemed	3,000,000
Converted outstanding Common Stock		3,000,000
Common stock, shares outstanding			0	0
Number of votes entitled \| Vote / shares			10
Additional Common Stock [Member]
Class of Stock [Line Items]
Common stock, shares authorized					50,000,000
Common stock, par value \| $ / shares					$ 0.01
Common Stock [Member]
Class of Stock [Line Items]
Number of votes entitled \| Vote / shares			1

Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) ¥ in Thousands, $ in Thousands	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2013 CNY (¥)
Trading securities
Trading securities	$ 4,937	¥ 30,632	¥ 36,569
Available-for-sale securities:
Available-for-sale securities	$ 3,181	19,737	20,630
Fair Value, Measurements, Recurring [Member]
Trading securities
Trading securities		30,632	36,569
Available-for-sale securities:
Trading and Available-for-sale securities		50,369	57,199
Fair Value, Measurements, Recurring [Member] \| Quoted prices In Active Market for Identical Assets (Level 1) [Member]
Trading securities
Trading securities		30,632	36,569
Available-for-sale securities:
Trading and Available-for-sale securities		50,369	57,199
Fair Value, Measurements, Recurring [Member] \| Hong Kong [Member]
Trading securities
Trading securities		11,602	19,433
Fair Value, Measurements, Recurring [Member] \| Hong Kong [Member] \| Hotel operations [Member]
Trading securities
Trading securities		2,429	2,540
Available-for-sale securities:
Available-for-sale securities		19,737	20,630
Fair Value, Measurements, Recurring [Member] \| Hong Kong [Member] \| Gaming, entertainment and tourist-related [Member]
Trading securities
Trading securities		3,301	6,171
Fair Value, Measurements, Recurring [Member] \| Hong Kong [Member] \| Property development and investment [Member]
Trading securities
Trading securities		5,872	8,824
Fair Value, Measurements, Recurring [Member] \| Hong Kong [Member] \| Others [Member]
Trading securities
Trading securities			1,898
Fair Value, Measurements, Recurring [Member] \| Hong Kong [Member] \| Quoted prices In Active Market for Identical Assets (Level 1) [Member]
Trading securities
Trading securities		11,602	19,433
Fair Value, Measurements, Recurring [Member] \| Hong Kong [Member] \| Quoted prices In Active Market for Identical Assets (Level 1) [Member] \| Hotel operations [Member]
Trading securities
Trading securities		2,429	2,540
Available-for-sale securities:
Available-for-sale securities		19,737	20,630
Fair Value, Measurements, Recurring [Member] \| Hong Kong [Member] \| Quoted prices In Active Market for Identical Assets (Level 1) [Member] \| Gaming, entertainment and tourist-related [Member]
Trading securities
Trading securities		3,301	6,171
Fair Value, Measurements, Recurring [Member] \| Hong Kong [Member] \| Quoted prices In Active Market for Identical Assets (Level 1) [Member] \| Property development and investment [Member]
Trading securities
Trading securities		5,872	8,824
Fair Value, Measurements, Recurring [Member] \| Hong Kong [Member] \| Quoted prices In Active Market for Identical Assets (Level 1) [Member] \| Others [Member]
Trading securities
Trading securities			1,898
Fair Value, Measurements, Recurring [Member] \| Singapore [Member] \| Business management and consultancy, and provision of telecommunications and information technology services (through an associate) [Member]
Trading securities
Trading securities		19,030	17,136
Fair Value, Measurements, Recurring [Member] \| Singapore [Member] \| Quoted prices In Active Market for Identical Assets (Level 1) [Member] \| Business management and consultancy, and provision of telecommunications and information technology services (through an associate) [Member]
Trading securities
Trading securities		¥ 19,030	¥ 17,136

Commitments and Contingencies - Additional Information (Detail) - CNY (¥)	Dec. 31, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Outstanding capital commitments	¥ 0	¥ 0

Distribution of Profit - Additional Information (Detail) - CNY (¥)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Equity [Abstract]
Dividends paid on outstanding common stock	¥ 0	¥ 0	¥ 0
Distributable reserves	¥ 0	¥ 0

Related Party Balances, Transactions and Arrangements - Due from/to Related Parties (Detail) ¥ in Thousands, $ in Thousands	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2013 CNY (¥)
Due from:
Due from related parties	$ 52	¥ 322	¥ 401
Due to:
Due to related parties			287
CSH and its subsidiaries [Member]
Due from:
Due from related parties			87
Due to:
Due to related parties			287
GDI and its subsidiaries ("GDI Group") [Member]
Due from:
Due from related parties	1	2	2
Hanny and its subsidiaries (except GDI Group) [Member]
Due from:
Due from related parties	$ 51	¥ 320	¥ 312

Related Party Balances, Transactions and Arrangements - Additional Information (Detail) - Rosedale Hotel Holdings Limited [Member] - shares	Dec. 31, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Equity interest percentage	7.40%	7.40%
Available-for-sale Securities [Member]
Related Party Transaction [Line Items]
Number of share in equity interest	43,325,554	43,325,554
Trading Securities [Member]
Related Party Transaction [Line Items]
Number of share in equity interest	5,334,870	5,334,870

Payables to Securities Brokers - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Minimum [Member]
Securities Financing Transaction [Line Items]
Percentage of bearing interest payable to securities brokers	8.00%	8.00%
Maximum [Member]
Securities Financing Transaction [Line Items]
Percentage of bearing interest payable to securities brokers	11.25%	11.25%

Pledge of Assets - Additional Information (Detail) ¥ in Thousands, $ in Thousands	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2013 CNY (¥)
Financial Instruments Pledged as Collateral [Abstract]
Trading securities and available-for-sale securities pledged as collateral	$ 7,743	¥ 48,045	¥ 54,769

Concentration of Credit Risk - Additional Information (Detail) - Taiwan [Member] ¥ in Thousands	12 Months Ended
	Dec. 31, 2014 CNY (¥)	Dec. 31, 2014 TWD	Dec. 31, 2013
Concentration Risk [Line Items]
Cash maintained with one bank	99.10%	99.10%	99.60%
Maximum compensation insured per depositor	¥ 590	TWD 3,000,000