深圳中恒华发股份有限公司 2017 年年度报告全文
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2017
April 2018
深圳中恒华发股份有限公司 2017 年年度报告全文
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior
executives of Shenzhen Zhongheng HUAFA Co., Ltd. (hereinafter referred to as
the Company) hereby confirm that there are no any fictitious statements,
misleading statements, or important omissions carried in this report, and shall
take all responsibilities, individual and/or joint, for the reality, accuracy and
completion of the whole contents.
Li Zhongqiu, Principal of the Company, Yang Bin, person in charger of
accounting works and Wu Ai’jie, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of 2017 Annual
Report is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
Concerning the forward-looking statements with future planning involved in the
Report, they do not constitute a substantial commitment for investors. Majority
investors are advised to exercise caution of investment risks.
Risks factors are being well-described in the Report, found more in risks factors
and countermeasures disclosed in Prospects for Future Development of the
Board of Directors’ Report.
The Company has no plan of cash dividends carried out, bonus issued and
capitalizing of common reserves either.
深圳中恒华发股份有限公司 2017 年年度报告全文
Contents
Section I Important Notice, Contents and Paraphrase ................................................................. 2
Section II Company Profile and Main Finnaical Indexes ............................................................. 5
Section III Summary of Company Business .................................................................................. 7
Section IV Discussion and Analysis of Operation .......................................................................... 8
Section V Important Events .......................................................................................................... 12
Section VI Changes in shares and particular about shareholders............................................... 16
Section VII Preferred Stock……………………………………………………………………….18
Section VIII Particulars about Directors, Supervisors,Senior Executives and Employees ...... 19
Section IX Corporate Governance ................................................................................................. 20
Section X Corporate Bonds ........................................................................................................... 22
Section XI Financial Report ............................................................................................................ 22
Section XII Documents Available for Reference ........................................................................... 85
深圳中恒华发股份有限公司 2017 年年度报告全文
Paraphrase
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
深圳中恒华发股份有限公司 2017 年年度报告全文
Section II. Company Profile and Main Finnaical Indexes
I. Company profile
Short form of the stock Shen HUAFA A, Shen HUAFA B Stock code 000020, 200020
Short form of the stock after
N/A
changed (if applicable)
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
深圳中恒华发股份有限公司
Chinese)
Short form of the Company
深华发
(in Chinese)
Foreign name of the Company
SHENZHEN ZHONGHENG HUAFA CO., LTD.
(if applicable)
Abbr. of the foreign name (if
N/A
applicable)
Legal representative Li Zhongqiu
Registrations add. 411 Bldg., Huafa (N) Road, Futian District, Shenzhen
Code for registrations add 518031
Offices add. 33/F, No. 2 Building of Dachong Business Center, Nanshan District, Shenzhen
Codes for office add.
Company’s Internet Web Site http://www.hwafa.com.cn
E-mail huafainvestor@126.com.cn
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Yang Bin Niu Yuxiang
33/F, No. 2 Building of Dachong Business 33/F, No. 2 Building of Dachong Business
Contact add.
Center, Nanshan District, Shenzhen Center, Nanshan District, Shenzhen
Tel. 0755-86360220 0755-86360201
Fax. 0755-86360206 0755-86360206
E-mail huafainvestor@126.com.cn huafainvestor@126.com.cn
深圳中恒华发股份有限公司 2017 年年度报告全文
III. Information disclosure and preparation place
Newspaper appointed for information disclosure China Securities Journal; Securities Times; Hong Kong Commercial Daily
Website for annual report publish appointed by CSRC http://www.cninfo.com.cn
Preparation place for annual report Office of the Board of SHENZHEN ZHONGHENG HUAFA CO., LTD.
IV. Registration changes of the Company
Organization code Before change: 61883037-2; after changed: 91440300618830372G
Before the change of controlling shareholders: the main business was production and
sales of color TV, printed circuit board and injection molded parts etc. After the change
Changes of main business since listing (if
of controlling shareholders: the main business gradually adjusted to production and
applicable)
sales of injection molded parts, foam part (light packaging materials) and LCD whole
machine.
The Company’s predecessor was Shenzhen Huafa Electronic Co., LTD, which was
founded in 1981, initiated and established by three legal persons-- Shenzhen
Electronics Group Co., LTD, China Zhenhua Electronic Group Co., LTD and Hong
Kong Luks Industrial Co., LTD. In June 2005, Wuhan Zhongheng Group transferred
Previous changes for controlling the 44.12% equity of company, held by original first and second largest shareholder of
shareholders (if applicable) the Company Shenzhen Electronics Group Co., LTD and China Zhenhua Electronic
Group Co., LTD, and equity transfer formalities completed in April 2007; Wuhan
Zhongheng Group became the controlling shareholder of the Company. In September
2007, the company officially changed its name to “Shenzhen Zhongheng HUAFA Co.,
Ltd”.
V. Other relevant information
CPA engaged by the Company
Name of CPA DAXIN Certified Public Accountants LLP
Offices add. for CPA 15/F College International Mansion, No.1 Zhi Chun Road, Haidian District, Beijing
Signing Accountants Li Wei, Fan Zhang
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes √ No
2017 2016 Changes over last year
深圳中恒华发股份有限公司 2017 年年度报告全文
Operating income (RMB) 858,040,132.74 619,167,770.74 38.58% 499,455,781.11
Net profit attributable to
shareholders of the listed company 974,409.39 5,457,710.33 -82.15% -4,200,845.61
(RMB)
Net profit attributable to
shareholders of the listed company
2,079,588.86 5,109,926.82 -59.30% -29,211,107.30
after deducting non-recurring gains
and losses (RMB)
Net cash flow arising from
11,723,254.36 -18,693,296.58 162.71% 173,486,015.99
operating activities (RMB)
Basic earnings per share
0.0034 0.0193 -82.38% -0.0148
(RMB/Share)
Diluted earnings per share
0.0034 0.0193 -82.38% -0.0148
(RMB/Share)
Weighted average ROE 0.30% 1.72% -1.42% -1.50%
Changes over end of
End of 2017 End of 2016 End of 2015
last year
Total assets (RMB) 629,762,731.38 632,475,542.40 -0.43% 1,154,989,593.34
Net assets attributable to
shareholder of listed company 320,672,978.02 319,698,568.63 0.30% 313,937,229.70
(RMB)
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VIII. Quarterly main financial index
In RMB
深圳中恒华发股份有限公司 2017 年年度报告全文
1st Q 2nd Q 3rd Q 4th Q
Operating income 191,829,256.72 247,650,887.45 232,880,839.08 185,679,149.49
Net profit attributable to
421,173.37 1,725,298.63 -1,798,082.55 626,019.94
shareholders of the listed company
Net profit attributable to
shareholders of the listed company
-36,964.59 1,514,165.88 -3,376,198.78 3,978,586.35
after deducting non-recurring gains
and losses
Net cash flow arising from
-18,501,959.59 -16,895,407.33 19,537,585.01 27,583,036.27
operating activities
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the company’s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item 2017 2016 2015 Note
Gains/losses from the disposal of
non-current asset (including the write-off 199,069.56 82,132.08 449,051.44
that accrued for impairment of assets)
Governmental subsidy reckoned into current
gains/losses (not including the subsidy
enjoyed in quota or ration according to 1,451,189.68 1,419,888.89 1,691,800.00
national standards, which are closely
relevant to enterprise’s business)
Other non-operating income and expenditure
427,054.02 -1,209,982.33 690,149.43
except for the aforementioned items
Other gain/loss items satisfying the
333,974.06 25,247,171.27
definition of nonrecurring gain/loss account
Less: Impact on income tax -672,860.55 278,229.19 3,067,910.45
Total -1,105,179.47 347,783.51 25,010,261.69 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
深圳中恒华发股份有限公司 2017 年年度报告全文
the Public --- Extraordinary Profit/loss
深圳中恒华发股份有限公司 2017 年年度报告全文
Section III. Summary of Company Business
I. Main businesses of the company in the reporting period
Whether the company needs to comply with the disclosure requirements of the particular industry
No
After years of development, the company has gradually formed two main businesses in industry and property
management. Among them, the industrial business mainly includes injection molding, foam pieces (light-weight
packaging materials), and complete machine production and sales of liquid crystal display, property management
business is mainly the lease of its own property.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Equity assets No major change
Fixed assets No major change
Intangible assets No major change
Construction in progress No major change
2. Main overseas assets
□ Applicable √ Not applicable
III. Core competitiveness analysis
Whether the company needs to comply with the disclosure requirements of the particular industry
No
1. All industrial lands of the Company located in Shenzhen were taken into the first batch of plan under 2010 Shenzhen urban
upgrade planning. In the future, development and operation of self-owned land resources would become the income source of the
Company on a long-term and stable basis.
2. The Company has three plants in Wuhan economic technology park with an area of nearly 90,000 square meters where various
famous enterprises are located in this area. Benefiting from radiation radius requirements for processing matching services, the
Company enjoys superior and stable customer resources and has established a good long-term cooperative relationship; in particular,
its injection molding business and polystyrene businesses have been operated for many years with steady management group and
abundant production experiences, which makes the Company enjoying high recognition and annual production capacity and scale in
the forefront of Central China.
深圳中恒华发股份有限公司 2017 年年度报告全文
Section IV. Discussion and Analysis of Operation
1. Introduction
In 2017, the China’s economy entered a shifting period of growth, and the traditional industries were undergoing
transformation and rebirth while the new economy was growing rapidly. Under the current situation, enterprises
have been faced with unprecedented complex challenges and opportunities. From the perspective of the operating
status of China’s home appliance industry, it has been still moving forward under pressure, after years of rapid
development, it has entered the stage of low-speed growth and integration improvement with the main features of
improved consumption. As an industrial manufacturing enterprise of supporting products and services in the home
appliance industry, under the influence of internal and external factors, the company has always been providing
high-quality services and high-quality products to its customers, striving to open up the market, accelerating
transformation and upgrading, and adapting to changes in the industry and the trend of development. In 2017, the
company achieved operating revenue of 858,040,100 Yuan, an increase of 38.58% on a year-on-year basis, and
net profits of 974,400 Yuan, decreased slightly compared with the same period last year.
● Video service business achieved annual operating revenue of 477,934,200 Yuan, an increase of 52.7% over the
same period last year. The management team of the video business division strengthened the fine management,
and focused on the efficiency promotion and management improvement, fully mobilized resources, and added
three series of new products and researches on various new products on the basis of original ones, and deepened
the diversified development road of products; in the market, served customer needs, embarked on customer sales
model innovation, quickly responded to the customization needs, and formed good market effects, with the
product sales covering the domestic, Asia Pacific, Europe, North America and other regions, the multi -channel
sales model promoted the steady growth of sales revenue. Under the squeeze of market competition, labor costs
and other unfavorable factors, the turnover efficiency has been improved, capital costs have been reduced, and
fine management work has been further enhanced.
● Injection molding business achieved annual operating revenue of 252,361,800 Yuan, an increase of 3.84% over
the same period last year. Driven by the leading enterprises of white goods, the injection molding business as a
whole has grown to some extent. In the face of external pressures such as significant increase in labor costs and
rise in material prices, the injection molding business management team timely and decisively took measures to
adjust the product structure, greatly reduced the costs by energy saving and consumption reduction and promoting
the product automatic production, and ensured product quality and production efficiency through personnel
training, institutional guarantee, and error correction mechanism, and other measures; gave full play to
geographical advantages, maintained good customer relationships to provide more customer needs, played the
upstream and downstream driving effect of the industrial chain, found new business growth points, and fully
expanded the scope of business, so that customer satisfaction fed back in the business profits.
● Polystyrene business achieved annual operating revenue of 81,395,500 Yuan, an increase of 18.80% over the
same period last year. In the face of intensified market competition, rising production costs and weak pricing
深圳中恒华发股份有限公司 2017 年年度报告全文
ability, the company continued to implement advanced management concepts, paid attention to environmental
protection, ensured up to the standard to reduce the risks environmental protection policy influence, and
maintained a good growth trend; promoted development by innovation, seized the opportunities of customer
product structure adjustment through continuous process innovation, market innovation and management
innovation to continuously expanded market shares.
● The property rental business achieved annual operating revenue of 36,350,800 Yuan, a decrease of 7.98% over
the same period last year. The company’s own property, Huafa Building, had a renovation, so the tenants had a
relatively large change, resulting in a relative decrease in rental income. Gongming Huafa Electronic City was still
in the renovation stage, no rental income was generated during the year, therefore, in 2017, the company’s overall
rental income slightly decreased compared with the previous year.
II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of Operation”
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
2017
Increase/decrease
Ratio in operation Ratio in operation
Amount Amount y-o-y
revenue revenue
Total operation
858,040,132.74 100% 619,167,770.74 100% 38.58%
revenue
According to industries
Display 477,934,212.10 55.70% 312,991,895.11 50.55% 52.70%
Plastic injection
252,361,777.26 29.41% 188,550,863.79 30.45% 33.84%
hardware
Foam 81,395,469.03 9.49% 68,514,616.64 11.07% 18.80%
Property leasing 36,350,826.04 4.24% 39,501,885.54 6.38% -7.98%
Scrap income 2,695,453.61 0.31% 2,385,455.00 0.39% 13.00%
Utilities and other 7,302,394.70 0.85% 7,223,054.66 1.17% 1.10%
According to products
Display 477,934,212.10 55.70% 312,991,895.11 50.55% 52.70%
Plastic injection
252,361,777.26 29.41% 188,550,863.79 30.45% 33.84%
hardware
深圳中恒华发股份有限公司 2017 年年度报告全文
Foam 81,395,469.03 9.49% 68,514,616.64 11.07% 18.80%
Property leasing 36,350,826.04 4.24% 39,501,885.54 6.38% -7.98%
Scrap income 2,695,453.61 0.31% 2,385,455.00 0.39% 13.00%
Utilities and other 7,302,394.70 0.85% 7,223,054.66 1.17% 1.10%
According to region
Hong Kong 279,854,122.73 32.62% 211,129,139.32 34.10% 32.55%
Central China 535,937,015.83 62.46% 363,057,765.71 58.64% 47.62%
South China 42,248,994.18 4.92% 44,980,865.71 7.26% -6.07%
(2) About the industries, products, or regions accounting for over 10% of the company’s operating income
or operating profit
√Applicable □ Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
No
In RMB
Increase/decrease Increase/decrease Increase/decrease
Operating
Operating cost Gross profit ratio of operating of operating cost of gross profit
revenue
revenue y-o-y y-o-y ratio y-o-y
According to industries
Display 477,934,212.10 459,102,321.66 3.94% 52.70% 54.76% -1.28%
Plastic injection
252,361,777.26 233,283,112.81 7.56% 33.84% 39.03% -3.45%
hardware
Foam 81,395,469.03 75,512,163.41 7.23% 18.80% 25.27% -4.79%
Property leasing 36,350,826.04 2,341,112.56 93.56% -7.98% 27.73% -1.80%
According to products
Display 477,934,212.10 459,102,321.66 3.94% 52.70% 54.76% -1.28%
Plastic injection
252,361,777.26 233,283,112.81 7.56% 33.84% 39.03% -3.45%
hardware
Foam 81,395,469.03 75,512,163.41 7.23% 18.80% 25.27% -4.79%
Property leasing 36,350,826.04 2,341,112.56 93.56% -7.98% 27.73% -1.80%
According to region
Hong Kong 279,854,122.73 270,565,333.69 3.32% 60.71% 59.32% 0.85%
Central China 531,914,907.91 501,765,727.19 5.67% 99.23% 109.59% -4.62%
South China 36,273,253.79 5,877,729.00 83.80% -24.98% -32.94% 1.65%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
latest one year’s scope of period-end
深圳中恒华发股份有限公司 2017 年年度报告全文
□ Applicable √ Not applicable
(3) Income from physical sales larger than income from labors
√ Yes □ No
Increase/decrease
Industries Item Unit 2017
y-o-y
Sales volume Set 1,130,907 811,394 39.38%
Display Output Set 1,118,816 808,745 38.34%
Storage Set 12,530 24,621 -49.11%
Sales volume Ton 13,179 11,182 17.86%
Plastic injection
Output Ton 13,566 11,450 18.48%
hardware
Storage Ton 1,057 670 57.69%
Sales volume Ton 4,487.58 3,918 14.54%
Foam Output Ton 4,341.03 4,006 8.36%
Storage Ton 225.45 372 -39.40%
Reasons for y-o-y relevant data with over 30% changes
√Applicable □ Not applicable
Sales volume increased for display mainly due to the sales increased from a year earlier; Output increased for display mainly due to
the sales volume increased from a year earlier; Storage for plastic injection hardware increased mainly due to the inventory for
year-end; storage for foam decreased mainly due to the decrease of inventory for year-end.
(4) Fulfillment of the company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
(5) Constitute of operation cost
Classification of products
Classification of products
In RMB
2017
Increase/decrease
Industries Item Ratio in operation Ratio in operation
Amount Amount y-o-y
cost cost
Display Raw materials 448,842,209.98 97.77% 286,810,241.68 96.68% 1.09%
Display Labor wages 6,506,927.33 1.42% 4,308,058.58 1.45% -0.03%
Display Depreciation 1,255,263.35 0.27% 991,591.74 0.33% -0.06%
Display Energy
Plastic injection Raw materials 205,433,313.18 85.68% 151,841,264.00 90.49% -4.81%
深圳中恒华发股份有限公司 2017 年年度报告全文
hardware
Plastic injection
Labor wages 16,716,971.22 6.97% 9,626,323.95 5.74% 1.23%
hardware
Plastic injection
Depreciation 3,537,615.26 1.48% 4,344,035.13 2.59% -1.11%
hardware
Plastic injection
Energy
hardware
Foam Raw materials 42,999,667.41 53.47% 33,860,390.08 56.17% -2.70%
Foam Labor wages 9,868,282.35 12.27% 9,931,093.00 16.48% -4.21%
Foam Depreciation 1,685,290.19 2.10% 1,589,128.86 2.64% -0.54%
Foam Energy 10,858,241.16 13.50% 10,391,245.05 17.24% -3.74%
Explanation
Cost of main business amounting to 779,289,846.16 Yuan, including 459,102,321.66 Yuan for display, 239,771,854.49 Yuan for
plastic injection hardware and 80,415,670.01 Yuan for foam.
(6) Whether the changes in the scope of consolidation in Reporting Period
□Yes √No
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period
□ Applicable √ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) 733,342,661.49
Proportion in total annual sales volume for top five clients 85.47%
Ratio of related parties in annual total sales among the top
24.62%
five clients
Information of top five clients of the Company
Serial Clients Sales (RMB) Proportion in total annual sales
1 No. 1 223,278,364.34 26.02%
2 No. 2 211,214,811.44 24.62%
3 No. 3 150,667,996.59 17.56%
4 No. 4 79,542,177.83 9.27%
5 No. 5 68,639,311.29 8.00%
Total -- 733,342,661.49 85.47%
Other situation of main clients
深圳中恒华发股份有限公司 2017 年年度报告全文
□ Applicable √ Not applicable
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 496,000,099.41
Proportion in total annual purchase amount for top five
69.99%
suppliers
Ratio of related parties in annual total sales among the top
44.45%
five suppliers
Information of top five suppliers of the Company
Serial Supplier Purchase (RMB) Proportion in total purchase
1 No. 1 209,991,225.25 29.63%
2 No. 2 130,565,469.07 18.42%
3 No. 3 105,013,206.11 14.82%
4 No. 4 29,167,805.77 4.12%
5 No. 5 21,262,393.21 3.00%
Total -- 496,000,099.41 69.99%
Other notes of main suppliers
□ Applicable √ Not applicable
3. Expenses
In RMB
Increase/decrease
2017 2016 Note of major changes
y-o-y
Sales expense 15,916,493.87 11,415,270.82 39.43% Sale increased in the period
Administrative expense 42,783,111.53 50,261,495.60 -14.88%
Exchange losses from change of
Financial expense 8,979,085.95 5,012,897.34 79.12%
exchange rate in the period
4. R&D investment
□ Applicable √ Not applicable
5. Cash flow
In RMB
Item 2017 2016 Y-o-y changes
Subtotal of cash in-flow from
840,952,371.80 644,747,922.80 30.43%
operation activity
深圳中恒华发股份有限公司 2017 年年度报告全文
Subtotal of cash out-flow from
829,229,117.44 663,441,219.38 24.99%
operation activity
Net cash flow from operation
11,723,254.36 -18,693,296.58 162.71%
activity
Subtotal of cash in-flow from
291,541,885.91 335,222,336.06 -13.03%
investment activity
Subtotal of cash out-flow from
301,268,751.27 341,328,243.65 -11.74%
investment activity
Net cash flow from investment
-9,726,865.36 -6,105,907.59 -59.30%
activity
Subtotal of cash in-flow from
288,636,279.36 249,042,766.85 15.90%
financing activity
Subtotal of cash out-flow from
312,866,866.83 752,494,340.83 -58.42%
financing activity
Net cash flow from financing
-24,230,587.47 -503,451,573.98 95.19%
activity
Net increased amount of cash
-22,540,338.67 -528,831,643.19 95.74%
and cash equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
1.Sales increased in the periiod and renewing equipment at the same time, purchasing of fixed assets increased;
2. Long-term loans are paid last period
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□ Applicable √ Not applicable
III. Analysis of the non-main business
√Applicable □Not applicable
In RMB
Amount Ratio in total profit Note Whether be sustainable
Income from short-term
Investment income 372,245.91 14.71% No
financial products
Mainly due to current
Asset impairment 1,421,786.71 56.17% accrued for other account No
receivable bad debt losses
Non-operating Liquidated damages and
3,476,152.23 137.34% No
income government grants
Non-operating Loss of transfer of creditor’s
5,902,438.16 233.20% No
expense rights
深圳中恒华发股份有限公司 2017 年年度报告全文
IV. Assets and liability
1. Major changes of assets composition
In RMB
End of 2017 End of 2016
Ratio
Ratio in total Ratio in total Notes of major changes
Amount Amount changes
assets assets
Monetary fund 68,812,495.97 10.93% 93,332,709.81 14.76% -3.83%
Account 148,795,998.2
23.63% 139,808,058.20 22.10% 1.53%
receivable
Inventory 60,387,021.65 9.59% 46,902,384.80 7.42% 2.17%
Investment real
52,410,958.62 8.32% 54,145,225.02 8.56% -0.24%
estate
Long-term equity
0.00% 0.00% 0.00%
investment
Fix assets 83,619,842.39 13.28% 81,544,707.02 12.89% 0.39%
Construction in
654,356.00 0.10% 654,356.00 0.10% 0.00%
process
166,620,264.8
Short-term loans 26.46% 181,210,467.81 28.65% -2.19%
Long-term loans 0.00% 0.00%
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 2,571,550.38 Bank acceptance bill
Notes receivable 15,738,970.85 Pledge
Accounts receivable 8,831,928.89 Pledge
Investment real estate 27,583,299.22 Bank loan secured
Fixed assets 74,643,021.02 Bank loan secured
Liquidation of fixed assets 92,857,471.69 Court closure
Intangible assets 43,097,497.43 Bank loan secured
Total 265,323,739.48
深圳中恒华发股份有限公司 2017 年年度报告全文
V. Investment
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.
5. Application of raised proceeds
□ Applicable √ Not applicable
The Company has no application of raised proceeds 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.
2. Sales of major equity
□ Applicable √ Not applicable
VII. Analysis of main holding company and stock-jointly companies
√Applicable □ Not applicable
深圳中恒华发股份有限公司 2017 年年度报告全文
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company Main Operating Operating
Type Register capital Total assets Net Assets Net profit
name business revenue profit
Hengfa
Production
Technolog Subsidiary 181,643,111.00 465,649,679.80 215,763,646.31 815,791,138.56 3,651,019.75 4,243,458.88
sales
y company
HUAFA Property
Property Subsidiary manageme 1,000,000.00 217,436.82 -1,807,801.75 1,092,686.41 -922,623.13 -922,623.13
Company nt
HUAFA Property
Lease Subsidiary manageme 1,000,000.00 1,900,692.20 -5,026,990.71
Company nt
HUAFA Property
Hengtian Subsidiary manageme 1,000,000.00 997,220.20 997,220.20 -863.66 -863.66
Company nt
HUAFA Property
Hengtai Subsidiary manageme 1,000,000.00 997,950.73 997,950.73 -861.28 -861.28
Company nt
Particular about subsidiaries obtained or disposed in report period
□Applicable √Not applicable
Explanation of main holding company and stock-jointly companies
Nil
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
(I) Industry development and market analysis
In 2018, the global economic situation is complex and changeable, China is also shifting from the high-speed
growth phase to the high-quality development phase, and the home appliance industry will benefit from the
background of rising consumption and maintain relatively stable growth. However, we can also see that the era in
which made in china relies solely on scale for benefits has gone far away, under the condition of overall worrying
gross profit margin, it is futile to get rid of the slow lane of slow development simply by reducing expenditure.
Affected by intensified market competition, rising prices of raw materials, rising labor costs, and exchange rate
fluctuations, the pressure faced by home appliances OEMs and supporting enterprises is increasing. Under the
pressure of huge market, young customer groups are gradually becoming the main consumer groups of home
appliances, and willing to pay for the quality of life has become the younger generation’s consumption concept.
深圳中恒华发股份有限公司 2017 年年度报告全文
The company’s industrial production and processing business belongs to a labor-intensive and
technology-intensive, and semi-automated production mode, product orders mainly rely on a number of
well-known domestic large-scale home appliance manufacturers with brand effect, larger scale, and business
stability. As a traditional industry, the core of solving the development dilemma is to improve profitability by
upgrading technology and increasing technology added value. Under the background of downstream consumer
demand upgrading, we will actively seek transformation and upgrading by increasing R&D efforts on new
products, adjusting and improving product mix, improving production processes, increasing production efficiency,
expanding downstream channels, and nurturing own brands. In terms of technology upgrading, in addition to inner
nurturing, we also take the road of extensional development, allowing innovative technologies to inject new
potential energy into business growth.
For a certain period of time, property rental is still an important business for the company’s development, making
full use of self-owned properties, providing operations, leasing, and service business will bring certain
contributions to the company’s cash flow. The upgrade of commercial properties will bring long-term and stable
sources of income for the company after the gradual implementation of renovation projects.
New Annual Business Plan
◆ Industrial Business Upgrade
On the basis of serving existing customers, we will vigorously expand the market and strive for more market
shares; strengthen management, increase production efficiency, enhance product quality, and make full use of the
geographical advantages of the company to make the business bigger and stronger. Actively seek out high-quality
technical projects for consumer electronics, and gradually realize industrial upgrading through technological
optimization and management optimization.
◆ Promote the urban renewal project
Speed up the promotion of renewal unit project of Huafa District, Gongming Street, Guangming New District,
Shenzhen and the renewal project renovation progress of Huafa Building, Huaqiang North Street, Futian District,
Shenzhen, accelerate the settlement of project procedures, and strive to make stage progress as early as possible.
◆ Continue to focus on strengthening the company’s internal control
In 2018, the company will further optimize the corporate governance structure and improve the internal control
system and process and strictly implement and improve the executive ability of relevant system in accordance
with the governance requirements of listed companies, the company’s management and relevant departments will
execute the administrative provisions for approval procedures of fund utilizing, management system of related
transactions, working system of internal audit, internal reporting system of major information in strict accordance
with the requirements of internal control documents.
深圳中恒华发股份有限公司 2017 年年度报告全文
X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
√Applicable □ Not applicable
Time Way Type Basic situation index of investigation
2017-01-01 Telephone communication Individual N/A
Reception (times)
Number of hospitality
Number of individual reception
Number of other reception
Disclosed, released or let out major undisclosed
No
information
深圳中恒华发股份有限公司 2017 年年度报告全文
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during
the Reporting Period
□ Applicable √ Not applicable
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years
(including the reporting period)
In recent three years the Company accumulated retained net profit is negative and it did not have the conditions for profit distribution,
so the Company did not undertake profit allocation in recent years and no capital reserve shall be converted into share capital either.
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Net profit attributable to Ratio in net profit
Amount for cash common stock attributable to common
Year for Amount for cash Proportion for cash
bonus (tax shareholders of listed stock shareholders of listed
bonus shares bonus by other ways bonus by other ways
included) company in consolidation company contained in
statement for bonus year consolidation statement
2017 0.00 974,409.39 0.00% 0.00
2016 0.00 5,457,710.33 0.00% 0.00
2015 0.00 -4,200,845.61 0.00% 0.00
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent company is
positive but no plan of cash dividend proposed of common stock
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the year.
III. Implementation of commitment
1. Commitments that the actual controller, shareholders, related party, offeror and committed party as the
Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting
period
√Applicable □ Not applicable
深圳中恒华发股份有限公司 2017 年年度报告全文
Type of Commitment Commitment
Commitments Promise Content of commitments Implementation
commitments date term
The enterprise and its subsidiaries
will not participate directly or
indirectly in operation of the
Implement
business with competitive of Shen
Wuhan since 12 April
Huafa and its controlling subsidiary In normal
Zhongheng 2007-03-29 2007
concerned, and not to damage the implementing
Group throughout the
interest of the Shen Huafa and its
year
controlling subsidiary by making
use of the potential controlling-ship
of the Shen Huafa either
The enterprise and its subordinate
enterprise shall avoid a related
transaction as far as possible with
Shen Huafa and its controlling
subsidiary, as for the related
dealings occurred inevitable or
have reasonable cause, the
enterprise promise to follow the
Commitments for Implement
principle of fair-ness, justice and
share reform Wuhan since 12 April
open-ness, signed the agreement in In normal
Zhongheng 2007-03-29 2007
line with the laws, perform legal implementing
Group throughout the
program, fulfill information
year
disclosure obligation and relevant
approval procedures according to
the relevant laws, regulations and
“Listing Rules” of the Shenzhen
Stock Exchange, guarantee not to
damage the legal interest of Shen
Huafa and its shareholders through
related transactions
After acquisition and assets
restructuring, guarantee to have an Implement
Wuhan independent staff, owns since 12 April
In normal
Zhongheng independent and completed assets, 2007-03-29
implementing
Group and independent in aspect of throughout the
business, financial and institution year
from Shen Huafa
Commitments in
report of
acquisition or
equity change
深圳中恒华发股份有限公司 2017 年年度报告全文
Commitments in
assets
reorganization
Commitments
make in initial
public offering or
re-financing
Equity incentive
commitment
Regarding the lawsuit with
Shenzhen Vanke: 1. If the
arbitration judges Shenzhen Vanke
to win, the arbitration losses caused
Implemented
Wuhan by the contract disputes shall be
since 20 In normal
Zhongheng undertaken by Wuhan Zhongheng 2016-12-20
December implementing
Group Group in full; 2. The contingent
losses and risks arising from the
termination of relevant contracts
shall be undertaken by Wuhan
Other Zhongheng Group in advance.
commitments for
medium and Ended as the
small
Promise to increasing shares of reporting period,
shareholders Wuhan In 6 months
holding as 2.83 million shares of the promises during
Zhongheng 2017-11-20 since the date
B-stock of the Company in 6 performance period
Group of notification
months since the letter delivery has not been
implemented yet
Ended as the
Promise to increasing shares of reporting period,
Wuhan n 6 months
holding as 2.8 million shares of the promises during
Zhongheng 2017-11-28 since the date
A-stock at least in 6 months since performance period
Group of notification
the letter delivery has not been
implemented yet
Completed on
Yes
time(Y/N)
If the
commitments is
not fulfilled on
time, shall
Not applicable
explain the
specify reason
and the next work
plan
深圳中恒华发股份有限公司 2017 年年度报告全文
2. Concerning assts or project of the Company, which has profit forecast, and reporting period still in
forecasting period, explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors
(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculation
method compared with the financial report of last year
√Applicable □ Not applicable
In 2017, the Ministry of Finance issued the “Accounting Standards for Business Enterprises No. 42 - Non-current
Assets for Sale, Disposal Groups, and Termination of Operations”, which has taken effect on May 28, 2017, and
it’s required to adopt prospective applications to dispose the non-current assets for sale, disposal groups, and
termination of operations existing on the date of implementation. The Company has implemented according to the
requirements of the Standards.
The Ministry of Finance revised the “Accounting Standards for Business Enterprises No. 16 - Government Grants”
in 2017, the revised Standards has taken effect on June 12, 2017. Government grants existed before January 1,
2017 were required to be disposed by prospective applications; the government grants newly added from January
1, 2017 to the implementation date were also required to be adjusted according to the revised Standards. The
Company has implemented according to the requirements of the Standards.
In 2017, the Ministry of Finance issued the “Notice on Revising and Issuing the Financial Statements Format of
General Enterprises of the Ministry of Finance” (CK (2017) No. 30). Enterprises implementing the Accounting
Standards for Business Enterprises should prepare the financial statements of 2017 and the subsequent periods in
accordance with the Accounting Standards for Business Enterprises and the Notice requirements. The Company
has implemented according to the requirements of the Notice.
Impact from new rules executed:
Contents and reasons of the change of Items Amount Amount Amount listed in Amount listed in
accounting policy impacted impacted re-stated last non-operation non-operation
period revenue last expenditure last
period period
1. Relevant costs expenses are being Financial Written down — — —
written down by parts of the cost 276,000.00
government grants with income
深圳中恒华发股份有限公司 2017 年年度报告全文
concerned
2.Government grants with daily Other 161,420.00 — 183,500.00 —
operation activity concerned are benefits
reckoned into other income
3.Adjustment of the listing of Asset 199,069.56 82,132.08 122,730.30 40,598.22
gains/losses from assets disposal disposal
income
VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
□ Applicable √ Not applicable
Compared with last year, the Company sold Yutian Henghua Company in the period.
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm DAXIN Certified Public Accountants LLP
Remuneration for domestic accounting firm (in 10
thousand Yuan)
Continuous life of auditing service for domestic
accounting firm
Name of domestic CPA Li Wei, Fan Zhang
Consecutive years for auditing service from
domestic CPA
Name of foreign accounting firm (if applicable) N/A
Remuneration for foreign accounting firm (in 10
thousand Yuan) (if applicable)
Continuous life of auditing service for foreign
accounting firm (if applicable)
Name of foreign CPA N/A
Consecutive years for auditing services from foreign
CPA (If applicable)
Re-appointed accounting firms in this period
□Yes √ No
深圳中恒华发股份有限公司 2017 年年度报告全文
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
In 2017, the Company employed Shine Wing Certified Public Accountants LLC as internal control audit institutions.
X. Particular about suspended and delisting after annual report disclosed
□ Applicable √ Not applicable
XI. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitrations of the Company
√Applicable □Not applicable
Amount of
Execution
money Advances
Predicted The results and effects of the
The basic situation of involved in litigation Disclosure
liabilities of litigation litigation Disclosure index
litigation (Arbitration) (in 10 (Arbitration date
(Y/N) (Arbitration) (Arbitratio
thousand )
n)
Yuan)
In September 2016, Wuhan Ruling on
Zhongheng Group Co., Ltd. 16 August
and the Company and 2017; put
Shenzhen Vanke were forward the http://www.cninfo.co
applied for arbitration due to application m.cn/cninfo-new/discl
the dispute case of for Found more in notice Court 2018-02-0 osure/szse_main/bulle
46,460 N
“Contract for the dismantling of the Company accepted 9 tin_detail/true/120440
Cooperative Operation of by the 6606?announceTime=
the Old Projects at Huafa Company 2018-02-09
Industrial Park, Gongming and
Street, Guangming New controlling
District”. shareholder
In
Court decision as
November
Jifang Company has
In March 2016, HUAFA 2016, the http://www.cninfo.co
to paid 27.9023
Property suit against the Company m.cn/cninfo-new/discl
million Yuan
Shenzhen Jifang Investment win in the Implement 2016-11-0 osure/szse_main/bulle
1,416.67 N (including rental,
Co., Ltd. for site occupation, ruling ing 8 tin_detail/true/120281
administrative fee,
without rental, and utilities judged by 7664?announceTime=
compensation,
paid for a long-time Shenzhen 2016-11-08
penalty, lawyer’s fee
Arbitration
and arbitration fees) in
Commissio
深圳中恒华发股份有限公司 2017 年年度报告全文
n total for the Company
In March 2016, the
Company and HUAFA
Science & Technology suit
against the follow
companies, including
Shenzhen Huayongxing
Environmental Technology
Co., Ltd., Shenzhen First trail http://www.cninfo.co
Guangyong Breadboard Co., has m.cn/cninfo-new/discl
Ltd., Shenzhen Mingyi completed 2nd trial has not been Not 2016-09-1 osure/szse_main/bulle
1,964.92 N
Electronic Co., Ltd., and 2nd trial judged applicable 4 tin_detail/true/120270
Shenzhen Ouruilai in 2423?announceTime=
Technology Co., Ltd and processing 2016-09-14 07:41
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
2018.3.15-
The Company and HUAFA
The
Property suit against
Company http://www.cninfo.co
Shenzhen Jifang investment nd
wins in 2 m.cn/cninfo-new/discl
Co., Ltd. and Shenzhen
judgment; Implement 2016-09-1 osure/szse_main/bulle
Jianianhua Foreign Trade 73.38 N Enter a judgment
2018.3.26- ing 4 tin_detail/true/120270
Clothing City Co., Ltd. for
application 2423?announceTime=
refusing to paid the rents
for 2016-09-14 07:41
and administrative fee
enforcemen
without justified reasons
t
2018-3-15:
The
In March 2016, the
Company
Company and HUAFA
wins in 2nd http://www.cninfo.co
Property suit against
judgment; m.cn/cninfo-new/discl
Shenzhen Huayongxing
the Applying 2016-09-1 osure/szse_main/bulle
Environmental Technology 947.26 N Enter a judgment
Company in April 4 tin_detail/true/120270
Co., Ltd., and Shenzhen
nd
wins in 2 2423?announceTime=
Yidaxin Technology Co.,
judgment 2016-09-14 07:41
Ltd. for contract violation
and ready
and refuse to move the site
for
enforcemen
深圳中恒华发股份有限公司 2017 年年度报告全文
t
The
Company
In December 2015, the
win in the
Company and HUAFA
ruling
Property suit against Dai
judged by
Qiangbo for arrears of rent
People’s
and occupied the leased Case
68 N Court of Act under coercion
premises, and refuse to closed
Futian
move out; Dai Zhijun, Xie
District,
Lihua and Dai Tianyi bear
Shenzhen
joint liability for debts of
Municipal
Dai Qiangbo
on 13
Feb.2017
XIII. Penalty and rectification
√Applicable □Not applicable
Type of
Conclusion (if Date of
Name Type Reason investigation and Index of disclosure
applicable) disclosure
punishment
i. Failing to disclose related
transactions with the subsidiary
http://www.cninfo.com.cn/c
of controlling shareholder in
Condemned by ninfo-new/disclosure/szse_
Shen The accordance with regulations; ii.
Stock Exchange Denounced 2017-01-06 main/bulletin_detail/true/12
HUAFA Company Failing to disclose significant
publicly 02994856?announceTime=2
financial transactions; iii.
017-01-06
Failing to disclosed the related
transactions out of amount limit
i. Failing to disclose related
transactions with the subsidiary
http://www.cninfo.com.cn/c
of controlling shareholder in
Condemned by ninfo-new/disclosure/szse_
Li Actual accordance with regulations; ii.
Stock Exchange Denounced 2017-01-06 main/bulletin_detail/true/12
Zhongqiu controller Failing to disclose significant
publicly 02994856?announceTime=2
financial transactions; iii.
017-01-06
Failing to disclosed the related
transactions out of amount limit
Note of rectification
√ Applicable □Not applicable
Completed
深圳中恒华发股份有限公司 2017 年年度报告全文
XIV. Integrity of the company and its controlling shareholders and actual controllers
√ Applicable □Not applicable
During the reporting period, the Company and the controlling shareholders and the actual controllers have no large amount due
unliquidated debt sentenced by the court.
XV. Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives
□ Applicable √ Not applicable
The Company had no stock incentive plan, employee stock ownership plan or other employee incentive in the reporting period.
XVI. Major related transaction
1. Related transaction with routine operation concerned
√Applicable □Not applicable
Whethe
Trading r over
Related Availabl
Clearin
Content transacti Proporti limit the Index
Type of g form e Date of
of Pricing Related on on in approve approve of
Related Relatio related for
related principl transacti amount similar similar disclosu
party nship transacti related
transacti e on price (in 10 transacti d (in 10 d disclos
on transacti market re
on thousan ons thousan limited ure
on
d Yuan) price
d Yuan) or not
(Y/N)
http://w
ww.cni
nfo.co
m.cn/cn
info-ne
Sharing w/discl
the osure/s
Synchro
same Purchasi Telegra zse_ma
HK nized 2017-04
controll Purchase ng LCD 20,999 20,999 47.10% 26,137 No phic —— in/bulle
Yutian with the -30
ing monitors transfer tin_deta
market
shareho il/true/1
lder
604?an
nounce
Time=2
017-04-
Hengshen Sharing Purchase Purchasi Confirm 8,512 8,512 19.09% 10,781 No Telegra The 2017-04 Same
深圳中恒华发股份有限公司 2017 年年度报告全文
g the ng LCD ed with phic average -30 as
Photoelec same monitors 1% of transfer market above
tricity controll current price
ing market refers to
shareho average the
lder price in price of
principl same
e, and specific
refer to ations
both which is
their searche
bargaini d from
ng through
power the
world
famous
professi
onal
market
survey
compan
y
website
http://w
ww.wits
view.co
m
recogni
zed
authorit
y in the
industry
and
LCD
professi
onal
market
survey
compan
y
website
http://w
ww.wits
view.co
深圳中恒华发股份有限公司 2017 年年度报告全文
m
Accordi
ng to
Sharing the
the order
Hengshen
same Purchasi price, Telegra Same
g 2017-04
controll Purchase ng LCD deducte 1,990 1,990 4.46% 6,861 No phic —— as
Photoelec -30
ing monitors d 1 transfer above
tricity
shareho Yuan
lder each for
operatio
n charge
Accordi
Sharing
Sales ng to
the
LCD the
same Telegra Same
HK overall custome 2017-04
controll Sales 21,121 21,121 44.19% 36,592 No phic —— as
Yutian monitor r sales -30
ing transfer above
machine order
shareho
set price
lder
sure
Total -- -- 52,622 -- 80,371 -- -- -- -- --
Detail of sales return with major
N/A
amount involved
In the reporting, Hengfa Technology purchased LCD from HK Yutian with $ 30.99 million
Report the actual implementation of approximately, 77.49% of the annual amount predicted at the beginning of the year;
the daily related transactions which purchased LCD from Hengsheng Photo electricity with $ 13.02 million approximately,
were projected about their total 78.95% of the annual amount predicted at the beginning of the year; purchasing LCD from
amount by types during the reporting Hengsheng Photo electricity with about $ 3.04 million, 29% of the annual amount predicted
period(if applicable) at the beginning of the year; sold LCD whole machine to HK Yutian with $ 31.25 million
approximately, 55.81% of the annual amount predicted at the beginning of the year.
Reasons for major differences
between trading price and market N/A
reference price
2. Related transactions by assets acquisition and sold
□Applicable √Not applicable
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.
深圳中恒华发股份有限公司 2017 年年度报告全文
4. Contact of related credit and debt
□ Applicable √ Not applicable
The company had no contact of related credit or debt in reporting period.
5. Other related transactions
□ Applicable √ Not applicable
The company had no other significant related transactions in reporting period.
XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in reporting period.
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period.
(3) Leasing
□ Applicable √ Not applicable
No leasing for the Company in reporting period.
2. Major guarantees
√Applicable □ Not applicable
(1) Guarantees
In 10 thousand Yuan
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Related Guarante
Actual date of
Announce Actual e for
Name of the Company Guarantee happening (Date Guarantee Guarantee Implemen
ment guarantee related
guaranteed limit of signing type term ted (Y/N)
disclosure limit party
agreement)
date (Y/N)
N/A
深圳中恒华发股份有限公司 2017 年年度报告全文
Guarantee of the Company and the subsidiaries
Related Guarante
Actual date of
Announce Actual e for
Name of the Company Guarantee happening (Date Guarantee Guarantee Implemen
ment guarantee related
guaranteed limit of signing type term ted (Y/N)
disclosure limit party
agreement)
date (Y/N)
Wuhan Hengfa Joint liability
2017-04-30 30,000 14,089.39 1 year No No
Technology Co., Ltd. guarantee
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in report 30,000 14,089.39
subsidiaries in report period
period (B1)
(B2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 30,000 3,812.03
the end of reporting period
end of reporting period (B3)
(B4)
Guarantee of the subsidiaries for the subsidiaries
Related
Actual date of Complete Guarante
Announce Actual
Name of the Company Guarantee happening (Date Guarantee Guarantee implemen e for
ment guarantee
guaranteed limit of signing type term tation or related
disclosure limit
agreement) not party
date
N/A
Total amount of guarantee of the Company( total of three abovementioned guarantee)
Total amount of approving Total amount of actual
guarantee in report period 30,000 occurred guarantee in report 14,089.39
(A1+B1+C1) period (A2+B2+C3)
Total amount of approved Total balance of actual
guarantee at the end of report 30,000 guarantee at the end of 3,812.03
period (A3+B3+C2) report period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the net
11.89%
assets of the Company (that is A4+ B4+C4)
Including:
Amount of guarantee for shareholders, actual controller and its
related parties (D)
The debts guarantee amount provided for the guaranteed parties
whose assets-liability ratio exceed 70% directly or indirectly (E)
Proportion of total amount of guarantee in net assets of the
Company exceed 50% (F)
Total amount of the aforesaid three guarantees (D+E+F)
Explanations on possibly bearing joint and several liquidating
N/A
responsibilities for undue guarantees (if applicable)
深圳中恒华发股份有限公司 2017 年年度报告全文
Explanations on external guarantee against regulated procedures
N/A
(if applicable)
Explanation on compound guarantee
(2) Guarantee outside against the regulation
□Applicable √Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
□Applicable √Not applicable
No entrust others to cash asset management
(2) Entrusted loans
□ Applicable √ Not applicable
The company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period.
XVIII. Social responsibility
1. Performance of social responsibility
Not applicable
2. Execution of social responsibility of targeted poverty alleviation
(1) Targeted poverty alleviation scheme
Not applicable
(2) Summary of targeted poverty alleviation
Not applicable
深圳中恒华发股份有限公司 2017 年年度报告全文
(3) Targeted poverty alleviation effect
Index Unit of measure Quantity /implementation
I. Overall condition —— ——
II. Poverty alleviation by items —— ——
1.Industry development —— ——
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
Not applicable
3. Environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
No
The listed Company and its subsidiary don’t belongs to the key sewage units released from environmental protection department
XIX. Explanation on other significant events
√Applicable □Not applicable
(I) The Company signed Asset Exchange Contract with Wuhan Zhongheng Group on 29 April 2009 (details were
referred to in the announcement dated 30 April 2009), and pursuant to the contract, since part of the assets of the
Company (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 were
A627-005 andA627-007, and the aggregate area was 48,200 sq.m) were the lands listed in the first batch of plan
for 2010 Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and
joint 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 first
extraordinary general meeting of the Board in 2015 on March 4, 2015, which considered and approved the
深圳中恒华发股份有限公司 2017 年年度报告全文
“Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area at
Gongming street, Guangming new district, Shenzhen”, specified that the Company and Wuhan Zhongheng Group
shall obtain the corresponding compensatory consideration for removal from the respectively owned project plots
and the respectively contributed and constructed above-ground buildings before the land development, it is
estimated that the compensatory consideration obtained by the Company accounts for 50.5% of the total
consideration 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 held
on September 11, 2015 have considered and adopted the “Proposal on the project promotion and implementation
of 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 urban
renewal 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
Zhongheng Group”), Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as “Shenzhen Vanke”), and
Shenzhen 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 of
the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen” against the Company
and 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 the
arbitration claims proposed by Shenzhen Vanke are rejected by arbitration court, the arbitration procedures and
so-called cognizance of fact of contract breach still has problems in arbitration. The results have damaged the
legitimate rights and interest of the Company, and we have putting forward the application for dismantling in
February 2018 to the Shenzhen Intermediate People’s Court. The Court has accepted the case formally. Progress
of the case found more in the Notices released on Juchao website (www.cninfo.com.cn) dated 14 Sept. 2016, 1
Nov. 2016, 16 Nov. 2016, on 18 Feb. 2017, 24 March 2017, 25 April 2017, 1 July 2017, 18 August 2017 and 9
Feb. 2018 respectively.
(II) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to China
Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. Wuhan Zhongheng Group deferred the
repurchase business day to 30 June 2017. on 1 Feb. 2016, Wuhan Zhongheng Group pledge the 27,349,953 shares
held to China Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. The above mentioned
shares are deferred for repurchase of stock pledge by Wuhan Zhongheng Group; pledge expired on 31 December
2017. The trading day for repurchase put off to the date when pledge actually removed. Till end of this period
released, controlling shareholder still not removed the pledge and the Company has apply by letter, relevant
Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice released
深圳中恒华发股份有限公司 2017 年年度报告全文
on Juchao website (www.cninfo.com.cn) date 2 Feb. 2018.
(III) Our controlling shareholder Wuhan Zhongheng Group holds 116,489,894 shares of the Company, accounting
for 41.14% of total share capital. The above shares were judicially sealed on 27 September 2016, shares freeze
from 27 September 2016 to 26 September 2018. Details are set out in the announcement published at Juchao
information website (www.cninfo.com.cn) on 27 October 2016.
(IV) The company received the notice about registering and investigating from China Securities Regulatory
Commission on January 18, 2016, who decided to register and investigate the company on suspicion of illegal
information disclosure. On January 5, 2017, the company received the “Notice on Giving Public Censure and
Punishment to Shenzhen Zhongheng HUAFA Co., Ltd. and the Relevant Parties” from the Shenzhen Stock
Exchange, see details on the notice published at www.cninfo.com.cn on January 6, 2017.
(V) On March 21, 2014, Huafa Property and Shenzhen Jifang Investment Co., Ltd. (hereinafter referred to as
\"Jifang Investment\") signed the \"Shenzhen Housing Leasing Contract\" and the \"Supplemental Agreement on
Leasing Contract\", which were canceled on February 5, 2016. As Jifang Investment occupied the site, and
defaulted rent, management fee and water and electricity bills in the long term, in order to safeguard the legitimate
rights and interests, Huafa Property submitted a request for arbitration to Shenzhen Arbitration Commission on
March 8, 2016, and received the (2016) SZCZ No. 346 ruling paper from Shenzhen Arbitration Commission in
November 2016 which ruled Huafa Property won the lawsuit. See details on the notice published at
www.cninfo.com.cn by the company on November 8, 2016. The Case still in act under coercion stage presently
(VI) Mr. Li Yongping, the director and vice-president of the company, has applied for resigning the director,
vice-president and the committee member of the special committee under the board of directors of the company
due to the mandatory retirement age (60 years old), recommended by the company’s second largest shareholder,
SEG (Hong Kong) Co., Ltd., the company’s first extraordinary general meeting of shareholders in 2017 considered
and approved Mr. Zhang Guangliu to be the director of the company, and elected Mr. Zhang Guangliu as the
vice-president of the company’s 9th Board of Directors by the 3rd extraordinary meeting of the board of directors of
the company in 2017, see details on the relevant announcement the company issued at www.cninfo.com.cn on
July 19, 2017.
(VII) The company’s planning for major assets restructuring
The company was planning for major asset reorganization which involved the sale of the stock right of the
wholly-owned subsidiary - Wuhan Hengfa Technology Co., Ltd. and the small land and plant located at Wuhan
plant under the name of the Company, due to the uncertainties in relevant matters, the company's stock was
suspended since the opening on May 31, 2017 in order to maintain the investor interests and avoid significant
impact on the company’s share price. Later, after careful research for current market environment changed, the
Company terminated the major asset reorganization, stock of the Company resumption of trading on 25 August
2017. See details on the relevant announcement the company issued at www.cninfo.com.cn on August 25, 2017.
深圳中恒华发股份有限公司 2017 年年度报告全文
(VIII) Changes in the ownership structure of controlling shareholders
Li Zhongqiu, the original shareholder of the controlling shareholder - Wuhan Zhongheng Group, transferred part of
shares he held in Wuhan Zhongheng Group to Li Li, and Wuhan Henghui Investment and Consulting Co., Ltd.
transferred all shares it held in Wuhan Zhongheng Group to Li Li, after the transfer, Li Zhongqiu held 51% equity
stake of Wuhan Zhongheng Group, and Li Li held 49% equity stake of Wuhan Zhongheng Group, in the above
natural person shareholders, Li Zhongqiu and Li Li have parent-child relationship and belong to concerted action
person.
(IX) Commitments of Major shareholder to Increase Shareholding
On November 20, and November 28, 2017, the controlling shareholders respectively made commitments to
increase the shareholding of 2.83 million shares of the company’s B Shares and no less than 2.8 million shares of
the company’s A Shares, with a commitment period of 6 months. As of the disclosure date of this report, it’s still
in the commitment fulfillment period, and the commitment has not been fulfilled.
XX. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
深圳中恒华发股份有限公司 2017 年年度报告全文
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Capitaliza
New
Proportio Bonus tion of Subtot Proportio
Amount shares Others Amount
n shares public al n
issued
reserve
I. Restricted shares 0 0.00% 0 0 0 0 0 0 0.00%
283,161,2
II. Unrestricted shares 100.00% 0 0 0 0 0 283,161,227 100.00%
181,165,3
1. RMB Ordinary shares 63.98% 0 0 0 0 0 181,165,391 63.98%
2. Domestically listed foreign 101,995,8
36.02% 0 0 0 0 0 101,995,836 36.02%
shares
283,161,2
III. Total shares 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
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
□ Applicable √ Not applicable
深圳中恒华发股份有限公司 2017 年年度报告全文
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□ Applicable √ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and
liability structure
□ Applicable √ Not applicable
3. Existing internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
Total preference
shareholders
Total preference
Total common with voting
Total common shareholders with
stock rights recovered
stock voting rights
shareholders at at end of last
shareholders in 27,633 28,974 recovered at end of 0
end of last month month before
reporting reporting period (if
before annual annual report
period-end applicable) (found
report disclosed disclosed (if
in note8)
applicable)
(found in note8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Total Number of share pledged/frozen
Amount Amount
sharehold
Proportio Changes of of
Full name of Nature of n of ers at
in report restricted un-restrict
Shareholders shareholder shares the end of
State of share Amount
held period shares ed shares
report
held held
period
Domestic Pledged 116,489,894
Wuhan Zhongheng 116,489,8 116,489,8
non-state-owned 41.14% 0
Group 94 94 Frozen 116,489,894
legal person
SEG (HONG Overseas legal 16,569,56 16,569,56 Pledged
5.85% 0
KONG) CO., LTD. person 0 0 Frozen
深圳中恒华发股份有限公司 2017 年年度报告全文
GOOD HOPE Pledged
CORNER Overseas legal 12,700,00 12,700,00
4.49% 0
INVESTMENTS person 0 0 Frozen
LTD
Changjiang Pledged
Securities
Overseas legal
Brokerage 1.89% 5,355,249 0 0 5,355,249
person Frozen
(Hongkong) Co.,
Ltd.
Jiangsu Shenghe Domestic Pledged
Investment Co., non-state-owned 0.64% 1,793,900 1,793,900
Frozen
Ltd. legal person
Domestic nature Pledged
Xu Dongdong 0.44% 1,231,700 1,231,700
person Frozen
Domestic nature Pledged
Zhou Hongbing 0.43% 1,221,800 1,221,800
person Frozen
Domestic nature Pledged
Zhong Jiachao 0.39% 1,112,200 1,112,200
person Frozen
LI SHERYN Overseas nature Pledged
0.36% 1,022,800 1,022,800
ZHAN MING person Frozen
Domestic nature Pledged
Li Senzhuang 0.32% 900,000 900,000
person Frozen
Strategy investors or general
corporation comes top 10 shareholders
N/A
due to rights issue (if applicable) (see
note 3)
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
Explanation on associated relationship
Companies. The Company neither knew whether there exists associated relationship among
among the aforesaid shareholders
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 shares held
Type of shares
Shareholders’ name Amount of un-restrict shares held at Period-end
Type Amount
RMB common
Wuhan Zhongheng Group 116,489,894 116,489,894
share
深圳中恒华发股份有限公司 2017 年年度报告全文
Domestically
SEG (HONG KONG) CO., LTD. 16,569,560 listed foreign 16,569,560
shares
Domestically
GOOD HOPE CORNER
12,700,000 listed foreign 12,700,000
INVESTMENTS LTD
shares
Domestically
Changjiang Securities Brokerage
5,355,249 listed foreign 5,355,249
(Hongkong) Co., Ltd.
shares
RMB common
Jiangsu Shenghe Investment Co., Ltd. 1,793,900 1,793,900
share
RMB common
Xu Dongdong 1,231,700 1,231,700
share
RMB common
Zhou Hongbing 1,221,800 1,221,800
share
RMB common
Zhong Jiachao 1,112,200 1,112,200
share
Domestically
LI SHERYN ZHAN MING 1,022,800 listed foreign 1,022,800
shares
Domestically
Li Senzhuang 900,000 listed foreign 900,000
shares
Among the top ten unrestricted shareholders, the Company neither knew whether there
Expiation on associated relationship or exists associated relationship among the other tradable shareholders, nor they belong to
consistent actors within the top 10 consistent actors that are prescribed in Measures for the Administration of Disclosure of
un-restrict shareholders and between Shareholder Equity Changes of Listed Companies. Among the top ten shareholders, Wuhan
top 10 un-restrict shareholders and top Zhongheng Group neither bears associated relationship with other shareholders, nor
10 shareholders 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 shareholders
involving margin business (if N/A
applicable) (see note 4)
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.
深圳中恒华发股份有限公司 2017 年年度报告全文
2. Controlling shareholder of the Company
Nature of controlling shareholders: natural person holding
Type of controlling shareholders: legal person
Legal
person/person Date of Organizati
Controlling shareholders Main operation business
in charge of foundation on code
the unit
Production, sales of computers, TV set, display, other hardware and
computer software; development of internal data communication
network, building of packing materials and light weight building
material for packaging; management of exports business for the
own products and technologies for the Company and member
enterprise; management of export business on raw material,
apparatus and instrument, machinery equipments, spare parts and
91420114 technologies (not including goods and technologies that import and
Wuhan Zhongheng Group Li Zhongqiu 1996-03-21 71195460 export are national restricted or prohibited ); dry clean and steam
1W iron service; copy & print; business information consulting; house
tenancy; property management; wholesale and retails of the
hardware metal products, plastic products, audio electronic
products, electronic equipment, textile, toys, clothing & shoes,
luggage, bedding article, general merchandise, curtain, household
appliances and building materials; development of real-estate and
sales of commercial housings (projects with special provision of the
state can be operation after approval)
Equity of other
domestic/oversea listed
company control by
Not applicable
controlling shareholder as
well as stock-joint in
report period
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Actual controller of the Company
Nature of actual controller: domestic natural person
Type of actual controller: natural person
Enjoy the residence rights in the other country or area
Actual controller’s name Nationality
(Y/N)
Li Zhongqiu Hong Kong Y
Main occupation in position He serves as the Chairman for Wuhan Zhongheng Group since 1996 and serves as
深圳中恒华发股份有限公司 2017 年年度报告全文
Chairman and GM of the Company since 2007.
Listed companies in and out of China that
N/A
controlled in last 10 years
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controllers for the Company in reporting period.
Property right and controlling relationship between the actual controller and the Company is as follow:
Li Zhongqiu
51%
Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd
41.14%
Shenzhen Zhongheng Huafa Co., Ltd.
Actual controller controlling the Company by entrust or other assets management
□ Applicable √ Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
□ Applicable √ Not applicable
5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,
restructuring side and other commitment subjects
□ Applicable √ Not applicable
深圳中恒华发股份有限公司 2017 年年度报告全文
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
深圳中恒华发股份有限公司 2017 年年度报告全文
Section VIII. Particulars about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Amount Amount
Shares Shares
of shares of shares
Start held at Other held at
Working End date increased decreased
dated of
Title Sex Age of office period-be changes period-en
Name status office in this in this
term d
term gin (share)
period period
(Share) (Share)
(Share) (Share)
Li Currently 2007-07- 2019-09-
Chairman M 53 0 0 0 0
Zhongqiu in office 08 18
Li Vice Leave the 2013-08- 2017-07-
M 60 0 0 0 0
Yongping Chairman office 23 17
Zhang Vice Currently 2017-07- 2019-09-
M 0 0 0 0
Guangliu Chairman in office 18 18
Director,
secretary
Currently 2015-11- 2019-09-
Yang Bin of the M 45 0 0 0 0
in office 06 18
Board,
CFO
Independ
Li Currently 2016-09- 2019-09-
ent M 72 0 0 0 0
Ding’an in office 19 18
director
Independ
Xu Currently 2016-09- 2019-09-
ent M 52 0 0 0 0
Jingwen in office 19 18
director
Independ
Zhang Currently 2014-05- 2019-09-
ent M 61 0 0 0 0
Zhaoguo in office 23 18
director
Huang Superviso Currently 2012-01- 2019-09-
F 55 0 0 0 0
Yanbo r in office 16 18
Superviso Currently 2012-04- 2019-09-
Geng Qu F 48 0 0 0 0
r in office 09 18
Superviso Currently 2015-11- 2019-09-
Chen Qin F 31 0 0 0 0
r in office 06 18
深圳中恒华发股份有限公司 2017 年年度报告全文
Tang Deputy Currently 2013-08- 2019-09-
F 40 0 0 0 0 0
Ganyu GM in office 23 18
Total -- -- -- -- -- -- 0 0 0 0 0
II. Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Title Type Date Reasons
Li Yongping Vice Chairman Leave the office 2017-07-17 Mandatory age for retirement (60-year-old)
III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors, supervisors and
senior executive
Li Zhongqiu: Male, was born in 1962 with Master of Engineering, members of the Hubei Political Consultative
Conference. May the first of labor medalist of Wuhan. He serves as Chairman of Wuhan Zhongheng New Science
& Technology Industrial Group Co., Ltd. since 1996. And he serves as Chairman and the General Manager of the
Company since July 2007.
Zhang Guangliu, male, born in 1962, a master of management, currently serves as a director of Shenzhen SEG
Co., Ltd., the deputy general manager, a member of the party committee, and the secretary of the board of
Shenzhen Electronics Group Co., Ltd., the president of Shenzhen SEG Kangle Enterprise Development Co., Ltd.,
and the chairman of the board of supervisors of Shenzhen SI Semiconductors Co., Ltd. He once served as the
deputy section chief, deputy general manager and a member of party committee of Jiangxi Pingxiang Department
Store, the deputy manager of Jiangxi Pingxiang Industrial Products Trade Center, the deputy manager of Zhenhua
Subbranch of Shenzhen Rainbow Shopping Mall, and the first class director of Shenzhen Rainbow Shopping Mall
Co., Ltd., a director and the chief financial officer of Shenzhen Hua Sheng Enterprise Group Company Limited,
Shenzhen Pharmaceutical Production and Supply Corporation and Shenzhen Building Material Group Co., Ltd.,
the chairman of the board of supervisors of Shenzhen Huakong SEG Co., Ltd., and the chairman of SEG (Hong
Kong) Co., Ltd.
Yang Bin, male, born in April 1972, a master degree holder graduated from Xi’an Jiaotong University. He once
worked at the high-tech development zone branch of Xi’an Branch of Industrial and Commercial Bank of China,
the business department of Xi’an Branch of China Minsheng Banking Corporation, and the international sales
department of Shenzhen Mindray Bio-Medical Electronics Co., Ltd.; he once served as the deputy general
manager and secretary of the board of Shenzhen China Agricultural University Technology Co., Ltd., an
independent director of Livzon Group, and an independent director of CTL Testing. Since November 2015, he has
been serving as a director, the secretary of the board and the chief financial officer of the Company.
深圳中恒华发股份有限公司 2017 年年度报告全文
Li Ding’an: male, born in Dec. 1945, professor, doctoral tutor, the first batch of Chinese certified public
accountants. In 1982, he obtained the master degree of economics of Zhongnan University of Finance and
Economics and stayed at the university as a teacher; in June 1996, he was transferred to South China University of
Technology, served as the professor and deputy director of the Department of Applied Mathematics; from 1998 to
2012, he served successively as the 8th, 9th, and 10th standing committee member of CPPCC Guangdong
Provincial Committee; he serves as the professor at School of Business Administration from May, 2002, and
served as executive vice president of the School of Economics and Trade from July 2005 to January 2009. He has
been serving as the professor at School of Business Administration South China University of Technology since
2009, he is also the director of Guangdong Provincial Tax Institute, the director of Guangdong Provincial Local
Tax Institute, the vice chairman of the enterprise development research specialist working committee of
Guangdong Manufacturers Association, the director of CPPCC Guangdong Provincial Committee Fellowship
Council, the independent director of Guangdong Kangmei Pharmaceutical Co., Ltd., the independent director of
PCI-Suntek Tech Co., Ltd., and the independent director of Wuhan Liyuan Information Technology Co., Ltd.. He
has been serving as the independent director of the company since September 2016.
Zhang Zhaoguo, Ph. D. in Management, former director of accounting dept. in School of Management of
Huazhong University of Science & Technology, a professor (secondary) and doctoral supervisor. He enjoys the
special allowance of the State Council. Successively study in Finance & Economics University of Jiangxi,
Zhongnan University of Economics and Law and HUST, and serve as a teacher in Wuhan University and HUST.
He served as chief editor in Communication of Finance & Accounting. Now served as the president of Accounting
Institute of China, vice president of Accounting Association of Hubei Province, vice president of Hubei Central
Enterprise Accounting Association, dean of Wuhan Yangtze Business University, and served as independent
directors of Hubei Radio &Television Information Network Co., Ltd., Shenzhen Zhongheng Huafa, Kaidi
Ecological and Mailyard. And in 2016, he selected in top 50 of the Academic Influence of College Accountancy
( Ranked 17th), the only one selected in Hubei.
Xu Jinwen, male, born in 1965, is a doctor of management science and engineering of Huazhong University of
Science and Technology. He worked at China Construction Bank Wuhan Sub-branch from July 1984 to
September 1985; served as the credit section chief at China Construction Bank Hubei Branch from September
1985 to December 1990; served as the deputy general manager of Hubei Province Trust and Investment
Corporation of China Construction Bank; served as the executive deputy general manager of Guotai Junan
Securities Hubei Branch from October 1995 to August 2000; served as the general manager of Guotai Junan
Securities Jiangxi Headquarters from August 2000 to November 2002; served as the president of Golden Sun
Securities Co., Ltd. from November 2002 to April 2006; served as the chairman of Changjiang Bali Baifuqin
Securities Co., Ltd. from April 2006 to May 2007; served as the vice president and secretary of the board of
Changjiang Securities Co., Ltd. from May 2007 to March 2016; he has been serving as the chairman and CEO of
Changjiang Securities Holding (Hong Kong) Co., Ltd. since December 2011. He has been serving as an
independent director of the company since September 2016.
深圳中恒华发股份有限公司 2017 年年度报告全文
Huang Yanbo: female, born in 1962, a university background and a senior accountant. She served as financial
director of Wuhan Zhongda Shopping Mall since 1985 to 1998; and worked as financial manager of Wuhan
Zhongheng New Science & Technology Industrial Group Co., Ltd. from 1998 to 2007 and GM assistant in charge
of auditing supervise from 2007 to 2011; she serves as CFO of the Company from 2012 to 2016; she serves as
deputy GM of Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd. since October 2016, and
the supervisor of the Company since January 2012 and she is the chairman of supervisory committee of the
Company since August 2013.
Geng Qu: female, born in 1969, is graduated from Beihang University, the first quality engineer, a real estate
economist, a human resources economist and an engineer. She worked for the Company since 1990 and
successively served as director of quality standard, director of comprehensive management department and deputy
chief of office of the Company. She serves as employee supervisory of the Company since April 2012.
Chen Qin: Female, born in 1986, bachelor degree, human resources professional. Worked on administrative work
in Merida Bicycle (China) Co., Ltd. from July 2002 to July 2003, engaged in purchasing work in Hui Pu
Electronics (Shenzhen) Co., Ltd. from August 2003 to September 2004, and served as the administration manager
in Huake United Technology (Shenzhen) Co., Ltd. from September 2004 to 2005 October; works in the Company
since October 2005 and serves as supervisor of the Company since 2015
Tang Ganyu: Female, born in 1977, college degree. Served as assistant of factory director in Wuhan Hengsheng
Optoelectronics Industry Co., Ltd. from August 2003 to July 2005, engineering manager from August 2005 to
July 2006, project manager and production manager from August 2006 to December 2011; served as the
supervisor of the Company from July 2007 to January 2012 and general manager assistant of the Company from
January 2012 to August 2013, and serves as deputy general manager of the Company since August 2013, and in
charge of the operation management in three division of the industry.
Post-holding in shareholder’s unit
√ Applicable □ Not applicable
Received
Position in Start dated of office End date of remuneration from
Name Name of shareholder’s unit
shareholder’s unit n term office term shareholder’s unit
(Y/N)
Li Zhongqiu Wuhan Zhongheng Group Chairman 1996-03-21 Y
Shenzhen Electronics Deputy GM, party
Zhang
Group Co., Ltd. and its committee and secretary N
Guangliu
subsidiaries of the Board
Huang Yanbo Wuhan Zhongheng Group Deputy GM 2016-10-12 N
深圳中恒华发股份有限公司 2017 年年度报告全文
Post-holding in other unit
√ Applicable □ Not applicable
Received
Position in Start dated of End date of office remuneration
Name Name of other units
other unit n office term term from other unit
(Y/N)
Li Ding’an South China University of Technology Professor
Guangdong Provincial International Tax
Li Ding’an Director
Institute
Guangdong Provincial Local Taxation
Li Ding’an Director
Institute
Working Committee of Experts on
Li Ding’an Enterprise Development of Guangdong Vice president
Manufacturing Association
Guangdong Provincial Committee of
Li Ding’an Director
CPPCC
Guangdong Kangmei Pharmaceutical Co., Independent
Li Ding’an
Ltd. director
Independent
Li Ding’an Jiadu Xintai Technology Co., Ltd.
director
Wuhan LiYuan Information Technology Independent
Li Ding’an
Co., Ltd. director
Changjiang Securities Holding (Hong Chairman and
Xu Jingwen
Kong) Co., Ltd. CEO
Chinese Accounting Association Branch of President of
Zhang Zhaoguo
High Engineering College and University the Board
Zhang Zhaoguo Accounting Association of Hubei Province Vice president
Hubei Central Enterprise Accounting
Zhang Zhaoguo Vice president
Association
Zhang Zhaoguo Wuhan Yangtze Business University Dean
Independent
Zhang Zhaoguo HRTN
director
Katie Ecological Environment POlytron Independent
Zhang Zhaoguo
Technology Inc director
Independent
Zhang Zhaoguo Eastern Jin Yu Co., Ltd.
director
Punishment of securities regulatory authority in recent three years to the company’s current and outgoing directors, supervisors and
senior management during the reporting period
√ Applicable □ Not applicable
深圳中恒华发股份有限公司 2017 年年度报告全文
1. On December 22, 2016, the company received the “Written Decision of Administrative Penalty” ([2006] No. 7) from CSRC
Shenzhen Securities Regulatory Bureau which gave following penalties to the company and related parties: (a) order Shen HUAFA
to correct errors, give a warning, and impose a fine of 400,000 Yuan; (b) give a warning to Li Zhongqiu and impose a fine of 250,000
Yuan; (c) give a warning to Chen Zhigang, and impose a fine of 80,000 Yuan; (d) give a warning to Tang Ganyu, and impose a fine
of 80,000 Yuan; (e) give a warning to Weng Xiaoyu and Cai Li, and impose a fine of 30,000 Yuan. See details on the “Notice on
Receiving Written Decision of Administrative Penalty from CSRC” (Notice No.: 2016-68) at http://www.cninfo.com.cn.
2. On January 5, 2017, the company received the “Announcement on Public Condemnation to Shenzhen Zhongheng Huafa Co., Ltd.
and Related Parties” of the Shenzhen Stock Exchange (hereinafter referred to as the “SZSE”): 1. Give a public condemnation to
Shenzhen Huafa; 2. Give a public condemnation to Li Zhongqiu, the actual controller, chairman and general manager of Shenzhen
Huafa; for the illegal behavior of Shenzhen Huafa and related parties and the punishment given by SZSE, SZSE will record in the
credit archive of listed companies and publish to the public. See details at http://www.cninfo.com.cn about the Announcement on
Receipt of Public Condemnation of Shenzhen Stock Exchange to the Company and Related Parties” (Announcement No.: 2017-01).
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
Remuneration of directors and supervisors are determined by general meeting, and the allowance standard for
each independent director is RMB 60, 000 per year (tax included).
Remuneration of senior management is determined by the board based on the unified remuneration management
system and actual completion of operational targets, and the “Proposal of Basic Remuneration for High-ranking
Managers of the Company” was deliberated and approved in 2nd extraordinary meeting of the Board for year of
2012.
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Total Whether
remuneration remuneration
Post-holding
Name Title Sex Age obtained from the obtained from
status
Company (before related party of
taxes) the Company
Currently in
Li Zhongqiu Chairman, GM M 53 48 No
office
Li Yongping Vice Chairman M 60 Leave the office 0 Yes
Currently in
Zhang Guangliu Vice Chairman M 55 0 Yes
office
Director,
Currently in
Yang Bin secretary of the M 45 30 No
office
Board, CFO
Independent Currently in
Li Ding’an M 72 6 No
director office
深圳中恒华发股份有限公司 2017 年年度报告全文
Independent Currently in
Xu Jingwen M 52 6 No
director office
Independent Currently in
Zhang Zhaoguo M 61 6 No
director office
Currently in
Huang Yanbo Supervisor F 55 0 Yes
office
Currently in
Geng Qu Supervisor F 48 9.3 No
office
Currently in
Chen Qin Supervisor F 31 9 No
office
Currently in
Tang Ganyu Deputy GM F 40 36 No
office
Total -- -- -- -- 150.3 --
Delegated equity incentive for directors, supervisors and senior executives in reporting period
□ Applicable √ Not applicable
V. Particulars of workforce
1. Number of Employees, Professional composition, Education background
Employee in-post of the parent Company (people)
Employee in-post of main Subsidiaries (people)
The total number of current employees (people)
The total number of current employees to receive pay (people)
Retired employee’ s expenses borne by the parent Company and
main Subsidiaries (people)
Professional composition
Category of professional composition Numbers of professional composition (people)
Production personnel
Sales personnel
Technical personnel
Financial personnel
Administrative personnel
Total
Education background
Category of education background Numbers (people)
Master and on-the-job graduate students
Undergraduate
深圳中恒华发股份有限公司 2017 年年度报告全文
Junior college
Other
Total
2. Remuneration Policy
The company’s directors (excluding independent directors), supervisors and senior management personnel are
monthly paid by basic pay and performance pay, and the annual remunerations are paid after annual assessment;
the company’s independent directors are paid 60,000 Yuan per person per year as allowances (including tax), the
travel expenses for attending the board meeting and stockholders' meeting and the necessary expenses generated
by exercising their powers in accordance with relevant laws and regulations can be applied for reimbursement
according to the company’s regulations; the remuneration ordinary employees are decided by the positions,
including probationary period salary regular employee salary, and the company pays social security and public
accumulated funds for them in accordance with the national regulations.
3. Training programs
(1) The directors, supervisors and senior management personnel actively participate in the relevant training and
assessment organized by the regulatory agencies, such as Shenzhen Stock Exchange, Shenzhen Securities
Regulatory Bureau, etc.
(2) The company regularly or irregularly organizes professional trainings for employees according to the
departments and division of labor, including internal trainings and external trainings, thereinto, internal trainings
are provided by specialized personnel in the company; external trainings are provided by organizing employees
to participate in the trade associations and the training organized by supervision department.
(3) Organize staff in all positions to actively participate in the learning and assessment of technical professional
qualifications required by different positions.
4. Labor outsourcing
□ Applicable √ Not applicable
深圳中恒华发股份有限公司 2017 年年度报告全文
Section IX. Corporate Governance
I. Corporate governance of the Company
During the reporting period, in accordance with the laws and regulations of the \"Company Law\", \"Securities Law\",
and \"Governance Norms of Listed Companies\", and the relevant rules and requirements promulgated by the China
Securities Regulatory Commission, the company has constantly improved the corporate governance structure,
established a sound internal control system, enhanced the level of standard operation, strictly followed the
provisions of the production and management control and the financial management and control and the
information disclosure and control, carried out the work on the basis of the \"Articles of Association\", \"Rules of
Procedure of the Board of Directors”, \"Rules of Procedure of the Board of Supervisors”, “Working System of the
Independent Directors”, and “Working Rules of the General Manager”, and ensured that the shareholders' meeting,
the board of directors and the board of supervisors can perform their duties and responsibilities normally. The
company's governance meets the requirements on the documents of governance norms of listed companies issued
by China Securities Regulatory Commission.
During the reporting period, in order to safeguard the legitimate rights and interests of the company, the
shareholders and the creditors and regulate the organization and behavior of the company, the company has
revised the “Constitution of Shenzhen Zhongheng Huafa Co., Ltd.” according to the “Company Law of the
People's Republic of China”, “Securities Law of the People's Republic of China” and the “Guidelines for the
Articles of Association of Listed Companies (2014 Revision)” issued by China Securities Regulatory Commission
Is there any difference between the actual condition of corporate governance and relevant regulations about
corporate governance for listed company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about
corporate governance for listed company from CSRC.
II. Independency of the Company relative to controlling shareholders’ in aspect of businesses,
personnel, assets, organization and finance
During the reporting period, the company’s controlling shareholder - Wuhan Zhongheng Group has separated the
business, personnel, assets, organization and finance from the controlling shareholders in accordance with the laws
and regulations of the \"Company Law\" and \"Articles of Association\", and had the independent and complete
business system and the capabilities of independent management.
1. Personnel: The company fully and independently operates in the labor, personnel and salary management
systems and has established the independent management system, all of the company's senior executives are
深圳中恒华发股份有限公司 2017 年年度报告全文
working in the Company and receive the salaries, no senior executive has held a post in both the Company and the
controlling shareholder’s company, and no financial staff has held a post in two or more of the related companies.
2. Assets: The company has the clear property rights with the controlling shareholders and the capabilities of
independent management, possesses the full rights to control the production system, supporting facilities and land
use rights, no major shareholder has occupied or dominated the assets.
3. Finance: The company has established the independent, complete, standardized financial accounting system and
financial management system, and the corresponding internal control system and internal audit system in
accordance with the requirements of the \"Accounting Standards for Business Enterprises\" to make the independent
financial decisions.
4. Organization: the board of directors, the board of supervisors, and other internal organizations are sound and
operate independently, the organization is completely separated from the controlling shareholders, all
organizations of the company are set up based on the norms and requirements of the listed company and the
company’s actual business features which have the independent office addresses and there is no mixed operation
or co-working, and the controlling shareholders legally exercise the investors’ rights and undertake the
corresponding obligations.
5. Business: the company has the completely independent business operation system, the capabilities of
independent management, the independent purchasing system, production system and marketing system, doesn’t
depend on the controlling shareholders to gain profits or have the horizontal competition relationship with the
controlling shareholders or the subsidiaries.
III. Horizontal competition
□ Applicable √ Not applicable
IV. In the report period, the Company held annual shareholders’ general meeting and
extraordinary shareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report period
Ratio of investor
Session of meeting Type Date Date of disclosure Index of disclosure
participation
http://www.cninfo.co
m.cn/cninfo-new/dis
closure/fulltext/bulle
2016 AGM AGM 47.02% 2017-05-16 2017-05-17
tin_detail/true/12035
26132?announceTim
e=2017-05-17
2017 First Extraordinary http://www.cninfo.co
Extraordinary shareholders’ general 47.01% 2017-07-18 2017-07-19 m.cn/cninfo-new/dis
shareholders’ general meeting closure/fulltext/bulle
深圳中恒华发股份有限公司 2017 年年度报告全文
meeting tin_detail/true/12037
12866?announceTim
e=2017-07-19
Cancel the Meeting
http://www.cninfo.co
2017 Second
Extraordinary m.cn/cninfo-new/dis
Extraordinary
shareholders’ general closure/fulltext/bulle
shareholders’ general
meeting tin_detail/true/12038
meeting
64961?announceTim
e=2017-08-25
http://www.cninfo.co
2017 Third m.cn/cninfo-new/dis
Extraordinary
Extraordinary closure/fulltext/bulle
shareholders’ general 47.11% 2017-11-16 2017-11-17
shareholders’ general tin_detail/true/12041
meeting
meeting 45314?announceTim
e=2017-11-17
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
The attending of independent directors and BOD
Times of Absent the Times
Times of
Board meeting Times of Times of Meeting for presented in
Independent attending by Times of
supposed to present in entrusted the second shareholders’
Director communicatio Absence
attend in the person presence time in a row general
n
report period (Y/N) meeting
Zhang Zhaoguo 10 3 6 1 0N
Li Ding’an 10 4 6 0 0N
Xu Jingwen 10 2 6 2 0N
Explanation of absent the Board Meeting for the second time in a row
Nil
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□Yes √No
Independent directors has no objections for relevant events in reporting period
深圳中恒华发股份有限公司 2017 年年度报告全文
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directors
Advices about the Company from independent directors are all accepted in the reporting period.
VI. Duty performance of the special committees under the board during the reporting period
1. Duty performance of the audit committee
During the reporting period, the work carried out by the audit committee mainly included: listening to the
company's annual operating, financial and internal audit work, continuing to concern and guide the company’s
financial affairs and internal audit supervision, carrying forward the audit work to the company’s annual financial
report, sending a letter to urge the audit report to be submitted on time, communicating with the certified public
accountants time after time during the annual audit, objectively evaluating the annual audit work of the accounting
firm, and making the resolution to agree to re-appoint the accounting firm.
2. Remuneration & appraisal committee
During the reporting period, the remuneration & appraisal committee has audited 2013 annual remuneration of the
company’s directors, supervisors and senior management which was considered to be consistent with the actual
situation and in line with the provisions of relevant laws and the regulations of remuneration and appraisal system.
3. The nominations committee
During the reporting period, the nominations committee has investigated the proposal for the supplement of
independent directors, and made the decision to agree to submit to the board of directors for consideration.
4. The Strategic Committee
In the reporting period, the Strategic Committee
VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Examination and incentives of senior management
During the reporting period, in order to enable the senior management to better perform their duties and maintain
the interests of the company and its shareholders, the company has floatingly paid the remuneration to urge the
company's management to work more diligently and ensure the realization of the company's development strategy
and operation target accordingly to the “Staff rank and basic salary system” and the performance assessment and
combining with the company's actual operating conditions.
深圳中恒华发股份有限公司 2017 年年度报告全文
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
2. Appraisal Report of Internal Control
Disclosure date of full internal control
2018-04-24
evaluation report
Disclosure index of full internal control Juchao Website
evaluation report http://www.cninfo.com.cn
The ratio of the total assets of units
included in the scope of evaluation
accounting for the total assets on the 100.00%
company's consolidated financial
statements
The ratio of the operating income of units
included in the scope of evaluation
accounting for the operating income on the 100.00%
company's consolidated financial
statements
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
1. General deficiencies: when facing
1. General deficiencies: the amount of direct low-risk matters in the process of
property loss is between 50,000 and 150,000 business operation, the unit being
Yuan, penalized by the district-level inspected didn’t take corresponding
(including district-level) government sector internal control measures and respond
but not having a negative impact on the effectively;
company’s regular disclosure; 2. Important 2. Important deficiencies: when facing
deficiencies: the amount of direct property matters at a moderate risk level in the
loss is between 150,000 and 450,000 Yuan, process of business operation, the unit
Qualitative criteria
penalized by the provincial level (including being inspected didn’t take
provincial level) government sector but not corresponding internal control measures
having a negative impact on the company’s and respond effectively;
regular disclosure; 3. Major deficiencies: the 3. Major deficiencies: when facing
amount of direct property loss is more than high-risk matters in the process of
450,000 Yuan, penalized by the government business operation, the unit being
sector and having a negative impact on the inspected didn’t take corresponding
company’s regular disclosure; internal control measures and respond
effectively.
深圳中恒华发股份有限公司 2017 年年度报告全文
1. It belongs to important deficiency if the
misstatement of the company’s cash on hand,
bank deposits, notes receivable, and notes
payable caused by internal control
deficiencies is less than RMB 1000 Yuan; it General deficiencies: misstatement index
belongs to major deficiency if the 1 ≥0.5‰, and misstatement index 2 <
misstatement caused by internal control 0.5‰;
Quantitative standard deficiencies is greater than or equal to RMB Important deficiencies: 0.5‰ ≤
1000 Yuan. misstatement index 2 < 1‰;
2. Other deficiencies in internal controls: Major deficiencies: misstatement index
general deficiencies: misstatement index 1 ≥ 2≥1‰
0.5 ‰, and misstatement index 2 < 0.5 ‰;
important deficiencies: 0.5 ‰ ≤
misstatement index 2 <1 ‰; major
deficiencies: misstatement index 2 ≥ 1 ‰
Amount of significant defects in financial
reports
Amount of significant defects in
non-financial reports
Amount of important defects in financial
reports
Amount of important defects in
non-financial reports
X. Auditing report of internal control
√ Applicable □ Not applicable
Deliberations in Internal Control Audit Report
We believes the Company was in accordance with the \"basic norms of internal control\" and the relevant provisions and maintained
effective internal control of financial reporting in all material respects on 31 Dec. 2017.
Disclosure details of audit report of
Disclosed
internal control
Disclosure date of audit report of
2018-04-24
internal control (full-text)
Index of audit report of internal
The designated website: Juchao Website
control (full-text)
Opinion type of auditing report of
Standard unqualified
IC
Whether the non-financial report
No
had major defects
Carried out modified opinion for internal control audit report from CPA
深圳中恒华发股份有限公司 2017 年年度报告全文
□Yes √ No
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
√ Yes □ No
深圳中恒华发股份有限公司 2017 年年度报告全文
Section X. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without
due on the date when annual report approved for released or fail to cash in full on due
□Yes √ No
深圳中恒华发股份有限公司 2017 年年度报告全文
Section XI. Financial Report
I. Audit report
Type of audit opinion Standard unqualified opinion
Signing date of audit report 2018-04-20
Name of audit institute DAXIN Certified Public Accountants LLP
Document serial of audit report Da Xin Shen Zi [2018] No.: 5-00108
Name of CPA Li Wei, Fan Zhang
Auditor’s Report
I. Auditing opinions
We have audited the financial statement under the name of SHENZHEN ZHONGHENG HUAFA CO., LTD.
(hereinafter referred to as the Company), including the consolidated and parent Company’s balance sheet of 31
December 2017 and profit statement, and cash flow statement, and statement on changes of shareholders’ equity
for the year ended, and notes to the financial statements for the year ended.
In our opinion, the Company’s financial statements have been prepared in accordance with the Enterprises
Accounting Standards and Enterprises Accounting System, and they fairly present the financial status of the
Company and of its parent company as of 31 December 2017 and its operation results and cash flows for the year
ended.
II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our
responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the
Financial Statements” section of the auditor’s report. We are independent of the Company in accordance with the
Certified Public Accountants of China’s Code of Ethics for Professional Accountants, and we have fulfilled our
other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
III. Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
(I) The transfer of creditor's rights to Jifang Company.
1. Description of the matter
Refer to Notes V (28) and V (38) of the consolidated statements that the company’s subsidiary Huafa Property
and Shenzhen Jifang Investment Co., Ltd. signed a house lease contract to rent out the first to third floors of the
深圳中恒华发股份有限公司 2017 年年度报告全文
company’s own property Huafa Building to Jifang Company. However, Jifang Company has not paid the rent and
management fees since December 2015, Huafa Property submitted arbitration to Shenzhen Arbitration
Commission in March 2016 and received the Award No. 346 from Shenzhen Arbitration Commission in
November 2016, according to the arbitration, Jifang Company needed to pay the rent and management fees of
2017 of RMB 23,020,800 to the company, the company confirmed the income of RMB 21,717,000 according to
the lease contract, this income accounted for 53% of the company’s property income for this year. The company
hanged out its shingle to transfer this claim at the cost of RMB 17,265,600 via Shenzhen United Property and
Share Rights Exchange, Shenzhen Jufan Investment Industry Co., Ltd. successfully picked the shingle and paid
RMB 17,265,600 in December 2017, the company confirmed the loss of RMB 5,755,000 in transfer, this matter
had the risks of creditor’s rights confirmed by the management and the authenticity of credit assignment.
Therefore, we regarded this matter as a key audit matter.
2. Audit response
We have implemented procedures for this matter:
(1) Understand and evaluate the effectiveness of the internal control design and operation related to the formation
of management revenue recognition claims, and understand the procedures for the collection and payment of
credit assignment.
(2) Check the lease contract, award, and recognize whether the assessment to the formation of revenue recognition
clauses claims meet the accounting standards, and confirm whether the accounting treatment for the creditor’s
right is correct.
(3) Check the credit assignment commission contract, the transaction certificate of Shenzhen United Property and
Share Rights Exchange, and bank slip, verify the amount of funds received from this credit assignment, and
recheck the loss of this credit assignment and whether its accounting treatment is correct.
(4) Inquire the industrial and commercial information whether Shenzhen Jufan Investment Industrial Co., Ltd. is a
related party and implement visit procedures to evaluate the authenticity of the transfer.
(II) Arbitration with Vanke
1. Description of the matter
In accordance with Notes XI (2) of the consolidated statements, in August 2015, Shenzhen Huafa and Wuhan
Zhongheng New Technology Industry Group Co., Ltd. (hereinafter referred to as “Wuhan Zhongheng”) signed the
“Cooperation Agreement on Urban Renewal Project of Updated Units at Huafa Industrial Park, Gongming Street,
Guangming New District, Shenzhen”. In September 2016, Shenzhen Vanke went to arbitration to South China
International Economic and Trade Arbitration Commission (hereinafter referred to as “South China International
Arbitration”) on the ground that Shenzhen Huafa and Wuhan Zhongheng violated the “Cooperation Contract” and
exceeded the time limit and handled the “Confirmation of Reforming Implementation Subject”, and required
Shenzhen Huafa and Wuhan Zhongheng to pay the payment of liquidated damages and the attorneys’ fees of
RMB 464,600,000 in total. On August 16, 2017, South China International Economic and Trade Arbitration
Commission made the “Arbitral Award” SCIA [2017] D376, ruling Shenzhen Huafa and Wuhan Zhongheng to
深圳中恒华发股份有限公司 2017 年年度报告全文
pay the payment of liquidated damages and other expenses of 234 million Yuan in total. The company considered
that the verdict of this case had problems with the arbitration procedures and the assertions of the so-called breach
of contract facts, its verdict has damaged the company’s legitimate rights and interests, and the company has filed
a withdrawal application to the Shenzhen Intermediate People’s Court, and the Shenzhen Intermediate People’s
Court has already formally accepted the case on February 7, 2018, the case number was (2018) Yue 03 MT 113.
Whether the company’s management had breach of contract and whether the defaulting party’s internal fault
liability allocation was correct, and the judgment risks that the finding did not confirm the estimated liability or
the current profit and loss, therefore, we regarded the arbitration matters with Vanke as key audit matters.
2. Audit response
(1) Understand the company’s policies or procedures for determining contingencies by performing inspections,
consulting with the company’s legal advisor, etc.
(2) Check the company’s assets replacement contract related to this matter, the asset replacement and related
transaction announcement, the renovation contract, the cooperation agreement between the company and Wuhan
Zhongheng Group, the award of the case, and whether the reasons and facts and the company’s affirmation for the
company to revoke the arbitration application and verify the formation of this matter are reasonable.
(3) Communicate with the company’s legal advisor and obtain special legal opinion from the legal advisor, and
understand the professional advice with legislative confirmation on this matter.
(III) Arbitration on lawyers’ fee with V&T Law Firm
1. Description of the matter
Refer to Note V (5) and XI (2) of the consolidated statements, on October 8, 2016, Wuhan Zhongheng New
Technology Industry Group and the Company entrusted V&T Law Firm to agent for the arbitration case with
Vanke and signed the “Entrusted Agency Contract” and “Supplementary Agreement”. According to the
supplementary agreement, if the seized objects could be successfully applied for replacement with other assets,
RMB 2 million would be paid within 3 days after receiving the adjudication. In view of the fact that V&T Law
Firm promised to replace the seized objects, the company has paid 2 million Yuan as a prepayment in advance.
However, V&T Law Firm failed to replace the seized objects and eventually lost the case. The company has
applied to Shenzhen Intermediate People's Court for the revocation of the arbitral award on February 8, 2018, and
the Intermediate People's Court has accepted the case. However, V&T Law Firm still asked for a huge amount of
legal fees after losing the case and filed an arbitration with the arbitration commission, the company received the
application for arbitration that V&T Law Firm applied to Wuhan Zhongheng and the Company for paying the
legal fees of RMB 19,402,000 for Vanke arbitration case from Shenzhen International Arbitration Commission on
March 12, 2018, in view of the fact that V&T Law Firm did not complete the agreement on the replacement of
seized objects and did not satisfy the payment condition of RMB 2 million, the company has already filed an
arbitration on refunding the lawyer fees. The company transferred the pre-expenditure of RMB 2 million to other
receivables and bad debts were accrued based on the aging of the account, as the amount of lawyer fees had a
greater impact on profit or loss and there was risk of management judgment, therefore, we regarded this matter as
深圳中恒华发股份有限公司 2017 年年度报告全文
a key audit matter.
2. Audit response
(1) Understand and evaluate the effectiveness of the internal control design and operation related to the
management payment and bad debts provisions
(2) Examine the agency contract, bank slip, and the arbitration application for lawyer fees, and implement the
authenticity of law firm’s external confirmations procedures to evaluate the creditor's right.
(3) Understand the company’s procedures for determining contingencies by performing inspections, consulting
with the company’s legal advisor, etc.
(4) Check the agency contracts, awards, identification of payment, analysis of aging, check whether the bad debt
accruals assessment conforms to accounting standards, a , and whether the accounting treatment is correct.
We have fulfilled the responsibilities described in the “CPA's Responsibility for the Audit of Financial Statements”
in this report, including those responsibilities related to these key audit matters. The results of our audit
procedures, including the procedures performed in response to the above key audit matters, provided the basis for
the overall release of the audit opinion in the financial statements.
IV. Other information
The management of the Company (the “Management”) is responsible for other information which includes the
information covered in the Company’s 2017 annual report excluding the financial statement and our audit report.
The audit opinion issued by us for the financial statement has not covered other information, for which we do not
issue any form of assurance opinions.
Considering our audit on financial statements, we are liable to read other information, during which, we shall
consider whether other information differs materially from the financial statements or that we understand during
our audit, or whether there is any material misstatement.
Based on the works executed by us, we should report the fact if we find any material misstatement in other
information. In t his regards, we have nothing to report.
V. Responsibilities of management and those charged with governance for the financial statements
The management is responsible for the preparation of the financial statements in accordance with the Accounting
Standards for Enterprise to secure a fair presentation, and for the design, establishment and maintenance of the
internal control necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing matters related to going concern and using the going concern assumption
unless the management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
深圳中恒华发股份有限公司 2017 年年度报告全文
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern assumption and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required by the CAS to draw users’ attention in audit report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are based
on the information obtained up to the date of audit report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express audit opinion on the financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
深圳中恒华发股份有限公司 2017 年年度报告全文
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguard measures.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in the auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in the auditor’s report because of the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
II. Financial statement
Currency used in note of financial statement is RMB (Yuan)
1. Consolidated Balance Sheet
Prepared by SHENZHEN ZHONGHENG HUAFA CO., LTD
In RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 68,812,495.97 93,332,709.81
Settlement provisions
Capital lent
Financial assets measured by fair
value and with variation reckoned into
current gains/losses
Derivative financial liability
Notes receivable 64,778,266.65 52,663,100.89
Accounts receivable 148,795,998.26 139,808,058.20
Accounts paid in advance 943,328.01 13,075,721.93
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance
receivable
Interest receivable
Dividend receivable
Other receivables 4,335,729.72 3,934,376.89
Purchase restituted finance asset
深圳中恒华发股份有限公司 2017 年年度报告全文
Inventories 60,387,021.65 46,902,384.80
Assets held for sale
Non-current asset due within one
12,191.49
year
Other current assets 52,310.51
Total current assets 348,105,150.77 349,728,544.01
Non-current assets:
Loans and payments on behalf
Finance asset available for sales
Held-to-maturity investment
Long-term account receivable
Long-term equity investment
Investment real estate 52,410,958.62 54,145,225.02
Fix assets 83,619,842.39 81,544,707.02
Construction in progress 654,356.00 654,356.00
Engineering material
Disposal of fixed asset 92,857,471.69 92,857,471.69
Productive biological asset
Oil and gas asset
Intangible assets 43,307,316.37 44,878,095.77
Expense on Research and
Development
Goodwill
Long-term expenses to be
141,666.55 191,666.59
apportioned
Deferred income tax asset 6,731,168.99 8,475,476.30
Other non-current asset 1,934,800.00
Total non-current asset 281,657,580.61 282,746,998.39
Total assets 629,762,731.38 632,475,542.40
Current liabilities:
Short-term loans 166,620,264.81 181,210,467.81
Loan from central bank
Absorbing deposit and interbank
deposit
Capital borrowed
Financial liability measured by fair
value and with variation reckoned into
current gains/losses
深圳中恒华发股份有限公司 2017 年年度报告全文
Derivative financial liability
Notes payable 17,810,270.28 16,714,584.01
Accounts payable 84,004,870.73 73,714,424.77
Accounts received in advance 278,128.18 48,846.60
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 5,083,357.93 4,542,531.22
Taxes payable 15,136,277.68 16,768,030.70
Interest payable 164,895.80 123,641.69
Dividend payable
Other accounts payable 19,927,276.95 17,050,035.16
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Liability held for sale
Non-current liabilities due within 1
year
Other current liabilities
Total current liabilities 309,025,342.36 310,172,561.96
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital
securities
Long-term account payable
Long-term wages payable
Special accounts payable
Projected liabilities 64,411.00 2,604,411.81
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 64,411.00 2,604,411.81
Total liabilities 309,089,753.36 312,776,973.77
深圳中恒华发股份有限公司 2017 年年度报告全文
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 -186,467,113.73 -187,441,523.12
Total owner’s equity attributable to
320,672,978.02 319,698,568.63
parent company
Minority interests
Total owner’s equity 320,672,978.02 319,698,568.63
Total liabilities and owner’s equity 629,762,731.38 632,475,542.40
Legal representative: Li Zhongqiu Person in charge of accounting works:Yang Bin
Person in charge of accounting institution: Wu Aijie
2. Balance Sheet of Parent Company
In RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 25,181,764.87 10,375,152.87
Financial assets measured by fair
value and with variation reckoned into
current gains/losses
Derivative financial liability
Notes receivable
Accounts receivable
Account paid in advance 2,500,000.00
Interest receivable
Dividends receivable
深圳中恒华发股份有限公司 2017 年年度报告全文
Other receivables 99,922,143.84 114,067,051.57
Inventories 14,806.50 14,806.50
Assets held for sale
Non-current assets maturing within
one year
Other current assets
Total current assets 125,118,715.21 126,957,010.94
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term receivables
Long-term equity investment 186,608,900.00 186,608,900.00
Investment real estate 27,583,299.22 28,796,525.38
Fix assets 6,821,367.58 6,491,983.71
Construction in progress 654,356.00 654,356.00
Project materials
Disposal of fixed assets 92,857,471.69 92,857,471.69
Productive biological assets
Oil and natural gas assets
Intangible assets 4,843,600.68 4,988,546.40
Research and development costs
Goodwill
Long-term deferred expenses 141,666.55 191,666.59
Deferred income tax assets 7,519,546.71 9,217,543.32
Other non-current assets
Total non-current assets 327,030,208.43 329,806,993.09
Total assets 452,148,923.64 456,764,004.03
Current liabilities:
Short-term borrowings 120,000,000.00 120,000,000.00
Financial liability measured by fair
value and with variation reckoned into
current gains/losses
Derivative financial liability
Notes payable
Accounts payable 10,745,840.16 10,745,840.16
深圳中恒华发股份有限公司 2017 年年度报告全文
Accounts received in advance 67,210.00 44,162.00
Wage payable 1,039,196.20 857,735.20
Taxes payable 9,305,468.70 10,094,737.11
Interest payable
Dividend payable
Other accounts payable 14,339,551.78 13,383,939.40
Liability held for sale
Non-current liabilities due within 1
year
Other current liabilities
Total current liabilities 155,497,266.84 155,126,413.87
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital
securities
Long-term account payable
Long-term wages payable
Special accounts payable
Projected liabilities 64,411.00 2,604,411.81
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 64,411.00 2,604,411.81
Total liabilities 155,561,677.84 157,730,825.68
Owners’ equity:
Share capita 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
深圳中恒华发股份有限公司 2017 年年度报告全文
Reasonable reserve
Surplus reserve 77,391,593.25 77,391,593.25
Retained profit -210,552,845.95 -208,106,913.40
Total owner’s equity 296,587,245.80 299,033,178.35
Total liabilities and owner’s equity 452,148,923.64 456,764,004.03
3. Consolidated Profit Statement
In RMB
Item Current Period Last Period
I. Total operating income 858,040,132.74 619,167,770.74
Including: Operating income 858,040,132.74 619,167,770.74
Interest income
Insurance gained
Commission charge and commission
income
II. Total operating cost 853,455,010.07 611,110,771.22
Including: Operating cost 777,906,611.12 534,736,613.02
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
Taxes and surcharge 6,447,920.89 6,137,557.58
Sales expenses 15,916,493.87 11,415,270.82
Administration expenses 42,783,111.53 50,261,495.60
Financial expenses 8,979,085.95 5,012,897.34
Losses of devaluation of asset 1,421,786.71 3,546,936.86
Add: Changing income of fair
value(Loss is listed with “-”)
Investment income (Loss is listed 372,245.91 333,974.06
深圳中恒华发股份有限公司 2017 年年度报告全文
with “-”)
Including: Investment income on
affiliated company and joint venture
Exchange income (Loss is listed
with “-”)
Income from assets disposal
199,069.56 82,132.08
(Loss is listed with “-”)
Other income 161,420.00
III. Operating profit (Loss is listed with
5,317,858.14 8,473,105.66
“-”)
Add: Non-operating income 2,971,956.07 5,410,701.48
Less: Non-operating expense 5,758,731.56 5,200,794.92
IV. Total Profit (Loss is listed with “-”) 2,531,082.65 8,683,012.22
Less: Income tax expense 1,556,673.26 3,225,301.89
V. Net profit (Net loss is listed with “-”) 974,409.39 5,457,710.33
(i) net profit from continuous
operation (Net loss is listed with “-”)
(ii) net profit from discontinued
operation (Net loss is listed with “-”)
Net profit attributable to owner’s of
974,409.39 5,457,710.33
parent company
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 income
items which will not be reclassified
subsequently to profit of loss
1. Changes as a result of
re-measurement of net defined benefit
plan liability or asset
2. Share of the other
comprehensive income of the investee
accounted for using equity method which
will not be reclassified subsequently to
profit and loss
深圳中恒华发股份有限公司 2017 年年度报告全文
(II) Other comprehensive income
items which will be reclassified
subsequently to profit or loss
1. Share of the other
comprehensive income of the investee
accounted for using equity method which
will be reclassified subsequently to profit
or loss
2. Gains or losses arising
from changes in fair value of
available-for-sale financial assets
3. Gains or losses arising
from reclassification of held-to-maturity
investment as available-for-sale financial
assets
4. The effect hedging portion
of gains or losses arising from cash flow
hedging instruments
5. Translation differences
arising on translation of foreign currency
financial statements
6. Other
Net after-tax of other comprehensive
income attributable to minority
shareholders
VII. Total comprehensive income 974,409.39 5,457,710.33
Total comprehensive income
974,409.39 5,457,710.33
attributable to owners of parent Company
Total comprehensive income
attributable to minority shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.0034 0.0193
(ii) Diluted earnings per share 0.0034 0.0193
Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and
realized 0 Yuan at last period for combined party
Legal representative: Li Zhongqiu Person in charge of accounting works:Yang Bin
Person in charge of accounting institution: Wu Aijie
深圳中恒华发股份有限公司 2017 年年度报告全文
4. Profit Statement of Parent Company
In RMB
Item Current Period Last Period
I. Operating income 41,156,307.77 43,547,414.64
Less: Operating cost 5,877,729.00 6,585,571.92
Taxes and surcharge 2,665,603.29 2,909,400.85
Sales expenses
Administration expenses 21,974,153.89 24,443,614.03
Financial expenses 8,006,852.33 5,510,413.62
Losses of devaluation of asset 502,503.49 3,296,102.05
Add: Changing income of fair
value(Loss is listed with “-”)
Investment income (Loss is
listed with “-”)
Including: Investment income
on affiliated company and joint venture
Income from assets disposal
-18,924.00
(Loss is listed with “-”)
Other income
II. Operating profit (Loss is listed
2,129,465.77 783,388.17
with “-”)
Add: Non-operating income 1,689,721.90 3,569,624.89
Less: Non-operating expense 5,755,745.88 5,154,489.08
III. Total Profit (Loss is listed with
-1,936,558.21 -801,476.02
“-”)
Less: Income tax expense 509,374.34 415,372.60
IV. Net profit (Net loss is listed with
-2,445,932.55 -1,216,848.62
“-”)
(i) net profit from continuous
operation (Net loss is listed with “-”)
(ii) net profit from discontinued
operation (Net loss is 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
深圳中恒华发股份有限公司 2017 年年度报告全文
1. Changes as a result of
re-measurement of net defined benefit
plan liability or asset
2. Share of the other
comprehensive income of the investee
accounted for using equity method
which will not be reclassified
subsequently to profit and loss
(II) Other comprehensive income
items which will be reclassified
subsequently to profit or loss
1. Share of the other
comprehensive income of the investee
accounted for using equity method
which will be reclassified subsequently
to profit or loss
2. Gains or losses arising
from changes in fair value of
available-for-sale financial assets
3. Gains or losses arising
from reclassification of held-to-maturity
investment as available-for-sale
financial assets
4. The effect hedging
portion of gains or losses arising from
cash flow hedging instruments
5. Translation differences
arising on translation of foreign
currency financial statements
6. Other
VI. Total comprehensive income -2,445,932.55 -1,216,848.62
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share
5. Consolidated Cash Flow Statement
In RMB
Item Current Period Last Period
I. Cash flows arising from operating
activities:
深圳中恒华发股份有限公司 2017 年年度报告全文
Cash received from selling
commodities and providing labor 827,133,048.96 576,271,328.32
services
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
Net increase of amount from
disposal financial assets that measured
by fair value and with variation
reckoned into current gains/losses
Cash received from interest,
commission charge and commission
Net increase of capital borrowed
Net increase of returned business
capital
Write-back of tax received 11,937.37
Other cash received concerning
13,807,385.47 68,476,594.48
operating activities
Subtotal of cash inflow arising from
840,952,371.80 644,747,922.80
operating activities
Cash paid for purchasing
commodities and receiving labor 700,632,478.96 469,147,356.40
service
Net increase of customer loans and
advances
Net increase of deposits in central
bank and interbank
Cash paid for original insurance
contract compensation
Cash paid for interest, commission
深圳中恒华发股份有限公司 2017 年年度报告全文
charge and commission
Cash paid for bonus of guarantee
slip
Cash paid to/for staff and workers 74,059,833.16 61,583,984.43
Taxes paid 12,201,020.91 21,225,973.55
Other cash paid concerning
42,335,784.41 111,483,905.00
operating activities
Subtotal of cash outflow arising from
829,229,117.44 663,441,219.38
operating activities
Net cash flows arising from operating
11,723,254.36 -18,693,296.58
activities
II. Cash flows arising from investing
activities:
Cash received from recovering
291,000,000.00 334,700,000.00
investment
Cash received from investment
372,245.91 333,974.06
income
Net cash received from disposal of
fixed, intangible and other long-term 169,640.00 188,362.00
assets
Net cash received from disposal of
subsidiaries and other units
Other cash received concerning
investing activities
Subtotal of cash inflow from investing
291,541,885.91 335,222,336.06
activities
Cash paid for purchasing fixed,
10,268,751.27 6,628,243.65
intangible and other long-term assets
Cash paid for investment 291,000,000.00 334,700,000.00
Net increase of mortgaged loans
Net cash received from
subsidiaries and other units obtained
Other cash paid concerning
investing activities
Subtotal of cash outflow from investing
301,268,751.27 341,328,243.65
activities
Net cash flows arising from investing
-9,726,865.36 -6,105,907.59
activities
深圳中恒华发股份有限公司 2017 年年度报告全文
III. Cash flows arising from financing
activities
Cash received from absorbing
303,628.60
investment
Including: Cash received from
absorbing minority shareholders’
investment by subsidiaries
Cash received from loans 288,636,279.36 248,739,138.25
Cash received from issuing bonds
Other cash received concerning
financing activities
Subtotal of cash inflow from financing
288,636,279.36 249,042,766.85
activities
Cash paid for settling debts 302,262,347.00 743,361,629.35
Cash paid for dividend and profit
10,604,519.83 9,132,711.48
distributing or interest paying
Including: Dividend and profit of
minority shareholder paid by
subsidiaries
Other cash paid concerning
financing activities
Subtotal of cash outflow from financing
312,866,866.83 752,494,340.83
activities
Net cash flows arising from financing
-24,230,587.47 -503,451,573.98
activities
IV. Influence on cash and cash
equivalents due to fluctuation in -306,140.20 -580,865.04
exchange rate
V. Net increase of cash and cash
-22,540,338.67 -528,831,643.19
equivalents
Add: Balance of cash and cash
104,015,312.97 632,846,956.16
equivalents at the period-begin
VI. Balance of cash and cash
81,474,974.30 104,015,312.97
equivalents at the period-end
6. Cash Flow Statement of Parent Company
In RMB
Item Current Period Last Period
深圳中恒华发股份有限公司 2017 年年度报告全文
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor 39,724,764.06 21,453,165.00
services
Write-back of tax received
Other cash received concerning
58,292,413.82 76,073,111.02
operating activities
Subtotal of cash inflow arising from
98,017,177.88 97,526,276.02
operating activities
Cash paid for purchasing
commodities and receiving labor 5,040,091.56 5,792,314.81
service
Cash paid to/for staff and workers 4,211,674.37 3,166,849.75
Taxes paid 4,009,011.87 11,555,523.30
Other cash paid concerning
60,441,124.86 127,611,991.39
operating activities
Subtotal of cash outflow arising from
73,701,902.66 148,126,679.25
operating activities
Net cash flows arising from operating
24,315,275.22 -50,600,403.23
activities
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 576.00
assets
Net cash received from disposal of
subsidiaries and other units
Other cash received concerning
investing activities
Subtotal of cash inflow from investing
576.00
activities
Cash paid for purchasing fixed,
1,449,992.31 2,763,012.20
intangible and other long-term assets
深圳中恒华发股份有限公司 2017 年年度报告全文
Cash paid for investment
Net cash received from
subsidiaries and other units
Other cash paid concerning
investing activities
Subtotal of cash outflow from investing
1,449,992.31 2,763,012.20
activities
Net cash flows arising from investing
-1,449,992.31 -2,762,436.20
activities
III. Cash flows arising from financing
activities
Cash received from absorbing
303,628.60
investment
Cash received from loans 120,000,000.00 120,000,000.00
Cash received from issuing bonds
Other cash received concerning
financing activities
Subtotal of cash inflow from financing
120,000,000.00 120,303,628.60
activities
Cash paid for settling debts 120,000,000.00 574,300,000.00
Cash paid for dividend and profit
8,058,841.68 7,203,237.97
distributing or interest paying
Other cash paid concerning
financing activities
Subtotal of cash outflow from financing
128,058,841.68 581,503,237.97
activities
Net cash flows arising from financing
-8,058,841.68 -461,199,609.37
activities
IV. Influence on cash and cash
equivalents due to fluctuation in 170.77 -132.65
exchange rate
V. Net increase of cash and cash
14,806,612.00 -514,562,581.45
equivalents
Add: Balance of cash and cash
10,375,152.87 524,937,734.32
equivalents at the period -begin
VI. Balance of cash and cash
25,181,764.87 10,375,152.87
equivalents at the period -end
深圳中恒华发股份有限公司 2017 年年度报告全文
7. Statement of Changes in Owners’ Equity (Consolidated)
This Period
In RMB
This Period
Owners’ equity attributable to parent company
Other
equity instrument
Item Less: Other Provisio Minorit Total
Perpet Reason
Share Capital Invento compre Surplus n of Retaine y owners’
ual able
capital Prefer capita reserve ry hensive reserve general d profit interests equity
red Other reserve
l shares income risk
stock
securi
ties
283,16 -187,44
I. Balance at the 146,587 77,391, 319,698
1,227. 1,523.1
end of the last year ,271.50 593.25 ,568.63
00
Add:
Changes of
accounting policy
Error
correction of the
last period
Enterprise
combine under
the same control
Other
II. Balance at the 283,16 146,587 77,391,
-187,44
319,698
beginning of this 1,227. 1,523.1
,271.50 593.25 ,568.63
year 00
III. Increase/
Decrease in this 974,409 974,409
year (Decrease is .39 .39
listed with “-”)
(i) Total 974,409 974,409
comprehensive
.39 .39
income
(ii) Owners’
devoted and
decreased capital
1.Common shares
invested by
shareholders
2. Capital invested
by holders of other
equity instruments
深圳中恒华发股份有限公司 2017 年年度报告全文
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 to
capital (share
capital)
3. Remedying loss
with surplus
reserve
4. Other
(V) Reasonable
reserve
1. Withdrawal in
the report period
2. Usage in the
report period
(VI)Others
IV. Balance at the 283,16 146,587 77,391,
-186,46
320,672
end of the report 1,227. 7,113.7
,271.50 593.25 ,978.02
period 00
Last Period
In RMB
深圳中恒华发股份有限公司 2017 年年度报告全文
Last Period
Owners’ equity attributable to the parent Company
Other
equity instrument Minorit
Item Less: Other Provisio Total
Perpet Reason y
Share Capital Invento compre Surplus n of Retaine interest owners’
ual able
capital Prefer capita reserve ry hensive reserve general d profit equity
reserve s
red Other shares income risk
l
stock
securi
ties
283,16 -195,42
I. Balance at the 146,283 77,391, 311,406
1,227. 9,900.9
end of the last year ,642.90 593.25 ,562.20
00
Add:
Changes of
accounting policy
Error 2,530,6 2,530,6
correction of the
67.50 67.50
last period
Enterprise
combine under the
same control
Other
II. Balance at the 283,16 -192,89
146,283 77,391, 313,937
beginning of this 1,227. 9,233.4
,642.90 593.25 ,229.70
year 00
III. Increase/
Decrease in this 303,628 5,457,7 5,761,3
year (Decrease is .60 10.33 38.93
listed with “-”)
(i) Total 5,457,7 5,457,7
comprehensive
10.33 10.33
income
(ii) Owners’ 303,628 303,628
devoted and
.60 .60
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
深圳中恒华发股份有限公司 2017 年年度报告全文
303,628 303,628
4 Other
.60 .60
(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 to
capital (share
capital)
3. Remedying loss
with surplus
reserve
4. Other
(V) Reasonable
reserve
1. Withdrawal in
the report period
2. Usage in the
report period
(VI)Others
IV. Balance at the 283,16 -187,44
146,587 77,391, 319,698
end of the report 1,227. 1,523.1
,271.50 593.25 ,568.63
period 00
8. Statement of Changes in Owners’ Equity (Parent Company)
This Period
In RMB
This Period
Item
Share Other Capital Less: Other Reasonab Surplus Retaine Total
深圳中恒华发股份有限公司 2017 年年度报告全文
capital equity instrument reserve Inventory comprehe le reserve reserve d profit owners’
shares nsive equity
Perpetu
income
al
Preferre
capital Other
d stock
securiti
es
-208,10
I. Balance at the 283,161, 146,587,2 77,391,59 299,033,1
6,913.4
end of the last year 227.00 71.50 3.25 78.35
Add: Changes
of accounting
policy
Error
correction of the
last period
Other
II. Balance at the 283,161, -208,10
146,587,2 77,391,59 299,033,1
beginning of this 6,913.4
227.00 71.50 3.25 78.35
year
III. Increase/
Decrease in this -2,445,9 -2,445,93
year (Decrease is 32.55 2.55
listed with “-”)
(i) Total -2,445,9 -2,445,93
comprehensive
32.55 2.55
income
(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. Distribution for
owners (or
深圳中恒华发股份有限公司 2017 年年度报告全文
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. Other
(V) Reasonable
reserve
1. Withdrawal in
the report period
2. Usage in the
report period
(VI)Others
IV. Balance at the 283,161, -210,55
146,587,2 77,391,59 296,587,2
end of the report 2,845.9
227.00 71.50 3.25 45.80
period
Last period
In RMB
Last period
Other
equity instrument
Other Total
Item Perpetu Less:
Share Capital comprehe Reasonab Surplus Retaine
al Inventory owners’
capital Preferre reserve nsive le reserve reserve d profit
capital Other shares equity
d stock income
securiti
es
-209,42
I. Balance at the 283,161, 146,283,6 77,391,59 297,415,7
0,732.2
end of the last year 227.00 42.90 3.25 30.87
Add: Changes
of accounting
policy
Error 2,530,6 2,530,667
correction of the 67.50 .50
深圳中恒华发股份有限公司 2017 年年度报告全文
last period
Other
II. Balance at the 283,161, -206,89
146,283,6 77,391,59 299,946,3
beginning of this 0,064.7
227.00 42.90 3.25 98.37
year
III. Increase/
Decrease in this 303,628.6 -1,216,8 -913,220.
year (Decrease is 0 48.62 02
listed with “-”)
(i) Total -1,216,8 -1,216,84
comprehensive
48.62 8.62
income
(ii) Owners’ 303,628.6 303,628.6
devoted and
0
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
303,628.6 303,628.6
4. Other
0
(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
深圳中恒华发股份有限公司 2017 年年度报告全文
reserve
4. Other
(V) Reasonable
reserve
1. Withdrawal in
the report period
2. Usage in the
report period
(VI)Others
IV. Balance at the 283,161, -208,10
146,587,2 77,391,59 299,033,1
end of the report 6,913.4
227.00 71.50 3.25 78.35
period
III. Company profile
1. 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, Shenzhen
Legal representative: Li Zhongqiu
Registered capital: RMB 283,161,227
2. The nature of the business and the main business activities
The 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 and
operation of real estate (Shen Fang Di Zi No.: 7226760) and property management. Funded affiliated companies
in Wuhan and Jilin. Setting up branches in capital of the province (Lhasa City excluded) in China and
municipality directly under the central government.
3. Relevant party offering approval reporting of financial statements and date thereof
The financial statement has been deliberated and approved by BOD on 23 April 2018. According to Article of
Association, the statement shall be submitted for deliberation in shareholders general meeting.
4. Scope of consolidate financial statement
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 Hengfa
Technology Co., Ltd., Shenzhen HUAFA Hengtian Co., Ltd. and Shenzhen HUAFA Hengtai Co., Ltd. more of
subsidiaries found in “Note VII. Equity in other subjects”.
深圳中恒华发股份有限公司 2017 年年度报告全文
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 for
Business Enterprise – Basic Standards and specific principle of accounting standards issued by the Ministry of
Finance, the Company prepared and formulate the financial statement lies on the followed important accounting
policy and estimation.
2. Going concern
The Company estimated that the production and sales of the Company, in 12 months since end of the period, will
in a virtuous cycle. We have good management and continuous operation ability, and there is no risk of continuing
operations.
V. Important accounting policy and estimation
Whether the company needs to comply with the disclosure requirements of the particular industry
No
Notes on specific accounting policies and accounting estimation:
According to actual operation characteristic, the Group formulate specific accounting policy and accounting
estimation, 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 and
reorganization and measurement of revenue etc.
1. Declaration of obedience to Accounting Standards for Business Enterprise
The Financial Statements of the Company are up to requirements of Accounting Standards for Business Enterprise
and also a true and thorough reflection to the relevant information as the Company’s financial position dated 30 th
June 2017 and the operation results as well as cash flow for the year of 2017.
2. Accounting period
The Company’s accounting year is Gregorian calendar year, namely from 1st January to 31st December of every
year.
3. Business cycle
The Company’s business cycle is one year (12 months) as a normal cycle, and the business cycle is the
determining 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.
深圳中恒华发股份有限公司 2017 年年度报告全文
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 control
satisfies the combination consideration by payment of cash, transfer of non-cash assets or assumption of debt, the
carrying value of the net assets of the acquire in combined financial statement of the ultimate controller shared by
the Company as at the combination date shall be deemed as the initial investment cost of such long term equity
investment. 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 of
long-term equity investment and book value of consideration (or total face value of the shares issued) paid, capital
surplus 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 the
assets paid, liabilities occurred or assumed as well as equity securities issued by the acquirer to obtain control over
the 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 value
on day of purchased. If the consolidation cost larger than the fair value amount of indentified net assets from
acquiree’s, the differences should be recognized as goodwill. If the consolidation cost less than the fair value
amount of indentified net assets from acquiree’s, the differences should reckoned into current gains/losses after
re-examination.
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) into
consolidated financial statement, including companies controlled by the Company, non-integral part of the
investees 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, the
necessary adjustment is made on the subsidiaries’ financial statements in the preparation of the consolidated
financial statements according to the Company’s accounting policies and periods.
3. Setoff of consolidated financial statement
The consolidated financial statements shall be prepared on the basis of the balance sheet of the parent company
and subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries and
within subsidiaries. The owner’s equity of the subsidiaries not attributable to the parent company shall be
presented as minority equity under the owner’s equity item in the consolidated balance sheet. The long term
equity investment of the parent company held by the subsidiaries, deemed as treasury stock of the corporate group
as well as the reduction of owners’ equity, shall be presented as “Less: treasury stock” under the owners’ equity
item in the consolidated balance sheet.
深圳中恒华发股份有限公司 2017 年年度报告全文
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 financial
statements from the beginning of the financial year in which the combination took place. When
preparing the consolidated financial statements, for the subsidiaries acquired from business
combination not involving entities under common control, the identifiable net assets of the subsidiaries are
adjusted 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 through
separate entities are classified as joint operations. Separate entities refer to the entities with separate identifiable
financial architecture including separate legal entities and legally recognized entities without the qualification of
legal entity. Joint arrangements achieved through separate entities are generally classified as joint ventures. In
case of changes in rights entitled to and obligations undertaken by the parties of joint venture under a joint
arrangement 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 joint
operation, and proceed with accounting in accordance with the relevant provisions under the Accounting
Standards for Business Enterprises: to recognize their separate assets or liabilities held, and recognize the assets or
liabilities jointly held according to their respective shares; to recognize the income from the disposal of their
output share under joint operation; to recognize the income from the disposal of output under joint operation
according to their respective shares; to recognize the expenses incurred separately, and recognize the expenses
incurred 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 undertake
relevant liabilities of the joint operation, accounting will be carried out with reference to the provisions of the
parties of joint operation; otherwise, it should be subject to relevant Accounting Standards for Business
Enterprises.
3. Accounting treatment for joint ventures
The parties of a joint venture should perform accounting for investments by the joint venture in accordance with
the Accounting Standards for Business Enterprises No. 2 – Long-term Equity Investments. The parties not under
common 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 deposits
available for payment anytime. The cash equivalents recognized in the preparation of the cash flow statements
深圳中恒华发股份有限公司 2017 年年度报告全文
refers to the investment held by the Company with characteristic of short-term, strong mobility, easy transfer to
known 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 trasaction occurred should be used for standard
money conversion while foreign currency exchange occurred On the balance sheet day, the monetary items are
converted on the current rate on the balance sheet day, concerning the exchange differences between the spot
exchange 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 specific
loans, which was reckoned into cost for capitalizing. The non-monetary items measured on the historic cost are
still 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 exchange
rate on the confirmation day of fair value, difference between the converted amount of bookkeeping currency and
original 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 accounting
check and preparation of the consolidated financial statements are made. Assets and liabilities items in the balance
sheet 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, should
converted by the approximate exchange rate of spot exchange rate on occurring date. The conversion difference of
the foreign currency financial statements is listed specifically in the owners’ equity in the balance sheet. If the
foreign cash flow determined by rational system method, the approximate exchange rate of spot exchange rate on
occurring date should prevail. The cash influenced by the rate fluctuation is listed specifically in the cash flow
statement. As for the foreign operation, the conversion difference of the foreign currency statement related to the
foreign operation is transferred in proportion into the disposal of the current loss/gain.
10. Account receivable
(1) Account receivables with single major amount and withdrawal bad debt provision independently
Book balance of the account receivable with over 0.5 million
Criterion or amount standards of major single amount
Yuan
Withdrawal method for individual bad debt provision accrual Recognized on the difference between the book value and the
with major single amount concerned current value of the estimative future cash flow
深圳中恒华发股份有限公司 2017 年年度报告全文
(2) Account receivable with bad debt provision accrual by portfolio
Portfolio Accrued method for bad debts
Age portfolio Aging of accounts
Withdrawing bad bed provision by aging method in portfolio:
√ Applicable □ Not applicable
Accrued proportion of other accounts
Account ages Accrued proportion of accounts receivable
receivable
Within one year (one year included) 0.00% 0.00%
1－2 years 5.00% 5.00%
2－3 years 10.00% 10.00%
Over three years 30.00% 30.00%
Withdrawing bad bed provision by percentage of total accounts receivable outstanding in portfolio:
□ Applicable √ Not applicable
Withdrawing bad bed provision by other methods in portfolio:
□ Applicable √ Not applicable
(3) Account receivable with minor single amount but has individual bad debt provision accrual
Receivable has minor amount and cannot reflect the risk
Reasons for individual bad debt prevision accrual
characteristic by withdrawing bad debt provision by group
Recognized on the difference between the book value and the
Accrued method for bad debt provision
current value of the estimative future cash flow
11. Inventory
Whether the company needs to comply with the disclosure requirements of the particular industry
No
1. Categories of inventory
The inventory is goods or manufactured products held for sale, products in process, and materials and matters
utilized in the production or supply of labor. Mainly including raw material, revolving materials, outside
processing materials, wrappage, low-value consumption goods, goods in process, semi-finished goods, stocks and
so 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 of
large quantity and low price, the provision is accrued on the inventory category.
深圳中恒华发股份有限公司 2017 年年度报告全文
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
12. Long term equity investment
1. Recognition of initial investment cost
Initial investment cost of long term equity investment obtained by corporate consolidation: in the case of the
consolidation of enterprises under the same control, recognized as the initial cost is the book value of the owners’
equity obtained from the consolidated party; in the case of the consolidation of enterprises not under the same
control, recognized as the initial cost is the recognized consolidation cost on the purchase day. As for the long
term equity investment obtained by cash payment, the initial investment cost is the actual purchase payment. As
for the long term equity investment obtained by the equity securities offering, the initial investment cost is the fair
value of the equity securities. As for the long-term equity 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 the long term equity investment obtained by the
exchange of the non-monetary assets and the debts restructuring, the initial investment cost is recognized on the
relevant rules in the Principles.
2. Subsequent measurement and profit or loss recognition
Where the investor 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 of
the 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 of
equity investments indirectly held by the investor shall be measured at fair value through profit or loss according
to according to relevant requirements of Accounting Standards for Business Enterprises No.22—Recognization
and measurement of Financial Instruments regardless whether the above entities have significant influence on
such 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 investee
Joint control over an investee refers to where the activities which have a significant influence on return on certain
arrangement could be decided only by mutual consent of the investing parties sharing the control, which includes
the 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 to
that: significant influence over the investee exists when holding more than 20% but less than 50% of the shares
with voting rights or even if the holding is below 20%, there is still significant influence if any of the following
conditions 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 on
the technology or technical information of the investing company; or major transactions with the investee.
13. Investment real estate
Measurement for investment real estate
深圳中恒华发股份有限公司 2017 年年度报告全文
Cost method
Depreciation or amortization method
The leased buildings in the Company’s investment property adopts straight-line depreciation to calculate and
distill 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.
14. Fixed assets
(1) Recognition
Fixed assets refers to the tangible assets holding for purpose of producing goods, providing labor services, leasing
or operation management, which has one accounting fiscal year of using life. Meanwhile as up to the following
conditions, 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 Depreciation method Depreciation life (year) Salvage rate Annual depreciation rate
House building Straight-line depreciation 20-50 10.00 1.80-4.50
Machine equipment Straight-line depreciation 10 10.00 9.00
Mold equipment Straight-line depreciation 3 10.00 30.00
Transportation
Straight-line depreciation 5 10.00 18.00
equipment
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 of
fixed assets according to the nature and use of various types of fixed assets. At the end of the year, review the useful life, estimated
net residual value, and depreciation method of fixed assets, if there is a difference from the original estimate, make corresponding
adjustments. Except for the fixed assets that have been fully depreciated and continue to be used and the land that is separately
accounted for, the Company calculates and depreciates all fixed assets.
15. Project in progress
Whether the company needs to comply with the disclosure requirements of the particular industry
No
Project in progress of the Company divided as self-run construction and out-bag construction. The project in
progress of the Company carried forward as fixed assets while the construction is ready for the intended use.
Criteria of the expected condition for use should apply one of the follow conditions: The substance construction
(installation included) of the fixed assets has completed all or basically; As the projects have been in test
深圳中恒华发股份有限公司 2017 年年度报告全文
production or operation, and the results show that the assets can operate properly and produce the qualified
products stably, or the test operation result shows the assets can operate or open properly. The expenditure of the
fixed assets on the construction is a little or little. The fixed assets of the project constructed have been up to the
requirements of the design or contract, or basically up to.
16. 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 is
capitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on the
actual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capital
assets, 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 period
of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while
the abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction or
production.
As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actual
interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the
return of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum is
recognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, and
times the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount or
premium 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 future
cash flow in the expectant duration period as the current book value of the borrowing.
17. 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 the
actual cost on the actual payment and relevant expenditure. As for the intangible assets invested in by the
investors, the actual cost is recognized on the value stipulated in the contract or agreement; however, if what is
stipulated in the contract or agreement is not fair value, the actual cost is recognized on fair value. As for the
self-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 is
taken on the intangible assets of finite service life, and at the yea-end, the check is taken on the service life and
dilution of the intangible assets, and the corresponding adjustment is made if there is inconsistency with the
深圳中恒华发股份有限公司 2017 年年度报告全文
previous estimative ones. As for the intangible assets of uncertain service life, it is not diluted, however, the
service life is checked at year-end; If there is solid evidence to its finite service life, its service life is estimated
and diluted 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 the
company, 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 the
contract stipulates or the law rules there is no definite useful life; combining the same industry case and or the
relevant expert argumentation, it is still incapable of judging the time limit within which the intangible assets
bring economic benefits to the company.
At the end of each year, review the useful life of intangible assets with indefinite useful life by mainly adopting
the bottom-up method, the relevant departments of intangible assets take the basic review and evaluate whether
there 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 current
profit or loss when incurred; expenditures incurred at the development phase and recognized as intangible assets
shall be transferred to intangible assets accounting.
18. Long-term investment 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 and
goodwill are tested for impairment if there is any indication that an asset may be impaired at the balance date. If
the 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 carrying
amount 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 future
cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on
the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the
recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest
group 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 of
whether there is any indication that the asset may be impaired. For the purpose of impairment testing, the carrying
amount of goodwill acquired in a business combination is allocated from the acquisition date on a reasonable
basis to each of the related asset groups; if it is impossible to allocate to the related asset groups, it is allocated to
each of the related set of asset groups. If the carrying amount of the asset group or set of asset groups is higher
than its recoverable amount, the amount of the impairment loss first reduced by the carrying amount of the
goodwill allocated to the asset group or set of asset groups, and then the carrying amount of other assets (other
than the goodwill) within the asset group or set of asset groups, pro rata based on the carrying amount of each
asset.
深圳中恒华发股份有限公司 2017 年年度报告全文
Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent period.
19. Long-term deferred expenditure
The Company’s long-term deferred expenditure are expenses paid out and with one year above (1-year included)
benefit period. The long-term unamortized expenses are diluted by periods according to the benefit period. As the
long-term unamortized expenses cannot enable the accounting period’s beneficiary, all dilution values of the
project undiluted yet, are transferred into the current loss/gain.
22. Employees benefits
(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 the
current period. At the time of actual occurrence, The Company’s employee benefits are recorded into the profits
and losses of the current year or assets associated costs according to the actual amount. The non-monetary
employee benefits are measured at fair value. Regarding to the medical and health insurance, industrial injury
insurance, maternity insurance and other social insurances, housing fund and labor union expenditure and
personnel education that the Company paid for employees, the Company should recognize corresponding
employees benefits payable according to the appropriation basis and proportion as stipulated by relevant
requirements and recognize the corresponding liabilities and include these expenses in the profits or losses of the
current 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 under
defined contribution scheme shall be recognized as a liability and recorded in profit and loss of the current period
or in assets. In respect of the defined benefit scheme, the Company shall use the projected unit credit method and
attribute the welfare obligations calculated using the formula stipulated by the defined benefit scheme to the
service 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 earlier
of the following dates: when the Company can no longer withdraw the offer of those benefits; and when the
Company 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 of
defined contribution scheme, the Company shall account for them according to relevant requirements of the
defined contribution scheme. In addition, the Company recognizes and measures the net liabilities or net assets of
the other long-term employee benefits according to relevant requirements of the defined contribution scheme.
深圳中恒华发股份有限公司 2017 年年度报告全文
21. Accrual liability
The obligation related to contingencies is the current obligation assumed by the company, and performing this
obligation may result in an outflow of economic benefits, and this obligation can be determined as the estimated
liabilities when the amount can be reliably measured. The Company makes initial measurement in accordance
with 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 determined
by the median value within the range; if a number of items are involved, the best estimate is determined by the
calculation of various possible outcomes and related probabilities.
At the balance sheet date, the book value of estimated liabilities should be rechecked, if there is conclusive
evidence indicates that this book value cannot truly reflect the current best estimate, and then the book value
should be adjusted in accordance with the current best estimate.
22. Revenue
Whether the company needs to comply with the disclosure requirements of the particular industry
No
1. Sales of goods
The Company shall ascertain the revenue incurred by selling goods in accordance with the received or receivable
price stipulated in the contract or agreement signed between the enterprise and the buyer unless the following
conditions are met simultaneously: ① the significant risks and rewards of ownership of the goods have been
transferred to the buyer by the enterprise; ② the enterprise retains neither continuous management right that
usually keeps relation with the ownership nor effective control over the sold goods; ③the relevant amount of
revenue can be measured in a reliable way; ④ relevant economic benefits may flow into the enterprise and ⑤
the relevant 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. The
revenue 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 the
labor services it provides, it shall recognize the revenue from providing services employing the
percentage-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 calculation
of completed works.
If an enterprise cannot, on the date of the balance sheet, measure the result of a transaction concerning the
providing 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 the
providing of labor services shall be recognized in accordance with the amount of the cost of labor services
incurred, and the cost of labor services shall be carried forward at the same amount; ②if the cost of labor services
incurred is not expected to compensate, the cost incurred should be included in the current profits and losses, and
no revenue from the providing of labor services may be recognized.
深圳中恒华发股份有限公司 2017 年年度报告全文
3. Transition of asset use right
When economic benefits relating to transition of asset use right is likely to inflow into the Company and the
relevant income can be measured reliably, the Company shall recognize such income from transition of asset use
right.
The Company’s specific income recognition method: it is recognized as income when the product has been sent
out and signed for receipt by the other party for domestic sales; it is recognized as income when the product has
been shipped and its customs procedures have been completed with the relevant declaration documents for export
sales. Income from house leases and property management is recognized according to the lease contract
agreement, receipt of relevant payments, or relevant collection proof.
23. Government subsidy
(1) Determination basis and accounting treatment for government grants related to assets
Government grant obtained by the Company for the purpose of constructing or otherwise forming long term assets
is recognized as government grant related to assets. The specific projects for which the government documents
have specified the subsidies should be divided according to the relative proportion of the amount paid for forming
assets and the amount paid included in costs in the budgeting of the specific project, and the dividing ratio needs
to be rechecked on each balance sheet date, and be changed if necessary. Government grants related to assets that
were received before January 1, 2017 are recognized as deferred income, the useful life of underlying assets is
included in the current profit or loss by reasonable and systematic methods, and those received on and after
January 1, 2017 are recognized as deferred income. The amount recognized as deferred income shall be included
in the current profit and loss in a reasonable and systematic way within the useful life of the relevant assets. Those
related to the daily activities of the Company are included in other income, and those not related to the daily
activities of the Company are included in non-operating income.
Government grants measured on the basis of nominal amounts are directly included in the current profit or loss.
(2) Determination basis and accounting treatment for government grants related to income
The government documents only make general statements on the use, and those not specified as special items are
regarded as government grants related to income.
Government grants related to income are treated in the following situations respectively: those used to compensate
the related expenses or losses of the enterprise in the subsequent period shall be recognized as deferred income
and shall be included in the current profit or loss during the period of confirming related expenses. Those used to
compensate the occurred related expenses or losses of the enterprise shall be directly included in the current profit
and loss. When being included in the current profits and losses, the government grants related to the Company’s
daily activities are included in other income; government grants that are not related to the Company’s daily
activities are included in non-operating income.
深圳中恒华发股份有限公司 2017 年年度报告全文
24. 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 item
that has not been recognized as an asset or liability, if its tax base can be determined in light of the tax law, the tax
base shall recognized as the difference) the deferred income tax and deferred income tax liabilities shall be
determined according to the applicable tax rate in period of assets expected to recover or liability expected to pay
off.
2. The deferred income tax assets shall be recognized to the extent of the amount of the taxable income which it is
most 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 deductible
temporary difference, the un-confirmed deferred income tax assts in previous accounting period shall be
recognized. If there has no enough taxable amounts, obtained in future period, to deducted the deferred income tax
assets, 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 enterprises
shall recognized as deferred income tax liability, unless the Company can control the time of the reverse of
temporary differences and the temporary differences are unlikely to be reversed in the expected future. As for the
deductible 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 the
expected future and it is likely to acquire any amount of taxable income tax that may be used for making up the
deductible temporary differences.
25. Leasing
(1) Accounting treatment for operating lease
Accounting treatment for operating lease: Operating lease payments are recognized on a straight-line basis over
the term of the relevant lease, and are either included 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 leased
asset at an amount equal to the lower of the fair value of the leased asset and the present value of the minimum
lease 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 deducting
unrecognized financing charges are listed as long-term payables.
26. Other important accounting policy and estimation
The company does not disclose other important accounting policies and accounting estimates.
深圳中恒华发股份有限公司 2017 年年度报告全文
27. Changes in important accounting policies and estimates
(1) Changes in important accounting policies
√ Applicable □ Not applicable
Content and reason of changes in
Approval procedure Note
accounting policies
(2) Changes in important accounting estimates
√ Applicable □ Not applicable
Contents and reasons of
Approval procedure Time for application Notes
changes in accounting estimates
VI. Taxes
1. Major tax and tax rate
Taxes Taxation basis Tax rate
VAT Domestic sales revenue 17%, 6%, 5%, 3%
Urban maintenance and construction tax Transfer tax payable 7%
Corporate income tax Taxable income 15, 25%
Business tax Taxable income 5%
Educational surtax Transfer tax payable 3%
Local educational surtax Transfer tax payable 2%, 1.5%
Property tax 70% of original value of the property 1.2%
Explain the different taxation entity of the enterprise income tax
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 enterprise
application, expert review, and public announcement and other procedures, the Company’s wholly-owned
subsidiary, 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 Hubei
Province on November 28, 2017, the certificate number is GR201742001840, which is valid for 3 years. The
深圳中恒华发股份有限公司 2017 年年度报告全文
applicable corporate income tax rate of the subsidiary Wuhan Hengfa Technology Co., Ltd. for 2017 was 15%.
VII. Notes to main items in consolidated financial statement
1. Monetary fund
In RMB
Item Closing balance Opening balance
Cash on hand 170,053.77 235,039.12
Bank deposit 66,070,891.82 91,075,765.36
Other monetary fund 2,571,550.38 2,021,905.33
Total 68,812,495.97 93,332,709.81
Other explanation
Other monetary funds are bank acceptance deposits.
2. Note receivable
(1) Category
In RMB
Item Closing balance Opening balance
Bank acceptance bill 37,676,025.26 30,321,803.17
Commercial acceptance bill 27,102,241.39 22,341,297.72
Total 64,778,266.65 52,663,100.89
(2) Note receivable pledged at period-end
In RMB
Item Amount pledged
Bank acceptance bill 15,738,970.85
Total 15,738,970.85
(3) Note receivable which have endorsed and discount at period-end and has not expired on balance sheet
date
In RMB
Item De-recognization amount at period-end Un de-recognization amount at period-end
Bank acceptance bill 43,511,682.25
Commercial acceptance bill 36,173,534.80
深圳中恒华发股份有限公司 2017 年年度报告全文
Total 79,685,217.05
3. Account receivable
(1) Category of account receivable
In RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Book
Proportio Accrual Proportio Accrual Book value
Amount Amount value Amount Amount
n ratio n ratio
Account receivable
with single
significant amount 7,556,36 7,556,36 7,649,7 7,649,789
4.67% 100.00% 5.00% 100.00%
and withdrawal bad 3.72 3.72 89.11 .11
debt provision
separately
Account receivable
with bad debt 148,804, 148,795,9 139,832 139,808,05
91.88% 8,352.08 0.01% 91.36% 24,580.65 0.02%
provision accrual by 350.34 98.26 ,638.85 8.20
portfolio
Accounts with single
significant amount
5,592,83 5,592,83 5,576,9 5,576,978
and bad debts 3.45% 100.00% 3.64% 100.00%
8.19 8.19 78.19 .19
provision accrued
individually
161,953, 13,157,5 148,795,9 153,059 13,251,34 139,808,05
Total 100.00% 100.00%
552.25 53.99 98.26 ,406.15 7.95 8.20
Account receivable with major single amount and withdrawal bad debt provision single at period-end:
√ Applicable □ Not applicable
In RMB
Account receivable (by Closing balance
units) Account receivable Bad debt reserve Accrual ratio Reasons
TCL ACE ELECTRIC
APPLIANCE 1,870,887.18 1,870,887.18 100.00% Un-recyclable
(HUIZHOU) CO., LTD.
SKYWORTH
Multimedia (Shenzhen) 1,325,431.75 1,325,431.75 100.00% Un-recyclable
Co., Ltd.
Hongkong Haowei 1,225,326.15 1,225,326.15 100.00% Un-recyclable
深圳中恒华发股份有限公司 2017 年年度报告全文
Industry Co. Ltd.
Qingdao Haier Parts
579,343.89 579,343.89 100.00% Un-recyclable
Procurement Co., Ltd.
Shenzhen Portman
2,555,374.75 2,555,374.75 100.00% Un-recyclable
Bowling Club Co., Ltd.
Total 7,556,363.72 7,556,363.72 -- --
Account receivable with bad debt provision withdrawal by method of account age in portfolio:
√ Applicable □ Not applicable
In RMB
Closing balance
Account age
Account receivable Bad debt provision Accrual ratio
Sub-item of within one year
Subtotal of within one year 148,639,591.75
1-2 year 162,475.62 8,123.78 5.00%
2-3 year 2,282.97 228.30 10.00%
Total 148,804,350.34 8,352.08
Explanation on portfolio basis:
Withdrawing bad bed provision by percentage of total accounts receivable outstanding in portfolio:
□ Applicable √ Not applicable
Withdrawing bad bed provision by other methods in portfolio:
Accounts with single significant amount and bad debts provision accrued individually at period-end
Debtor Book balance Bad debt Accrual ratio (%) Reasons
Shenzhen Huixin Video Technology Co., 381,168.96 381,168.96 100
Uncollectible
Ltd.
Shenzhen Wandelai Digital Technology 351,813.70 351,813.70 100
Uncollectible
Co., Ltd.
Shenzhen Dalong Electronic Co., Ltd. 344,700.00 344,700.00 100 Uncollectible
Shenzhen Keya Electronic Co., Ltd. 332,337.76 332,337.76 100 Uncollectible
Shenzhen Qunping Electronic Co., Ltd. 304,542.95 304,542.95 100 Uncollectible
China Galaxy Electronics (Hong Kong) 288,261.17 288,261.17 100
Uncollectible
Co., Ltd.
Dongguan Weite Electronic Co., Ltd. 274,399.80 274,399.80 100 Uncollectible
Chuangjing 247,811.87 247,811.87 100 Uncollectible
Hong Kong New Century Electronics Co., 207,409.40 207,409.40 100
Uncollectible
Ltd.
Shenyang Beitai Electronic Co., Ltd. 203,304.02 203,304.02 100 Uncollectible
Beijing Xinfang Weiye Technology Co., 193,000.00 193,000.00 100 Uncollectible
深圳中恒华发股份有限公司 2017 年年度报告全文
Ltd.
TCL Electronics (Hong Kong) Co., Ltd. 145,087.14 145,087.14 100 Uncollectible
Huizhou TCL Xinte Electronics Co., Ltd. 142,707.14 142,707.14 100 Uncollectible
SkyWorth – RGB Electronic Co., Ltd. 133,485.83 133,485.83 100 Uncollectible
Other 2,042,808.45 2,042,808.45 100 Uncollectible
Total 5,318,438.39 5,592,838.19
(2) Bad debt provision accrual, switch-back or taken back in the period
Bad debt provision accrual was 15,860.00 Yuan; the amount collected or switches back amounting to 109,653.96 Yuan.
Including major amount of bad debt provision that switch-back or taken back in the Period:
In RMB
Company Amount switch back or taken back Way
SKYWORTH Multimedia (Shenzhen) Co.,
93,425.39 Bank deposit
Ltd.
Total 93,425.39 --
(3) Top five receivables collected by arrears party at ending balance
Name Closing balance Proportion of total accounts Reserve balance of
receivable (%) bad debts
Qingdao Haier Spare Parts 57,011,599.00 35.20 1,225,326.15
Purchasing Co., Ltd.
Hongkong Yutian International 44,436,775.47 27.44
Investment Co., Ltd.
Wuhan Aidemeng Technology Co., 10,068,618.43 6.22
Ltd.
TCL Air-Conditioner Wuhan Co., 10,006,057.60 6.18
Ltd.
TopVictoryInvestmentsLtd 9,876,423.70 6.10
Total 131,399,474.20 81.13 1,225,326.15
4. Prepayments
(1) Prepayments listed by account age
In RMB
Closing balance Opening balance
Account age
Amount Proportion Amount Proportion
Within one year 937,895.64 90.47% 12,760,284.18 97.59%
深圳中恒华发股份有限公司 2017 年年度报告全文
1-2 year 3,732.52 9.47% 17,494.85 0.13%
2-3 year 1,699.85 0.06% 297,942.90 2.28%
Total 943,328.01 -- 13,075,721.93 --
Explanation on prepayments with over one year in age and reasons of un-settle:
None
Other explanation:
None
5. Other account receivable
(1) Category of other account receivable
In RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Book
Proportio Accrual Proportio Accrual Book value
Amount Amount value Amount Amount
n ratio n ratio
Other account
receivable with
single significant 6,722,60 6,722,60 641,266.6 7,572,2 6,042,827 1,529,426.6
34.28% 91.29% 41.36% 79.80%
amount and 2.71 2.71 4 54.02 .38
withdrawal bad debt
provision separately
Other account
receivable with bad 4,528,82 193,093. 3,615,664 2,384,0 2,326,151.8
23.09% 5.07% 13.02% 57,893.17 2.43%
debt provision 3.44 72 .68 45.02
accrual by portfolio
Other account
receivable with
single minor amount 8,359,64 8,359,64 8,351,8 8,273,100
42.63% 99.07% 78,798.40 45.62% 99.06% 78,798.40
but withdrawal single 3.58 3.58 98.56 .16
item bad debt
provision
19,611,0 15,275,3 4,335,729 18,308, 14,373,82 3,934,376.8
Total 100.00% 100.00%
69.73 40.01 .72 197.60 0.71
Other account receivable with major single amount and withdrawal bad debt provision single at period-end:
√ Applicable □ Not applicable
In RMB
Other account receivable Closing balance
(units) Other account receivable Bad debt provision Accrual ratio Accrual reason
深圳中恒华发股份有限公司 2017 年年度报告全文
Portman 4,021,734.22 4,021,734.22 100.00% Un-recyclable
Shenzhen Jifang
1,071,160.00 1,071,160.00 100.00% Un-recyclable
Investment Co., Ltd.
Traffic accident
555,785.81 555,785.81 100.00% Un-recyclable
compensation
Zhao Baomin 553,901.68 553,901.68 100.00% Un-recyclable
Hebei Botou Court 520,021.00 520,021.00 100.00% Un-recyclable
Total 6,722,602.71 6,722,602.71 -- --
Other account receivable with bad debt provision withdrawal by method of account age in portfolio:
√ Applicable □ Not applicable
In RMB
Closing balance
Account age
Other account receivable Bad debt provision Accrual ratio
Sub-item of within one year
A combination of bad debts 720,065.04
Subtotal of within one year 633,884.00
1-2 year 3,037,474.40 151,873.72 5.00%
2-3 year 10.00%
Over three years 137,400.00 41,220.00 30.00%
Total 4,528,823.44 193,093.72
Explanation on portfolio basis:
Withdrawing bad bed provision by percentage of total other accounts receivable outstanding in portfolio
□ Applicable √ Not applicable
Withdrawing bad bed provision by other methods in portfolio:
√ Applicable □ Not applicable
Other account receivable with single minor amount but withdrawal single item bad debt provision at period-end
Debtor Book balance Bad debt Accrual ratio (%) Reasons
Electricity fee in Gongming canteen 489,214.70 489,214.70 100.00 Uncollectible
Jiantao (Fogang) Laminates Co., Ltd. 465,528.10 465,528.10 100.00 Uncollectible
Labor union 332,402.55 332,402.55 100.00 Uncollectible
Lu Wei 290,000.00 290,000.00 100.00 Uncollectible
4/F hotle Daiqiangbo 194,569.00 194,569.00 100.00 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 units 6,224,740.39 6,224,740.39 100.00 Uncollectible
Total 8,359,643.58 8,359,643.58 —— ——
深圳中恒华发股份有限公司 2017 年年度报告全文
(2) Bad debt provision accrual, switch-back or taken back in reporting period
Bad debt provision accrual was 901,519.30 Yuan; the amount collected or switches back amounting to 0.00 Yuan.
Including major amount of bad debt provision that switch-back or taken back in the Period:
In RMB
Company Amount switch-back or taken back Way
(3) Classify according to nature
In RMB
Nature Ending book balance Opening book balance
Margin and deposit 1,793,485.04 1,793,485.04
Borrow money 2,190,666.85 2,719,549.04
Intercourse funds 9,081,233.88 7,503,053.91
Rent receivable 5,857,777.46 6,195,824.01
Other 687,906.50 96,285.60
Total 19,611,069.73 18,308,197.60
(4) Top 5 other receivables collected by arrears party at ending balance
In RMB
Proportion in total
Ending balance of
Company Nature Ending balance Account age other receivables at
bad debt provision
year-end
Portman Lease receivable 4,021,734.22 Over three years 22.84% 4,021,734.22
Shenzhen Jifang
Lease receivable 1,071,160.00 1-2 year 6.08% 1,071,160.00
Investment Co., Ltd.
Fujian Jielian
Deposit 800,000.00 Within 1 year 4.54%
Electronic Co., Ltd.
Wuwu Branch of
Shenzhen Dachong Deposit 641,266.64 2-3 year 3.64%
Industrial Co., Ltd.
Traffic accident
Other 555,785.81 Over three years 3.16% 555,785.81
compensation
Total -- 7,089,946.67 -- 40.26% 5,648,680.03
6. Inventory
Whether the company needs to comply with the disclosure requirements of the real estate industry
No
深圳中恒华发股份有限公司 2017 年年度报告全文
(1) Category of inventory
In RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
price fall-down price fall-down
Raw materials 29,640,518.78 937,858.86 28,702,659.92 29,871,068.31 1,089,943.56 28,781,124.75
Goods in process 119,575.09 119,575.09
Inventory goods 29,291,605.18 1,660,379.81 27,631,225.37 15,940,570.96 914,927.55 15,025,643.41
Homemade
semi-finished 3,433,461.82 1,444.25 3,432,017.57 2,757,682.20 41,816.29 2,715,865.91
products
Low priced and
easily worn 587,236.21 85,692.51 501,543.70 404,377.39 24,626.66 379,750.73
articles
Total 63,072,397.08 2,685,375.43 60,387,021.65 48,973,698.86 2,071,314.06 46,902,384.80
Does the Company comply with the disclosure requirement of “Information Disclosure Guidelines of Shenzhen Stock Exchange
No.4 – Listed Companies Engaged in Seed Industry and Planting Business” or not
No
(2) Provision for price fall-down
In RMB
Current increased Current decreased
Items Opening balance Switch back or Closing balance
Accrual Other Other
Written-off
Raw materials 1,089,943.56 434,503.93 586,588.63 937,858.86
Inventory goods 914,927.55 1,304,232.69 558,780.43 1,660,379.81
Homemade
semi-finished 41,816.29 1,444.25 41,816.29 1,444.25
products
Low priced and
easily worn 24,626.66 69,485.78 8,419.93 85,692.51
articles
Total 2,071,314.06 1,809,666.65 1,195,605.28 2,685,375.43
Inventory depreciation combining with sluggishness and inventory age was accrued based on the net realizable
value, some raw material prices went up and down, and some low-value consumables were recycled.
深圳中恒华发股份有限公司 2017 年年度报告全文
(3) Explanation on capitalization of borrowing costs in ending balance of inventory
(4) Assets completed without settle resulted by construction contract at period-end
In RMB
Item Amount
Other explanation:
7. Non-current assets due within one year
In RMB
Item Closing balance Opening balance
Decoration fee 12,191.49
Total 12,191.49
Other explanation:
8. Other current assets
In RMB
Item Closing balance Opening balance
Value-added tax to be deducted 9,996.21
Advance payment of income tax 42,314.30
Total 52,310.51
Other explanation:
Nil
9. Investment real estate
(1) Investment real estate measured at cost
√ Applicable □ Not applicable
In RMB
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
深圳中恒华发股份有限公司 2017 年年度报告全文
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 and
accumulated
amortization
1.Opening balance 79,516,461.92 79,516,461.92
2.Current increased 1,734,266.40 1,734,266.40
(1) accrual or
1,734,266.40 1,734,266.40
amortization
3.Current decreased
(1) disposal
(2) other
transfer-out
4.Closing balance 81,250,728.32 81,250,728.32
III. Depreciation reserves
1.Opening balance
2.Current increased
(1) accrual
3. Current decreased
(1) disposal
(2) other
transfer-out
4.Closing balance
深圳中恒华发股份有限公司 2017 年年度报告全文
IV. Book value
1. Ending Book
52,410,958.62 52,410,958.62
value
2. Opening Book
54,145,225.02 54,145,225.02
value
(2) Investment real estate measure on fair value
□ Applicable √ Not applicable
10. Fixed assets
(1) Fixed assets
In RMB
House and Machine Transportatio Office Instrument Tool Mold
Items Total
building equipment n equipment equipment equipment equipment equipment
I. Original
book value:
1.Opening 65,608,798.8 77,069,199.6 12,606,833.3 174,538,795.
5,213,153.64 6,900,942.25 2,755,661.49 4,384,205.71
balance 5 9 9
2.Current 11,888,960.0
6,656,731.60 1,440,927.36 90,551.41 296,264.95 1,134,912.22 2,269,572.50
increased
11,888,960.0
6,656,731.60 1,440,927.36 90,551.41 296,264.95 1,134,912.22 2,269,572.50
(1)purchasing
(2)constructi
on in
progress
transfer-in
(3) increased
by
combination
3.Current
3,567,206.46 222,226.00 10,029.81 51,121.45 3,850,583.72
decreased
(1) disposal
3,567,206.46 222,226.00 10,029.81 51,121.45 3,850,583.72
or scrapping
4.Closing 65,608,798.8 80,158,724.8 6,431,855.00 6,981,463.85 3,051,926.44 5,467,996.48 14,876,405.8 182,577,171.
深圳中恒华发股份有限公司 2017 年年度报告全文
balance 5 3 9
II.
Accumulativ
e
depreciation
1.Opening 12,890,366.5 57,558,303.0 92,994,088.0
3,162,640.76 5,197,749.19 2,426,117.30 2,566,496.57 9,192,414.59
balance 6 3
2.Current
1,953,603.12 4,185,128.76 585,278.77 295,829.04 70,786.08 568,510.06 1,582,869.80 9,242,005.63
increased
(1) accrual 1,953,603.12 4,185,128.76 585,278.77 295,829.04 70,786.08 568,510.06 1,582,869.80 9,242,005.63
3.Current
3,063,586.19 179,753.40 9,026.83 26,398.26 3,278,764.68
decreased
(1) disposal
3,063,586.19 179,753.40 9,026.83 26,398.26 3,278,764.68
or scrapping
4.Closing 14,843,969.6 58,679,845.6 10,775,284.3 98,957,328.9
3,568,166.13 5,484,551.40 2,496,903.38 3,108,608.37
balance 8 0 9
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 50,764,829.1 21,478,879.2 83,619,842.3
2,863,688.87 1,496,912.45 555,023.06 2,359,388.11 4,101,121.50
Book value 7 3
深圳中恒华发股份有限公司 2017 年年度报告全文
2. Opening 52,718,432.2 19,510,896.6 81,544,707.0
2,050,512.88 1,703,193.06 329,544.19 1,817,709.14 3,414,418.80
Book value 9 6
(2) Fixed assets leasing-out by operational lease
In RMB
Item Ending book value
House and building 905,391.76
905,391.76
11. Construction in progress
(1) Construction in progress
In RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Transformation
project of Huafa 654,356.00 654,356.00 654,356.00 654,356.00
Building
Total 654,356.00 654,356.00 654,356.00 654,356.00
12. Disposal of fixed assets
In RMB
Item Closing balance Opening balance
Gongming Huafa Electronic City 92,857,471.69 92,857,471.69
Total 92,857,471.69 92,857,471.69
Other explanation:
Urban reconstruction in Gongming
14. Intangible assets
(1) Intangible assets
In RMB
Non-patented
Item Land use right Patent right Computer software Total
technology
I. Original book
深圳中恒华发股份有限公司 2017 年年度报告全文
value
1.Opening
55,187,826.36 661,878.97 55,849,705.33
balance
2.Current
increased
(1) purchasing
(2) internal
R&D
(3) increased by
combination
3.Current
98,052.00 98,052.00
decreased
(1) disposal 98,052.00 98,052.00
4.Closing
55,089,774.36 661,878.97 55,751,653.33
balance
II. Accumulated
amortization
1.Opening
10,569,435.45 402,174.11 10,971,609.56
balance
2.Current
1,443,964.11 49,885.92 1,493,850.03
increased
(1) accrual 1,443,964.11 49,885.92 1,493,850.03
3.Current
21,122.63 21,122.63
decreased
(1) disposal 21,122.63 21,122.63
4.Closing
11,992,276.93 452,060.03 12,444,336.96
balance
III. Depreciation
reserves
1.Opening
balance
2.Current
increased
深圳中恒华发股份有限公司 2017 年年度报告全文
(1) accrual
3.Current
decreased
(1) disposal
4.Closing
balance
IV. Book value
1. Ending Book
43,097,497.43 209,818.94 43,307,316.37
value
2. Opening
44,618,390.91 259,704.86 44,878,095.77
Book value
The proportion of intangible assets form by internal R&D in total book value of intangible assets at period-end
14. Long-term deferred expenditure
In RMB
Item Opening balance Current increased Amortized in Period Other decreased Closing balance
Golf membership fee 191,666.59 50,000.04 141,666.55
Total 191,666.59 50,000.04 141,666.55
Other explanation
15. Deferred income tax asset /deferred income tax liability
(1) Deferred income tax assets un-offset
In RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences asset differences asset
Provision for impairment
27,849,536.92 6,690,066.24 26,543,004.31 6,635,751.08
of assets
Estimated liabilities 64,411.00 16,102.75 2,604,411.81 651,102.95
Other 4,754,489.08 1,188,622.27
Total 27,913,947.92 6,706,168.99 33,901,905.20 8,475,476.30
深圳中恒华发股份有限公司 2017 年年度报告全文
(2) Amount of deferred income tax asset and deferred income tax liability after trade-off
In RMB
Ending balance of Trade-off between the Opening balance of
Trade-off between the
deferred income tax deferred income tax deferred income tax
Item deferred income tax
assets or liabilities after assets and liabilities at assets or liabilities after
assets and liabilities
off-set period-begin off-set
Deferred income tax
6,731,168.99 8,475,476.30
asset
(3) Deferred income tax asset without confirmed
In RMB
Item Closing balance Opening balance
Deductible temporary difference 3,172,018.51 3,153,478.41
Deductible loss 525,348.33 1,006,234.22
Total 3,697,366.84 4,159,712.63
(4) Deductible losses of deferred income tax asset without confirmed will expired in later year
In RMB
Year Closing amount Opening amount Note
2017 480,885.89
2018 525,348.33 525,348.33
Total 525,348.33 1,006,234.22 --
Other explanation:
Nil
16. Short-term borrowing
(1) Category of short-term borrowing
In RMB
Item Closing balance Opening balance
Loan in pledge 8,500,000.00 6,500,000.00
Mortgage borrowing 100,000,000.00 100,000,000.00
Guaranteed loan 20,000,000.00 20,000,000.00
Portfolio loans with mortgage guarantee 38,120,264.81 54,710,467.81
Total 166,620,264.81 181,210,467.81
深圳中恒华发股份有限公司 2017 年年度报告全文
Explanation on category of short-term borrowing:
Nil
17. Note payable
In RMB
Category Closing balance Opening balance
Bank acceptance bill 17,810,270.28 16,714,584.01
Total 17,810,270.28 16,714,584.01
Totally 0 Yuan due note payable are paid at period-end
18. Account payable
(1) Account payable
In RMB
Item Closing balance Opening balance
Within one year (one year included) 71,817,382.90 61,929,564.68
Over 1 year 12,187,487.83 11,784,860.09
Total 84,004,870.73 73,714,424.77
(2) Major account payable over one year
In RMB
Item Closing balance Reasons of un-paid or carry-over
Shenzhen Yuehai Global Logistics Co.,
2,858,885.97 Unsettled
Ltd.
LG 1,906,267.50 Unsettled
Dongjin Electronics (Nanjing) Plasma Co.,
617,963.45 Unsettled
Ltd.
Total 5,383,116.92 --
Other explanation:
Nil
19. Account received in advance
(1) Account received in advance
In RMB
Item Closing balance Opening balance
深圳中恒华发股份有限公司 2017 年年度报告全文
Within one year (one year included) 234,017.18 1,067.00
Over 1 year 44,111.00 47,779.60
Total 278,128.18 48,846.60
20. Salary payable
(1) Salary payable
In RMB
Increase during the Decrease during this
Item Opening balance Closing balance
period period
I. Short-term compensation 4,547,625.04 66,161,797.50 65,620,970.79 5,088,451.75
II. Post-employment
welfare- defined -5,093.82 4,639,594.05 4,639,594.05 -5,093.82
contribution plans
III. Dismiss welfare 296,106.68 296,106.68
Total 4,542,531.22 71,097,498.23 70,556,671.52 5,083,357.93
(2) Short-term compensation
In RMB
Increase during the Decrease during this
Item Opening balance Closing balance
period period
1. Wages, bonuses, allowances
3,542,662.41 58,299,582.57 57,802,934.79 4,039,310.19
andsubsidies
2. Welfare for workers
5,162,936.06 5,135,827.06 27,109.00
and staff
3. Social insurance 23,041.98 2,059,937.27 2,059,937.27 23,041.98
Including: Medical
23,041.98 1,720,922.00 1,720,922.00 23,041.98
insurance
Work injury
191,453.81 191,453.81
insurance
Maternity
147,561.46 147,561.46
insurance
4. Housing accumulation
24,310.00 468,303.32 468,303.32 24,310.00
fund
5. Labor union
expenditure and 957,610.65 171,038.28 153,968.35 974,680.58
personnel education
深圳中恒华发股份有限公司 2017 年年度报告全文
expense
Total 4,547,625.04 66,161,797.50 65,620,970.79 5,088,451.75
(3) Defined contribution plans
In RMB
Increase during the Decrease during this
Item Opening balance Closing balance
period period
1. Basic endowment
-5,093.82 4,439,964.74 4,439,964.74 -5,093.82
insurance
2. Unemployment
199,629.31 199,629.31
insurance
Total -5,093.82 4,639,594.05 4,639,594.05 -5,093.82
Other explanation:
Nil
21. Tax payable
In RMB
Item Closing balance Opening balance
Value-added tax 5,473,037.12 5,922,024.47
Enterprise income tax 5,228,514.39 8,460,507.90
Individual income tax 20,213.76 72,577.79
Urban maintenance and construction tax 1,447,509.59 444,600.28
House property tax 743,004.72 763,249.59
Land use tax 324,212.74 324,212.71
Education surcharge 621,129.51 191,311.22
Local education surcharge 322,572.35 101,317.51
Dike fee 1,665.00 1,149.33
Stamp tax 34,988.50 20,009.90
Disposal fund of waste electrical products 919,430.00 467,070.00
Total 15,136,277.68 16,768,030.70
Other explanation:
Nil
22. Interest payable
In RMB
深圳中恒华发股份有限公司 2017 年年度报告全文
Item Closing balance Opening balance
Interest of short-term loans payable 164,895.80 123,641.69
Total 164,895.80 123,641.69
Significant overdue and unpaid interest:
In RMB
Loan unit Overdue amount Reason for overdue
Other explanation:
Nil
23. Other payable
(1) Classification of other payable according to nature of account
In RMB
Item Closing balance Opening balance
Margin and deposit 6,280,204.22 5,957,390.38
Lease management fee 2,307,901.27 2,003,231.87
Intercourse funds 6,534,652.44 5,330,161.96
After sale and repairmen 2,384,774.18 1,302,101.54
Other 2,419,744.84 2,457,149.41
Total 19,927,276.95 17,050,035.16
(2) Significant other payable with over one year age
In RMB
Item Closing balance Reasons of un-paid or carry-over
Shenzhen SED Property Development Co.,
1,244,058.55 Unsettled
Ltd.
Shenzhen Huayongxing Environmental
1,000,000.00 Deposit
Protection Technology Co., Ltd.
Linghang Technology (Shenzhen) Co., Ltd. 656,345.28 Unsettled
Shenzhen Tongxing Electronics Co., Ltd. 578,259.83 Unsettled
Shenzhen Yongdasheng Investment
558,970.00 Deposit
Development Co., Ltd.
Total 4,037,633.66 --
Other explanation
Nil
深圳中恒华发股份有限公司 2017 年年度报告全文
24. Accrued liabilities
In RMB
Item Closing balance Opening balance Causes
Pending action 64,411.00 2,604,411.81 Business and labor disputes
Total 64,411.00 2,604,411.81 --
Other explanations, including important assumptions and estimation about important estimated liabilities:
Note 1: On November 24, 2015, Shenzhen Intermediate People's Court adjudicated the dispute case that Shaanxi
Linghua complained about the Company’s work contract ((2013) SZFSZZ No. 1491): Shaanxi Linghua should
pay the damages for breach of contract of 1,778,081.05 Yuan to the Company within 10 days from the date the
adjudication takes effect, Shaanxi Linghua should pay the remaining payment of 869,458.96 Yuan to the
Company within 10 days from the date the adjudication takes effect, and compensate for the loss of interest. The
Company applied for retrial to Guangdong Higher People's Court. On December 3, 2016, Guangdong Higher
People's Court made a ruling on the application ((2016) YMSNo. 3280), and rejected the Company’s retrial
application. Up to December 31, 2016, the Company accrued the litigation cost of RMB 2,360,203.26 and
recognized it as an estimated liability. On July 27, 2017, the Company received the closing notice from the
People’s Court of Futian District, Shenzhen, Guangdong Province, stating that the Company did not execute its
obligations according to the judgments of Civil Judgment (2010) SFFMECZ No. 9 and Civil Judgment (2013)
SZFSZZ No. 1491, on July 18, 2017, the court made a mandatory deduction of the amount of RMB 1,012,400.00
from the Company’s account at China CITIC Bank, Shenzhen Houhai Sub-branch (7352). At this point, the
dispute case between the Company and Adlink was settled.
Note 2: According to the Enforcement Notice ( (2008) SFFZZ No.522-529) of Shenzhen Intermediate People's
Court, Shenzhen Labor Dispute Arbitration Commission issued SLZC [2007] No. 1069-1077, No. 1079, No. 1081,
and No. 1085-1087 arbitration awards for the labor dispute case of Cai Yaoqiang and other thirteen people, which
has taken legal effect. According to the Basic Information Credit Report of Enterprises, the Company has total
unexecuted labor dispute subject of RMB 64,411.00, and the Company recognizes it as the estimated liability.
25. Share capital
In RMB
Changes in the Period (+,-)
Opening Shares transfer Closing
Issuing new
balance Bonus shares from public Other Subtotal balance
shares
reserves
Total shares 283,161,227.00 283,161,227.00
Other explanation:
Ended as 31 December 2016, the shares of the Company held by controlling shareholder has 116,100,000 shares
in status of pledge, taking 41% of the total share capital; mortgagee is China Merchants Securities Assets
Management Co., Ltd. Shares in judicial freeze amounted as 116,489,894 shares. The mortgage expired on 31
深圳中恒华发股份有限公司 2017 年年度报告全文
December 2017
26. Capital surplus
In RMB
Increase during the Decrease during this
Item Opening balance Closing balance
period period
Capital premium (equity
96,501,903.02 96,501,903.02
premium)
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
27. Surplus reserves
In RMB
Increase during the Decrease during this
Item Opening balance Closing balance
period period
Statutory surplus
21,322,617.25 21,322,617.25
reserves
Discretionary surplus
56,068,976.00 56,068,976.00
reserve
Total 77,391,593.25 77,391,593.25
Other explanation, including changes and reasons for changes:
Nil
28. Retained profit
In RMB
Item This period Last period
Retained profit at the end of the previous period
-187,441,523.12
before adjustment
Retained profit at period-begin after adjustment -187,441,523.12
Add: net profit attributable to owners of the parent
974,409.39
company
Retained profit at period-end -186,467,113.73
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 retained
profits 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.
深圳中恒华发股份有限公司 2017 年年度报告全文
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 2,530,667.50 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
29. Operating income and cost
In RMB
Current Period Last Period
Item
Income Cost Income Cost
Main business 811,691,458.39 767,897,597.88 570,057,375.54 524,715,312.30
Other business 46,348,674.35 10,311,192.00 49,110,395.20 10,021,300.72
Total 858,040,132.74 778,208,789.88 619,167,770.74 534,736,613.02
31. Tax and surcharges
In RMB
Item Current Period Last Period
City maintenance and construction tax 1,427,781.18 1,237,422.94
Educational surtax 611,819.05 532,299.17
House property tax 2,699,817.08 2,379,135.20
Land use tax 864,650.63 651,551.53
Vehicle use tax 9,075.62 1,050.62
Stamp tax 515,320.90 314,848.62
Business tax 705,358.40
Local education development fee 319,456.43 315,891.10
Total 6,447,920.89 6,137,557.58
Other explanation:
Nil
31. Sales expenses
In RMB
Item Current Period Last Period
Employee compensation 4,984,220.26 3,961,051.20
Transportation fee 4,707,497.34 3,734,511.93
Commodity inspection fee 1,016,453.60 835,099.19
Customs fee 71,162.46 73,375.06
深圳中恒华发股份有限公司 2017 年年度报告全文
Commodity loss 1,270,308.03 577,556.46
After sales service fee 3,184,997.76 1,750,857.26
Entertainment expense 183,187.97 134,299.80
Other 498,666.45 348,519.92
Total 15,916,493.87 11,415,270.82
Other explanation:
Nil
32. Administrative expenses
In RMB
Item Current Period Last Period
Salary 9,181,074.76 10,789,526.57
Depreciation charge 2,005,410.35 2,727,784.79
Social insurance premium 3,063,807.83 6,752,570.66
Business entertainment expenses 2,164,825.72 2,789,553.98
Taxes and surcharges 1,053,920.89
Employee benefits 2,282,050.50 1,582,132.90
Travel expenses 3,182,447.37 3,242,531.84
Amortization of intangible assets 1,472,727.40 1,494,294.72
Transportation fee 1,234,314.61 1,564,024.45
Consulting fee 4,178,432.28 5,469,220.77
Security fee 1,909,696.23 1,213,334.31
Repairs fee 2,434,021.55 1,380,527.36
Audit fee 967,918.64 734,235.85
Office allowance 1,472,390.85 2,282,069.51
Communication fee 294,064.24 364,141.24
Amortization of low cost and short lived
391,757.33 540,722.73
articles
Securities information disclosure fee 646,641.60 404,595.80
Litigation fee 487,564.11 460,211.00
Lease fee 4,416,416.15 4,499,772.41
Staff education and labor union
113,009.17 100,664.53
expenditure
Water and electricity fee 476,436.91 101,827.25
Other expenses 408,103.93 713,832.04
深圳中恒华发股份有限公司 2017 年年度报告全文
Total 42,783,111.53 50,261,495.60
Other explanation:
Nil
33. Financial expenses
In RMB
Item Current Period Last Period
Interest costs 10,849,008.00 9,256,353.17
Less: interest income 1,682,070.72 865,609.05
Exchange loss 4,516,307.95 2,967,605.72
Less: exchange gains 5,205,454.35 8,734,892.51
Handing expense 498,775.07 427,320.01
Asset management fee 1,960,000.00
Other expense 2,520.00 2,120.00
Total 8,979,085.95 5,012,897.34
Other explanation:
Nil
34. Losses on assets impairment
In RMB
Item Current Period Last Period
I. Bad debt losses 807,725.34 3,370,059.54
II. Inventory falling price loss 614,061.37 176,877.32
Total 1,421,786.71 3,546,936.86
Other explanation:
Nil
35. Gains on investment
In RMB
Item Current Period Last Period
Investment income generated by financial
372,245.91 333,974.06
products
Total 372,245.91 333,974.06
Other explanation:
深圳中恒华发股份有限公司 2017 年年度报告全文
36. Asset disposal income
In RMB
Source of asset disposal income Current Period Last Period
Disposal gains or losses arising from the
disposal of not held for sale fixed assets 199,069.56 82,132.08
construction in progress \ productive
biological assets \ intangible assets
199,069.56 82,132.08
37. Other income
In RMB
Source of other income Current Period Last Period
Stabilization subsidy 161,420.00
38. Non-operating income
In RMB
Amount reckoned in current
Item Current Period Last Period
non-recurring gains/losses
Receive donations 51,500.00 4,000.00 51,500.00
Government subsidy 1,013,769.68 1,419,888.89 1,013,769.68
Unable to pay 139,368.16 379,187.99 139,368.16
Penalty revenue 1,670,673.90 3,526,305.00 1,670,673.90
Fine income 77,471.33 81,319.60 77,471.33
Other 19,173.00 19,173.00
Total 3,476,152.23 5,533,431.78 2,971,956.07
Government subsidy reckoned into current gains/losses:
In RMB
Subsidy
impact The special Assets-relate
Issuing Offering Amount in Amount in
Item Nature current subsidy d/income-rela
subject causes the Period last period
gains/losses (Y/N) ted
(Y/N)
Commercial Subsidy
Bureau of obtained for Income-relate
Export bonus Reward No Yes 50,000.00 20,000.00
Caidian conforms d
District, with the local
深圳中恒华发股份有限公司 2017 年年度报告全文
Wuhan support
policy for
investment
incentive to
encourage
investment
Subsidy
Human obtained for
Resources & conforms
Social with the local
Stabilization Security support Income-relate
Reward No Yes 183,500.00
subsidy Bureau of policy for d
Caidian investment
District, incentive to
Wuhan encourage
investment
Subsidy
obtained for
Reward for
conforms
excellent Commercial
with the local
private Bureau of
support Income-relate
enterprise in Caidian Reward No Yes 200,000.00
policy for d
Caidian District,
investment
District for Wuhan
incentive to
year of 2016
encourage
investment
Subsidy
obtained for
Development
conforms
& promotion Commercial
with the local
funds for Bureau of
support Income-relate
processing Caidian Reward No Yes 270,000.00
policy for d
trade of District,
investment
Midwest for Wuhan
incentive to
year of 2016
encourage
investment
Subsidy
Economic &
obtained for
Information
Enterprise conforms
Bureau of Income-relate
development Subsidy with the local No Yes 100,000.00
Caidian d
subsidy support
District,
policy for
Wuhan
investment
深圳中恒华发股份有限公司 2017 年年度报告全文
incentive to
encourage
investment
Subsidy
obtained for
conforms
Excellent Caidian with the local
enterprise Bureau of support Income-relate
Reward No Yes 200,000.00 200,000.00
award for Finance, policy for d
year of 2016 Wuhan investment
incentive to
encourage
investment
Enterprise Subsidy for
development research and
fund Caidian development,
(manufacturi Bureau of technical Income-relate
Subsidy No Yes 293,769.68 863,469.00
ng project of Finance, reforming d
home Wuhan and
appliance reconstructio
parts ) n
Subsidy
obtained for
conforms
Office of with the local
Water
Water support Income-relate
conservation Reward No Yes 10,000.00
Conservation policy for d
subsidy
of Wuhan investment
incentive to
encourage
investment
Subsidy
obtained for
Shenzhen
conforms
Municipal
with the local
Maternity Bureau of
support Income-relate
insurance Human Subsidy No Yes 42,919.89
policy for d
benefits Resources &
investment
Social
incentive to
Security
encourage
investment
Total -- -- -- -- -- 1,013,769.68 1,419,888.89 --
Other explanation:
深圳中恒华发股份有限公司 2017 年年度报告全文
Nil
39. Non-operating expenditure
In RMB
Amount included in current
Item Current Period Last Period
non-recurring profits or losses
Penalty expenditure 2,985.68 401,518.25 2,985.68
Loss of creditor's rights transfer 5,755,200.00 4,754,489.08 5,755,200.00
Other expenses 545.88 44,787.59 545.88
Total 5,758,731.56 5,200,794.92
Other explanation:
Nil
40. Income tax expenses
(1) Statement of income tax expense
In RMB
Item Current Period Last Period
Current income tax expense 1,000,988.22 5,300,506.90
Deferred income tax expense 555,685.04 -2,075,205.01
Total 1,556,673.26 3,225,301.89
(2) Adjustment on accounting profit and income tax expenses
In RMB
Item Current Period
Total profit 2,531,082.65
Income tax based on statutory/applicable rate 442,130.64
Impact by different tax rate applied by subsidies -461,085.57
Cost, expenses and loss which are not deductible 553,226.30
Impact on deductible temporary differences or losses deductible
1,022,694.52
which was un-recognized as deferred income tax assets
Income tax expense 1,556,673.26
Other explanation
Nil
深圳中恒华发股份有限公司 2017 年年度报告全文
41. Items of statement of cash flow
(1) Other cash received in relation to operation activities
In RMB
Item Current Period Last Period
Unit intercourse account 5,469,555.18 58,857,368.87
Collection management fee and utilities
430,720.45 887,774.50
etc.
Repayment from employees 3,315,558.82 2,519,419.93
Margin, deposit 59,281.50 1,195,207.00
Interest income 211,336.37 198,375.93
Refund 1,764,059.75 1,484,810.16
Claim deduction etc. 905,067.46 70,996.80
Government grants 1,451,189.68 1,419,888.89
Receive grant 15,500.00 4,000.00
Capital occupation fee 0.00 1,838,752.40
Other 185,116.26
Total 13,807,385.47 68,476,594.48
Explanation on other cash received in relation to operation activities:
Nil
(2) Other cash paid in relation to operation activities
In RMB
Item Current Period Last Period
Unit intercourse account 2,512,814.07 67,264,966.80
Advances to employees 3,794,266.72 3,149,396.42
Litigation fee 2,215,866.00 489,061.00
Margin, deposit 1,167,554.00 1,665,134.00
Entertainment expense 2,769,800.23 2,974,661.79
Water and electricity 370,312.12 101,827.25
Travel expenses 3,287,308.11 3,356,481.54
Transportation fee 5,008,475.05 3,918,442.17
Transportation fee 1,030,400.36 1,632,669.14
Repairs 3,724,821.24 1,419,253.95
Audit fees, consulting fees 5,258,621.00 9,261,709.50
深圳中恒华发股份有限公司 2017 年年度报告全文
Security 166,131.50 1,212,962.31
Financial institutions handling fee 517,938.92 426,098.13
Office expenses 668,598.26 2,171,388.26
Communication fee 313,916.50 381,223.14
Lease fee 4,616,957.86 4,507,704.41
Other 971,692.54 1,410,801.99
Refund 1,114,064.48
Asset management fee 1,960,000.00
Commodity inspection fee 977,449.41 812,042.67
After sales service fee 1,698,357.00 1,447,902.00
Fines and indemnities 600,818.52 401,518.25
Securities information disclosure fee 663,685.00 404,595.80
Total 42,335,784.41 111,483,905.00
Explanation on other cash paid in relation to operation activities:
Nil
42. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB
Supplementary information This Period Last Period
1. Net profit adjusted to cash flow of
-- --
operation activities:
Net profit 974,409.39 5,457,710.33
Add: Assets impairment provision 1,421,786.71 3,546,936.86
Depreciation of fixed assets, consumption of
oil assets and depreciation of productive 10,976,272.03 11,051,791.44
biology assets
Amortization of intangible assets 1,493,850.03 1,494,294.72
Amortization of long-term deferred expenses 62,191.53 70,900.08
Loss from disposal of fixed assets, intangible
assets and other long-term assets(gain is -199,069.56 -101,056.08
listed with “-”)
Loss from discarding fixed assets as useless
18,924.00
(gain is listed with “-”)
Financial expenses (gain is listed with “-”) 10,910,660.03 11,476,211.74
深圳中恒华发股份有限公司 2017 年年度报告全文
Investment loss (income is listed with “-”) -372,245.91 -333,974.06
Decrease of deferred income tax assets
1,744,307.31 -2,075,205.01
(increase is listed with “-”)
Decrease of inventory (increase is listed with
-13,484,636.85 -19,947,136.21
“-”)
Decrease of operating receivable accounts
2,182,974.23 -65,334,769.96
(increase is listed with “-”)
Increase of operating payable accounts
-3,987,244.58 35,982,075.57
(decrease is listed with “-”)
Net cash flow arising from operating
11,723,254.36 -18,693,296.58
activities
2. Material investment and financing not
-- --
involved in cash flow:
3. Net change of cash and cash equivalents: -- --
Balance of cash at period end 66,240,945.59 91,310,804.48
Less: Balance of cash at period-begin 91,310,804.48 632,846,956.16
Add: Balance of cash equivalent at
15,234,028.71 12,704,508.49
period-end
Less: Balance of cash equivalent at
12,704,508.49
period-begin
Net increasing of cash and cash equivalents -22,540,338.67 -528,831,643.19
(2) Constitution of cash and cash equivalent:
In RMB
Item Closing balance Opening balance
Ⅰ. Cash 66,240,945.59 91,310,804.48
Including: Cash on hand 170,053.77 235,039.12
Bank deposit available for payment
66,070,891.82 91,075,765.36
at any time
II. Cash equivalent 15,234,028.71 12,704,508.49
Including: bond investment due in three
15,234,028.71 12,704,508.49
months
Ⅲ. Balance of cash and cash equivalent at
81,474,974.30 104,015,312.97
period-end
Other explanation:
Monetary fund at year-end-other monetary fund refers to the bank acceptance bond 2,571,550.38 Yuan, which is
not belonging to the cash and cash equivalent. At end of the year, among the note receivable due within 3 months,
the 8,228,588.14 Yuan are used for pledge, which is not belongs to cash and cash equivalent.
深圳中恒华发股份有限公司 2017 年年度报告全文
43. Assets with ownership or use right restricted
In RMB
Item Ending book value Restriction reasons
Monetary Fund 2,571,550.38 Bank acceptance bill
Notes receivable 15,738,970.85 Pledge
Fixed assets 74,643,021.02 Bank loan secured
Intangible assets 43,097,497.43 Bank loan secured
Accounts receivable 8,831,928.89 Pledge
Investment real estate 27,583,299.22 Bank loan secured
Liquidation of fixed assets 92,857,471.69 Court closure
Total 265,323,739.48 --
Other explanation:
Nil
44. Item of foreign currency
(1) Item of foreign currency
In RMB
Closing balance of foreign
Items Rate of conversion Ending RMB balance converted
currency
Including: USD 3,121,823.67 6.5342 20,398,620.22
HKD 32.66 0.8359 27.30
Including: USD 8,312,142.14 6.5342 54,313,199.17
Advance account
Including: USD 6,885.13 6.5342 44,988.82
Short term loan
Including: USD 3,538,346.67 6.5342 23,120,264.81
Other explanation:
Nil
45. Other
1. The government grants collected in the year amounting as 1,451,189.68 Yuan in total, including 0.00 Yuan
governmetn grants with assets concerned, 1,451,189.68 Yuan received in the period; the grants with income
concerned amounting as 1,451,189.68 Yuan.
2. Government grants related to income
深圳中恒华发股份有限公司 2017 年年度报告全文
Item Amount reckoned into Item that reckoned
gain/loss (listed by positive
number)
Stabilization subsidy 161,420.00 Other income
Export bonus 50,000.00 Non operating income
Reward for excellent private enterprise in Caidian 200,000.00 Non operating income
District for year of 2016
Development & promotion funds for processing trade of 270,000.00 Non operating income
Midwest for year of 2016
Excellent enterprise award for year of 2016 200,000.00 Non operating income
Enterprise development fund (manufacturing project of 293,769.68 Non operating income
home appliance parts )
Subsidized loan 258,500.00 Finacnial cost reduction
Interest subsidy for liquidity loans from growth 17,500.00 Finacnial cost reduction
enterprise in Wuhan for year of 2016
Total 1,451,189.68 ——
VIII. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
Main operation Share-holding ratio
Subsidiary Registered place Business nature Acquired way
place Directly Indirectly
Huafa Leasing Property Investment
Shenzhen Shenzhen 60.00%
Company management establishment
Huafa Property Property Investment
Shenzhen Shenzhen 100.00%
Company management establishment
Hengfa
Production and Investment
Technology Wuhan Wuhan 100.00%
sales establishment
Company
Hengfa Hengtian Property Investment
Shenzhen Shenzhen 100.00%
Company management establishment
Hengfa Hengtai Property Investment
Shenzhen Shenzhen 100.00%
Company management establishment
Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Nil
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over
half and over voting rights:
深圳中恒华发股份有限公司 2017 年年度报告全文
Nil
Controlling basis for the structuring entity included in consolidated range:
Nil
Basis on determining to be an agent or consignor:
Nil
Other explanation:
Nil
IX. The risk associated with financial instruments
The Group's main financial instruments include loans, receivables, payables, tradable financial assets, trading
financial liabilities, etc., please refer to the details of each financial instrument in Note 5. The risks associated with
these financial instruments and the risk management policies adopted by the Group to reduce these risks are
described below. The management of the Group manages and monitors these risk exposures to ensure that the
above risks are controlled within the limits.
1. Various risk management objectives and policies
The objective of the Group's risk management is to strike a proper balance between risks and profits, minimize the
negative impact of risks on the Group's operating results, and maximize the benefits of shareholders and other
equity investors. Based on this risk management objectives, the Group's basic strategy for risk management is to
identify and analyze the risks faced by the Group, establish appropriate risk bottom lines and carry out risk
management, 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 financial
instruments fluctuate due to the changes in market prices, including foreign exchange risk, interest rate risk and
other price risk.
1) Exchange rate risk
The Group's exchange rate risk is mainly related to US dollars and Hong Kong dollars. Except the Group's second
level subsidiary, Hengfa Technology Company’s monitor business has day-to-day operations in US dollars; other
principal business activities of the Group settle accounts in RMB. On December31, 2017, except for the US dollar
balance of assets and liabilities in below table and the sporadic Hong Kong dollar balance, the Group's assets and
liabilities 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 2017-12-31 (RMB convertion) 2016-12-31 (RMB convertion)
Monetary Fund - USD 20,398,620.23 16,473.78
Monetary Fund - HKD 27.30 29.21
Accounts receivable - USD 54,313,199.17 46,955,995.68
Advance account - USD 44,988.82 8,873,087.08
Accounts payable - USD 1,172,353.00
深圳中恒华发股份有限公司 2017 年年度报告全文
Short term borrowings 23,120,264.81 34,710,467.81
- USD
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 the
interest rate risk of fair value. The Group determines the relative proportion of fixed rate and floating interest
rate contracts based on the prevailing market environment. On December 31, 2017, the Group's interest-bearing
debt was mainly the floating interest rate loan contract denominated in Renminbi and US dollars, amounting to
RMB 166,620,264.81 (December 31, 2016: RMB 181,210,467.81).
The Group's risk of changes in the cash flow of financial instruments due to changes in interest rates is mainly
related to the floating interest rate bank loans. The Group's policy is to maintain the floating interest rate of these
loans 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 causes
property loss to another party. On December 31, 2017, the maximum credit risk exposure that may cause financial
losses to the Group is mainly attributable to the failure of the other party to fulfill its obligations resulting in the
losses 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 financial
instruments 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 out
the credit approval, and implement other monitoring procedures to take necessary measures to recover the overdue
credit. In addition, the Group reviews the recovery of each individual receivable at every balance sheet date to
accrue sufficient provision for bad debts of uncollectible funds. As a result, the Group's management believes that
the 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 capital
is low.
The Group has adopted necessary policies to ensure that all customers have good credit records. In addition to the
top five account receivables, the Group has no other significant credit risk.
The total amount of the top five account receivables is RMB 131,399,474.20.
深圳中恒华发股份有限公司 2017 年年度报告全文
(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's
approach to manage liquidity risk is to ensure that there is sufficient financial liquidity to fulfill its due debts but
not cause unacceptable losses or damages to the corporate reputation. The Group regularly analyzes the structure
and duration of liabilities to ensure there are sufficient funds. The management of the Group monitors the use of
bank loans and ensures the compliance with loan agreement, and conducts financing consultations with financial
institutions in order to maintain a certain line of credit and reduce the liquidity risk.
The financial assets and financial liabilities held by the Group based on the maturity of the undiscounted
outstanding contractual obligations are analyzed as follows
Amount on December 31, 2017
Item Within 1 year 1-2 year 2-3 year Over 3 year Total
Financial assets
Monetary Fund 68,812,495.97 68,812,495.97
Notes receivable 64,778,266.65 64,778,266.65
Accounts receivable 148,639,591.75 154,351.84 2,054.67 148,795,998.26
Other receivables 1,443,680.72 895,869.00 96,180.00 2,435,729.72
Advance account 2,603,895.64 272,532.52 1,699.85 2,878,128.01
Financial liabilities
Short term borrowings 166,620,264.81 166,620,264.81
Notes payable 17,810,270.28 17,810,270.28
Accounts payable 71,817,382.90 178,286.54 126,368.67 11,882,832.62 84,004,870.73
Other payables 15,889,643.29 4,037,633.66 19,927,276.95
Advance receivable 234,017.18 77.00 25,952.00 18,082.00 278,128.18
Employee salary 5,083,357.93 5,083,357.93
payable
2. Sensitivity analysis
The Group uses the sensitivity analysis technique to analyze the possible impacts of the reasonable and possible
changes in risk variable on the currents profit and losses or the owner's equity. Since any risk variable rarely
changes in isolation, and the correlation among the variables has a significant effect on the final effect amount of a
certain risk variable changes, and the following contents are on the assumption that the change in each variable is
independent.
(1) Sensitivity analysis of foreign exchange risk
Sensitivity analysis of foreign exchange risk assumes that all overseas operating net investment hedges and cash
flow 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 possible
and reasonable changes in the exchange rate on the current profits and losses are as follows
深圳中恒华发股份有限公司 2017 年年度报告全文
Item Exchange rate 2017
fluctuation Impact on net profit Impact on owner's Impact on net profit Impact on owner's
equity equity
All foreign 5% appreciation of the -2,581,828.54 -2,581,828.54 -998,138.25 -998,138.25
currency RMB
All foreign 5% devaluarion of the 2,581,828.54 2,581,828.54 998,138.25 998,138.25
currency RMB
X. Related party and related transactions
1. Parent company of the enterprise
Share-holding ratio
Voting right ratio on
Parent company Registration place Business nature Registered capital on the enterprise for
the enterprise
parent company
Production and sales,
Wuhan Zhongheng real estate
New Technology development and
Wuhan 34,500,000.00 41.14% 41.14%
Industry Group Co., sales, housing
Ltd. leasing and
management
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. Equity in other entity in the Note
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 Photoelectric Industry Co., Ltd. Control by same controlling shareholder and ultimate controller
Hongkong 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
深圳中恒华发股份有限公司 2017 年年度报告全文
Wuhan Optical Valley Display System Co., Ltd. Control by same controlling shareholder and ultimate controller
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 Trade 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
Hongkong 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 explanation
Nil
4. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB
Whether over the
Amount of this Trading limit
Related party Content approved limited or Amount of last period
period approved
not
Hongkong Yutian
International
Purchase good 209,991,225.25 261,368,000.00 N 160,560,343.18
Investment Co.,
Ltd.
Wuhan Hengsheng
Photoelectric Purchase good 122,865,451.21 176,423,400.00 N 48,070,877.55
Industry Co., Ltd.
Goods sold/labor service providing
In RMB
Related party Content Amount of this period Amount of last period
Hongkong Yutian International
Sales good 211,214,811.40 193,821,823.74
Investment Co., Ltd.
Wuhan Hengsheng Sales good 4,328,922.01 1,907,193.07
深圳中恒华发股份有限公司 2017 年年度报告全文
Photoelectric Industry Co., Ltd.
Explanation on goods purchasing, labor service providing and receiving
(2) Related guarantee
As the guarantor
In RMB
Secured party Amount guarantee Start End Completed or not (Y/N)
Hengfa Technology
50,000,000.00 2017-11-21 2018-11-21 No
Company
As the secured party
In RMB
Guarantor Amount guarantee Start End Completed or not (Y/N)
Li Zhongqiu 20,000,000.00 2017-05-19 2018-05-19 No
Li Zhongqiu, Wuhan
Zhongheng New Science
100,000,000.00 2016-07-22 2018-07-21 No
& Technology Industrial
Group Co., Ltd.
Explanation on related guarantee
Nil
(3) Remuneration of key manager
In RMB
Item Current Period Last Period
Remuneration of key manager 1,143,000.00 1,394,600.00
5. Receivable/payable items of related parties
(1) Receivable item
In RMB
Closing balance Opening balance
Item Related party
Book balance Bad debt reserves Book balance Bad debt reserves
Accounts receivable 44,436,775.47 41,299,300.89
Hongkong Yutian
Advance payment International 44,988.82 8,873,087.08
Investment Co., Ltd.
深圳中恒华发股份有限公司 2017 年年度报告全文
(2) Payable item
In RMB
Item Related party Ending book balance Opening book balance
Shenzhen Zhongheng Huafa
Other payables Science and Technology Co., 6,288.00
Ltd.
Wuhan Hengsheng
Accounts payable 3,565,595.98 7,173,172.20
Photoelectric Industry Co., Ltd.
6. Commitments of related party
In line with the claim of application for arbitration from Shenzhen Vanke, Shen HUAFA and Wuhang Zhongheng
paid and money together. As the commitment letter to Shen HUAFA from Wuhang Zhongheng Group, if the
Vanke wins, the losses from disputes arising by contract will bear by Wuhan Zhongheng Group in full.
XI. Commitment or contingency
1. Important commitment
Important commitment on balance sheet date
As 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 Minimum leasing payment
contract
First year after balance sheet date 3,847,599.84
Second year after balance sheet date 3,847,599.84
Third year after balance sheet date 2,426,125.45
Total 10,121,325.13
2. Contingency
(1) Contingency on balance sheet date
1. Pending arbitration with Shenzhen Vanke
In August 2015, Shenzhen HUAFA and Wuhan Zhongheng New Technology Industry Group Co., Ltd.
(hereinafter referred to as “Wuhan Zhongheng”) signed the “Cooperation Agreement on Urban Renewal Project
of Update Units at Huafa Industrial Park, Gongming Street, Guangming New District, Shenzhen”. As Shenzhen
HUAFA and Wuhan Zhongheng planned to cooperate with Shenzhen Vanke Real Estate CO., Ltd. (hereinafter
referred to as “Shenzhen Vanke”) on the Huafa urban renewal project (hereinafter referred to as “Huafa
Renovation Project) at Gongming Street, Guangming New District, Shenzhen, both parties appointed that
深圳中恒华发股份有限公司 2017 年年度报告全文
Shenzhen HUAFA entrusted Wuhan Zhongheng to represent it in this cooperation, and established project
company - Shenzhen Vanke Guangming Real Estate Co., Ltd. (hereinafter referred to as “Vanke Guangming”) as
the subject of project implementation with Shenzhen Vanke; Vanke Guangming signed “Demolition
Compensation Agreement” with Shenzhen HUAFA and Wuhan Zhongheng, and paid the compensation for
demolition.
On August 21, 2015, Shenzhen HUAFA, Wuhan Zhongheng and Shenzhen Vanke signed the “Cooperative
Operation Contract of Renovation Project at Huafa Industrial Park, Gongming Street, Guangming New
District”(hereinafter referred to as “Cooperative Operation Contract”), the contract refined and appointed the
cooperation model and operating steps of both sides. And then Shenzhen HUAFA, Wuhan Zhongheng and
Shenzhen Vanke signed the “Agreement on the Housing Acquisition and Removal Compensation and Settlement”.
After signing the above agreement, Shenzhen Vanke paid the cooperation price of 600 million Yuan to Wuhan
Zhongheng through Vanke Guangming.
In September 2016, Shenzhen Vanke filed an arbitration to South China International Economic and Trade
Arbitration Commission (hereinafter referred to as “South China Arbitration”) as Shenzhen HUAFA and Wuhan
Zhongheng violated the appointment of “Cooperative Operation Contract” and handled the “Confirmation of
Subject of Reconstruction Implementation” at an overdue time, and required Shenzhen HUAFA and Wuhan
Zhongheng to pay liquidated damages and attorneys' fees of RMB 464.60 million.
While filing the arbitration, Shenzhen Vanke also applied for property preservation of 400 million Yuan of
property under the name of Shenzhen Huafa and Wuhan Zhongheng to Shenzhen Intermediate People’s Court.
According to the ruling of Shenzhen Intermediate People's Court and “Notification of Sealing up, Seizing and
Freezing Assets” (The reference numbers are (2016) Yue 03 Cai Bao No. 51, (2016) Yue 03 Cai Bao No. 53), the
27 house properties (Note: the property within the scope of Huafa renovation project) under the name of Shenzhen
HUAFA and 116,489,894 shares (Note: of which 116,100,000 shares have been pledged) of Shenzhen HUAFA
stock held by Wuhan Zhongheng were frozen.
On November 12, 2016, the arbitration court held a hearing on this case.
In December 2016, Wuhan Zhongheng to Shenzhen HUAFA issued a “Commitment Letter” which included that if
the arbitration (Note: the case) ruled in favor of Shenzhen Vanke, the loss of arbitration caused by the contract
disputes should be fully assumed by our company. In the above contingent losses, if the judicial decision ruled
your company to pay the compensation in advance, our company promised to pay your company in cash within
one month, if our company could not pay on time due to uncontrollable factors, our company would like to pay the
corresponding interest according to the benchmark interest rate of bank loans in the corresponding period.
Because the plots in the renovation project placed in our company hadn’t been applied for transfer procedures and
were still under your company’s name (Note: based on the “Asset Replacement Contract” signed by Wuhan
Zhongheng and Shenzhen HUAFA on April 29, 2009), therefore, there was no risk of compliance, at the same time,
our company promised to give priority to paying the above compensation with the compensation for demolition of
renovation project.
On March 14, 2017, Shenzhen HUAFA received the “Decision of Arbitrator not Granting Avoiding” issued by
South China Arbitration, which rejected the application for avoiding of chief arbitrator proposed by Shenzhen
Vanke. On March 15, 2017, Shenzhen HUAFA received the “Letter About the Resignation of the Chief Arbitrator
of No. SHEN DP20160334 Case” signed by the chief arbitrator and forwarded by South China Arbitration. On
March 20, 2017, Shenzhen HUAFA received the “Letter About the Resignation of the Arbitrator of No. SHEN
DP20160334 Case” forwarded by South China Arbitration, the arbitrator selected by Shenzhen Vanke said to
深圳中恒华发股份有限公司 2017 年年度报告全文
resign from the arbitrator of this case due to physical reasons.
The deadline for giving a ruling to this case was originally scheduled on February 12, 2017. According to the
“Decision of Adjourning the Ruling” issued by South China Arbitration on February 10, 2017, the deadline for
giving a ruling to this case shall be prolonged to May 12, 2017. Due to the changes in the members of above
arbitration court, this case needs South China Arbitration to reassign the chief arbitrator and Shenzhen Vanke to
reselect the arbitrators. According to the provisions of article 32 of the Arbitration Rules of South China
Arbitration, after constituting the new arbitration court, it shall decide whether all or part of the hearing
procedures that have been carried out before need to be reopened; if the arbitration court decides to reopen all
hearing procedures, then the deadline for giving a ruling shall be calculated from the date that the arbitration court
decides to reopen the hearing procedures.
On August 16, 2017, South China International Economic and Trade Arbitration Commission made the “Arbitral
Award” SCIA [2017] D376, according to the arbitral award, the applicant and counterclaim respondent in
arbitration case SCIA [2017] D376 were Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as
“Applicant” and “Vanke”). The first respondent and the first applicant for counterclaim were Wuhan Zhongheng
New Technology Industry Group Co., Ltd. (hereinafter referred to as “Wuhan Zhongheng” and “First
Respondent”). The second respondent and the second applicant for counterclaim were Zhongheng Huafa. The
award results were as follows:
(1) The first respondent and the second respondent pay liquidated damages to the applicant with a base number of
RMB 600 million, calculating by the annual interest rate of 36% from October 1, 2015 to November 11, 2016;
(2) The first respondent and the second respondent pay the lawyer fees of RMB 1.4 million to the applicant due to
the case;
(3) The first respondent and the second respondent pay the property preservation fees of RMB 10,000 to the
applicant;
(4) The arbitration fees for this request and case was RMB 3,101,515.00, the first respondent and the second
respondent should bear 70%, i.e. RMB 2,171,060.50, and the applicant should bear 30%, i.e. RMB 930,454.50.
The applicant had already paid the arbitration fees in full amount for this request which could be used as the
arbitration fees of this case and request and shall not be refunded. The first respondent and the second respondent
should directly pay RMB 2,171,060.50 to the applicant;
The arbitration fee of counterclaim in this case was RMB 76,050 which was undertaken by the first respondent
and the second respondent at their own expense. The first respondent and the second respondent paid the
arbitration fees in full amount for this request which could be used as the arbitration fees of this case and request
and shall not be refunded;
The actual expenses of the arbitrators in this case amounted to RMB 7,754.90, the first respondent and the second
respondent assumed 70%, i.e. RMB 5,428.43, and the applicant assumed 30%, i.e. RMB 2,326.47; the above
actual expenses of the arbitrators had been paid by the Commission, so the first respondent and the second
respondent and the applicant should directly pay RMB 5,428.43 and RMB 2,326.47 respectively to the
Commission;
(5) Reject the applicant’s other arbitration requests;
(6) Reject the arbitration counterclaims of the first respondent and the second respondent.
In summary, Wuhan Zhongheng and Shenzhen Huafa should pay liquidated damages, interest, lawyer fees,
深圳中恒华发股份有限公司 2017 年年度报告全文
property preservation fees, and arbitration fees for this request to Vanke and pay actual expenses of the arbitrators
in this case and pay the actual expenses incurred by the arbitrators in this case to South China International
Economic and Trade Arbitration Commission.
The reasons of Wuhan Zhongheng resulted in a failure of a net handover, the district urban renewal functional
department could not issue the corresponding demolition documents, which in turn made the project company fail
to be confirmed as the subject of implementation, and finally and directly made the subject of implementation fail
to get the “Land Value Payment Notification” and sign the “Land Use Rights Transfer Contract”. Wuhan
Zhongheng shall bear all responsibilities for faults in response to the three major default facts. On February 6,
2018, Shenzhen Huafa believed that the ruling of the case had problems in the arbitration procedure and the
assertion of the so-called breach of contract facts, the ruling results damaged the legitimate rights and interests of
Shenzhen Huafa, Huafa has filed an application for revoking the award to Shenzhen Intermediate People’s Court,
and Shenzhen Intermediate People’s Court has officially accepted the case on February 7, 2018, the case number
is (2018) Yue 03 MT 113. The case has been accepted but not sub judice yet.
2. The contingent liability from pending action and its financial impact
Litigious party Types of litigations, times and Cause of Case No. Amount Note
explaination action object
Defendant: Shenzhen Jifang -----2016.03.08(People’s Court of Dispute (2016) Yue0304 Litigatio
Investment Co., Ltd. and Futian Disctrict, Shenzhen) accept the over MC No.: 5870; n
Shenzhen Carnival case leasing (2017) Yue 03 MZ amount:
Foreigning Trade Clothing -----2016.03.24 Application for contracts No.: 22027;
City Co., Ltd . bankaccount preservation of 550,000 (2018) Yue 0304 Z Yuan
Yuan No.: 10334
-----Date of first instance opening:
2017.3.7
----- Date of second instance opening
2017.11.9
-----2018.3.15 (verdict of the 2nd
instance effective)
---2018.3.26 Application for
enforcement, in processing
Defendant: Shenzhen ----2016.03.23 (Pepole’s Court of Dispute 2016 Yue 0306 Litigatio
Huayongxing Enviornmental Baoan District, Shenzhen) accept the over MC No.6180 n
Technology Co., Ltd. case leasing amount:9
Shenzhen Yidaxing contracts .4726
Technology Co., Ltd. (Pepole’s Court of Baoan District, million
Shenzhen) Application for Yuan
bankaccount preservation of 8 million
Yuan (in payment)
-----2017.3.20 Opening a trail
The first trial has come out, and the
opponent applied for an appeal, the
深圳中恒华发股份有限公司 2017 年年度报告全文
2nd trial’s citation has not been
received yet
Defendant: Shenzhen ----2016.03.24(Pepole’s Court of Dispute 2016 Yue 0306 Litigatio
Huayongxing Enviornmental Baoan District, Shenzhen) accept the over MC No. 6229 n
Technology Co., Ltd., case leasing amount:
Shenzhen Guangyong contracts 19.6492
Breadboard Co., Ltd., -----2016.04.11(Pepole’s Court of million
Shenzhen Mingyi Electric Baoan District, Shenzhen) Application Yuan
Co., Ltd., Shenzhen Ouruilai for bankaccount preservation of 17
Technology Co., Ltd. and million Yuan
Shenzhen Kangzhengxin ------2017.2.14 Opening a trail
Technology Co., Ltd. The first trial has come out, and the
opponent applied for an appeal, the
2nd trial’s citation has not been
received yet
Defendant: Wuhan ---- On March 12, 2018, we received Dispute Case No.: SHEN Litigatio
Zhongheng New Technology the arbitration application of V&T over DX20180087 n
Industrial Group Co., ltd. and Law Firm from Shenzhen agency amount:
Shenzhen Zhongheng Huawa International Arbitration Commission, contract 19.402
Co., Ltd. we have entrusted lawyers to respond million
Plaintiff: V&T LAW FIRM to the suits and filed a counterclaim Yuan
against V&T Law Firm, there is no
notice of hearing at present.
XII. Principle notes of financial statements of parent company
1. Accounts receivable
(1) Category of account receivable
In RMB
Closing balance Opening balance
Book balance Bad debt reserves Book balance Bad debt reserves
Category Book
Accrual Accrual Book value
Amount Ratio Amount value Amount Ratio Amount
ratio ratio
Account receivable
with single
significant amount 5,000,98 5,000,98 5,094,4 5,094,414
48.58% 100.00% 49.05% 100.00%
and withdrawal bad 8.97 8.97 14.36 .36
debt provision
separately
Accounts with single 5,292,43 51.42% 5,292,43 100.00% 5,292,4 50.95% 5,292,435 100.00%
深圳中恒华发股份有限公司 2017 年年度报告全文
significant amount 5.32 5.32 35.32 .32
and bad debts
provision accrued
individually
10,293,4 10,293,4 10,386, 10,386,84
Total 100.00% 100.00%
24.29 24.29 849.68 9.68
Account receivable with major single amount and withdrawal bad debt provision single at period-end:
√ Applicable □ Not applicable
In RMB
Account receivable (by Closing balance
unit) Accounts receivable Bad debt reserve Provision ratio Provision reason
Hongkong Haowei
1,870,887.18 1,870,887.18 100.00% Un-recyclable
Industry Co. Ltd.
TCL ACE ELECTRIC
APPLIANCE 1,325,431.75 1,325,431.75 100.00% Un-recyclable
(HUIZHOU) CO., LTD.
Qingdao Haier Parts
1,225,326.15 1,225,326.15 100.00% Un-recyclable
Procurement Co., Ltd.
SKYWORTH Multimedia
579,343.89 579,343.89 100.00% Un-recyclable
(Shenzhen) Co., Ltd.
Total 5,000,988.97 5,000,988.97 -- --
Account receivable with bad debt provision withdrawal by method of account age in portfolio:
□ Applicable √ Not applicable
In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable:
□ Applicable √ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for account receivable:
Accounts with single significant amount and bad debts provision accrued individually at period-end
Debtor Book balance Bad debt Accrual ratio Reasons
Shenzhen Huixin Video Technology Co., 381,168.96 381,168.96 100.00
Uncollectible
Ltd.
Shenzhen Wandelai Digital Technology 351,813.70 351,813.70 100.00
Uncollectible
Co., Ltd.
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) 288,261.17 288,261.17 100.00
Uncollectible
Co., Ltd.
Dongguan Weite Electronic Co., Ltd. 274,399.80 274,399.80 100.00 Uncollectible
Hong Kong New Century Electronics Co., 207,409.40 207,409.40 100.00 Uncollectible
深圳中恒华发股份有限公司 2017 年年度报告全文
Ltd.
Shenyang Beitai Electronic Co., Ltd. 203,304.02 203,304.02 100.00 Uncollectible
Beijing Xinfang Weiye Technology Co., 193,000.00 193,000.00 100.00
Uncollectible
Ltd.
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 1,990,217.45 1,990,217.45 100.00 Uncollectible
Total 5,292,435.32 5,292,435.32 —— ——
(2) Bad debt provision accrual, switch-back or taken back in reporting period
Bad debt provision accrual was 0.00 Yuan; the amount collected or switches back amounting to 93,425.39 Yuan.
Including major amount of bad debt provision that switch-back or taken back in the Period:
In RMB
Company Amount switch back or taken back Way
SKYWORTH Multimedia (Shenzhen) Co.,
93,425.39 Bank deposit
Ltd.
Total 93,425.39 --
(3)Top five receivables collected by arrears party at ending balance
Company Closing balance Ratio in total account Balance of bad debt
receivable (%) provision
Hong Kong Haowei Industrial Co. Ltd. 1,870,887.18 100.00 1,870,887.18
TCL ACE ELECTRIC APPLIANCE 1,325,431.75 100.00 1,325,431.75
(HUIZHOU) CO., LTD
Qingdao Haier Parts Procurement Co., Ltd. 1,225,326.15 100.00 1,225,326.15
SKYWORTH Multimedia (Shenzhen) Co., 579,343.89 100.00 579,343.89
Ltd.
Shenzhen Huixin Video Technology Co., 381,168.96 100.00 381,168.96
Ltd.
Total 5,382,157.93 —— 5,382,157.93
2. Other accounts receivable
(1) Category of other account receivable
In RMB
Category Closing balance Opening balance
深圳中恒华发股份有限公司 2017 年年度报告全文
Book balance Bad debt reserves Book balance Bad debt reserves
Book
Accrual Accrual Book value
Amount Ratio Amount value Amount Ratio Amount
ratio ratio
Other account
receivable with
single significant 108,940, 11,281,4 97,659,34 123,637 10,601,68 113,035,81
91.51% 10.36% 93.25% 8.57%
amount and 808.28 61.86 6.42 ,504.36 6.53 7.83
withdrawal bad debt
provision separately
Other account
receivable with bad 2,286,09 102,100. 2,183,999 965,485
1.92% 4.47% 0.73% 13,050.45 1.35% 952,435.34
debt provision 9.02 00 .02 .79
accrual by portfolio
Other account
receivable with
single minor amount 7,815,58 7,736,78 7,988,4 7,909,685
6.57% 98.99% 78,798.40 6.02% 99.01% 78,798.40
but withdrawal single 8.16 9.76 84.16 .76
item bad debt
provision
119,042, 19,120,3 99,922,14 132,591 18,524,42 114,067,05
Total 100.00% 100.00%
495.46 51.62 3.84 ,474.31 2.74 1.57
Other account receivable with major single amount and withdrawal bad debt provision single at period-end:
√ Applicable □ Not applicable
In RMB
Closing balance
Other account receivable
Other account
(units) Bad debt provision Accrual ratio Accrual reason
receivable
Shenzhen Huafa Property
4,558,859.15 4,558,859.15 100.00% Un-recyclable
Leasing Co., Ltd.
Hebei Botou Court 520,021.00 520,021.00 100.00% Un-recyclable
Traffic accident
555,785.81 555,785.81 100.00% Un-recyclable
compensation
Portman 4,021,734.22 4,021,734.22 100.00% Un-recyclable
Zhao Baomin 553,901.68 553,901.68 100.00% Un-recyclable
Shenzhen Jifang
1,071,160.00 1,071,160.00 100.00% Un-recyclable
Investment Co., Ltd.
Total 11,281,461.86 11,281,461.86 -- --
Other account receivable with bad debt provision withdrawal by method of account age in portfolio:
√ Applicable □ Not applicable
深圳中恒华发股份有限公司 2017 年年度报告全文
In RMB
Closing balance
Account age
Other receivable Bad debt reserves Accrual ratio
Sub-item of within one year
A combination of bad debts. 97,738,144.82
Subtotal of within one year 279,099.02
1-2 year 2,000,000.00 5.00%
2-3 year 10.00%
Over three years 7,000.00 2,100.00 30.00%
Total 100,024,243.38 2,100.00
Explanation on portfolio basis:
Nil
In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable:
□ Applicable √ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable:
√ Applicable □ Not applicable
Other account receivable with single minor amount but withdrawal single item bad debt provision at period-end
Debtor Book balance Bad debt Accrual ratio (%) Reasons
Electricity fee in Gongming canteen 489,214.70 489,214.70 100.00 Uncollectible
Jiantao (Fogang) Laminates Co., Ltd. 465,528.10 465,528.10 100.00 Uncollectible
Labor union 332,402.55 332,402.55 100.00 Uncollectible
Lu Wei 290,000.00 290,000.00 100.00 Uncollectible
4/F hotel Dai Qiangbo 194,569.00 194,569.00 100.00 Uncollectible
Chuangjing 192,794.00 192,794.00 100.00 Uncollectible
Shenzhen Mingli Co., Ltd. 170,394.84 170,394.84 100.00 Uncollectible
78,798.40 Deposit without
Shenzhen Poly Property Group Co., Ltd.
accrual
Other Units 5,601,886.57 5,601,886.57 100.00 Uncollectible
Total 7,815,588.16 7,736,789.76 —— ——
(2) Bad debt provision accrual, switch-back or taken back in reporting period
Bad debt provision accrual was 495,928.88 Yuan; the amount collected or switches back amounting to 0.00 Yuan.
Including major amount of bad debt provision that switch-back or taken back in the Period:
In RMB
Company Amount switch-back or taken back Way
深圳中恒华发股份有限公司 2017 年年度报告全文
(3) Other receivables by nature
In RMB
Nature Ending book balance Opening book balance
Margin and deposit 720,065.04 720,065.04
Borrow money 2,013,402.14 2,570,694.91
Intercourse funds 110,451,250.82 123,104,890.35
Rent receivable 5,857,777.46 6,195,824.01
Total 119,042,495.46 132,591,474.31
(4) Top 5 other receivables collected by arrears party at ending balance
In RMB
Proportion in total
Ending balance of
Company Nature Ending balance Account age other receivables at
bad debt provision
year-end
Wuhan Hengfa
Intercourse funds 95,098,997.30 0-2 year 81.25%
Technology Co. Ltd.
Shenzhen Huafa
Property Leasing Co., Intercourse funds 4,558,859.15 Over three years 3.90% 4,558,859.15
Ltd.
Portman Lease receivable 4,021,734.22 Over three years 3.44% 4,021,734.22
Wan shang tian qin
(shenzhen) law firm Receivables 2,000,000.00 1-2year 1.68% 100,000.00
company.
Shenzhen Zhongheng
Huafa Property Co., Intercourse funds 1,919,082.48 Within 1 year 1.64%
Ltd.
Total -- 107,598,673.15 -- 90.39% 9,651,753.37
3. Long-term equity investment
In RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment for
187,208,900.00 600,000.00 186,608,900.00 187,208,900.00 600,000.00 186,608,900.00
subsidiary
Total 187,208,900.00 600,000.00 186,608,900.00 187,208,900.00 600,000.00 186,608,900.00
深圳中恒华发股份有限公司 2017 年年度报告全文
(1) Investment for subsidiary
In RMB
Ending balance of
Increase during Decrease during Impairment
The invested entity Opening balance Closing balance impairment
the period this period accrual
provision
Huafa Leasing
600,000.00 600,000.00 600,000.00
Company
Huafa Property
1,000,000.00 1,000,000.00
Company
Hemgfa
Technology 183,608,900.00 183,608,900.00
company
Huafa Hengtian
1,000,000.00 1,000,000.00
Company
Huafa Hengtai
1,000,000.00 1,000,000.00
Company
Total 187,208,900.00 187,208,900.00 600,000.00
4. Operating income and cost
In RMB
Current Period Last Period
Items
Income Cost Income Cost
Other business 41,156,307.77 5,877,729.00 43,547,414.64 6,585,571.92
Total 41,156,307.77 5,877,729.00 43,547,414.64 6,585,571.92
Other explanation:
Other business - by category
Current Period Last Period
Item
Income Cost Income Cost
Subtotal of other business 41,156,307.77 5,877,729.00 43,547,414.64 6,585,571.92
Property leasing 36,273,253.79 1,517,893.56 38,068,434.47 1,832,841.70
Utilities and others 4,883,053.98 4,359,835.44 5,478,980.17 4,752,730.22
Total 41,156,307.77 5,877,729.00 43,547,414.64 6,585,571.92
XIII. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable □ Not applicable
深圳中恒华发股份有限公司 2017 年年度报告全文
In RMB
Item Amount Note
Gains/losses from the disposal of
199,069.56
non-current asset
Governmental subsidy reckoned into current
gains/losses (not including the subsidy
enjoyed in quota or ration according to 1,451,189.68
national standards, which are closely
relevant to enterprise’s business)
Other non-operating income and expenditure
-3,800,545.17
except for the aforementioned items
Other gains and losses items complying with
372,245.91
definition for non-current gains and losses
Less: impact on income tax -672,860.55
Total -1,105,179.47 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
2. REO and earnings per share
Earnings per share
Profits during report period Weighted average ROE Diluted EPS
Basic EPS (RMB/Share)
(RMB/Share)
Net profits belong to common stock
0.30% 0.0034 0.0034
stockholders of the Company
Net profits belong to common stock
stockholders of the Company after
0.65% 0.0073 0.0180
deducting nonrecurring gains and
losses
深圳中恒华发股份有限公司 2017 年年度报告全文
Section XII. 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 the accounting 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 Association
V. Other relevant files.
