SEMI-ANNUAL REPORT 2019
SHENZHEN ZHONGHENG HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2019
August 2019
SEMI-ANNUAL REPORT 2019
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and seniorexecutives of Shenzhen Zhongheng Huafa Co., Ltd. (hereinafter referred to asthe Company) hereby confirm that there are no any fictitious statements,misleading statements, or important omissions carried in this report, and shalltake all responsibilities, individual and/or joint, for the reality, accuracy andcompletion of the whole contents.
Li Zhongqiu, Principal of the Company, Yang Bin, person in charger ofaccounting works and Wu Aijie, person in charge of accounting organ(accounting principal) hereby confirm that the Financial Report of 2019Semi-Annual Report is authentic, accurate and complete.
Other directors attending the Meeting for semi-annual report deliberationexcept for the followed
Name of directorabsent
| Name of director absent | Title for absent director | Reasons for absent | Attorney |
| Gao Jianbai | director | personal reason | Li Zhongqiu |
| Xu Jinwen | independent director | personal reason | Zhang Zhaoguo |
Concerning the forward-looking statements with future planning involved in theReport, they do not constitute a substantial commitment for investors. Majorityinvestors are advised to exercise caution of investment risks.
The Company has no plan of cash dividends carried out, bonus issued andcapitalizing of common reserves either.
SEMI-ANNUAL REPORT 2019
Contents
Semi-annual Report 2019 ...... 1
Section I Important Notice and Paraphrase ...... 2
Section II Company Profile and Main Financial Indexes ...... 5
Section III Summary of Company Business ...... 8
Section IV Discussion and Analysis of Operation ...... 9
Section V Important Events ...... 15
Section VI Changes in shares and particular about shareholders ...... 32
Section VII Preferred Stock ...... 37
Section VIII Particulars about Directors, Supervisors and Senior Executives ...... 38
Section IX Corporate Bonds ...... 39
Section X Financial Report ...... 40
Section XI Documents Available for Reference ...... 147
SEMI-ANNUAL REPORT 2019
Paraphrase
Items
| Items | Refers to | Contents |
| Company, Shen Huafa | Refers to | SHENZHEN ZHONGHENG HUAFA CO., LTD. |
| Hengfa Technology | Refers to | Wuhan Hengfa Technology Co., Ltd. |
| Huafa Property | Refers to | Shenzhen Zhongheng Huafa Property Co., Ltd |
| Huafa Lease | Refers to | Shenzhen Huafa Property Lease Management Co., Ltd |
| Huafa Trade | Refers to | Wuhan Zhongheng Huafa Trade Co., Ltd. |
| Wuhan Zhongheng Group | Refers to | Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd. |
| HK Yutian | Refers to | Hong Kong Yutian International Investment Co., Ltd. |
| Hengsheng Photoelectricity | Refers to | Wuhan Hengsheng Photoelectricity Industry Co., Ltd. |
| Hengsheng Yutian | Refers to | Wuhan Hengsheng Yutian Industrial Co., Ltd. |
| Yutian Henghua | Refers to | Shenzhen Yutian Henghua Co., Ltd. |
| Huafa Hengtian | Refers to | Shenzhen Huafa Hengtian Co., Ltd. |
| Huafa Hengtai | Refers to | Shenzhen Huafa Hengtai Co., Ltd. |
| Shenzhen Vanke | Refers to | Shenzhen Vanke Real Estate Co., Ltd. |
| Vanke Guangming | Refers to | Shenzhen Vanke Guangming Real Estate Development Co., Ltd |
SEMI-ANNUAL REPORT 2019
Section II. Company Profile and Main Financial IndexesI. Company profile
Short form of the stock
| Short form of the stock | Shen Huafa A, Shen Huafa B | Stock code | 000020, 200020 |
| Short form of the stock after changed (if applicable) | N/A | ||
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Name of the Company (in Chinese) | 深圳中恒华发股份有限公司 | ||
| Short form of the Company (in Chinese) | 深华发 | ||
| Foreign name of the Company (if applicable) | SHENZHEN ZHONGHENG HUAFA CO., LTD. | ||
| Abbr. of the foreign name (if applicable) | N/A | ||
| Legal representative | Li Zhongqiu | ||
II. Person/Way to contact
| Secretary of the Board | Rep. of security affairs | |
| Name | Yang Bin | Niu Zhuo |
| Contact add. | 33/F, No. 2 Building of Dachong Business Center, Nanshan District, Shenzhen | 33/F, No. 2 Building of Dachong Business Center, Nanshan District, Shenzhen |
| Tel. | 0755-86360201 | 0755-86360201 |
| Fax. | 0755-86360206 | 0755-86360206 |
| hwafainvestor@126.com.cn | hwafainvestor@126.com.cn |
III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period ornot
□ Applicable √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,found more details in Annual Report 2018.
SEMI-ANNUAL REPORT 2019
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparationplace for semi-annual report have no change in reporting period, found more details in Annual Report 2018IV. Main accounting data and financial indexesWhether it has retroactive adjustment or re-statement on previous accounting data or not
□Yes √No
| Current period | Same period last year | Changes over last year (+, -) | |
| Operating income (RMB) | 339,190,174.05 | 340,984,843.24 | -0.53% |
| Net profit attributable to shareholders of the listed company (RMB) | 2,580,411.13 | 2,793,133.60 | -7.62% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) | 2,197,912.06 | 2,053,467.02 | 7.03% |
| Net cash flow arising from operating activities (RMB) | 45,194,220.56 | -26,671,325.63 | |
| Basic earnings per share (RMB/Share) | 0.0091 | 0.0099 | -8.08% |
| Diluted earnings per share (RMB/Share) | 0.0091 | 0.0099 | -8.08% |
| Weighted average ROE | 0.79% | 0.87% | -0.08% |
| Period-end | Period-end of last year | Changes over period-end of last year (+, -) | |
| Total assets (RMB) | 623,980,175.29 | 617,090,153.46 | 1.12% |
| Net assets attributable to shareholder of listed company (RMB) | 326,548,411.87 | 323,968,000.74 | 0.80% |
V. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (InternationalAccounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
SEMI-ANNUAL REPORT 2019
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules orChinese GAAP (Generally Accepted Accounting Principles) in the period.VI. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item
| Item | Amount | Note |
| Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | 129,039.57 | |
| Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) | 223,300.00 | |
| Gains/losses from entrusted investment or assets management | 74,936.14 | |
| Other non-operating income and expenditure except for the aforementioned items | 9,458.00 | |
| Less: Impact on income tax | 54,234.64 | |
| Total | 382,499.07 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists ofextraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities tothe Public --- Extraordinary Profit/loss
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Section III. Summary of Company Business
I. Main businesses of the company in the reporting periodWhether the company needs to comply with the disclosure requirements of the particular industryNoAfter years of development, the company has gradually formed two main businesses in industry and propertymanagement. Among them, the industrial business mainly includes injection molding, POLYLON (light-weightpackaging materials), and complete machine production and sales of liquid crystal display, property managementbusiness is mainly the lease of its own property.II. Major changes in main assets
1. Major changes in main assets
Major assets
| Major assets | Note of major changes |
| Equity assets | N/A |
| Fixed assets | N/A |
| Intangible assets | N/A |
| Construction in progress | N/A |
2. Main overseas assets
□ Applicable √ Not applicable
III. Core competitiveness analysisWhether the company needs to comply with the disclosure requirements of the particular industryNoAll industrial lands of the Company located in Shenzhen were taken into the first batch of plan under 2010 Shenzhen urban upgradeplanning. In the future, development and operation of self-owned land resources would become the income source of the Companyon a long-term and stable basis.
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Section IV. Discussion and Analysis of Operation
I. IntroductionAfter years of development, the company has gradually formed two main businesses of industrial business andproperty management business. Among them, the industrial business is the production and sales ofinjection-molded parts, Styrofoam (lightweight material packaging), and liquid crystal display. The propertymanagement business is mainly for the rental of self-owned properties.
In the first half of 2019, the company achieved operation revenue of 339.19 million yuan, with a y-o-y declined of
0.53%; operating profit of 295 million yuan, with a y-o-y growth of 16.15%; net profit of 2.58 million yuan, witha y-o-y declined of 7.62%; operation revenue from industry production has 318.76 million yuan in the first half ofthe year, with a y-o-y declined of 1.43%, operating profit of 1.69 million yuan, with a y-o-y declined of 68.15%;net profit of 1.6358 million yuan, with a y-o-y declined of 68.24%; the revenue earns from property leasing in firsthalf year comes to 18.91 million yuan, an increase of 21.20% over the same period last year, and the operatingprofit was 1.26 million yuan, with a y-o-y growth of 3.93 million yuan (from the same period last year to (2.67)million yuan); the net profit was 94.58 million yuan, and from the same period last year to (1.72) million yuan.
II. Main business analysisSee the “I-Introduction” in “Discussion and Analysis of Operation”Change of main financial data on a y-o-y basis
In RMB
| Current period | Same period last year | y-o-y changes | Reasons | |
| Operating revenue | 339,190,174.05 | 340,984,843.24 | -0.53% | |
| Operating cost | 297,580,208.34 | 302,582,979.44 | -1.65% | |
| Sales expenses | 9,130,380.22 | 8,433,363.31 | 8.26% | |
| Administrative expenses | 19,616,991.39 | 20,400,985.42 | -3.84% | |
| Financial expenses | 5,068,371.24 | 5,447,070.22 | -6.95% | |
| Income tax expenses | 603,910.08 | 463,831.41 | 30.20% | Increase in property rental income |
| Net cash flow from operating activities | 45,194,220.56 | -26,671,325.63 | Note receivable are collected at maturity | |
| Net cash flow from investment activities | -3,964,794.99 | -6,545,541.50 | Last period, invest in new workshop and replace old production |
SEMI-ANNUAL REPORT 2019
equipment
| equipment | ||||
| Net cash flow from financing activities | -32,459,238.76 | -21,012,832.62 | Short-term borrowing decreased in the current period | |
| Net increase of cash and cash equivalent | 8,869,836.86 | -54,379,579.55 | Note receivable are collected at maturity |
Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not applicable
No major changes on profit composition or profit resources occurred in reporting periodConstitution of main business
In RMB
| Operating revenue | Operating cost | Gross profit ratio | Increase/decrease of operating revenue y-o-y | Increase/decrease of operating cost y-o-y | Increase/decrease of gross profit ratio y-o-y | |
| According to industries | ||||||
| Display | 164,964,344.94 | 156,855,763.07 | 4.92% | 32.94% | 34.97% | -1.42% |
| Plastic injection hardware | 111,142,622.51 | 97,350,242.91 | 12.41% | -27.04% | -30.76% | 4.70% |
| Styrofoam | 34,292,527.88 | 31,279,310.58 | 8.79% | -17.96% | -18.19% | 0.26% |
| According to products | ||||||
| Display | 164,964,344.94 | 156,855,763.07 | 4.92% | 32.94% | 34.97% | -1.42% |
| Plastic injection hardware | 111,142,622.51 | 97,350,242.91 | 12.41% | -27.04% | -30.76% | 4.70% |
| Styrofoam | 34,292,527.88 | 31,279,310.58 | 8.79% | -17.96% | -18.19% | 0.26% |
| According to region | ||||||
| Hong Kong and Taiwan | 63,962,270.03 | 60,275,954.47 | 5.76% | -17.18% | -18.18% | 1.15% |
| Central China | 158,337,367.02 | 140,986,540.09 | 10.96% | -20.17% | -22.39% | 2.55% |
| East China | 88,099,858.28 | 84,222,822.00 | 4.40% | 106.63% | 112.14% | -2.48% |
III. Analysis of the non-main business
□Applicable √ Not applicable
SEMI-ANNUAL REPORT 2019
IV. Assets and liability
1. Major changes of assets composition
In RMB
| Period-end | Period-end last year | Ratio changes | Notes of major changes | |||
| Amount | Ratio in total assets | Amount | Ratio in total assets | |||
| Monetary fund | 47,981,541.61 | 7.69% | 65,403,374.30 | 10.55% | -2.86% | |
| Account receivable | 149,540,866.46 | 23.97% | 182,542,130.75 | 29.45% | -5.48% | |
| Inventory | 86,709,541.76 | 13.90% | 37,519,314.34 | 6.05% | 7.85% | |
| Investment real estate | 49,817,157.72 | 7.98% | 29,404,574.44 | 4.74% | 3.24% | |
| Long-term equity investment | 0.00% | 0.00% | 0.00% | |||
| Fix assets | 185,008,101.52 | 29.65% | 108,018,926.67 | 17.43% | 12.22% | |
| Construction in process | 7,552,776.46 | 1.21% | 654,356.00 | 0.11% | 1.10% | |
| Short-term loans | 134,676,280.00 | 21.58% | 85,012,392.00 | 13.72% | 7.86% | |
2. Assets and liability measured by fair value
□ Applicable √Not applicable
3. Assets right restriction till end of reporting period
| Item | Ending book value | Restriction reasons |
| Monetary Fund | 11,150,495.15 | Bank acceptance deposit and frozen by court |
| Notes receivable | 3,866,647.92 | Pledge |
| Accounts receivable | 14,609,128.53 | Pledge |
| Investment real estate | 37,728,701.12 | Bank loan secured |
SEMI-ANNUAL REPORT 2019
Fixed assets
| Fixed assets | 42,487,962.49 | Bank loan secured |
| Liquidation of fixed assets | 92,857,471.69 | Court closure |
| Intangible assets | 36,306,830.17 | Bank loan secured |
| Total | 239,007,237.07 | -- |
V. Investment analysis
1. Overall situation
□ Applicable √Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable √Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable √Not applicable
The Company has no securities investment in the Period.
(2) Derivative investment
□ Applicable √Not applicable
The Company has no derivatives investment in the Period.VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √Not applicable
The Company had no sales of major assets in the reporting period.
SEMI-ANNUAL REPORT 2019
2. Sales of major equity
□ Applicable √Not applicable
VII. Analysis of main holding company and stock-jointly companies
√Applicable □ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Companyname
| Company name | Type | Main business | Register capital | Total assets | Net Assets | Operating revenue | Operating profit | Net profit |
| Hengfa Technology Company | Subsidiary | R&D, production and sales of the products as well as import & export business etc. | 181,643,111.00 | 472,002,521.79 | 222,311,685.87 | 318,755,726.11 | 1,694,088.29 | 1,635,779.35 |
| Huafa Property Company | Subsidiary | Leasing and management of own property | 1,000,000.00 | 18,582,268.84 | -1,921,466.74 | 2,393,312.63 | 400,723.44 | 300,542.58 |
| Huafa Lease Company | Subsidiary | Leasing and management of own property | 1,000,000.00 | 1,900,692.20 | -5,026,990.71 | 0.00 | 0.00 | 0.00 |
| Huafa Hengtian Company | Subsidiary | Leasing and management of own property | 1,000,000.00 | 995,680.41 | 995,680.41 | 0.00 | -701.25 | -701.25 |
| Huafa Hengtai Company | Subsidiary | Leasing and management of own property | 1,000,000.00 | 996,716.29 | 996,716.29 | 0.00 | -396.39 | -396.39 |
Particular about subsidiaries obtained or disposed in report period
SEMI-ANNUAL REPORT 2019
□Applicable √ Not applicable
Explanation of main holding company and stock-jointly companiesNil
VIII. Structured vehicle controlled by the Company
□ Applicable √Not applicable
IX. Prediction of business performance from January – September 2019Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or thewarning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable √ Not applicable
X. Risks and countermeasures
1. Operational risks of industrial business: industrial restructuring, fluctuations in raw material prices, decline inmarket demand, and frustration of new product promotion.Countermeasures: continue to open up the market, maintain the existing customers, positively develop newcustomers, and continue to improve production efficiency;
2. Financial risks: large demands for funds, substantial increase or decrease in financial costs caused by exchangerate fluctuations, and bank credit constraints caused by changes in financial costs and so on.Countermeasures: pay close attention to macroeconomic policy trends, actively expand the financing channels,establish a virtuous circle mechanism for funds, improve the service efficiency, and use financial instruments toavoid exchange rate risks.
SEMI-ANNUAL REPORT 2019
Section V. Important EventsI. In the report period, the Company held annual shareholders’ general meeting andextraordinary shareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report period
Session of meeting
| Session of meeting | Type | Ratio of investor participation | Date | Date of disclosure | Index of disclosure |
| Annual General Meeting of 2017 | AGM | 48.02% | 2019-05-21 | 2019-05-22 | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&stockCode=000020&announcementId=1206288941&announcementTime=2019-05-22 |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √Not applicable
II. Profit distribution plan in the period and capitalizing of common reserves plan
□ Applicable √Not applicable
The Company plans not to distribute cash dividend and bonus for the semi-annual, and no capitalizing of common reserves either.III. Commitments that the actual controller, shareholders, related party, offeror andcommitted party as the Company etc. have fulfilled during the reporting period and have notyet fulfilled by the end of reporting period
√Applicable □ Not applicable
| Commitments | Promise | Type of commitments | Content of commitments | Commitment date | Commitment term | Implementation |
| Commitments for share reform | ||||||
| Commitments in report of acquisition or equity change | ||||||
| Commitments in assets |
SEMI-ANNUAL REPORT 2019
reorganization
| reorganization | ||||||
| Commitments make in initial public offering or re-financing | ||||||
| Equity incentive commitment | ||||||
| Other commitments for medium and small shareholders | Wuhan Zhongheng Group | Promise to increasing shares of holding as 2.83 million shares of B-stock of the Company in 6 months since the letter delivery | 2017-11-20 | In 6 months since the date of notification | Performance Finished | |
| Wuhan Zhongheng Group | Promise to increasing shares of holding as 2.8 million shares of A-stock at least in 6 months since the letter delivery | 2017-11-28 | In 6 months since the date of notification | Performance Finished | ||
| Completed on time(Y/N) | Yes | |||||
| If the commitments are not fulfilled on time, shall explain the specify reason and the next work plan | Not applicable | |||||
IV. Appointment and non-reappointment (dismissal) of CPA
Whether the financial report has been audited or not
□Yes √no
The company's semi-annual report has not been audited.
SEMI-ANNUAL REPORT 2019
V. Explanation from Board of Directors and Supervisory Committee for “Qualified Opinion”that issued by CPA
□ Applicable √Not applicable
VI. Explanation from the Board for “Qualified Opinion” of last year’s
□ Applicable √Not applicable
VII. Bankruptcy reorganization
□ Applicable √Not applicable
No bankruptcy reorganization for the Company in reporting period
VIII. LawsuitsSignificant lawsuits and arbitration
√Applicable □Not applicable
The basicsituation of
litigation(Arbitration)
| The basic situation of litigation (Arbitration) | Amount of money involved (in 10 thousand Yuan) | Predicted liabilities (Y/N) | Advances in litigation (Arbitration) | The results and effects of litigation (Arbitration) | Execution of the litigation (Arbitration) | Disclosure date | Disclosure index |
| In September 2016, Wuhan Zhongheng Group Co., Ltd. and the Company and Shenzhen Vanke were applied for arbitration due to the dispute case of “Contract for the Cooperative Operation of the Old Projects at Huafa Industrial Park, Gongming Street, Guangming New District”. | 46,460 | No | Ruling on 16 August 2017; put forward the application for dismantling by the Company and controlling shareholder, the application was rejected by the court | Found more in announcement of the Company | Implementing | 2018-02-09 | http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/true/1204406606?announceTime=2018-02-09 ；http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&stockCode=00 |
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0020&announcementId=1205326846&announcementTime=2018-08-25
| 0020&announcementId=1205326846&announcementTime=2018-08-25 | |||||||
| In March 2016, the Company and HUAFA Science & Technology suit against the follow companies, including Shenzhen Huayongxing Environmental Technology Co., Ltd., Shenzhen Guangyong Breadboard Co., Ltd., Shenzhen Mingyi Electronic Co., Ltd., Shenzhen Ouruilai Technology Co., Ltd and Shenzhen Kangzhengxin Technology Co., Ltd., for arrears of rent. and refuse to move the site, forcibly occupied switch board room and other power unit under the name of the Company | 1,964.92 | No | The judgment of 2nd trial has been issued, and has applied for compulsory execution | Ended | Ended | 2016-09-14 | http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/true/1202702423?announceTime=2016-09-14 07:41 |
SEMI-ANNUAL REPORT 2019
In March 2016,the Companyand HUAFAProperty suitagainst ShenzhenHuayongxingEnvironmentalTechnology Co.,Ltd., andShenzhenYidaxinTechnology Co.,Ltd. for contractviolation andrefuse to movethe site
| In March 2016, the Company and HUAFA Property suit against Shenzhen Huayongxing Environmental Technology Co., Ltd., and Shenzhen Yidaxin Technology Co., Ltd. for contract violation and refuse to move the site | 947.26 | No | The second trial decides the Company wins the lawsuit on 15 March 2018, and has applied for enforcement | Implementing | Implementing | 2016-09-14 | http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/true/1202702423?announceTime=2016-09-14 07:41 |
| Application for arbitration in case of contract dispute between the V&T (Shenzhen) Law Firm and Shenzhen Zhongheng Huafa Co., Ltd. and Wuhan Zhongheng Group | 1,940.2 | No | Arbitration has been heard for adjudication | To be adjudicated | To be adjudicated | 2018-11-14 | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&stockCode=000020&announcementId=1205602053&announcementTime=2018-11-14 |
Other lawsuits
□Applicable √ Not applicable
IX. Penalty and rectification
□Applicable √ Not applicable
The Company has no penalty and rectification in the period
X. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable √Not applicable
SEMI-ANNUAL REPORT 2019
XI. Implementation of the company’s stock incentive plan, employee stock ownership plan orother employee incentives
□ Applicable √Not applicable
The Company had no stock incentive plan, employee stock ownership plan or other employee incentive in the reporting period.XII. Major related transaction
1. Related transaction with routine operation concerned
√Applicable □ Not applicable
Relatedparty
| Related party | Relationship | Type of related transaction | Content of related transaction | Pricing principle | Related transaction price | Related transaction amount (in 10 thousand Yuan) | Proportion in similar transactions | Trading limit approved (in 10 thousand Yuan) | Whether over the approved limited or not (Y/N) | Clearing form for related transaction | Available similar market price | Date of disclosure | Index of disclosure |
| HK Yutian | Sharing the same controlling shareholder | Purchase | Purchasing LCD monitors | Synchronized with the market | 5,531.49 | 5,531.49 | 35.26% | 16,778.09 | N | Telegraphic transfer | —— | 2019-04-30 | http://www.cninfo.com.cn/new/disclosure/detail?plate=&orgId=gssz0000020&stockCode=0000 |
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20&announcementId=
4&announcementTime=2019-04-3
| 20&announcementId=1206157984&announcementTime=2019-04-30 | |||||||||||||
| Hengsheng Photoelectricity | Sharing the same controlling shareholder | Purchase | Purchasing LCD monitors | Confirmed with 1% of current market average price in principle, and refer to both their bargaining power | 4,735.80 | 4,735.8 | 30.19% | 12,326.76 | N | Telegraphic transfer | The average market price refers to the price of same specifications which is searched from through the world famous professional market | 2019-04-30 | http://www.cninfo.com.cn/new/disclosure/detail?plate=&orgId=gssz0000020&stockCode=000020&announcemen |
SEMI-ANNUAL REPORT 2019
surveycompanywebsitehttp://www.witsview.comrecognizedauthority intheindustry andLCDprofessionalmarketsurveycompanywebsitehttp://www.witsview.com
| survey company website http://www.witsview.com recognized authority in the industry and LCD professional market survey company website http://www.witsview.com | tId=1206157984&announcementTime=2019-04-30 | ||||||||||||
| Hengsheng Photoelectricity | Sharing the same controlling shareholder | Purchase | Purchasing LCD monitors | According to the order price, deducted 1 Yuan each for | 1,037.41 | 1,037.41 | 6.61% | 8,217.84 | N | Telegraphic transfer | —— | 2019-04-30 | http://www.cninfo.com.cn/new/disclosure/ |
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operationcharge
| operation charge | detail?plate=&orgId=gssz0000020&stockCode=000020&announcementId=1206157984&announcementTime=2019-04-30 | ||||||||||||
| HK Yutian | Sharing the same controlling shareholder | Sales | Sales LCD overall monitor machine set | According to the customer sales order price sure | 6,413.62 | 6,413.62 | 38.87% | 23,968.7 | N | Telegraphic transfer | —— | 2019-04-30 | http://www.cninfo.com.cn/new/disclosure/detail?plate=&or |
SEMI-ANNUAL REPORT 2019
gId=gssz
0&stockCode=0
20&announcementId=
4&announcementTime=2019-04-3
| gId=gssz0000020&stockCode=000020&announcementId=1206157984&announcementTime=2019-04-30 | |||||||||||||
| Hengsheng Photoelectricity | Sharing the same controlling shareholder | Sales | LCD display screen/LCD | According to the customer sales order price sure | 1,218.41 | 1,218.41 | 7.77% | 3,971.96 | N | Telegraphic transfer | —— | 2019-04-30 | http://www.cninfo.com.cn/new/disclosure/detail?plate=&orgId=gssz000002 |
SEMI-ANNUAL REPORT 2019
0&stockCode=0
20&announcementId=
4&announcementTime=2019-04-3
| 0&stockCode=000020&announcementId=1206157984&announcementTime=2019-04-30 | ||||||||||
| Total | -- | -- | 18,936.73 | -- | 65,263.35 | -- | -- | -- | -- | -- |
| Detail of sales return with major amount involved | N/A | |||||||||
| Report the actual implementation of the daily related transactions which were projected about their total amount by types during the reporting period (if applicable) | In the reporting, Hengfa Technology purchased LCD display screen from HK Yutian with US$ 8.1662 million approximately, 33.33% of the annual amount predicted at the beginning of the year; purchased LCD display screen from Hengsheng Photoelectricity with US $ 6.8918 million approximately, 38.29% of the annual amount predicted at the beginning of the year; purchasing LCD from Hengsheng Photoelectricity with about US $ 1.5097 million, 12.58% of the annual amount predicted at the beginning of the year; sold LCD whole machine to HK Yutian with US $ 9.4896 million approximately, 27.11% of the annual amount predicted at the beginning of the year. Sold LCD (display screen) to Hengsheng Photoelectricity with US $ 1.7731 million approximately, 30.57% of the annual amount predicted at the beginning of the year. | |||||||||
| Reasons for major differences between trading price and market reference price (if applicable) | Not applicable | |||||||||
2. Related transactions by assets acquisition and sold
□Applicable √ Not applicable
SEMI-ANNUAL REPORT 2019
No above-mentioned transactions occurred
3. Main related transactions of mutual investment outside
□ Applicable √Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
□ Applicable √Not applicable
No contact of related credit and debt in the period
5. Other related transactions
□ Applicable √Not applicable
The Company had no other significant related transactions in reporting period.
XIII. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.XIV. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable √Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable √Not applicable
No leasing for the Company in reporting period
2. Major guarantees
√Applicable □ Not applicable
SEMI-ANNUAL REPORT 2019
(1) Guarantees
In 10 thousand Yuan
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
| Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries) | |||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) | |
| Guarantee of the Company and the subsidiaries | |||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) | |
| Wuhan Hengfa Technology Co., Ltd. | 2019-08-27 | 30,000 | 2,267.63 | Joint liability guarantee | One year | N | Y | ||
| Total amount of approving guarantee for subsidiaries in report period (B1) | 30,000 | Total amount of actual occurred guarantee for subsidiaries in report period (B2) | 5,926.83 | ||||||
| Total amount of approved guarantee for subsidiaries at the end of reporting period (B3) | 30,000 | Total balance of actual guarantee for subsidiaries at the end of reporting period (B4) | 2,267.63 | ||||||
| Guarantee of the subsidiaries for the subsidiaries | |||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) | |
| Total amount of guarantee of the Company (total of three abovementioned guarantee) | |||||||||
| Total amount of approving guarantee in report period (A1+B1+C1) | 30,000 | Total amount of actual occurred guarantee in report period (A2+B2+C3) | 5,926.83 | ||||||
| Total amount of approved guarantee at the end of report period (A3+B3+C2) | 30,000 | Total balance of actual guarantee at the end of report period (A4+B4+C4) | 2,267.63 | ||||||
| The proportion of the total amount of actually guarantee in the net assets of the Company (that is A4+ B4+C4) | 6.94% | ||||||||
SEMI-ANNUAL REPORT 2019
Including:
| Including: | |
| Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (if applicable) | N/A |
| Explanations on external guarantee against regulated procedures (if applicable) | N/A |
Explanation on compound guaranteeNil
(2) Guarantee outside against the regulation
□Applicable √ Not applicable
No guarantee outside against the regulation in Period.
3. Other material contracts
□ Applicable √Not applicable
No other material contracts for the Company in reporting period.
XV. Social responsibility
1. Material environmental protection
The listed Company and its subsidiary whether belong to the key sewage units released from environmental protection departmentNot applicableListed companies and their subsidiaries do not belong to key pollutant discharge units announced by environmental protectiondepartments.
2.Execution of social responsibility of targeted poverty alleviation
(1) targeted poverty alleviation
(2) Summary of targeted poverty alleviation
(3) Performance of the targeted poverty alleviation
| Index | Unit of measure | Quantity /implementation |
| I. Overall condition | —— | —— |
| II. Poverty alleviation by items | —— | —— |
| 1.Industry development | —— | —— |
SEMI-ANNUAL REPORT 2019
2.Shift employment
| 2.Shift employment | —— | —— |
| 3. Relocating in other places | —— | —— |
| 4. Education | —— | —— |
| 5. Health | —— | —— |
| 6.Ecological protection | —— | —— |
| 7. Reveal all the details | —— | —— |
| 8. Society | —— | —— |
| 9.Other | —— | —— |
| III. Award received (content and grade) | —— | —— |
(4) Follow-up targeted poverty alleviation scheme
XVI Explanation on other significant events
√Applicable □ Not applicable
(i) The Company signed Asset Exchange Contract with Wuhan Zhongheng Group on 29 April 2009 (details werereferred to in the announcement dated 30 April 2009), and pursuant to the contract, since part of the assets of theCompany (namely two parcel of industrial lands located at Huafa road, Gongming town, Guangming new district,Shenzhen (the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763, No. of parcels wereA627-005 andA627-007, and the aggregate area was 48,200 sq.m) were the lands listed in the first batch of planfor 2010 Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project andjoint cooperation, the Company has not completed the transfer procedures in respect of the aforesaid land.The Company convoked the first extraordinary meeting of the Board in 2015 on February 16, 2015 and the firstextraordinary general meeting of the Board in 2015 on March 4, 2015, which considered and approved the“Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area atGongming street, Guangming new district, Shenzhen”, specified that the Company and Wuhan Zhongheng Groupshall obtain the corresponding compensatory consideration for removal from the respectively owned project plotsand the respectively contributed and constructed above-ground buildings before the land development, it isestimated that the compensatory consideration obtained by the Company accounts for 50.5% of the totalconsideration and Wuhan Zhongheng Group accounts for 49.5% by calculation.The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting heldon September 11, 2015 have considered and adopted the “Proposal on the project promotion and implementationof urban renewal and the progress of related transactions of ‘the updated units at Huafa Area, Gong Ming Street,Guangming New District, Shenzhen’”, the company has signed the “Agreement on the cooperation of urbanrenewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”,“Contract for the cooperative venture of reconstruction project for Huafa Industrial Park, Gong Ming Street,Guangming New District” and “Agreement on housing acquisition and removal compensation and resettlement”with Wuhan Zhongheng New Technology Industry Group Co., Ltd. (hereinafter referred to as “Wuhan
SEMI-ANNUAL REPORT 2019
Zhongheng Group”), Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as “Shenzhen Vanke”), andShenzhen Vanke Guangming Real Estate Development Co., Ltd. (hereinafter referred to as “Vanke Guangming”).On 12 September 2016, the Company received a “Notice of Arbitration No.: SHEN DP20160334” from SCIA,Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation of urban renewal project ofthe updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen” against the Companyand Wuhan Zhongheng Group. The arbitration court holds hearings on 12 November 2016 and 13 May 2017.Shenzhen Court of International Arbitration (SCIA) has given a ruling in August 2017, although most of thearbitration claims proposed by Shenzhen Vanke are rejected by arbitration court, the arbitration procedures andso-called cognizance of fact of contract breach still has problems in arbitration. The results have damaged thelegitimate rights and interest of the Company, and we have putting forward the application for dismantling inFebruary 2018 to the Shenzhen Intermediate People’s Court. The Court has accepted the case formally. Progressof the case found more in the Notices released on Juchao website (www.cninfo.com.cn) dated 14 Sept. 2016, 1Nov. 2016, 16 Nov. 2016, on 18 Feb. 2017, 24 March 2017, 25 April 2017, 1 July 2017, 18 August 2017 and 9Feb. 2018 respectively.(ii) Major shareholders’ commitment to increase holdingsOn November 20 and 28, 2017, the controlling shareholders made a commitment to increase the holding of 2.83million shares of the company's B shares and not less than 2.8 million shares of the A shares, the commitment periodwas within 6 months, and it has been completed in May 2019 after two times of postponement.(iii) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to ChinaMerchants Securities Assets Co., Ltd. with due date of 31 December 2016. Wuhan Zhongheng Group deferred therepurchase business day to 30 June 2017. on 1 Feb. 2016, Wuhan Zhongheng Group pledge the 27,349,953 sharesheld to China Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. The above-mentionedpledged shares are deferred by Wuhan Zhongheng Group; pledge expired on 31 December 2017. The trading dayfor repurchase put off to the date when pledge actually removed. Till end of this period released, controllingshareholder still not removed the pledge and the Company has apply by letter, relevant Notice of Presentment onStock Pledge from Controlling Shareholder was released. Found more in notice released on Juchao website(www.cninfo.com.cn) date 2 Feb. 2018.(iv) The controlling shareholder Wuhan Zhongheng Group holds 119,289,894 shares of the Company’ stock,accounting for 42.13% of the total share capital of the Company, of which 116,489,894 shares were judicially frozenon September 27, 2016, and the frozen period was until September 13, 2021, which were frozen again by theShenzhen Intermediate People's Court on December 14, 2018, with a frozen period of 36 months, the remaining2,800,000 shares were frozen by the Shenzhen Intermediate People's Court on May 29, 2019, and were frozen againby the Higher People’s Court of Guangdong Province on July 5, 2019. For details, please refer to the company’sannouncements published on www.cninfo.com.cn on October 27, 2016, January 11, 2019, May 31, 2019 andAugust 7, 2019.
SEMI-ANNUAL REPORT 2019
XVII. Significant event of subsidiary of the Company
□ Applicable √Not applicable
SEMI-ANNUAL REPORT 2019
Section VI. Changes in Shares and Particulars about ShareholdersI. Changes in Share Capital
1. Changes in Share Capital
In Share
| Before the Change | Increase/Decrease in the Change (+, -) | After the Change | |||||||
| Amount | Proportion | New shares issued | Bonus shares | Capitalization of public reserve | Others | Subtotal | Amount | Proportion | |
| I. Restricted shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| II. Unrestricted shares | 283,161,227 | 100.00% | 0 | 0 | 0 | 0 | 0 | 283,161,227 | 100.00% |
| 1. RMB Ordinary shares | 181,165,391 | 63.98% | 0 | 0 | 0 | 0 | 0 | 181,165,391 | 63.98% |
| 2. Domestically listed foreign shares | 101,995,836 | 36.02% | 0 | 0 | 0 | 0 | 0 | 101,995,836 | 36.02% |
| III. Total shares | 283,161,227 | 100.00% | 0 | 0 | 0 | 0 | 0 | 283,161,227 | 100.00% |
Reasons for share changed
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changed
□ Applicable √ Not applicable
Progress of shares buy-back
□ Applicable √ Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
SEMI-ANNUAL REPORT 2019
2. Changes of restricted shares
□ Applicable √Not applicable
II. Securities issuance and listing
□ Applicable √Not applicable
III. Amount of shareholders of the Company and particulars about shares holding
In Share
Total common stockshareholders in reportingperiod-end
| Total common stock shareholders in reporting period-end | 23,417 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (found in note8) | 0 | |||||||
| Particulars about common shares held above 5% by shareholders or top ten common shareholders | ||||||||||
| Full name of Shareholders | Nature of shareholder | Proportion of shares held | Total common shareholders at the end of report period | Changes in report period | Amount of restricted common shares held | Amount of un-restricted common shares held | Number of share pledged/frozen | |||
| State of share | Amount | |||||||||
| Wuhan Zhongheng Group | Domestic non-state-owned legal person | 42.13% | 119,289,894 | 2608800 | 0 | 119,289,894 | Pledged | 116,100,000 | ||
| Frozen | 119,289,894 | |||||||||
| SEG (HONG KONG) CO., LTD. | Overseas legal person | 5.85% | 16,569,560 | 0 | 0 | 16,569,560 | Pledged | 0 | ||
| Frozen | 0 | |||||||||
| GOOD HOPE CORNER INVESTMENTS LTD | Overseas legal person | 4.49% | 12,700,000 | 0 | 0 | 12,700,000 | Pledged | 0 | ||
| Frozen | 0 | |||||||||
| Changjiang Securities Brokerage (Hong Kong) Co., Ltd. | Overseas legal person | 1.89% | 5,355,249 | 0 | 0 | 5,355,249 | Pledged | 0 | ||
| Frozen | 0 | |||||||||
| Guoyuan | Overseas legal | 1.36% | 3,845,1 | 0 | 0 | 3,845,117 | Pledged | 0 | ||
SEMI-ANNUAL REPORT 2019
SecuritiesBrokerage(Hong Kong)Co., Ltd.
| Securities Brokerage (Hong Kong) Co., Ltd. | person | 17 | Frozen | 0 | ||||||
| Li Zhongqiu | Overseas nature person | 1.00% | 2,830,000 | 2,830,000 | 0 | 2,830,000 | Pledged | 0 | ||
| Frozen | 0 | |||||||||
| Zhong Jiachao | Domestic nature person | 0.45% | 1,277,494 | 1,277,494 | Pledged | 0 | ||||
| Frozen | 0 | |||||||||
| Li Senzhuang | Domestic nature person | 0.35% | 986,550 | 986,550 | Pledged | 0 | ||||
| Frozen | 0 | |||||||||
| LI SHERYN ZHAN MING | Overseas nature person | 0.35% | 980,100 | 980,100 | Pledged | 0 | ||||
| Frozen | 0 | |||||||||
| Han Yaming | Domestic nature person | 0.30% | 864,200 | 864,200 | Pledged | 0 | ||||
| Frozen | 0 | |||||||||
| Strategy investors or general corporation comes top 10 shareholders due to rights issue (if applicable) (see note 3) | N/A | |||||||||
| Explanation on associated relationship among the aforesaid shareholders | Among the top ten shareholders, Wuhan Zhongheng Group neither bears associated relationship with other shareholders, nor belongs to the consistent actor that are prescribed in Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed Companies. The Company neither knew whether there exists associated relationship among the other tradable shareholders, nor they belong to consistent actors that are prescribed in Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed Companies. | |||||||||
| Particular about top ten shareholders with un-restrict common shares held | ||||||||||
| Shareholders’ name | Amount of un-restrict common shares held at Period-end | Type of shares | ||||||||
| Type | Amount | |||||||||
| Wuhan Zhongheng Group | 119,289,894 | RMB common share | 119,289,894 | |||||||
| SEG (HONG KONG) CO., LTD. | 16,569,560 | Domestically listed foreign shares | 16,569,560 | |||||||
| GOOD HOPE CORNER INVESTMENTS LTD | 12,700,000 | Domestically listed foreign shares | 12,700,000 | |||||||
| Changjiang Securities Brokerage (Hong Kong) Co., Ltd. | 5,355,249 | Domestically listed foreign shares | 5,355,249 | |||||||
SEMI-ANNUAL REPORT 2019
Guoyuan Securities Brokerage(Hong Kong) Co., Ltd.
| Guoyuan Securities Brokerage (Hong Kong) Co., Ltd. | 3,845,117 | Domestically listed foreign shares | 3,845,117 |
| Li Zhongqiu | 2,830,000 | Domestically listed foreign shares | 2,830,000 |
| Zhong Jiachao | 1,277,494 | RMB common share | 1,277,494 |
| Li Senzhuang | 986,550 | Domestically listed foreign shares | 986,550 |
| LI SHERYN ZHAN MING | 980,100 | Domestically listed foreign shares | 980,100 |
| Han Yaming | 864,200 | Domestically listed foreign shares | 864,200 |
| Expiation on associated relationship or consistent actors within the top 10 un-restrict common shareholders and between top 10 un-restrict common shareholders and top 10 shareholders | Among the top ten unrestricted shareholders, the Company neither knew whether there exists associated relationship among the other tradable shareholders, nor they belong to consistent actors that are prescribed in Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed Companies. Among the top ten shareholders, Wuhan Zhongheng Group neither bears associated relationship with other shareholders, nor belongs to the consistent actor that are prescribed in Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed Companies. | ||
| Explanation on top 10 common shareholders involving margin business (if applicable) (see note 4) | Among the top ten shareholders, Zhong Jiachao holds 1,277,494 shares of the Company, of which, 743,494 shares held by normal account, and 534,000 shares held through credit security account | ||
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-backagreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have nobuy-back agreement dealing in reporting period.IV. Change of controlling shareholder or actual controllerChanges of controlling shareholders in reporting period
□ Applicable √Not applicable
The Company had no changes of controlling shareholders in reporting periodChanges of actual controller in reporting period
□ Applicable √Not applicable
SEMI-ANNUAL REPORT 2019
No changes of actual controllers for the Company in reporting period.
SEMI-ANNUAL REPORT 2019
Section VII. Preferred Stock
□ Applicable √Not applicable
The Company had no preferred stock in the Period.
SEMI-ANNUAL REPORT 2019
Section VIII. Particulars about Directors, Supervisors and Senior
ExecutivesI. Changes of shares held by directors, supervisors and senior executives
√ Applicable □ Not applicable
Name
| Name | Title | Working status | Sex (M/F) | Age | Start dated of office term | End date of office term | Shares held at period-begin (Share) | Amount of shares increased in this period (Share) | Amount of shares decreased in this period (Share) |
| Li Zhongqiu | Chairman/General Manager | Currently in office | 0 | 2,830,000 | 0 | 2,830,000 | 0 | 0 | 0 |
| Total | -- | -- | 0 | 2,830,000 | 0 | 2,830,000 | 0 | 0 | 0 |
II. Changes of directors, supervisors and senior executives
□ Applicable √ Not applicable
No changes of directors, supervisors and senior executives, found more details in Annual Report 2018.
SEMI-ANNUAL REPORT 2019
Section IX. Corporate BondWhether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date whensemi-annual report approved for released or fail to cash in full on dueNo
Section X. Financial ReportI. Audit report
Whether the semi-annual report was audited or not
□ Yes √ No
The financial report of this semi-annual report was unauditedII. Financial statementCurrency used in note of financial statement is RMB (Yuan)
1. Consolidated Balance Sheet
Prepared by SHENZHEN ZHONGHENG HUAFA CO., LTD
2019-08-27
In RMB
Item
| Item | 2019-6-30 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 47,981,541.61 | 34,108,330.27 |
| Settlement provisions | ||
| Capital lent | ||
| Tradable financial assets | ||
| Financial assets measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial assets | ||
| Note receivable | 10,427,934.87 | 69,185,516.71 |
| Account receivable | 149,540,866.46 | 116,797,834.51 |
| Receivable financing | ||
| Accounts paid in advance | 28,418,600.46 | 31,348,429.54 |
| Insurance receivable | ||
| Reinsurance receivables | ||
| Contract reserve of reinsurance receivable | ||
| Other account receivable | 5,781,851.15 | 5,777,179.08 |
Including: Interest receivable
| Including: Interest receivable | ||
| Dividend receivable | ||
| Buying back the sale of financial assets | ||
| Inventories | 86,709,541.76 | 62,973,909.38 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current asset due within one year | ||
| Other current assets | 1,218,695.38 | 59,370.18 |
| Total current assets | 330,079,031.69 | 320,250,569.67 |
| Non-current assets: | ||
| Loans and payments on behalf | ||
| Debt investment | ||
| Finance asset available for sales | ||
| Other debt investment | ||
| Held-to-maturity investment | ||
| Long-term account receivable | ||
| Long-term equity investment | ||
| Investment in other equity instrument | ||
| Other non-current financial assets | ||
| Investment real estate | 49,817,157.72 | 50,681,322.86 |
| Fixed assets | 185,008,101.52 | 188,083,873.38 |
| Construction in progress | 7,552,776.46 | 5,727,760.23 |
| Productive biological asset | ||
| Oil and gas asset | ||
| Right-of-use assets | ||
| Intangible assets | 43,977,752.24 | 41,815,689.74 |
| Expense on Research and Development | ||
| Goodwill | ||
| Long-term expenses to be apportioned | 425,949.07 | 542,116.99 |
| Deferred income tax asset | 6,829,856.59 | 6,829,856.59 |
Other non-current asset
| Other non-current asset | 289,550.00 | 3,158,964.00 |
| Total non-current asset | 293,901,143.60 | 296,839,583.79 |
| Total assets | 623,980,175.29 | 617,090,153.46 |
| Current liabilities: | ||
| Short-term loans | 134,676,280.00 | 161,568,657.88 |
| Loan from central bank | ||
| Capital borrowed | ||
| Transactional financial liability | ||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial liability | ||
| Note payable | 13,804,210.29 | 27,642,356.66 |
| Account payable | 102,035,210.28 | 60,975,306.43 |
| Accounts received in advance | 156,232.44 | 159,528.60 |
| Selling financial asset of repurchase | ||
| Absorbing deposit and interbank deposit | ||
| Security trading of agency | ||
| Security sales of agency | ||
| Wage payable | 4,045,824.29 | 4,700,208.36 |
| Taxes payable | 11,609,232.63 | 11,232,819.87 |
| Other account payable | 31,040,362.49 | 26,778,863.92 |
| Including: Interest payable | 54,347.32 | 439,558.70 |
| Dividend payable | ||
| Commission charge and commission payable | ||
| Reinsurance payable | ||
| Contractual liability | ||
| Liability held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 297,367,352.42 | 293,057,741.72 |
| Non-current liabilities: |
Insurance contract reserve
| Insurance contract reserve | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | ||
| Long-term wages payable | ||
| Accrual liability | 64,411.00 | 64,411.00 |
| Deferred income | ||
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 64,411.00 | 64,411.00 |
| Total liabilities | 297,431,763.42 | 293,122,152.72 |
| Owner’s equity: | ||
| Share capital | 283,161,227.00 | 283,161,227.00 |
| Other equity instrument | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Capital public reserve | 146,587,271.50 | 146,587,271.50 |
| Less: Inventory shares | ||
| Other comprehensive income | ||
| Reasonable reserve | ||
| Surplus public reserve | 77,391,593.25 | 77,391,593.25 |
| Provision of general risk | ||
| Retained profit | -180,591,679.88 | -183,172,091.01 |
| Total owner’ s equity attributable to parent company | 326,548,411.87 | 323,968,000.74 |
| Minority interests | ||
| Total owner’ s equity | 326,548,411.87 | 323,968,000.74 |
| Total liabilities and owner’ s equity | 623,980,175.29 | 617,090,153.46 |
Legal representative: Li Zhongqiu
Person in charge of accounting works: Yang BinPerson in charge of accounting institution: Wu Aijie
2. Balance Sheet of Parent Company
In RMB
Item
| Item | 2019-6-30 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 1,793,275.01 | 13,234,774.97 |
| Transactional financial assets | ||
| Financial assets measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial assets | ||
| Note receivable | ||
| Account receivable | ||
| Receivable financing | ||
| Accounts paid in advance | 53,050.00 | 153,050.00 |
| Other account receivable | 111,782,724.70 | 99,155,253.08 |
| Including: Interest receivable | ||
| Dividend receivable | ||
| Inventories | 14,806.50 | 14,806.50 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current assets maturing within one year | ||
| Other current assets | 17,055.88 | |
| Total current assets | 113,643,856.21 | 112,574,940.43 |
| Non-current assets: | ||
| Debt investment | ||
| Available-for-sale financial assets | ||
| Other debt investment | ||
| Held-to-maturity investments | ||
| Long-term receivables |
Long-term equity investments
| Long-term equity investments | 186,608,900.00 | 186,608,900.00 |
| Investment in other equity instrument | ||
| Other non-current financial assets | ||
| Investment real estate | 25,770,502.38 | 26,374,703.70 |
| Fixed assets | 98,675,129.84 | 99,227,872.22 |
| Construction in progress | ||
| Productive biological assets | ||
| Oil and natural gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 4,626,182.10 | 4,698,654.96 |
| Research and development costs | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred income tax assets | 7,506,905.90 | 7,506,905.90 |
| Other non-current assets | ||
| Total non-current assets | 323,187,620.22 | 324,417,036.78 |
| Total assets | 436,831,476.43 | 436,991,977.21 |
| Current liabilities | ||
| Short-term borrowings | 100,000,000.00 | 100,000,000.00 |
| Transactional financial liability | ||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial liability | ||
| Notes payable | ||
| Account payable | 9,740,367.33 | 10,745,840.16 |
| Accounts received in advance | 41,605.01 | 41,937.00 |
| Contractual liability | ||
| Wage payable | 820,979.02 | 1,020,979.02 |
| Taxes payable | 7,423,067.53 | 7,161,707.15 |
| Other accounts payable | 22,811,198.36 | 22,672,441.54 |
| Including: Interest payable | ||
| Dividend payable |
Liability held for sale
| Liability held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 140,837,217.25 | 141,642,904.87 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | ||
| Long term employee compensation payable | ||
| Accrued liabilities | 64,411.00 | 64,411.00 |
| Deferred income | ||
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 64,411.00 | 64,411.00 |
| Total liabilities | 140,901,628.25 | 141,707,315.87 |
| Owners’ equity: | ||
| Share capital | 283,161,227.00 | 283,161,227.00 |
| Other equity instrument | ||
| Including: preferred stock | ||
| Perpetual capital securities | ||
| Capital public reserve | 146,587,271.50 | 146,587,271.50 |
| Less: Inventory shares | ||
| Other comprehensive income | ||
| Special reserve | ||
| Surplus reserve | 77,391,593.25 | 77,391,593.25 |
| Retained profit | -211,210,243.57 | -211,855,430.41 |
| Total owner’s equity | 295,929,848.18 | 295,284,661.34 |
| Total liabilities and owner’s equity | 436,831,476.43 | 436,991,977.21 |
3. Consolidated Profit Statement
In RMB
Item
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Total operating income | 339,190,174.05 | 340,984,843.24 |
| Including: Operating income | 339,190,174.05 | 340,984,843.24 |
| Interest income | ||
| Insurance gained | ||
| Commission charge and commission income | ||
| II. Total operating cost | 336,433,054.05 | 338,576,691.78 |
| Including: Operating cost | 297,580,208.34 | 302,582,979.44 |
| Interest expense | ||
| Commission charge and commission expense | ||
| Cash surrender value | ||
| Net amount of expense of compensation | ||
| Net amount of withdrawal of insurance contract reserve | ||
| Bonus expense of guarantee slip | ||
| Reinsurance expense | ||
| Tax and extras | 1,310,110.00 | 1,712,293.39 |
| Sales expense | 9,130,380.22 | 8,433,363.31 |
| Administrative expense | 19,616,991.39 | 20,400,985.42 |
| R&D expense | 3,726,992.86 | |
| Financial expense | 5,068,371.24 | 5,447,070.22 |
| Including: Interest expenses | 5,355,676.92 | 5,989,883.31 |
| Interest income | -419,336.28 | -349,858.59 |
| Add: other income | ||
| Investment income (Loss is listed with “-”) | 74,936.14 | 245,679.10 |
| Including: Investment income on affiliated company and joint venture |
The termination ofincome recognition for financial assetsmeasured by amortized cost(Loss islisted with “-”)
| The termination of income recognition for financial assets measured by amortized cost(Loss is listed with “-”) | ||
| Exchange income (Loss is listed with “-”) | ||
| Net exposure hedging income (Loss is listed with “-”) | ||
| Income from change of fair value (Loss is listed with “-”) | ||
| Loss of credit impairment (Loss is listed with “-”) | -8,432.50 | |
| Losses of devaluation of asset (Loss is listed with “-”) | -5,941.50 | |
| Income from assets disposal (Loss is listed with “-”) | 129,039.57 | -105,779.36 |
| III. Operating profit (Loss is listed with “-”) | 2,952,663.21 | 2,542,109.70 |
| Add: Non-operating income | 232,758.00 | 887,662.07 |
| Less: Non-operating expense | 1,100.00 | 172,806.76 |
| IV. Total profit (Loss is listed with “-”) | 3,184,321.21 | 3,256,965.01 |
| Less: Income tax expense | 603,910.08 | 463,831.41 |
| V. Net profit (Net loss is listed with “-”) | 2,580,411.13 | 2,793,133.60 |
| (i) Classify by business continuity | ||
| 1.continuous operating net profit (net loss listed with ‘-”) | 2,580,411.13 | 2,793,133.60 |
| 2.termination of net profit (net loss listed with ‘-”) | ||
| (ii) Classify by ownership | ||
| 1.Net profit attributable to owner’s of parent company | 2,580,411.13 | 2,793,133.60 |
| 2.Minority shareholders’ gains and losses | ||
| VI. Net after-tax of other comprehensive income | ||
| Net after-tax of other comprehensive income attributable to owners of parent company |
(I) Other comprehensive incomeitems which will not be reclassifiedsubsequently to profit of loss
| (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
| 1.Changes of the defined benefit plans that re-measured | ||
| 2.Other comprehensive income under equity method that cannot be transfer to gain/loss | ||
| 3.Change of fair value of investment in other equity instrument | ||
| 4.Fair value change of enterprise's credit risk | ||
| 5. Other | ||
| (ii) Other comprehensive income items which will be reclassified subsequently to profit or loss | ||
| 1.Other comprehensive income under equity method that can transfer to gain/loss | ||
| 2.Change of fair value of other debt investment | ||
| 3.gain/loss of fair value changes for available-for-sale financial assets | ||
| 4.Amount of financial assets re-classify to other comprehensive income | ||
| 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset | ||
| 6.Credit impairment provision for other debt investment | ||
| 7.Cash flow hedging reserve | ||
| 8.Translation differences arising on translation of foreign currency financial statements | ||
| 9.Other |
Net after-tax of other comprehensiveincome attributable to minorityshareholders
| Net after-tax of other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 2,580,411.13 | 2,793,133.60 |
| Total comprehensive income attributable to owners of parent Company | 2,580,411.13 | 2,793,133.60 |
| Total comprehensive income attributable to minority shareholders | ||
| VIII. Earnings per share: | ||
| (i) Basic earnings per share | 0.0091 | 0.0099 |
| (ii) Diluted earnings per share | 0.0091 | 0.0099 |
Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, andrealized 0 Yuan at last period for combined partyLegal representative: Li ZhongqiuPerson in charge of accounting works: Yang BinPerson in charge of accounting institution: Wu Aijie
4. Profit Statement of Parent Company
In RMB
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Operating income | 18,041,135.31 | 16,961,088.74 |
| Less: Operating cost | 3,172,031.59 | 2,510,518.82 |
| Taxes and surcharge | 562,061.05 | 585,014.62 |
| Sales expenses | ||
| Administration expenses | 9,024,394.50 | 11,134,855.37 |
| R&D expenses | ||
| Financial expenses | 4,423,699.05 | 4,888,654.05 |
| Including: interest expenses | 4,398,333.30 | 4,903,025.04 |
| Interest income | -9,938.10 | -22,022.66 |
| Add: other income | ||
| Investment income (Loss is listed with “-”) |
Including: Investmentincome on affiliated Company andjoint venture
| Including: Investment income on affiliated Company and joint venture | ||
| The termination of income recognition for financial assets measured by amortized cost (Loss is listed with “-”) | ||
| Net exposure hedging income (Loss is listed with “-”) | ||
| Changing income of fair value (Loss is listed with “-”) | ||
| Loss of credit impairment (Loss is listed with “-”) | ||
| Losses of devaluation of asset (Loss is listed with “-”) | ||
| Income on disposal of assets (Loss is listed with “-”) | ||
| II. Operating profit (Loss is listed with “-”) | 858,949.12 | -2,157,954.12 |
| Add: Non-operating income | 1,300.00 | |
| Less: Non-operating expense | 131,247.82 | |
| III. Total Profit (Loss is listed with “-”) | 860,249.12 | -2,289,201.94 |
| Less: Income tax | 215,062.28 | -444,975.63 |
| IV. Net profit (Net loss is listed with “-”) | 645,186.84 | -1,844,226.31 |
| (i)continuous operating net profit (net loss listed with ‘-”) | 645,186.84 | -1,844,226.31 |
| (ii) termination of net profit (net loss listed with ‘-”) | ||
| V. Net after-tax of other comprehensive income | ||
| (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
| 1.Changes of the defined benefit plans that re-measured | ||
| 2.Other comprehensive income under equity method that |
cannot be transfer to gain/loss
| cannot be transfer to gain/loss | ||
| 3.Change of fair value of investment in other equity instrument | ||
| 4.Fair value change of enterprise's credit risk | ||
| 5. Other | ||
| (II) Other comprehensive income items which will be reclassified subsequently to profit or loss | ||
| 1.Other comprehensive income under equity method that can transfer to gain/loss | ||
| 2.Change of fair value of other debt investment | ||
| 3.gain/loss of fair value changes for available-for-sale financial assets | ||
| 4.Amount of financial assets re-classify to other comprehensive income | ||
| 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset | ||
| 6.Credit impairment provision for other debt investment | ||
| 7.Cash flow hedging reserve | ||
| 8.Translation differences arising on translation of foreign currency financial statements | ||
| 9.Other | ||
| VI. Total comprehensive income | 645,186.84 | -1,844,226.31 |
| VII. Earnings per share: | ||
| (i) Basic earnings per share | 0.0023 | -0.0065 |
| (ii) Diluted earnings per share | 0.0023 | -0.0065 |
5. Consolidated Cash Flow Statement
In RMB
Item
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 283,565,570.88 | 195,284,689.59 |
| Net increase of customer deposit and interbank deposit | ||
| Net increase of loan from central bank | ||
| Net increase of capital borrowed from other financial institution | ||
| Cash received from original insurance contract fee | ||
| Net cash received from reinsurance business | ||
| Net increase of insured savings and investment | ||
| Cash received from interest, commission charge and commission | ||
| Net increase of capital borrowed | ||
| Net increase of returned business capital | ||
| Net cash received by agents in sale and purchase of securities | ||
| Write-back of tax received | ||
| Other cash received concerning operating activities | 3,403,272.55 | 3,010,278.37 |
| Subtotal of cash inflow arising from operating activities | 286,968,843.43 | 198,294,967.96 |
| Cash paid for purchasing commodities and receiving labor service | 182,811,441.04 | 158,655,192.45 |
| Net increase of customer loans and advances | ||
| Net increase of deposits in |
central bank and interbank
| central bank and interbank | ||
| Cash paid for original insurance contract compensation | ||
| Net increase of financial assets held for transaction purposes | ||
| Net increase of capital lent | ||
| Cash paid for interest, commission charge and commission | ||
| Cash paid for bonus of guarantee slip | ||
| Cash paid to/for staff and workers | 33,770,584.01 | 35,688,181.95 |
| Taxes paid | 4,582,072.62 | 12,954,614.98 |
| Other cash paid concerning operating activities | 20,610,525.20 | 17,668,304.21 |
| Subtotal of cash outflow arising from operating activities | 241,774,622.87 | 224,966,293.59 |
| Net cash flows arising from operating activities | 45,194,220.56 | -26,671,325.63 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | ||
| Cash received from investment income | 74,936.14 | 253,638.00 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 320,500.00 | 737,982.00 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | 49,000,000.00 | 80,000,000.00 |
| Subtotal of cash inflow from investing activities | 49,395,436.14 | 80,991,620.00 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 4,360,231.13 | 7,537,161.50 |
| Cash paid for investment | ||
| Net increase of mortgaged loans |
Net cash received fromsubsidiaries and other units obtained
| Net cash received from subsidiaries and other units obtained | ||
| Other cash paid concerning investing activities | 49,000,000.00 | 80,000,000.00 |
| Subtotal of cash outflow from investing activities | 53,360,231.13 | 87,537,161.50 |
| Net cash flows arising from investing activities | -3,964,794.99 | -6,545,541.50 |
| III. Cash flows arising from financing activities | ||
| Cash received from absorbing investment | ||
| Including: Cash received from absorbing minority shareholders’ investment by subsidiaries | ||
| Cash received from loans | 61,315,748.80 | 156,361,250.00 |
| Cash received from issuing bonds | ||
| Other cash received concerning financing activities | ||
| Subtotal of cash inflow from financing activities | 61,315,748.80 | 156,361,250.00 |
| Cash paid for settling debts | 88,051,864.63 | 172,529,301.86 |
| Cash paid for dividend and profit distributing or interest paying | 5,723,122.93 | 4,844,780.76 |
| Including: Dividend and profit of minority shareholder paid by subsidiaries | ||
| Other cash paid concerning financing activities | ||
| Subtotal of cash outflow from financing activities | 93,774,987.56 | 177,374,082.62 |
| Net cash flows arising from financing activities | -32,459,238.76 | -21,012,832.62 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 99,650.05 | -149,879.80 |
| V. Net increase of cash and cash equivalents | 8,869,836.86 | -54,379,579.55 |
Add: Balance of cash and cashequivalents at the period -begin
| Add: Balance of cash and cash equivalents at the period -begin | 27,961,209.60 | 81,474,974.30 |
| VI. Balance of cash and cash equivalents at the period -end | 36,831,046.46 | 27,095,394.75 |
6. Cash Flow Statement of Parent Company
In RMB
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 16,386,026.55 | 11,824,697.08 |
| Write-back of tax received | ||
| Other cash received concerning operating activities | 4,240,814.47 | 107,677,057.73 |
| Subtotal of cash inflow arising from operating activities | 20,626,841.02 | 119,501,754.81 |
| Cash paid for purchasing commodities and receiving labor service | ||
| Cash paid to/for staff and workers | 1,551,291.30 | 1,812,043.81 |
| Taxes paid | 791,510.74 | 3,627,519.72 |
| Other cash paid concerning operating activities | 25,327,205.64 | 116,155,663.65 |
| Subtotal of cash outflow arising from operating activities | 27,670,007.68 | 121,595,227.18 |
| Net cash flows arising from operating activities | -7,043,166.66 | -2,093,472.37 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | ||
| Cash received from investment income | ||
| Net cash received from disposal of fixed, intangible and other |
long-term assets
| long-term assets | ||
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | ||
| Subtotal of cash inflow from investing activities | ||
| Cash paid for purchasing fixed, intangible and other long-term assets | 1,696,400.00 | |
| Cash paid for investment | ||
| Net cash received from subsidiaries and other units obtained | ||
| Other cash paid concerning investing activities | ||
| Subtotal of cash outflow from investing activities | 1,696,400.00 | |
| Net cash flows arising from investing activities | -1,696,400.00 | |
| III. Cash flows arising from financing activities | ||
| Cash received from absorbing investment | ||
| Cash received from loans | 100,000,000.00 | |
| Cash received from issuing bonds | ||
| Other cash received concerning financing activities | ||
| Subtotal of cash inflow from financing activities | 100,000,000.00 | |
| Cash paid for settling debts | 116,054,041.68 | |
| Cash paid for dividend and profit distributing or interest paying | 4,398,333.30 | 3,884,001.07 |
| Other cash paid concerning financing activities | ||
| Subtotal of cash outflow from financing activities | 4,398,333.30 | 119,938,042.75 |
| Net cash flows arising from financing activities | -4,398,333.30 | -19,938,042.75 |
IV. Influence on cash and cashequivalents due to fluctuation inexchange rate
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 424.56 | |
| V. Net increase of cash and cash equivalents | -11,441,499.96 | -23,727,490.56 |
| Add: Balance of cash and cash equivalents at the period -begin | 12,024,179.58 | 25,181,764.87 |
| VI. Balance of cash and cash equivalents at the period -end | 582,679.62 | 1,454,274.31 |
7. Statement of Changes in Owners’ Equity (Consolidated)
Current Period
In RMB
| Item | Semi-annual of 2019 | ||||||||||||||
| Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance at the end of the last year | 283,161,227.00 | 146,587,271.50 | 77,391,593.25 | -183,172,091.01 | 323,968,000.74 | 323,968,000.74 | |||||||||
| Add: Changes of accounting policy | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
II. Balance atthe beginningof this year
| II. Balance at the beginning of this year | 283,161,227.00 | 146,587,271.50 | 77,391,593.25 | -183,172,091.01 | 323,968,000.74 | 323,968,000.74 | |||||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 2,580,411.13 | 2,580,411.13 | 2,580,411.13 | ||||||||||||
| (i) Total comprehensive income | 2,580,411.13 | 2,580,411.13 | 2,580,411.13 | ||||||||||||
| (ii) Owners’ devoted and decreased capital | |||||||||||||||
| 1.Common shares invested by shareholders | |||||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | |||||||||||||||
| (III) Profit distribution | |||||||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | |||||||||||||||
| 4. Other | |||||||||||||||
| (IV) Carrying |
forwardinternalowners’equity
| forward internal owners’ equity | |||||||||||||||
| 1. Capital reserves conversed to capital (share capital) | |||||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | |||||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Reasonable reserve | |||||||||||||||
| 1. Withdrawal in the report period | |||||||||||||||
| 2. Usage in the report period | |||||||||||||||
| (VI)Others | |||||||||||||||
| IV. Balance at the end of the report period | 283,161,227.00 | 146,587,271.50 | 77,391,593.25 | -180,591,679.88 | 326,548,411.87 | 326,548,411.87 |
Last Period
In RMB
Item
| Item | Semi-annual of 2018 | ||||||||||||||
| Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance at the end of the last year | 283,161,227.00 | 146,587,271.50 | 77,391,593.25 | -186,467,113.73 | 320,672,978.02 | 320,672,978.02 | |||||||||
| Add: Changes of accounting policy | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning of this year | 283,161,227.00 | 146,587,271.50 | 77,391,593.25 | -186,467,113.73 | 320,672,978.02 | 320,672,978.02 | |||||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 2,793,133.60 | 2,793,133.60 | 2,793,133.60 | ||||||||||||
| (i) Total comprehensi | 2,79 | 2,79 | 2,793 | ||||||||||||
ve income
| ve income | 3,133.60 | 3,133.60 | ,133.60 | ||||||||||||
| (ii) Owners’ devoted and decreased capital | |||||||||||||||
| 1.Common shares invested by shareholders | |||||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | |||||||||||||||
| (III) Profit distribution | |||||||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | |||||||||||||||
| 4. Other | |||||||||||||||
| (IV) Carrying forward internal owners’ equity | |||||||||||||||
| 1. Capital reserves conversed to capital (share capital) | |||||||||||||||
| 2. Surplus reserves |
conversed tocapital (sharecapital)
| conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | |||||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Reasonable reserve | |||||||||||||||
| 1. Withdrawal in the report period | |||||||||||||||
| 2. Usage in the report period | |||||||||||||||
| (VI)Others | |||||||||||||||
| IV. Balance at the end of the report period | 283,161,227.00 | 146,587,271.50 | 77,391,593.25 | -183,673,980.13 | 323,466,111.62 | 323,466,111.62 |
8. Statement of Changes in Owners’ Equity (Parent Company)
Current period
In RMB
| Item | Semi-annual of 2019 | |||||||||||
| Share capital | Other equity instrument | Capital public reserv | Less: Inventory shares | Other comprehensive | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred | Perpetual | Other | ||||||||||
stock
| stock | capital securities | e | income | |||||||||
| I. Balance at the end of the last year | 283,161,227.00 | 146,587,271.50 | 77,391,593.25 | -211,855,430.41 | 295,284,661.34 | |||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 283,161,227.00 | 146,587,271.50 | 77,391,593.25 | -211,855,430.41 | 295,284,661.34 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 645,186.84 | 645,186.84 | ||||||||||
| (i) Total comprehensive income | 645,186.84 | 645,186.84 | ||||||||||
| (ii) Owners’ devoted and decreased capital | ||||||||||||
| 1.Common shares invested by shareholders | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | ||||||||||||
| 4. Other |
(III) Profitdistribution
| (III) Profit distribution | ||||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution for owners (or shareholders) | ||||||||||||
| 3. Other | ||||||||||||
| (IV) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus reserve | ||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | ||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (V) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | ||||||||||||
| 2. Usage in the report period | ||||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 283,161,22 | 146,587,271. | 77,391,593.2 | -211,210, | 295,929,848.18 |
7.00
| 7.00 | 50 | 5 | 243.57 |
Last period
In RMB
| Item | Semi-annual of 2018 | |||||||||||
| Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 283,161,227.00 | 146,587,271.50 | 77,391,593.25 | -210,552,845.95 | 296,587,245.80 | |||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 283,161,227.00 | 146,587,271.50 | 77,391,593.25 | -210,552,845.95 | 296,587,245.80 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | -1,844,226.31 | -1,844,226.31 | ||||||||||
| (i) Total comprehensive income | -1,844,226.31 | -1,844,226.31 | ||||||||||
| (ii) Owners’ devoted and decreased capital | ||||||||||||
| 1.Common shares invested by | ||||||||||||
shareholders
| shareholders | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | ||||||||||||
| 4. Other | ||||||||||||
| (III) Profit distribution | ||||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution for owners (or shareholders) | ||||||||||||
| 3. Other | ||||||||||||
| (IV) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus reserve | ||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | ||||||||||||
| 5．Carry-over retained earnings from |
othercomprehensive income
| other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (V) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | ||||||||||||
| 2. Usage in the report period | ||||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 283,161,227.00 | 146,587,271.50 | 77,391,593.25 | -212,397,072.26 | 294,743,019.49 |
III. Company profile
(i) The registration place of the enterprise, the form of organization and the headquarters address
Shenzhen Zhongheng HUAFA Company Limited (hereinafter referred to as Company or the Company),established on 8 December 1981. Uniform social credit code 91440300618830372G.Registered place and head office of the Company: 411 Bldg., Huafa (N) Road, Futian District, ShenzhenLegal representative: Li ZhongqiuRegistered capital: RMB 283,161,227
(ii) The nature of the business and the main business activitiesThe Company belongs to the computer, telecommunication and manufacturing of other electronic equipment.Business scope: producing and sales of vary color TV set, liquid crystal display, LCD (operates in branch),radio-recorder, sound equipment, electronic watch, electronic game and computers, the printed wiring board,precision injection parts, light packaging material (operates in Wuhan) and hardware (including tool and mould)for various electronic products and supporting parts, plating and surface treatment and tin wire, development andoperation of real estate (Shen Fang Di Zi No.: 7226760) and property management. Funded affiliated companiesin Wuhan and Jilin. Setting up branches in capital of the province (Lhasa City excluded) in China andmunicipality directly under the central government.
(iii) Relevant party offering approval reporting of financial statements and date thereof
The financial statement has been deliberated and approved by BOD on 23 August 2019. According to Article ofAssociation, the statement shall be submitted for deliberation in shareholders general meeting.
Consolidate scope in the Period including: parent company – Shenzhen Zhongheng HUAFA Company Limited,subsidiary including Shenzhen HUAFA Property Leasing Management Co., Ltd. (no annual inspection in 2011,and business license revoke on 1 April 2014), Shenzhen Zhongheng HUAFA property Co., Ltd., Wuhan HengfaTechnology Co., Ltd., Shenzhen HUAFA Hengtian Co., Ltd. and Shenzhen HUAFA Hengtai Co., Ltd. more ofsubsidiaries found in “Note IX. Equity in other subjects”.
IV. Preparation basis of Financial Statements
1. Preparation basis
Base on the running continuously and actual transactions and events, in line with the Accounting Standards forBusiness Enterprise – Basic Standards and specific principle of accounting standards issued by the Ministry ofFinance, the Company prepared and formulate the financial statement lies on the followed important accountingpolicy and estimation.
2. Going concern
The Company estimated that the production and sales of the Company, in 12 months since end of the period, willin a virtuous cycle. We have good management and continuous operation ability, and there is no risk of continuingoperations.
V. Important accounting policy and estimationNotes on specific accounting policies and accounting estimation:
According to actual operation characteristic, the Group formulate specific accounting policy and accountingestimation, including trade cycle, reorganization and measurement on account bad debt provision of receivables,inventory measurement, classification and depreciation method of fixed assets, intangible assets amortization andreorganization and measurement of revenue etc.
1. Declaration of obedience to Accounting Standards for Business EnterpriseThe Financial Statements of the Company are up to requirements of Accounting Standards for Business Enterpriseand also a true and thorough reflection to the relevant information as the Company’s financial position dated 30
th
June 2019 and the operation results as well as cash flow for the first half year of 2019.
2. Accounting period
The Company’s accounting year is Gregorian calendar year, namely from 1
st January to 31
stDecember of everyyear.
3. Business cycle
The Company’s business cycle is one year (12 months) as a normal cycle, and the business cycle is thedetermining criterion for the liquidity of assets and liabilities of the Company.
4. Bookkeeping standard currency
The Renminbi (RMB) is taken as the book-keeping standard currency.
5. Accounting methods for consolidation of enterprises under the same control or otherwise
1. Consolidation of enterprises under the same control
Where the Company for long term equity investment arising from business combination under common controlsatisfies the combination consideration by payment of cash, transfer of non-cash assets or assumption of debt, thecarrying value of the net assets of the acquire in combined financial statement of the ultimate controller shared bythe Company as at the combination date shall be deemed as the initial investment cost of such long term equityinvestment. If the equity instrument issued by combining party are consider as the combination consideration,than the total value of the issuing shares are consider as the share capital. The difference between the initial cost oflong-term equity investment and book value of consideration (or total face value of the shares issued) paid, capitalsurplus adjusted; if the capital surplus not enough to written down, than retained earning adjusted.
2. Business combination not under common control
As for business combination not under common control, combination costs refer to the sum of the fair value of theassets paid, liabilities occurred or assumed as well as equity securities issued by the acquirer to obtain control overthe acquire as at the acquisition date. As for acquiree that obtained by consolidation not under the same control,the qualified confirmation of identified assets, liability and contingency liabilities should calculated by fair valueon day of purchased. If the consolidation cost larger than the fair value amount of identified net assets fromacquiree’s, the differences should be recognized as goodwill. If the consolidation cost less than the fair valueamount of identified net assets from acquiree’s, the differences should reckoned into current non-operatingincome.
6. Preparation methods for consolidated financial statements
1. Consolidation financial statement range
The Company includes all the subsidiaries (including the separate entities controlled by the Company) intoconsolidated financial statement, including companies controlled by the Company, non-integral part of theinvestees and structural main body.
2. Centralize accounting policies, balance sheet dates and accounting periods of parent and subsidiaries.As for the inconsistency between the subsidiaries and the Company in the accounting policies and periods, thenecessary adjustment is made on the subsidiaries’ financial statements in the preparation of the consolidatedfinancial statements according to the Company’s accounting policies and periods.
3. Offset of consolidated financial statement
The consolidated financial statements shall be prepared on the basis of the balance sheet of the parent companyand subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries andwithin subsidiaries. The owner’s equity of the subsidiaries not attributable to the parent company shall bepresented as minority equity under the owner’s equity item in the consolidated balance sheet. The long termequity investment of the parent company held by the subsidiaries, deemed as treasury stock of the corporate groupas well as the reduction of owners’ equity, shall be presented as “Less: treasury stock” under the owners’ equityitem in the consolidated balance sheet.
4. Accounting for acquisition of subsidiary through combination
For subsidiaries acquired under enterprise merger involving enterprises under common control,the assets, liabilities, operating results and cash flows of the subsidiaries are included in the consolidated financialstatements from the beginning of the financial year in which the combination took place. Whenpreparing the consolidated financial statements, for the subsidiaries acquired from businesscombination not involving entities under common control, the identifiable net assets of the subsidiaries areadjusted on the basis of their fair values on the date of acquisition.
7. Classification of joint arrangements and accounting treatment of joint operation
1. Classification of joint arrangements
Joint arrangements are divided into joint operations and joint ventures. Joint arrangements achieved not throughseparate entities are classified as joint operations. Separate entities refer to the entities with separate identifiablefinancial architecture including separate legal entities and legally recognized entities without the qualification oflegal entity. Joint arrangements achieved through separate entities are generally classified as joint ventures. Incase of changes in rights entitled to and obligations undertaken by the parties of joint venture under a jointarrangement due to the changes in relevant facts and circumstances, the parties of joint venture will re-assess the
classification of joint arrangements.
2. Accounting treatment for joint operations
The parties of joint operation should recognize the following items in relation to their share of interest in jointoperation, and proceed with accounting in accordance with the relevant provisions under the AccountingStandards for Business Enterprises: to recognize their separate assets or liabilities held, and recognize the assets orliabilities jointly held according to their respective shares; to recognize the income from the disposal of theiroutput share under joint operation; to recognize the income from the disposal of output under joint operationaccording to their respective shares; to recognize the expenses incurred separately, and recognize the expensesincurred under joint operation according to their respective shares.For the parties of a joint operation not under common control, if they are entitled to relevant assets and undertakerelevant liabilities of the joint operation, accounting will be carried out with reference to the provisions of theparties of joint operation; otherwise, it should be subject to relevant Accounting Standards for BusinessEnterprises.
3. Accounting treatment for joint ventures
The parties of a joint venture should perform accounting for investments by the joint venture in accordance withthe Accounting Standards for Business Enterprises No. 2 – Long-term Equity Investments. The parties not undercommon control should carry out accounting depending on their influence on the joint venture.
8. Determination criteria of cash and cash equivalent
The cash recognized in the preparation of the cash flow statements, is the Company’s storage cash and depositsavailable for payment anytime. The cash equivalents recognized in the preparation of the cash flow statementsrefers to the investment held by the Company with characteristic of short-term, strong mobility, easy transfer toknown sum cash and has slim risk from value changes.
9. Foreign currency exchange and the conversion of foreign currency statements
1. Foreign currency exchange
The approximate exchange rate of the spot exchange rate on transaction occurred should be used for standardmoney conversion while foreign currency exchange occurred On the balance sheet day, the monetary items areconverted on the current rate on the balance sheet day, concerning the exchange differences between the spotexchange rate on that date and initial confirmation or the sport exchange rate on previously balance sheet date,should reckoned in to current gains/losses except the capitalizing on exchange differences for foreign specificloans, which was reckoned into cost for capitalizing. The non-monetary items measured on the historic cost arestill measured by the original bookkeeping rate with the sum of the bookkeeping standard currency unchanged.Items of non-monetary foreign currency which was calculated by fair value, should converted by spot exchangerate on the confirmation day of fair value, difference between the converted amount of bookkeeping currency andoriginal amount of bookkeeping currency, was treated as changes of fair value (including exchange rate changed)
reckoned into current gains/losses or recognized as other consolidated income.
2. Conversion of foreign currency financial statements
Upon the conversion of the foreign currency financial statements of the controlling subsidiaries, joint enterprises,and the affiliated enterprises on the bookkeeping standard currency different from the Company’s, the accountingcheck and preparation of the consolidated financial statements are made. Assets and liabilities items in the balancesheet are converted on the current rate on the balance sheet day; owners’ equity items besides the “retained profit”item, the other items are converted on the actual rate. Items of revenue and expenses in profit statement, shouldconverted by the approximate exchange rate of spot exchange rate on occurring date. The conversion difference ofthe foreign currency financial statements is listed specifically in the owners’ equity in the balance sheet. If theforeign cash flow determined by rational system method, the approximate exchange rate of spot exchange rate onoccurring date should prevail. The cash influenced by the rate fluctuation is listed specifically in the cash flowstatement. As for the foreign operation, the conversion difference of the foreign currency statement related to theforeign operation is transferred in proportion into the disposal of the current loss/gain.
10. Financial instrument
Financial asset or financial liability is recognized when the Company becomes a party to financial instrumentcontract.
(1) Classification, recognition and measurement of financial assets
According to the business model of managing financial assets and the contractual cash flow characteristics offinancial assets, the Company classifies the financial assets into the financial assets measured at amortized cost,the financial assets measured at fair value and whose changes are included in other comprehensive income, andthe financial assets measured at fair value and whose changes are included in current profit or loss.Financial assets are measured at fair value on initial recognition. For financial assets measured at fair value andwhose changes are included in current profit or loss, the related transaction expenses are directly included incurrent profit or loss. For other types of financial assets, the related transaction costs are included in the initialrecognition amount. For the accounts receivable or notes receivable arising from the sale of products or theprovision of labor services that do not contain or consider the significant financing components, the Companyuses the consideration amount that is expected to be received as the initial recognition amount.
①Financial assets measured at amortized cost
The Company's business model for managing financial assets measured at amortized cost is to collect contractualcash flows, and the contractual cash flow characteristics of such financial assets are consistent with the basicborrowing and lending arrangements, i.e. the cash flows generated on a specific date are only the payment for theprincipal and the interest based on the outstanding principal amount. The Company adopts effective interestmethod for this type of financial assets which are subsequently measured at amortized cost, the gains or lossesarising from amortization or impairment are included in current profit or loss.
② Financial assets measured at fair value and whose changes are included in other comprehensive incomeThe Company's business model for managing such financial assets is to target at both the collection of contractual
cash flows and the sale, and the contractual cash flow characteristics of such financial assets are consistent withthe basic borrowing and lending arrangements. The Company adopts the fair value measurement for suchfinancial assets and whose changes are included in the current profit and loss, but the impairment losses or gains,exchange gains and losses and interest income calculated by using the effective interest method are included incurrent profit or loss.In addition, the Company designates part of non-trading equity instrument investments as financial assetsmeasured at fair value and whose changes are included in other comprehensive income. The Company's relateddividend income of such financial assets is included in the current profit and loss, and the changes in fair value areincluded in other comprehensive income. When the financial assets are derecognized, the accumulated gains orlosses previously included in other comprehensive income are transferred from other comprehensive income toretained earnings, which are not included in current profit or loss.
③Financial assets carried at fair value through profit or loss for the current periodThe Company classifies the financial assets except the above financial assets measured at amortized cost and theabove financial assets measured at fair value and whose changes are included in other comprehensive income intothe financial assets measured at fair value and whose changes are included in current profit or loss. In addition, atthe time of initial recognition, the Company designates part of financial assets as financial assets measured at fairvalue and whose changes are included in current profit or loss in order to eliminate or significantly reduceaccounting mismatch. For such financial assets, the Company adopts fair value for subsequent measurement, andchanges in fair value are included in current profit and loss.
(2) Classification, recognition and measurement of financial liabilities
At initial recognition, financial liabilities are classified into financial liabilities measured by fair value withchanges counted into current gains/losses and other financial liabilities. For financial liabilities classified as fairvalue through profit or loss, relevant transaction costs are directly recognized in profit or loss for the period. Forfinancial liabilities classified as other categories, relevant transaction costs are included in the amount initiallyrecognized.
① Financial liabilities at fair value through profit or loss for the period
Financial liabilities measured at fair value and whose changes are included in current profits or losses include thetrading financial liabilities (including derivatives belong to financial liabilities) and the financial liabilities that aredesignated as fair value in the initial recognition and whose changes are included in current profit or loss.Trading financial liabilities (including derivatives belong to financial liabilities) are subsequently measured at fairvalue, in addition to those related to hedge accounting, the changes in fair value are included in current profit orloss.A financial liability designated to be measured at fair value and whose changes are included in current profit orloss, and of which the changes in fair value arising from changes in the Company's own credit risk are included inother comprehensive income, when the liability is derecognized, its accumulated amount of changes in fair valueincluded in other comprehensive income and the changes arising from its own credit risk are transferred toretained earnings. The remaining changes in fair value are included in the current profit and loss. If the effects of
changes in the own credit risk of these financial liabilities are handled as described above, but the handling causesor expands the accounting mismatch in the profit or loss, the Company will include all gains or losses of thefinancial liabilities (including the amount affected by changes in the credit risk of the enterprise itself) in thecurrent profit and loss.
② Other financial liabilities
Other financial liabilities, except for the financial liabilities whose transfer of financial assets doesn’t fit thederecognition condition or continue to be involved in the transferred financial assets, and the financial guaranteecontract, are classified as financial liabilities measured at amortized cost, which takes follow-up measurement byamortized cost, the gains or losses arising from derecognition or amortization are included in current profit or loss.
(3) Recognition basis and measurement method for transfer of financial assets
As for the financial assets up to the following conditions, the recognition termination is available: ①Terminationof the contract right to take the cash flow of the financial assets; ② transferred to the transferring-in part nearly allrisk and compensation; ③ all risk and compensation neither transferred nor retained, and with the give-up of thecontrol over the financial assets.As for financial assets of almost all risk and compensation neither transferred nor retained, and without thegive-up of the control over the financial assets, it was recognized according to the extension of the continual entryinto the transferred financial assets and relevant liabilities are correspondingly recognized. The continual entryinto the transferred financial assets is risk level which the enterprise faces up to due to the assets changes.As for the whole transfer of the financial assets up to the recognition termination conditions, the book value of thetransferred assets, together with the difference between the consideration value and the accumulative total of thefair value change of the other consolidated income, is reckoned into the current gain/loss.As for the partial transfer of the financial assets up to the recognition termination conditions, the book value of thetransferred assets is diluted on the relative fair value between the terminated part and the un-terminated part; andreckoned into the current loss/gain is the difference between the sum of the consideration value and theaccumulative sum of the valuation change ought to be diluted into the recognition termination part but into theother consolidated income, and the above diluted book value, is reckoned into the current loss/gain.For financial assets that are transferred with recourse or endorsement, the Group needs to determine whether therisk and rewards of ownership of the financial asset have been substantially transferred. If the risk and rewards ofownership of the financial asset have been substantially transferred, the financial assets shall be derecognized. Ifthe risk and rewards of ownership of the financial asset have been retained, the financial assets shall not bederecognized. If the Group neither transfers nor retains substantially all the risks and rewards of ownership of thefinancial asset, the Group shall assess whether the control over the financial asset is retained, and the financialassets shall be accounted for according to the above paragraphs.
(4) Termination recognition of financial liabilities
Only is released the whole (or part) of the current duties, the termination of the liabilities (or part of it) is available.The Group (the debtor) signed the agreement with the lender: the original liabilities are replaced by the bearing ofthe new liabilities; and the contract terms are fundamentally different of the new liabilities and the original ones;
the termination of the recognition of the original ones is available; and the recognition of new ones is available. Ifthe Company makes substantial changes to the contractual terms of the original financial liabilities (or a partthereof), derecognize the original financial liabilities, and recognize a new financial liability in accordance withthe revised terms.If the financial liability (or a part thereof) is derecognized, the Company includes the difference between the bookvalue and the consideration paid (including the transferred non-cash assets or liabilities assumed) in current profitor loss.
(5) Balance-out between the financial assets and liabilities
As the Group has the legal right to balance out the financial liabilities by the net or liquidation of the financialassets, the balance-out sum between the financial assets and liabilities is listed in the balance sheet. In addition,the financial assets and liabilities are listed in the balance sheet without being balanced out.
(6) Method for determining the fair value of financial assets and financial liabilitiesFair value refers to the price that a market participant can get by selling an asset or has to pay for transferring aliability in an orderly transaction that occurs on the measurement date. For a financial instrument having an activemarket, the Company uses the quoted prices in the active market to determine its fair value. Quotations in anactive market refer to prices that are readily available from exchanges, brokers, industry associations, pricingservices, etc., and represent the prices of market transactions that actually occur in an arm's length transaction. Ifthere is no active market for a financial instrument, the Company uses valuation techniques to determine its fairvalue. Valuation techniques include reference to prices used in recent market transactions by parties familiar withthe situation and through voluntary trade, and reference to current fair values of other financial instruments thatare substantially identical, discounted cash flow methods, and option pricing models. At the time of valuation, thecompany adopts valuation techniques that are applicable in the current circumstances and that are sufficientlysupported by data and other information, selects the input value with characteristics consistent with thecharacteristics of assets or liabilities to be considered in the transactions of the relevant assets or liabilities of themarket participants, and uses the relevant observable input values as much as possible. Use unallowable inputvalues if the relevant observable input values are not available or are not practicable.
(7) Impairment of financial assets
The financial assets that the Company needs to recognize impairment loss are financial assets measured atamortized cost, debt instruments investment that are measured at fair value and whose changes are included inother comprehensive income, and lease receivables, mainly including bills receivable, account receivables, otherreceivables, debt investment, other debt investments, long-term receivables, etc. In addition, for contract assetsand some financial guarantee contracts, the impairment provision is also made and credit impairment losses arerecognized in accordance with the accounting policies described in this section.
①Confirmation method of impairment provision
On the basis of expected credit losses, the Company makes provision for impairment and confirms creditimpairment losses for each of the above items in accordance with its applicable expected credit loss measurementmethod (general method or simplified method).
Credit loss refers to the difference between all contractual cash flows that the Company discounts at the originalactual interest rate and are receivable in accordance with contract and all cash flows expected to be received, thatis, the present value of all cash shortages. Among them, for the purchase or source of financial assets that havesuffered credit impairment, the Company discounts the financial assets at the actual interest rate adjusted bycredit.
The general method for measuring the estimated credit loss is that the Company assesses whether the credit risk ofthe financial assets (including other applicable items such as contract assets, the same below) has beensignificantly increased since the initial recognition on each balance sheet date, if the credit risk has increasedsignificantly after the initial recognition, the Company shall measure the loss preparation according to the amountof expected credit loss in the whole duration; if the credit risk has not increased significantly since the initialrecognition, the Company shall measure the loss preparation according to the amount equivalent to the expectedcredit loss in the next 12 months. The Company considers all reasonable and evidenced information, includingforward-looking information, when evaluating expected credit losses.For the financial instrument with lower credit risk on the balance sheet date, the Company assumes that its creditrisk has not increased significantly since the initial recognition, and measures the loss provisions according to theexpected credit losses in the next 12 months.
② Judging criteria for whether credit risk has increased significantly since initial recognitionIf the probability of default of a financial asset within the estimated duration recognized on the balance sheet issignificantly higher than the probability of default within the estimated duration decided at the initial recognition,it indicates that the credit risk of the financial asset is significantly increased. Except for special circumstances,the Company uses the change in default risk occurring within the next 12 months as a reasonable estimate of thechange in default risk throughout the duration to determine whether the credit risk has increased significantlysince the initial recognition.
③A combined approach to assessing expected credit risk on a portfolio basis
The Company evaluates credit risk individually for financial assets with significantly different credit risks. Suchas receivables from related parties; receivables that are in dispute with the other party or involve litigation orarbitration; receivables have clear indications that the debtor is likely to be unable to fulfill the repaymentobligations.In addition to financial assets that assess credit risk individually, the Company classifies financial assets intodifferent groups based on common risk characteristics and evaluates credit risk on a portfolio basis.
④Accounting treatment of financial assets impairment
At the end of the period, the Company calculates the estimated credit losses of various financial assets. If theestimated credit loss is greater than the carrying amount of its current impairment provision, the difference is
recognized as the impairment loss; if it is less than the carrying amount of the current impairment provision, thedifference is recognized as an impairment gain.
11.Note receivable
Found more in 10.(7)-Impairment of financial assets
12. Account receivable, account receivable
For receivables that do not contain significant financing components, the Company measures the loss provisionbased on the amount of expected credit losses equivalent to the entire duration of the period.For receivables that contain significant financing components, the Company measures the loss provision alwaysbased on the amount of expected credit losses equivalent to the entire duration of the period.
In addition to accounts receivable whose credit risk is assessed individually, they are classified into differentcombinations based on their credit risk characteristics:
Item
| Item | Basis |
| Account age | Take the account age of receivable as the credit risk characteristics |
| Related party | The related parties in consolidate scope |
(8) Determination and accounting treatment on the expected credit losses of account receivable found more in10(7)Impairment of financial assets above mentioned
13. Receivable financing
Including the note receivable and account receivable that measured on fair value and with its variation reckonedinto other comprehensive income on balance sheet date.
14. Other account receivable
Determination and accounting treatment on the expected credit losses of other account receivable
The Company measures the impairment loss based on the amount of expected credit losses in the next 12 monthsor the entire duration based on whether the credit risk of other receivables has increased significantly since theinitial recognition.
15. Inventory
Whether the company needs to comply with the disclosure requirements of the particular industryNo
1. Categories of inventory
The inventory is goods or manufactured products held for sale, products in process, and materials and mattersutilized in the production or supply of labor. Mainly including raw material, revolving materials, outsideprocessing materials, wrappage, low-value consumption goods, goods in process, semi-finished goods, stocks andso on.
2. Accounting method for inventory delivery
When inventories are issued, the actual cost is determined by the first in first out method.
3. Accrual method inventory falling price reserves
On the balance sheet day, the inventory is measured on the lower one between the cost and the net realizable value,and the provision for the falling price reserves is accrued on each inventory item; however, as for the inventory oflarge quantity and low price, the provision is accrued on the inventory category.
4. Inventory system
Inventory system of the Company is perpetual inventory system
5. Amortization method for the low-value consumables and wrap page
Low-value consumables and packages are amortized by one-point method
16. Long-term equity investment
1. Recognition of initial investment cost
For a long-term equity investment obtained by a business combination, if it is a business combination under thesame control, take the share of the combine party obtained in the book value of the net assets in the consolidatedfinancial statements of the ultimate controlling party on the combination date as the initial investment cost; in thecase of the consolidation of enterprises not under the same control, recognized as the initial cost is the recognizedconsolidation cost on the purchase day. As for the long term equity investment obtained by cash payment, theinitial investment cost is the actual purchase payment. As for the long term equity investment obtained by theequity securities offering, the initial investment cost is the fair value of the equity securities. As for the long-termequity investment obtained by debt reorganization, initial investment cost of such investment should determine by
relevant regulation of the “Accounting Standards for Business Enterprise No.12- Debt Reorganization”; as for thelong term equity investment obtained by the exchange of the non-monetary assets, the initial investment cost isrecognized on the relevant rules in the “Accounting Standards for Business Enterprise No. 7- Exchange ofNon-Monetary Assets”
2. Subsequent measurement and profit or loss recognition
Where the company has a control over the investee, long-term equity investments are measured using cost method.Long-term equity investments in associates and joint ventures are measured using equity method. Where part ofthe equity investments of an investor in its associates are held indirectly through venture investment institutions,common fund, trust companies or other similar entities including investment linked insurance funds, such part ofequity investments indirectly held by the investor shall be measured at fair value through profit or loss accordingto according to relevant requirements of Accounting Standards for Business Enterprises No.22—Recognizationand measurement of Financial Instruments regardless whether the above entities have significant influence onsuch part of equity investments, while the remaining part shall be measured using equity method.
3. Basis of conclusion for common control and significant influence over the investeeJoint control over an investee refers to where the activities which have a significant influence on return on certainarrangement could be decided only by mutual consent of the investing parties sharing the control, which includesthe sales and purchase of goods or services, management of financial assets, acquisition and disposal of assets,research and development activities and financing activities, etc.; Significant influence on the investee refers tothat: significant influence over the investee exists when holding more than 20% but less than 50% of the shareswith voting rights or even if the holding is below 20%, there is still significant influence if any of the followingconditions is met: there is representative in the board of directors or similar governing body of the investee;participation in the investee’s policy setting process; assign key management to the investee; the investee relies onthe technology or technical information of the investing company; or major transactions with the investee.
17. Investment real estate
Measurement for investment real estateCost methodDepreciation or amortization method
The types of investment real estate of the Company include the leased land use rights, leased buildings, and landuse rights held and prepared for transfer after appreciation. Investment real estate is initially measured at cost andsubsequently measured by using the cost model.
The leased buildings in the Company’s investment property adopts straight-line depreciation to calculate anddistill depreciation, specific accounting policy are same as part of the fixed assets. The leased land use rights in
the investment property and the land use rights to be transferred after appreciation adopt straight-line amortization,specific accounting policy are same as part of the intangible assets.
18. Fixed assets
(1) Recognition
Fixed assets refers to the tangible assets holding for purpose of producing goods, providing labor services, leasingor operation management, which has one accounting fiscal year of using life. Meanwhile as up to the followingconditions, they are recognized: the economic interest related to the fixed assets probably flow into the Company;the cost of the fixed assets can be measured reliably.
(2) Depreciation method
Category
| Category | Depreciation method | Depreciation life (year) | Salvage rate | Annual depreciation rate |
| House building | Straight-line depreciation | 20-50 | 10.00 | 1.80-4.50 |
| Machinery equipment | Straight-line depreciation | 10 | 10.00 | 9.00 |
| Mold equipment | Straight-line depreciation | 3 | 10.00 | 30.00 |
| Transportation equipment | Straight-line depreciation | 5 | 10.00 | 18.00 |
| Instrument equipment | Straight-line depreciation | 5 | 10.00 | 18.00 |
| Tool equipment | Straight-line depreciation | 5 | 10.00 | 18.00 |
| Office equipment | Straight-line depreciation | 5 | 10.00 | 18.00 |
The fixed assets of the Company mainly include buildings, machinery equipment, electronic equipment, transportation equipment,etc.; the method of depreciation is based on the straight-line method. Determine the useful life and estimated net residual value offixed assets according to the nature and use of various types of fixed assets. At the end of the year, review the useful life, estimatednet residual value, and depreciation method of fixed assets, if there is a difference from the original estimate, make correspondingadjustments. Except for the fixed assets that have been fully depreciated and continue to be used and the land that is separatelyaccounted for, the Company calculates and depreciates all fixed assets.
(3) Recognition basis, valuation and depreciation method for fixed assets under financing leaseThe fixed assets under financing lease are the lease that has substantially transferred all the risks and rewardsassociated with asset ownership. The initial valuation of the fixed assets under financing lease is to take the lowerone between the fair value of the leased assets and the present value of the minimum lease payments on the startdate of the lease period as the entry value; the subsequent valuation of the fixed assets under financing leaseadopts the depreciation policy consistent with the own fixed assets to make depreciation and impairmentprovision.
19. Construction in process
Construction in process of the Company divided as self-run construction and out-bag construction. TheConstruction in process of the Company carried forward as fixed assets while the construction is ready for theintended use. Criteria of the expected condition for use should apply one of the follow conditions: The substanceconstruction (installation included) of the fixed assets has completed all or basically; As the projects have been intest production or operation, and the results show that the assets can operate properly and produce the qualifiedproducts stably, or the test operation result shows the assets can operate or open properly. The expenditure of thefixed assets on the construction is a little or little. The fixed assets of the project constructed have been up to therequirements of the design or contract, or basically up to.
20. Borrowing expenses
1. Recognition principle on capitalization of borrowing expenses
As for the Company’s actual borrowing expenses directly attributable to the assets construction or production, it iscapitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on theactual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capitalassets, investment real estate, and inventory reaching the expectant availability or sale ability.
2. Calculation of the capitalization
Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The periodof capitalization suspended is not included. The capitalization of borrowing expenses should be suspended whilethe abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction orproduction.As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actualinterest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or thereturn of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum isrecognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, andtimes the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount orpremium to be diluted in every accounting period is recognized in the actual rate method.The effective interest method is the method for the measurement of the diluted discount or premium or interest
expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the futurecash flow in the expectant duration period as the current book value of the borrowing.
21. Intangible assets
(1) Accounting method, service life and impairment test
1. Accounting method of intangible assets
The Company’s intangible assets are measured initially on cost. The intangible assets purchased in are taken as theactual cost on the actual payment and relevant expenditure. As for the intangible assets invested in by theinvestors, the actual cost is recognized on the value stipulated in the contract or agreement; however, if what isstipulated in the contract or agreement is not fair value, the actual cost is recognized on fair value. As for theself-developed intangible assets, their cost is the actual total expenditure before reaching the expectant purpose.
The follow-up measurements of the Company’s intangible assets respectively are: the line amortization method istaken on the intangible assets of finite service life, and at the yea-end, the check is taken on the service life anddilution of the intangible assets, and the corresponding adjustment is made if there is inconsistency with theprevious expected ones. As for the intangible assets of uncertain service life, it is not diluted, however, the servicelife is checked at year-end; If there is solid evidence to its finite service life, its service life is estimated anddiluted in straight line method.
2. Judgment basis for uncertain service life
The Company will not be able to foresee the time limit within which the asset brings economic benefits to thecompany, or the intangible assets with uncertain useful life identified as intangible assets with uncertain useful life.The basis for judging the uncertainty of useful life is from the contractual rights or other legal rights, but thecontract stipulates or the law rules there is no definite useful life; combining the same industry case and or therelevant expert argumentation, it is still incapable of judging the time limit within which the intangible assetsbring economic benefits to the company.At the end of each year, review the useful life of intangible assets with indefinite useful life by mainly adoptingthe bottom-up method, the relevant departments of intangible assets take the basic review and evaluate whetherthere is any change in the judgment basis for indefinite useful life.
(2) Accounting policies for internal research and development expenditure
Expenditures for internal research and development projects at the research phase shall be included in the currentprofit or loss when incurred; expenditures incurred at the development phase and recognized as intangible assetsshall be transferred to intangible assets accounting.
22. Long-term assets impairment
Long-term equity investments, investment properties measured at cost and long-term assets such as fixed assets,construction in progress, productive biological assets at cost method, oil and gas assets, intangible assets andgoodwill are tested for impairment if there is any indication that an asset may be impaired at the balance date. Ifthe result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount,a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carryingamount exceeds its recoverable amount.The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the futurecash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized onthe individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, therecoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallestgroup of assets that is able to generate independent cash inflows.Goodwill arising from a business combination is tested for impairment at least at each year end, irrespective ofwhether there is any indication that the asset may be impaired. For the purpose of impairment testing, the carryingamount of goodwill acquired in a business combination is allocated from the acquisition date on a reasonablebasis to each of the related asset groups; if it is impossible to allocate to the related asset groups, it is allocated toeach of the related set of asset groups. If the carrying amount of the asset group or set of asset groups is higherthan its recoverable amount, the amount of the impairment loss first reduced by the carrying amount of thegoodwill allocated to the asset group or set of asset groups, and then the carrying amount of other assets (otherthan the goodwill) within the asset group or set of asset groups, pro rata based on the carrying amount of eachasset.Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent period.
23. Long-term deferred expenditure
The Company’s long-term deferred expenditure are expenses paid out and with one year above (one-yearexcluded) benefit period. The long-term deferred expenses are diluted by periods according to the benefit period.As the long-term deferred expenses cannot enable the accounting period’s beneficiary, all dilution values of theproject undiluted yet, are transferred into the current loss/gain.
24. Employees remuneration
(1) Accounting for short-term benefits
In the period of employee services, short-term benefits are actually recognized as liabilities and charged to profit
or loss, or if otherwise required or allowed by other accounting standards, to the related costs of assets for thecurrent period. At the time of actual occurrence, The Company’s employee benefits are recorded into the profitsand losses of the current year or assets associated costs according to the actual amount. The non-monetaryemployee benefits are measured at fair value. Regarding to the medical and health insurance, industrial injuryinsurance, maternity insurance and other social insurances, housing fund and labor union expenditure andpersonnel education that the Company paid for employees, the Company should recognize correspondingemployees benefits payable according to the appropriation basis and proportion as stipulated by relevantrequirements and recognize the corresponding liabilities and include these expenses in the profits or losses of thecurrent period or recognized as respective assets costs.
(2) Accounting for post-employment benefits
During the accounting period in which an employee provides service, the amount payable calculated underdefined contribution scheme shall be recognized as a liability and recorded in profit and loss of the current periodor in assets. In respect of the defined benefit scheme, the Company shall use the projected unit credit method andattribute the welfare obligations calculated using the formula stipulated by the defined benefit scheme to theservice period of the employee, and record the obligation in the current profit and loss or related assets cost.
(3) Accounting for termination benefits
The Company recognizes a liability and expenses in the current profit or loss for termination benefits at the earlierof the following dates: when the Company can no longer withdraw the offer of those benefits; and when theCompany recognizes costs for restructuring involving the payment of termination costs.
(4) Accounting for other long-term employee benefits
The Company provides other long-term employee benefits to its employees. For those falling within the scope ofdefined contribution scheme, the Company shall account for them according to relevant requirements of thedefined contribution scheme. In addition, the Company recognizes and measures the net liabilities or net assets ofthe other long-term employee benefits according to relevant requirements of the defined contribution scheme.
25. Accrual liability
The obligation related to contingencies is the current obligation assumed by the company, and performing thisobligation may result in an outflow of economic benefits, and this obligation can be determined as the estimatedliabilities when the amount can be reliably measured. The Company makes initial measurement in accordancewith the best estimate for performing the related current obligation, if the expenditure as needed has a continuous
range, and the likelihood of occurrence of various results in this range is the same, the best estimate is determinedby the median value within the range; if a number of items are involved, the best estimate is determined by thecalculation of various possible outcomes and related probabilities.At the balance sheet date, the book value of estimated liabilities should be rechecked, if there is conclusiveevidence indicates that this book value cannot truly reflect the current best estimate, and then the book valueshould be adjusted in accordance with the current best estimate.
26. Revenue
Whether the company needs to comply with the disclosure requirements of the particular industryNoWhether implemented the new revenue standards
□Yes √No
1. Sales of goods
The Company shall ascertain the revenue incurred by selling goods in accordance with the received or receivableprice stipulated in the contract or agreement signed between the enterprise and the buyer unless the followingconditions are met simultaneously: ① the significant risks and rewards of ownership of the goods have beentransferred to the buyer by the enterprise; ② the enterprise retains neither continuous management right thatusually keeps relation with the ownership nor effective control over the sold goods; ③the relevant amount ofrevenue can be measured in a reliable way; ④ relevant economic benefits may flow into the enterprise and ⑤ therelevant costs incurred or to be incurred can be measured in a reliable way.Money collection for the contract or agreement use the mode of deferred, actually has the financing features. Therevenue of commodity sales is recognized by the fair value of the money receivable on contract or agreement.
2. Labor service providing
If an enterprise can, on the date of the balance sheet, reliably estimate the outcome of a transaction concerning thelabor services it provides, it shall recognize the revenue from providing services employing thepercentage-of-completion method. The enterprise can ascertain the schedule of completion(percentage-of-completion) under the transaction concerning the providing of labor services based on calculationof completed works.If an enterprise cannot, on the date of the balance sheet, measure the result of a transaction concerning theproviding of labor service in a reliable way, it shall be conducted in accordance with the following circumstances,respectively: ①if the cost of labor services incurred is expected to be compensated, the revenue from theproviding of labor services shall be recognized in accordance with the amount of the cost of labor servicesincurred, and the cost of labor services shall be carried forward at the same amount; ②if the cost of labor servicesincurred is not expected to compensate, the cost incurred should be included in the current profits and losses, andno revenue from the providing of labor services may be recognized.
3. Transition of asset use right
When economic benefits relating to transition of asset use right is likely to inflow into the Company and therelevant income can be measured reliably, the Company shall recognize such income from transition of asset useright.The Company’s specific income recognition method: it is recognized as income when the product has been sentout and signed for receipt by the other party for domestic sales; it is recognized as income when the product hasbeen shipped and its customs procedures have been completed with the relevant declaration documents for exportsales. Income from house leases and property management is recognized according to the lease contractagreement, receipt of relevant payments, or relevant collection proof.
27. Government subsidy
1.Category of government subsidy and accounting treatment
Governments subsidy of the Company refer to the monetary and non-monetary assets obtained from governmentfor free (excluding the capital invested by government as an owner). If the government grants are monetary assets,it shall be measured according to the amount received or receivable. If the government grants are non-monetaryassets, it shall be measured at fair value; if the fair value cannot be obtained reliably, it shall be measured at thenominal amount.
Government grants related to daily activities are included in other income in accordance with the economicbusiness. Government grants not related to daily activities are included in the non-operating income andexpenditure.Government grants that the government documents clearly stipulate to be used for the purchase and establishmentor forming long-term assets in other way are recognized as government grants related to assets. For thegovernment grants that the government documents do not clearly specify the subsidy target and can formlong-term assets, the part corresponding to the asset value is recognized as the government grants related to theassets, and the rest is recognized as the government grants related to the income. For the government grants whichare difficult to be distinguished, recognize the whole as the government grants related to the income. Governmentgrants related to assets are recognized as deferred income. The amount recognized as deferred income is includedin the current profit and loss in a reasonable and systematic manner within the useful life of the relevant asset.Government grants other than government grants related to assets are recognized as government grants related toincome. If the government grants related to the income are used to compensate the related expenses or losses ofthe enterprise in the future period, recognize them as deferred income and include them in the current profit andloss during the period of recognizing the related expenses. The government grants used to compensate the relevantexpenses or losses incurred by the enterprise are directly included in the current profit and loss.The Company obtained the policy preferential loan interest subsidy, and the finance allocated the interest subsidyfunds to the loan bank, and the loan bank provides loans to the Company at a preferential interest rate, take theactual amount of the loan received as the entry value of the loan, and calculate the relevant borrowing costsaccording to the loan principal the policy preferential interest rate. If the finance directly appropriates the interest
subsidy funds to the Company, the Company will offset the relevant borrowing costs with the correspondinginterest subsidy.
2. Time points to recognize the government grants
Government grants are recognized when they meet the conditions attached to government grants and can bereceived. Government grants measured in accordance with the amount receivable are recognized when there isconclusive evidence at the end of the period that it meets the relevant conditions stipulated in the financial supportpolicy and is expected to receive financial support funds. Other government grants other than government grantsmeasured in accordance with the receivable amount are recognized when the grant is actually received.
28. Deferred income tax asset/Deferred income tax liability
1. Where there is difference between the carrying amount of the assets or liabilities and its tax base, (as for an itemthat has not been recognized as an asset or liability, if its tax base can be determined in light of the tax law, the taxbase shall recognized as the difference) the deferred income tax and deferred income tax liabilities shall bedetermined according to the applicable tax rate in period of assets expected to recover or liability expected to payoff.
2. The deferred income tax assets shall be recognized to the extent of the amount of the taxable income which it ismost likely to obtain and which can be deducted from the deductible temporary difference. On balance sheet date,if there have concrete evidence of obtaining, in future period, enough taxable amounts to deduct the deductibletemporary difference, the un-confirmed deferred income tax assets in previous accounting period shall berecognized. If there has no enough taxable amounts, obtained in future period, to deducted the deferred income taxassets, book value of the deferred income tax assets shall be kept in decreased.
3. The taxable temporary differences related to the investments of subsidiary companies and associated enterprisesshall recognized as deferred income tax liability, unless the Company can control the time of the reverse oftemporary differences and the temporary differences are unlikely to be reversed in the expected future. As for thedeductible temporary difference related to the investment of the subsidiary companies and associated enterprises,deferred income tax assets shall be recognized while the temporary differences are likely to be reversed in theexpected future and it is likely to acquire any amount of taxable income tax that may be used for making up thedeductible temporary differences.
29. Leasing
(1) Accounting treatment for operating lease
Operating lease payments are recognized on a straight-line basis over the term of the relevant lease, and are eitherincluded in the cost of related asset or charged to profit or loss for the period.
(2) Accounting treatment for finance lease
Accounting treatment for finance lease: At the commencement of the lease term, the Group records the leasedasset at an amount equal to the lower of the fair value of the leased asset and the present value of the minimumlease payments. The difference between the recorded amounts is accounted for as unrecognized finance charge,using the effective interest method amortization during the lease term. Minimum lease payments deductingunrecognized financing charges are listed as long-term payable.
30. Changes in important accounting policies and estimates
(1)Changes in important accounting policies
√ Applicable □Not applicable
Content and reason of changes inaccounting policies
| Content and reason of changes in accounting policies | Approval procedure | Note |
| The Ministry of Finance issued the Accounting Standards for Business Enterprise No. 22- Recognition and Measurement of Financial Instruments, Accounting Standards for Business Enterprise No. 23- Transfer of Financial Assets, Accounting Standards for Business Enterprise No. 24- Hedge Accounting and Accounting Standards for Business Enterprise No. 37- Presentation of Financial Instruments after revised in 2017 ( these four items are collectively referred to as the new financial instrument standards).The Company implemented the above mentioned new standards after revision since 1st January 2019, and relevant content with accounting policy concerned are been adjusted. | Change of the accounting policy has deliberated and approved by the 11th session of 9th BOD | |
| In April 2019, the Ministry of Finance issued the Notice on Revision and Issuance of 2019 Financial Statement Format for General Corporate (Cai Kuai [2019] No.6) (hereinafter referred to as Financial Statement Format), in terms of the financial statement of mid-term 2019, the annual financial statement and | Change of the accounting policy has deliberated and approved by the 11th session of 9th BOD |
later period’s financial statement arerequired to preparing in line with theAccounting Standards for BusinessEnterprise and Financial StatementFormat.
The Company will implement the relevant regulation of Cai Kuai (2019) No.6 issued by Ministry of Finance, relevant financialstatements are been adjusted. Items and amount has major influence on 31
stDecember 2018 in balance sheet are as:
later period’s financial statement arerequired to preparing in line with theAccounting Standards for BusinessEnterprise and Financial StatementFormat.
Item
| Item | Consolidate balance sheet | |
| Before adjustment | After adjustment | |
| Note receivable and account receivable | 185,983,351.22 | |
| Note receivable | 69,185,516.71 | |
| Account receivable | 116,797,834.51 | |
| Note payable and account payable | 88,617,663.09 | |
| Note payable | 27,642,356.66 | |
| Account payable | 60,975,306.43 | |
(2)Changes in important accounting estimates
□ Applicable √Not applicable
(3)Adjustment the financial statements at the beginning of the first year of implementation of new financialinstrument standards, new revenue standards and new leasing standards
□ Applicable √Not applicable
(4)Retrospective adjustment of early comparison data description when initially implemented the newfinancial instrument standards and new leasing standards
□ Applicable √Not applicable
VI. Taxes
1. Major tax and tax rate
| Taxes | Taxation basis | Tax rate |
| VAT | Domestic sales revenue | 16%, 13% 6%, 5%, 3% |
| Urban maintenance and construction tax | Turnover tax payable | 7% |
| Corporate income tax | Taxable income | 15%, 25% |
| Educational surtax | Turnover tax payable | 3% |
| Local educational surtax | Turnover tax payable | 2%, 1.5% |
| Property tax | 0% of original value of the property | 1.2% |
Explain the different taxation entity of the enterprise income tax
Taxation entity
| Taxation entity | Income tax rate |
| Shenzhen Zhongheng Huafa Co., Ltd. | 25% |
| Wuhan Hengfa Technology Co., Ltd. | 15% |
2. Tax preferences
According to the “Measures for the Determination of High-tech Enterprises”, and through the enterpriseapplication, expert review, and public announcement and other procedures, the Company’s wholly-ownedsubsidiary, Wuhan Hengfa Technology Co., Ltd., has been identified as a high-tech enterprise, and obtained the“High-tech Enterprise Certificate” jointly issued by the Science and Technology Department of Hubei Province,Hubei Provincial Finance Department, Hubei Provincial Office, SAT, and Local Taxation Bureau of HubeiProvince on November 28, 2017, the certificate number is GR201742001840, which is valid for 3 years. Theapplicable corporate income tax rate of the subsidiary Wuhan Hengfa Technology Co., Ltd. for 2018 was 15%.
VII. Notes to main items in consolidated financial statement
1. Monetary fund
RMB/CNY
| Item | Closing balance | Opening balance |
| Cash on hand | 426,742.83 | 236,354.29 |
| Bank deposit | 37,614,899.02 | 28,935,450.70 |
| Other monetary fund | 9,939,899.76 | 4,936,525.28 |
| Total | 47,981,541.61 | 34,108,330.27 |
Other explanationOther monetary funds are bank acceptance deposits.
2. Note receivable
(1)Category
RMB/CNY
| Item | Closing balance | Opening balance |
| Bank acceptance bill | 4,773,726.59 | 56,817,845.23 |
| Commercial acceptance bill | 5,654,208.28 | 12,367,671.48 |
| Total | 10,427,934.87 | 69,185,516.71 |
RMB/CNY
Category
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Accrual ratio | Amount | Proportion | Amount | Accrual ratio | |||
| Including: | ||||||||||
| Including: | ||||||||||
Accrual of bad debt provision on single basis:
RMB/CNY
| Name | Closing balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
Accrual of bad debt provision on portfolio:
RMB/CNY
| Name | Closing balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
Explanation on portfolio basis:
If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please refer tothe disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
(2)Note receivable that pledged at period-end
RMB/CNY
| Item | Amount pledged at period-end |
| Bank acceptance bill | 3,866,647.92 |
| Total | 3,866,647.92 |
(3)Notes endorsement or discount and undue on balance sheet date
RMB/CNY
| Item | Amount derecognition at period-end | Amount not derecognition at period-end |
| Bank acceptance bill | 21,094,964.31 | |
| Commercial acceptance bill | 48,107,418.75 | |
| Total | 69,202,383.06 |
3. Account receivable
(1)Category
RMB/CNY
Category
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Accrual ratio | Amount | Proportion | Amount | Accrual ratio | |||
| Account receivable with bad debt provision accrual on a single basis | 13,144,007.21 | 8.08% | 13,144,007.21 | 100.00% | 0.00 | 13,144,007.21 | 8.08% | 13,144,007.21 | 100.00% | 0.00 |
| Including: | ||||||||||
| Account receivable with single significant amount and withdrawal bad debt provision on single basis | 7,556,363.72 | 4.64% | 7,556,363.72 | 100.00% | 0.00 | 7,556,363.72 | 4.64% | 7,556,363.72 | 100.00% | 0.00 |
| Account receivable with single minor amount but with bad debts provision accrued on a single basis | 5,587,643.49 | 3.43% | 5,587,643.49 | 100.00% | 0.00 | 5,587,643.49 | 3.43% | 5,587,643.49 | 100.00% | 0.00 |
| Account receivable with bad debt provision accrual on portfolio | 149,541,677.74 | 91.92% | 811.28 | 0.00% | 149,540,866.46 | 116,798,645.79 | 91.88% | 811.28 | 0.01% | 116,797,834.51 |
| Including: | ||||||||||
| Total | 162,685,684.95 | 13,144,818.49 | 149,540,866.46 | 129,942,653.00 | 13,144,818.49 | 116,797,834.51 | ||||
Accrual of bad debt provision on single basis: 7,556,363.72 Yuan
RMB/CNY
| Name | Closing balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Shenzhen Portman | 2,555,374.75 | 2,555,374.75 | 100.00% | Uncollectible |
Bowling Club Co.,Ltd.
| Bowling Club Co., Ltd. | ||||
| Hong Kong Haowei Industrial Co. Ltd. | 1,870,887.18 | 1,870,887.18 | 100.00% | Uncollectible |
| TCL ACE ELECTRIC APPLIANCE (HUIZHOU) CO., LTD. | 1,325,431.75 | 1,325,431.75 | 100.00% | Uncollectible |
| Qingdao Haier Parts Procurement Co., Ltd. | 1,225,326.15 | 1,225,326.15 | 100.00% | Uncollectible |
| SKYWORTH Multimedia (Shenzhen) Co., Ltd. | 579,343.89 | 579,343.89 | 100.00% | Uncollectible |
| Total | 7,556,363.72 | 7,556,363.72 | -- | -- |
Accrual of bad debt provision on single basis: 5,587,643.49 Yuan
RMB/CNY
| Name | Closing balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Shenzhen Huixin Video Technology Co., Ltd. | 381,168.96 | 381,168.96 | 100.00% | Uncollectible |
| Shenzhen Wandelai Digital Technology Co., Ltd. | 351,813.70 | 351,813.70 | 100.00% | Uncollectible |
| Shenzhen Dalong Electronic Co., Ltd. | 344,700.00 | 344,700.00 | 100.00% | Uncollectible |
| Shenzhen Keya Electronic Co., Ltd. | 332,337.76 | 332,337.76 | 100.00% | Uncollectible |
| Shenzhen Qunping Electronic Co., Ltd. | 304,542.95 | 304,542.95 | 100.00% | Uncollectible |
| China Galaxy Electronics (Hong Kong) Co., Ltd. | 288,261.17 | 288,261.17 | 100.00% | Uncollectible |
| Dongguan Weite Electronic Co., Ltd. | 274,399.80 | 274,399.80 | 100.00% | Uncollectible |
| Chuangjing | 247,811.87 | 247,811.87 | 100.00% | Uncollectible |
| Hong Kong New Century Electronics Co., Ltd. | 207,409.40 | 207,409.40 | 100.00% | Uncollectible |
Shenyang BeitaiElectronic Co., Ltd.
| Shenyang Beitai Electronic Co., Ltd. | 203,304.02 | 203,304.02 | 100.00% | Uncollectible |
| Beijing Xinfang Weiye Technology Co., Ltd. | 193,000.00 | 193,000.00 | 100.00% | Uncollectible |
| TCL Electronics (Hong Kong) Co., Ltd. | 145,087.14 | 145,087.14 | 100.00% | Uncollectible |
| Huizhou TCL Xinte Electronics Co., Ltd. | 142,707.14 | 142,707.14 | 100.00% | Uncollectible |
| SkyWorth – RGB Electronic Co., Ltd. | 133,485.83 | 133,485.83 | 100.00% | Uncollectible |
| Other | 2,037,613.75 | 2,037,613.75 | 100.00% | Uncollectible |
| Total | 5,587,643.49 | 5,587,643.49 | -- | -- |
Accrual of bad debt provision on single basis:
RMB/CNY
| Name | Closing balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
Accrual of bad debt provision on portfolio: 811.28 Yuan
RMB/CNY
| Name | Closing balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
| Account age | 149,541,677.74 | 811.28 | |
| Total | 149,541,677.74 | 811.28 | -- |
Explanation on portfolio basis:
Accrual of bad debt provision on portfolio:
RMB/CNY
| Name | Closing balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
Explanation on portfolio basis:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, pleaserefer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
By account age
RMB/CNY
| Account age | Closing balance |
| Within one year(One year included) | 149,536,867.00 |
| 149,536,867.00 | |
| 1-2 years | 2,527.77 |
Over 3 years
| Over 3 years | 2,282.97 |
| 3-4 years | 2,282.97 |
| Total | 149,541,677.74 |
(2)Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
RMB/CNY
| Category | Opening balance | Amount changed in the period | Closing balance | ||
| Accrual | Collected or reversal | Written-off | |||
Including major amount bad debt provision that collected or reversal in the period:
RMB/CNY
| Enterprise | Amount collected or reversal | Collection by |
(3)Account receivable actually written-off in the period
RMB/CNY
| Item | Amount written-off |
Including major account receivable written-off :
RMB/CNY
| Enterprise | Nature of account receivable | Amount written-off | Causes of written-off | Procedures of written-off | Amount arising from related transactions (Y/N) |
Explanation on account receivable written-off:
(4)Top 5 account receivables at ending balance by arrears party
Total period-end balance of top five receivables by arrears party amounting to 138,920,788.78 Yuan, takes 85.39 percent of the totalaccount receivable at period-end, bad debt provision accrual correspondingly at year-end amounting as 0 Yuan.
4. Account paid in advance
(1) By account age
RMB/CNY
| Account age | Closing balance | Opening balance | ||
| Amount | Ratio | Amount | Ratio | |
| Within one year | 28,212,818.13 | 99.28% | 31,254,429.54 | 99.42% |
1-2 years
| 1-2 years | 135,695.39 | 0.48% | 94,000.00 | 0.40% |
| 2-3 years | 70,086.94 | 0.25% | 0.18% | |
| Total | 28,418,600.46 | -- | 31,348,429.54 | -- |
Explanation on reasons of failure to settle on important account paid in advance with age over one year:
Nil
(2)Top 5 account paid in advance at ending balance by prepayment objectTotal period-end balance of top five account paid in advance by prepayment object amounted to 26,129,883.92 Yuan, takes 91.95percent of the total advance payment at period-end.
Other explanation:
Nil
5. Other account receivable
RMB/CNY
| Item | Closing balance | Opening balance |
| Other account receivable | 5,781,851.15 | 5,777,179.08 |
| Total | 5,781,851.15 | 5,777,179.08 |
(1)Other account receivable
1) By nature
RMB/CNY
| Nature | Closing book balance | Opening book balance |
| Margin and deposit | 1,793,485.04 | 1,793,485.04 |
| Borrow money | 2,005,861.48 | 1,973,013.76 |
| Intercourse funds | 11,333,647.83 | 10,108,494.46 |
| Rent receivable | 5,918,159.34 | 6,317,469.46 |
| Other | 0.00 | 845,586.40 |
| Total | 21,051,153.69 | 21,038,049.12 |
2)Accrual of bad debt provision
RMB/CNY
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) |
Balance on Jan. 1,2019
| Balance on Jan. 1, 2019 | 15,260,870.04 | 15,260,870.04 | ||
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
| Current accrual | 8,432.50 | 8,432.50 | ||
| Balance on Jun. 30, 2019 | 15,269,302.54 | 15,269,302.54 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
RMB/CNY
| Account age | Closing balance |
| Within one year(One year included) | 4,786,976.16 |
| 4,786,976.16 | |
| 1-2 years | 54,876.99 |
| 2-3 years | 848,718.00 |
| Over 3 years | 91,280.00 |
| 3-4 years | 91,280.00 |
| Total | 5,781,851.15 |
3) Top 5 other account receivables at ending balance by arrears party
RMB/CNY
| Enterprise | Nature | Closing balance | Account age | Ratio in total ending balance of other receivables | Closing balance of bad debt reserve |
| Portman | Rent receivable | 4,021,734.22 | Over 3 years | 19.10% | 4,021,734.22 |
| Shenzhen Jifang Investment Co., Ltd | Rent receivable | 1,380,608.00 | Over one year | 6.56% | 1,380,608.00 |
| Wuwu Branch of Shenzhen Dachong Industrial Co., Ltd. | Deposit for leasing | 740,909.97 | Within one year | 3.52% | |
| Zhao Baomin | Rent receivable | 553,901.68 | Over 3 years | 2.63% | 564,646.35 |
| Traffic accident compensation | Intercourse funds | 555,785.81 | Over 3 years | 2.64% | 555,785.81 |
| Total | -- | 7,252,939.68 | -- | 34.45% | 6,522,774.38 |
6. Inventory
Whether implemented the new revenue standards
□Yes √No
(1)Category
RMB/CNY
Item
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for price fall-down | Book value | Book balance | Provision for price fall-down | Book value | |
| Raw materials | 42,796,975.03 | 1,539,330.06 | 41,215,197.14 | 39,497,353.01 | 1,695,940.61 | 37,801,412.40 |
| Inventory goods | 40,987,482.00 | 1,083,796.82 | 39,903,685.18 | 24,483,140.41 | 1,543,123.71 | 22,940,016.70 |
| Low priced and easily worn articles | 313,838.99 | 0.00 | 356,286.82 | 216,771.16 | 35,563.68 | 181,207.48 |
| Homemade semi-finished products | 5,639,117.53 | 404,744.91 | 5,234,372.62 | 2,175,657.06 | 124,384.26 | 2,051,272.80 |
| Total | 89,737,413.55 | 3,027,871.79 | 86,709,541.76 | 66,372,921.64 | 3,399,012.26 | 62,973,909.38 |
Whether the Company needs to comply with the disclosure requirement of Industry Information Disclosure Guidelines of ShenzhenStock Exchange No.4 -Listed Companies Engaged in Seed Planting BusinessNo
(2)Provision for price fall-down
RMB/CNY
| Item | Opening balance | Current increased | Current decreased | Closing balance | ||
| Accrual | Other | Reversal or write-off | Other | |||
| Raw materials | 1,695,940.61 | 156,610.55 | 1,539,330.06 | |||
| Inventory goods | 1,543,123.71 | 459,326.89 | 1,083,796.82 | |||
| Low priced and easily worn articles | 35,563.68 | 35,563.68 | ||||
| Homemade semi-finished products | 124,384.26 | 280,360.65 | 404,744.91 | |||
Total
| Total | 3,399,012.26 | 280,360.65 | 0.00 | 651,501.12 | 3,027,871.79 |
Nil
7. Other current assets
Whether implemented the new revenue standards
□Yes √No
RMB/CNY
| Item | Closing balance | Opening balance |
| Value-added tax to be deducted | 1,176,381.08 | 17,055.88 |
| Advance payment of income tax | 42,314.30 | 42,314.30 |
| Total | 1,218,695.38 | 59,370.18 |
Other explanation
8. Investment real estate
(1) Investment real estate measured at cost
√ Applicable □Not applicable
RMB/CNY
| Item | House and building | Land use right | Construction in process | Total |
| I. Original book value | ||||
| 1.Opening balance | 133,661,686.94 | 133,661,686.94 | ||
| 2.Current increased | ||||
| (1) Outsourcing | ||||
| (2)inventory\fixed assets\construction in process transfer-in | ||||
| (3)increased by combination | ||||
| 3.Current decreased | ||||
| (1) Disposal | ||||
| (2) other transfer-out | ||||
| 4.Closing balance | 133,661,686.94 | 133,661,686.94 | ||
| II. Accumulated |
depreciation andaccumulatedamortization
| depreciation and accumulated amortization | ||||
| 1.Opening balance | 82,980,364.08 | 82,980,364.08 | ||
| 2.Current increased | 864,165.14 | 864,165.14 | ||
| (1) Accrual or amortization | 864,165.14 | 864,165.14 | ||
| 3.Current decreased | ||||
| (1) Disposal | ||||
| (2) other transfer-out | ||||
| 4.Closing balance | 83,844,529.22 | 83,844,529.22 | ||
| III. Depreciation reserves | ||||
| 1.Opening balance | ||||
| 2.Current increased | ||||
| (1)Accrual | ||||
| 3. Current decreased | ||||
| (1) Disposal | ||||
| (2) other transfer-out | ||||
| 4.Closing balance | ||||
| IV. Book value | ||||
| 1.Ending book value | 49,817,157.72 | 49,817,157.72 | ||
| 2.Opening book value | 50,681,322.86 | 50,681,322.86 |
9. Fixed assets
RMB/CNY
| Item | Closing balance | Opening balance |
| Fixed assets | 92,150,629.83 | 95,226,401.69 |
| Disposal of fixed assets | 92,857,471.69 | 92,857,471.69 |
| Total | 185,008,101.52 | 188,083,873.38 |
(1)Fixed asset
RMB/CNY
Item
| Item | House building | Machinery equipment | Transportation equipment | Tool equipment | Office equipment | Mold equipment | Instrument equipment | Total |
| I. Original book value | ||||||||
| 1.Opening balance | 65,608,798.85 | 90,197,960.43 | 5,960,519.70 | 6,552,700.16 | 6,325,043.73 | 16,231,125.01 | 3,137,707.65 | 194,013,855.53 |
| 2.Current increased | 1,719,220.35 | 424,216.15 | 27,792.74 | 665,886.99 | 7,077.88 | 2,844,194.11 | ||
| (1) Purchasing | 1,719,220.35 | 424,216.15 | 27,792.74 | 665,886.99 | 7,077.88 | 2,844,194.11 | ||
| (2)Construction in process transfer-in | ||||||||
| (3)increased by combination | ||||||||
| 3.Current decreased | 1,101,038.34 | 85,470.09 | 12,210.00 | 1,198,718.43 | ||||
| (1) Disposal or scrapping | 1,101,038.34 | 85,470.09 | 12,210.00 | 1,198,718.43 | ||||
| 4.Closing balance | 65,608,798.85 | 90,816,142.44 | 5,960,519.70 | 6,891,446.22 | 6,352,836.47 | 16,897,012.00 | 3,132,575.53 | 195,659,331.21 |
| II. Accumulati |
vedepreciation
| ve depreciation | ||||||||
| 1.Opening balance | 16,797,572.46 | 58,664,225.14 | 4,178,805.31 | 2,960,180.84 | 4,171,441.92 | 9,535,972.63 | 2,479,255.54 | 98,787,453.84 |
| 2.Current increased | 962,101.85 | 2,302,459.41 | 368,771.97 | 438,939.57 | 148,478.01 | 1,486,528.54 | 58,040.38 | 5,765,319.73 |
| (1)Accrual | 962,101.85 | 2,302,459.41 | 368,771.97 | 438,939.57 | 148,478.01 | 1,486,528.54 | 58,040.38 | 5,765,319.73 |
| 3.Current decreased | 990,775.51 | 42,307.68 | 10,989.00 | 1,044,072.19 | ||||
| (1) Disposal or scrapping | 990,775.51 | 42,307.68 | 10,989.00 | 1,044,072.19 | ||||
| 4.Closing balance | 17,759,674.31 | 59,975,909.04 | 4,547,577.28 | 3,356,812.73 | 4,319,919.93 | 11,022,501.17 | 2,526,306.92 | 103,508,701.38 |
| III. Depreciation reserves | ||||||||
| 1.Opening balance | ||||||||
| 2.Current increased | ||||||||
| (1)Accrual | ||||||||
| 3.Current decreased | ||||||||
| (1) Disposal or scrapping |
| 4.Closing balance | ||||||||
| IV. Book value | ||||||||
| 1.Ending book value | 47,849,124.54 | 30,840,233.40 | 1,412,942.42 | 3,534,633.49 | 2,032,916.54 | 5,874,510.83 | 606,268.61 | 92,150,629.83 |
| 2.Opening book value | 48,811,226.39 | 31,533,735.29 | 1,781,714.39 | 3,592,519.32 | 2,153,601.81 | 6,695,152.38 | 658,452.11 | 95,226,401.69 |
(2)Fixed assets leasing-out by operational lease
RMB/CNY
| Item | Ending book value |
| House building | 826,662.23 |
(3)Disposal of fixed assets
RMB/CNY
| Item | Closing balance | Opening balance |
| Renovation of Gongming Huafa Electric Town | 92,857,471.69 | 92,857,471.69 |
| Total | 92,857,471.69 | 92,857,471.69 |
Other explanationNil
10. Construction in process
RMB/CNY
| Item | Closing balance | Opening balance |
| Construction in process | 7,552,776.46 | 5,727,760.23 |
| Total | 7,552,776.46 | 5,727,760.23 |
(1)Construction in process
RMB/CNY
| Item | Closing balance | Opening balance |
Book balance
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Expansion for the plastic injection 3# plant | 7,552,776.46 | 7,552,776.46 | 5,727,760.23 | 5,727,760.23 | ||
| Total | 7,552,776.46 | 7,552,776.46 | 5,727,760.23 | 5,727,760.23 |
(2) change of major construction in process in the period
RMB/CNY
| Item | Budget | Opening balance | Current increased | Fixed assets transfer-in in the Period | Other decreased in the Period | Closing balance | Proportion of project investment in budget | Progress | Accumulated amount of interest capitalization | including: interest capitalized amount of the year | Interest capitalization rate of the year | Source of funds |
| Expansion for 3# injection molding Plant | 5,727,760.23 | 1,825,016.23 | 7,552,776.46 | |||||||||
| Total | 5,727,760.23 | 1,825,016.23 | 7,552,776.46 | -- | -- | -- |
11. Intangible assets
(1)Intangible assets
RMB/CNY
| Item | Land use right | Patent right | Non-patented technology | Software charges | Total |
| I. Original book value | |||||
| 1.Opening balance | 55,089,774.36 | 661,878.97 | 55,751,653.33 |
2.Current
increased
| 2.Current increased | |||||
| (1) Purchasing | 3,034,537.44 | 3,034,537.44 | |||
| (2) internal R&D | |||||
| (3)increased by combination | |||||
| 3.Current decreased | |||||
| (1) Disposal | |||||
| 4.Closing balance | 55,089,774.36 | 3,696,416.41 | 58,786,190.77 | ||
| II. Accumulated amortization | |||||
| 1.Opening balance | 13,434,017.64 | 501,945.95 | 13,935,963.59 | ||
| 2.Current increased | 722,744.45 | 149,730.49 | 872,474.94 | ||
| (1)Accrual | 722,744.45 | 149,730.49 | 872,474.94 | ||
| 3.Current decreased | |||||
| (1) Disposal | |||||
| 4.Closing balance | 14,156,762.09 | 651,676.44 | 14,808,438.53 | ||
| III. Depreciation reserves | |||||
| 1.Opening balance | |||||
| 2.Current increased |
(1)Accrual
| (1)Accrual | |||||
| 3.Current decreased | |||||
| (1) Disposal | |||||
| 4.Closing balance | |||||
| IV. Book value | |||||
| 1.Ending book value | 40,933,012.27 | 3,044,739.97 | 43,977,752.24 | ||
| 2.Opening book value | 41,655,756.72 | 159,933.02 | 41,815,689.74 |
The proportion of intangible assets form by internal R&D in total book value of intangible assets at period-end
12. Long-term deferred expenditure
RMB/CNY
| Item | Opening balance | Current increased | Amortized in Period | Other decreased | Closing balance |
| Golf membership fee | |||||
| Cloud service charge | 542,116.99 | 116,167.92 | 425,949.07 | ||
| Total | 542,116.99 | 116,167.92 | 425,949.07 |
Other explanationNil
13. Deferred income tax asset/Deferred income tax liability
(1)Deferred income tax assets without offset
RMB/CNY
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred income tax asset | Deductible temporary differences | Deferred income tax asset | |
| Provision for assets impairment | 28,641,162.99 | 6,813,753.84 | 28,641,162.96 | 6,813,753.84 |
| Accrual liability | 64,411.00 | 16,102.75 | 64,411.00 | 16,102.75 |
Total
| Total | 28,705,573.99 | 6,829,856.59 | 28,705,573.96 | 6,829,856.59 |
(2)Amount of deferred income tax asset and deferred income tax liability after trade-off
RMB/CNY
| Item | Trade-off between the deferred income tax assets and liabilities | Ending balance of deferred income tax assets or liabilities after off-set | Trade-off between the deferred income tax assets and liabilities at period-begin | Opening balance of deferred income tax assets or liabilities after off-set |
| Deferred income tax asset | 6,829,856.59 | 6,829,856.59 |
(3)Deferred income tax asset without recognized
RMB/CNY
| Item | Closing balance | Opening balance |
| Deductible temporary differences | 3,163,837.81 | 3,163,837.81 |
| Deductible loss | 1,427,605.96 | 1,427,605.96 |
| Total | 4,591,443.77 | 4,591,443.77 |
(4)Deductible losses of deferred income tax asset without recognized will expired in later year
RMB/CNY
| Year | Closing amount | Opening amount | Note |
| 2019 | 51,859.78 | 51,859.78 | |
| 2020 | |||
| 2021 | 182,573.55 | 182,573.55 | |
| 2022 | 848,078.83 | 848,078.83 | |
| 2023 | 345,093.80 | 345,093.80 | |
| Total | 1,427,605.96 | 1,427,605.96 | -- |
Other explanation
14. Other non-current assets
Whether implemented the new revenue standards
□Yes √No
RMB/CNY
| Item | Closing balance | Opening balance |
| Advance payment for engineering | 80,000.00 | 80,000.00 |
Advance payment for equipment
| Advance payment for equipment | 209,550.00 | 357,810.00 |
| Advance payment for intangible assets | 2,721,154.00 | |
| Total | 289,550.00 | 3,158,964.00 |
Other explanation
15. Short-term loans
(1)Category
RMB/CNY
| Item | Closing balance | Opening balance |
| Loan in pledge | 22,676,280.00 | 13,500,000.00 |
| Secured portfolio loan | 112,000,000.00 | 148,068,657.88 |
| Total | 134,676,280.00 | 161,568,657.88 |
Explanation on category of Short-term loansNil
16. Note payable
RMB/CNY
| Category | Closing balance | Opening balance |
| Commercial acceptance bill | 13,804,210.29 | 17,642,356.66 |
| Bank acceptance bill | 10,000,000.00 | |
| Total | 13,804,210.29 | 27,642,356.66 |
Totally 0 Yuan due note payable are paid at period-end
17. Account payable
(1)Account payable
RMB/CNY
| Item | Closing balance | Opening balance |
| Within one year(One year included) | 90,992,129.99 | 48,686,573.85 |
| Over one year | 11,043,080.29 | 12,288,732.58 |
| Total | 102,035,210.28 | 60,975,306.43 |
(2)Major account payable over one year
RMB/CNY
Item
| Item | Closing balance | Reasons for non-payment or carry over |
| Shenzhen Yuehai Global Logistics Co., Ltd. | 2,858,885.97 | Without settlement |
| LG | 1,906,267.50 | Without settlement |
| Dongjin Electronics (Nanjing) Plasma Co., Ltd. | 617,963.45 | Without settlement |
| Total | 5,383,116.92 | -- |
Other explanation:
Nil
18. Account received in advance
Whether implemented the new revenue standards
□Yes √No
(1)Account received in advance
RMB/CNY
| Item | Closing balance | Opening balance |
| Within one year(One year included) | 113,637.43 | 116,601.60 |
| Over one year | 42,595.01 | 42,927.00 |
| Total | 156,232.44 | 159,528.60 |
19. Employees remuneration payable
(1)Employees remuneration payable
RMB/CNY
| Item | Opening balance | Increase during the period | Decrease during this period | Closing balance |
| I. Short-term benefits | 4,700,208.36 | 32,286,086.59 | 32,958,058.24 | 4,028,236.71 |
| II. Post-employment benefits-defined contribution plans | 2,247,995.53 | 2,230,407.95 | 17,587.58 | |
| III. Dismiss welfare | 45,365.00 | 45,365.00 | ||
| Total | 4,700,208.36 | 34,579,447.12 | 35,233,831.19 | 4,045,824.29 |
(2)Short-term benefits
RMB/CNY
Item
| Item | Opening balance | Increase during the period | Decrease during this period | Closing balance |
| 1. Wages , bonuses, allowances and subsidies | 3,720,025.80 | 28,492,788.83 | 29,146,144.28 | 3,066,670.35 |
| 2. Welfare for workers and staff | 754.00 | 2,489,517.44 | 2,489,517.44 | 754.00 |
| 3. Social insurance | 22,287.98 | 1,067,739.83 | 1,086,356.03 | 3,671.78 |
| Including: Medical insurance | 22,287.98 | 894,902.90 | 913,519.10 | 3,671.78 |
| Work injury insurance | 91,845.56 | 91,845.56 | ||
| Maternity insurance | 80,991.37 | 80,991.37 | ||
| 4. Housing accumulation fund | 24,310.00 | 150,800.88 | 150,800.88 | 24,310.00 |
| 5. Labor union expenditure and personnel education expense | 932,830.58 | 85,239.61 | 85,239.61 | 932,830.58 |
| Total | 4,700,208.36 | 32,286,086.59 | 32,958,058.24 | 4,028,236.71 |
(3)Defined contribution plans
RMB/CNY
| Item | Opening balance | Increase during the period | Decrease during this period | Closing balance |
| 1. Basic endowment insurance | 2,170,497.43 | 2,152,909.85 | 17,587.58 | |
| 2. Unemployment insurance | 77,498.10 | 77,498.10 | ||
| Total | 2,247,995.53 | 2,230,407.95 | 17,587.58 |
Other explanation:
Nil
20. Tax payable
RMB/CNY
| Item | Closing balance | Opening balance |
| VAT | 3,119,280.60 | 3,432,174.00 |
Corporate income tax
| Corporate income tax | 5,914,787.16 | 5,683,136.41 |
| Individual income tax | 219,921.41 | 45,962.89 |
| Urban maintenance and construction tax | 50,723.32 | 547,965.38 |
| Property tax | 533,189.74 | 290,438.28 |
| Land use tax | 552,604.04 | 75,345.69 |
| Educational surtax | 229,278.13 | 235,610.56 |
| Local educational surtax | 123,222.03 | 126,852.76 |
| Dike fee | 1,665.00 | 1,665.00 |
| Stamp tax | 33,611.20 | 24,738.90 |
| Disposal fund of waste electrical products | 830,950.00 | 768,930.00 |
| Total | 11,609,232.63 | 11,232,819.87 |
Other explanation:
Nil
21. Other account payable
RMB/CNY
| Item | Closing balance | Opening balance |
| Interest payable | 54,347.32 | 439,558.70 |
| Other account payable | 30,986,015.17 | 26,339,305.22 |
| Total | 31,040,362.49 | 26,778,863.92 |
(1)Interest payable
RMB/CNY
| Item | Closing balance | Opening balance |
| Interest of short-term loans payable | 54,347.32 | 439,558.70 |
| Total | 54,347.32 | 439,558.70 |
Significant overdue and unpaid interest:
RMB/CNY
| Loan unit | Overdue amount | Reason for overdue |
Other explanation:
Nil
(2)Other account payable
1)Other account payable by nature
RMB/CNY
Item
| Item | Closing balance | Opening balance |
| Margin and deposit | 17,395,159.40 | 10,914,478.12 |
| Lease management fee | 7,152,279.11 | 2,612,566.67 |
| Intercourse funds | 3,741,736.55 | 7,531,055.87 |
| After sale and repairmen | 1,759,470.00 | 1,696,994.97 |
| Other | 937,370.11 | 3,584,209.59 |
| Total | 30,986,015.17 | 26,339,305.22 |
2)Significant other account payable with over one year age
RMB/CNY
| Item | Closing balance | Reasons for non-payment or carry over |
| Shenzhen SED Property Development Co., Ltd. | 1,244,058.55 | Without settlement |
| Shenzhen Huayongxing Environmental Protection Technology Co., Ltd. | 1,000,000.00 | Margin |
| Linghang Technology (Shenzhen) Co., Ltd | 656,345.28 | Without settlement |
| Shenzhen Tongxing Electronics Co., Ltd. | 578,259.83 | Without settlement |
| Shenzhen Yongdasheng Investment Development Co., Ltd. | 558,970.00 | Margin |
| Total | 4,037,633.66 | -- |
Other explanationNil
22. Accrual liability
Whether implemented the new revenue standards
□Yes √No
RMB/CNY
| Item | Closing balance | Opening balance | Causes |
| Pending action | 64,411.00 | 64,411.00 | Business and labor disputes |
| Total | 64,411.00 | 64,411.00 | -- |
Other explanations, including important assumptions and estimation about important estimated liabilities:
According to the Enforcement Notice ( (2008) SFFZZ No.522-529) of Shenzhen Intermediate People's Court, Shenzhen LaborDispute Arbitration Commission issued SLZC [2007] No. 1069-1077, No. 1079, No. 1081, and No. 1085-1087 arbitration awards forthe labor dispute case of Cai Yaoqiang and other thirteen people, which has taken legal effect. According to the Basic InformationCredit Report of Enterprises, the Company has total unexecuted labor dispute subject of 64,411.00 yuan, and the Companyrecognizes it as the estimated liability.
23.Share capital
In RMB
| Opening balance | Changes in the Period (+,-) | Closing balance | |||||
| Issuing new shares | Bonus shares | Shares transfer from public reserves | Other | Subtotal | |||
| Total shares | 283,161,227.00 | 283,161,227.00 | |||||
Other explanation:
Up to 30
th
June 2019, the shares of the Company held by controlling shareholder has 116,100,000 shares in status of pledge, taking41% of the total share capital; mortgagee is China Merchants Securities Assets Management Co., Ltd. Shares in judicial freezeamounted as 119,289,894 shares.
24. Capital surplus
RMB/CNY
| Item | Opening balance | Increase during the period | Decrease during this period | Closing balance |
| Capital premium (equity premium) | 96,501,903.02 | 96,501,903.02 | ||
| Other capital surplus | 50,085,368.48 | 50,085,368.48 | ||
| Total | 146,587,271.50 | 146,587,271.50 |
Other explanation, including changes and reasons of changes:
Nil
25. Surplus reserves
RMB/CNY
| Item | Opening balance | Increase during the period | Decrease during this period | Closing balance |
| Statutory surplus reserves | 21,322,617.25 | 21,322,617.25 | ||
| Discretionary surplus reserve | 56,068,976.00 | 56,068,976.00 | ||
| Total | 77,391,593.25 | 77,391,593.25 |
Other explanation, including changes and reasons for changes:
Nil
26. Retained profit
RMB/CNY
Item
| Item | Current period | Last period |
| Retained profit at the end of the previous period before adjustment | -183,172,091.01 | -186,467,113.73 |
| Retained profit at period-begin after adjustment | -183,172,091.01 | -186,467,113.73 |
| Add: net profit attributable to owners of the parent company | 2,587,578.75 | 3,295,022.72 |
| Retained profit at period-end | -180,591,679.88 | -183,172,091.01 |
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retainedprofits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.
5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
27. Operating income and cost
RMB/CNY
| Item | Current period | Last period | ||
| Income | Cost | Income | Cost | |
| Main business | 310,399,495.33 | 285,485,316.56 | 318,222,786.98 | 295,038,716.84 |
| Other business | 28,790,678.72 | 12,094,891.78 | 22,762,056.26 | 7,544,262.60 |
| Total | 339,190,174.05 | 297,580,208.34 | 340,984,843.24 | 302,582,979.44 |
Whether implemented the new revenue standards
□Yes √No
Other explanationNil
28. Tax and surcharges
RMB/CNY
| Item | Current period | Last period |
| Urban maintenance and construction tax | 68,304.63 | 266,947.39 |
| Educational surtax | 33,062.14 | 159,757.95 |
Property tax
| Property tax | 706,398.83 | 232,452.12 |
| Land use tax | 278,113.28 | 663,931.20 |
| Vehicle use tax | 3,420.00 | 4,800.00 |
| Stamp tax | 205,372.70 | 217,911.90 |
| Local education development fee | 15,438.42 | 166,492.83 |
| Total | 1,310,110.00 | 1,712,293.39 |
Other explanation:
Nil
29. Sales expense
RMB/CNY
| Item | Current period | Last period |
| Employees remuneration | 2,350,311.18 | 2,301,867.88 |
| Freight | 2,883,611.66 | 2,334,595.10 |
| Commodity inspection fee | 46,041.22 | 335,545.03 |
| Customs fee | 85,340.66 | 84,390.47 |
| Commodity loss | 1,669,582.49 | 1,556,975.69 |
| Other | 2,095,493.01 | 1,819,989.14 |
| Total | 9,130,380.22 | 8,433,363.31 |
Other explanation:
Nil
30. Administrative expense
RMB/CNY
| Item | Current period | Last period |
| Salary | 4,819,623.00 | 4,210,697.93 |
| Depreciation charge | 1,108,894.27 | 2,586,727.68 |
| Social insurance premium | 1,183,069.73 | 1,219,441.85 |
| Social expenses | 1,975,609.14 | 1,336,624.80 |
| Taxes and surcharge | 0.00 | 0.00 |
| Employee benefits | 453,205.88 | 900,960.35 |
| Travel expenses | 913,668.77 | 1,086,267.27 |
| Amortization of intangible assets | 872,474.94 | 745,813.31 |
| Traffic expenses | 880,726.46 | 1,047,578.29 |
Consulting fee
| Consulting fee | 365,549.99 | 565,076.31 |
| Security | 478,584.83 | 710,066.72 |
| Repairs | 981,308.38 | 839,233.34 |
| Audit fee | 812,786.23 | 624,271.85 |
| Office expenses | 775,082.77 | 527,020.48 |
| Communication fee | 106,108.39 | 166,858.35 |
| Amortization of low cost and short lived articles | 76,180.62 | 488,293.61 |
| Securities information disclosure fee | 255,915.74 | 188,679.24 |
| Litigation fee | 0.00 | 0.00 |
| Staff education | 86,051.41 | 35,034.65 |
| Water and electricity fee | 336,221.83 | 272,971.66 |
| Lease fee | 2,444,912.69 | 2,298,165.79 |
| Eco fee | 194,709.07 | 90,598.66 |
| Premium | 45,221.73 | 164,030.73 |
| Other expenses | 451,085.52 | 296,572.55 |
| Total | 19,616,991.39 | 20,400,985.42 |
Other explanation:
Nil
31. R& D expenses
RMB/CNY
| Item | Current period | Last period |
| Personnel cost | 2,086,504.20 | |
| Direct input cost | 846,252.61 | |
| Depreciation and amortization expenses | 218,337.01 | |
| Other related expenses | 575,899.04 | |
| Total | 3,726,992.86 |
Other explanation:
Nil
32. Financial expense
RMB/CNY
| Item | Current period | Last period |
| Interest expenditure | 5,355,676.92 | 5,989,883.31 |
Less: interest income
| Less: interest income | 419,336.28 | 349,858.59 |
| Add: Exchange loss | -87,878.70 | -297,171.10 |
| Add: Other expense | 219,909.30 | 104,216.60 |
| Total | 5,068,371.24 | 5,447,070.22 |
Other explanation:
Nil
33. Investment income
RMB/CNY
| Item | Current period | Last period |
| Investment income generated by financial products | 74,936.14 | 245,679.10 |
| Total | 74,936.14 | 245,679.10 |
Other explanation:
Nil
34. Credit impairment loss
RMB/CNY
| Item | Current period | Last period |
| Bad debt loss of other account receivable | -8,432.50 | |
| Total | -8,432.50 |
Other explanation:
Nil
35. Assets impairment loss
Whether implemented the new revenue standards
□Yes √No
RMB/CNY
| Item | Current period | Last period |
| I. Bad debt losses | -5,941.50 | |
| Total | -5,941.50 |
Other explanation:
Nil
36. Asset disposal income
RMB/CNY
Source of asset disposal income
| Source of asset disposal income | Current period | Last period |
| Income from fixed assets sold | 129,039.57 | -105,779.36 |
37. Non-operating income
RMB/CNY
| Item | Current period | Last period | Amount included in current non-recurring profits or losses |
| Government subsidy | 223,300.00 | 771,800.00 | |
| Fine income | 9,458.00 | 115,862.07 | |
| Total | 232,758.00 | 887,662.07 |
Government subsidy reckoned into current gains/losses:
RMB/CNY
| Item | Issuing subject | Offering causes | Nature | Subsidy impact current gains/losses (Y/N) | The special subsidy (Y/N) | Amount in the Period | Amount in last period | Assets-related/income-related |
| Award for excellent enterprise for 2018 | Finance bureau of economic development district of Wuhan Caidian | Award | Subsidy obtained for conforms with the local support policy for investment incentive to encourage investment | N | N | 200,000.00 | Income-related | |
| 2018 provincial foreign economic and trade funds | Zero-balance special account of the Finance bureau of Wuhan | Award | Subsidy obtained for conforms with the local support policy for | N | N | 17,300.00 | Income-related |
investmentincentive toencourageinvestment
| investment incentive to encourage investment | ||||||||
| Job-hunting and entrepreneurship subsidy | Labor and employment bureau of Caidian District, Wuhan | Subsidy | Subsidy obtained for conforms with the local support policy for investment incentive to encourage investment | N | N | 6,000.00 | Income-related | |
| Subsidy for science & technology innovation platform in 2017 | Bureau of Science, Technology and Economic Information of Caidian District, Wuhan | Subsidy | Subsidy obtained for conforms with the local support policy for investment incentive to encourage investment | N | N | 300,000.00 | Income-related | |
| Guiding funds for business development | Caidian Bureau of Finance, Wuhan | Award | Subsidy obtained for conforms with the local support policy for investment incentive to encourage investment | N | N | 150,000.00 | Income-related | |
| Subsidy for cultivating enterprise | Wuhan Science and | Subsidy | Subsidy obtained for | N | N | 50,000.00 | Income-related |
Technology Bureau(WuhanIntellectualPropertyOffice)
| Technology Bureau (Wuhan Intellectual Property Office) | conforms with the local support policy for investment incentive to encourage investment | |||||||
| 2018 municipal foreign economic and trade funds | Treasury branch of Wuhan Finance bureau | Award | Subsidy obtained for conforms with the local support policy for investment incentive to encourage investment | N | N | 271,800.00 | Income-related |
Other explanation:
Nil
38. Non-operating expenditure
RMB/CNY
| Item | Current period | Last period | Amount included in current non-recurring profits or losses |
| Penalty expenditure | 1,100.00 | 40,000.00 | 1,100.00 |
| Other | 132,806.76 | ||
| Total | 1,100.00 | 172,806.76 | 1,100.00 |
Other explanation:
Nil
39. Income tax expenses
(1)Statement of income tax expense
RMB/CNY
| Item | Current period | Last period |
Current income tax expense
| Current income tax expense | 388,847.80 | 908,807.04 |
| Deferred income tax expense | 215,062.28 | -444,975.63 |
| Total | 603,910.08 | 463,831.41 |
(2)Adjustment on accounting profit and income tax expenses
RMB/CNY
| Item | Current period |
| Total profit | 3,184,321.21 |
| Income tax based on statutory/applicable rate | 796,080.30 |
| Impact by different tax rate applied by subsidies | -193,287.88 |
| Impact of the deductible temporary differences or deductible loss of deferred income tax asset without recognized in the period | 274.41 |
| Income tax expense | 603,910.08 |
Other explanation
40. Annotation of cash flow statement
(1)Cash received with other operating activities concerned
RMB/CNY
| Item | Current period | Last period |
| Unit intercourse account | 1,869,387.03 | 1,042,828.59 |
| Collection management fee and utilities etc. | 1,189,095.86 | 601,727.14 |
| Repayment from employees | 32,462.10 | 22,608.36 |
| Margin | 40,263.30 | 500,000.00 |
| Interest income | 48,764.26 | 71,314.28 |
| Government subsidy | 223,300.00 | 771,800.00 |
| Total | 3,403,272.55 | 3,010,278.37 |
Note of cash received with other operating activities concerned:
The cash received with other operating activities concerned in the period mainly including collection management fee and utilities,government subsidy, margin and other intercourse funds
(2)Cash paid with other operating activities concerned
RMB/CNY
Item
| Item | Current period | Last period |
| Unit intercourse account | 1,315,156.92 | 1,840,448.01 |
| Advances to employees | 2,563,755.64 | 1,046,817.78 |
| Litigation fee | 249,530.00 | |
| Deposit, margin | 1,656,408.00 | 831,867.00 |
| Social expenses | 1,299,864.19 | 1,166,779.68 |
| Water and electricity | 2,365,472.40 | 2,270,904.17 |
| Travel expenses | 638,939.25 | 849,867.40 |
| Freight | 2,983,611.66 | 2,336,595.10 |
| Traffic expenses | 521,848.44 | 620,026.07 |
| Repairs | 1,067,602.12 | 965,726.34 |
| Audit and consulting fees | 792,049.00 | 1,037,410.89 |
| Security | 620,945.00 | 218,400.00 |
| Financial institutions handling fee | 62,759.86 | 103,694.09 |
| Office expenses | 508,512.98 | 408,916.56 |
| Communication fee | 154,173.54 | 195,355.57 |
| Lease fee | 2,444,912.69 | 2,418,018.66 |
| Other | 1,614,513.51 | 1,107,946.89 |
| Total | 20,610,525.20 | 17,668,304.21 |
Note of cash paid with other operating activities concerned:
(3)Cash received with other investment activities concerned
RMB/CNY
| Item | Current period | Last period |
| Redemption of principal of financial products | 49,000,000.00 | 80,000,000.00 |
| Total | 49,000,000.00 | 80,000,000.00 |
Note of cash received with other investment activities concernedNil
(4)Cash paid related with investment activities
RMB/CNY
| Item | Current period | Last period |
| Purchasing financial products | 49,000,000.00 | 80,000,000.00 |
Total
| Total | 49,000,000.00 | 80,000,000.00 |
Note of cash paid related with investment activitiesNil
41.Supplementary information to statement of cash flow
(1)Supplementary information to statement of cash flow
RMB/CNY
| Supplementary information | Current period | Last period |
| 1. Net profit adjusted to cash flow of operation activities: | -- | -- |
| Net profit | 2,580,411.13 | 2,793,133.60 |
| Add: Provision for assets impairment | 6,025,283.55 | 7,322,855.85 |
| Amortization of intangible assets | 872,474.94 | 709,576.88 |
| Amortization of long-term deferred expenditure | 116,167.92 | 63,722.66 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets(gain is listed with “-”) | -129,039.57 | 333,454.38 |
| Financial expenses (gain is listed with “-”) | 5,262,857.89 | 5,536,037.89 |
| Investment loss (income is listed with “-”) | -74,936.14 | -245,679.10 |
| Decrease of deferred income tax assets (increase is listed with “-”) | 1,218.57 | |
| Decrease of inventory (increase is listed with “-”) | -23,735,632.38 | 4,786,891.71 |
| Decrease of operating receivable accounts (increase is listed with “-”) | -17,697,245.84 | -15,034,088.55 |
| Increase of operating payable accounts (decrease is listed with “-”) | 71,973,879.06 | -32,938,449.52 |
| Net cash flow arising from operating activities | 45,194,220.56 | -26,671,325.63 |
| 2. Material investment and financing not involved in cash flow: | -- | -- |
| 3. Net change of cash and cash equivalents: | -- | -- |
| Balance of cash at period end | 38,041,641.85 | 23,838,986.21 |
| Less: Balance of cash at period-begin | 29,171,804.99 | 66,240,945.59 |
| Add: Balance of cash equivalent at | 3,256,408.54 |
period-end
| period-end | ||
| Less: Balance of cash equivalent at period-begin | 15,234,028.71 | |
| Net increased amount of cash and cash equivalent | 8,869,836.86 | -54,379,579.55 |
(2)Constitution of cash and cash equivalent
RMB/CNY
| Item | Closing balance | Opening balance |
| Ⅰ. Cash | 38,041,641.85 | 29,171,804.99 |
| Including:Cash on hand | 426,742.83 | 236,354.29 |
| Bank deposit available for payment at any time | 37,614,899.02 | 28,935,450.70 |
| Ⅲ. Balance of cash and cash equivalent at period-end | 36,831,046.46 | 27,961,209.60 |
Other explanation:
Ending Monetary fund-other monetary fund refers to the margin of bank acceptance 9,939,899.76 Yuan, which isnot belonging to the cash and cash equivalent. Ending Monetary fund-Bank deposit has 1,210,595.39 Yuan frozenby the court, which is not belonging to the cash and cash equivalent either.
42. Assets with ownership or use right restricted
RMB/CNY
| Item | Ending book value | Restriction reasons |
| Monetary fund | 11,150,495.15 | Issuing the bank acceptance |
| Note receivable | 3,866,647.92 | Pledged |
| Inventory | 14,609,128.53 | Pledged |
| Fixed assets | 37,728,701.12 | Bank loan secured |
| Intangible assets | 42,487,962.49 | Bank loan secured |
| Disposal of fixed assets | 92,857,471.69 | Court closure |
| Intangible assets | 36,306,830.17 | Bank loan secured |
| Total | 239,007,237.07 | -- |
Other explanation:
Nil
43. Item of foreign currency
(1) Item of foreign currency
RMB/CNY
Item
| Item | Closing balance of foreign currency | Rate of conversion | Closing RMB balance converted |
| Monetary fund | -- | -- | |
| Including:USD | 1,361,685.55 | 6.87 | 9,356,958.43 |
| Euro | |||
| HKD | 32.66 | 0.88 | 28.62 |
| Account receivable | -- | -- | |
| Including:USD | 5,942,756.38 | 6.87 | 40,836,244.74 |
| Euro | |||
| HKD | |||
| Long-term loans | -- | -- | |
| Including:USD | |||
| Euro | |||
| HKD | |||
| Account paid in advance | |||
| Including:USD | 2,249,052.99 | 6.87 | 15,454,592.53 |
| Short-term loans | |||
| Including:USD | 3,300,000.00 | 6.87 | 22,676,280.00 |
Other explanation:
Nil
44. Government subsidy
(1)Government subsidy
RMB/CNY
| Category | Amount | Item | Amount reckoned into current gains/losses |
| Award for excellent enterprise for 2018 | 200,000.00 | Non-operating income | 200,000.00 |
2018 provincial foreigneconomic and trade funds
| 2018 provincial foreign economic and trade funds | 17,300.00 | Non-operating income | 17,300.00 |
| Job-hunting and entrepreneurship subsidy | 6,000.00 | Non-operating income | 6,000.00 |
(2)Refund of government subsidy
□ Applicable √Not applicable
Other explanation:
NilVIII. Equity in other subjects
1. Equity in subsidiary
(1)Constitute of enterprise group
| Subsidiary | Main operation place | Registered place | Business nature | Share-holding ratio | Acquired way | |
| Directly | Indirectly | |||||
| HUAFA Lease Company | Shenzhen | Shenzhen | Property management | 60.00% | Investment establishment | |
| HUAFA Property Company | Shenzhen | Shenzhen | Property management | 100.00% | Investment establishment | |
| Hengfa Technology Company | Wuhan | Wuhan | Production sales | 100.00% | Investment establishment | |
| HUAFA Hengtian Company | Shenzhen | Shenzhen | Property management | 100.00% | Investment establishment | |
| HUAFA Hengtai Company | Shenzhen | Shenzhen | Property management | 100.00% | Investment establishment | |
Explanation on share-holding ratio in subsidiary different from ratio of voting right:
NilBasis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with overhalf and over voting rights:
NilMajor structured entity included in consolidate statement:
NilBasis of termination of agent or consignor:
NilOther explanation:
Nil
IX. The risk associated with financial instruments
The Group's main financial instruments include loans, receivables, payable, tradable financial assets, trading andfinancial liabilities, etc. The risks associated with these financial instruments and the risk management policiesadopted by the Group to reduce these risks are described below. The management of the Group manages andmonitors these risk exposures to ensure that the above risks are controlled within the limits.
The objective of the Group's risk management is to strike a proper balance between risks and profits, minimize thenegative impact of risks on the Group's operating results, and maximize the benefits of shareholders and otherequity investors. Based on this risk management objectives, the Group's basic strategy for risk management is toidentify and analyze the risks faced by the Group, establish appropriate risk bottom lines and carry out riskmanagement, and timely and reliably monitor the risks control them within the limits.
(1) Market risk
The market risk of financial instruments refers to the risk that the fair value or the future cash flows of financialinstruments fluctuate due to the changes in market prices, including foreign exchange risk, interest rate risk andother price risk.
1)FX risk
The Group's exchange rate risk is mainly related to US dollars and Hong Kong dollars. Except the Group's secondlevel subsidiary, Hengfa Technology Company’s monitor business has day-to-day operations in US dollars; otherprincipal business activities of the Group settle accounts in RMB. On 30 June 2019, except for the US dollarbalance of assets and liabilities in below table and the sporadic Hong Kong dollar balance, the Group's assets andliabilities are all RMB balance. The exchange rate risk arising from the assets and liabilities of the US dollar,Hong Kong dollar balance may have an impact on the Group's operating results.
Item
| Item | 2019-6-30(RMB conversion) | 2018-12-31(RMB conversion) |
| Monetary fund -USD | 9,356,958.43 | 2,010,146.81 |
| Monetary fund -HKD | 28.61 | 28.62 |
| Account receivable -USD | 40,836,244.74 | 44,086,655.90 |
| Account paid in advance-USD | 15,454,592.53 | 19,035,307.91 |
| Account payable -USD | 0.00 | |
| Short-term loans-USD | 22,676,280.00 | 25,068,657.88 |
The Company eyes on the influence from variation of exchange
2) Interest rate risk
The interest rate risk of the Group arises from bank loans. The financial liabilities of floating interest rate make
the Group face cash flow interest rate risk, and the financial liabilities of fixed rate make the Group face theinterest rate risk of fair value. The Group determines the relative proportion of fixed rate and floating interest ratecontracts based on the prevailing market environment. On 30 June 2019, the Group's interest-bearing debt wasmainly the floating interest rate loan contract denominated in Renminbi and US dollars, amounting to RMB124,676,280 (December 31, 2018: RMB 161,568,657.88).
The Group's risk of changes in the cash flow of financial instruments due to changes in interest rates is mainlyrelated to the floating interest rate bank loans. The Group's policy is to maintain the floating interest rate of theseloans so as to eliminate the fair value risk of the interest rate changes.
3) Price risk
The Group sells monitors and so on at market prices and is therefore affected by such price fluctuations.
(2) Credit risk
Credit risk refers to the risk that a party of the financial instrument does not fulfill its obligations and causesproperty loss to another party. On December 31, 2017, the maximum credit risk exposure that may cause financiallosses to the Group is mainly attributable to the failure of the other party to fulfill its obligations resulting in thelosses of the Group's financial assets and the Group's financial guarantees, including:
The carrying amount of the financial assets recognized in the consolidated balance sheet; for the financialinstruments measured at fair value, the book value reflects its risk exposures but not the maximum risk exposure,and its maximum risk exposure changes with the future changes in fair value.In order to reduce the credit risk, the Group has set up a special department to determine the credit line, carry outthe credit approval, and implement other monitoring procedures to take necessary measures to recover the overduecredit. In addition, the Group reviews the recovery of each individual receivable at every balance sheet date toaccrue sufficient provision for bad debts of uncollectible funds. As a result, the Group's management believes thatthe Group's credit risk has been greatly reduced.The Group's working capital is deposited in banks with higher credit ratings, so the credit risk of working capitalis low.The Group has adopted necessary policies to ensure that all customers have good credit records. In addition to thetop five account receivables, the Group has no other significant credit risk.The total amount of the top five account receivables is RMB 138,920,788.78.
(3) Liquidity risk
The liquidity risk is the risk that the Group is unable to fulfill its financial obligations on the due date. The Group'sapproach to manage liquidity risk is to ensure that there is sufficient financial liquidity to fulfill its due debts butnot cause unacceptable losses or damages to the corporate reputation. The Group regularly analyzes the structureand duration of liabilities to ensure there are sufficient funds. The management of the Group monitors the use ofbank loans and ensures the compliance with loan agreement, and conducts financing consultations with financialinstitutions in order to maintain a certain line of credit and reduce the liquidity risk.
2. Sensitivity analysis
The Group uses the sensitivity analysis technique to analyze the possible impacts of the reasonable and possiblechanges in risk variable on the currents profit and losses or the owner's equity. Since any risk variable rarelychanges in isolation, and the correlation among the variables has a significant effect on the final effect amount of acertain risk variable changes, and the following contents are on the assumption that the change in each variable isindependent.
(1) Sensitivity analysis of foreign exchange risk
Sensitivity analysis of foreign exchange risk assumes that all overseas operating net investment hedges and cashflow hedges are highly effective.On the basis of the above assumptions, in case that other variable don’t change, the after-tax effect of the possibleand reasonable changes in the exchange rate on the current profits and losses are as follows
Item
| Item | Exchange rate fluctuation | Jan.-Jun. 2019 | Jan.-Jun. 2018 | ||
| Impact on net profit | Impact on owner's equity | Impact on net profit | Impact on owner's equity | ||
| All foreign currency | 5% appreciation of the RMB | 1,031,885.69 | 1,031,885.69 | -284,157.38 | -284,157.38 |
| All foreign currency | 5% devaluation of the RMB | -1,031,885.69 | -1,031,885.69 | 284,157.38 | 284,157.38 |
X. Related party and related transactions
1. Parent company of the enterprise
Parent company
| Parent company | Registration place | Business nature | Registered capital | Share-holding ratio on the enterprise for parent company | Voting right ratio on the enterprise |
| Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd | Wuhan | Production and sales, real estate development and sales, housing leasing and management | 138,000,000.00 | 42.13% | 42.13% |
Explanation on parent company of the enterprise
Nil
The ultimate control of the enterprise is Li Zhongqiu.Other explanation:
Nil
2. Subsidiary of the Enterprise
Found more in VIII.
3. Other Related party
| Other Related party | Relationship with the Enterprise |
| Shenzhen Zhongheng Huafa Science and Technology Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Wuhan Hengsheng Yutian Industrial Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Wuhan Hengsheng Photo-electricity Industry Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Hong Kong Yutian International Investment Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Wuhan New Oriental Real Estate Development Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Wuhan Zhongheng Property Management Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Wuhan Optical Valley Display System Co., Ltd. | Control by same controlling shareholder and ultimate controller |
Wuhan Yutian Xingye Property Co., Ltd.
| Wuhan Yutian Xingye Property Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Wuhan Yutian Dongfang Property Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Wuhan Xiahua Zhongheng Electronics Co. Ltd. | Control by same controlling shareholder and ultimate controller |
| Wuhan Zhongheng Yutian Trading Co,, Ltd | Control by same controlling shareholder and ultimate controller |
| Wuhan Yutian Hongguang Real Estate Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Shenzhen Zhongheng Huayu Investment Holding Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Yutian Investment Co., Ltd.(Famous Sky Capital Limited) | Control by same controlling shareholder and ultimate controller |
| Yutian International Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Hong Kong Zhongheng Yutian Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Shenzhen Yutian Henghua Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Shenzhen Zhongheng Yongye Technology Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Shenzhen Yutian Hengrui Co., Ltd. | Control by same controlling shareholder and ultimate controller |
Other explanationNil
4. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
RMB/CNY
| Related party | Content | Current Period | Trading limit approved | Whether over the approved limited or not (Y/N) | Last period |
| Hong Kong Yutian International Investment Co., | Purchasing goods | 55,314,886.74 | 167,780,900.00 | N | 57,922,243.81 |
Ltd.
| Ltd. | |||||
| Wuhan Hengsheng Photo-electricity Industry Co., Ltd. | Purchasing goods | 57,732,114.71 | 205,446,000.00 | N | 44,866,194.55 |
Goods sold/labor service providing
RMB/CNY
| Related party | Content | Current period | Last period |
| Hong Kong Yutian International Investment Co., Ltd. | Sales of goods | 64,136,216.85 | 63,231,882.88 |
| Wuhan Hengsheng Photo-electricity Industry Co., Ltd. | Sales of goods | 12,184,138.45 | 2,772,074.10 |
Explanation on goods purchasing, labor service providing and receivingNil
(2)Related guarantee
As the guarantor
RMB/CNY
| Secured party | Amount guarantee | Start | End | Completed or not (Y/N) |
| Hengfa Technology Company | 30,000,000.00 | 2018-04-20 | 2022-04-20 | N |
As the secured party
RMB/CNY
| Guarantor | Amount guarantee | Start | End | Completed or not (Y/N) |
Explanation on related guaranteeNil
(3)Remuneration of key manager
RMB/CNY
| Item | Current period | Last period |
| Total remuneration | 781,248.00 | 784,673.68 |
5. Receivable/payable items of related parties
(1) Receivable item
RMB/CNY
Item
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Account receivable | Hong Kong Yutian International Investment Co., Ltd. | 37,716,619.04 | 34,850,150.19 | ||
| Account paid in advance | Hong Kong Yutian International Investment Co., Ltd. | 15,495,075.48 | 20,591,047.90 | ||
(2)Payable item
RMB/CNY
| Item | Related party | Closing book balance | Opening book balance |
| Account payable | Wuhan Hengsheng Photo-electricity Industry Co., Ltd. | 1,933,617.32 | 871,821.45 |
6. Commitments of related party
In line with the claim of application for arbitration from Shenzhen Vanke, Shen HUAFA and Wuhan Zhongheng paid and moneytogether. As the commitment letter to Shen HUAFA from Wuhan Zhongheng Group, if the Vanke wins, the losses from disputesarising by contract will bear by Wuhan Zhongheng Group in full.
XI. Commitment or contingency
1. Important commitment
Important commitment on balance sheet dateAs of the balance sheet date, the irrepealable operating lease contract signed by the Company are as:
The Company entered into a house leasing contract with Wuwu Branch of Shenzhen Dacong Industrial Co., Ltd.,term of the leasing period from 18 August 2015 to 17 August 2020
| Minimum leasing payment for irrepealable operating lease contract | Minimum leasing payment |
First year after balance sheet date
| First year after balance sheet date | 3,847,599.84 |
| Second year after balance sheet date | 502,325.53 |
2. Contingency
(1) Contingency on balance sheet date
1. Arbitration case of legal service contract dispute with V&T (Shenzhen) Law FirmOn March 12, 2018, the company received the arbitration notice No. SHEN DX20180087 from Shenzhen Courtof International Arbitration, V&T (Shenzhen) Law Firm requested to make a ruling that the Company and WuhanZhongheng pay the delinquent lawyer’s fees of RMB 19,402,000 and the liquidated damages (The liquidateddamages shall take five ten-thousandths of a day as a standard based on RMB 19,402,000 from August 24, 2017 tothe date of payment of the above-mentioned lawyer’s fees, and the liquidated damages up to February 12, 2018was RMB 1,678,273.00). The company should bear all the arbitration fees for this case.The company has entrusted lawyers to respond to the lawsuit and file a counterclaim against V&T Law Firm. Thecompany filed a countersuit against V&T Law Firm that V&T Law Firm seriously violated the obligations of theEntrusted Agency Contract and the Supplementary Agreement of the Entrusted Agency Contract, failed to fulfillthe contractual obligations, failed to fulfill the duty of diligence and responsibility and failed to safeguard thelegitimate rights and interests of the principal. And the lawyer’s fees are far higher than the government guidanceprice of the Shenzhen lawyer service. It is requested to return the prepaid 2.5 million lawyers’ fees, terminate theEntrusted Agency Contract and the Supplementary Agreement of the Entrusted Agency Contract previouslysigned with V&T Law Firm, and bear the lawyers’ fees of 100,000 Yuan for this counterclaim. The case ispending, and on 4 April 2019, the Company received a notice from the Shenzhen International Arbitration Courtextending the award to 5 May 2019.
2. Other pending lawsuit
| Basic information of litigation (arbitration) | Amount involved in the case (10 thousand Yuan) | Accrual liability resulted (Y/N) | Progress | Outcome and impact | Enforcement of judgments | Disclosure date | Index for disclosure |
| In September 2016, the dispute was submitted for arbitration on “Cooperative Operation Contract of Renovation Project at Huafa Industrial Park, Gongming Street, Guangming New | 46,460 | N | Judgement on 16 August 2017, the Company and its controlling shareholders are applied for withdrawal the judgement, but it | Found more in the Notice of the Company | Executing | 2018-02-09 | http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/true/1204406606?announceTime=2018-02-09 ；http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&stockCode=000020&announcementId=1205326846&ann |
District” entered intobetween WuhanZhongheng, theCompany and ShenzhenVanke
| District” entered into between Wuhan Zhongheng, the Company and Shenzhen Vanke | was rejected by the Court. | ouncementTime=2018-08-25 | |||||
| In March 2016, the Company and Huafa Technology bring an action against the flowed enterprise as Shenzhen Huayongxing Eco Technology Co., Ltd, Shenzhen Guanyong Line Board Co., Ltd, Shenzhen Mingyi Electric Co., Ltd, Shenzhen ORL Technology Co., Ltd. and Shenzhen Kangzhengxin Technology Co., Ltd for delays payment of rent, refuse to move out the site, forcibly occupy the Company’s distribution room and other power supply unit | 1,964.92 | N | Now the second instance judgment has been made, and has applied for compulsory execution. | Case closed | Case closed | 2019-05-07 | http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/true/1202702423?announceTime=2016-09-14 07:41 |
| In March 2016, the Company and Huafa Property bring a suit against Shenzhen Huayongxing Eco Technology Co., Ltd and Shenzhen YDX Technology Co., Ltd for violation of the Contract and refuse to clear up and remove the place | 947.26 | N | On 15 March 2018, the 2nd trial decides was won and has applied for compulsory execution | Executing | Executing | 2016-09-14 | http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/true/1202702423?announceTime=2016-09-14 07:41 |
| Arbitration case of legal service contract dispute with V&T (Shenzhen) Law Firm and the Company and Wuhan | 1,940.2 | N | The arbitration has been held and waiting for adjudication | Waiting for adjudicate | Waiting for adjudicate | 2018-11-14 | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&stockCode=000020&announcementId=1205602053&announcementTime=2018-11-14 |
Zhongheng Group
(2) For the important contingency not necessary to disclosed by the Company, explained reasons
The Company has no important contingency that need to disclosedXII. Events after balance sheet date
1. important non-adjustment items
RMB/CNY
Zhongheng Group
Item
| Item | Content | Impact on financial status and operating results | Reasons for the inability to estimate the impact |
2. Profit distribution
RMB/CNY
3. Sales return
Nil
4. Explanation on other events after balance sheet date
NilXIII. Other important event
1. Earlier accounting errors collection
(1)Retrospective restatement
RMB/CNY
| Correction content | Treatment procedures | Items for each comparison period affected | Cumulative impact |
(2)Prospective application
| Correction content | Approval procedures | Reasons for prospective application adoption |
2. Debt restructuring
3. Assets exchange
(1)Non-monetary assets exchange
(2)Other assets exchange
4. Pension plan
5. Discontinuing operation
RMB/CNY
Item
| Item | Income | Expenses | Total profit | Income tax expenses | Net profit | Profit of discontinuing operation attributable to owners of parent company |
Other explanation
6. Segment
(1)Recognition basis and accounting policy for reportable segment
(2)Financial information for reportable segment
RMB/CNY
| Item | Offset of segment | Total |
(3) If there are no segment in the Company, or the total assets and liabilities of the segment are un-able todisclosed, explain the reasons
(4)Other explanation
7. Major transaction and events makes influence on investor’s decision
8. Other
XIV. Principle notes of financial statements of parent company
1. Account receivable
(1)Category of account receivable
RMB/CNY
Category
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
| Account receivable with bad debt provision accrual on a single basis | 10,293,424.29 | 100.00% | 10,293,424.29 | 100.00% | 0.00 | 10,293,424.29 | 100.00% | 10,293,424.29 | 100.00% | 0.00 |
| Including: | ||||||||||
| Including: | ||||||||||
| Total | 10,293,424.29 | 10,293,424.29 | 10,293,424.29 | 10,293,424.29 | ||||||
Accrual of bad debt provision on single basis: 10,293,424.29 Yuan
RMB/CNY
| Name | Closing balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Shenzhen Huafa Proerty Leasing Company | 4,558,859.15 | 4,558,859.15 | 100.00% | Uncollectible |
| Portman | 4,021,734.22 | 4,021,734.22 | 100.00% | Uncollectible |
| Shenzhen Jifang Investment Co., Ltd | 1,380,608.00 | 1,380,608.00 | 100.00% | Uncollectible |
| Traffic accident | 555,785.81 | 555,785.81 | 100.00% | Uncollectible |
compensation
| compensation | ||||
| Zhao Baomin | 553,901.68 | 553,901.68 | 100.00% | Uncollectible |
| Hebei Botou Court | 520,021.00 | 520,021.00 | 101.00% | Uncollectible |
| Electricity charge of the canteen in Gongming | 489,214.70 | 489,214.70 | 100.00% | Uncollectible |
| Jiantao (Fogang) Laminated Board Co., Ltd. | 465,528.10 | 465,528.10 | 100.00% | Uncollectible |
| Labor union | 72,402.55 | 72,402.55 | 100.00% | Uncollectible |
| Lu Wei | 290,000.00 | 290,000.00 | 100.00% | Uncollectible |
| Dai Qiangbo 4/F hotel | 354,569.00 | 354,569.00 | 100.00% | Uncollectible |
| Chuangjing | 192,794.00 | 192,794.00 | 100.00% | Uncollectible |
| Shenzhen Mingli Co., ltd | 170,394.84 | 170,394.84 | 100.00% | Uncollectible |
| Other enterprise | 5,440,838.45 | 5,440,838.45 | 100.00% | Uncollectible |
| Total | 10,293,424.29 | 10,293,424.29 | -- | -- |
Accrual of bad debt provision on single basis:
RMB/CNY
| Name | Closing balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
Accrual of bad debt provision on portfolio:
RMB/CNY
| Name | Closing balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
Explanation on portfolio basis:
NilAccrual of bad debt provision on portfolio:
RMB/CNY
| Name | Closing balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
Explanation on portfolio basis:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please referto the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
By account age
RMB/CNY
Account age
| Account age | Closing balance |
| Total | 0.00 |
(2)Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
RMB/CNY
| Category | Opening balance | Amount changed in the period | Closing balance | ||
| Accrual | Collected or reversal | Written-off | |||
Including major amount bad debt provision that collected or reversal in the period:
RMB/CNY
| Enterprise | Amount collected or reversal | Collection by |
(3)Account receivable actually written-off in the period
RMB/CNY
| Item | Amount written-off |
Including major account receivable written-off :
RMB/CNY
| Enterprise | Nature of account receivable | Amount written-off | Causes of written-off | Procedures of written-off | Amount arising from related transactions (Y/N) |
Explanation on account receivable written-off:
(4)Top 5 account receivables at ending balance by arrears party
(5)Assets and liabilities resulted by account receivable transfer and continues involvement
Other explanation:
2. Other account receivable
RMB/CNY
| Item | Closing balance | Opening balance |
| Other account receivable | 111,782,724.70 | 99,155,253.08 |
| Total | 111,782,724.70 | 99,155,253.08 |
(1)Interest receivable
1)Category of interest receivable
RMB/CNY
Item
| Item | Closing balance | Opening balance |
2)Significant overdue interest
| Borrower | Closing balance | Overdue time | Overdue reason | Whether impairment occurs and judgment basis |
Other explanation:
3)Accrual of bad debt provision
□ Applicable √Not applicable
(2)Dividend receivable
1)Category of dividend receivable
RMB/CNY
| Item (or invested enterprise) | Closing balance | Opening balance |
2)Important dividend receivable with account age over one year
RMB/CNY
| Item (or invested enterprise) | Closing balance | Account age | Reasons for un-collection | Whether impairment occurs and judgment basis |
3)Accrual of bad debt provision
□ Applicable √Not applicable
Other explanation:
(3)Other account receivable
1)Other account receivable by nature
RMB/CNY
| Nature | Closing book balance | Opening book balance |
| Margin deposit | 720,065.04 | 720,065.04 |
| Borrow money | 1,475,463.06 | 2,013,402.14 |
| Intercourse funds | 119,568,896.93 | 110,451,250.82 |
| Rental income | 9,088,088.00 | 5,857,777.46 |
| Total | 130,852,513.03 | 119,042,495.46 |
2)Accrual of bad debt provision
RMB/CNY
Bad debt provision
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance on Jan. 1, 2019 | 19,069,788.33 | 19,069,788.33 | ||
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
| Balance on Jun. 30, 2019 | 19,069,788.33 | 19,069,788.33 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
RMB/CNY
| Account age | Closing balance |
| Within one year(One year included) | 111,723,124.99 |
| 111,723,124.99 | |
| 1-2 years | 59,599.71 |
| Total | 111,782,724.70 |
3)Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
RMB/CNY
| Category | Opening balance | Amount changed in the period | Closing balance | |
| Accrual | Collected or reversal | |||
NilIncluding important bad debt provision that collected or reversal in the period:
RMB/CNY
| Enterprise | Amount collected or reversal | Collection by |
4)Other account receivable actually written-off in the period
RMB/CNY
| Item | Amount written-off |
Including important other account receivable written-off in the period:
RMB/CNY
| Enterprise | Nature of other account receivable | Amount written-off | Causes of written-off | Procedures of written-off | Amount arising from related transactions (Y/N) |
Explanation on other account receivable written-off:
5) Top 5 other account receivables at ending balance by arrears party
RMB/CNY
Enterprise
| Enterprise | Nature | Closing balance | Account age | Ratio in total ending balance of other receivables | Closing balance of bad debt reserve |
| Hengfa Technology Company | Intercourse funds | 91,887,895.78 | Within one year | 70.22% | |
| Zhongheng Huafa Property | Intercourse funds | 20,186,113.28 | Within 2 years | 15.43% | |
| HUAFA Lease Company | Intercourse funds | 4,558,859.15 | Over 3 years | 3.48% | 4,558,859.15 |
| Portman | Lease fee receivable etc | 4,021,734.22 | Over 3 years | 3.07% | 4,021,734.22 |
| Shenzhen Jifang Investment Co., Ltd | Lease fee receivable etc | 1,380,608.00 | Within one year | 1.06% | |
| Total | -- | 122,035,210.43 | -- | 93.26% | 8,580,593.37 |
3. Long-term equity investment
RMB/CNY
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment for subsidiary | 187,208,900.00 | 600,000.00 | 186,608,900.00 | 187,208,900.00 | 600,000.00 | 186,608,900.00 |
| Total | 187,208,900.00 | 600,000.00 | 186,608,900.00 | 187,208,900.00 | 600,000.00 | 186,608,900.00 |
(1)Investment for subsidiary
RMB/CNY
| The invested entity | Opening balance (Book value) | Changes in the period | Closing balance (Book value) | Closing balance of impairment provision | |||
| Additional investment | Negative investment | Accrual of impairment provision | Other | ||||
| HUAFA Lease Company | 0.00 | 0.00 | 600,000.00 | ||||
| HUAFA Property | 1,000,000.00 | 1,000,000.00 | |||||
Company
| Company | |||||||
| Hengfa Technology Company | 183,608,900.00 | 183,608,900.00 | |||||
| Huafa Trading Company | 0.00 | ||||||
| HUAFA Hengtian Company | 1,000,000.00 | 1,000,000.00 | |||||
| HUAFA Hengtai Company | 1,000,000.00 | 1,000,000.00 | |||||
| Total | 186,608,900.00 | 186,608,900.00 | 600,000.00 |
4. Operating income and cost
RMB/CNY
| Item | Current period | Last period | ||
| Income | Cost | Income | Cost | |
| Other business | 18,041,135.31 | 3,172,031.59 | 16,961,088.74 | 2,510,518.82 |
| Total | 18,041,135.31 | 3,172,031.59 | 16,961,088.74 | 2,510,518.82 |
Whether implemented the new revenue standards
□Yes √No
Other explanation:
NilXV. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable □Not applicable
RMB/CNY
| Item | Amount | Note |
| Gains/losses from the disposal of non-current asset | 129,039.57 | |
| Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are | 223,300.00 |
closely relevant to enterprise’s business)
| closely relevant to enterprise’s business) | ||
| Gain/loss of entrusted investment or assets management | 74,936.14 | |
| Other non-operating income and expenditure except for the aforementioned items | 9,458.00 | |
| Less: Impact on income tax | 54,234.64 | |
| Total | 382,499.07 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √Not applicable
2. ROE and earnings per share
| Profits during report period | Weighted average ROE | Earnings per share | |
| Basic earnings per share(RMB/Share) | Diluted earnings per share(RMB/Share) | ||
| Net profits belong to common stock stockholders of the Company | 0.79% | 0.0091 | 0.0091 |
| Net profits belong to common stock stockholders of the Company after deducting nonrecurring gains and losses | 0.68% | 0.0078 | 0.0078 |
Section XI. Documents available for reference
I. Text of the Annual Report caring signature of the Chairman;II. Financial statement carrying the signatures and seals of the person in charge of the Company, principal of theaccounting works and person in charge of accounting organ;III. All documents of the Company and manuscripts of public notices that disclosed in the China Securities journal,Securities Times and Hong Kong Commercial Daily designated by CSRC in the report period;IV. Article of AssociationV. Other relevant files.