China Fangda Group Co., Ltd.
2020 Annual Report
March 2021
Chapter 1 Important Statement, Table of Contents and Definitions
The members of the Board and the Company guarantee that theannouncement is free from any false information, misleading statement ormaterial omission and are jointly and severally liable for the information’struthfulness, accuracy and integrity.
Mr. Xiong Jianming, the Chairman of Board, Mr. Lin Kebin, the ChiefFinancial Officer, and Mr. Wu Bohua, the manager of accounting departmentdeclare: the Financial Report carried in this report is authentic and completed.
All the Directors have attended the meeting of the board meeting at whichthis report was examined.
Forward-looking statements involved in this report including future plansdo not make any material promise to investors. Investors should pay attention toinvestment risks.
The Company needs to comply with disclosure requirements of theShenzhen Stock Exchange Industry Information Disclosure Guideline No.6 –Listed Companies Engaged in Decoration Business and disclosure requirementsof the Shenzhen Stock Exchange Industry Information Disclosure GuidelineNo.3 – Listed Companies Engaged in Property Development.
The Company has specified market, management and production andoperation risks in this report. Please review the potential risks and measures
mentioned in the discussion and analysis of future development in IV. OperationDiscussion and Analysis.
The Company will distribute no cash dividends or bonus shares and has noreserve capitalization plan.
Table of Contents
Chapter 1 Important Statement, Table of Contents and Definitions ...... 2
Chapter 2 About the Company and Financial Highlights ...... 7
Chapter 3 Business Introduction ...... 12
Chapter 4 Operation Discussion and Analysis ...... 19
Chapter 5 Significant Events ...... 46
Chapter VI Changes in Share Capital and Shareholders ...... 61
Chapter VII Preferred Shares ...... 69
VIII. Information about the Company‘s Convertible Bonds .................................................................................................................. 70
Chapter IX Particulars about the Directors, Supervisors, Senior Management and Employees ...... 71
Chapter X Corporation Governance ...... 78
Chapter XI Information about the Company‘s Securities ...... 86
Chapter XII Financial Statements ...... 87
Chapter 13 Documents for Reference ...... 245
Definitions
| Terms | Refers to | Description |
| Fangda Group, company, the Company | Refers to | China Fangda Group Co., Ltd. |
| Articles of Association | Refers to | Articles of Association of China Fangda Group Co., Ltd. |
| Meeting of shareholders | Refers to | Meetings of shareholders of China Fangda Group Co., Ltd. |
| Board of Directors | Refers to | Board of Directors of China Fangda Group Co., Ltd. |
| Supervisory Committee | Refers to | Supervisory Committee of China Fangda Group Co., Ltd. |
| Banglin Technology | Refers to | Shenzhen Banglin Technologies Development Co., Ltd. |
| Shilihe Co. | Refers to | Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) |
| Shengjiu Co. | Refers to | Shengjiu Investment Ltd. |
| Fangda Jianke | Refers to | Shenzhen Fangda Jianke Group Co., Ltd. |
| Fangda Zhichuang | Refers to | Fangda Zhichuang Science and Technology Co., Ltd. |
| Fangda New Material | Refers to | Fangda New Materials (Jiangxi) Co., Ltd. |
| Fangda New Energy | Refers to | Shenzhen Fangda New Energy Co., Ltd. |
| Fangda Property | Refers to | Shenzhen Fangda Property Development Co., Ltd. |
| Chengdu Fangda | Refers to | Chengda Fangda Construction Technology Co., Ltd. |
| Dongguan Fangda New Material | Refers to | Dongguan Fangda New Material Co., Ltd. |
| Kechuangyuan Software | Refers | Shenzhen Qianhai Kechuangyuan Software Co., Ltd. |
| to | ||
| Fangda Property Management | Refers to | Shenzhen Fangda Property Management Co., Ltd. |
| Fangda Property | Refers to | Fangda (Jiangxi) Property Development Co., Ltd. |
| Hongjun Investment Company | Refers to | Shenzhen Hongjun Investment Co., Ltd. |
| Fangda Investment Partnership | Refers to | Shenzhen Fangda Investment Partnership (Limited Partnership) |
| Lifu Investment | Refers to | Shenzhen Lifu Investment Co., Ltd |
| Xunfu Investment | Refers to | Shenzhen Xunfu Investment Co., Ltd |
| Jianke Hong Kong | Refers to | Fangda Jianke Hong Kong Co., Ltd. |
| Fangda Jianzhi | Refers to | Shanghai Fangda Jianzhi Technology Co., Ltd. |
| Fangda Zhijian | Refers to | Shanghai Fangda Zhijian Technology Co., Ltd |
| Fangda Cloud Rail | Refers to | Shenzhen Fangda Cloud Rail Technology Co., Ltd. |
| Jianke Australia | Refers to | Fangda Australia Pty Ltd |
| Zhichuang Technology Hong Kong | Refers to | Fangda Zhichuang Science and Technology (Hong Kong) Co., Ltd. |
| Shihui International | Refers to | Shihui International Holding Co., Ltd. |
| Fangda Southeast Asia | Refers to | Fangda Southeast Asia Co., Ltd. |
| Shenyang Fangda | Refers to | Shenyang Fangda Semi-conductor Lighting Co., Ltd. |
| Shenzhen Woke | Refers to | Shenzhen Woke Semi-conductor Lighting Co., Ltd. |
| SZSE | Refers to | Shenzhen Stock Exchange |
Chapter 2 About the Company and Financial Highlights
1. Company profiles
| Stock ID | Fangda Group, Fangda B | Stock code | 000055, 200055 |
| Modified stock ID (if any) | None | ||
| Stock Exchange | Shenzhen Stock Exchange | ||
| Chinese name | China Fangda Group Co., Ltd. | ||
| Chinese abbreviation | Fangda Group | ||
| English name (if any) | CHINA FANGDA GROUP CO., LTD. | ||
| English abbreviation (if any) | CFGC | ||
| Legal representative | Xiong Jianming | ||
| Registered address | Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone, Shenzhen, PR China. | ||
| Zip code | 518057 | ||
| Office address | 20F, Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone, Shenzhen, PR China. | ||
| Zip code | 518057 | ||
| Website | http://www.fangda.com | ||
| fd@fangda.com | |||
2. Contacts and liaisons
| Secretary of the Board | Representative of Stock Affairs | |
| PRINTED NAME | Xiao Yangjian | Guo Linchen |
| Address | 20F, Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone, Shenzhen, PR China. | 20F, Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone, Shenzhen, PR China. |
| Telephone | 86(755) 26788571 ext. 6622 | 86(755) 26788571 ext. 6622 |
| Fax | 86(755)26788353 | 86(755)26788353 |
| zqb@fangda.com | zqb@fangda.com |
3. Information disclosure and inquiring
| Press medias of information disclosure | China Securities Journal, Security Times, Shanghai Securities Daily, Securities Daily, Hong Kong Commercial Daily |
| Website assigned by CSRC to release the online reports | http://www.cninfo.com.cn |
| Place for information inquiry | Secretarial Office of the Board |
4. Registration changes
| Organization code | None |
| Changes in main businesses since the listing of the Company | None |
| Changes in the controlling shareholders | None |
5. Other information
Public accountants employed by the Company
| Public accountants | RSM Thornton (limited liability partnership) |
| Address | 901-22 to 901-26, Foreign Trade Building, No.22, Fuchengmenwai Street, Xicheng District, Beijing, China |
| Signing accountant names | Chen Zhaoxin, Zeng Hui, Hu Gaosheng |
Sponsor engaged by the Company to perform continued supervision and guide during the reporting period
□ Applicable √ Inapplicable
Financial advisor engaged by the Company to perform continued supervision and guide during the reporting period
□ Applicable √ Inapplicable
6. Financial Highlight
Whether the Company needs to make retroactive adjustment or restatement of financial data of previous years
□ Yes √ No
| 2020 | 2019 | Increase/decrease | 2018 | |
| Turnover (yuan) | 2,979,296,410.16 | 3,005,749,558.66 | -0.88% | 3,048,680,152.06 |
| Net profit attributable to shareholders of the listed company (yuan) | 382,051,466.98 | 347,771,182.73 | 9.86% | 2,246,164,571.68 |
| Net profit attributable to the shareholders of the listed company and after deducting of non-recurring gain/loss (RMB) | 376,968,729.62 | 291,449,314.27 | 29.34% | 21,171,063.10 |
| Net cash flow generated by business operation (RMB) | 548,709,785.90 | -5,284,830.77 | 10,482.73% | 387,102,719.57 |
| Basic earnings per share | 0.35 | 0.31 | 12.90% | 1.91 |
| (yuan/share) | ||||
| Diluted Earnings per share (yuan/share) | 0.35 | 0.31 | 12.90% | 1.91 |
| Weighted average net income/asset ratio | 7.26% | 6.82% | 0.44% | 53.17% |
| End of 2020 | End of 2019 | Increase/decrease from the end of last year | End of 2018 | |
| Total asset (RMB) | 11,866,857,250.39 | 11,369,964,580.11 | 4.37% | 10,658,854,133.73 |
| Net profit attributable to the shareholders of the listed company (RMB) | 5,380,857,155.39 | 5,182,795,079.67 | 3.82% | 5,195,187,621.88 |
The Company's net profit before and after non-recurring gains and losses was negative for the last three fiscal years, and the latestaudit report showed uncertainty about the Company's ability to continue operating
□ Yes √ No
Net profit before and after deducting non-re current gains and losses is negative
□ Yes √ No
7. Differences in accounting data under domestic and foreign accounting standards
1. Differences in net profits and assets in financial statements disclosed according to the international andChinese account standards
□ Applicable √ Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese accountstandards during the report period.
2. Differences in net profits and assets in financial statements disclosed according to the overseas andChinese account standards
□ Applicable √ Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese accountstandards during the report period.
8. Financial highlights by quarters
In RMB
| Q1 | Q2 | Q3 | Q4 | |
| Turnover | 413,826,888.79 | 837,781,175.63 | 848,436,105.17 | 879,252,240.57 |
| Net profit attributable to the shareholders of the listed company | 94,777,419.75 | 52,062,464.82 | 68,793,891.42 | 166,417,690.99 |
| Net profit attributable to the | 95,563,557.35 | 50,729,290.59 | 54,966,749.35 | 175,709,132.33 |
| shareholders of the listed company and after deducting of non-recurring gain/loss | ||||
| Cash flow generated by business operations, net | -339,105,046.99 | 202,119,567.59 | 316,947,166.56 | 368,748,098.74 |
Where there is difference between the above-mentioned financial data or sum and related financial data in quarter report and interimreport disclosed by the Company
□ Yes √ No
9. Accidental gain/loss item and amount
√ Applicable □ Inapplicable
In RMB
| Item | 2020 | 2019 | 2018 | Notes |
| Non-current asset disposal gain/loss (including the write-off part for which assets impairment provision is made) | -541,838.10 | -101,676.86 | -5,080,792.02 | |
| Subsidies accounted into the current income account (except the government subsidy closely related to the enterprise‘s business and based on unified national standard quota) | 12,872,885.30 | 5,411,736.29 | 5,931,937.15 | |
| Capital using expense charged to non-financial enterprises and accounted into the current income account | 585,760.51 | 922,330.10 | ||
| Gain from entrusted investment or assets management | 27,065,331.33 | |||
| Gain/loss from change of fair value of transactional financial asset and liabilities, and investment gains from disposal of transactional and derivative financial assets and liabilities and sellable financial assets, other than valid period value instruments related to the Company‘s common businesses | 8,759,056.18 | 9,236,658.20 | -1,192,774.07 | |
| Write-back of impairment provision of receivables and contract assets for which impairment test is performed individually | 0.00 | 100,023.62 | ||
| Gain/loss from commissioned loans | 393,485.98 | 442,060.24 | ||
| Gain/loss from change of fair value of investment property measured at fair value | 19,205,841.18 | 42,608,311.58 | 2,916,598,485.48 |
| in follow-up measurement | ||||
| Other non-business income and expenditures other than the above | -34,752,456.16 | -1,108,687.74 | 1,675,521.71 | |
| Other gain/loss items satisfying the definition of non-recurring gain/loss account | -936,467.20 | |||
| Less: Influenced amount of income tax | 778,490.70 | 164,700.18 | 720,926,531.10 | |
| Influenced amount of minority shareholders‘ equity (after-tax) | 75,746.32 | -248,850.00 | ||
| Total | 5,082,737.36 | 56,321,868.46 | 2,224,993,508.58 | -- |
Explanation statement should be made for accidental gain/loss items defined and accidental gain/loss items defined as regulargain/loss items according to the Explanation Announcement of Information Disclosure No. 1 - Non-recurring gain/loss mentioned.
□ Applicable √ Inapplicable
No circumstance that should be defined as recurrent profit and loss according to Explanation Announcement of InformationDisclosure No. 1 - Non-recurring gain/loss occurs in the report period.
Chapter 3 Business Introduction
1. Major businesses of the Company during the report period
The Company is headquartered in Nanshan District, Shenzhen. The stock was listed on the Shenzhen Stock Exchange onNovember 29, 1995. Currently, six major business subsidiaries of the Company are national high-tech enterprises with modernproduction bases in Shanghai, Chengdu, Nanchang, and Dongguan. The Company has developed the smart curtain wall, PVDFaluminum veneer, and rail transit screen door system industries in China earlier. Green, low-carbon and environmental protection hasalways been the Company's original goal of development. Since its establishment 30 years ago, the Company has maintained thesame main business, pursued excellence in craftsmanship, and insisted on technological innovation to consolidate the road ofdevelopment. The smart curtain wall and material industry and the rail transit screen door system industry have become industrybenchmarks. Major businesses of the Company during the report period:
1. Smart curtain wall system and material industry:
(1) Main products and purpose
The Company‘s main products include smart energy-saving curtain walls, photo-electricity curtain walls, LED color-displaycurtain walls, PVDF aluminum plate, graphene aluminum plate, and Nano aluminum plate materials. Building curtain wall is mainlyused for high-rise buildings (such as R&D center of enterprise headquarters, business center), large-span public buildings (such asairport, station, cultural center, convention and Exhibition Center), building daylighting roofs (such as schools, hospitals andmaintenance centers), special-shaped buildings (such as spherical and bell shaped buildings), structures, etc., with peripheralprotection, decoration and energy saving functions.
(2) Macroeconomic situation of the industry, the impact of changes in the industrial policy environment on the Company,and the countermeasures taken by the Company
2021 is the first year of the "14th Five-Year Plan", and the "Outline of the Fourteenth Five-Year Plan for National Economicand Social Development and the 2035 Vision Goals" clearly promotes the construction of traditional infrastructure and newinfrastructure. In recent years, China‘s supply-side structural reform has continued to deepen, and the national regional coordinateddevelopment strategy has been further promoted. Development plans such as new urbanization, coordinated development ofBeijing-Tianjin-Hebei, ―One Belt and One Road‖ construction, Guangdong-Hong Kong-Macao Greater Bay Area, and ShenzhenPilot Demonstration Zone have attracted worldwide attention and have brought unprecedented development opportunities to thedevelopment of curtain wall systems and material industries. Shenzhen is a pioneer in opening up and a "new hub", "outlet" and"weathervane" connecting the domestic and international dual cycles. It has outstanding advantages, special status and importantroles in building a new development pattern. In 2021, Shenzhen will vigorously promote the construction of ―dual zones‖ in theGuangdong-Hong Kong-Macao Greater Bay Area and Shenzhen Pilot Demonstration Zone, and implement comprehensive reformpilots in Shenzhen. At the same time, Shenzhen is also an important curtain wall market for the Company. The Company willcontinue to promote high-quality development and face multiple In the new era of strategic overlap, expand and extend marketcoverage, use lean quality to consolidate the existing market position, explore new market fertile ground, continue to increase R&Dand innovation, actively practice the concept of green development, enhance core competitiveness, and maintain the leading positionin the industry.
(3) Main business modes, specific risks and changes;
The projects implemented by the Company are mainly through the bidding method to obtain contract orders. Project design,material procurement, production and processing, and the construction and installation and after-sales service model are based on thecontract orders. The main risk of this mode is that it takes a long period of time from the completion of the order to the completion ofthe project, and it is highly dependent on raw materials and labor costs. It is greatly affected by the national industrial policy, raw
material prices, and labor market fluctuations. Different contract orders have different requirements, imposing high requirements ontechnology and production management. The main business model of the Company's curtain wall engineering is the entire industrychain, from design, process, material procurement, production and processing, to construction and after-sales service. The operationmode remained unchanged in the report period.
(4) Market competition pattern, cyclical characteristics of the Company's industry and the Company's market positionThe sudden outbreak of the COVID-19 epidemic in 2020 has had an important impact on the development of the constructioncurtain wall industry. As the pressure of market competition continues to increase, leading companies in the industry continue toexpand their business scale, highly concentrated talents and resources, and strengthen their differentiated core competitiveness. At thesame time, the total number of employees in the curtain wall industry is declining, and the contradictions in human resources aremore prominent. It also puts forward more urgent needs for intelligent manufacturing and management tool applications. There is noobvious periodicity in the curtain wall industry.The Company has been engaged in smart curtain wall related business since its inception. Over the past more than 30 years, theCompany has undertaken hundreds of large projects and received the highest award in the industry China Construction Luban Awardand Zhan Tianyou Civil Engineering Award for many times. The Company has also received nearly 100 provincial and above awards.The Company has been in the ―China's top 100 building curtain wall industry‖ for many years, and has already had strong brandadvantages and competitiveness in the industry. The Company has a strong technology lead in the industry. The Company also tookpart in the preparation of more than 10 national or industry standards including the Public Construction Energy Saving DesignStandard, making 9 records among Chinese enterprises. The Company has a Class A qualification for building curtain wallengineering contracting and class A qualification for building curtain wall engineering design. It is the highest level for curtain walldesign and construction companies in China.
(5) Industry qualification types and validity period
During the reporting period, the Company's relevant qualifications have not changed significantly, and the validity period hasnot expired. For the detailed information about the qualifications obtained, please refer to the Chapter V, XIX, Explanation of OtherMajor Matters of this report.
(6) Quality control system, implementation standards, control measures and overall evaluation
Quality control system: The Company implements a comprehensive quality management system and has established a qualitymanagement system in accordance with ISO9001 from the aspects of design, procurement, storage, production, testing, delivery,installation, and after-sales service, and conduct regular reviews.
Implementation of the standard: In the process of building curtain wall business, the Company strictly complies withGB/T21086-2007 "Building Curtain Wall", JG/T231-2007 "Building Glass Lighting Roof" and other national and industrialstandards.
Control measures: The Company has established complete and effective quality control measures and quality managementbodies, and strictly implements various quality management and control measures.
Overall evaluation: The Company's products and project quality are in full compliance with the relevant requirements of therelevant national standards and standards, and maintain proper operation, providing customers with stable and reliable qualityproducts and engineering.
(7) Major project quality problem during the reporting period
None.
2. Rail transport equipment business:
The "Fourteenth Five-Year Plan for National Economic and Social Development and Outline of Long-Term Goals for 2035"emphasizes the in-depth implementation of the strategy of making the country a strong nation, and promotes the innovativedevelopment of advanced rail transit equipment and other industries. Since 1999, the Company has taken the lead in developing railtransit screen door technology in China. The Company's main products in this sector are rail transport screen door systems andtechnical maintenance services, which are a necessary part of modern subway system. It is installed at the edge of the subway
platform and separates trains from the platform. The business model is to order-based production, obtain contract orders throughbidding (divided into open bidding and bid invitation), design, process, purchase raw materials, factory production, construction andinstallation, and technical maintenance services according to the orders. The Company has built a complete industry chain thatintegrates R&D, designing, manufacturing, engineering and technical services. The business model has not changed during thereporting period. The Company has established a quality management system from design, procurement, production, installation andafter-sales service in accordance with ISO9001, and has passed ISO9001, ISO14000 and international railway IRIS systemcertification. The Company's rail transit shielding door system adopts the original technology of the Company and has the productwith the independent intellectual property right. The Company has compiled the first industry standard of the rail transit stationshielding door in our country and compiled the national standard of evaluation method of energy consumption and emission index ofurban rail transit (GB/T 37420-2019). Fangda Zhichuang Technology Co., Ltd. is engaged in the subway transportation shield doorsystem industry as a state-level high-tech enterprise.
As a "pioneer" in the domestic rail transit screen door system industry, after more than 20 years of development, the Companyhas successively constructed subway screens in Beijing, Shanghai, Tianjin, Guangzhou, Shenzhen, Nanjing, Shenyang, Wuhan, Xi'an,Fuzhou, Nanchang and other cities. The door system has a coverage rate of more than 70% in the domestic cities that have openedsubway operations, and the market share steadily ranks first. It is a leading enterprise in China's rail transit screen door industry. Inaddition, the Company's products have been continuously promoted to overseas markets, and many projects have been won incountries and regions along the ―Belt and Road‖ such as Singapore, India, Malaysia, Thailand, Hong Kong and Taiwan. At present,the Fangda screen door system has been applied in the rail transit of 42 cities around the world. More than ten million people use theFangda screen door system every day. The Company has become the world's leading manufacturer and supplier of screen doorsystems in the rail transit equipment market.
3. New energy industry: Solar PV power generation industry is largely supported by the Chinese government. The Company isone of the first companies that possess intellectual property rights in the designing, production and integration of solar PV systems. In2020, the grid-connected Jiangxi Pingxiang Xuanfeng Town Solar Photovoltaic Power Station, Nanchang Jiangxi Isuzu AutomobileCo., Ltd. Parking Shade Photovoltaic Power Station and Dongguan Songshan Lake Photovoltaic Power Station all operated smoothly,and the power generation efficiency was in line with the power plan design efficiency. In the future, it will still bring long-term,stable income and profits to the Company.
4. Real estate
The Company currently has completed: Fang Dacheng ("Fang Dacheng", the same below) project in Nanshan District, Shenzhen;one project under development: the Nanchang Phoenix Island Fangda Center project; Two: Fangda Bangshen Industrial Park projectin Baoan District, Shenzhen, and urban renewal project in the area along the Dakang River in Henggang, Shenzhen.For a detailed discussion of the Company’s business, please refer to “III. Analysis of Core Competencies” in this sectionof the report and Chapter VI “Operation Discussion and Analysis”.
II. Major assets change
1. Major assets change
| Main assets | Major change |
| Equity assets | None |
| Fixed assets | None |
| Intangible assets | None |
| Construction in process | None |
| Investment real estate | None |
| Deferred income tax assets | Deferred income tax assets decreased by 45.64% year-on-year, mainly because the Shenzhen Fangda Plaza project reached the land value-added tax settlement conditions during the current period. As the matters involved in the liquidation are planned to be included in the final settlement of corporate income tax in 2020, the deferred income tax assets corresponding to the accrued and unpaid taxes are transferred back. |
| Notes receivable | Notes receivable decreased by 32.1% on a year-on-year basis, which was mainly due to the decrease in collection by means of notes at the end of the period |
2. Major foreign assets
□ Applicable √ Inapplicable
3 Core Competitiveness Analysis
(1) Smart curtain wall system and material
1. Expertise and brand competitiveness
As the world‘s top smart curtain wall system supplier and service provider, the Company has independently developed andmastered core technologies. The average annual R&D and innovation investment is about 5% of sales revenue. It has been selected asone of the ―Top 500 Chinese Listed Companies Innovation Index‖ twice and participated in the compilation of more than 10 nationalor industry standards such as the "Design Standards for Energy Conservation of Public Buildings", and created 9 new records forChinese enterprises. The Company has a Class A qualification for building curtain wall engineering contracting and class Aqualification for building curtain wall engineering design. It is the highest level for curtain wall design and construction companies inChina. In the same industry across the country, the Company is the earliest to establish R&D institutions such as corporatepostdoctoral workstations, engineering technology centers, and curtain wall research and design institutes. Founded 30 years ago, ithas undertaken thousands of major curtain wall system projects in more than 100 countries and regions. For example, during thereporting period, it has undertaken the Shenzhen Special Economic Zone 40th Anniversary Celebration Conference venue-ShenzhenQianhai International Conference Center‘s smart curtain wall project, 2018 General Secretary Xi Jinping visited Shenzhen Museumof Contemporary Art and Urban Planning Exhibition Hall and Vanke Qianhai Corporate Mansion‘s curtain wall system, the curtainwall system of the Xiamen International Conference Center, the venue of the 2017 Xiamen BRICS Summit, the 2014 APEC Summit,the curtain wall system of the 2017 ―One Belt One Road‖ Beijing Yanqi Lake International Conference Capital, the main venue ofthe International Cooperation Summit Forum, has won wide acclaim from all walks of life. The industry and target market of theCompany have high requirements for the performance of participating enterprises which has formed certain thresholds. Especially inthe super high-rise buildings, large public buildings and special-shaped external maintenance structures, the Company has richexperience in project implementation. It has established business contacts and cooperation with many large real estate developmentcompanies. The Company has a high reputation and strong market competitiveness.The Company has created many firsts in the industry and is one of the high-end preferred brands in the Chinese smart curtainwall system materials industry. So far, four subsidiaries including Shenzhen Fangda Construction Technology Group Co., Ltd.,Dongguan Fangda New Materials Co., Ltd., Chengdu Fangda Construction Technology Co., Ltd., Shanghai Fangda ZhijianTechnology Co., Ltd., Fangda New Materials (Jiangxi) Co., Ltd. have been recognized as hi-tech companies. The "FANGDA"trademark was recognized as a well-known trademark in China, and the "FANGDA" brand was awarded "International ReputationBrand", "Shenzhen Time-honored Brand", and "Shenzhen Famous Brand".
2. Location advantage
2021 is the first year of the "14th Five-Year Plan". Shenzhen will vigorously promote the construction of the Guangdong-HongKong-Macao Greater Bay Area and the Shenzhen Pilot Demonstration Zone "Dual Zone", implement comprehensive reform pilots inShenzhen, and the implementation of the plan will directly stimulate the construction of large public buildings, and There is a largemarket demand for building curtain walls. Since its establishment in Shekou, Shenzhen in 1991, the Company has been based inShenzhen for 30 years. It has been rated as "Guangdong Province Contract-abiding and Credit-Reliable Enterprise Company","Guangdong Province Top 500 Manufacturing Enterprises", "Shenzhen Top 500 Enterprises", and Shenzhen Special Zone 40Anniversary "50 Most Potential Listed Companies". The Company will continue to take advantage of the industry's regionalleadership, grasp the policy dividend, and follow the national development strategy to promote the Company's rapid development.
3. Focusing on the high-end market to edge out competitors
In the fierce market competition, the Company accurately positions the market in the field of smart energy-saving curtain wallsystems with high requirements for technology, service and management, and focuses its resources on high-end curtain wall projects.Many of the curtain wall projects undertaken won the national "Luban Award", "Zhan Tianyou Civil Engineering Award", "NationalQuality Engineering Award", "China Construction Engineering Decoration Award", "White Magnolia" Award and "CustomerSatisfaction Project" awards, and Won the title of ―Top Ten Most Competitive in China's Curtain Wall Industry‖. The Company hasbuilt a leading brand and created a clear edge in the high-end curtain wall market.
4. Well-developed industry base landscape
In order for the Company to better serve the market and meet the growing demand for orders, after years of accumulation andcontinuous investment in hardware facilities, the Company's curtain wall system and material industry has been establishednationwide with Shenzhen as its headquarters and Shanghai, Chengdu, Nanchang, and Dongguan as production bases, among whichDongguan Songshan Lake Base and Nanchang Base are one of the largest and most modern curtain wall system and materialproduction bases in China and even the world. The Company's production base continues to increase digital and intelligentconstruction, introduces intelligent equipment, realizes robot intelligent welding, automatic glue, and uses Internet technology totrack the Company's products and continuously improve efficiency. The layout of the production base provides an importantguarantee for improving the market share and comprehensive competitiveness.
The Company's curtain wall system and material industry integrates R&D, design, production, project management andconstruction, with complete industrial supporting facilities, and has strong comprehensive strength in technology, cost advantages,quality and service.
5. Talent
The Company always adheres to the "people-oriented" talent concept, actively introduces and trains all kinds of professionaltechnology and management talents, and is committed to building an efficient management and operation team. After years ofdevelopment, the Company has an experienced senior management team and middle-level managers with strong execution ability, aswell as a complete talent training system and talent reserve. This year, the Company continuously optimized the effective incentiveand assessment system, implemented quantitative management, built a platform for industry university research integration withcolleges and universities and scientific research institutions, promoted the cooperation between colleges and enterprises and thecombination of industry and university, promoted the effective docking of talent cultivation and industrial demand, and ensured thatthe Company's scientific research strength in the field of smart curtain wall was at the leading level in the industry.
(2) Rail transport equipment business
1. Expertise competitiveness
Through continued independent innovation, the Company has developed the global leading metro screen door system with fullintellectual property right and broken the monopoly of overseas competitors. The Company has also compiled the Rail TransportStation Screen Door Standard, which is the first of its kind in China. The standard was implemented as a national standard on March1, 2007. As the first standard in the industry in China, the standard has played a key role in guiding the development of China‘s railtransport screen door industry and enabled the Company a dominant lead in the industry. In 2019, following the editor-in-chief of the
Urban Rail Transit Platform Screen Door, the Company once again participated in the preparation of the Urban Rail Transit EnergyConsumption and Emission Index Evaluation Method (GB / T 37420-2019) officially implemented it on December 1, 2019,highlighting the Company's technical strength and industry leader status in the field of urban rail transit. Fangda ZhichuangTechnology Co., Ltd., a subsidiary of the Company engaged in metro platform screen door system industry of rail transit, is astate-level high-tech enterprise. During the reporting period, it was awarded the "scientific and technological innovation contributionaward of equipment industry in socialist first demonstration zone".
2. Brand competitiveness
Rail transit platform screen door is related to people's daily transportation, so the requirements for product safety, technology,quality and service ability are particularly high. In 1999, the Company began to take the lead in developing rail transit platformscreen door technology in China, accumulated rich experience, had the first mover advantage, and gradually grew into an excellentbrand enterprise in the industry. Up to now, the Company has undertaken the construction projects of track screen doors in 42 citiesand regions at home and abroad, including Shenzhen, Shanghai, Guangzhou, Wuhan, Hong Kong, Singapore, Kuala Lumpur,Malaysia, Noida, India and Bangkok, Thailand. The Fangda subway screen door system has grasped a leading market share andestablished incomparable brand influence thanks to its patents, standard and maintenance services. The Company has become aleading railway screen door supplier in the world.
3. Industry chain advantage
As China's first enterprise to enter the subway platform screen door, the Company has an overall solution industry chain of railtransit platform screen door integrating R & D, design, manufacturing, engineering construction and technical services. Withyears of accumulated reputation, leading technical services and independent intellectual property products, the Company has won thefavor of the domestic and foreign rail transit platform screen door market, and the subway platform screen door of the Company hasbeen widely used in China. The coverage rate of the cities with metro operation has reached more than 70%. With many domesticmetro platform screen door systems entering the maintenance period, the Company actively expands the industrial chain and takesthe lead in developing Metro maintenance business in China. The Company has a natural advantage in this high-end service industry.Our screen door system are independently developed by us, thus enabling us to provide prompt, overall, effective and standardmaintenance services for our customers without other third parties. With more and more metro operation, the performancecontribution of the business will continue to improve.
(3) New energy industry
The Company's new energy industry mainly includes the development of new energy saving technologies such as solarphotovoltaic application and photovoltaic building integration. With more than ten years' experience in developing solar energy PVpower generating curtain wall technology, the Company is the earliest company that masters the intelligent property right in thedesigning, production and integration of solar energy PV curtain wall systems and is a earlier in the application of PV curtain walltechnology.
Distributed solar power PV power generation is closely related to the Company‘s existing businesses. Most distributed solarpower PV systems are closely related to construction. Moreover, the Company has more than 10 years' experience in electricalproduct integration. The Company also has more than 30 years‘ experience in construction management and has the level-1construction curtain wall engineering qualification and electrical installation engineering qualification.
(4) Real Estate
1. The Company is located in the core area of Guangdong, Hong Kong and Macao, focusing on the development of urbanrenewal projects in Shenzhen. Benefiting from the dividend of Shenzhen's rapid economic development, it is expected that theCompany's real estate business will contribute profits to the Company in the future.
2. Although the Company is a later comer in the industry, the Shenzhen Fangda Town project was quickly recognized by themarket and the sales rate was faster. The Company's subordinate enterprises have been rated as "Shenzhen real estate developmentindustry brand value enterprise" by Shenzhen Real Estate Industry Association for three consecutive years and "Shenzhen real estatedevelopment industry development potential enterprise" for two consecutive years.
Chapter 4 Operation Discussion and Analysis
1. Summary
In 2020, it was a very unusual year. The sudden COVID-19 has been raging all over the world, and the social and economicsectors have been greatly affected, which has brought great challenges to the Company's operation. In the face of challenges, theCompany has always insisted on the prevention and control of epidemic situation on one hand and the resumption of work andproduction on the other hand, vigorously explored the market, paid close attention to sales, cost control, collection and other aspectsof production and operation, and continued to enhance its profitability. On February 9, the Company started to resume work andproduction earlier. The Company focuses on the main business of smart curtain wall and rail transit platform screen door, and alwaysadheres to the drive of technological innovation. Under the leadership of the board of directors and through the efforts of allemployees, the Company has achieved its business objectives. During the reporting period, the Company achieved operating incomeof RMB2,979,296,400, a year-on-year decrease of 0.88%; and the net profit attributable to owners of the parent company wasRMB382,051,500, a year-on-year increase of 9.86%. The Company's net profit after deducting non recurring profits and losses wasRMB376,968,700, an increase of 29.34% over the same period of last year. As of the end of the reporting period, the Company'sorder reserve was RMB4,926,291,100 (excluding presales of real estate), an increase of 8.58% from the end of the previous year,which was 1.65 of the Company's operating revenue in 2020. Sufficient order reserve provides a strong guarantee for the sustainabledevelopment of the Company.
1. Smart curtain wall system and material industry
(1) Make further use of the Company's advantages to grab orders
In 2020, it is the 40th anniversary of the establishment of Shenzhen Special Economic Zone. It is the year for the constructionof Guangdong, Hong Kong, Macau and Shenzhen to spread out and push forward the construction of socialism with Chinesecharacteristics in an all-round way. Despite the big test of epidemic situation, in the era node of "double zone" construction, with thespirit of "pioneering", "pioneering" and "dry" style, the Company firmly seized the opportunity, with the product quality, technicalstrength and brand influence of core competitiveness, made unconventional efforts to open up the market, and made use of theadvantages of Shenzhen, the core area of Guangdong, Hong Kong and Macao Bay District to win numerous orders and also madeunremitting efforts to expand overseas markets.
During the reporting period, the Company has successively won or signed the bid for the curtain wall project of the SouthDistrict of Shenzhen Qianhai Trading Plaza II, Xili campus of Shenzhen University (phase II), Shenzhen Huarun Sungang VientianePlaza project, Guangzhou Vanke Expo site 15, Zhuhai Hengqin Renhe International Innovation Center of traditional Chinesemedicine, Zhuhai Litang jinliwan business center phase II, Panyu nantianmingyuan, Dongguan Changan oppo R & D centerCenter project, Shantou Tianhe Mingmen Haoting, Shanghai Qibao Vanke ecological business district commercial office project,Shanghai xihongqiao business district xujingzhong 29-02 (a) plot, Shanghai Vanke Longhua project North District, Nanjing Scienceand technology development Island South primary school, Nanchang Xinli Times Square 2 building, Kunming Jinmao Yitingbusiness center, Haikou Huacai haikouwan square 12 building of China Merchants magic cube in Chengdu, phase I of CentralBusiness District of Sanjiangkou CBD in Yibin City, Sichuan Province, Baofeng hospital and maintenance hospital project inNingxia, gmhbaproject in Jilang, Australia, Rosella project in Melbourne, Australia, wills st project in Melbourne, Australia, Victoriaplace project in Australia, Shanta Forum in Bangladesh A large number of smart curtain wall systems and materials projects, such astower project, Sam project in Thailand and flash bid section of Saudi metro, were awarded and newly signed orders totaling 2.989billion yuan, an increase of 38.66% over the same period of last year, including 1.694 billion yuan in Guangdong, Hong Kong andMacao, accounting for 56.68%, and 130 million yuan in overseas projects, accounting for 4.34%.
2. In the reporting period, the curtain wall system and materials industry realized operating income of RMB2,141,476,100, an
increase of 2.50% over the same period of the previous year; the net profit was RMB157,754,700, an increase of 51.52%; with agross margin of 17.15%, up 2 percentages over the same period of last year; By the end of the reporting period, the order reserve ofcurtain wall system and material industry of the Company was RMB3,321,131,200, an increase of 22.40% over the same period oflast year, which was 1.55 times of the operating revenue of curtain wall system and material industry in 2020.
(2) Reasonable layout of production bases and comprehensive improvement of production capacityIn order to better serve the market, meet the growing demand for orders and convert orders into operating revenue as soon aspossible, the Company's new Shanghai Songjiang East China production base was put into use during the reporting period. After thecompletion of the East China base, the Company has formed a national industrial layout with Shenzhen as its headquarters, Shanghaias its base for the East China market, Nanchang as its base for the central market, Dongguan Songshan Lake as its base for the SouthChina and overseas markets, and Chengdu as its base for the western market. In response to China's strategy of accelerating theformation of a new development pattern with domestic circulation as the main body and domestic and international doublecirculation promoting each other, the Company has sought to improve the Company's market share and comprehensivecompetitiveness to provide a strong guarantee.
(3) Promote intelligent manufacturing and enhance the Company's competitive advantage
During the reporting period, guided by the concept of high-quality development, driven by technological innovation andenabled by science and technology, the Company actively used advanced technology to improve the quality and efficiency ofproduction and construction. In the curtain wall project construction of Shenzhen Qianhai International Conference Center, the venueof Shenzhen Special Economic Zone's 40th anniversary celebration conference, the Company uses 3D scanning robot, BIM modeland other advanced technical means to achieve efficient and high-quality scientific construction, which interprets the greatcraftsman's spirit of "products are excellent", and ensures the successful completion of the conference venue construction.
In 2020, the Company will comprehensively and deeply carry out the construction of intelligent factory, optimize theproduction mode, production process and production process, and carry out intelligent upgrading and transformation of productionlinks to realize intelligent production. Welding robot, glue robot, automatic cutting machine and other intelligent productionequipment have been applied to production and manufacturing. The second phase of MES system has been put into use, realizing thewhole process information management from planning, manufacturing, warehousing to delivery, promoting the Company to developin the direction of "information technology service + intelligent manufacturing", accelerating the upgrading from "manufacturing" to"intelligent manufacturing", and improving the production efficiency.
2. Rail transport screen door business
(1) Actively explore the market and promote the "double circulation" of domestic and international markets
In recent years, the state has successively issued a series of development plans, such as "three year action plan for enhancingthe core competitiveness of manufacturing industry (2018-2020)", "outline for building a transportation power" and "13th five yearplan for the development of modern comprehensive transportation system", focusing on the development of advanced manufacturingindustries such as urban rail transit equipment. As an important equipment of rail transit, the Company's platform screen door systemis one of the key equipment supported by the state for localization. The Company will seize new opportunities, rely on technologicalinnovation, continuously develop domestic and foreign markets, and show more strength of "made in China" on the world stage.
During the reporting period, the Company received orders for professional technical maintenance services for platform screendoor system of Singapore Metro Jurong line project, Hong Kong International Airport P4 terminal station, Shenzhen metro line 16,Xi'an Metro Line 5 phase II, Nanning rail transit line 5 phase I (Guokai Avenue Jinqiao passenger station), Fuzhou rail transit line 5,Shenzhen Metro line 1, 2, 5, 11, Nanchang Rail Transit Line 2, etc. By the end of the report period, the Company's order reserve ofrail transit platform screen door equipment industry has reached RMB1,605,159,900, which is 2.46 times of the industry's operatingrevenue in 2020.
(2) Good growth momentum of revenue and profit and consolidation of leading position in the industry
During the reporting period, the Company completed the construction of 14 rail transit lines, including golden line of Bangkok,
phase III of Shenzhen Metro Line 6, line 10 and line 4, Hangzhou metro line 16, north section of Shijiazhuang Metro Line 3 phase I,East extension of Nanning Metro Line 4 and line 2, Zhengzhou Metro line 4, Taiyuan Metro Line 2, Nanchang Metro Line 3, phase IIof Fuzhou Metro Line 1 and Xi'an Metro Line 5 The platform screen door system has been successfully put into operation, with 205stations and 303.3km line mileage, which is the highest in the industry, consolidating the Company's global leading position in therail transit platform screen door equipment industry. At present, Fangda platform screen door system has been applied in the railtransit of 42 cities in the world, of which the coverage rate of metro operation in domestic cities has reached more than 70%, andmore than 20 million people use Fangda platform screen door system every day, thus continuing to maintain the world's leadingmarket share. During the reporting period, the industry realized operating income of RMB651,249,400, and realized net profit ofRMB75,448,600, with the net profit increasing by 20.32% compared with the same period of last year.
(3) Maintenance technology services continue to improve
As the world's largest supplier of rail transit platform screen door system, the Company takes the lead in developing "intelligentmaintenance" system by using big data, AI and 5g technology in the same industry. With high quality and efficient professionalmaintenance service, the Company has won wide praise in the urban rail transit industry, and the Company's technical maintenanceservice revenue continues to rise. During the reporting period, the revenue of technical maintenance services was RMB33,995,400,an increase of 36.82% over the same period of last year. The Company is a leading company that can provide the entire industrychain technology and product services for subway screen doors. The added value of technical services is high. In the future, thisbusiness will become an important performance growth point for the Company. The Company will also strive to become a metroscreen door technology maintenance service expert. During the reporting period, the Company was repeatedly rated as "advancedoutsourcing maintenance unit" and "excellent cooperative outsourcing unit" by the users of metro platform screen doors. Therecognition of the industry partners affirms the Company's advanced technology and product quality in the field of urban rail transitshielding door equipment, and reflects Fangda's brand influence and maintenance professional service in China's rail transit shieldingdoor industry.
3. New energy industry
During the reporting period, the Company continued to implement the refined management of new energy photovoltaic powerstations. The three solar photovoltaic power stations that have been connected to the grid maintained efficient, stable and safeoperation, with a net profit of 10.8386 million yuan, an increase of 35.94% over the same period of last year. The operation efficiencyof the three power stations met the design efficiency of the power station system. During the reporting period, the Company's solarphotovoltaic power plants produced clean energy equivalent to reducing carbon dioxide emissions by about 20000 tons.
4. Real estate
(1) Changes in the macroeconomic situation and industry policy environment, the status of industry development andpolicy situation in the city where the Company's main projects
At the beginning of 2020, affected by the epidemic, the national real estate industry was greatly affected, and the nationalturnover fell. In 2020, China's economy began to recover, and the transaction scale of commercial residential buildings in 100 citiesincreased slightly, showing a trend of "rising, falling, and stable". In the second half of the year, the market picked up, but thesubsequent increment was insufficient.
The main project locations of the Company are Shenzhen and Nanchang. Shenzhen is located in the core area of Guangdong,Hong Kong and Macao. The Company will focus on the development of urban renewal projects in Shenzhen.
Nanchang real estate is still under the control policy, residential transactions are stable as a whole, the supply of commercialand office buildings is large, and the price and quantity fall together. The municipal government plans to introduce relevant policieson commercial destocking.
Under the influence of macroeconomic and real estate industry regulation, the sales volume and gross profit rate of theCompany's real estate sector will decrease, but it is expected to contribute to the Company's profits.
(2) The Company's main business model, business project format, real estate sales in the city where the main project islocated, market position and competitive advantages of listed companies, main risks and countermeasures
The Company's real estate business mainly adopts the business model of self-development, partial sales and partialself-supporting. At present, the Company mainly develops, sells and rents office, commercial and apartment products. The Companyhas established a professional team to operate and manage the Company's commercial and property.The Fangda Town project developed by the Company is located in the north of Huaqiaocheng, Nanshan District, Shenzhen city.As of the end of the report period, the sales rate of the project is 92.80%. See "(V) sales of main projects in this section for details ofthe sales situation. The Fangda Town center project, located in Honggutan New District, Nanchang City, Jiangxi Province, is acommercial complex integrating office, apartment, shopping, leisure and entertainment. The project focuses on sales and rental Theproject will be sold in advance on December 28, 2019. As of the end of the report period, the sales rate of the project is 13.56%.Although the Company is a later comer in the industry, the Fangda Town project was quickly recognized by the market and thesales rate was faster. As the Company's wholly-owned subsidiary, Fangda Real Estate Co., Ltd. has been rated as "Shenzhen realestate development industry brand value enterprise" by Shenzhen Real Estate Industry Association for three consecutive years and"Shenzhen real estate development industry development potential enterprise" for two consecutive years. Nanchang's commercialoffice buildings have a large inventory, and the volume and price are showing a downward trend. The location of the Company'sFangda Center project has obvious location advantages, and the products have good market expectations.
(3) New land reserve projects
| Parcel or project name | Land location | Purpose | Land area (m2) | Building area (m2) | Obtaining method | Interests percentage | Total land price (ten thousand yuan) | Equity consideration (ten thousand yuan) |
| None |
Total land reserve
| Project/region name | Floor area (10,000 m2) | Total building area (10,000 m2) | Remaining building area (10,000 m2) |
| Fangda Town | 3.53 | 21.24 | 0 |
| Nanchang Fangda Center | 1.66 | 6.64 | 0 |
| Total | 5.19 | 27.88 | 0 |
(4) Main production development status
| City/region | Item | Land location | Project form | Interests percentage | Starting time | Development progress | Completion rate | Land area (m2) | Planning construction area (m2) | Area completed in this phase (m2) | Total area completed in this phase (m2) | Estimated total investment (in RMB10,000) | Accumulated total investment (in RMB10,000) |
| Shenzhen Nanshan District | Fangda Town | No.2 Longzhu 4th Road | Office commercial complex | 100.00% | May 1st, 2014 | 100% | 100.00% | 35,397.60 | 212,400.00 | 0 | 217,763.69 | 258,500 | 283,600 |
| Honggutan New | Fangda Center | No.1516 Ganjian | Commercial | 100.00% | 1 May 2018 | 100% | 100.00% | 16,608.55 | 66,432.61 | 65,376.94 | 65,376.94 | 67,000 | 66,992.35 |
| District, Nanchang | g North Avenue Fangda Center |
(5) Main production sales status
| City/region | Item | Land location | Project form | Interests percentage | Building area | Sellable area (m2) | Cumulative pre-sale (sales) area (m2) | Pre-sale (sales) area in this period (m2) | Amount of pre-sale (sales) in the current period (RMB10,000) | Cumulative settlement area (m2) | Settlement area in the current period (m2) | Settlement amount in this period (RMB10,000) |
| Shenzhen Nanshan District | Fangda Town | No.2 Longzhu 4th Road | Office commercial complex | 100.00% | 212,400 | 93,086.25 | 86,380.85 | 901.43 | 5,223.08 | 86,380.85 | 901.43 | 5,223.08 |
| Honggutan New District, Nanchang | Fangda Center | No.1516 Ganjiang North Avenue Fangda Center | Commercial | 100.00% | 65,376.94 | 32,354.44 | 4,385.76 | 4,385.76 | 5,853.22 | 0 | 0 | 0 |
(6) Main production lease status
| Item | Land location | Project form | Interests percentage | Leasable area (m2) | Cumulative leased area (m2) | Average lease ratio |
| Shenzhen Fangda Town | Shenzhen Nanshan District | Office commercial complex | 100.00% | 72,517.71 | 41,180.31 | 56.79% |
| Shenzhen Fangda Town | Shenzhen Nanshan District | Commercial shop | 100.00% | 22,775.52 | 22,652.59 | 99.46% |
| Jiangxi Nanchang Science and Technology Park | Nanchang, Jiangxi Province | Plant and office building | 100.00% | 11,037.20 | 11,037.20 | 100.00% |
| Fangda Building | Shenzhen Nanshan District | Office building | 100.00% | 17,792.47 | 12,454.13 | 70.00% |
(7) First-level development of land
□ Applicable √ Inapplicable
(8) Financing source
| Financing source | Ending financing balance (RMB10,000) | Financing cost range / average financing cost | Term structure (RMB10,000) | |||
| Within 1 year | 1-2 years | 2-3 years | Over 3 years | |||
| Bank loan | 116,179.78 | During the same period, the benchmark interest rate of the loan was adjusted at the agreed rate to 5.715% | 8,929.78 | 8,750.00 | 13,500.00 | 85,000.00 |
| Total | 116,179.78 | 8,929.78 | 8,750.00 | 13,500.00 | 85,000.00 | |
(9) Development strategy and operation plan in the next year
Under the continuous regulation of real estate policy, it is expected that the overall transaction scale of the real estate marketwill drop slightly in 2021, the differentiation of different cities will continue, and the transactions of the first tier and some secondtier markets are expected to keep increasing. The Company is still optimistic about the future development of real estate in core citiesand core areas. In the future, the Company will continue to expand the brand effect, deepen the product types, deepen the localmarket, and effectively improve the Company's operating performance.In 2021, the main task of the Company's real estate sector is to realize the sales of Shenzhen Fangda Town project, and focus onpromoting the sales and leasing of Nanchang Fangda Town center project.In 2020, the Company's fangdabangshen project and Henggang Dakang project will be affected by the epidemic situation andpolicies, and the application of special regulations and project approval will be delayed to a certain extent. In 2021, the Company willactively promote the application of projects according to the latest local policies.
(10) Bank mortgage loan guarantee provided for commercial housing purchasers
√ Applicable □ Inapplicable
As of June 30, 2020, the balance of the Company's guarantee for commercial housing offenders due to bank mortgage loans wasRMB176 million.
(11) Co-investment between Directors, supervisors and senior management and listed companies
□ Applicable √ Inapplicable
5. Innovation
The Company adheres to the development strategy of focusing on technological innovation to strengthen the Company'scompetitiveness. During the reporting period, the Company applied for 75 new patents and 46 new authorized patents, andindependently developed 29 new products. We have actively promoted the introduction and application of advanced technologiessuch as intelligent manufacturing, robotics, Internet of things, AI, VR + Ar and big data, and achieved preliminary results. Theconstruction of intelligent factories has been accelerated, and intelligent production facilities such as automatic welding andautomatic gluing have been put into use. During the reporting period, the amount of R&D investment was 141.6119 million yuan,accounting for 4.75% of the sales revenue, an increase of 3.41% over the same period of last year, providing an important guaranteefor the Company to achieve high-quality growth.In 2020, management innovation remained the focus of the Company's work. We should scientifically formulate productionplans, implement the "three reductions" of reducing inventory, cost and accounts receivable stock, and improve business efficiency.We should comprehensively carry out the "comparison, learning, catching up and Surpassing" activities to stimulate internal potential.We should hold the "Fangda craftsman" skill competition and "Fangda lecture" training To continuously improve the theoreticalknowledge and operation skills of employees, and create a team of skilled talents with reasonable structure, exquisite technology and
excellent style. In 2020, five employees including Yang Xingzhong, Chen Guowei, Liu Licheng, Liang ruke and Wu Tianjie wereawarded the "top 100 craftsmen in Shenzhen"; Wenlin, Xu Qiang and Yu Zhenjian were awarded the titles of "top 10 scientific andtechnological talents", "top 10 outstanding young curtain wall designers" and "top 10 star craftsmen" by Shenzhen DecorationIndustry Association.
6. Awards
During the reporting period, the Company was awarded the title of ―Advanced Private Enterprise in Fighting New CoronaryPneumonia Epidemic‖ by the All-China Federation of Industry and Commerce, ―Private Enterprise with Outstanding Contribution toFighting the New Coronary Pneumonia Epidemic in Guangdong Province‖, ―The Most Beautiful Enterprise in Action Against theEpidemic‖, and the 2020 China Enterprise Charity 500 Advanced private enterprise in Jiangxi Province‘s "Thousands of EnterprisesHelping Thousands of Villages" Targeted Poverty Alleviation Action, has been listed in the "Top 500 A-share Listed CompaniesInnovation Index in China" for two consecutive years, has been ranked among the "Top 500 Manufacturing Industries in GuangdongProvince" and won the "Shenzhen Time-honored Brand" "The 40th Anniversary of the Shenzhen Special Economic Zone, "The 50Most Potential Listed Companies", was awarded the "Outstanding Enterprise for Social Responsibility" for three consecutive years.The "FANGDA" brand was awarded the "International Reputation Brand" and won the honorary title of "Shenzhen Famous Brand"for six consecutive times. Chairman Xiong Jianming won the honors of "2020 China Charity Entrepreneur", "2020 ?Golden Quality‘Outstanding Entrepreneur Award", and "Present to the Special Zone 40 Years to Salute 40 Brands".
During the reporting period, the Shenzhen Overseas Chinese Town Building, Shenzhen Hanjing Financial Center, and WuxiWanda City‘s Phase I Wanda Mall Exterior Decoration Project Bid Section 2, and Shenzhen Energy Building, which wereconstructed by the subsidiary Fangda Construction Technology, were awarded the ―Architectural Engineering Decoration‖ by theChina Building Decoration Association. Shenzhen Hanjing Financial Center, Shenzhen International Convention and ExhibitionCenter (Phase I) and Shenzhen Overseas Chinese Town Building won the ―Guangdong Province Excellent Architectural DecorationEngineering Award‖; the Shenzhen Overseas Chinese Town Building undertaken by Shenzhen won the ―15th AL-Survey Best Lovethe curtain wall project"; the curtain wall project of the Shenzhen International Convention and Exhibition Center won the third prizeof the "First Architectural Decoration BIM Competition"; the Shenzhen International Convention and Exhibition Center (Phase 1),Shenzhen Hanjing Financial Center, Shenzhen Hanjing Times Building, Shenzhen Overseas Chinese Town The building, ShenzhenShuibei International Jewelry Center, Shenzhen Huide Building, and Shenzhen Shenye Zhongcheng respectively won the "ShenzhenGolden Peng Award for Decoration in 2019"; the "Unit Type Porcelain Curtain Wall" with independent intellectual property rightswas awarded by the China Building Decoration Association "Building Decoration Industry Science and Technology Award", thispatented technology won the "Top Ten Science and Technology Innovation Achievement Award" of Shenzhen Decoration Industry.
During the reporting period, the subsidiary Fangda Zhichuang Technology won the "Shenzhen Industry Leaders Top 100Enterprises", the "Socialist Pilot Demonstration Zone Equipment Industry Technology Innovation Contribution Award", "2020 GanpoHelps Akto's Poverty Alleviation Model Group", 2020 ( The 13th) Rail Transit and Urban International Summit "2019 ExcellentSupplier of Screen Doors", "Excellent Equipment Supplier" issued by Shenzhen Metro Group Co., Ltd., "Advanced OutsourcingMaintenance Unit" by Xiamen Rail Transit Group Co., Ltd. , Tianjin Rail Transit Operation Group Co., Ltd. "Excellent CooperativeOutsourcing Unit", Hohhot Metro Line 1 Construction Management Co., Ltd. "Excellent Supplier", Wuhan Wuhan Railway TravelService Media Co., Ltd. Customer Service Maintenance Branch "Excellent Outsourcing Company" "Maintenance Project" and the"Recognition of Outsourcing Maintenance Work" issued by the Maintenance Center of Nanchang Rail Transit Group Co., Ltd.Operation Branch.
Subsidiary Jiangxi Land was awarded the "Model Group of Compassion for the Prevention and Control of New CoronaryPneumonia in 2020", and Fangda Real Estate was awarded the title of "Brand Value Enterprise in Shenzhen Real Estate DevelopmentIndustry" for three consecutive years.
2. Main business analysis
1. Summary
For details see Management Discussion and Analysis – 1. Profile
2. Income and costs
(1) Turnover composition
In RMB
| 2020 | 2019 | YOY change (%) | |||
| Amount | Proportion in operating costs (%) | Amount | Proportion in operating costs (%) | ||
| Total turnover | 2,979,296,410.16 | 100% | 3,005,749,558.66 | 100% | -0.88% |
| Industry | |||||
| Metal production | 2,141,476,129.47 | 71.88% | 2,196,425,708.75 | 73.07% | -2.50% |
| Railroad industry | 651,249,442.29 | 21.86% | 460,906,724.26 | 15.33% | 41.30% |
| New energy industry | 19,978,873.86 | 0.67% | 20,103,218.63 | 0.67% | -0.62% |
| Real estate | 151,222,473.25 | 5.08% | 307,563,025.40 | 10.23% | -50.83% |
| Others | 15,369,491.29 | 0.52% | 20,750,881.62 | 0.69% | -25.93% |
| Product | |||||
| Curtain wall system and materials | 2,141,476,129.47 | 71.88% | 2,196,425,708.75 | 73.07% | -2.50% |
| Subway screen door and service | 651,249,442.29 | 21.86% | 460,906,724.26 | 15.33% | 41.30% |
| PV power generation products | 19,978,873.86 | 0.67% | 20,103,218.63 | 0.67% | -0.62% |
| Real estate sales | 151,222,473.25 | 5.08% | 307,563,025.40 | 10.23% | -50.83% |
| Others | 15,369,491.29 | 0.52% | 20,750,881.62 | 0.69% | -25.93% |
| District | |||||
| In China | 2,825,857,732.62 | 94.85% | 2,824,371,016.83 | 93.97% | 0.05% |
| Out of China | 153,438,677.54 | 5.15% | 181,378,541.83 | 6.03% | -15.40% |
(2) Industries, products or districts that take more than 10% of the Company’s business turnover or profit
√ Applicable □ Inapplicable
In RMB
| Turnover | Operating cost | Gross margin | Year-on-year | Year-on-year | Year-on-year |
| change in operating revenue | change in operating costs | change in gross margin | ||||
| Industry | ||||||
| Metal production | 2,141,476,129.47 | 1,774,196,596.41 | 17.15% | -2.50% | -4.80% | 2.00% |
| Real estate | 151,222,473.25 | 114,818,966.26 | 24.07% | -50.83% | 346.95% | -91.05% |
| Railroad industry | 651,249,442.29 | 511,339,468.47 | 21.48% | 41.30% | 48.71% | -3.92% |
| Product | ||||||
| Curtain wall system and materials | 2,141,476,129.47 | 1,774,196,596.41 | 17.15% | -2.50% | -4.80% | 2.00% |
| Real estate sales | 151,222,473.25 | 114,818,966.26 | 24.07% | -50.83% | 346.95% | -91.05% |
| Metro screen door | 651,249,442.29 | 511,339,468.47 | 21.48% | 41.30% | 48.71% | -3.92% |
| District | ||||||
| In China | 2,825,857,732.62 | 2,303,733,820.91 | 18.48% | 0.05% | 13.15% | -9.43% |
Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable √ Inapplicable
In RMB
| Turnover | Operating cost | Gross margin | Year-on-year change in operating revenue | Year-on-year change in operating costs | Year-on-year change in gross margin | |
| Industry | ||||||
| Metal production | 2,141,476,129.47 | 1,774,196,596.41 | 17.15% | -2.50% | -4.80% | 2.00% |
| Product | ||||||
| Curtain wall system and materials | 2,141,476,129.47 | 1,774,196,596.41 | 17.15% | -2.50% | -4.80% | 2.00% |
| District | ||||||
| In China | 2,035,536,957.95 | 1,710,029,904.88 | 15.99% | -3.21% | -5.29% | 1.85% |
Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable √ Inapplicable
Different business types of the Company
In RMB
| Business type | Turnover | Operating cost | Gross margin |
| Curtain wall system and materials | 2,141,476,129.47 | 1,774,196,596.41 | 17.15% |
Whether the Company runs business through the Internet
□ Yes √ No
Whether the Company runs overseas projects
√ Yes □ No
| No. | Location | Number of overseas projects | Total amount of overseas project contracts (RMB10,000) |
| 1 | Australia | 8 | 14,390.34 |
| 2 | Southeast Asia | 1 | 4,870.37 |
| Total | 9 | 19,260.71 |
(3) The physical sales revenue is high the labor service revenue
□ Yes √ No
(4) Performance of signed major sales contracts in the report period
√ Applicable □ Inapplicable
In RMB
| Project amount | Cumulative recognized output value | Amount of unfinished part | |
| Unfinished project | 6,343,113,784.88 | 3,195,264,742.88 | 3,147,849,042.00 |
Major unfinished project
√ Applicable □ Inapplicable
In RMB
| Item | Project amount | Construction period | Completion percentage | Income recognized in this period | Cumulative recognized income | Payment collection | Balance of accounts receivable |
| Tencent Digital Building curtain wall project | 314,399,189.26 | September 4, 2018 – November 20, 2019(The construction period agreed in the construction contract is different from the actual construction situation. The customer has made corresponding adjustments to | 58.14% | 131,330,574.65 | 182,799,146.56 | 134,229,918.10 | 39,994,441.07 |
In RMB
the constructionperiod accordingto the actualsituation. Thecurrent project isprogressingsmoothly).
| Accumulative occurred costs | Accumulative recognized gross margin | Estimated loss | Settled amount | Balance of unpaid amount of finished project | |
| Finished but not settled project | 3,476,427,151.59 | 824,584,471.14 | 0.00 | 3,500,243,552.24 | 800,768,070.49 |
Any major outstanding unsettled projects during the reporting perio.
□ Applicable √ Inapplicable
(5) Operation cost composition
Industry
In RMB
| Industry | Item | 2020 | 2019 | YOY change (%) | ||
| Amount | Proportion in operating costs (%) | Amount | Proportion in operating costs (%) | |||
| Metal production | Raw materials | 1,123,365,829.74 | 63.32% | 1,233,265,964.58 | 66.18% | -2.86% |
| Metal production | Installation and engineering costs | 445,959,180.45 | 25.14% | 422,121,605.36 | 22.65% | 2.49% |
| Metal production | Labor cost | 100,484,793.92 | 5.66% | 106,412,147.98 | 5.71% | -0.05% |
| Railroad industry | Raw materials | 318,518,796.97 | 62.29% | 233,885,738.50 | 68.02% | -5.73% |
| Railroad industry | Installation and engineering costs | 75,861,403.42 | 14.84% | 40,119,904.40 | 11.67% | 3.17% |
| Railroad industry | Labor cost | 32,435,591.19 | 6.34% | 37,872,672.06 | 11.01% | -4.67% |
| Real estate | Construction and installation cost | 64,064,455.04 | 55.80% | 37,414,096.74 | -80.47% | 136.27% |
| Real estate | Land cost | 2,998,466.20 | 2.61% | -164,158,729.89 | 353.07% | -350.46% |
| Real estate | Loan interest | 33,180.45 | 0.03% | 3,308,860.53 | -7.12% | 7.15% |
| Real estate | Labor cost | 12,855,369.02 | 11.20% | 14,043,313.15 | -30.20% | 41.40% |
Notes
In addition to the above costs, other costs are mainly energy costs such as water, electricity and rent.Main business cost
In RMB
| Cost composition | Business type | 2020 | 2019 | YOY change (%) | ||
| Amount | Proportion in operating costs (%) | Amount | Proportion in operating costs (%) | |||
| Raw materials | Curtain wall system and materials | 1,123,365,829.74 | 63.32% | 1,233,265,964.58 | 66.18% | -2.86% |
| Installation and engineering costs | Curtain wall system and materials | 445,959,180.45 | 25.14% | 422,121,605.36 | 22.65% | 2.49% |
| Labor cost | Curtain wall system and materials | 100,484,793.92 | 5.66% | 106,412,147.98 | 5.71% | -0.05% |
(6) Change to the consolidation scope in the report period
√ Yes □ No
In this period, the Company set up a company directly controlled and 3 subsidiaries indirectly controlled. The Companydirectly controlled is Shenzhen Fangda Investment Partnership (Limited Partnership), and the 3 companies controlled indirectly are:
Shenzhen Lifu Investment Co., Ltd., Shenzhen Xunfu Investment Co., Ltd. and Fangda Jianke Hong Kong Co., Ltd. added 4companies to the consolidated statements for this period.
(7) Major changes or adjustment of business, products or services in the report period
□ Applicable √ Inapplicable
(8) Major sales customers and suppliers
Main customers
| Total sales amount to top 5 customers (RMB) | 449,060,999.47 |
| Proportion of sales to top 5 customers in the annual sales | 15.07% |
| Percentage of sales of related parties in top 5 customers in the annual sales | 0.00% |
Information of the Company's top 5 customers
| No. | Customer | Sales (RMB) | Percentage in the annual sales |
| 1 | No.1 | 120,486,765.73 | 4.04% |
| 2 | No.2 | 90,066,693.35 | 3.02% |
| 3 | No.3 | 88,048,505.68 | 2.96% |
| 4 | No.4 | 81,894,414.24 | 2.75% |
| 5 | No.5 | 68,564,620.47 | 2.30% |
| Total | -- | 449,060,999.47 | 15.07% |
Other information about major customers
□ Applicable √ Inapplicable
Main suppliers
| Purchase amount of top 5 suppliers (RMB) | 544,883,166.90 |
| Proportion of purchase amount of top 5 suppliers in the total annual purchase amount | 21.18% |
| Percentage of purchasing amount of related parties in top 5 customers in the annual purchasing amount | 0.00% |
Information of the Company‘s top 5 suppliers
| No. | Supplier | Purchase amount (RMB) | Percentage in the annual purchase amount |
| 1 | No.1 | 155,480,661.68 | 6.04% |
| 2 | No.2 | 138,903,997.24 | 5.40% |
| 3 | No.3 | 87,543,049.51 | 3.40% |
| 4 | No.4 | 86,476,124.00 | 3.36% |
| 5 | No.5 | 76,479,334.47 | 2.97% |
| Total | -- | 544,883,166.90 | 21.18% |
Other information about major suppliers
□ Applicable √ Inapplicable
3. Expenses
In RMB
| 2020 | 2019 | YOY change (%) | Notes | |
| Sales expense | 39,303,536.85 | 57,584,186.20 | -31.75% | This is mainly due to the decrease in real estate sales, the corresponding decrease in labor and sales agency fees, and the implementation of the new revenue standard to classify the transportation expenses belonging to the performance cost into the operating cost. |
| Administrative expense | 141,769,402.74 | 170,443,795.50 | -16.82% | |
| Financial expenses | 87,013,598.41 | 82,608,834.38 | 5.33% | |
| R&D cost | 141,611,939.34 | 59,754,971.20 | 136.99% | Mainly due to the increase in R & D personnel and investment in R & D this year |
| Taxes and surcharges | -222,323,473.74 | 61,963,170.98 | -458.80% | See remarks for details |
Remarks:
This year, the amount of taxes and surcharges changed a lot, mainly because the subsidiary Fangda Real Estate received theliquidation notice of land value-added tax from the tax bureau in December 2020. Fangda Real Estate calculated the land value-addedtax of the Fangda Town project according to the relevant laws and regulations of land value-added tax and liquidation methods, andoffset the land value-added tax of RMB250 million withdrawn in previous years. As of the reporting date, Fangda Real Estate hascompleted the liquidation declaration and payment of land value-added tax. At present, the tax bureau is in the process of auditing,and the final amount of tax payable for land value-added tax liquidation is subject to the examination and approval result of the taxbureau.
The reasons for the difference between the withholding land value-added tax and the actual liquidation declaration and paymentof Fangda Real Estate are as follows:
1. The actual settlement cost of the project increased. During the reporting period, Fangda Real Estate completed the settlementor dispute check of various engineering costs of Fangda Town project, and the final settlement increased by 6% over the originalestimated cost, increasing about RMB111 million.
2. The deductible cost of VAT is adjusted and increased according to the scope of tax liquidation. Fangda Real Estate hired aprofessional tax agent firm to audit the land value-added tax settlement, audited the project cost according to the scope of taxsettlement, adjusted the cost sharing of self-supporting and sales parts, and issued the land value-added tax settlement audit report.
The above two factors make the comprehensive tax negative rate of land value-added tax paid by liquidation declaration lowerthan that of original provision.
4. R&D investment
√ Applicable □ Inapplicable
The Company adheres to the development strategy of focusing on technological innovation to strengthen the Company'scompetitiveness. During the reporting period, the Company applied for 75 new patents and 46 new authorized patents, andindependently developed 29 new products. We have actively promoted the introduction and application of advanced technologiessuch as intelligent manufacturing, robotics, Internet of things, AI, VR + Ar and big data, and achieved preliminary results. Theconstruction of intelligent factories has been accelerated, and intelligent production facilities such as automatic welding andautomatic gluing have been put into use. During the reporting period, the amount of R&D investment was 141.6119 million yuan,accounting for 4.75% of the sales revenue, an increase of 3.41% over the same period of last year, providing an important guaranteefor the Company to achieve high-quality growth.R&D investment
| 2020 | 2019 | Change | |
| R&D staff number | 565 | 503 | 12.33% |
| R&D staff percentage | 25.17% | 21.00% | 4.17% |
| R&D investment amount (RMB) | 141,611,939.34 | 136,943,143.23 | 3.41% |
| Investment percentage in operation turnover | 4.75% | 4.56% | 0.19% |
| Capitalization of R&D investment amount (RMB) | 0.00 | 0.00 | 0.00% |
| Percentage of capitalization of R&D investment in the R&D investment | 0.00% | 0.00% | 0.00% |
Reason for the increase in the percentage of R&D investment in the business turnover
□ Applicable √ Inapplicable
Explanation of the increase in the capitalization of R&D investment
□ Applicable √ Inapplicable
5. Cash flow
In RMB
| Item | 2020 | 2019 | YOY change (%) |
| Sub-total of cash inflow from business operations | 3,557,072,996.63 | 2,745,391,880.62 | 29.57% |
| Sub-total of cash outflow from business operations | 3,008,363,210.73 | 2,750,676,711.39 | 9.37% |
| Cash flow generated by business operations, net | 548,709,785.90 | -5,284,830.77 | 10,482.73% |
| Sub-total of cash inflow generated from investment | 9,143,834,240.33 | 7,100,600,589.19 | 28.78% |
| Subtotal of cash outflows | 9,018,647,958.83 | 7,555,258,305.31 | 19.37% |
| Cash flow generated by investment activities, net | 125,186,281.50 | -454,657,716.12 | 127.53% |
| Subtotal of cash inflow from financing activities | 2,748,060,091.27 | 1,094,836,280.53 | 151.00% |
| Subtotal of cash outflow from financing activities | 3,121,218,820.25 | 866,537,570.34 | 260.19% |
| Net cash flow generated by financing activities | -373,158,728.98 | 228,298,710.19 | -263.45% |
| Net increase in cash and cash equivalents | 298,982,484.49 | -230,920,987.78 | 229.47% |
Explanation of major changes in related data from the same period last year
√ Applicable □ Inapplicable
During the reporting period, the net cash flow from operating activities of the Company increased by 10482.73% compared with thatof last year, mainly due to the Company's real estate business providing mortgage guarantee for commercial housing purchasers.After the house property certificate and mortgage registration procedures are completed in this period, the restrictions are removed,and the real estate sales proceeds are collected. The net cash flow from investment activities increased by 127.53% compared withthat of last year, mainly due to the withdrawal of mortgage guarantee in this period At the end of the previous period, the balance offinancial investment, construction in progress and investment in real estate and other buildings decreased, and the net cash flow fromfinancing activities decreased by 263.45% compared with last year, mainly due to the decrease in the net income and expenditure of
bank loans in the current period and the payment of B-share repurchase funds.Explanation of major difference between the cash flow generated by operating activities and the net profit in the year
√ Applicable □ Inapplicable
During the reporting period, the difference between the net cash flow generated by the Company's business activities and the netprofit of this year is mainly due to the release of the limitation of the phased guarantee deposit of the real estate industry for thecommercial housing purchasers.
3. Non-core business analysis
√ Applicable □ Inapplicable
In RMB
| Amount | Profit percentage | Reason | Whether continuous | |
| Investment income | 1,274,767.24 | 0.27% | No | |
| Gain/loss caused by changes in fair value | 19,221,299.32 | 4.12% | Due to adjustment of fair value of investment real estate | No |
| Assets impairment loss | 52,970,037.82 | 11.35% | It mainly refers to the provision for impairment of contract assets | No |
| Non-operating revenue | 522,504.72 | 0.11% | No | |
| Non-business expenses | 35,564,536.75 | 7.62% | Mainly litigation liquidated damages and donation expenses | No |
| Credit impairment loss | 29,820,678.51 | 6.39% | Mainly bad debt provision corresponding to accounts receivable | No |
IV. Assets and Liabilities
1. Major changes in assets composition
The Company implemented new income standard or new lease standard for the first time since 2020, and adjust and implementedrelevant items of financial statements at the beginning of the yearApplicable
In RMB
| End of 2020 | Beginning of 2020 | Change (% ) | Notes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary capital | 1,459,840,020.10 | 12.30% | 1,209,811,978.95 | 10.64% | 1.66% | |
| Account | 616,195,129.4 | 5.19% | 462,694,993.85 | 4.07% | 1.12% | |
| receivable | 0 | |||||
| Inventory | 837,831,790.88 | 7.06% | 733,711,143.46 | 6.45% | 0.61% | |
| Investment real estate | 5,634,648,416.52 | 47.48% | 5,522,391,984.11 | 48.57% | -1.09% | |
| Long-term share equity investment | 55,902,377.95 | 0.47% | 57,222,240.83 | 0.50% | -0.03% | |
| Fixed assets | 483,161,673.38 | 4.07% | 477,332,830.92 | 4.20% | -0.13% | |
| Construction in process | 168,626,803.01 | 1.42% | 129,988,982.86 | 1.14% | 0.28% | |
| Short-term loans | 1,048,250,327.62 | 8.83% | 724,618,197.34 | 6.37% | 2.46% | |
| Long-term loans | 1,099,411,462.35 | 9.26% | 546,501,491.56 | 4.81% | 4.45% | This is mainly due to the borrowing in the new growth period of the current period |
| Non-current liabilities due in 1 year | 103,359,833.57 | 0.87% | 922,346,563.72 | 8.11% | -7.24% | Mainly due to the repayment of loans in the current period |
| Contract assets | 1,425,040,223.27 | 12.01% | 1,297,743,546.73 | 11.41% | 0.60% |
2. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
In RMB
| Item | Opening amount | Gain/loss caused by changes in fair value | Accumulative changes in fair value accounting into the income account | Impairment provided in the period | Amount purchased in the period | Amount sold in the period | Other change | Closing amount |
| Financial assets | ||||||||
| 1. Transactional financial assets | 10,330,062.18 | 4,051,015.05 | ||||||
| (excluding derivative financial assets) | ||||||||
| 2. Derivative financial assets | 6,974,448.22 | |||||||
| 4. Investment in other equity tools | 20,660,181.44 | -3,031,873.85 | -17,783,543.61 | 17,628,307.59 | ||||
| Subtotal | 30,990,243.62 | -3,031,873.85 | -17,783,543.61 | 28,653,770.86 | ||||
| Investment real estate | 5,306,116,360.12 | 19,205,841.18 | 11,675,404.61 | 57,690,444.55 | 5,504,673.99 | 250,783,476.54 | 5,628,291,448.40 | |
| Receivable financing | 2,954,029.00 | 10,727,129.28 | ||||||
| Other non-current financial assets | 5,009,728.02 | 15,458.14 | 5,025,186.16 | |||||
| Total | 5,345,070,360.76 | 16,189,425.47 | -6,108,139.00 | 57,690,444.55 | 5,504,673.99 | 250,783,476.54 | 5,672,697,534.70 | |
| Financial liabilities | 96,767.62 | 915,234.93 |
Other change
Other changes of investment real estate were RMB250,783,476.54, mainly due to the completion acceptance and planningacceptance of Jiangxi Nanchang Fenghuangzhou Fangda Center project in this period, which started to be measured by fair value,and the investment real estate under construction measured by cost was RMB245,953,338.54 and was converted into investment realestate measured by fair value; at the end of the reporting period, the investment real estate was measured according to the fair valueassessed by professional asset appraisal institutions.
Major changes in the assets measurement property of the Company in the report period
□ Yes √ No
3. Right restriction of assets at the end of the period
| Item | Book value on December 31, 2020 (RMB) | Reason |
| Monetary capital | 435,587,632.71 | Margin, pledge and judicial frozen deposit, etc. |
| Account receivable | 38,906,851.06 | Loan by pledge |
| Inventory | 103,973,925.13 | Credit Mortgage, Mortgage Loan |
| Investment real estate | 2,820,277,340.71 | Loan by pledge |
| Fixed assets | 63,229,493.11 | Loan by pledge |
| Construction in process | 44,368,937.04 | Loan by pledge |
| Intangible assets | 19,429,756.30 | Loan by pledge |
| 100% stake in Fangda Property Development held by the Company | 200,000,000.00 | Loan by pledge |
| Total | 3,725,773,936.06 |
5. Investment
1. General situation
□ Applicable √ Inapplicable
2. Major equity investment in the report period
□ Applicable √ Inapplicable
3. Major non-equity investment in the report period
□ Applicable √ Inapplicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ Inapplicable
The Company made no investment in securities in the report period
(2) Derivative investment
√ Applicable □ Inapplicable
In RMB10,000
| Derivative investment operator name | Relationship | Related transaction | Type | Initial amount | Start date | End date | Initial investment amount | Amount in this period | Amount sold in this period | Impairment provision (if any) | Closing investment amount | Proportion of closing investment amount in the closing | Actual gain/loss in the report period |
| net assets in the report period | |||||||||||||
| Shanghai Futures Exchange | No | No | Shanghai aluminum | February 6, 2020 | Thursday, December 31, 2020 | 22,803.47 | 14,691.38 | 8,112.09 | 1.51% | 653.09 | |||
| Banks | No | No | Forward foreign exchange | 2,166 | 2 August 2019 | Thursday, December 31, 2020 | 2,166 | 11,055.98 | 7,418.95 | 5,803.03 | 1.08% | 26.97 | |
| Total | 2,166 | -- | -- | 2,166 | 33,859.45 | 22,110.33 | 13,915.12 | 2.59% | 680.06 | ||||
| Capital source | Self-owned fund | ||||||||||||
| Lawsuit involved | None | ||||||||||||
| Disclosure date of derivative investment approval by the Board of Directors | 16 April 2020 | ||||||||||||
| Disclosure date of derivative investment approval by the shareholders‘ meeting | None | ||||||||||||
| Risk analysis and control measures for the derivative holding in the report period (including without limitation market, liquidity, credit, operation and legal risks) | The Company's aluminum futures hedging and foreign exchange derivatives trading business is the derivatives investment business. The Company has established and implemented the Administrative Measures for the Derivatives Investment Business, the Internal Control and Risk Management System for Commodity Futures Hedging Business, and the approval authority, business management, risk management, information disclosure and file management of the derivatives trading business, etc. in order to effectively control the risk of the Company‘s derivatives holdings. | ||||||||||||
| Changes in the market price or fair value of the derivative in the report period, the analysis of the derivative‘s fair value should disclose the method used and related assumptions and parameters. | Fair value of derivatives are measured at open prices in the open market | ||||||||||||
| Material changes in the accounting policies and rules related to the derivative in the report period | None | ||||||||||||
| compared to last period | |
| Opinions of independent directors on the Company‘s derivative investment and risk controlling | None |
5. Use of raised capital
□ Applicable √ Inapplicable
The Company used no raised capital in the report period.VI. Major assets and equity sales
1. Major assets sales
□ Applicable √ Inapplicable
The Company sold no assets in the report period.
2. Major equity sales
√ Applicable □ Inapplicable
| Counterpart | Stock sold | Disposal day | Price (in RMB10,000) | The equity contributed by the equity to the listed company from the beginning of the current period to the selling date (in ten thousand yuan) | Impacts | Proportion of net profit contributed by listed Companies to equity investments as a percentage of total net profits | Equity sales pricing principle | Related transaction | Relationship with the counterparty | Whether the equity involved has been completely transferred | Whether it is implemented according to schedule, if it is not implemented according to plan, it should explain the reasons and the measures the Company has | Date of disclosure | Index for information disclosure |
| taken | |||||||||||||
| Gong Qing Cheng Yingfa Investment Partnership Enterprise | 5.71% equity of Fangda Zhichuang Technology Co., Ltd., a wholly-owned subsidiary of the original company | Monday, August 17, 2020 | 2,661.67 | 454.84 | It has no significant impact on the Company's daily production and operation, and has no impact on the Company's current net profit (according to the relevant provisions of the accounting standards, the parent company disposes the long-term equity investment in the subsidiary without | 0.00% | It is calculated according to the price determined in the asset appraisal report issued by the asset appraisal institution | No | None | Yes | It is completed | Wednesday, June 24, 2020 | Announcement on Equity Transfer of Wholly Owned Subsidiary on http://www.cninfo.com.cn on June 24, 2020 |
VII. Analysis of major joint stock companies
√ Applicable □ Inapplicable
Major subsidiaries and joint stock companies affecting more than 10% of the Company‘s net profit
In RMB
losingthecontrolright. Intheconsolidatedfinancialstatements, thedifferencebetweenthedisposalpriceand theshare ofnetassets isincludedin thecapitalreserve.
Company
| Company | Type | Main business | Registered capital | Total assets | Net assets | Turnover | Operation profit | Net profit |
| Fangda Jianke | Subsidiaries | Curtain wall system and materials | 500,000,000.00 | 3,466,131,725.88 | 1,196,617,185.40 | 1,962,642,074.95 | 181,085,382.82 | 162,465,293.74 |
| Fangda Property | Subsidiaries | Real estate | 200,000,000.00 | 5,957,895,593.88 | 2,457,372,720.02 | 97,137,398.98 | 134,253,555.30 | 78,655,282.50 |
| Fangda Zhichuang | Subsidiaries | Subway screen door and service | 105,000,000.00 | 776,900,841.65 | 245,400,952.91 | 649,888,076.25 | 37,019,757.51 | 28,983,457.83 |
| Kechuangyua | Subsidiaries | Subway | 5,000,000.00 | 65,447,789.8 | 52,395,803.0 | 50,882,662.9 | 49,086,686.0 | 43,280,923.7 |
| n | screen door and service | 5 | 7 | 4 | 6 | 1 |
Acquisition and disposal of subsidiaries in the report period
√ Applicable □ Inapplicable
| Company | Acquisition and disposal of subsidiaries in the report period | Impacts on overall production, operation and performance |
| Shenzhen Fangda Investment Partnership (Limited Partnership) | Newly set | None |
| Shenzhen Lifu Investment Co., Ltd | Newly set | None |
| Shenzhen Xunfu Investment Co., Ltd | Newly set | None |
| Fangda Jianke Hong Kong Co., Ltd. | Newly set | None |
Major joint-stock companies
VIII. Structural entities controlled by the Company
□ Applicable √ Inapplicable
IX. Future Prospect
(1) Competition map and development trned
1. Smart curtain wall and material system industry
In recent years, with the rapid growth of China's economy and the acceleration of urbanization, China's real estate andconstruction industry continue to grow, and the high-end curtain wall and material industry has shown great development potential.In the first year of the fourteenth five year plan, the State takes promoting new infrastructure construction as an important part ofexpanding investment space and building a new development pattern. New urbanization, one belt, one road construction, and theconstruction of Guangdong, Hong Kong and Macau will become the important driving force and precious opportunity for the futuredevelopment of high-end curtain wall system and material industry.
2. Rail transport screen door business
According to the statistics of China Urban Rail Transit Association, as of December 31, 2020, a total of 45 cities in mainlandChina have opened 7978.19 km of urban rail transit lines. In 2020, a total of 1241.99 km of new urban rail transit lines will be added,setting a new record. During the 13th Five Year Plan period, the total length of new urban rail transit lines in mainland China reached4360 km, with an average annual length of 872 km. In the past five years, the length of newly added urban rail transit lines exceedsthe total length of urban rail transit lines before the 13th five year plan. According to the latest forecast of "China's urban rail transitmarket development report 2020", it is estimated that 40 urban rail transit lines in Shanghai, Chongqing, Shenzhen, Xiamen, Nanning,Ningbo, Jinan and Wuxi will start construction from 2021 to 2022, with a total mileage of 3381.94 km, 1377 stations and a totalinvestment of 1992.824 billion yuan. China's urban rail transit market still maintains a large-scale construction Situation.
3. New energy industry
China's photovoltaic market will enter the next stage of rapid development under the guidance of carbon neutral target. It ispredicted that China's new installed capacity will be 55-65gw in 2021, and the domestic average annual new installed capacity willbe 70-90gw in the 14th five year plan. The development of large domestic power station bases will become a trend, and parityprojects (or non subsidy projects) will continue to be the main force of grid connected projects in the future. While promoting China'senergy structure transformation, economic transformation and high-quality development, it will also play an active leading role in the
world's low-carbon transformation. At the same time, China's photovoltaic industry is also facing new energy distribution and storageand complex external environment And so on.
4. Real estate
In 2021, the pace of development of the national real estate market will slow down. Under the background of new urbanization,key resources such as population and land will accelerate to gather in urban agglomerations and central cities. Regionaldifferentiation will bring new development opportunities for Guangdong, Hong Kong and Macao Great Bay district. The top-leveldesign of Guangdong, Hong Kong and Macao Great Bay District has been implemented. There are many central support policies,mature industrial development, strong population attraction, and strong demand in real estate market. In addition, the overall regionalmarket has continued to adjust at a low level in recent years, and the market demand has been partially suppressed. Under thebackground of the continuous emergence of regional coordinated development, the market is booming The recovery momentum isstrong.
(2) Company development strategy and business plan
In 2021, the 30th anniversary of the establishment of the Company, standing at a new starting point, the Company will continueto focus on the management theme of "high-quality development", strive to improve the development quality and productcompetitiveness of the enterprise, accurately position the marketing strategy, make full use of the brand advantage of haofangda,seize the opportunity of "new infrastructure", and focus on the core areas and regions of Guangdong, Hong Kong and Macao,Yangtze River Delta, Chengdu and Chongqing Home market, strive for more high-quality orders. By means of acquisition andindustrial merger and acquisition, we can improve and extend the industrial chain, broaden the business scope and industrial scale,expand and strengthen the main business, and enhance the core competitiveness of the Company.
At the same time, we will make full use of AI, 5g, big data, robots and other information and intelligent technologies to help theCompany's technological progress, continue to increase innovation, and carry out in-depth and comprehensive construction ofintelligent factories. Speed up the completion of the final sales of Fangda Town office building in Shenzhen and the sales and rentalof Nanchang Fangda Town center, continue to do a good job in the business investment and operation of Fangda Town, build aregional business benchmark, and continuously improve the business revenue of Fangda Town. Through the open and inclusiveenterprise culture, we should practice the employment mechanism of "coming in, staying and using flexibly", optimize the salary,incentive and assessment system, improve the channels for employees' growth and promotion, strengthen the construction of talentechelon and the accumulation of human resources, and ensure the adequate supply of talents. The Company will further improve theprocess system, stimulate the vitality of the organization, improve the operation efficiency and profitability of the enterprise, andrealize the sustainable and effective development of the enterprise through process reengineering and quantitative management.
(3) Capital demand and source for projects in progress
To realize the business target in 2021, the Company will develop suitable financial and capital plans, accelerate the collection ofaccounts receivable, sales payment from sales of Fangda Town, expand financing channels, and use share issuance, bank loans andother financing products to meet the demand for capital.
(4) Risks and solutions
1. Risks and Countermeasures of macroeconomic uncertainty and policy changes
The global economy is always faced with many uncertainties. In addition, emergencies such as the new coronavirus epidemicmay also bring unpredictable risks to the overall economy. The main business sectors of the Company are closely related to themacro-economy and industry policies, and are greatly affected by the overall macro-economic development. If China's economydevelops slowly or fluctuates periodically in the future, the reduction of fixed asset investment will affect the demand of publicbuilding curtain wall industry and rail transit equipment industry, which will have an adverse impact on the Company's futureprofitability. In view of the above risks, the Company will pay close attention to the changes of macro-economy and policy situationat home and abroad, timely adjust the Company's business strategy, and further enhance its market competitiveness, operation andmanagement ability, so as to improve its anti risk ability.
2. Market risks and measures
As the overall designing and engineering quality continues improving in the domestic construction curtain wall industry, curtainwall products will become increasingly standard, intensifying the market competition. In addition, the market concentration of first-and second-tier cities will increase, and regional competition will become more intense. The Company will continue to adopt aprudent management policy, refined management, and technological innovations to reduce management costs and accelerate thereturn of funds. Through new technologies and processes, we will improve product quality, lower costs and elevate earnings. Whileconsolidating the domestic market, the Company will step up the efforts in exploring overseas markets, thus elevating ourcompetitiveness in global markets and improving our resistance to risks.
3. Management risks and measures
In recent years, with the Company's curtain wall and material system industry, rail transit screen door industry orders increasingyear by year and the Company's real estate property sector increased, the Company's assets, business, personnel and other aspectshave expanded significantly, the organizational structure and management system will tend to Due to the complexity, the Companymay face the management risk of industrial scale expansion. The Company will continue to improve the management mode, integratebusiness management, optimize the business flow, seeking to build a high-efficient and solid management team. We will introducehigh-quality, professional technical and management talents in different fields to strengthen the Company's core competitiveness.
4. Production and operation risks and measures
The macro-economy and market demand have added to the fluctuation in prices of main raw materials and labor, affecting theCompany‘s profitability and creating additional production and operation risks for the Company. The Company will make use of rawmaterial futures products to hedge against the risk of large price fluctuations, strive to reduce procurement and manufacturing costs,increase technology research and development efforts, reduce the loss of raw materials, improve the automation and intelligence ofproduction equipment, strengthen staff skills training, improve staff labor efficiency, and maintain the sustainable development of theCompany.
5. Real estate industry risks and countermeasures
The real estate industry is obviously affected by the country 's macro-control, and the Company needs to review the situation andfurther strengthen the forward-looking research on the economic situation, policies and industry situation, and the capital market,enhance predictive power, improve the control and resilience of risk factors, and timely adjust business strategies to adapt to the neweconomic normal and new changes in the real estate industry. At the same time, the Company will increase its efforts to eliminate thecash and ensure that the Company continues to maintain stable operation and healthy development by withdrawing cash.X. Acceptance of surveys, negotiation and visits
1. Reception of investigations, communications, or interviews in the reporting period
√ Applicable □ Inapplicable
| Time/date | Place | Way | Visitor | Visitor | Main content involved and materials provided | Disclosure of information |
| Friday, June 12, 2020 | Shenzhen Fangda Building meeting room | Onsite investigation | Institution | Great Wall Securities | Business and future development | Investor Relationship Record Form on www.cninfo.com.cn |
| 30 September 2020 | Shenzhen Fangda Town Meeting room | Onsite investigation | Institution | Guotai Junan Securities Co., Ltd., Shenzhen Cyberna | Business and future development | Investor Relationship Record Form on www.cninfo.com.cn |
| Capital Management Partnership (Limited Partnership), Shenzhen Dexun Investment Co., Ltd., Shenzhen Qianhai Pai Asset Management Co., Ltd., Shenzhen Qianhai Hongxing Investment Co., Ltd., Qianhai Yangtze River Fund Management (Shenzhen) Co., Ltd., Shenzhen Zhongna Capital Investment Management Co., Ltd., Shenzhen Qianhai Daqian Huayan Investment Co., Ltd., Shenzhen Qianhai Leying Investment Management Co., Ltd., Shenzhen Daqin Fund Management Co., Ltd., Shenzhen Private Equity Chamber of Commerce | |||
| TIme | 44 | ||
| Number of institutes | 12 | ||
| Number of individuals | 41 | ||
| Number of other visitors | 1 | ||
| Disclosure of any non-public information | No | ||
Chapter 5 Significant Events
I. Profit distribution and reserve capitalization planEstablishment, implementation or adjustment of profit distribution policies especially the cash dividend policy during the reportperiod
√ Applicable □ Inapplicable
During the report period, the Company implemented the profit distribution plan for 2019. Approved by the annual generalmeeting of shareholders in 2019 held on May 8, 2020, the Company's profit distribution plan in 2019 is as follows: the Company willdistribute cash dividend of RMB 0.50 (tax included) to all shareholders for every 10 shares based on the total share capital after theclosing of the market on the day of equity registration when the profit distribution plan is implemented. A total of RMB54413947.55will be distributed in cash, and no bonus shares will be given, nor will the capital reserve be converted into share capital.During the period from the disclosure of the profit distribution plan in 2019 to its implementation, the Company completed therepurchase of some domestic listed foreign shares (B shares) in 2019, and completed the repurchase and cancellation procedures of35105238 B shares in Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. on May 20, 2020. After thecancellation, the total share capital of the Company was reduced from 1123384189 shares to 1088278951 shares. The total sharecapital of the Company is 1088278951 shares after the stock right registration date of the implementation of the profit distributionplan in 2019 is June 3, 2020. That is to say, this profit distribution is based on 1088278951 shares, and the cash dividend of RMB
0.50 (tax included) is distributed to all shareholders for every 10 shares. A total of RMB54413947.55 will be distributed in cashwithout bonus shares or capital reserve conversion.
| Explanation of Cash Dividend Distribution Policies | |
| Comply with the Articles of Association or resolution made at the General Shareholders' Meeting | Yes |
| Clear and definite distribution standard and proportion | Yes |
| Decision-making procedure and mechanism | Yes |
| Independent directors fulfill their duties | Yes |
| Middle and small shareholders express their opinions and claims. There rights are well protected. | Yes |
| Cash dividend distribution policies are adjusted or revised according to law | Inapplicable |
Profit distribution and reserve capitalizing pre-plans or plans over the recent three years (including the reporting period)
2018: Based on the total share capital of 1,123,384,189 shares after the cancellation of the B shares repurchased on January 11,2019, the Company distributed a cash dividend of RMB2.00 (including tax) for every 10 shares to all shareholders, and a total ofRMB224,676,837.8. No dividend share or capitalization share was issued in the year.
In 2019, the Company will distribute a cash dividend of RMB 0.50 (tax included) to all shareholders for every 10 shares basedon 1088278951 shares of the Company's total share capital after the closing of the market on June 3, 2020 on the equity registrationdate when the profit distribution plan is implemented. No bonus shares will be given and no capital reserve will be converted intoshare capital.
2020: no cash dividends, no bonus shares, no capital accumulation fund to increase share capital, and no undistributed
profits to be carried forward to the next year.
Distribution of cash dividend over the recent three years (including this period)
In RMB
| Year | Cash dividend (including tax) | Net profit attributable to shareholders in the consolidated financial statements | Cash Dividend proportion in the net project attributable to shareholders in the consolidated financial statements | Cash dividend paid in other manners (such as repurchase of shares) | Proportion of cash dividends in other ways in the consolidated statement of net profit attributable to shareholders of common stock of listed companies | Total cash dividend (including other manners) | The proportion of total cash dividends (including other methods) to the net profit attributable to shareholders of common shares of listed companies in the consolidated statement |
| 2020 | 0.00 | 382,051,466.98 | 0.00% | 142,134,417.40 | 37.20% | 142,134,417.40 | 37.20% |
| 2019 | 54,413,947.55 | 347,771,182.73 | 15.65% | 88,223,945.70 | 25.37% | 142,637,893.25 | 41.01% |
| 2018 | 224,676,837.80 | 2,246,164,571.68 | 10.00% | 111,166,053.48 | 4.95% | 335,842,891.28 | 14.95% |
Cash dividend proposed despite the Company records profits in the report period and a positive undistributed profit/
√ Applicable □ Inapplicable
| Cash dividend proposed despite the Company records profits in report period and a positive undistributed profit/ Reason | Use and use plan of the company's undistributed profits |
| The total amount of cash dividends of the company in the last three years (2018-2020) is RMB620,615,200 (including cash paid for repurchase B shares), accounting for 62.56% of the average annual net profit attributable to the shareholders of the listed company in recent three years. There is no significant difference between the cash dividend of the Company and the average of the listed companies in the industry. The profit distribution plan of the Company complies with the articles of association and relevant regulations. | According to the development needs of the Company, the undistributed profits in 2020 will be used for the operation and development of the company. |
II. Profit Distribution and Reserve Capitalization in the Report Period
□ Applicable √ Inapplicable
The Company distributed no cash dividends or bonus shares and has no reserve capitalization plan.III. Performance of promises
1. Commitments that have been fulfilled and not fulfilled by actual controller, shareholders, related parties,acquirers of the Company
□ Applicable √ Inapplicable
There is no commitment that has not been fulfilled by actual controller, shareholders, related parties, acquirers of the Company
2. Explanation and reason of profit forecasts on assets or projects that remain in the report period
□ Applicable √ Inapplicable
IV. Non-operating capital use by the controlling shareholder or related parties in thereporting term
□ Applicable √ Inapplicable
The controlling shareholder and its affiliates occupied no capital for non-operating purpose of the Company during the report period.
V. Statement of the Board of Directors, Supervisory Committee and Independent Directors (ifapplicable) on the “non-standard auditors’ report” issued by the CPA on the current reportperiod
□ Applicable √ Inapplicable
VI. Statement of changes to accounting policies, estimates and audit methods compared withthe financial report of the previous year
√ Applicable □ Inapplicable
(1) Changes in accounting policies
On July 5, 2017, the Ministry of Finance issued the accounting standards for Business Enterprises No. 14 - Revenue (CK[2017] No. 22) (hereinafter referred to as the "new revenue standards"). Domestic listed enterprises are required to implement thenew income standard from January 1, 2020. The Company implemented the new income standard on January 1, 2020 to adjust therelevant contents of accounting policies.The new income standard requires that the cumulative impact of the first implementation of the standard should be adjusted tothe amount of retained earnings and other relevant items in the financial statements at the beginning of the first implementation year(i.e. January 1, 2020), and the information of the comparable period should not be adjusted. On December 10, 2019, the Ministry ofFinance issued the interpretation of accounting standards for Business Enterprises No. 13.On December 10, 2019, the Ministry of Finance issued the interpretation of accounting standards for Business Enterprises No.
13. The Company implemented the interpretation on January 1, 2020, and did not trace back the previous years.
The cumulative impact of the above accounting policies is as follows:
Due to the implementation of the new income standard, the Company's consolidated financial statements were adjustedaccordingly as of January 1, 2020, including accounts receivable of - 1493496313.22 yuan, contract assets of 1297743546.73 yuan,other non current assets due within one year of 50120998.68 yuan, other non current assets of 145631767.81 yuan, advances of -135007647.28 yuan, contract liabilities of 124240948.05 yuan and other current liabilities of 10766 yuan, 699.23 yuan, and therelevant adjustment has no impact on the shareholders' equity attributable to the parent company in the consolidated financialstatements of the Company. At the same time, due to the implementation of the new income standard, there is no impact on thefinancial statements of the parent company of the Company.
(2) Changes in major accounting estimates
At the beginning of 2020, according to the new financial instruments standard, the relevant enterprises should assess whetherthe credit risk of the relevant financial instruments has changed significantly on each balance sheet date. According to the method ofcalculating the expected credit loss, the Company uses the latest historical data and combined with forward-looking factors tocalculate the expected credit loss in 2020 In order to objectively and truly reflect the financial situation and operating results of theCompany's various businesses, the accounting estimates of the expected credit loss rate of accounts receivable and contract assets arechanged. The accounting estimate change was approved by the 22nd Meeting of the 8th board of directors on April 16, 2020.
The statement items affected by the change of accounting estimate are as follows: increased accounts receivable byRMB24,118,098.91, increased contract assets by RMB71,658,974.92, increased other non current assets due within one year byRMB11,866,064.90, increased other non current assets by RMB3,415,296.51, decreased deferred income tax assets byRMB16,744,810.10, increased surplus reserve by RMB334.64, increased undistributed profit by RMB93,672, 139.18, increasedminority shareholders' equity RMB641,151.31, increased credit impairment loss RMB24,118,098.91, increased asset impairment loss
RMB86,940,336.32 yuan, increased income tax expense RMB16,744,810.10, increased minority shareholders' profit and lossRMB64,1151.31.VII. Statement of retrospective restatement of major accounting errors in the report period
□ Applicable √ Inapplicable
No retrospective restatement of major accounting errors in the report periodVIII. Statement of change in the financial statement consolidation scope compared with theprevious financial report
√ Applicable □ Inapplicable
In this period, the Company set up a company directly controlled and 3 subsidiaries indirectly controlled. The Companydirectly controlled is Shenzhen Fangda Investment Partnership (Limited Partnership), and the 3 companies controlled indirectly are:
Shenzhen Lifu Investment Co., Ltd., Shenzhen Xunfu Investment Co., Ltd. and Fangda Jianke Hong Kong Co., Ltd. added 4companies to the consolidated statements for this period.IX. Engaging and dismissing of CPA
CPA engaged currently
| Domestic public accountants name | RSM Thornton (limited liability partnership) |
| Remuneration for the domestic public accountants (in RMB10,000) | 150 |
| Consecutive years of service by the domestic public accountants | 2 |
| Name of certified accountants of the domestic public accountants | Chen Zhaoxin, Zeng Hui, Hu Gaosheng |
| Consecutive years of service by the domestic public accountants | Chen Zhaoxin has served for four years, Zeng Hui for three years and Hu Gaosheng for one year |
| Overseas public accountants name (if any) | None |
| Remuneration for the overseas public accountants (in RMB10,000) | 0 |
| Consecutive years of service by the overseas public accountants (if any) | None |
| Name of certified accountants of the overseas public accountants (if any) | None |
| Consecutive years of service by the domestic public accountants | None |
Whether the CPA is replaced
□ Yes √ No
Engaging of internal control audit CPA, financial advisor and sponsor
√ Applicable □ Inapplicable
During the reporting period, the Company continued engaging RSM China (limited liability partnership) as the financial statement
and internal control auditing CPA with a fee of RMB1.5 million.X. Delisting after disclosure of annual report
□ Applicable √ Inapplicable
XI. Bankruptcy and capital reorganizing
□ Applicable √ Inapplicable
The Company has no bankruptcy or reorganization events in the report period.
XII. Significant lawsuit and arbitration
□ Applicable √ Inapplicable
The Company has no significant lawsuit or arbitration affair in the report period.XIII. Punishment and rectification
□ Applicable √ Inapplicable
The Company received no penalty and made no correction in the report period.XIV. Credibility of the Company, controlling shareholder and actual controller
√ Applicable □ Inapplicable
During the reporting period, the Company, its controlling shareholders, and actual controllers did not fail to fulfill the court'seffective judgment, and the large amount of debt due and unpaid.
XV. Share incentive schemes, staff shareholding program or other incentive plans
□ Applicable √ Inapplicable
There is no share incentive schemes, staff shareholding program or other incentive plans in the report periodXVI. Material related transactions
1. Related transactions related to routine operation
□ Applicable √ Inapplicable
The Company made no related transaction related to daily operating in the report period.
2. Related transactions related to assets transactions
□ Applicable √ Inapplicable
The Company made no related transaction of assets or equity requisition and sales in the report period.
3. Related transactions related to joint external investment
□ Applicable √ Inapplicable
The Company made no related transaction of joint external investment in the report period.
4. Related credits and debts
□ Applicable √ Inapplicable
The Company had no related debt in the report period.
5. Other major related transactions
□ Applicable √ Inapplicable
The Company has no other significant related transaction in the report period.XVII. Significant contracts and performance
1. Asset entrusting, leasing, contracting
(1) Asset entrusting
□ Applicable √ Inapplicable
The Company made no custody in the report period.
(2) Contracting
□ Applicable √ Inapplicable
The Company made no contract in the report period
(3) Leasing
□ Applicable √ Inapplicable
There is no leasing during the reporting period.
2. Significant guarantee
√ Applicable □ Inapplicable
(1) Guarantee
In RMB10,000
| External guarantees made by the Company and subsidiaries (exclude those made for subsidiaries) | ||||||||
| Guarantee provided to | Date of | Guarantee | Actual date | Actual | Type of | Term | Complete | Related |
| disclosure | amount | amount of guarantee | guarantee | d or not | party | |||
| None | ||||||||
| Guarantee provided to subsidiaries | ||||||||
| Guarantee provided to | Date of disclosure | Guarantee amount | Actual date | Actual amount of guarantee | Type of guarantee | Term | Completed or not | Related party |
| Fangda Jianke | Saturday, April 18, 2020 | 50,000 | Tuesday, July 14, 2020 | 32,864.69 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Jianke | Saturday, April 18, 2020 | 40,000 | 30 September 2020 | 18,309.38 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Jianke | Wednesday, January 30, 2019 | 30,000 | 1 August 2019 | 9,500 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Jianke Co., Ltd., Fangda Zhichuang Co., Ltd., Kechuangyuan, the Company | Wednesday, January 30, 2019 | 60,000 | Monday, February 24, 2020 | 23,944.07 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Jianke | Saturday, April 18, 2020 | 25,000 | Tuesday, September 22, 2020 | 5,973.25 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Jianke | Saturday, April 18, 2020 | 30,000 | Friday, June 12, 2020 | 27,047.79 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Jianke | Wednesday, January 30, 2019 | 15,000 | Friday, April 10, 2020 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes | |
| Fangda Jianke | Wednesday, January 30, 2019 | 20,000 | Friday, March 6, 2020 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes | |
| Fangda Jianke and | Wednesday, | 14,000 | Wednesday, | 9,905.68 | Joint liability | since engage | No | Yes |
| Fangda Zhichuang | January 30, 2019 | December 18, 2019 | of contract to 2 years upon due of debt | |||||
| Fangda Zhichuang | Saturday, April 18, 2020 | 40,000 | Tuesday, July 28, 2020 | 28,375.36 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Zhichuang | Saturday, April 18, 2020 | 20,000 | 16 June 2020 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes | |
| Fangda Zhichuang | Saturday, April 18, 2020 | 15,000 | 30 September 2020 | 4,941.4 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Zhichuang | Saturday, April 18, 2020 | 3,000 | 29 June 2020 | 3,000 | Joint liability | From the effective date of this contract to three years after the expiration of the debt performance period under the "guarantee agreement" (or the debt early maturity date announced by Party B) | No | Yes |
| Fangda Zhichuang | Wednesday, January 30, 2019 | 10,000 | Friday, April 10, 2020 | Joint liability | From the effective date of this contract to three years after the expiration of the debt performance period under | No | Yes |
| the "guarantee agreement" (or the debt early maturity date announced by Party B) | ||||||||
| Fangda New Material | Saturday, April 18, 2020 | 8,000 | 23 May 2020 | 1,979.29 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda New Material | Saturday, April 18, 2020 | 6,500 | Tuesday, July 14, 2020 | 1,354.24 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Property | Wednesday, December 4, 2019 | 135,000 | 25 February 2020 | 97,147.63 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Property | Wednesday, January 30, 2019 | 20,000 | 19 June 2019 | 19,032.15 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Zhijian | Wednesday, January 30, 2019 | 8,000 | 31 July 2019 | 4,097.35 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Total of guarantee to subsidiaries approved in the report term (B1) | 386,500 | Total of guarantee to subsidiaries actually occurred in the report term (B2) | 370,133.43 | |||||
| Total of guarantee to subsidiaries approved as of the report term (B3) | 549,500 | Total of balance of guarantee actually provided to the subsidiaries as of end of report term (B4) | 287,472.28 | |||||
| Guarantee provided to subsidiaries | ||||||||
| Guarantee provided to | Date of disclosure | Guarantee amount | Actual date | Actual amount of guarantee | Type of guarantee | Term | Completed or not | Related party |
| Total of guarantee provided by the Company (total of the above three) | ||||||||
| Total of guarantee approved in the report term (A1+B1+C1) | 386,500 | Total of guarantee occurred in the report term (A2+B2+C2) | 370,133.43 |
| Total of guarantee approved as of end of report term (A3+B3+C3) | 549,500 | Total of guarantee occurred as of the end of report term (A4+B4+C4) | 287,472.28 |
| Percentage of the total guarantee occurred (A4+B4+C4) on net asset of the Company | 53.42% | ||
| Including: | |||
| Guarantees provided to the shareholders, substantial controllers and the related parties (D) | 0 | ||
| Guarantee provided directly or indirectly to objects with over 70% of liability on asset ratio (E) | 19,032.15 | ||
| Amount of guarantee over 50% of the net asset (F) | 18,429.42 | ||
| Total of the above 3 (D+E+F) | 19,032.15 | ||
| Note of immature guarantee with guarantee liabilities or possible joint damage liabilities in the report period | None | ||
| Statement of external guarantees violating the procedure | None | ||
(2) Incompliant external guarantee
□ Applicable √ Inapplicable
The Company made no incompliant external guarantee in the report period.
3. Entrusted cash capital management
(1) Wealth management
√ Applicable □ Inapplicable
Wealth management during the reporting period
In RMB10,000
| Type | Source of fund | Amount | Undue balance | Due balance to be recovered |
| Bank financial products | Self-owned fund | 79,029.74 | 405.1 | 0 |
| Total | 79,029.74 | 405.1 | 0 | |
Specific circumstances of high-risk entrusted financing with large individual amount or low security, poor liquidity, and no costprotection
□ Applicable √ Inapplicable
Entrusted financial management expected to fail to recover the principal or likely result in impairment
□ Applicable √ Inapplicable
(2) Trusted loans
√ Applicable □ Inapplicable
Overview of entrusted loans during the reporting period
In RMB10,000
| Total entrusted loans | Source of funds for entrusted loans | Undue balance | Due balance to be recovered |
| 2,000 | Self-owned fund | 0 | 0 |
Specific circumstances of high-risk entrusted loan with large individual amount or low security, poor liquidity, and no cost protection
□ Applicable √ Inapplicable
Entrusted loans expected to fail to recover the principal or likely result in impairment
□ Applicable √ Inapplicable
4. Major contracts for daily operation
□ Applicable √ Inapplicable
5. Other significant contract
□ Applicable √ Inapplicable
The Company entered into no other significant contract in the report.XVI Social responsibilities
1. Fulfillment of social responsibilities
The Company has disclosed the "2020 Social Responsibility Report", the details of which were published on thehttp://www.cninfo.com.cn on March 23, 2020.
2. Performance of poverty relieving responsibilities
(1) Annual epidemic prevention and control, targeted poverty alleviation and summaryIn 2020, the Company and its employees donated a total of RMB7.7662 million for epidemic prevention and control, targetedpoverty alleviation and other matters. The main items are as follows:
1. In order to prevent and control the new crown epidemic, the Company supports medical staff who are on the front line of theepidemic, respectively donating RMB2 million to the Wuhan Red Cross Society and RMB1 million to the Jiangxi Red CrossFoundation for the purchase of prevention and control materials, motivate frontline medical staff;
2. Period To help the large tenants in Shenzhen, the Company has reduced the rent by RMB2.52 million;
3. The Company donated RMB2 million to the Jiangxi Red Cross Foundation to support poverty alleviation in Aktao County,Xinjiang;
4. The Company organized party members and employees to donate RMB120,500 to fight the epidemic;
5. The Company donated 50,000 masks to the new district of Nanchang City, equivalent to RMB112,500 in capital;
The Company will continue to fulfill its social responsibility for precision poverty alleviation, and make donations from time totime based on business development.
(2) Result of targeted poverty alleviation
| Specifications | Unit | Qty/Description |
| 1. General situation | —— | —— |
| Including: 1. Fund | (in RMB10,000) | 200.1 |
| II. Investment | —— | —— |
| 1. Industry development poverty relief | —— | —— |
| Including: 1.1 Industry development projects | —— | Others |
| 2. Employment transfer | —— | —— |
| 3. Relocation | —— | —— |
| 4. Education | —— | —— |
| 5. Health care support | —— | —— |
| 6. Eco-protection support | —— | —— |
| 7. Last-line guarantee | —— | —— |
| 8. Social poverty relieving | —— | —— |
| 8.2 Targeted poverty alleviation investment amount | (in RMB10,000) | 200.1 |
| 9. Others | —— | —— |
| III. Prizes | —— | —— |
| Top 500 charitable enterprises in China in 2020 | ||
| Jiangxi Province "thousands of enterprises help thousands of villages" precise poverty alleviation action advanced private enterprise title | ||
| Example group of Jiangxi Poyang to help aketao out of poverty in 2020 | ||
| Chairman Xiong Jianming won the title of "2020 China Charity entrepreneur" |
(3) Further property relief plans
The Company will continue to fulfill its social responsibility for precision poverty alleviation, and make donations from time to timebased on business development.
3. Environmental protection
Whether the Company and its subsidiaries are key polluting companies disclosed by the environmental protection authority
□ Yes √ No
NoThe Company and its subsidiaries have earnestly implemented the Environmental Protection Law of the People's Republic ofChina, the Law of the People's Republic of China on Water Pollution Prevention and Control, the Law of the People's Republic ofChina on the Prevention and Control of Air Pollution, and the Law of the People's Republic of China on the Prevention and Controlof Solid Waste Pollution. In the environmental protection laws and regulations, there were no penalties for violations of laws andregulations during the reporting period.XIX. Other material events
√ Applicable □ Inapplicable
1. From April 3, 2020 to May 12, 2020, the Company completed the repurchase of some domestically listed foreign shares (Bshares) in 2019 through centralized bidding, and the cumulative number of B shares repurchased without selling restrictions was35,105,238 On May 20, 2020, the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. completed the repurchaseand cancellation procedures. The unrestricted B shares decreased by 35,105,238 shares, and the total share capital decreased from1,123,384,189 shares to 1,088,278,951 shares.
2. As of September 22, 2020, the Company's 2020 repurchase period for some domestically listed foreign shares (B shares) hasexpired. A total 14,404,724 B shares have been repurchased. The highest price of repurchase is HK$3.47 per share. The lowest priceis HK$3.16 per share, and the cumulative payment of HK$48,359,819.24 (including transaction-related expenses). The Company hasdisclosed the "Announcement on the Expiry of the Repurchase Period and the Implementation Results of Share Repurchase" onSeptember 24, 2020. The repurchased shares shall be cancelled and the registered capital shall be reduced after being reviewed andapproved by the general meeting of shareholders within three years after the announcement of the repurchase results is disclosed; ifthe Company's shareholders' meeting does not pass the review, the shares that have been repurchased will be transferred within threeyears according to relevant regulations.The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.During the reporting period, the Company's relevant qualifications have not changed significantly, and the validity period hasnot expired.
| No. | Qualification | Valid period |
| 1 | Construction curtain wall designing class A | Until March 16, 2025 |
| 2 | Construction curtain wall contracting class A | Until December 31, 2021 |
| 3 | Construction decoration contracting class B | Until December 31, 2021 |
| 4 | Steel structure engineering contracting class B | Until December 31, 2021 |
| 5 | Construction mechanical and electric equipment installation contracting class C | Until December 31, 2021 |
| 6 | City and road lighting engineering contracting class C | Until December 31, 2021 |
| 7 | Construction mechanical and electric equipment installation contracting class A | Until February 25, 2025 |
In the report period, the Company‘s safety management is normal. The Company pays large attention to employees‘ safety
awareness and capabilities of emergency processing. The Company has strengthened safety production and investigation of safetyrisks. The Company has formulated safety management guidelines to guide safety management. There was no significant safetyaccidents in the report period.
XX. Material events of subsidiaries
□ Applicable √ Inapplicable
Chapter VI Changes in Share Capital and Shareholders
I. Changes in shares
1. Changes in shares
In share
| Before the change | Change (+,-) | After the change | |||||||
| Quantity | Proportion | Issued new shares | Bonus shares | Transferred from reserves | Others | Subtotal | Quantity | Proportion | |
| I. Shares with trade restriction conditions | 1,431,568 | 0.13% | 870,525 | 870,525 | 2,302,093 | 0.21% | |||
| 1. State-owned shares | |||||||||
| 2. State-owned legal person shares | |||||||||
| 3. Other domestic shares | 1,431,568 | 0.13% | 870,525 | 870,525 | 2,302,093 | 0.21% | |||
| Including: Shares held by domestic legal persons | |||||||||
| Domestic natural person shares | 1,431,568 | 0.13% | 870,525 | 870,525 | 2,302,093 | 0.21% | |||
| 4. Shares held by foreign investors | |||||||||
| Including: Shares held by foreign legal persons | |||||||||
| Domestic natural person shares | |||||||||
| II. Unrestricted shares | 1,121,952,621 | 99.87% | -35,975,763 | -35,975,763 | 1,085,976,858 | 99.79% | |||
| 1. Common shares in RMB | 678,283,904 | 60.38% | -870,525 | -870,525 | 677,413,379 | 62.25% | |||
| 2. Foreign shares in domestic market | 443,668,717 | 39.49% | -35,105,238 | -35,105,238 | 408,563,479 | 37.54% | |||
| 3. Foreign shares in overseas market | |||||||||
| 4. Others | |||||||||
| III. Total of capital shares | 1,123,384, | 100.00% | -35,105,2 | -35,105,2 | 1,088,278 | 100.00% | |||
| 189 | 38 | 38 | ,951 |
Reasons
√ Applicable □ Inapplicable
1. From April 3, 2020 to May 12, 2020, the Company completed the repurchase of some domestically listed foreign shares (Bshares) in 2019 through centralized bidding, and the cumulative number of B shares repurchased without selling restrictions was35,105,238 On May 20, 2020, the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. completed the repurchaseand cancellation procedures. The unrestricted B shares decreased by 35,105,238 shares, and the total share capital decreased from1,123,384,189 shares to 1,088,278,951 shares.
2. Xiong Jianming, chairman of the board of directors of the Company, increased 1171000 A-share shares of the Company fromthe secondary market through the securities trading system of Shenzhen Stock Exchange from July 1, 2020 to August 27, 2020.Among them, 878250 shares are senior management lock-in shares with limited sales conditions. Therefore, 878250 shares of theCompany are increased with limited sales conditions and 878250 shares are decreased with unlimited sales conditions.
3. Mr. Ye Zhiqing, the employee representative supervisor of the Company, resigned on May 8, 2020. He holds 19,100 A sharesof the Company, 14,325 shares subject to sales restrictions and 4,775 shares subject to restrictions on sales before he resigns. All theshares need to be locked within half a year after leaving office. Therefore, 4,775 shares of restricted shares were reduced, and 4,775shares of restricted shares were increased.
4. Mr. Fan Xiaodong, a supervisor elected by the Company‘s 2019 annual general meeting on May 8, 2020, holds 8,800 A sharesof the Company. Starting from May 11, 2020, 6,600 shares of which are subject to sales restrictions Regarding the locked shares,6,600 shares were added to the restricted shares and 6,600 shares were not restricted.
Approval of the change
√ Applicable □ Inapplicable
1. The Company's 2019 repurchase of certain domestically listed foreign shares (B shares) related matters, respectively, onNovember 28, 2019, and December 16, 2019. The nineteenth meeting of the eighth board of directors and Deliberated and approvedat the first extraordinary general meeting of shareholders in 2019.
2. On May 8, 2020, Mr. Fan Xiaodong was elected as a supervisor at the Company's 2019 annual general meeting.
Share transfer
√ Applicable □ Inapplicable
The Company repurchased some 35,105,238 shares of domestically listed foreign shares (B shares) in 2019, and completed the sharerepurchase and cancellation procedures at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited onMay 20, 2020.
Progress in the implementation of share repurchase
√ Applicable □ Inapplicable
1. Repurchase of some domestic listed foreign shares (B shares) in 2019: from April 3, 2020 to May 12, 2020, a total of35105238 B shares of the Company have been repurchased, with the highest price of HK $3.33 per share and the lowest price of HK$2.45 per share, and the accumulated payment of HK $108930044.20 (including transaction related fees). The cancellationprocedures of 35105238 shares repurchased have been completed on May 20, 2020. For details, please refer to the announcement oncompletion of cancellation of repurchased shares disclosed by the Company on May 22, 2020.
2. Repurchase of some domestic listed foreign shares (B shares) in 2020: as of September 22, 2020, the repurchase period hasexpired, and 14404724 B shares of the Company have been repurchased, with the highest price of HK $3.47 per share and the lowestprice of HK $3.16 per share, and the cumulative payment of 48359, 819.24 Hong Kong dollars (including transaction related
expenses). The Company has disclosed the announcement on the expiration of the repurchase period and the implementation resultsof share repurchase on September 24, 2020. The shares to be repurchased will be cancelled and the registered capital will be reducedafter being deliberated and approved by the general meeting of shareholders within three years after the announcement of therepurchase results is disclosed. If the deliberation is not approved by the general meeting of shareholders, the repurchased shares willbe cancelled within three years according to relevant regulations transfer the possession of.
Progress in the implementation of the reduction of shareholding shares by means of centralized bidding
□ Applicable √ Inapplicable
Impacts on financial indicators including basic and diluted earnings per share, net assets per share attributable to commonshareholders of the Company in the most recent year and period
□ Applicable √ Inapplicable
Others that need to be disclosed as required by the securities supervisor
□ Applicable √ Inapplicable
2. Changes in conditional shares
√ Applicable □ Inapplicable
In share
| Shareholder name | Conditional shares at beginning of the period | Increased this period | Released this period | Conditional shares at end of the period | Reason of condition | Date of releasing |
| Xiong Jianming | 1,417,243 | 878,250 | 2,295,493 | Increase of shareholding | 25% of the annual shareholding is released from the sale | |
| Ye Zhiqing | 14,325 | 14,325 | The supervisor leaves after the expiration of his term of office | Monday, November 9, 2020 | ||
| Fan Xiaodong | 6,600 | 6,600 | Newly elected supervisor | 25% of the annual shareholding is released from the sale | ||
| Total | 1,431,568 | 884,850 | 14,325 | 2,302,093 | -- | -- |
II. Share placing and listing
1. Securities issuance (excluding preference shares) during the report period
□ Applicable √ Inapplicable
2. Statement of changes in share number and shareholder structure, assets and liabilities structure
□ Applicable √ Inapplicable
3. Current employees’ shares
□ Applicable √ Inapplicable
III. Shareholders and the substantial controller of the Company
1. Shareholders and shareholding
In share
| Number of shareholders of common shares at the end of the report period | 59,221 | Total number of ordinary share shareholders at the end of the month before the disclosure date of the annual report | 57,995 | Number of shareholders of preferred stocks of which voting rights recovered in the report period | 0 | Total number of shareholders of preference shares of which voting rights resumed at the end of the month before the disclosure date of the annual report | 0 | ||||||
| Shareholders holding 5% of the Company's shares or top-10 shareholders | |||||||||||||
| Shareholder name | Nature of shareholder | Shareholding percentage | Number of shares held at the end of the reporting period | Change in the reporting period | Conditional shares | Amount of shares without sales restriction | Pledging or freezing | ||||||
| Share status | Quantity | ||||||||||||
| Shenzhen Banglin Technologies Development Co., Ltd. | Domestic non-state legal person | 10.87% | 118,307,546 | 3,464,892 | 0 | 118,307,546 | Pledged | 32,700,000 | |||||
| Shengjiu Investment Ltd. | Foreign legal person | 9.66% | 105,134,562 | 1,440,533 | 0 | 105,134,562 | |||||||
| Fang Wei | Overseas natural person | 2.79% | 30,322,437 | -4,723,102 | 0 | 30,322,437 | |||||||
| Gong Qing Cheng Shi Li He Investment Management Partnership | Domestic non-state legal person | 1.46% | 15,860,609 | -10,930,879 | 0 | 15,860,609 | |||||||
| Enterprise (limited partner) | ||||||||||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | Foreign legal person | 0.58% | 6,312,683 | -1,633,800 | 0 | 6,312,683 | ||||
| VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND | Foreign legal person | 0.57% | 6,247,740 | 375,733 | 0 | 6,247,740 | ||||
| Shenwan Hongyuan Securities (Hong Kong) Co., Ltd. | Foreign legal person | 0.53% | 5,783,896 | -1,847,400 | 0 | 5,783,896 | ||||
| Qu Chunlin | Domestic natural person | 0.52% | 5,666,861 | 1,359,850 | 0 | 5,666,861 | ||||
| First Shanghai Securities Limited | Foreign legal person | 0.36% | 3,938,704 | -63,000 | 0 | 3,938,704 | ||||
| Shanghai Silver Leaf Investment Co., Ltd.-Silver Leaf Quantitative Hedging Phase 1 Private Securities Investment Fund | Others | 0.35% | 3,755,500 | 3,755,500 | 0 | 3,755,500 | ||||
| A strategic investor or ordinary legal person becomes the Top10 shareholder due a stock issue. | None | |||||||||
| Notes to top ten shareholder relationship or "action in concert" | Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology Development Co., Ltd. and Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise are related parties. The Company is not notified of other action-in-concert or related parties among the other holders of current shares. | |||||||||
| Description of the above shareholders involved in entrusted / entrusted voting right and waiver of voting right | None | |||||||||
| Top 10 holders of unconditional shares | ||||||||||
| Shareholder name | Amount of shares without sales restriction | Category of shares | ||||||||
| Category of shares | Quantity | |||||||||
| Shenzhen Banglin Technologies Development Co., Ltd. | 118,307,546 | RMB common shares | 118,307,546 |
| Shengjiu Investment Ltd. | 105,134,562 | Domestically listed foreign shares | 105,134,562 |
| Fang Wei | 30,322,437 | RMB common shares | 30,322,437 |
| Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) | 15,860,609 | RMB common shares | 15,860,609 |
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | 6,312,683 | Domestically listed foreign shares | 6,312,683 |
| VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND | 6,247,740 | Domestically listed foreign shares | 6,247,740 |
| Shenwan Hongyuan Securities (Hong Kong) Co., Ltd. | 5,783,896 | Domestically listed foreign shares | 5,783,896 |
| Qu Chunlin | 5,666,861 | RMB common shares | 5,666,861 |
| First Shanghai Securities Limited | 3,938,704 | Domestically listed foreign shares | 3,938,704 |
| Shanghai Silver Leaf Investment Co., Ltd.-Silver Leaf Quantitative Hedging Phase 1 Private Securities Investment Fund | 3,755,500 | RMB common shares | 3,755,500 |
| No action-in-concert or related parties among the top10 unconditional shareholders and between the top10 unconditional shareholders and the top10 shareholders | Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology Development Co., Ltd. and Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise are related parties. The Company is not notified of other action-in-concert or related parties among the other holders of current shares. | ||
| Top-10 common share shareholders participating in margin trade | Shenzhen Banglin Technology Development Co., Ltd. holds 55,000,000 shares of the Company through the customer credit transaction guarantee securities account of Ping An Securities Co., Ltd., and Shanghai Yinye Investment Co., Ltd.-Yinye Quantitative Hedging Phase 2 Private Securities Investment Fund through Xiangcai Securities Co., Ltd. The customer credit transaction guarantee securities account holds 3,755,500 shares of the Company. | ||
Agreed re-purchasing by the Company‘s top 10 shareholders of common shares and top 10 shareholders of unconditional commonshares in the report period
□ Yes √ No
No agreed re-purchasing by the Company‘s top 10 shareholders of common shares and top 10 shareholders of unconditional commonshares in the report period
2. Profile of the controlling shareholders
Shareholder nature: natural person holdingType of shareholder: legal person
| Name of controlling shareholder | Legal representative/responsible person | Date of establishment | Organization code | Main business |
| Shenzhen Banglin Technologies Development Co., Ltd. | Chen Jinwu | Jun. 7, 2001 | 914403007298400552 | Industrial investment, developing of electronic products, technical consulting, domestic commerce, material trading |
| Stock ownership of other domestic and overseas listed company controlled or whose shares are held by controlling shareholders | None | |||
Changes in the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
No change in the controlling shareholder in the report period
3. Actual controller and persons acting in concert
Nature of actual controller: domestic natural personType of actual controller: natural person
| Name of substantial controller | Relationship with the actual controller | Nationality | Right of residence in another country or region |
| Xiong Jianming | Himself | Chinese | Yes |
| Job and position | Chairman of the Board and president of the Company over the past 5 years | ||
| Profiles of domestic and overseas listed companies in which the controller held shares | The controller held no share in other listed companies in the last ten years. | ||
Change in the actual controller in the report period
□ Applicable √ Inapplicable
No change in the actual shareholder in the report period
7. Chart of the controlling relationship
Controlling over the Company by the substantial controller through trust or other asset management
□ Applicable √ Inapplicable
4. Other legal person shareholders with over 10% of total shares
□ Applicable √ Inapplicable
5. Conditional decrease of shareholding by controlling shareholder, actual controller, reorganizer andother entities
□ Applicable √ Inapplicable
Chapter VII Preferred Shares
□ Applicable √ Inapplicable
The Company had no preferred share in the report period.
VIII. Information about the Company’s Convertible Bonds
□ Applicable √ Inapplicable
No convertible bonds in the report period
Chapter IX Particulars about the Directors, Supervisors, Senior
Management and EmployeesI. Changes in shareholding of Directors, Supervisors and Senior Management
| PRINTED NAME | Position | Job status | Sex | Age | Starting date of the term | End date of the term | Number of shares held at beginning of the period | Increased shares in this period (share) | Decreased shares in this period (share) | Other increase and decrease (share) | Number of shares held at end of the period |
| Xiong Jianming | Chairman, president | In office | M | 63 | Monday, November 20, 1995 | Monday, May 8, 2023 | 1,889,657 | 1,171,000 | 3,060,657 | ||
| Xiong Jianwei | Director | In office | M | 52 | Friday, April 16, 1999 | Monday, May 8, 2023 | |||||
| Zhou Zhigang | Director | In office | M | 58 | Monday, April 9, 2007 | Monday, May 8, 2023 | |||||
| Zhou Zhigang | Vice president | In office | M | 58 | Tuesday, April 11, 2017 | Monday, May 8, 2023 | |||||
| Zhou Zhigang | Secretary of the Board | Resigned | M | 58 | Wednesday, October 22, 2003 | 8 May 2020 | |||||
| Lin Kebin | Director | In office | M | 43 | Tuesday, April 11, 2017 | Monday, May 8, 2023 | |||||
| Lin Kebin | Vice president | In office | M | 43 | Friday, June 6, 2008 | Monday, May 8, 2023 | |||||
| Guo Jinlong | Independent director | In office | M | 59 | Tuesday, April 11, 2017 | Monday, May 8, 2023 | |||||
| Huang Yaying | Independent | In office | M | 58 | 8 May 2020 | Monday, May 8, |
| director | 2023 | ||||||||||
| Cao Zhongxiong | Independent director | In office | M | 42 | 8 May 2020 | Monday, May 8, 2023 | |||||
| Dong Gelin | Supervisory Committee meeting convener | In office | M | 42 | Friday, December 28, 2018 | Monday, May 8, 2023 | |||||
| Cao Naisi | Supervisor | In office | F | 42 | Tuesday, April 11, 2017 | Monday, May 8, 2023 | |||||
| Fan Xiaodong | Supervisor | In office | M | 34 | 8 May 2020 | Monday, May 8, 2023 | 8,800 | 8,800 | |||
| Wei Yuexing | Vice president | In office | M | 52 | Jul. 29, 2011 | Monday, May 8, 2023 | |||||
| Xiao Yangjian | Secretary of the Board | In office | M | 36 | Tuesday, June 23, 2020 | Monday, May 8, 2023 | |||||
| Guo Wanda | Independent director | Resigned | M | 55 | Monday, March 31, 2014 | 8 May 2020 | |||||
| Deng Lei | Independent director | Resigned | M | 42 | Tuesday, February 16, 2016 | 8 May 2020 | |||||
| Ye Zhiqing | Supervisor | Resigned | M | 46 | Friday, December 28, 2018 | 8 May 2020 | 19,100 | 19,100 | |||
| Total | -- | -- | -- | -- | -- | -- | 1,917,557 | 1,171,000 | 0 | 0 | 3,088,557 |
II. Changes in the Directors, Supervisors and Senior Executives
√ Applicable □ Inapplicable
| PRINTED NAME | Job | Type | Date | Reason |
| Guo Wanda | Independent director | Leaving office | 8 May 2020 | Office term expires |
| Deng Lei | Independent | Leaving office | 8 May 2020 | Office term expires |
| director | ||||
| Ye Zhiqing | Staff representative supervisor | Leaving office | 8 May 2020 | Office term expires |
| Zhou Zhigang | Secretary of the Board | Leaving office | 8 May 2020 | Office term expires |
| Huang Yaying | Independent director | Elected | 8 May 2020 | Re-elected |
| Cao Zhongxiong | Independent director | Elected | 8 May 2020 | Re-elected |
| Fan Xiaodong | Supervisor | Elected | 8 May 2020 | Re-elected |
| Xiao Yangjian | Secretary of the Board | Engaged | Tuesday, June 23, 2020 | Re-elected |
III. Office DescriptionProfessional background, work experience and main duties in the Company of existing directors, supervisors and senior management
1. Mr. Xiong Jianming: PHD Management; senior engineer; part-time professor of Beijing Institute of Civil Engineering andArchitecture and Nanchang University. He is now the chairman and CEO of the Company, representative of the 13th NationalPeople's Congress and the 6th Shenzhen People's Congress, president of the Shenzhen Semi-conductor Lighting Industry PromotionAssociation, chairman of Shenzhen Nanshan District Industry and Commerce Association and honorary chairman of ShenzhenNanshan District Charity. He was once employed by Jiangxi Provincial Machinery Design Academe, Administration Bureau ofShekou District of Shenzhen government, etc, deputy to the 10th People‘s Congress of Guangdong Province, deputy to the 2nd and3rd People‘s Congress of Shenzhen City.
2. Mr. Xiong Jianwei: Master of business administration. Now he is the director of the Company, chairman of Fangda Jiankecompany, and member of the 14th Nanchang CPPCC Standing Committee.
3. Mr. Zhou Zhigang: Bachelor degree. He is now the director and vice president of the Company. He used to be the Secretary of theboard of directors, director of the marketing headquarters, general manager of the enterprise management center, and director of thehuman resources department of the Company.
4. Mr. Lin kebing: Bachelor degree. He is now the director and vice president of the Company. He was once the financial director ofthe Company.
5. Guo Jinlong: master's degree, CPA. He was a member of the fifth session of the CPPCC of Shenzhen City. He is currently thedeputy to the sixth session of the People's Congress of Shenzhen, vice chairman of Guangdong Certified Public AccountantsAssociation (limited liability partnership), partner of ShineWing Certified Public Account, and an independent director of theCompany, Shenzhen Sanlipu Photoelectric Technology Co., Ltd. and Inner Mongolia Furui Medical Technology Co., Ltd. He was aformer member of the 5th CPPCC Shenzhen.
6. Mr. Huang YAYING: Master, Professor, part-time lawyer. He is currently a professor of Shenzhen University, a part-time lawyer ofBeiyuan law firm, and an independent director of the Company, Han's Laser Technology Industry Group Co., Ltd., ShenzhenBAOYING Construction Holding Group Co., Ltd., and Shenzhen Lihe Technology Innovation Co., Ltd. He was once a professor ofNorthwest University of Political Science and Law, and dean of Shenzhen University Law School.
7. Mr. Cao Zhongxiong: doctor, now is the executive director of New Economy Research Institute of comprehensive developmentand Research Institute (Shenzhen, China). He is engaged in the research and consulting work of new economy and enterprise strategy.
He is an independent director of the Company. He was once a technician of China National Chemical Corporation Bluestar CleaningAgent Co., Ltd. of China National Chemical Corporation.Mr. Dong Gelin: bachelor's degree, a senior engineer, the Supervisory Committee meeting convener and deputy technical director. Hewas once a designer of Shenzhen Fangda Jianke, a wholly-owned subsidiary of the Company, chief engineer of the designinginstitution, assistant to the general manager, and general manager of Beijing branch of Fangda Jianke. He is now the vice generalmanager of Fangda Jianke.
9. Ms. Cao Naisi: Bachelor's degree, intermediate economist, currently Supervisor of the Company and Deputy General Manager ofFangda Jianke. She once served as the securities affairs representative of the Company, the director of the audit and supervisiondepartment, the deputy director of the human resources department, the general manager of Fangda Jianke Beijing Branch, thegeneral manager of Fangda Jianke South China Branch and so on.
10. Mr. Fan Xiaodong: Bachelor degree, major in law. He joined the legal department of the Company in 2011. He is now thesupervisor and vice minister of the legal department of the Company.
11. Mr. Wei Yuexing holds a Bachelor degree and is a senior engineer. He is the vice president of the and general manager of FangdaJianke.
12. Mr. Xiao Yangjian: Bachelor degree. Now he is the Secretary of the board of directors of the Company. He once served as deputygeneral manager and Secretary of the board of directors of Shenzhen Xiongtao Power Technology Co., Ltd. and deputy generalmanager and Secretary of the board of directors of Shenzhen Guangfeng Technology Co., Ltd.Offices held at shareholders entitie
√ Applicable □ Inapplicable
| Name | Shareholder entity | Office | Starting date of the term | End date of the term | Whether any remuneration is paid at the shareholder entity |
| Xiong Jianming | Shengjiu Investment Ltd. | Director | Oct. 6, 2011 | No | |
| Wei Yuexing | Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) | Executive partner | Tuesday, December 20, 2016 | No | |
| Office description | None | ||||
Offices held at other entities
√ Applicable □ Inapplicable
| Name | Entity name | Office | Starting date of the term | End date of the term | Whether any remuneration is paid at the shareholder entity |
| Guo Jinlong | ShineWing Certified Public Accountants (limited liability partnership) | Partner | Saturday, October 1, 2005 | Yes | |
| Guo Jinlong | Shenzhen Sanlipu Photoelectric Technology Co., Ltd. | Independent director | Friday, July 10, 2020 | Yes | |
| Guo Jinlong | Inner Mongolia Furui Medical Technology Co., Ltd | Independent director | Wednesday, May 20, 2020 | Yes |
| Huang Yaying | Shenzhen University | Professor | Tuesday, September 16, 2003 | Yes | |
| Huang Yaying | Beiyuan law firm | Part-time lawyer | Wednesday, April 15, 2020 | No | |
| Huang Yaying | Han's Laser Technology Industry Group Co., Ltd | Independent director | Friday, October 11, 2013 | Yes | |
| Huang Yaying | Shenzhen BAOYING Construction Holding Group Co., Ltd. | Independent director | Tuesday, June 2, 2020 | Yes | |
| Huang Yaying | Shenzhen Lihe Technology Innovation Co., Ltd. | Independent director | Monday, February 10, 2020 | Yes | |
| Cao Zhongxiong | General Development Research Institute (Shenzhen, China) | Executive director of New Economy Research Institute | Thursday, January 15, 2015 | Yes | |
| Office description | The above-mentioned three are independent directors of the Company. | ||||
Penalties given by existing securities regulators on directors, supervisors and senior management and those who have resigned in thereport period
□ Applicable √ Inapplicable
IV. Remunerations of the Directors, Supervisors and Senior Executives
Decision making procedures, basis and actual payment of remunerations of the Directors, Supervisors and Senior Executives
1. Remuneration schemes for directors and supervisors are proposed by the Remuneration and Assessment Committee of the Board,and implemented upon approval of the Board and the Shareholders‘ Meetings; the remuneration schemes for executives are approvedand implemented by the Board.Remuneration for directors and supervisors are decided by the shareholders‘ meeting. Remunerations for executives are composed ofwages and performance bonus as decided by the Board.Payment on monthly basis
Remunerations of the Directors, Supervisors and Senior Executives of the Company During the reporting period
In RMB10,000
| PRINTED NAME | Position | Sex | Age | Job status | Total remuneration | Remuneration from related parties |
| Xiong Jianming | Chairman, president | M | 63 | In office | 228.67 | No |
| Xiong Jianwei | Director | M | 52 | In office | 107.34 | No |
| Zhou Zhigang | Director, vice president | M | 58 | In office | 81.43 | No |
| Lin Kebin | Director, vice president | M | 43 | In office | 105.28 | No |
| Guo Jinlong | Independent director | M | 59 | In office | 8 | No |
| Huang Yaying | Independent director | M | 58 | In office | 5.14 | No |
| Cao Zhongxiong | Independent director | M | 42 | In office | 5.14 | No |
| Dong Gelin | Supervisory Committee meeting convener | M | 42 | In office | 71.9 | No |
| Cao Naisi | Supervisor | F | 42 | In office | 58.55 | No |
| Fan Xiaodong | Supervisor | M | 34 | In office | 40.36 | No |
| Wei Yuexing | Vice president | M | 52 | In office | 105.47 | No |
| Xiao Yangjian | Secretary of the Board | M | 36 | In office | 47.75 | No |
| Guo Wanda | Independent director | M | 55 | Resigned | 2.86 | No |
| Deng Lei | Independent director | M | 42 | Resigned | 2.86 | No |
| Ye Zhiqing | Supervisor | M | 46 | Resigned | 25.42 | No |
| Total | -- | -- | -- | -- | 896.17 | -- |
Equity incentive programs provided for the Directors, and Senior Executives of the Company during the reporting period
□ Applicable √ Inapplicable
5. Employees
1. Staff number, professional composition and education
| Staff number of the parent | 65 |
| Staff number of major subsidiaries | 1,693 |
| Total staff number | 2,245 |
| Number of employees receiving remuneration in the period | 2,245 |
| Resigned and retired staff number to whom the parent and major subsidiaries need to pay remuneration | 0 |
| Professional composition | |
| Categories of professions | Number of people |
| Production | 820 |
| Sales & Marketing | 69 |
| Technicians | 1,140 |
| Finance & Accounting | 73 |
| Administration | 143 |
| Total | 2,245 |
| Education | |
| Categories of education | Number of people |
| High school or below | 1,014 |
| College diploma | 452 |
| Bachelor | 756 |
| Master‘s degree | 21 |
| Doctor‘s degree | 2 |
| Total | 2,245 |
2. Remuneration policy
Staff remuneration policy: The Company‘s staff remuneration comprises post wage, performance wage, allowance and annual bonus.The Company has set up an economic responsibility assessment system according to the annual operation target and responsibilityindicators for all departments. The performance wage is determined by the economic indicators, management indicators, optimizationindicators and internal control. The annual bonus is determined by the Company's annual profit and fulfillment of targets set forvarious departments. The staff remuneration and welfare will be adjusted according to the Company‘s business operation andchanges in the local standard of living and price index.
3. Training program
Staff training plan: The Company has paid continuous attention to training and development of the staff and introducesinnovative learning as part of the long-term strategy. We provide training programs through different channels and in different fieldsfor different employees will help them fulfill their works, including new staff training, on-the-job training, operation andmanagement training programs. These programs have largely elevated capabilities of the staff and underpin the success of theCompany.
4. Labor outsourcing
√ Applicable □ Inapplicable
| Total number of hours of labor outsourcing | 14,516,926.35 |
| Total remuneration paid for labor outsourcing (RMB) | 466,846,880.09 |
Chapter X Corporation Governance
1. Overview
During the report period, the Company strictly complied with the Company Law, Securities Law, Governance Standards forListed Companies, Shenzhen Stock Exchange Share Listing Rules, Operation Regulations for Listed Companies in the Main Boardof Shenzhen Stock Exchange, continued to improve the legal person governance structure and has formulated a series of internalmanagement systems covering various aspects. The Company has set up a comprehensive and effective internal control system inimportant decision making, related transaction decision making, financial management, HR management, administration, purchase,production and sales management, confidentiality and information disclosure.Major difference between the actual corporate governance and regulations on corporate governance of listed companies issued byCSRC
□ Yes √ No
There is no major difference between the actual corporate governance and regulations on corporate governance of listed companiesissued by CSRC.
2. Independence of the Company from the controlling shareholder in aspects of businesses,personnel, assets, organizations, and accounting
(1) In the aspect of business: the Company has its own purchasing, production, sales, and customer service system whichperforming independently. There is not any material related transactions occurred with the controlling shareholders.
(2) In personnel, the labor management, personnel and salary management are operated independently from the controllingshareholder. The senior managements take salaries from the Company and none of them takes senior management position in thecontrolling party.
(3) In assets, the Company owns its production, supplementary production system and accessory equipments independently, andpossesses its own industrial properties, non-patent technologies, and trademark.
(4) In organization, the production and business operation, executive management, and department setting are completelyindependent from the controlling shareholder. No situation of combined office exists. The Company adjusts its organizing structureonly for its own practical requirement of development and management.
(5) In accounting, the Company has its own independent accounting and auditing division, established independent andcompleted accounting system and management rules, has its own bank account, and exercise its liability of taxation independently.
3. Competition
□ Applicable √ Inapplicable
4. Annual and extraordinary shareholder meetings held during the report period
1. Annual shareholder meeting during the report period
| Meeting | Type | Participation of | Date | Date of | Index for information disclosure |
| investors | disclosure | ||||
| 2019 Annual Shareholder Meeting | Annual shareholders‘ meeting | 24.66% | 8 May 2020 | Saturday, May 9, 2020 | Notice on Resolutions of the Annual Shareholders‘ Meeting (2020-25) released on www.cninfo.com.cn |
2. Shareholders of preference shares of which voting right resume convening an extraordinaryshareholders’ meeting
□ Applicable √ Inapplicable
V. Performance of independent directors during the report period
1. Independent directors’ presenting of board meetings and shareholders’ meetings in the report period
| Independent directors‘ presenting of board meetings and shareholders‘ meetings in the report period | |||||||
| Name of independent director | Time of board meetings should have attended | Number of board meetings attended | Presented by telecom | Number of board meetings attended by proxy | Number of board meetings not attended | Absent for two consecutive meetings | Number of shareholders' meetings attended |
| Guo Jinlong | 8 | 3 | 5 | 0 | 0 | No | 1 |
| Huang Yaying | 5 | 2 | 3 | 0 | 0 | No | 0 |
| Cao Zhongxiong | 5 | 2 | 3 | 0 | 0 | No | 0 |
| Guo Wanda (left after term expired) | 3 | 1 | 2 | 0 | 0 | No | 1 |
| Deng Lei (left after term expired) | 3 | 1 | 2 | 0 | 0 | No | 1 |
Statement for absence for two consecutive board meetingsNone
2. Objection raised by independent directors
Any objection raised by independent directors against the Company‘s related issues
□ Yes √ No
Independent directors made no objection on related issued of the Company in the report period.
3. Other statement for performance of independent directors
Adoption of suggestion proposed by independent directors
√ Yes □ No
Statement for suggestion adopted or not by the Company
During the reporting period, the Company‘s independent directors strictly followed the relevant laws, regulations and the―Articles of Association‖ and paid attention to the Company‘s operations, attended the Company‘s Board of Directors andshareholders‘ meeting, and all the independent directors carefully reviewed the various proposals of the Company‘s Board ofDirectors and performed their duties conscientiously. The development decision has put forward constructive opinions or suggestions,and has issued independent opinions on the improvement of the Company's system and major business management matters,corporate guarantees, profit distribution, use of raised funds, etc. Independent directors have adopted the Company‘s relevantrecommendations. It has played an active role in safeguarding the interests of the Company and small and medium shareholders.VI. Performance of specific committees under the Board
(1) Performance of the Development Strategy Committee
During the report period, the Development Strategy Committee of the Company has performed its duties in accordance with theWorking Regulations for Development Strategy Committee and played its role in the decision-making process of the Company. Twomeetings were convened and details are disclosed as follows:
1. On April 16, 2020, the Company held the 6th meeting of the 8th Development Strategy Commission to listen to the report onproduction and operation in 2019 and production and operation plan for 2020.
2. On August 20, 2020, the 1st meeting of the Development Strategy Committee of the 8th term of the Board was held to viewthe Company‘s production and operation in the first half of 2020 and studied the fulfillment of the business plan in the first half of theyear and places to be improved in the second half.
(2) Performance of the Auditing Committee
During the reporting period, the audit committee of the board of directors of the Company held four meetings to review theaudit work arrangement, regular financial reports, selection and employment of accounting firms, aluminum futures hedging andforeign exchange derivatives trading. Details of the meetings are disclosed as follows:
1. On April 10, 2020, the 14th meeting of the Auditing Committee of the 8th term of the Board was held to review the financialstatements with the initial opinion issued by the CFA for 2019 and approve the auditor report issued by the CFA. After the CFAissued to final auditor‘s opinion, the Auditing Committee submitted the resolution on the annual financial statements to the Board andissued the summary report on the auditing of the CFA for this year.
2. On April 16, 2020, the Company held the 15th meeting of the audit committee of the 8th board of directors. The meetinglistened to the financial and internal audit work report of 2019, and deliberated and approved (1) the Company's audited financial andaccounting statements of 2019; (2) the financial and accounting statements of the first quarter of 2020; (3) the proposal to hire theaudit institution of 2020; (4) the Company's internal audit report of 2019 Work plan; (5) feasibility analysis on Aluminum FuturesHedging and foreign exchange derivatives trading business; (6) proposal on adjusting investment amount and service life ofaluminum futures hedging and foreign exchange derivatives trading business; (7) self-evaluation report on internal control of theCompany in 2019. The audit committee suggests that the internal audit body should increase communication with the auditcommittee to help the committee better under the Company's condition and make higher requirements on the audit quality. Themembers of the audit committee gave professional advice on improving the Company's processes, optimizing the system, and riskprevention from various perspectives based on their own experience in different industries. They also put forward higherrequirements for the Company's future internal control work.
3. On August 20, 2020, the Company held the first meeting of the audit committee of the ninth board of directors, and reportedto the members the financial work and internal audit report for the first half of 2020. The financial statements of the Company for thehalf year of 2020 were reviewed and approved.
4. On October 19, 2020, the Company held the second meeting of the audit committee of the ninth board of directors, anddeliberated and approved (1) the financial statements of the third quarter of 2020; (2) the feasibility analysis on the development ofcommodity futures option hedging business; (3) the proposal on the development of commodity futures option hedging business.
(3) Performance of the Remuneration and Assessment Committee
During the reporting period, the remuneration and assessment committee of the board of directors of the Company held twomeetings to review the remuneration and Allowance Schemes of the directors and senior managers of the Company in accordancewith the working rules of the remuneration and assessment committee formulated by the Company. Details of the meetings aredisclosed as follows:
1. On April 16, 2020, the Company held the third meeting of the remuneration and assessment committee of the eighth board ofdirectors, and deliberated and passed (1) the proposal on the remuneration of directors and senior managers in 2019; (2) the annualallowance scheme for the ninth directors (including independent directors) of the Company.
2. On May 8, 2020, the Company held the first meeting of the compensation and assessment committee of the ninth board ofdirectors, deliberating and approving the ninth senior management compensation plan of the Company.VII. Performance of Supervisory Committee
(1) Risks for the Company discovered by the Supervisory Committee
□ Yes √ No
No disagreement with supervisory issues by the Supervisory Committee during the report period.
(2) The Supervisory Committee’ Work Report 2020
In 2020, the Supervisory Committee performed its duties and obligations in supervision and protect all shareholders‘ and theCompany‘s interests in accordance with the Company Law, Share Listing Rules, Articles of Association and Rules of the Procedureof the Supervisory Committee. The 2020 supervisory committee's work plan is as follows:
1. Opinions
(1) Legal compliance
In 2020, the Board of Supervisors of the Company supervised the operation of the Company in accordance with the law. In thereport period, the Company has been operated in accordance with law. The convening of meeting of the Board and thedecision-making process are compliant with law, regulations and Articles of Association; the internal control system is solid.Directors and senior management have performed their obligations. No violation against law, regulations, Articles of Association andinterests of the Company and shareholders was discovered.
(2) Financial condition
During the period, the Board of Supervisors supervised the financial affairs of the Company. The accounting management hasbeen compliant with the Accounting Law, Enterprise Accounting Standard. No false, misleading statement or significant omissionwas found in financial statements. The financial reports of the Company reflect the Company‘s financial position, operationperformance, cash flows and major risks truthfully, accurately and completely. The CPA has issued the standard auditor's report in2020, which is objective, fair and truthful. It reflects the Company's financial position and operation performance.
(3) Implementation of internal control
According to the board of supervisors, the design and operation of the internal control is effective and meets the Company'smanagement and development requirements. It can ensure the truthfulness, lawfulness, completeness of the financial materials andensure the safety and completeness of the Company‘s property. In 2020, there was no violation by the Company against theOperation Regulations for Listed Companies in the Shenzhen Stock Exchange and the Company‘s internal control system. The 2020Internal Control Self-evaluation Report truthfully and objectively reflects the establishment, implementation and improvement of theCompany‘s internal control system. There are no significant or important problems in the financial and non-financial reports in thereport period.
(4) Associated Transactions
The Board of Supervisors held that the related transactions of the Company were carried out in strict accordance with the related
transaction rules and agreements, in line with the principle of fairness and rationality, and did not damage the interests of theCompany and shareholders.
(5) Fulfillment of social responsibilities
In 2020, the Company has made due contributions to economic development and environmental protection, actively participatedin public welfare and charity, conscientiously fulfilled its due social responsibility, and safeguarded the interests of shareholders,customers and employees.
2. Meetings and resolutions of the supervisory meeting in the report period
Four meetings were held in 2020, all of which are on-site meetings. All proposal were approved and disclosed as required:
| No. | Meeting | Date | Convening method | Topic |
| 1 | 13th meeting of the 8th Supervisory Committee | 16 April 2020 | On-site | 1. Supervisory Committee‘s Annual Report 2019; 2. Annual Report 2019 and the Summary; 3. Reviewing the 2020 Q1 Report and Text; 4. Financial Settlement Report 2019; 5. Proposal of dividend distribution for year 2019; 6. The proposal of engaging the auditor for 2020; 7. The Company‘s internal control self-evaluation report 2019; 8. Proposal on changes in accounting estimates for accrued credit impairment losses; 9. The proposal of re-electing the 9th Supervisory Committee of the Company: |
| 2 | 1st meeting of the 9th Supervisory Committee | 8 May 2020 | On-site | Elect the convener of the ninth Board of Supervisors of the Company. |
| 3 | 2nd meeting of the 9th Supervisory Committee | Thursday, August 20, 2020 | On-site | 2020 Interim Report and the Summary of the Company |
| 4 | 3rd meeting of the 9th Supervisory Committee | 19 October 2020 | On-site | Reviewing the 2020 Q3 Report and Text. |
(III) The Supervisory Committee's Work Report 2021In 2021, the Supervisory Committee of the Company will closely focus on the overall business objectives of the Company,actively perform the supervision function of the Supervisory Committee and supervise the standardized operation of the Company inaccordance with the Company Law and other laws and regulations, the articles of association and the rules of procedure of theSupervisory Committee; at the same time, it will continuously strengthen its professional quality, strive to improve its professionalability and performance level; and strengthen the supervision of major projects and related parties of the Company, pay attention tothe Company's risk management and internal control system construction, ensure that the Company implements effective internalcontrol measures, and further promote the Company's standardized operation.
VIII. Assessment and motivation of senior executivesThe Company has implemented a remuneration system that combines post wage and performance bonus. The wages and bonusare determined by on the assessment of senior executives‘ innovation capabilities, general quality, performance, fulfillment of profitand payment collection targets according to the Company's annual performance assess and performance assess implementationmethods for wholly-owned subsidiaries.
IX. Internal control
1. Major problems in internal control discovered in the report period
□ Yes √ No
2. Internal control self-evaluation report
| Date of disclosure of the internal control evaluation report | Tuesday, March 23, 2021 | |
| Disclosure of the internal control evaluation report | www.cninfo.com.cn | |
| Percentage of assets in the evaluation scope in the total assets in the consolidated financial statements | 99.55% | |
| Percentage of operation income in the evaluation scope in the total operation income in the consolidated financial statements | 98.45% | |
| Standard | ||
| Type | Financial report | Non-financial report |
| Standard | 1. The following problems are considered major problems: 1. Non-effective control environment; 2. corrupt practice by directors, supervisor and senior management, causing substantial loss and impacts for the Company; 3. Substantial mistakes in the financial statements in the period discovered by the CPA, which are not discovered by the internal control; 4. Ineffective supervision of the internal control by the Company‘s auditing department 2. The following problems are considered significant problems: 1 accounting policies are selected and used without complying to widely accepted accounting | I. The following condition indicates significant problems in the internal control of non-financial reports: 1. Serious violation against national laws, regulations or specifications; 2. Serious business system problems and system ineffectiveness; 3. Major or important problems cannot be corrected; 4. Lack of internal control and poor management; 5. Loss of management personnel or key employees; 6. Safety and environmental accidents that cause major adverse impacts; 7. Other situations that cause major adverse impacts on the Company. II. The following situations |
| standards; 2. No anti-corrupt and important balance system and control measures are taken; 3. Separate or multiple problems in the preparation of financial reports, which are serious enough to affecting the truthfulness and accuracy of the reports; no control system is established and no related compensation system is implemented for accounts of irregular or special transactions 3. Other problems are considered normal problems. | indicate that there may be significant problems with the internal control: 1. business system problems and system ineffectiveness; 2. Major or important problems cannot be corrected; 3. Other situations that cause major adverse impacts on the Company III. The following situation indicate likely normal problems in the internal control: 1. Problems in the general business system; 2. Normal problems in the internal control supervision cannot be correctly promptly. | |
| Standard | 1. Significant problem: 1 mistakes affecting 5% and more of the pre-tax profit and more than RMB5 million in the consolidated statements; 2. Mistakes affecting 5% and more of the consolidated assets and more than RMB5 million 2. Important problem: 1. Mistakes affecting 1%-5% of the pre-tax profit in the consolidated statements; 2. Mistakes affecting 1%-5% the consolidated assets. III. Normal problem: 1. Mistakes affecting less than 1% of the pre-tax profit and total assets of the consolidate statements. | See the recognition standard of the internal control problems for financial statements |
| Significant problems in financial statements | 0 | |
| Significant problems in non-financial statements | 0 | |
| Important problems in financial statements | 0 | |
| Important problems in non-financial statements | 0 | |
X. Internal control audit report
√ Applicable □ Inapplicable
| Comments in the internal control audit report | |
| We believe that China Fangda Group has maintained effective internal control on financial reports according to Basic Regulations on Enterprise Internal Control and related regulations on December 31, 2020. | |
| Disclosure of internal auditor‘s report | Disclosed |
| Date of disclosure of the internal control audit report | Tuesday, March 23, 2021 |
| Source of disclosure of the internal control audit report | www.cninfo.com.cn |
| Opinion type | Standard opinion auditor‘s report |
| Problems in non-financial statements | No |
Non-standard internal control audit report by the CFA
□ Yes √ No
Consistency between the internal control audit report and self-evaluation report
√ Yes □ No
Chapter XI Information about the Company’s SecuritiesBonds publicly issued and listed in a securities exchange, immature or not fully paid by the approval date of the annual reportNo
Chapter XII Financial StatementsI. Auditor’s report
| Type | Standard opinion auditor‘s report |
| Issued on | Friday, March 19, 2021 |
| Auditor | RSM Thornton (limited liability partnership) |
| Report No. | RSM[2021) No.361Z0020 |
| CPA names | Chen Zhaoxin, Zeng Hui, Hu Gaosheng |
Auditors‘ ReportAuditors’ Report
RSM[2021) No.361Z0020
To the shareholders of China Fangda Group Co., Ltd.:
1. Auditors’ Opinions
We have audited the financial statements of Fangda Group Co., Ltd. (hereinafter referred to as Fangda group company),including the consolidated and parent company's balance sheet as of December 31, 2020, the consolidated and parent company'sincome statement, consolidated and parent company's cash flow statement, consolidated and parent company's statement of changesin owner's equity and notes to relevant financial statements in 2020.We believe that Fangda Group has been following with the Enterprise Accounting Standard in preparing of the FinancialStatements. The Financial Statements is reflecting, in all important aspects, the financial situation of Fangda Group as of December31, 2020, and the business performance and cash flow of year 2020.
2. Basis of the Opinions
We carried out the auditing works with compliance to Chinese CPA Auditing Standard, The ―CPA's Responsibility for AuditingFinancial Statements‖ section of the audit report further elaborated our responsibilities under these guidelines. In accordance with theCode of Ethics for Chinese Certified Public Accountants, we are independent of Fangda Group and perform other professional ethicsduties. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
3. Key Audit Matters
The key audit matters are the matters that we believe are most important for the audit of the current financial statements based
on professional judgment. The response to these matters is based on the overall audit of the financial statements and the formation ofan audit opinion. We do not comment on these matters separately.
(1) Income recognition
For related information disclosure, please refer to Note III, 24, Note V, 43 and Note XIII 2 of the financial statements.
1. Description
In 2020, the operating revenue of Fangda Group is 2.979 billion yuan, of which the revenue of curtain wall and metro platformscreen door accounts for 92.82% of the total revenue of the Group.
Fangda Group's performance obligations related to the construction subcontracting contract include building curtain wall andmetro platform screen door. As the customer can control the commodity under construction in the process of performance of Fangdagroup, the Company regards it as the performance obligation within a certain period of time, and recognizes the revenue according tothe performance progress. The Company shall determine the performance schedule of services according to the input method. Theperformance schedule shall be determined according to the proportion of the actual contract cost to the estimated total contract cost.Management needs to make a reasonable estimate of the initial total contract revenue and total contract costs for the Engineeringcontracting contract and continue to assess and revise it during the contract implementation process, which involves significantaccounting estimates of the management.
Therefore, we identify revenue recognition related to construction contracts as key audit matters.
2. Audit response
Our audit procedures for revenue recognition related to construction subcontracting contracts mainly include:
(1) Understand and evaluate the design of internal control related to management contract and engineering subcontractingcontract budget and revenue recognition, and test the effectiveness of key control implementation.
(2) Obtained a major engineering subcontracting contract, verified the contract revenue, and reviewed key contract terms. Checkthe engineering contracting contract and cost budget information on which management expects total revenue and estimated totalcost.
(3) Obtain the construction subcontracting contract account and project revenue and cost summary table, carry out analyticalreview on the gross profit of the project, and recalculate the performance progress and revenue in the construction subcontractingcontract account to verify its accuracy.
(4) Select samples to check the project engineering details of the main project, subcontracted labor approval forms, and theowner‘s production value approval documents and records to verify the contract costs incurred.
(5) Select samples to check if the relevant contract costs are recorded in the appropriate accounting period.
(6) Select a sample to conduct a site inspection of the progress of the project image to verify the reasonableness of the project'sperformance schedule.
(2) Measurement of fair value of investment real estate
For related information disclosure, please refer to Note III, 15, Note V, 16 (2), Note V 51 and Note IX of the financialstatements.
1. Description
As of December 31, 2020, the book balance of the investment real estate of Fangda group which adopts the fair value model forsubsequent measurement is 5.628 billion yuan, accounting for 47.43% of the total assets. The income from changes in fair valuerealized in the current period is 19 million yuan, which has a great impact on the financial indicators of the Group's consolidatedstatements.
The management of Fangda Group annually employs a third-party assessment agency with relevant qualifications to evaluatethe fair value of the investment real estate. The evaluation adopts the market comparison method and the income method tocomprehensively analyze various factors that affect the real estate price of the appraisal subject. The assessment of the fair value ofinvestment real estate involves many estimates and assumptions, such as the analysis of the economic environment and future trendsof the real estate where the investment real estate is located, discount rates, etc. The changes in estimates and assumptions will havebig impacts on the fair value of the investment real estate evaluated. Therefore, we identify the measurement of fair value ofinvestment real estate as a key audit matter.
2. Audit response
Our audit procedures for the measurement of fair value of investment real estate mainly include:
(1) Assess the competency, professional quality, independence and objectivity of third-party assessment agencies employed bythe management.
(2) Obtain the assessment report, selected major or typical samples, and use our real estate appraisal experts to review andreview the assessment methods and assumptions used in the assessment report and the rationality of the selected key assessment
parameters. Check the accuracy and relevance of the data used by the management in valuation.
(3) Review the measurement, presentation and disclosure of fair value of investment real estate in the financial statements.(III) Measurement of expected credit loss of accounts receivable and contract assetsFor related information disclosure, please refer to Note III, 9, Note V, 5 and Note V 10 of the financial statements.
1. Description
As stated in notes 3, 9, 5, 5 and 5, 10 of the financial statements, as of December 31, 2020, the total amount of accountsreceivable of the Company is 805 million yuan, the provision for bad debts has been withdrawn is 189 million yuan, the total amountof contract assets of the Company is 1.812 billion yuan, the provision for impairment has been withdrawn is 170 million yuan, andthe total amount of accounts receivable and contract assets accounts for 22.05% of the total assets. Due to the large amount ofaccounts receivable and contract assets of Fangda group, the management needs to use important accounting estimation andjudgment when determining the expected recoverable amount of accounts receivable and contract assets, and the expected credit lossof accounts receivable and contract assets is important for financial statements. Therefore, we determine the measurement ofexpected credit loss of accounts receivable and contract assets as the key audit accounting matters.
2. Audit response
(1) Understand and evaluate the effectiveness of internal control design related to the provision for bad debts of accountsreceivable and provision for impairment of contract assets of Fangda Group, and test the effectiveness of key control operation.
(2) Examining the expected credit loss measurement model, assessing the rationality of the major assumptions and keyparameters in the model and the appropriateness of the credit risk combination method. Sample the key data of the expected creditloss model, and test the integrity and accuracy of the historical data used by the management.
(3) Review the management's accrual process of bad debt provision for accounts receivable and contract assets impairmentprovision, including: ① for accounts receivable and contract assets with impairment provision based on aging analysis method,obtain the aging analysis table of accounts receivable and contract assets and the accrual table of bad debt provision prepared by themanagement, select samples to review the accuracy and calculation of aging division of accounts receivable and contract assets (2)for the accounts receivable and contract assets with single provision for impairment, review the accuracy and rationality of theinformation and relevant assumptions used by the management in the testing process, and check the provision for impairment for theaccounts receivable and contract assets with long accounting age, the accounts receivable and contract assets involving litigationmatters.
4. Other information
The management of Fangda Group (hereinafter referred to as management) is responsible for other information. The otherinformation includes the information covered in Fangda Group's 2020 annual report, but does not include the financial statements andour audit report.Our audit opinions published in the financial statements do not cover other information and we do not publish any form ofassurance conclusion on other information.In connection with our audit of the financial statements, our responsibility is to read other information. In the process, weconsider whether there is a material inconsistency or other material misstatement of other information whether it is in the financialstatements or what we have learned during the audit process.Based on the work we have performed, if we determine that there is a material misstatement of other information, we shouldreport that fact. In this regard, we have nothing to report.
5. Executives’ responsibilities on the Financial Statements
(1) Preparing these financial statements according to the Accounting Standards for Business Enterprises and presenting themfairly; (2) designing, implementing and maintaining necessary internal control to make sure that these financial statements are freefrom material misstatement, whether due to fraud or error.
In the preparation of the financial statements, the management is responsible for assessing Fangda Group's ability to continue asa going concern, disclosing issues related to going concern (if applicable), and applying the going concern assumption unlessmanagement plans to liquidate Fangda Group, terminate operations or there are no other realistic choices.
The management is responsible for overseeing the financial reporting process of Fangda Group.
6. Auditor's responsibility for auditing financial statements
Our objective is to obtain reasonable assurance as to whether the entire financial statements are free from material misstatementdue to fraud or error and to issue an audit report containing audit opinions. Reasonable assurance is a high level of assurance, but itdoes not guarantee that an audit performed in accordance with auditing standards can always be discovered when a majormisstatement exists. The report may be due to fraud or mistakes, and if a reasonable expectation of misstatement alone or aggregatedmay affect the economic decision-making made by users of financial statements based on the financial statements, the misstatementis generally considered to be material.
In the process of conducting audit work in accordance with auditing standards, we use professional judgment and maintainprofessional suspicion. At the same time, we also perform the following tasks:
(1) Identify and assess risks of material misstatement of financial statements due to fraud or errors, design and implement auditprocedures to address these risks, and obtain adequate and appropriate audit evidence as a basis for issuing audit opinions. As fraudmay involve collusion, forgery, willful omission, misrepresentation or override of internal control, the risk of not discovering amaterial misstatement due to fraud is higher than the risk of not discovering a material misstatement resulting from a mistake.
(2) Understand audit-related internal controls to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies adopted by the management and the reasonableness of accountingestimates and related disclosures.
(4) Conclude on the appropriateness of management's use of continuing operations assumptions. At the same time, based on theaudit evidence obtained, it concludes that whether there are major uncertainties in the matters or circumstances that may cause majordoubts about the ability of the Company‘s continuing operations. If we conclude that there are significant uncertainties, the auditingstandards require us to request the users of the report to pay attention to the relevant disclosures in the financial statements in theaudit report; if the disclosure is not sufficient, we should publish non-unqualified opinions. Our conclusions are based on theinformation available as of the date of the audit report. However, future events or circumstances may result in Fangda Group'sinability to continue operating.
(5) Evaluate the overall presentation, structure, and content of the financial statements and evaluate whether the financialstatements fairly reflect the relevant transactions and events.
(6) Obtain sufficient and appropriate audit evidence on the financial information of entity or business activities in Fangda Groupto express opinions on the financial statements. We are responsible for directing, supervising and executing group audits and assumefull responsibility for audit opinions.
We communicate with the governance team on planned audit scope, timing, and major audit findings, including communicationof the internal control deficiencies that we identified during the audit.
We also provide a statement to the management on compliance with ethical requirements related to independence, andcommunicate with the management on all relationships and other matters that may reasonably be considered to affect ourindependence, as well as related preventive measures (if applicable).
From the matters passed with the management, we determine which items are most important for the audit of the financial
statements of the current period and thus constitute the key audit matters. We describe these matters in our audit report, unless lawsand regulations prohibit the public disclosure of these matters, or in rare cases, if it is reasonably expected that the negativeconsequences of communicating something in the audit report will outweigh the benefits in the public interest, we determine thatsuch matter should not be communicated in the audit report.
| RSM China (limited liability partnership) | Chinese CPA: Chen Zhaoxin Chinese CPA: Zeng Hui | |
| Beijing, China | Chinese CPA: Hu Gaosheng | |
| Friday, March 19, 2021 |
II. Financial statementsUnit for statements in notes to financial statements: RMB yuan
1. Consolidated Balance Sheet
Prepared by: China Fangda Group Co., Ltd.
Thursday, December 31, 2020
In RMB
| Item | Thursday, December 31, 2020 | 31 December 2019 |
| Current asset: | ||
| Monetary capital | 1,459,840,020.10 | 1,209,811,978.95 |
| Settlement provision | ||
| Outgoing call loan | ||
| Transactional financial assets | 4,051,015.05 | 10,330,062.18 |
| Derivative financial assets | 6,974,448.22 | |
| Notes receivable | 207,145,563.97 | 305,070,930.97 |
| Account receivable | 616,195,129.40 | 1,956,191,307.07 |
| Receivable financing | 10,727,129.28 | 2,954,029.00 |
| Prepayment | 23,845,963.67 | 21,327,109.18 |
| Insurance receivable | ||
| Reinsurance receivable | ||
| Provisions of Reinsurance contracts receivable | ||
| Other receivables | 162,145,236.85 | 139,947,655.35 |
| Including: interest receivable | ||
| Dividend receivable | ||
| Repurchasing of financial assets | ||
| Inventory | 837,831,790.88 | 733,711,143.46 |
| Contract assets | 1,425,040,223.27 | |
| Assets held for sales | ||
| Non-current assets due in 1 year | 141,681,778.35 | |
| Other current assets | 233,223,084.51 | 323,765,585.90 |
| Total current assets | 5,128,701,383.55 | 4,703,109,802.06 |
| Non-current assets: | ||
| Loan and advancement provided | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term share equity investment | 55,902,377.95 | 57,222,240.83 |
| Investment in other equity tools | 17,628,307.59 | 20,660,181.44 |
| Other non-current financial assets | 5,025,186.16 | 5,009,728.02 |
| Investment real estate | 5,634,648,416.52 | 5,522,391,984.11 |
| Fixed assets | 483,161,673.38 | 477,332,830.92 |
| Construction in process | 168,626,803.01 | 129,988,982.86 |
| Productive biological assets | ||
| Gas & petrol | ||
| Use right assets | ||
| Intangible assets | 77,192,825.83 | 78,322,265.05 |
| R&D expense | ||
| Goodwill | ||
| Long-term amortizable expenses | 4,581,487.32 | 3,875,198.12 |
| Deferred income tax assets | 186,649,335.96 | 343,349,564.70 |
| Other non-current assets | 104,739,453.12 | 28,701,802.00 |
| Total of non-current assets | 6,738,155,866.84 | 6,666,854,778.05 |
| Total of assets | 11,866,857,250.39 | 11,369,964,580.11 |
| Current liabilities | ||
| Short-term loans | 1,048,250,327.62 | 724,618,197.34 |
| Loans from Central Bank | ||
| Call loan received | ||
| Transactional financial liabilities | ||
| Derivative financial liabilities | 915,234.93 | 96,767.62 |
| Notes payable | 866,224,515.42 | 578,816,027.44 |
| Account payable | 1,279,434,551.95 | 1,190,773,300.24 |
| Prepayment received | 1,544,655.62 | 136,340,104.73 |
| Contract liabilities | 265,487,113.12 | |
| Selling of repurchased financial assets | ||
| Deposit received and held for others | ||
| Entrusted trading of securities | ||
| Entrusted selling of securities | ||
| Employees' wage payable | 60,188,812.64 | 55,847,134.20 |
| Taxes payable | 358,662,944.42 | 17,848,987.68 |
| Other payables | 147,615,289.31 | 701,432,408.28 |
| Including: interest payable | ||
| Dividend payable | ||
| Fees and commissions payable | ||
| Reinsurance fee payable | ||
| Liabilities held for sales | ||
| Non-current liabilities due in 1 year | 103,359,833.57 | 922,346,563.72 |
| Other current liabilities | 107,688,425.69 | 181,694,574.47 |
| Total current liabilities | 4,239,371,704.29 | 4,509,814,065.72 |
| Non-current liabilities: | ||
| Insurance contract provision | ||
| Long-term loans | 1,099,411,462.35 | 546,501,491.56 |
| Bond payable | ||
| Including: preferred stock |
| Perpetual bond | ||
| Lease liabilities | ||
| Long-term payable | ||
| Long-term employees‘ wage payable | ||
| Anticipated liabilities | 33,425,500.13 | 7,793,527.16 |
| Deferred earning | 9,168,492.17 | 10,817,247.40 |
| Deferred income tax liabilities | 1,038,084,099.97 | 1,063,833,159.00 |
| Other non-current liabilities | ||
| Total of non-current liabilities | 2,180,089,554.62 | 1,628,945,425.12 |
| Total liabilities | 6,419,461,258.91 | 6,138,759,490.84 |
| Owner‘s equity: | ||
| Share capital | 1,088,278,951.00 | 1,123,384,189.00 |
| Other equity tools | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 11,459,588.40 | 1,454,191.59 |
| Less: Shares in stock | 42,748,530.12 | |
| Other miscellaneous income | 2,078,167.63 | -475,409.25 |
| Special reserves | ||
| Surplus reserve | 106,783,436.96 | 159,805,930.34 |
| Common risk provisions | ||
| Retained profit | 4,215,005,541.52 | 3,898,626,177.99 |
| Total of owner‘s equity belong to the parent company | 5,380,857,155.39 | 5,182,795,079.67 |
| Minor shareholders‘ equity | 66,538,836.09 | 48,410,009.60 |
| Total of owners‘ equity | 5,447,395,991.48 | 5,231,205,089.27 |
| Total of liabilities and owner‘s interest | 11,866,857,250.39 | 11,369,964,580.11 |
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua
2. Balance Sheet of the Parent Company
In RMB
| Item | Thursday, December 31, 2020 | 31 December 2019 |
| Current asset: |
| Monetary capital | 204,828,995.78 | 175,591,953.63 |
| Transactional financial assets | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Account receivable | 885,849.08 | 297,813.76 |
| Receivable financing | ||
| Prepayment | 1,323,361.34 | 250,205.32 |
| Other receivables | 1,156,802,204.91 | 1,973,381,342.74 |
| Including: interest receivable | ||
| Dividend receivable | ||
| Inventory | ||
| Contract assets | ||
| Assets held for sales | ||
| Non-current assets due in 1 year | ||
| Other current assets | 1,071,138.13 | 877,430.41 |
| Total current assets | 1,364,911,549.24 | 2,150,398,745.86 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term share equity investment | 1,196,831,253.00 | 963,508,253.00 |
| Investment in other equity tools | 16,392,331.44 | 18,604,010.22 |
| Other non-current financial assets | 30,000,001.00 | 48,831,242.35 |
| Investment real estate | 334,498,436.00 | 295,355,002.00 |
| Fixed assets | 65,157,481.98 | 67,361,529.52 |
| Construction in process | ||
| Productive biological assets | ||
| Gas & petrol | ||
| Use right assets | ||
| Intangible assets | 1,521,975.72 | 1,824,589.22 |
| R&D expense | ||
| Goodwill | ||
| Long-term amortizable expenses | 687,202.16 | 934,669.73 |
| Deferred income tax assets | 26,592,617.26 | 44,408,630.81 |
| Other non-current assets | ||
| Total of non-current assets | 1,671,681,298.56 | 1,440,827,926.85 |
| Total of assets | 3,036,592,847.80 | 3,591,226,672.71 |
| Current liabilities | ||
| Short-term loans | 491,503,263.89 | 300,442,988.19 |
| Transactional financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Account payable | 606,941.85 | 606,941.85 |
| Prepayment received | 927,674.32 | 746,761.55 |
| Contract liabilities | ||
| Employees' wage payable | 3,440,073.04 | 3,215,013.16 |
| Taxes payable | 2,993,196.12 | 312,647.89 |
| Other payables | 28,068,648.70 | 109,837,934.17 |
| Including: interest payable | ||
| Dividend payable | ||
| Liabilities held for sales | ||
| Non-current liabilities due in 1 year | 520,872,206.95 | |
| Other current liabilities | ||
| Total current liabilities | 527,539,797.92 | 936,034,493.76 |
| Non-current liabilities: | ||
| Long-term loans | 70,000,000.00 | |
| Bond payable | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Lease liabilities | ||
| Long-term payable | ||
| Long-term employees‘ wage payable | ||
| Anticipated liabilities | ||
| Deferred earning | ||
| Deferred income tax liabilities | 73,837,511.85 | 64,351,075.92 |
| Other non-current liabilities | ||
| Total of non-current liabilities | 73,837,511.85 | 134,351,075.92 |
| Total liabilities | 601,377,309.77 | 1,070,385,569.68 |
| Owner‘s equity: | ||
| Share capital | 1,088,278,951.00 | 1,123,384,189.00 |
| Other equity tools | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 360,835.52 | 360,835.52 |
| Less: Shares in stock | 42,748,530.12 | |
| Other miscellaneous income | -371,129.71 | 1,287,629.38 |
| Special reserves | ||
| Surplus reserve | 106,783,436.96 | 159,805,930.34 |
| Retained profit | 1,282,911,974.38 | 1,236,002,518.79 |
| Total of owners‘ equity | 2,435,215,538.03 | 2,520,841,103.03 |
| Total of liabilities and owner‘s interest | 3,036,592,847.80 | 3,591,226,672.71 |
3. Consolidated Income Statement
In RMB
| Item | 2020 | 2019 |
| 1. Total revenue | 2,979,296,410.16 | 3,005,749,558.66 |
| Incl. Business income | 2,979,296,410.16 | 3,005,749,558.66 |
| Interest income | ||
| Insurance fee earned | ||
| Fee and commission received | ||
| 2. Total business cost | 2,595,803,195.98 | 2,601,531,253.53 |
| Incl. Business cost | 2,408,428,192.38 | 2,169,176,295.27 |
| Interest expense | ||
| Fee and commission paid | ||
| Insurance discharge payment | ||
| Net claim amount paid | ||
| Net insurance policy responsibility contract reserves provided | ||
| Insurance policy dividend paid | ||
| Reinsurance expenses |
| Taxes and surcharges | -222,323,473.74 | 61,963,170.98 |
| Sales expense | 39,303,536.85 | 57,584,186.20 |
| Administrative expense | 141,769,402.74 | 170,443,795.50 |
| R&D cost | 141,611,939.34 | 59,754,971.20 |
| Financial expenses | 87,013,598.41 | 82,608,834.38 |
| Including: interest cost | 84,492,438.91 | 84,330,416.17 |
| Interest income | 14,654,298.98 | 10,770,653.40 |
| Add: other gains | 15,413,171.18 | 7,616,772.29 |
| Investment gains (―-‖ for loss) | 1,274,767.24 | -1,909,644.55 |
| Incl. Investment gains from affiliates and joint ventures | -1,319,862.88 | -2,152,583.08 |
| Financial assets derecognised as a result of amortized cost | -6,148,967.92 | -8,047,524.45 |
| Exchange gains ("-" for loss) | ||
| Net open hedge gains (―-‖ for loss) | ||
| Gains from change of fair value (―-― for loss) | 19,221,299.32 | 42,618,039.60 |
| Credit impairment ("-" for loss) | 29,820,678.51 | -34,518,434.36 |
| Investment impairment loss ("-" for loss) | 52,970,037.82 | 218,619.24 |
| Investment gains ("-" for loss) | -252,262.23 | -101,676.86 |
| 3. Operational profit ("-" for loss) | 501,940,906.02 | 418,141,980.49 |
| Plus: non-operational income | 522,504.72 | 2,857,177.74 |
| Less: non-operational expenditure | 35,564,536.75 | 3,965,865.48 |
| 4. Gross profit ("-" for loss) | 466,898,873.99 | 417,033,292.75 |
| Less: Income tax expenses | 85,121,657.12 | 70,271,688.45 |
| 5. Net profit ("-" for net loss) | 381,777,216.87 | 346,761,604.30 |
| (1) By operating consistency | ||
| 1. Net profit from continuous operation ("-" for net loss) | 381,777,216.87 | 347,246,227.22 |
| 2. Net profit from discontinuous operation ("-" for net loss) | -484,622.92 | |
| (2) By ownership | ||
| 1. Net profit attributable to the shareholders of the parent company | 382,051,466.98 | 347,771,182.73 |
| 2. Minor shareholders‘ equity | -274,250.11 | -1,009,578.43 |
| 6. After-tax net amount of other misc. incomes | 2,553,576.88 | -2,691,071.26 |
| After-tax net amount of other misc. incomes attributed to parent's owner | 2,553,576.88 | -2,691,071.26 |
| (1) Other misc. incomes that cannot be re-classified into gain and loss | -2,478,954.16 | -4,025,604.80 |
| 1. Re-measure the change in the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method | ||
| 3. Fair value change of investment in other equity tools | -2,478,954.16 | -4,025,604.80 |
| 4. Fair value change of the Company's credit risk | ||
| 5. Others | ||
| (2) Other misc. incomes that will be re-classified into gain and loss | 5,032,531.04 | 1,334,533.54 |
| 1. Other comprehensive income that can be transferred to profit or loss under the equity method | ||
| 2. Fair value change of other debt investment | ||
| 3. Gains and losses from changes in fair value of available-for-sale financial assets | ||
| 4. Other credit investment credit impairment provisions | ||
| 5. Cash flow hedge reserve | 5,232,583.76 | 1,208,493.78 |
| 6. Translation difference of foreign exchange statement | -200,052.72 | 126,039.76 |
| 7. Others | ||
| After-tax net of other misc. income attributed to minority shareholders | ||
| 7. Total of misc. incomes | 384,330,793.75 | 344,070,533.04 |
| Total of misc. incomes attributable to the owners of the parent company | 384,605,043.86 | 345,080,111.47 |
| Total misc gains attributable to the minor shareholders | -274,250.11 | -1,009,578.43 |
| 8. Earnings per share: | ||
| (1) Basic earnings per share | 0.35 | 0.31 |
| (2) Diluted earnings per share | 0.35 | 0.31 |
Net profit contributed by entities merged under common control in the report period was RMB0.00, net profit realized by partiesmerged during the previous period is RMB0.00.Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua
4. Income Statement of the Parent Company
In RMB
| Item | 2020 | 2019 |
| 1. Turnover | 24,471,432.70 | 28,729,890.94 |
| Less: Operation cost | 549,538.73 | 773,571.29 |
| Taxes and surcharges | 1,160,449.37 | 1,348,489.24 |
| Sales expense | ||
| Administrative expense | 25,339,223.31 | 27,178,767.85 |
| R&D cost | ||
| Financial expenses | 25,294,329.52 | 38,854,726.68 |
| Including: interest cost | 25,864,986.10 | 34,985,463.24 |
| Interest income | 2,892,457.34 | 2,165,024.86 |
| Add: other gains | 678,793.43 | 408,311.72 |
| Investment gains (―-‖ for loss) | 138,217,642.91 | 1,087,133,456.16 |
| Incl. Investment gains from affiliates and joint ventures | ||
| Financial assets derecognised as a result of amortized cost ("-" for loss) | ||
| Net open hedge gains (―-‖ for loss) | ||
| Gains from change of fair value (―-― for loss) | 39,143,434.00 | 1,784,860.63 |
| Credit impairment ("-" for loss) | -3,642.40 | 40,817.64 |
| Investment impairment loss ("-" for loss) |
| Investment gains ("-" for loss) | -2,253.68 | |
| 2. Operational profit (―-‖ for loss) | 150,161,866.03 | 1,049,941,782.03 |
| Plus: non-operational income | 51,867.27 | 26,335.45 |
| Less: non-operational expenditure | 2,592.22 | 1,223,230.35 |
| 3. Gross profit ("-" for loss) | 150,211,141.08 | 1,048,744,887.13 |
| Less: Income tax expenses | 37,629,582.04 | -8,892,465.53 |
| 4. Net profit (―-‖ for net loss) | 112,581,559.04 | 1,057,637,352.66 |
| (1) Net profit from continuous operation ("-" for net loss) | ||
| (2) Net profit from discontinuous operation ("-" for net loss) | ||
| 5. After-tax net amount of other misc. incomes | -1,658,759.09 | -2,302,498.50 |
| (1) Other misc. incomes that cannot be re-classified into gain and loss | -1,658,759.09 | -2,302,498.50 |
| 1. Re-measure the change in the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method | ||
| 3. Fair value change of investment in other equity tools | -1,658,759.09 | -2,302,498.50 |
| 4. Fair value change of the Company's credit risk | ||
| 5. Others | ||
| (2) Other misc. incomes that will be re-classified into gain and loss | ||
| 1. Other comprehensive income that can be transferred to profit or loss under the equity method | ||
| 2. Fair value change of other debt investment | ||
| 3. Gains and losses from changes in fair value of available-for-sale financial assets | ||
| 4. Other credit investment credit impairment provisions |
| 5. Cash flow hedge reserve | ||
| 6. Translation difference of foreign exchange statement | ||
| 7. Others | ||
| 6. Total of misc. incomes | 110,922,799.95 | 1,055,334,854.16 |
| 7. Earnings per share: | ||
| (1) Basic earnings per share | ||
| (2) Diluted earnings per share |
5. Consolidated Cash Flow Statement
In RMB
| Item | 2020 | 2019 |
| 1. Net cash flow from business operations: | ||
| Cash received from sales of products and providing of services | 3,367,623,820.15 | 2,648,185,771.07 |
| Net increase of customer deposits and capital kept for brother company | ||
| Net increase of loans from central bank | ||
| Net increase of inter-bank loans from other financial bodies | ||
| Cash received against original insurance contract | ||
| Net cash received from reinsurance business | ||
| Net increase of client deposit and investment | ||
| Cash received as interest, processing fee, and commission | ||
| Net increase of inter-bank fund received | ||
| Net increase of repurchasing business | ||
| Net cash received from trading securities | ||
| Tax refunded | 19,606,555.37 | 5,311,628.37 |
| Other cash received from business operation | 169,842,621.11 | 91,894,481.18 |
| Sub-total of cash inflow from business operations | 3,557,072,996.63 | 2,745,391,880.62 |
| Cash paid for purchasing products and services | 2,350,061,484.78 | 1,940,970,927.40 |
| Net increase of client trade and advance | ||
| Net increase of savings in central bank and brother company | ||
| Cash paid for original contract claim | ||
| Net increase in funds dismantled | ||
| Cash paid for interest, processing fee and commission | ||
| Cash paid for policy dividend | ||
| Cash paid to and for the staff | 323,217,126.27 | 330,737,740.20 |
| Taxes paid | 166,354,101.79 | 244,444,228.84 |
| Other cash paid for business activities | 168,730,497.89 | 234,523,814.95 |
| Sub-total of cash outflow from business operations | 3,008,363,210.73 | 2,750,676,711.39 |
| Cash flow generated by business operations, net | 548,709,785.90 | -5,284,830.77 |
| 2. Cash flow generated by investment: | ||
| Cash received from investment recovery | 9,127,070,331.13 | 7,028,386,864.50 |
| Cash received as investment profit | 16,736,972.11 | 59,694,513.21 |
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 26,937.09 | 12,519,211.48 |
| Net cash received from disposal of subsidiaries or other operational units | ||
| Other investment-related cash received | ||
| Sub-total of cash inflow generated from investment | 9,143,834,240.33 | 7,100,600,589.19 |
| Cash paid for construction of fixed | 124,920,360.11 | 201,244,475.00 |
| assets, intangible assets and other long-term assets | ||
| Cash paid as investment | 8,893,591,857.72 | 7,292,079,000.00 |
| Net increase of loan against pledge | ||
| Net cash paid for acquiring subsidiaries and other operational units | 61,934,830.31 | |
| Other cash paid for investment | 135,741.00 | |
| Subtotal of cash outflows | 9,018,647,958.83 | 7,555,258,305.31 |
| Cash flow generated by investment activities, net | 125,186,281.50 | -454,657,716.12 |
| 3. Cash flow generated by financing activities: | ||
| Cash received from investment | 1,200,000.00 | |
| Incl. Cash received from investment attracted by subsidiaries from minority shareholders | 1,200,000.00 | |
| Cash received from borrowed loans | 2,746,860,091.27 | 1,006,523,338.17 |
| Other cash received from financing activities | 88,312,942.36 | |
| Subtotal of cash inflow from financing activities | 2,748,060,091.27 | 1,094,836,280.53 |
| Cash paid to repay debts | 2,689,787,953.39 | 418,000,000.00 |
| Cash paid as dividend, profit, or interests | 167,293,954.61 | 320,109,344.09 |
| Incl. Dividend and profit paid by subsidiaries to minority shareholders | ||
| Other cash paid for financing activities | 264,136,912.25 | 128,428,226.25 |
| Subtotal of cash outflow from financing activities | 3,121,218,820.25 | 866,537,570.34 |
| Net cash flow generated by financing activities | -373,158,728.98 | 228,298,710.19 |
| 4. Influence of exchange rate changes on cash and cash equivalents | -1,754,853.93 | 722,848.92 |
| 5. Net increase in cash and cash equivalents | 298,982,484.49 | -230,920,987.78 |
| Plus: Balance of cash and cash | 725,269,902.90 | 956,190,890.68 |
| equivalents at the beginning of term | ||
| 6. Balance of cash and cash equivalents at the end of the period | 1,024,252,387.39 | 725,269,902.90 |
6. Cash Flow Statement of the Parent Company
In RMB
| Item | 2020 | 2019 |
| 1. Net cash flow from business operations: | ||
| Cash received from sales of products and providing of services | 25,311,576.38 | 21,696,664.72 |
| Tax refunded | 232,652.87 | |
| Other cash received from business operation | 5,923,588,766.78 | 3,227,285,187.16 |
| Sub-total of cash inflow from business operations | 5,949,132,996.03 | 3,248,981,851.88 |
| Cash paid for purchasing products and services | 1,296,998.99 | 1,693,694.68 |
| Cash paid to and for the staff | 17,120,262.06 | 17,754,587.59 |
| Taxes paid | 9,529,518.44 | 4,452,135.09 |
| Other cash paid for business activities | 5,193,502,562.12 | 4,620,509,035.31 |
| Sub-total of cash outflow from business operations | 5,221,449,341.61 | 4,644,409,452.67 |
| Cash flow generated by business operations, net | 727,683,654.42 | -1,395,427,600.79 |
| 2. Cash flow generated by investment: | ||
| Cash received from investment recovery | 3,561,034,532.05 | 2,696,000,000.00 |
| Cash received as investment profit | 138,917,642.91 | 1,187,133,456.16 |
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 6,235.50 | |
| Net cash received from disposal of subsidiaries or other operational units | ||
| Other investment-related cash received |
| Sub-total of cash inflow generated from investment | 3,699,958,410.46 | 3,883,133,456.16 |
| Cash paid for construction of fixed assets, intangible assets and other long-term assets | 58,173.88 | 254,183.30 |
| Cash paid as investment | 3,775,526,290.70 | 2,725,000,001.00 |
| Net cash paid for acquiring subsidiaries and other operational units | ||
| Other cash paid for investment | ||
| Subtotal of cash outflows | 3,775,584,464.58 | 2,725,254,184.30 |
| Cash flow generated by investment activities, net | -75,626,054.12 | 1,157,879,271.86 |
| 3. Cash flow generated by financing activities: | ||
| Cash received from investment | ||
| Cash received from borrowed loans | 690,000,000.00 | 400,000,000.00 |
| Other cash received from financing activities | 88,312,942.36 | |
| Subtotal of cash inflow from financing activities | 690,000,000.00 | 488,312,942.36 |
| Cash paid to repay debts | 1,090,000,000.00 | 10,000,000.00 |
| Cash paid as dividend, profit, or interests | 80,238,023.19 | 259,087,314.23 |
| Other cash paid for financing activities | 142,820,271.29 | 88,428,226.25 |
| Subtotal of cash outflow from financing activities | 1,313,058,294.48 | 357,515,540.48 |
| Net cash flow generated by financing activities | -623,058,294.48 | 130,797,401.88 |
| 4. Influence of exchange rate changes on cash and cash equivalents | 237,736.33 | 498,258.88 |
| 5. Net increase in cash and cash equivalents | 29,237,042.15 | -106,252,668.17 |
| Plus: Balance of cash and cash equivalents at the beginning of term | 175,341,953.63 | 281,594,621.80 |
| 6. Balance of cash and cash equivalents at the end of the period | 204,578,995.78 | 175,341,953.63 |
7. Statement of Change in Owners’ Equity (Consolidated)
Amount of the Current Term
In RMB
| Item | 2020 | ||||||||||||||
| Owners' Equity Attributable to the Parent Company | Minor shareholders‘ equity | Total of owners‘ equity | |||||||||||||
| Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserve | Common risk provisions | Retained profit | Others | Subtotal | |||||
| Preferred share | Perpetual bond | Others | |||||||||||||
| 1. Balance at the end of last year | 1,123,384,189.00 | 1,454,191.59 | -475,409.25 | 159,805,930.34 | 3,898,626,177.99 | 5,182,795,079.67 | 48,410,009.60 | 5,231,205,089.27 | |||||||
| Plus: Changes in accounting policies | |||||||||||||||
| Correction of previous errors | |||||||||||||||
| Consolidation of entities under common control | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance at the beginning of current year | 1,123,384,189.00 | 1,454,191.59 | -475,409.25 | 159,805,930.34 | 3,898,626,177.99 | 5,182,795,079.67 | 48,410,009.60 | 5,231,205,089.27 | |||||||
| 3. Change amount in the current period (―-― for decrease) | -35,105,238.00 | 10,005,396.81 | 42,748,530.12 | 2,553,576.88 | -53,022,493.38 | 316,379,363.53 | 198,062,075.72 | 18,128,826.49 | 216,190,902.21 | ||||||
| (1) Total of misc. incomes | 2,553,576.88 | 382,051,466.98 | 384,605,043.86 | -274,250.11 | 384,330,793.75 | ||||||||||
| (2) Investment | -35,1 | 42,748 | -64,28 | -142,1 | 7,450, | -134,6 | |||||||||
| or decreasing of capital by owners | 05,238.00 | ,530.12 | 0,649.28 | 34,417.40 | 000.00 | 84,417.40 | |||||||||
| 1. Common shares invested by owners | -35,105,238.00 | 42,748,530.12 | -64,280,649.28 | -142,134,417.40 | 7,450,000.00 | -134,684,417.40 | |||||||||
| 2. Capital contributed by other equity instrument holders | |||||||||||||||
| 3. Amount of shares paid and accounted as owners' equity | |||||||||||||||
| 4. Others | |||||||||||||||
| (3) Profit allotment | 11,258,155.90 | -65,672,103.45 | -54,413,947.55 | -54,413,947.55 | |||||||||||
| 1. Provision of surplus reserves | 11,258,155.90 | -11,258,155.90 | |||||||||||||
| 2. Common risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -54,413,947.55 | -54,413,947.55 | -54,413,947.55 | ||||||||||||
| 4. Others | |||||||||||||||
| (4) Internal carry-over of owners' equity | |||||||||||||||
| 1. Capitalizing of capital reserves (or share capital) | |||||||||||||||
| 2. Capitalizing of surplus reserves (or share capital) | |||||||||||||||
| 3. Surplus |
| reserves used to cover losses | |||||||||||||||
| 4. Retained gain transferred due to change in set benefit program | |||||||||||||||
| 5. Other miscellaneous income | |||||||||||||||
| 6. Others | |||||||||||||||
| (5) Special reserves | |||||||||||||||
| 1. Provided this year | |||||||||||||||
| 2. Used this period | |||||||||||||||
| (6) Others | 10,005,396.81 | 10,005,396.81 | 10,953,076.60 | 20,958,473.41 | |||||||||||
| 4. Balance at the end of this period | 1,088,278,951.00 | 11,459,588.40 | 42,748,530.12 | 2,078,167.63 | 106,783,436.96 | 4,215,005,541.52 | 5,380,857,155.39 | 66,538,836.09 | 5,447,395,991.48 |
Amount of the Previous Term
In RMB
| Item | 2019 | ||||||||||||||
| Owners' Equity Attributable to the Parent Company | Minor shareholders‘ equity | Total of owners‘ equity | |||||||||||||
| Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserve | Common risk provisions | Retained profit | Others | Subtotal | |||||
| Preferred share | Perpetual bond | Others | |||||||||||||
| 1. Balance at the end of last year | 1,155,481,686.00 | 1,454,191.59 | 10,831,437.66 | 7,382,087.59 | 120,475,221.40 | 3,921,225,872.96 | 5,195,187,621.88 | 5,195,187,621.88 | |||||||
| Plus: Changes in accounting policies | -5,166,425.58 | 524,860.03 | -39,930,304.63 | -44,571,870.18 | -44,571,870.18 | ||||||||||
| Correction of previous errors | |||||||||||||||
| Consolidation of entities under common control | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance at the beginning of current year | 1,155,481,686.00 | 1,454,191.59 | 10,831,437.66 | 2,215,662.01 | 121,000,081.43 | 3,881,295,568.33 | 5,150,615,751.70 | 5,150,615,751.70 | |||||||
| 3. Change amount in the current period (―-― for decrease) | -32,097,497.00 | -10,831,437.66 | -2,691,071.26 | 38,805,848.91 | 17,330,609.66 | 32,179,327.97 | 48,410,009.60 | 80,589,337.57 | |||||||
| (1) Total of misc. incomes | -2,691,071.26 | 347,771,182.73 | 345,080,111.47 | -1,009,578.43 | 344,070,533.04 | ||||||||||
| (2) Investment or decreasing of capital by owners | -32,097,497.00 | -10,831,437.66 | -66,957,886.36 | -88,223,945.70 | -88,223,945.70 | ||||||||||
| 1. Common shares invested by owners | -32,097,497.00 | -10,831,437.66 | -66,957,886.36 | -88,223,945.70 | -88,223,945.70 | ||||||||||
| 2. Capital contributed by other equity instrument holders | |||||||||||||||
| 3. Amount of shares paid and accounted as owners' equity | |||||||||||||||
| 4. Others | |||||||||||||||
| (3) Profit allotment | 105,763,735. | -330,440,573 | -224,676,837 | -224,676,837.8 |
| 27 | .07 | .80 | 0 | ||||||||||||
| 1. Provision of surplus reserves | 105,763,735.27 | -105,763,735.27 | |||||||||||||
| 2. Common risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -224,676,837.80 | -224,676,837.80 | -224,676,837.80 | ||||||||||||
| 4. Others | |||||||||||||||
| (4) Internal carry-over of owners' equity | |||||||||||||||
| 1. Capitalizing of capital reserves (or share capital) | |||||||||||||||
| 2. Capitalizing of surplus reserves (or share capital) | |||||||||||||||
| 3. Surplus reserves used to cover losses | |||||||||||||||
| 4. Retained gain transferred due to change in set benefit program | |||||||||||||||
| 5. Other miscellaneous income | |||||||||||||||
| 6. Others | |||||||||||||||
| (5) Special reserves | |||||||||||||||
| 1. Provided this year | |||||||||||||||
| 2. Used this period | |||||||||||||||
| (6) Others | 49,419, | 49,419, |
| 588.03 | 588.03 | ||||||||||||||
| 4. Balance at the end of this period | 1,123,384,189.00 | 1,454,191.59 | -475,409.25 | 159,805,930.34 | 3,898,626,177.99 | 5,182,795,079.67 | 48,410,009.60 | 5,231,205,089.27 |
8. Statement of Change in Owners’ Equity (Parent Company)
Amount of the Current Term
In RMB
| Item | 2020 | |||||||||||
| Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserve | Retained profit | Others | Total of owners‘ equity | |||
| Preferred share | Perpetual bond | Others | ||||||||||
| 1. Balance at the end of last year | 1,123,384,189.00 | 360,835.52 | 1,287,629.38 | 159,805,930.34 | 1,236,002,518.79 | 2,520,841,103.03 | ||||||
| Plus: Changes in accounting policies | ||||||||||||
| Correction of previous errors | ||||||||||||
| Others | ||||||||||||
| 2. Balance at the beginning of current year | 1,123,384,189.00 | 360,835.52 | 1,287,629.38 | 159,805,930.34 | 1,236,002,518.79 | 2,520,841,103.03 | ||||||
| 3. Change amount in the current period (―-― for decrease) | -35,105,238.00 | 42,748,530.12 | -1,658,759.09 | -53,022,493.38 | 46,909,455.59 | -85,625,565.00 | ||||||
| (1) Total of misc. incomes | -1,658,759.09 | 112,581,559.04 | 110,922,799.95 | |||||||||
| (2) Investment or decreasing of capital by | -35,105,238.00 | 42,748,530.12 | -64,280,649.28 | -142,134,417.40 | ||||||||
| owners | ||||||||||||
| 1. Common shares invested by owners | -35,105,238.00 | 42,748,530.12 | -64,280,649.28 | -142,134,417.40 | ||||||||
| 2. Capital contributed by other equity instrument holders | ||||||||||||
| 3. Amount of shares paid and accounted as owners' equity | ||||||||||||
| 4. Others | ||||||||||||
| (3) Profit allotment | 11,258,155.90 | -65,672,103.45 | -54,413,947.55 | |||||||||
| 1. Provision of surplus reserves | 11,258,155.90 | -11,258,155.90 | ||||||||||
| 2. Distribution to owners (or shareholders) | -54,413,947.55 | -54,413,947.55 | ||||||||||
| 3. Others | ||||||||||||
| (4) Internal carry-over of owners' equity | ||||||||||||
| 1. Capitalizing of capital reserves (or share capital) | ||||||||||||
| 2. Capitalizing of surplus reserves (or share capital) | ||||||||||||
| 3. Surplus reserves used to cover losses | ||||||||||||
| 4. Retained gain transferred due to change in set benefit program |
| 5. Other miscellaneous income | ||||||||||||
| 6. Others | ||||||||||||
| (5) Special reserves | ||||||||||||
| 1. Provided this year | ||||||||||||
| 2. Used this period | ||||||||||||
| (6) Others | ||||||||||||
| 4. Balance at the end of this period | 1,088,278,951.00 | 360,835.52 | 42,748,530.12 | -371,129.71 | 106,783,436.96 | 1,282,911,974.38 | 2,435,215,538.03 |
Amount of the Previous Term
In RMB
| Item | 2019 | |||||||||||
| Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserve | Retained profit | Others | Total of owners‘ equity | |||
| Preferred share | Perpetual bond | Others | ||||||||||
| 1. Balance at the end of last year | 1,155,481,686.00 | 360,835.52 | 10,831,437.66 | 8,756,553.46 | 120,475,221.40 | 504,081,999.00 | 1,778,324,857.72 | |||||
| Plus: Changes in accounting policies | -5,166,425.58 | 524,860.03 | 4,723,740.20 | 82,174.65 | ||||||||
| Correction of previous errors | ||||||||||||
| Others | ||||||||||||
| 2. Balance at the beginning of current year | 1,155,481,686.00 | 360,835.52 | 10,831,437.66 | 3,590,127.88 | 121,000,081.43 | 508,805,739.20 | 1,778,407,032.37 | |||||
| 3. Change amount in the current period | -32,097,497.00 | -10,831,437.66 | -2,302,498.50 | 38,805,848.91 | 727,196,779.59 | 742,434,070.66 | ||||||
| (―-― for decrease) | ||||||||||||
| (1) Total of misc. incomes | -2,302,498.50 | 1,057,637,352.66 | 1,055,334,854.16 | |||||||||
| (2) Investment or decreasing of capital by owners | -32,097,497.00 | -10,831,437.66 | -66,957,886.36 | -88,223,945.70 | ||||||||
| 1. Common shares invested by owners | -32,097,497.00 | -10,831,437.66 | -66,957,886.36 | -88,223,945.70 | ||||||||
| 2. Capital contributed by other equity instrument holders | ||||||||||||
| 3. Amount of shares paid and accounted as owners' equity | ||||||||||||
| 4. Others | ||||||||||||
| (3) Profit allotment | 105,763,735.27 | -330,440,573.07 | -224,676,837.80 | |||||||||
| 1. Provision of surplus reserves | 105,763,735.27 | -105,763,735.27 | ||||||||||
| 2. Distribution to owners (or shareholders) | -224,676,837.80 | -224,676,837.80 | ||||||||||
| 3. Others | ||||||||||||
| (4) Internal carry-over of owners' equity | ||||||||||||
| 1. Capitalizing of capital reserves (or share capital) | ||||||||||||
| 2. Capitalizing of surplus reserves (or share capital) |
| 3. Surplus reserves used to cover losses | ||||||||||||
| 4. Retained gain transferred due to change in set benefit program | ||||||||||||
| 5. Other miscellaneous income | ||||||||||||
| 6. Others | ||||||||||||
| (5) Special reserves | ||||||||||||
| 1. Provided this year | ||||||||||||
| 2. Used this period | ||||||||||||
| (6) Others | ||||||||||||
| 4. Balance at the end of this period | 1,123,384,189.00 | 360,835.52 | 1,287,629.38 | 159,805,930.34 | 1,236,002,518.79 | 2,520,841,103.03 |
III. General Information
1. LITITONG's Profile
China Fangda Group Co., Ltd. (hereinafter referred to as "the Company") was approved in October 1995 by the General Officeof the Shenzhen Municipal People's Government with the letter of Shenfu Office (1995) No. 194, in the original "Shenzhen FangdaBuilding Materials Co., Ltd." on the basis of the establishment of the fundraising method. The unified social credit code is:
91440300192448589C; registered address: Fangda Technology Building, Keji South 12th Road, South District, High-techIndustrial Park, Nanshan District, Shenzhen. Mr. Xiong Jianming is the legal representative.
The Company issued foreign currency shares (B shares) and local currency shares (A shares) and listed in November 1995 andApril 1996 respectively in Shenzhen Stock Exchange. The Company received the Reply to the Non-public Share Issuance of FangdaChina Group Co., Ltd. (CSRC License [2016] No.825) to allow the Company to conduct non-public issuance of 32,184,931 A-sharesin June 20116. According to the profit distribution plan for 2016 approved by the 2016 general shareholders' meeting, the Companyissued five shares for every ten shares to all shareholders through surplus capitalization based on the total 789,094,836 shares onDecember 31, 2016. The registered capital at the end of 2017 was RMB1,183,642,254.00. In August 2018, the Company repurchasedand cancelled 28,160,568 B-shares. In January 2019, the Company repurchased and cancelled 32,097,497 B-shares. The Companyrepurchased and cancelled in May 2020, and cancelled 35,105,238 B shares, and the existing registered capital isRMB1,088,278,951.00.
The Company has established a corporate governance structure that comprises shareholders‘ meeting, board of directors andsupervisory committee. Currently, the Company sets up the President Office, Administrative Department, HR Department, EnterpriseManagement Department, Financial Department, Audit and Supervisory Department, Securities Department, Technology InnovationDepartment and IT Department and has established subsidiaries including Fangda Decoration, Fangda Chuangzhi, Fangda NewMaterial, Fangda Property and Fangda New Energy.
The business nature and main business operations of the Company and subsidiaries ("the Group") include (1) production andsales of curtain wall materials, design, production and installation of construction curtain walls; (2) assembly and production ofsubway screen doors; (3) development and operation of real estate projects on land, of which rights have been obtained lawfully; (4)R&D, installation and sales of PV devices, design and installation of PV power plants.Date of financial statement approval: This financial statement is approved by the Board of Directors of the Company on March19, 2021.
2. Consolidation Scope and Change
This part of the simplified disclosure is as follows: The Company in the current period includes a total of 27 subsidiaries, ofwhich 4 have been added this year and 2 have been reduced this year. For details, please refer to "Note 6, Change of the scope ofmerger" and "Note 7, Rights and Interests in Other Subjects".
IV. Basis for the preparation of financial statements
1. Preparation basis
The Company prepares the financial statements based on continuous operation and according to actual transactions and events,with figures confirmed and measured in compliance with the Accounting Standards for Business Enterprises and other specificaccount standards, application guide and interpretations. The Company has also disclosed related financial information according tothe requirement of the Regulations of Information Disclosure No.15 – General Provisions for Financial Statements (Revised in 2014)issued by the CSRC.
2. Continuous operation
The Company assessed the continuing operations capability of the Company for the 12 months from the end of the reportingperiod. No matters were found that would affect the Company's ability to continue as a going concern. It is reasonable for theCompany to prepare financial statements based on continuing operations.
V. Significant Account Policies and Estimates
The following major accounting policies and accounting estimates shall be formulated in accordance with the accountingstandards of the enterprise. Unmentioned operations are carried out in accordance with the relevant accounting policies in theenterprise accounting standards.
1. Statement of compliance to the Enterprise Accounting Standard
These financial statements meet the requirements of the Accounting Standards for Business Enterprises and truly and fullyreflect the Company‘s financial status, performance result, changes in shareholders‘ equity and cash flows.
2. Fiscal Period
The Company The fiscal period ranges between January 1 and December 31 of the Gregorian calendar.
3. Operation period
Our normal business cycle is one year
4. Bookkeeping standard money
The Company's bookkeeping standard currency is Renminbi, and overseas subsidiaries are based on the currency of the maineconomic environment in which they operate.
5. Accounting treatment of the entities under common and different control
(1) Consolidation of entities under common control
The assets and liabilities acquired by the Company in a business combination are measured at the book value of the combinedparty in the consolidated financial statements of the ultimate controlling party on the date of combination. Among them, if theaccounting policy adopted by the merger party is different from that adopted by the Company before the merger, the accountingpolicy is unified based on the principle of importance, that is, the book value of the assets and liabilities of the merger party isadjusted according to the accounting policy of the Company. If there is a difference between the book value of the net assets acquiredby the Company in the business combination and the book value of the consideration paid, first adjust the balance of the capital
reserve (capital premium or equity premium), the balance of the capital reserve (capital premium or equity premium) If it isinsufficient to offset, the surplus reserve and undistributed profits will be offset in sequence.
See Note V, 6 for the accounting treatment method of business combination under the same control through step-by-steptransaction.
(2) Consolidation of entities under different control
All identifiable assets and liabilities acquired by the Company during the merger shall be measured at its fair value on the dateof purchase. Among them, if the accounting policy adopted by the merger party is different from that adopted by the Company beforethe merger, the accounting policy is unified based on the principle of importance, that is, the book value of the assets and liabilities ofthe merger party is adjusted according to the accounting policy of the Company. The merger cost of the Company on the date ofpurchase is greater than the fair value of the assets and liabilities recognized by the purchaser in the merger, and is recognized asgoodwill. If the merger cost is less than the difference between the identifiable assets and the fair value of the liabilities obtained bythe purchaser in the enterprise merger, the merger cost and the fair value of the identifiable assets and the liabilities obtained by thepurchaser in the enterprise merger are reviewed, and the merger cost is still less than the fair value of the identifiable assets andliabilities obtained by the purchaser after the review, the difference is considered as the profit and loss of the current period of themerger.
See Note V, 6 for the accounting treatment method of business combination under the same control through step-by-steptransaction.
(3) Treatment of related transaction fee in enterprise merger
Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal services occurred relating tothe merger of entities are accounted into current income account when occurred. The transaction fees of equity certificates or liabilitycertificates issued by the purchaser for payment for the acquisition are accounted at the initial amount of the certificates.
6. Preparation of Consolidated Financial Statements
(1) Consolidation scope
The consolidated scope of the consolidated financial statements is determined on a control basis and includes not onlysubsidiaries determined on the basis of voting rights (or similar voting rights) themselves or in conjunction with other arrangements,but also structured subjects determined on the basis of one or more contractual arrangements.
Control means the power possessed by the Company on invested entities to share variable returns by participating in relatedactivities of the invested entities and to impact the amount of the returns by using the power. The subsidiary company is the subjectcontrolled by the Company (including the enterprise, the divisible part of the invested unit and the structured subject controlled bythe enterprise, etc.). The structured subject is the subject which is not designed to determine the controlling party by taking the votingright or similar right as the decisive factor.
(2) Preparation of Consolidated Financial Statements
The Company prepares consolidated financial statements based on the financial statements of itself and its subsidiaries andbased on other relevant information.
The Company compiles consolidated financial statements, regards the whole enterprise group as an accounting entity, reflectsthe overall financial status, operating results and cash flow of the enterprise group according to the confirmation, measurement andpresentation requirements of the relevant enterprise accounting standards, and the unified accounting policy and accounting period.
① Merge the assets, liabilities, owner's rights and interests, income, expenses and cash flow of parent company and subsidiarycompany.
② Offset the long-term equity investment of the parent company to the subsidiary company and the share of the parentcompany in the ownership rights of the subsidiary company.
③ Offset the influence of internal transaction between parent company, subsidiary company and subsidiary company. If aninternal transaction indicates that the relevant asset has suffered an impairment loss, the part of the loss shall be confirmed in full.
④ adjust the special transaction from the angle of enterprise group.
（3） Processing of subsidiaries during the reporting period
① Increase of subsidiaries or business
A. Subsidiary or business increased by business combination under the same control(A) When preparing the consolidated balance sheet, adjust the opening number of the consolidated balance sheet and adjust therelated items of the comparative statement. The same report entity as the consolidated balance sheet will exist from the time of thefinal control party.(B) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the business combination fromthe beginning of the current period to the end of the reporting period are included in the consolidated cash flow statement, and therelated items of the comparative statement are adjusted, which is regarded as the combined report body since the final The controllerhas been there since the beginning of control.(C) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the business combination fromthe beginning of the current period to the end of the reporting period are included in the consolidated cash flow statement, and therelated items of the comparative statement are adjusted, which is regarded as the combined report body since the final The controllerhas been there since the beginning of control.B. Subsidiary or business increased by business combination under the same control(A) When preparing the consolidated balance sheet, the opening number of the consolidated balance sheet is not adjusted.(B) When preparing the consolidated profit statement, the income, expense and profit of the subsidiary company and thebusiness Purchase date and Closing balance shall be included in the consolidated profit statement.(C) When the consolidated cash flow statement is prepared, the cash flow from the purchase date of the subsidiary to the end ofthe reporting period is included in the consolidated cash flow statement.
② Disposal of subsidiaries or business
A. When preparing the consolidated balance sheet, the opening number of the consolidated balance sheet is not adjusted.B. When preparing the consolidated profit statement, the income, expense and profit of the subsidiary company and thebusiness opening and disposal date shall be included in the consolidated profit statement.
C. When the consolidated cash flow statement is prepared, the cash flow from the Beginning of the period of the subsidiary tothe end of the reporting period is included in the consolidated cash flow statement.
(4) Special considerations in consolidation offsets
① The long-term equity investment held by a subsidiary company shall be regarded as the inventory shares of the Company asa subtraction of the owner's rights and interests, which shall be listed under the item of "subtraction: Stock shares" under the item ofowner's rights and interests in the consolidated balance sheet.
The long-term equity investments held by the subsidiaries are offset by the shares of the shareholders of the subsidiaries.
② The "special reserve" and "general risk preparation" projects, because they are neither real capital (or share capital) norcapital reserve, but also different from the retained income and undistributed profits, are restored according to the ownership of theparent company after the long-term equity investment is offset by the ownership rights and interests of the subsidiary company.
③ If there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet and thetaxable basis of the taxpayer due to the offset of the unrealized internal sales gain or loss, the deferred income tax asset or thedeferred income tax liability is confirmed in the consolidated balance sheet, and the income tax expense in the consolidated profitstatement is adjusted, with the exception of the deferred income tax related to the transaction or event directly included in the owner'sequity and the merger of the enterprise.
④ The unrealized internal transaction gains and losses incurred by the Company from selling assets to subsidiaries shall befully offset against the "net profit attributable to the owners of the parent company". The unrealized internal transaction gains andlosses arising from the sale of assets by the subsidiary to the Company shall be offset between the ―net profit attributable to theowners of the parent company‖ and the ―minority shareholder gains and losses‖ in accordance with the Company‘s distribution ratioto the subsidiary. The unrealized internal transaction gains and losses arising from the sale of assets between subsidiaries shall be
offset between the "net profit attributable to the owners of the parent company" and the "minority shareholders' gains and losses" inaccordance with the Company's distribution ratio to the seller's subsidiary .
⑤ If the current loss shared by the minority shareholders of the subsidiary exceeds the share of the minority shareholders inthe owner ‘s equity of the subsidiary at the beginning of the period, the balance should still be offset against the minorityshareholders ‘equity.
(5) Accounting treatment of special transactions
① Purchase minority shareholders' equity
The Company purchases the shares of the subsidiaries owned by the minority shareholders of the subsidiaries. In the individualfinancial statements, the investment costs of the newly acquired long-term investments of the minority shares shall be measured atthe fair value of the price paid. In the consolidated financial statements, the difference between the newly acquired long-term equityinvestment due to the purchase of minority equity and the share of net assets that should be continuously calculated by the subsidiarysince the purchase date or the merger date should be adjusted according to the new shareholding ratio. The product (capital premiumor equity premium), if the capital reserve is insufficient to offset, the surplus reserve and undistributed profits are offset in turn.
② Step-by-step acquisition of control of the subsidiary through multiple transactions
A. Enterprise merger under common control through multiple transactions
On the date of the merger, the Company determines the initial investment cost of the long-term equity investment in theindividual financial statements based on the share of the subsidiary ‘s net assets that should be enjoyed after the merger in the finalcontroller ‘s consolidated financial statements; the initial investment cost and the The difference between the book value of thelong-term equity investment before the merger plus the book value of the consideration paid for new shares acquired on the mergerdate, the capital reserve (capital premium or equity premium) is adjusted, and the capital reserve (capital premium or equity premium)is insufficient to offset Reduced, in turn offset the surplus reserve and undistributed profits.
In consolidated financial statements, assets and liabilities obtained by the merging party from the merged party should bemeasured at the book value in the final controlling party‘s consolidated financial statements other than the adjustment made due todifferences in accounting policies; adjust the capital surplus (share premium) according to the difference between the initialinvestment cost and the book value of the held investment before merger plus the book value of the consideration paid on the mergerdate. Where the capital surplus falls short, the retained income should be adjusted.
If the merging party holds the equity investment before acquiring the control of the merged party and is accounted foraccording to the equity method, the date of acquiring the original equity and the merging party and the merged party are in the sameparty's final control from the later date to the merger date The relevant gains and losses, other comprehensive income and otherchanges in owner's equity have been confirmed between them, and the retained earnings at the beginning of the comparativestatement period should be offset separately.
A. Enterprise merger under common control through multiple transactions
On the merger day, in individual financial statements, the initial investment cost of the long-term equity investment on themerger day is based on the book value of the long-term equity investment previously held plus the sum of the additional investmentcosts on the merger day.
In the consolidated financial statements, the equity of the purchaser held prior to the date of purchase is revalued according tothe fair value of the equity at the date of purchase, and the difference between the fair value and its book value is credited to thecurrent investment income; If the shares held by the purchaser prior to the date of purchase involve other consolidated gains underthe equity law accounting, the other consolidated gains related thereto shall be converted to the current gains on the date of purchase,with the exception of the other consolidated gains arising from the remeasurement of the net assets or net liabilities of the mergedparty. The Company disclosed in the notes the fair value of the equity of the purchased party held before the purchase date and theamount of related gains or losses remeasured according to the fair value.
(3) The Company disposes of long-term equity investment in subsidiaries without losing control
The parent company partially disposes of the long-term equity investment in the subsidiary company without losing control. In
the consolidated financial statements, the disposal price corresponds to the disposal of the long-term equity investment. Thedifference between the shares is adjusted for the capital reserve (capital premium or equity premium). If the capital reserve isinsufficient to offset, the retained earnings are adjusted.
④ The Company disposes of long-term equity investment in subsidiaries and loses controlA. One transaction dispositionIf the Company loses control over the Invested Party due to the disposal of part of the equity investment, it shall remeasure theremaining equity according to its fair value at the date of loss of control when compiling the consolidated financial statement. Thesum of the consideration obtained from the disposal of equity and the fair value of the remaining equity minus the difference betweenthe share of the original subsidiary 's net assets that should be continuously calculated from the purchase date or the merger date,calculated as the loss of control The investment income of the current period.Other comprehensive income and other owner's equity changes related to the equity investment of the atomic company aretransferred to the current profit and loss when the control is lost, except for other comprehensive income arising from theremeasurement of the net benefits or net assets of the defined benefit plan by the investee. .B. Multi-transaction step-by-step dispositionIn consolidated financial statements, you should first determine whether a step-by-step transaction is a "blanket transaction".If the step-by-step transaction does not belong to a "package deal", in the individual financial statements, for each transactionbefore the loss of control of the subsidiary, the book value of the long-term equity investment corresponding to each disposal ofequity is carried forward, the price received and the disposal The difference between the book value of the long-term equityinvestment is included in the current investment income; in the consolidated financial statements, it should be handled in accordancewith the relevant provisions of "the parent company disposes of the long-term equity investment in the subsidiary without losingcontrol."
If a step-by-step transaction belongs to a "blanket transaction", the transaction shall be treated as a transaction that disposes ofthe subsidiary and loses control; In individual financial statements, the difference between each disposal price before the loss ofcontrol and the book value of the long-term equity investment corresponding to the equity being disposed of is first recognized asother consolidated gains and then converted to the current loss of control at the time of the loss of control; In the consolidatedfinancial statements, for each transaction prior to the loss of control, the difference between the disposition of the price and thedisposition of the investment corresponding to the share in the net assets of the subsidiary shall be recognized as other consolidatedgains and shall, at the time of the loss of control, be transferred to the loss of control for the current period.Where the terms, conditions, and economic impact of each transaction meet one or more of the following conditions, usuallymultiple transactions are treated as a "package deal":
(a) These transactions were concluded at the same time or in consideration of mutual influence.
(b) These transactions can only achieve the business result as a whole;
(c) The effectiveness of one transaction depends the occurance of at least another transaction;
(d) A single transaction is not economic and is economic when considered together with other transactions.
(5) Proportion of minority shareholders in factor companies who increase capital and dilute ownership of parent companies
Proportion of Others （ minority shareholders in factor companies who increase capital , dilute Subsidiaries of parentcompanies. In the consolidated financial statements, the share of the parent company in the net book assets of the former subsidiaryof the capital increase is calculated according to the share ratio of the parent company before the capital increase, the differencebetween the share and the net book assets of the latter subsidiary after the capital increase is calculated according to the share ratio ofthe parent company, the capital reserve (capital premium or capital premium), the capital reserve (capital premium or capitalpremium) is not offset, and the retained income is adjusted.
7. Recognition of cash and cash equivalents
Cash refers to cash in stock and deposits that can be used for payment at any time. Cash equivalents refer to investments with a
short holding period (generally referring to expiry within three months from the date of purchase), strong liquidity, easy to convert toa known amount of cash, and little risk of value change.
8.Foreign exchange business and foreign exchange statement translation
(1) Methods for determining conversion rates in foreign currency transactions
When the Company's foreign currency transactions are initially confirmed, they will be converted into the bookkeepingstandard currency at the spot exchange rate on the transaction date.
(2) Methods of conversion of foreign currency currency currency items on balance sheet days
At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balance sheet date. Theexchange differences caused by the difference in exchange rates on the balance sheet date and initial recognizing date or previousbalance sheet date are included in the current profits and losses. Non-monetary items accounted in foreign currency and on historicalcosts are exchanged with the spot exchange rate on the transaction date. Non-monetary items accounted in foreign currency and onfair value are exchanged with the spot exchange rate on the determination date of the fair value. The exchange difference between theaccounting standard-currency amount and the original accounting standard-currency amount are included in the current profits andlosses.
(3) Translation of foreign exchange statements
Prior to the conversion of the financial statements of an enterprise's overseas operations, the accounting period and policy ofthe overseas operations should be adjusted to conform to the accounting period and policy of the enterprise. The financial statementsof the corresponding currency (other than the functional currency) should be prepared according to the adjusted accounting policyand the accounting period. The financial statements of the overseas operations should be converted according to the followingmethods:
① The assets and liabilities items in the balance sheet are translated at the spot exchange rate on the balance sheet date. Exceptfor the "undistributed profits" items, the owner's equity items are translated at the spot exchange rate when they occur.
② The income and expense items in the profit statement are converted at the spot exchange rate on the transaction date or theapproximate exchange rate of the spot exchange rate.
③ The foreign currency cash flow and the foreign subsidiary's cash flow are converted using the immediate exchange rate orthe approximate exchange rate at the date of the cash flow. The impact of exchange rate changes on cash should be used as anadjustment item and presented separately in the cash flow statement.
④ During the preparation of the consolidated financial statements, the resulting foreign currency financial statementconversion variance is presented separately under the owner's equity item in the consolidated balance sheet.
When foreign operations are disposed of and the control rights are lost, the difference in foreign currency statements related tothe overseas operations that are listed in the shareholders' equity items in the balance sheet is transferred to the profit or loss for thecurrent period, either in whole or in proportion to the disposal of the foreign operations.
9. Financial instrument
Financial instrument refers to a company‘s financial assets and contracts that form other units of financial liabilities or equityinstruments.
(1) Recognition and de-recognition of financial instrument
The Company recognizes a financial asset or liability when it becomes one party in the financial instrument contract.
Financial asset is derecognized when:
① The contractual right to receive the cash flows of the financial assets is terminated;
② The financial asset is transferred and meets the following derecognition condition.
If the current obligation of a financial liability (or part of it) has been discharged, the Company derecognises the financialliability (or part of the financial liability). When the Company (borrower) and lender enter into an agreement to replace the originalfinancial liabilities by undertaking new financial liabilities and the contract terms for the new financial liabilities are essentiallydifferent from those for the original one, the original financial liabilities will be derecognized and new financial liabilities will be
recognized. Where the Company makes substantial amendments to the contract terms of the original financial liability (or partthereof), it shall terminate the original financial liability and confirm a new financial liability in accordance with the amended terms.Financial asset transactions in regular ways are recognized and de-recognized on the transaction date. The conventional sale offinancial assets means the delivery of financial assets in accordance with the contractual terms and conditions, at the time set out inthe regulations or market practices. Transaction date refers to the date when the Company promises to buy or sell financial assets.
(2) Classification and subsequent measurement of financial assets
At initial recognition, the Company classifies financial assets into the following three categories based on the business model ofmanaging financial assets and the contractual cash flow characteristics of financial assets: financial assets measured at amortized costare measured at fair value and their changes are included in other financial assets with current profit and loss and financial assetsmeasured at fair value through profit or loss. Unless the Company changes the business model for managing financial assets, in thiscase, all affected financial assets are reclassified on the first day of the first reporting period after the business model changes,otherwise the financial assets may not be initially confirmed.Financial assets are measured at the fair value at the initial recognition. For financial assets measured at fair value withvariations accounted into current income account, related transaction expenses are accounted into the current income. For otherfinancial assets, the related transaction expenses are accounted into the initial recognized amounts. Bills receivable and accountsreceivable arising from the sale of commodities or the provision of labor services that do not contain or do not consider significantfinancing components, the Company performs initial measurement according to the transaction price defined by the income standard.The subsequent measurement of financial assets depends on their classification:
① Financial assets measured at amortized cost
Financial assets that meet the following conditions at the same time are classified as financial assets measured at amortized cost:
The Company ‘s business model for managing this financial asset is to collect contractual cash flows as its goal; the contract terms ofthe financial asset stipulate that Cash flow is only the payment of principal and interest based on the outstanding principal amount.For such financial assets, the actual interest rate method is used for subsequent measurement according to the amortized cost. Thegains or losses arising from the termination of recognition, amortization or impairment based on the actual interest rate method areincluded in the current profit and loss.
② Financial assets measured at fair value and whose changes are included in other comprehensive income
Financial assets that meet the following conditions at the same time are classified as financial assets measured at fair value andtheir changes are included in other comprehensive income: The Company's business model for managing this financial asset is toboth target the collection of contractual cash flows and the sale of financial assets. Objective; The contractual terms of the financialasset stipulate that the cash flow generated on a specific date is only for the payment of principal and interest based on theoutstanding principal amount. For such financial assets, fair value is used for subsequent measurement. Except for impairment lossesor gains and exchange gains and losses recognized as current gains and losses, changes in the fair value of such financial assets arerecognized as other comprehensive income. Until the financial asset is derecognized, its accumulated gains or losses are transferredto current gains and losses. However, the relevant interest income of the financial asset calculated by the actual interest rate method isincluded in the current profit and loss.
The Company irrevocably chooses to designate a portion of non-tradable equity instrument investment as a financial assetmeasured at fair value and whose variation is included in other consolidated income. Only the relevant dividend income is includedin the current profit and loss, and the variation of fair value is recognized as other consolidated income.
③ Financial assets measured at fair value with variations accounted into current income account
The above financial assets measured at amortized cost and other financial assets measured at fair value and whose changes areincluded in other comprehensive income are classified as financial assets measured at fair value and whose changes are included inthe current profit and loss. For such financial assets, fair value is used for subsequent measurement, and all changes in fair value areincluded in current profit and loss.
(3) Classification and measurement of financial liabilities
The Company classifies financial liabilities into financial liabilities measured at fair value and their changes included in thecurrent profit and loss, loan commitments and financial guarantee contract liabilities for loans below market interest rates, andfinancial liabilities measured at amortized cost.The subsequent measurement of financial liabilities depends on their classification:
① Financial liabilities measured at fair value with variations accounted into current income account
Such financial liabilities include transactional financial liabilities (including derivatives that are financial liabilities) andfinancial liabilities designated as at fair value through profit or loss. After the initial recognition, the financial liabilities aresubsequently measured at fair value. Except for the hedge accounting, the gains or losses (including interest expenses) are recognizedin profit or loss. However, for the financial liabilities designated as fair value and whose variations are included in the profits andlosses of the current period, the variable amount of the fair value of the financial liability due to the variation of credit risk of thefinancial liability shall be included in the other consolidated income. When the financial liability is terminated, the cumulative gainsand losses previously included in the other consolidated income shall be transferred out of the other consolidated income and shall beincluded in the retained income.
② Loan commitments and financial security contractual liabilities
A loan commitment is a promise that the Company provides to customers to issue loans to customers with established contractterms within the commitment period. Loan commitments are provided for impairment losses based on the expected credit loss model.
A financial guarantee contract refers to a contract that requires the Company to pay a specific amount of compensation to thecontract holder who suffered a loss when a specific debtor is unable to repay the debt in accordance with the original or modifieddebt instrument terms. Financial guarantee contract liabilities are subsequently measured based on the higher of the loss reserveamount determined in accordance with the principle of impairment of financial instruments and the initial recognition amount afterdeducting the accumulated amortization amount determined in accordance with the revenue recognition principle.
③ Financial liabilities measured at amortized cost
After initial recognition, other financial liabilities are measured at amortized cost using the effective interest method.
Except in special circumstances, financial liabilities and equity instruments are distinguished according to the followingprinciples:
① If the Company cannot unconditionally avoid delivering cash or other financial assets to fulfill a contractual obligation, thecontractual obligation meets the definition of financial liability. While some financial instruments do not explicitly contain terms andconditions for the delivery of cash or other financial assets, they may indirectly form contractual obligations through other terms andconditions.
If a financial instrument is required to be settled with or can be settled with the Company's own equity instruments, theCompany's own equity instrument used to settle the instrument needs to be considered as a substitute for cash or other financial assetsor for the holder of the instrument to enjoy the remaining equity in the assets after all liabilities are deducted. If it is the former, theinstrument is the financial liabilities of the issuer; if it is the latter, the instrument is the equity instrument of the issuer. In some cases,a financial instrument contract provides that the Company shall or may use its own instrument of interest, in which the amount of acontractual right or obligation is equal to the amount of the instrument of its own interest which may be acquired or deliveredmultiplied by its fair value at the time of settlement, whether the amount of the contractual right or obligation is fixed or is basedentirely or in part on a variation of a variable other than the market price of the instrument of its own interest, such as the rate ofinterest, the price of a commodity or the price of a financial instrument, the contract is classified as a financial liability.
(4) Derivative financial instruments and embedded derivatives
Derivative financial instruments are initially measured at the fair value of the day when the derivative transaction contract issigned, and are subsequently measured at their fair values. Derivative financial instruments with a positive fair value are recognizedas asset, and instruments with a negative fair value are recognized as liabilities.
The gains and losses arising from the change in fair value of derivatives are directly included in the profits and losses of thecurrent period, except that the part of the cash flow that is valid in the hedge is included in the other consolidated income and
transferred out when the hedged item affects the gain and loss of the current period.For a hybrid instrument containing an embedded derivative instrument, if the principal contract is a financial asset, the hybridinstrument as a whole applies the relevant provisions of the financial asset classification. If the main contract is not a financial asset,and the hybrid instrument is not measured at fair value and its changes are included in the current profit and loss for accounting, theembedded derivative does not have a close relationship with the main contract in terms of economic characteristics and risks, and it isIf the instruments with the same conditions and exist separately meet the definition of derivative instruments, the embeddedderivative instruments are separated from the mixed instruments and treated as separate derivative financial instruments. If the fairvalue of the embedded derivative on the acquisition date or the subsequent balance sheet date cannot be measured separately, thehybrid instrument as a whole is designated as a financial asset or financial liability measured at fair value and whose changes areincluded in the current profit or loss.
(5) Financial instrument Less
The Company shall confirm the preparation for loss on the basis of expected credit loss for financial assets measured atamortization costs, creditor's rights investments measured at fair value, contractual assets, leasing receivables, loan commitments andfinancial guarantee contracts, etc.
① Measurement of expected credit losses of accounts receivable
The expected credit loss refers to the weighted average of the credit losses of financial instruments that are weighted by the riskof default. Credit loss refers to the difference between all contractual cash flows receivable from the contract and all cash flowsexpected to be received by the Company at the original actual interest rate, that is, the present value of all cash shortages. Amongthem, the financial assets which have been purchased or born by the Company shall be discounted according to the actual rate ofcredit adjustment of the financial assets.
The expected lifetime credit loss is the expected credit loss due to all possible default events during the entire expected life ofthe financial instrument.
Expected credit losses in the next 12 months are expected to result from possible defaults in financial instruments within 12months after the balance sheet date (or estimated duration of financial instruments if the expected duration is less than 12 months)Credit losses are part of the expected lifetime credit loss.
On each balance sheet day, the Company measures the expected credit losses of financial instruments at different stages. Wherethe credit risk has not increased significantly since the initial confirmation of the financial instrument, it is in the first stage. TheCompany measures the preparation for loss according to the expected credit loss in the next 12 months. Where the credit risk hasincreased significantly since the initial confirmation but the credit impairment has not occurred, the financial instrument is in thesecond stage. Where a credit impairment has occurred since the initial confirmation of the financial instrument, it shall be in the thirdstage, and the Company shall prepare for measuring the expected credit loss of the whole survival period of the instrument.
For financial instruments with low credit risk on the balance sheet date, the Company assumes that the credit risk has notincreased significantly since the initial recognition, and measures the loss provision based on the expected credit losses in the next 12months.
For financial instruments that are in the first and second stages and with lower credit risk, the Company calculates interestincome based on their book balances and actual interest rates without deduction for impairment provision. For financial instrumentsin the third stage, interest income is calculated based on the amortized cost and the actual interest rate after the book balance minusthe provision for impairment.
Regarding bills receivable, accounts receivable and financing receivables, regardless of whether there is a significant financingcomponent, the Company measures the loss provision based on the expected credit losses throughout the duration.
A Accounts receivable/contract assets
Where there is objective evidence of impairment, as well as other receivable instruments, receivables, other receivables,receivables financing and long-term receivables applicable to individual assessments, separate impairment tests are performed toconfirm expected credit losses and prepare individual impairment. For notes receivable, accounts receivable, other receivables,
financing of receivables, long-term receivables, and contract assets for which there is no objective evidence of impairment, or whenindividual financial assets cannot be assessed at a reasonable cost, the Company divides bills receivable, accounts receivable, otherreceivables, receivable financing, long-term receivables, and contract assets into several combinations based on credit riskcharacteristics, and calculates expected credit losses on the basis of the combination. The basis for determining the combination is asfollows:
The basis for determining the combination of notes receivable is as follows:
Notes Receivable Combination 1 Commercial Acceptance BillNotes Receivable Combination 2 Bank Acceptance BillFor Notes receivable divided into portfolios, the Company refers to historical credit loss experience, combined with currentconditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss ratewithin the next 12 months or the entire duration Expected credit losses.The basis for determining the combination of accounts receivable is as follows:
Accounts receivable combination 1 Accounts receivable businessAccounts receivable combination 2 Real estate receivable businessAccounts receivable combination 3 Others receivable businessOther receivable portfolio 4 Receivables from related parties within the scope of consolidationFor the accounts receivable divided into a combination, the Company refers to the historical credit loss experience, combinedwith the current situation and the forecast of the future economic situation, compiles the account receivable age and the wholeexpected credit loss rate table, and calculates the expected credit loss.
The basis for determining the combination of other receivables is as follows:
Other receivable portfolio 1 Interest receivablePortfolio of other receivables 2 Dividends receivableOther combinations of receivables 3 Deposit and margin receivableOther receivable portfolio 4 Receivable advancesCombination of other receivables 5 Value-added tax receivable is increased and refundedOther receivable portfolio 6 Receivables from related parties within the scope of consolidationOther receivables portfolio 7 Other receivablesFor other receivables divided into portfolios, the Company refers to historical credit loss experience, combined with currentconditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss ratewithin the next 12 months or the entire duration Expected credit losses.
The basis for determining the combination of receivables financing is as follows:
Receivables financing portfolio 1 bank acceptance billFor Notes receivable divided into portfolios, the Company refers to historical credit loss experience, combined with currentconditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss ratewithin the next 12 months or the entire duration Expected credit losses.The basis for determining the portfolio of contract assets is as follows:
Contract assets portfolio 1 conditional collection right of salesContract assets portfolio 2 Completed and unsettled project not meeting collection conditionsContract assets portfolio 3 Quality guarantee deposit not meeting collection conditionsFor contract assets divided into portfolios, the Company refers to historical credit loss experience, combined with currentconditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss ratewithin the next 12 months or the entire duration Expected credit losses.Other debt investmentFor other receivables divided into portfolios, the Company refers to historical credit loss experience, combined with current
conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss ratewithin the next 12 months or the entire duration Expected credit losses.
② Lower credit risk
If the risk of default on financial instruments is low, the borrower‘s ability to meet its contractual cash flow obligations in theshort term is strong, and even if the economic situation and operating environment are adversely changed over a long period of time,it may not necessarily reduce the receivables' performance of their contractual cash. The ability of the flow obligation, the financialinstrument is considered to have a lower credit risk.
③ Significant increase in credit risk
The Company compares the default probability of the financial instrument during the expected lifetime determined by thebalance sheet date with the default probability of the expected lifetime during the initial confirmation to determine the relativeprobability of the default probability of the financial instrument during the expected lifetime Changes to assess whether the creditrisk of financial instruments has increased significantly since initial recognition.
In determining whether the credit risk has increased significantly since the initial recognition, the Company considersreasonable and evidenced information, including forward-looking information, that can be obtained without unnecessary additionalcosts or effort. The information considered by the Company includes:
A. Significant changes in internal price indicators resulting from changes in credit risk;
B. Adverse changes in business, financial or economic conditions that are expected to cause significant changes in the debtor‘sability to perform its debt service obligations;
C. Whether the actual or expected operating results of the debtor have changed significantly; whether the regulatory, economicor technical environment of the debtor has undergone significant adverse changes;
D. Whether there is a significant change in the value of the collateral used as debt collateral or the guarantee provided by a thirdparty or the quality of credit enhancement. These changes are expected to reduce the debtor‘s economic motivation for repaymentwithin the time limit specified in the contract or affect the probability of default;
E. Whether there is a significant change in the economic motivation that is expected to reduce the debtor's repayment accordingto the contractual deadline;
F. Anticipated changes to the loan contract, including whether the expected violation of the contract may result in theexemption or revision of contract obligations, granting interest-free periods, rising interest rates, requiring additional collateral orguarantees, or making other changes to the contractual framework of financial instruments change;
G. Whether the expected performance and repayment behavior of the debtor has changed significantly;
H. Whether the contract payment is overdue for more than (including) 30 days.
Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantly on the basisof a single financial instrument or combination of financial instruments. When conducting an assessment based on a combination offinancial instruments, the Company can classify financial instruments based on common credit risk characteristics, such as overdueinformation and credit risk ratings.
If the overdue period exceeds 30 days, the Company has determined that the credit risk of financial instruments has increasedsignificantly. Unless the Company does not have to pay excessive costs or efforts to obtain reasonable and warranted information, itproves that although it has exceeded the time limit of 30 days agreed upon in the Contract, credit risks have not increasedsignificantly since the initial confirmation.
④ Financial assets with credit impairment
The Company assesses on the balance sheet date whether financial assets measured at amortized cost and credit investmentsmeasured at fair value and whose changes are included in other comprehensive income have undergone credit impairment. When oneor more events that adversely affect the expected future cash flows of a financial asset occur, the financial asset becomes a financialasset that has suffered a credit impairment. Evidence that credit impairment has occurred in financial assets includes the followingobservable information:
Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor, such as payment ofinterest or default or overdue of principal; (B) The concession that the debtor would not make under any other circumstances foreconomic or contractual considerations relating to the financial difficulties of the debtor; The debtor is likely to be bankrupt orundertake other financial restructuring; The financial difficulties of the issuer or debtor lead to the disappearance of the active marketfor the financial asset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that a credit loss hasoccurred.
⑤ Presentation of expected credit loss measurement
In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the Company re-measuresthe expected credit losses on each balance sheet date, and the increase or reversal of the loss provision resulting therefrom is includedas an impairment loss or gain. Current profit and loss. For financial assets measured at amortized cost, the loss allowance offsets thebook value of the financial asset listed on the balance sheet; for debt investments measured at fair value and whose changes areincluded in other comprehensive income, the Company Recognition of its loss provisions in gains does not offset the book value ofthe financial asset.
⑥ Canceled
If it is no longer reasonably expected that the contract cash flow of the financial assets will be fully or partially recovered, thebook balance of the financial assets will be directly reduced. Such write-off constitute the derecognition of related financial assets.This usually occurs when the Company determines that the debtor has no assets or sources of income that generate sufficient cashflow to cover the amount that will be written down.
If the financial assets that have been written down are recovered in the future, the reversal of the impairment loss is included inthe profit or loss of the current period.
(6) Transfer of financial assets
The transfer of financial assets refers to the following two situations:
A. Transfer the contractual right to receive cash flow of financial assets to another party;
B. Transfers the financial assets to the other party in whole or in part, but reserves the contractual right to collect the cash flowof the financial assets and undertakes the contractual obligation to pay the collected cash flow to one or more recipients.
① De-identification of transferred financial assets
Those who have transferred almost all risks and rewards in the ownership of financial assets to the transferee, or have neithertransferred nor retained almost all the risks and rewards in the ownership of financial assets, but have given up control of thefinancial assets, terminate the confirmation The financial asset.
In determining whether control over the transferred financial asset has been waived, the actual capacity of the transferor to sellthe financial asset is determined. If the transferor is able to sell the transferred financial assets wholly to a third party that does nothave a relationship with them, and has no additional conditions to limit the sale, it indicates ds has waived control over the financialassets.
The Company pays attention to the essence of financial asset transfer when judging whether financial asset transfer meets thecondition of financial asset termination.
If the overall transfer of financial assets meets the conditions for termination of confirmation, the difference between thefollowing two amounts is included in the current profit and loss:
A. Continuing identification of transferred Book value；
B. The sum of the amount received as a result of the transfer and the amount accrued as a result of the change in the fair valueof the transfer in respect of the termination recognized portion of the amount previously charged directly to the other consolidatedproceeds (the financial assets involved in the transfer are those classified in accordance with Article 18 of Enterprise AccountingStandard No. 22 - Financial Instruments Recognition and Measurement as measured by the fair value and whose change is charged tothe other consolidated proceeds).
If the partial transfer of financial assets meets the conditions for derecognition, the book value of the entire transferred financial
assets will be included in the derecognized part and the unterminated part (in this case, the retained service assets are regarded as partof the continued recognition of financial assets) Between them, they are apportioned according to their respective relative fair valueson the transfer date, and the difference between the following two amounts is included in the current profit and loss:
A. Termination of the book value of the recognized portion on the date of derecognition;B. The sum of the amount received as a result of the transfer and the amount accrued as a result of the change in the fair valueof the transfer in respect of the termination recognized portion of the amount previously charged to the other consolidated proceeds(the financial assets involved in the transfer are those classified in accordance with Article 18 of Enterprise Accounting Standard No.22 - Financial Instruments Recognition and Measurement as measured by the fair value and whose change is charged to the otherconsolidated proceeds).
② Continue to be involved in the transferred financial assets
If neither transfer nor retain almost all the risks and rewards of the ownership of financial assets, and have not given up controlof the financial assets, the relevant financial assets should be confirmed according to the extent of their continued involvement in thetransferred financial assets, and the relevant liabilities should be recognized accordingly.The extent to which the transferred financial assets continue to be involved refers to the extent to which the enterpriseundertakes the risk or compensation of the value change of the transferred financial assets.(III) Continuing identification of transferred financial assetsWhere almost all risks and remuneration in relation to ownership of the transferred financial assets are retained, the whole ofthe transferred financial assets shall continue to be recognized and the consideration received shall be recognized as a financialliability.The financial asset and the recognized related financial liabilities shall not offset each other. In the subsequent accountingperiod, the enterprise shall continue to recognize the income (or gain) generated by the financial asset and the costs (or losses)incurred by the financial liability.
(7) Deduction of financial assets and liabilities
Financial assets and financial liabilities should be listed separately in the balance sheet, and cannot be offset against each other.However, if the following conditions are met, the net amount offset by each other is listed in the balance sheet:
The Company has a statutory right to offset the confirmed amount, and such legal right is currently enforceable;
The Company plans to settle the net assets or realize the financial assets and liquidate the financial liabilities at the same time.
The transferring party shall not offset the transferred financial assets and related liabilities if it does not meet the conditions forterminating the recognition.
(8) Recognition of fair value of Finance instruments
See Note V 34 (1) for the recognition of fair value of financial assets and liabilities）.
10. Notes receivable
See Section XII, V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.
11. Account receivable
See Section XII, V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
12. Receivable financing
See Section XII, V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.
13. Other receivables
Methods for Determining Expected Credit Loss of Other Receivables and Accounting Processing Methods
See Section XII, V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.
14. Inventories
(1) Classification of inventories
Inventory refers to the finished products or commodities held by the Company for sale in daily activities, the products inprocess of production, the materials and materials consumed in the process of production or providing labor services, includingentrusted processing materials, raw materials, products in process, materials in transit, stored goods, low value consumables,development costs, development products and contract performance costs, etc.
(2) Pricing of delivering inventory
Inventories are measured at cost when procured. Raw materials, products in process and commodity stocks in transit aremeasured by the weighted average method.
The real estate business inventory mainly includes inventory materials, products under development, completed developmentproducts, and development products intended to be sold but temporarily rented out. Inventory is measured at the actual costs whenthe fixed assets are obtained The actual costs of development products include land transfer payment, infrastructure and facility costs,installation engineering costs, borrows before completion of the development and other costs during the development process. Thespecial maintenance funds collected in the first period are included in the development overheads. The actual costs of thedevelopment product is priced using the separate pricing method.
(3) Inventory system
The Company inventory adopts the perpetual inventory system, counting at least once a year, the inventory profit and lossamount is included in the current year's profit and loss.
(4) Recognition of inventory realizable value and providing of impairment provision
On the balance sheet date, inventories are accounted depending on which is lower between the cost and the net realizable value.If the cost is higher than the net realizable value, the impairment provision will be made.
The realizable net value of inventory should be recognized based on solid evidence with the purpose of the inventory andafter-balance-sheet-date events taken into consideration.
(1) In the course of normal production and operation, the net realizable value of finished goods, commodities and materialsdirectly used for sale shall be determined by the estimated price of the inventory minus the estimated cost of sale and related taxes.The inventory held for the execution of a sales contract or a labor contract shall be measured on the basis of the contract price as itsnet realizable value; If the quantity held is greater than the quantity ordered under the sales contract, the net realizable value of theexcess inventory is measured on the basis of the general sales price. For materials used for sale, the market price shall be used as themeasurement basis for the net realizable value.
②In the normal production and operation process, the inventory of materials that need to be processed is determined by theamount of the estimated selling price of the finished product minus the estimated cost to be incurred at the time of completion,estimated sales expenses and related taxes Realize the net value. If the net realizable value of the finished product produced by it ishigher than the cost, the material is measured at cost; If the decrease in the price of the material indicates that the net realizable valueof the finished product is lower than the cost, the material is measured as the net realizable value and the inventory is prepared for adecrease based on its difference.
③ Depreciation preparation of inventory is generally based on a single inventory item; For a large number of inventories witha lower unit price, they are accrued by inventory type.
④ If the factors affecting the previous write-down of inventory value have disappeared on the balance sheet date, the amountof the write-down will be restored and transferred back within the amount of inventory depreciation reserve that has been accrued,and the amount returned will be included in the current profit and loss.
(5) Methods of amortization of swing materials
① Low-value consumables are amortized on on-off amortization basis at using.
② Packages are amortized on on-off amortization basis at using.
15. Contract assets
Applicable from January 1, 2020
The Company presents contract assets or liabilities in the balance sheet according to the relationship between performance
obligation and customer payment. The consideration for which the Company is entitled to receive (subject to factors other than thepassage of time) for the transfer of goods or the provision of services to customers is listed as contract assets. The Company'sobligation to transfer goods or provide services to customers for consideration received or receivable from customers is listed ascontractual liabilities.
The Company's determination method and accounting treatment method for the expected credit loss of contract assets aredetailed in Note III 9.Contract assets and contract liabilities are listed separately in the balance sheet. Contract assets and contract liabilities under thesame contract are listed in net amount. If the net amount is the debit balance, it shall be listed in "contract assets" or "other noncurrent assets" according to its liquidity; if the net amount is the credit balance, it shall be listed in "contract liabilities" or "other noncurrent liabilities" according to its liquidity. Contract assets and contract liabilities under different contracts cannot offset each other.
16. Contract costs
Applicable from January 1, 2020
Contract cost is divided into contract performance cost and contract acquisition cost.
The cost incurred by the Company in performing the contract shall be recognized as an asset when the following conditions aremet simultaneously:
① The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturingexpenses (or similar expenses), clearly borne by the customer, and other costs incurred only due to the contract;
② This cost increases the Company's future resources for fulfilling its performance obligations.
③ The cost is expected to be recovered.
If the incremental cost incurred by the Company to obtain the contract is expected to be recovered, it shall be recognized as anasset as the contract acquisition cost.
The assets related to the contract cost shall be amortised on the same basis as the income from goods or services related to theassets; however, if the amortization period of the contract acquisition cost is less than one year, the Company shall include it in thecurrent profit and loss when it occurs.
If the book value of the assets related to the contract cost is higher than the difference between the following two items, theCompany will make provision for impairment for the excess part and recognize it as the loss of asset impairment, and furtherconsider whether the estimated liabilities related to the loss contract should be made:
① The residual consideration expected to be obtained due to the transfer of goods or services related to the asset;
② The estimated cost to be incurred for the transfer of the relevant goods or services.
If the above provision for impairment of assets is subsequently reversed, the book value of the asset after reversal shall notexceed the book value of the asset on the reversal date without provision for impairment.
The contract performance cost recognized as an asset with an amortization period of no more than one year or one normalbusiness cycle at the time of initial recognition shall be listed in the "inventory" item, and the amortization period of no more thanone year or one normal business cycle at the time of initial recognition shall be listed in the "other non current assets" item.
The contract acquisition cost recognized as an asset shall be listed in the item of "other current assets" when the amortizationperiod does not exceed one year or one normal business cycle at the time of initial recognition, and listed in the item of "other noncurrent assets" when the amortization period exceeds one year or one normal business cycle at the time of initial recognition.
17. Long-term share equity investment
The Group's long-term equity investment includes control on invested entities and significant impacts on equity investment.Invested entities on which the Group has significant impacts are associates of the Group.
(1) Basis for recognition of common control and major influence on invested entities
Common control refers to the common control of an arrangement in accordance with the relevant agreement, and the relevantactivities of the arrangement must be agreed upon by the participants who share control. In determining whether there is commoncontrol, the first step is to determine whether all or a group of participants collectively control the arrangement, which is considered
collective control by all or a group of participants if all or a group of participants must act together to determine the activitiesassociated with the arrangement. Secondly, it is judged whether the decision on related activities of the arrangement must be agreedby the participants who collectively control the arrangement. If there is a combination of two or more parties that can collectivelycontrol an arrangement, it does not constitute joint control. When judging whether there is joint control, the protective rights enjoyedare not considered.Major influence refers to the power to participate in decision-making of financial and operation policies of a company, butcannot control or jointly control the making of the policies. When considering whether the Company can impose significant impactson the invested entity, impacts of conversion of shares with voting rights held directly or indirectly by the investor and voting rightsthat can be executed in this period held by the investor and other party into shares of the invested entity should be considered.If the Company directly or through subsidiaries holds more than 20% (inclusive) but less than 50% of the shares with votingrights of the invested entity, unless there is clear evidence proving that the Company cannot participate the decision-making ofproduction and operation of the invested entity, the Company has major influence on the invested entity.
(2) Recognition of initial investment costs
Long-term equity investments formed by merger of enterprises shall be determined in accordance with the followingprovisions:
A. In the case of an enterprise merger under the same control, where the merging party makes a valuation of the merger bypayment of cash, transfer of non-cash assets or undertaking liabilities, the share of the book value of the owner's interest in the finalcontrolling party's consolidated financial statements as the initial investment cost of the long-term equity investment at the date of themerger. The difference between the initial investment cost of long-term equity investment and the cash paid, the transferred non-cashassets and the book value of the debt assumed shall be adjusted to the capital reserve; if the capital reserve is insufficient to offset, theretained earnings shall be adjusted;
Long-term equity investment generated by enterprise merger: for long-term equity investment obtained by merger ofenterprises under common control, the obtained share of book value of the interests of the merged party‘s owner in the consolidatefinancial statements on the merger date is costs; for long-term equity investment obtained by merger of enterprises not undercommon control, the merger cost is the investment cost. Adjust the capital reserve according to the difference between the initialinvestment cost of long-term equity investment and the total face value of the issued shares. If the capital reserve is insufficient tooffset or reduce, the retained income shall be adjusted;
For merger of entities under different control, the merger cost is the fair value of the asset paid, liability undertaken, and equitysecurities issued for exchanging of control power over the entities at the day of acquisition. Agency expenses and otheradministrative expenses such as auditing, legal consulting, or appraisal services occurred relating to the merger of entities areaccounted into current income account when occurred.
Long-term equity investments formed by merger of enterprises shall be determined in accordance with the followingprovisions:
For long-term equity investment obtained by cash, the actually paid consideration is the initial investment cost. Initialinvestment costs include expenses, taxes and other necessary expenditures directly related to the acquisition of long-term equityinvestments;
B. Long-term equity investments acquired from the issuance of interest securities are the initial investment costs based on thefair value of the issue interest securities;
C. For long-term equity investments obtained through non-monetary asset exchanges, if the exchange has commercialsubstance and the fair value of the exchanged assets or exchanged assets can be reliably measured, the fair value of the exchangedassets and relevant taxes shall be used as the initial Investment cost, the difference between the fair value and book value of theswapped-out asset is included in the current profit and loss; if the non-monetary asset exchange does not meet the above twoconditions at the same time, the book value of the swapped-out asset and relevant taxes will be used as the initial investment cost.
D. Long-term equity investments acquired through debt restructuring determine their recorded value at the fair value of the
waived claims and other costs such as taxes directly attributable to the assets and account for the difference between the fair valueand the book value of the waived claims.
(3) Subsequent measurement and recognition of gain/loss
The Company uses the cost method to measure long-term share equity investment in which the Company can control theinvested entity; and uses the equity method to measure long-term share equity investment in which the Company has substantialinfluence on the invested entity.
① Cost
For the long-term equity investment measured on the cost basis, except for the announced cash dividend or profit included inthe practical cost or price when the investment was made, the cash dividends or profit distributed by the invested entity arerecognized as investment gains in the current gain/loss account.
Equity
Gains from long-term equity investment measured by equity
When the equity method is used to measure long-term equity investment, the investment cost will not be adjusted if theinvestment cost of the long-term equity investment is larger than the share of fair value of the recognizable assets of the investedentity. When it is smaller than the share of fair value of the recognizable assets of the invested entity, the book value will be adjustedand the difference is included in the current gains of the investment.
When the equity method is used, the current investment gain is the share of the net gain realized in the current year that can beshared or borne, recognized as investment gain and other misc. income. The book value of the long-term equity investment isadjusted accordingly. The book value of the long-term equity investment should be accordingly decreased based on the share of profitor cash dividend announced by the invested entity; according to other changes in the owner‘s equity except for net profit and loss,other misc income and profit distribution of the invested entity, adjust the book value of the long-term equity investment and record itin the capital surplus (other capital surplus). When the share of the net gains that can be enjoyed is recognized, it is recognized afterthe net profit of the invested entity is adjusted based on the fair value of the recognizeable assets of the invested entity according tothe Company's accounting policies and accounting period. Where the accounting policy and accounting period adopted by theInvested unit are inconsistent with the Company, the financial statements of the Invested unit shall be adjusted in accordance with theaccounting policy and accounting period of the Company, and the investment income and other consolidated income shall berecognized. Internal transaction gain not realized between the Company and affiliates is measured according to the shareholdingproportion and the investment gains is recoginzied after deduction. The unrealized internal transaction loss between the Companyand the invested entity is the impairment loss of transferred assets and should not be written off.
Where substantial influence on invested entities is imposed or joint control is implemented due to increase in investment, thesum of the fair value of the original equity and increased investment on the conversion date is the initial investment cost under theequity method. If the equity investment originally held is classified as other equity instrument investment, the difference between thefair value and the book value, as well as the accumulated gains or losses originally included in other comprehensive income, shall betransferred out of other comprehensive income and included in retained income in the current period when the equity method isadopted.
Where joint control or substantial influence on invested entities is lost due to disposal of part of investment, the remainingequity after the disposal should be treated according to the Enterprise Accounting Standard No.22 – Recognition and Measurement ofFinancial Instruments from the date of losing the joint control or substantial influence. The difference between the fair value andbook value should be accounted the profit and loss of the current period. For other misc. incomes of original share equity investmentdetermined using the equity method, when the equity method is no longer used, it should be treated based on the same basis of thetreatment of related assets or liability of the invested entities; the other owners' interests related to the original share equityinvestment should be transferred to gain/loss of the current period.
(4) Equity investment held for sale
For the remaining equity investments not classified as assets held for sale, the equity method is adopted for accounting
treatment.Equity investments classified as held for sale to associates that are no longer eligible to hold classified assets for sale areretrospectively adjusted using the equity method starting from the date that they are classified as held for sale. The classification isadjusted to hold the financial statements for the period to be sold.
(5) Impairment examination and providing of impairment provision
See Note V. 24 for the assets impairment provision method for investment in subsidiaries and joint ventures.XVIII. Investment real estates
(1) Classification of investment real estate
Investment real estates are held for rent or capital appreciation, or both. These include, inter alia:
① Leased land using right
(2) the right to use the land that is transferred after holding and preparing for the increment.
③ Leased building
(2) Measurement of investment real estate
For investment real estates with an active real estate transaction market and the Company can obtain market price and otherinformation of same or similar real estates to reasonably estimate the investment real estates‘ fair value, the Company will use the fairvalue mode to measure the investment real estates subsequently. Variations in fair value are accounted into the current gain/lossaccount.The fair value of investment real estates is determined with reference to the current market prices of same or similar real estatesin active markets; when no such price is available, with reference to the recent transaction prices and consideration of factorsincluding transaction background, date and district to reasonably estimate the fair value; or based on the estimated lease gains andpresent value of related cash flows.
For investment real estate under construction (including investment real estate under construction for the first time), if the fairvalue cannot be reliably determined but the expected fair value of the real estate after completion is continuously and reliablyobtained, the investment real estate under construction is measured by cost. When the fair value can be measured reliably or aftercompletion (the earlier one), it is measured at fair value. For an investment real estate whose fair value is proven unable to beobtained continuously and reliably by objective evidence, the real estate will be measured at cost basis until it is disposed and noresidual value remains as assumed.
If the cost model is adopted to measure the investment real estate, the depreciation or amortization shall be calculated accordingto the straight line method after deducting the accumulated impairment and net residual value of the investment real estate cost. Forthe method of depreciation of the accrued assets, see Note V 24.
The types of investment real estate, estimated economic useful life and estimated net residual value rate are determined asfollows:
| Type | Service year (year) | Residual rate % | Annual depreciation rate % |
| Houses & buildings | 35-50 | 10 | 1.80-2.57 |
19. Fixed assets
(1) Recognition conditions
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing services, lease or foroperation & management, and have more than one accounting year of service life. Fixed assets are recognized at the actual cost ofacquisition when the following conditions are met: (1) The economic benefits associated with the fixed assets are likely to flow intothe enterprise. ② The cost of the fixed assets can be measured reliably. Overhaul cost generated by regular examination on fixedassets is recognized as fixed assets costs when there is evidence proving that it meets fix assets recognition conditions. If not, it willbe accounted into the current gain/loss account.
(2) Depreciation method
| Type | Depreciation method | Service year | Residual rate | Annual depreciation rate % |
| Houses & buildings | Average age | 35-50 | 10% | 1.8%-2.57% |
| Mechanical equipment | Average age | 10 | 10% | 9% |
| Transportation facilities | Average age | 5 | 10% | 18% |
| Electronics and other devices | Average age | 5 | 10% | 18% |
| PV power plants | Average age | 20 | 5% | 4.75% |
(3) Recognition and pricing of financing leased fixed assets
The Company transfers all the risks and rewards attached to the asset at substantially transferred to the lessee, it is recognizedas financial leasing, and the others are operational leasing. The cost of a fixed asset acquired by a financial lease is determined on thebasis of the lower of the fair value of the leased asset at the date of the lease and the present value of the minimum leased payment.The Group adopts the depreciation policy same as the self-owned fixed assets to made provision for depreciation of leased assets.Depreciation shall be accrued within the life of the leased assets if it is possible to reasonably determine that the leased assets will beentitled to ownership upon the expiry of the lease term; Depreciation is accrued within a shorter period between the lease term andthe service life of the leased asset if it is unable to reasonably determine that the leased asset ownership can be acquired at the end ofthe lease term.XX. Construction in process
(1) Construction in progress is accounted for by project classification.
(2) Standard and timing for transferring construction in process into fixed assets
The full expenditure incurred on the construction-in-progress project as a fixed asset is recorded as the value of the asset beforethe asset is constructed to the intended usable state. This includes construction costs, the original cost of equipment, other necessaryexpenditures incurred in order to enable the construction works to reach the intended usable status and the borrowing costs incurredfor the specific borrowing of the project and the general borrowing expenses incurred before the assets reach the intended usablestatus. Construction in process will be transferred to fixed assets when it reaches the preset service condition. The fixed assets thathave reached the intended usable state but have not been completed shall be transferred to the fixed assets according to the estimatedvalue according to the estimated value according to the estimated value according to the project budget, cost or actual project cost,etc. The depreciation of the fixed assets shall be accrued according to the Company's fixed assets depreciation policy. The originalestimated value shall be adjusted according to the actual cost after the completion.
XXI. Borrowing expenses
(1) Recognition principles for capitalization of borrowing expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or production of asset satisfying theconditions of capitalizing, are capitalized and accounted as cost of related asset.
(1) Asset expenditure has occurred;
② The borrowing expense has already occurred;
③ Purchasing or production activity, which is necessary for the asset to reach the useful status, has already started.
Other interest on loans, discounts or premiums and exchange differences are included in the income and loss incurred in thecurrent period.
If the construction or production of assets satisfying the capitalizing conditions is suspended abnormally for over 3 months,capitalizing of borrowing expenses shall be suspended. During the normal suspension period, borrowing expenses will be capitalizedcontinuously.
When the asset satisfying the capitalizing conditions has reached its usable or sellable status, capitalizing of borrowingexpenses shall be terminated.
(2) Calculation of the capitalization amount of borrowing expense
Interest expenses generated by special borrowings less the interests income obtained from the deposit of unused borrowings orinvestment gains from temporary investment is capitalized; the capitalization amount for general borrowing is determined based onthe capitalization rate which is the exceeding part of the accumulative assets expense over weighted average of the assets expense ofthe special borrowing/used general borrowing.
If the assets that are constructed or produced under the condition of capitalization occupy the general borrowing, the interestamount to be capitalized in the general borrowing shall be calculated and determined by multiplying the capital rate of the generalborrowing by the weighted average of the asset expenditure of the accumulated assets whose expenditure exceeds that of thespecialized borrowing. The capitalization ratio is the weighted average interest rate of general borrowings.
XXII. Intangible assets
(1) Pricing method, service life and depreciation test
(1) Pricing of intangible assets
Recorded at the actual cost of acquisition.
Amortization of intangible assets
① Useful life of intangible assets with limited useful life
| Item | Estimated useful life | Basis |
| Land using right | Term | Use right assets |
| Trademarks and patents | 10 | Reference to determine the lifetime of a company for which it can bring economic benefits |
| Proprietary technology | 10 | Reference to determine the lifetime of a company for which it can bring economic benefits |
| Software | 5. 10 years | Reference to determine the lifetime of a company for which it can bring economic benefits |
At the end of each year, the Company will reexamine the useful life and amortization basis of intangible assets with limiteduseful life. Upon review, the service life and amortization methods of intangible assets at the end of the period are not different fromthose previously estimated.
(2) Intangible assets which cannot be foreseeable to bring economic benefits to enterprises shall be regarded as intangible assetswhose useful life is uncertain. For intangible assets with uncertain service life, the Company reviews the service life of intangibleassets with uncertain service life at the end of each year. If it is still uncertain after rechecking, it shall conduct an impairment test onthe balance sheet date.
③ Amortization of intangible assets
For intangible assets with limited service life, the Company shall determine their service life at the time of acquisition, andshall use the straight line method system to reasonably amortize their service life, and the amortization amount shall be included inthe profit and loss of the current period according to the beneficial items. The specific amortization amount is the amount after thecost is deducted from the estimated residual value. For fixed assets for which depreciation provision is made, the depreciation ratewill be determined after the accumulative depreciation provision amount is deducted. The residual value of an intangible asset withlimited useful life is treated as zero, except where a third party undertakes to purchase the intangible asset at the end of its useful lifeor to obtain expected residual value information based on the active market, which is likely to exist at the end of its useful life.
Intangible assets with uncertain service life will not be amortized. At the end of each year, the useful life of intangible assetswith uncertain useful life is reviewed, and if there is evidence that the useful life of intangible assets is limited, the useful life isestimated and the system is reasonably amortized within the expected useful life.
(2) Accounting policies for internal R&D expenses
Specific standard for distinguish between research and development stage
① The Company takes the information and related preparatory activities for further development activities as the researchstage, and the intangible assets expenditure in the research stage is included in the current profit and loss period.
② The development activities carried out after the Company has completed the research stage as the development stage.
Specific conditions for capitalization of expenditures in the development phase
Expenditures in the development phase can be recognized as intangible assets only when the following conditions are met:
A. It is technically feasible to complete the intangible asset so that it can be used or sold;
B. Have the intention to complete the intangible asset and use or sell it;
C. The way intangible assets generate economic benefits, including the ability to prove that the products produced by theintangible assets exist in the market or the intangible assets themselves exist in the market, and the intangible assets will be usedinternally, which can prove their usefulness;
D. Have sufficient technical, financial and other resource support to complete the development of the intangible asset, and havethe ability to use or sell the intangible asset;
E. The expenditure attributable to the development stage of the intangible asset can be reliably measured.
23. Assets impairment
The Group uses the cost mode to continue measuring the assets impairment to investment real estate, fixed assets constructionin progress, intangible assets and goodwill (except for the inventories, investment real estate measured by the fair value mode,deferred income tax assets and financial assets). The method is determined as follows:
The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists, the Companyestimates the recoverable amount and conducts the impairment test. Impairment test is conducted annually for goodwill generated bymergers and intangible assets that have not reached the useful condition no matter whether the impairment sign exists.
The recoverable amount is determined by the higher of the net of fair value minus disposal expense and the present value of thepredicted future cash flow. The Company estimates the recoverable amount on the individual asset item basis; whether it is hard toestimate the recoverable amount on the individual asset item basis, determine the recoverable amount based on the asset group thatthe assets belong to. The assets group is determined by whether the main cash flow generated by the Group is independent from thosegenerated by other assets or assets groups.
When the recoverable amount of the assets or assets group is lower than its book value, the Company writes down the bookvalue to the recoverable amount, the write-down amount is accounted into the current income account and the assets impairmentprovision is made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized through reasonable measures sincethe purchase day to related asset groups; those cannot be amortized to related assets groups are amortized to related combination ofasset groups. The related asset groups or combination of asset groups refer to those that can benefit from the synergistic effect ofmergers and must not exceed to the reporting range determined by the Company.
When the impairment test is conducted, if there is sign of impairment to the asset group or combination of asset groups relatedto goodwill, first perform impair test for asset group or combination of asset groups without goodwill and calculate the recoverableamount and recognize the related impairment loss. Then conduct impairment test on those with goodwill, compare the book valuewith recoverable amount. If the recoverable amount is lower than the book value, recognize the impairment loss of the goodwill.
Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.
24. Long-term amortizable expenses
The long-term outstanding expenses shall be accounted for all expenses incurred by the Company but which shall be borne bythe current and future periods for more than one year, and the long-term outstanding expenses shall be amortized averagely within thebenefit period.
25. Contract liabilities
See 16. Contract assets in section 12, V. Important Accounting Policies and Accounting Estimates for details.
26. Staff remuneration
(1) Accounting of operational leasing
① Basic salary of employees (salary, bonus, allowance, subsidy)
In the accounting period for which the staff and workers provide services, the Company shall confirm the actual short-termremuneration as liabilities and shall account for the current income and loss, except as required or permitted by other accountingstandards.
② Employee welfare
The employee benefits incurred by the Company shall be included in the current profit and loss or related asset costs accordingto the actual amount incurred. Where the employee's benefit is non-monetary, it shall be measured on the basis of fair value.
③ Social insurance premiums and housing accumulation funds such as health insurance premiums, work injury premiums,birth insurance premiums, trade union funds and staff and education funds
The Company pays the medical insurance premiums, work injury insurance premiums, birth insurance premiums, etc. socialinsurance premiums and housing accumulation funds for the staff and workers, as well as the union funds and the staff and workerseducation funds according to the regulations, in the accounting period for which the staff and workers provide services, thecorresponding salary amount of the staff and workers, and confirms the corresponding liabilities, which are included in the currentprofit and loss or related asset costs.
④ Short-term paid leave
The Company accumulates the salary of the employees who are absent from work with pay when the employees provideservice, thus increasing their future right of absence with pay. The Company confirms the salary of the employee related to theabsence of non-cumulative salary during the actual absence accounting period.
⑤ Short-term profit share program
If the profit-sharing plan meets the following conditions at the same time, the Company shall confirm the salary payable to thestaff and workers:
A. The legal or presumptive obligation of the enterprise to pay the remuneration of its employees as a result of past matters;
B. The amount of employee compensation obligations due to the profit sharing plan can be reliably estimated.
(2) Accounting of post-employment welfare
The Group's post-employment benefit plan is defined contribution plan. Defined contribution plans include basic endowmentinsurance, unemployment insurance, etc. During the accounting period when employees provide services for them, the Companyshall recognize the deposit amount calculated according to the defined deposit plan as liabilities and include it in the current profitsand losses or related asset costs.
(3) Accounting of dismiss welfare
If the Company provides termination benefits to employees, the employee compensation liabilities arising from the terminationbenefits shall be recognized at the earliest of the following two and shall be included in the current profit and loss:
① An enterprise may not unilaterally withdraw the resignation benefits provided for by the dismissal plan or reductionproposal;
② When the enterprise recognizes the costs or expenses related to the reorganization involving the payment of resignationbenefits.
(4) Accounting of other long-term staff welfare
27. Anticipated liabilities
(1) Recognition standards of anticipated liabilities
When responsibilities occurred in connection to contingent issues, and all of the following conditions are satisfied, they arerecognized as expectable liability in the balance sheet:
① This responsibility is a current responsibility undertaken by the Company;
② Execution of this responsibility may cause financial benefit outflow from the Company;
③ Amount of the liability can be reliably measured.
(2) Measurement of anticipated liabilities
Expected liabilities are initially measured at the best estimation on the expenses to exercise the current responsibility, and withconsiderations to the relative risks, uncertainty, and periodic value of currency. On each balance sheet date, review the book value ofthe estimated liabilities. Where there is conclusive evidence that the book value does not reflect the current best estimate, the bookvalue is adjusted to the current best estimate.
28. Revenue
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
Applicable from January 1, 2020
(1) General principles
Income is the total inflow of economic benefits formed in the daily activities of the Company, which will lead to the increase ofshareholders' equity and has nothing to do with the capital invested by shareholders.
The Company has fulfilled the performance obligation in the contract, that is, the revenue is recognized when the customerobtains the control right of relevant goods. To obtain the control right of the relevant commodity means to be able to dominate theuse of the commodity and obtain almost all the economic benefits from it.
If there are two or more performance obligations in the contract, the Company will allocate the transaction price to each singleperformance obligation according to the relative proportion of the separate selling price of the goods or services promised by eachsingle performance obligation on the start date of the contract, and measure the income according to the transaction price allocated toeach single performance obligation.
The transaction price refers to the amount of consideration that the Company is expected to be entitled to receive due to thetransfer of goods or services to customers, excluding the amount collected on behalf of a third party. When determining the contracttransaction price, if there is a variable consideration, the Company shall determine the best estimate of the variable considerationaccording to the expected value or the most likely amount, and include it in the transaction price with the amount not exceeding theaccumulated recognized income when the relevant uncertainty is eliminated, which is most likely not to have a significant reversal. Ifthere is a significant financing component in the contract, the Company will determine the transaction price according to the amountpayable in cash when the customer obtains the control right of the commodity. The difference between the transaction price and thecontract consideration will be amortised by the effective interest method during the contract period. If the interval between thecontrol right transfer and the customer's payment is less than one year, the Company will not consider the financing componentPoints.
If one of the following conditions is met, the performance obligation shall be performed within a certain period of time;otherwise, the performance obligation shall be performed at a certain point of time:
① When the customer performs the contract in the Company, he obtains and consumes the economic benefits brought by theCompany's performance;
② Customers can control the goods under construction during the performance of the contract;
③ The goods produced by the Company in the process of performance have irreplaceable uses, and the Company has the rightto collect money for the performance part that has been completed so far during the whole contract period.
For the performance obligations performed within a certain period of time, the Company shall recognize the revenue accordingto the performance progress within that period, except that the performance progress cannot be reasonably determined. The Companydetermines the performance schedule of providing services according to the input method. When the progress of performance cannotbe reasonably determined, if the cost incurred by the Company is expected to be compensated, the revenue shall be recognizedaccording to the amount of cost incurred until the progress of performance can be reasonably determined.
For the performance obligation performed at a certain time point, the Company recognizes the revenue at the time point when
the customer obtains the control right of relevant goods. In determining whether a customer has acquired control of goods or services,the Company will consider the following signs:
① The Company has the right to receive payment for the goods or services, that is, the customer has the obligation to pay forthe goods;
② The Company has transferred the legal ownership of the goods to the customer, that is, the customer has the legalownership of the goods;
③ The Company has transferred the goods in kind to the customer, that is, the customer has possessed the goods in kind;
④ The Company has transferred the main risks and rewards of the ownership of the goods to the customer, that is, thecustomer has obtained the main risks and rewards of the ownership of the goods;
⑤ The product has been accepted by the customer.
Sales return clause
For the sales with sales return clauses, when the customer obtains the control right of the relevant goods, the Company shallrecognize the revenue according to the amount of consideration it is entitled to obtain due to the transfer of the goods to the customer,and recognize the amount expected to be returned due to the sales return as the estimated liability; at the same time, the Companyshall deduct the estimated cost of recovering the goods according to the book value of the expected returned goods at the time oftransfer（ The balance after deducting the value of the returned goods is recognized as an asset, that is, the cost of return receivable,which is carried forward by deducting the net cost of the above assets according to the book value of the transferred goods at the timeof transfer. On each balance sheet date, the Company re estimates the return of future sales and re measures the above assets andliabilities.
Warranty obligations
According to the contract and legal provisions, the Company provides quality assurance for the goods sold and the projectsconstructed. For the guarantee quality assurance to ensure that the goods sold meet the established standards, the Company conductsaccounting treatment in accordance with the accounting standards for Business Enterprises No. 13 - contingencies. For the servicequality assurance which provides a separate service in addition to guaranteeing that the goods sold meet the established standards, theCompany takes it as a single performance obligation, allocates part of the transaction price to the service quality assurance accordingto the relative proportion of the separate selling price of the goods and service quality assurance, and recognizes the revenue whenthe customer obtains the service control right. When evaluating whether the quality assurance provides a separate service in additionto assuring customers that the goods sold meet the established standards, the Company considers whether the quality assurance is astatutory requirement, the quality assurance period, and the nature of the Company's commitment to perform the task.
Customer consideration payable
If there is consideration payable to the customer in the contract, unless the consideration is to obtain other clearlydistinguishable goods or services from the customer, the Company will offset the transaction price with the consideration payable,and offset the current income at the later time of confirming the relevant income or paying (or promising to pay) the customer'sconsideration.
Contractual rights not exercised by customers
If the Company advances sales of goods or services to customers, the amount shall be recognized as liabilities first, and thenconverted into income when relevant performance obligations are fulfilled. When the Company does not need to return the advancepayment and the customer may give up all or part of the contract rights, if the Company expects to have the right to obtain theamount related to the contract rights given up by the customer, the above amount shall be recognized as income in proportionaccording to the mode of the customer exercising the contract rights; otherwise, the Company only has the very low possibility of thecustomer requiring to perform the remaining performance obligations The relevant balance of the above liabilities is converted intoincome.
Contract change
When the construction contract between the Company and the customer is changed:
① If the contract change increases the clearly distinguishable construction service and contract price, and the new contractprice reflects the separate price of the new construction service, the Company will treat the contract change as a separate contract foraccounting;
② If the contract change does not belong to the above-mentioned situation (1), and there is a clear distinction between thetransferred construction service and the non transferred construction service on the date of contract change, the Company will regardit as the termination of the original contract, and at the same time, combine the non performance part of the original contract and thecontract change part into a new contract for accounting treatment;
③ If the contract change does not belong to the above situation (1), and there is no clear distinction between the transferredconstruction services and the non transferred construction services on the date of contract change, the Company will take the contractchange part as an integral part of the original contract for accounting treatment, and the resulting impact on the recognized incomewill be adjusted to the current income on the date of contract change.
(2) Specific methods
The specific methods of revenue recognition of the Company are as follows:
① Commodity sales contract
The sales contract between the Company and customers includes the performance obligation of transferring curtain wallmaterials, electric energy, etc., which belongs to the performance obligation at a certain time point.
Revenue from domestic sales of products is recognized at the time when the customer obtains the right of control of the goodson the basis of comprehensive consideration of the following factors: the Ccompany has delivered the products to the customeraccording to the contract, the customer has accepted the goods, the payment for goods has been recovered or the receipt has beenobtained, and the relevant economic benefits are likely to flow in, the main risks and rewards of the ownership of the goods havebeen transferred, the legal ownership has been transferred;
Based on the comprehensive consideration of the following factors, the revenue of export products is recognized at the timewhen the customer obtains the control of the goods: the company has declared the products according to the contract, obtained thebill of lading, collected the payment for goods or obtained the receipt certificate, and the relevant economic benefits are likely to flowin, the main risks and rewards of the ownership of the goods have been transferred, and the legal ownership of the goods has beentransferred Move.
② Service contract
The service contract between the Company and its customers includes the performance obligations of metro platform screendoor operation and maintenance and property services. As the Company's performance at the same time, the customers obtain andconsume the economic benefits brought by the Company's performance, the Company takes it as the performance obligation within acertain period of time and allocates it equally during the service provision period.
③ Engineering contract
The project contract between the Company and the customer includes the performance obligations of curtain wall project andmetro platform screen door project construction. As the customer can control the goods under construction in the process of theCompany's performance, the Company takes them as the performance obligations within a certain period of time, and recognizes theincome according to the performance progress, except that the performance progress cannot be reasonably determined. The Companydetermines the performance schedule of providing services according to the input method. The performance schedule shall bedetermined according to the proportion of the actual contract cost to the estimated total contract cost. On the balance sheet date, theCompany re estimates the progress of completed or completed services to reflect the changes in performance.
④ Real estate sales contract
The income of the Company's real estate development business is recognized when the control of the property is transferred tothe customer. Based on the terms of the sales contract and the legal provisions applicable to the contract, the control of the propertycan be transferred within a certain period of time or at a certain point in time. Only if the goods produced by the Company during theperformance of the contract have irreplaceable uses, and the Company has the right to collect payment for the cumulative
performance part that has been completed during the entire contract period, the performance obligation has been completed duringthe contract period. The progress is recognized as revenue within a period of time, and the progress of the completed performanceobligations is determined in accordance with the ratio of the contract costs actually incurred to complete the performance obligationsto the estimated total cost of the contract. Otherwise, the income is recognized when the customer obtains the physical ownership orlegal ownership of the completed property and the Company has obtained the current right of collection and is likely to recover theconsideration. When confirming the contract transaction price, if the financing component is significant, the Company will adjust thecontract commitment consideration according to the financing component of the contract.The following revenue accounting policies are applicable to the year 2019 and before
1. Sales of goods goods Income
When all of the following conditions are satisfied, the sales of goods are recognized as sales income according to the contractamount received or receivable from the buyer: (1) Main risks and rewards attached to the ownership of the goods have beentransferred to the buyer; (2) No succeeding power of administration or effective control is reserved which are usually attached toownership; (3) Amount received can be reliably measured; (4) Related financial benefit may inflow to the Company; (5) Relativecosts, occurred or will occur, can be reliably measured.
(2) Basis for of revenue from providing of labor services
If they are not in the same year, then use the estimation on percentage basis when it is possible. The completion percentage isthe costs occurred on the total cost.
The reliable estimation of the result of providing of labor service must meet the following conditions: A. the revenue can bereliably measured; B. the economic benefit is very likely to flow into the Company; C. the completion can be determined reliably; D.costs incurred or will be incurred can be reliably measured.
The Company shall determine the total revenue of the Services provided under the Contract or Agreement Price received orreceivable, unless the Contract or Agreement Price received or receivable is not fair. On the balance sheet date, the total income ofthe labor service provided in the current period shall be recognized by multiplying the total income of the labor service provided bythe balance sheet by the amount of the accumulated income of the service provided in the previous accounting period. At the sametime, the total estimated cost of the labor service provided is multiplied by the completion schedule by the amount of the accumulatedconfirmed labor service cost in the previous accounting period to carry forward the current labor service cost.
If the results of the labor service transaction provided on the balance sheet date cannot be reliably estimated, the followingcases shall be dealt with:
If the cost of the services already incurred is expected to be compensated, it shall be recognized as the amount of the costsalready incurred
The income from providing services shall be carried forward to the cost of services at the same amount.
If the labor cost incurred is not expected to be compensated, the labor cost already incurred is included in the current profit andloss, and the income from providing labor services is not recognized.
(3) Asset tenure income
When the economic benefits related to the transaction are likely to flow into the enterprise, and the amount of income can bemeasured reliably, the amount of income from the transfer of asset use rights is determined in the following cases:
The amount of interest income shall be determined according to the time and the actual interest rate at which the money fundsof the enterprise are used by others.
The amount of royalty income shall be determined in accordance with the time and method of charge agreed upon in therelevant contract or agreement
(4) Construction contracts Income
On the balance sheet day, the Group recognizes the contract income and costs using the completion percentage method if theresult of the construction contract can be reliably estimated. The percentage of completion method recognizes income and costsbased on contract completion schedule. The competition percentage is determined by the share of the costs incurred in the total cost.
If not, such contracts are treated differently. If the contract cost can be recovered, the revenue is recognized according to theactual contract costs that can be recovered and the contract cost is recognized as the current expense; if not, the contract cost isrecognized as the current expense and no revenue is recognized.If the estimated total costs exceed the total revenue, the Group recognizes the estimated loss as the current expense.
(5) Specific revenue recognition method
① Construction contracts
Metro screen door projects of the Company and Shenzhen Fangda Automatic System, and curtain wall project of Fangda Jiankeare individual construction contracts. They are accounted by the following means:
Construction contracts completed within a fiscal year are recognized for their income and cost upon completion.
Income and expenses of the construction contracts carried over-year are recognized on percentage basis at balance sheet daywhen all of the following conditions are satisfied: contract income can be reliably measured, relative financial benefit can inflow tothe Company; progress of the project and costs to complete the contract can be reliably recognized; cost occurred to complete thecontract can be clearly distinguished and reliably measured, which enables comparing of actual cost with predicted cost.
Contract costs are direct and indirect expenses occurred since the date when the contract is engaged till the completion day. Thecompetition percentage is determined by the share of the costs incurred in the total cost.
Construction contracts completed in current term are recognized for income according to the actual total income of the contractless income recognized in previous terms; meanwhile, the total costs of the contract less costs recognized in previous terms arerecognized as current contract costs. If the total contract cost is predicted to be greater than the predicted total income, the predictedloss shall be recognized as current cost instantly.
Parts of the curtain wall project under Fangda Jianke are outsourced, and administrative fees are collected at the agreed rate.For these construction contracts, income will be recognized when ongoing payment for the project is received and correspondingcosts are transferred.
② Sales product
Revenue of products for domestic sales is recognized when the Group delivers the products and receives the sales payment orobtains the payment voucher; revenue for products for overseas sales is recognized at departure of the products.
③ Real estate sales
Income from real estate sales is recognized when the contract is signed and performed, project is developed and completed withthe record for the completion acceptance, the handover procedure is completed or property is deemed accepted by the customer asper the property sales contract, the payment is received or it is believed that the payment can be received, and the cost can bemeasured reliably.
Accounting policies used in revenue recognition and measurement
Differences in revenue recognition accounting policies caused by different business models of similar businesses
29. Government subsidy
(1) Government subsidy
Government subsidies are recognized when the following conditions are met:
① Requirements attached to government subsidies;
② The Company can receive government subsidies.
(2) Government subsidy
When a government subsidy is monetary capital, it is measured at the received or receivable amount. None monetary capital aremeasured at fair value; if no reliable fair value available, recognized at RMB1.
(3) Recognition of government subsidies
① Assets-related
Government subsidies related to assets are obtained by the Company to purchase, build or formulate in other mannerslong-term assets; or subsidies related to benefits. If the asset-related government subsidy is recognized as deferred gain, should be
recorded in gain and loss in the service life. Government subsidy measured at the nominal amount is accounted into current incomeaccount. If the relevant assets are sold, transferred, scrapped or damaged before the end of their useful life, the unallocated relevantdeferred income balance shall be transferred to the profit and loss of the current period of disposition of the assets.
Gain-related government subsidy should be accounted as follows:
The Company divides government subsidies into assets-related and earnings-related government subsidies. Gain-relatedgovernment subsidy should be accounted as follows:
Subsidy that will be used to compensate related future costs or losses should be recognized as deferred gain and recorded in thegain and loss of the current report and offset related cost;
Subsidy that is used to compensate existing cost or loss should be recorded in the gain and loss of the current period or offsetrelated cost.
For government subsidies that include both asset-related and income-related parts, separate different parts for accountingtreatment; It is difficult to distinguish between the overall classification of government subsidies related to benefits.
Government subsidy related to routine operations should be recorded in other gains or offset related cost. Government subsidynot related to routine operations should be recorded in non-operating income or expense.
③ Policy preferential loan discount
The policy-based preferential loan obtained has interest subsidy. If the government allocates the interest-subsidy funds to thelending bank, the loan amount actually received will be used as the entry value of the loan, and the borrowing cost will be calculatedbased on the loan principal and policy-based preferential interest rate.
If the government allocates the interest-bearing funds directly to the Group, discount interest will offset the borrowing costs.
④ Government subsidy refund
When a confirmed government subsidy needs to be returned, the book value of the asset is adjusted against the book value ofthe relevant asset at initial recognition. If there is a related deferred income balance, the book balance of the related deferred incomeis written off and the excess is credited to the current profit or loss; In other cases, it is directly included in the current profit and loss.
30. Differed income tax assets and differed income tax liabilities
The Company uses the temporary difference between the book value of the assets and liabilities on the balance sheet day andthe tax base and the liabilities method to recognize the deferred income tax. 26. Deferred income tax assets and deferred income taxliabilities
(1) Deferred income tax assets
For deductible temporary discrepancies, deductible losses and tax offsets that can be carried forward for future years, theimpact on income tax is calculated at the estimated income tax rate for the transfer-back period and the impact is recognized asdeferred income tax assets, provided that the Company is likely to obtain future taxable income for deductible temporarydiscrepancies, deductible losses and tax offsets.
At the same time, the impact on income tax of deductible temporary discrepancies resulting from the initial recognition ofassets or liabilities in transactions or matters with the following characteristics is inconclusive as deferred income tax assets:
A. The transaction is not a business combination;
B. the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;
In the event of temporary discrepancy of deductible investment related to subsidiaries, joint ventures and joint ventures, andmeeting the following two conditions, the amount of impact (talent) on income tax shall be deemed as deferred income tax assets:
A. Temporary discrepancies are likely to be reversed in the foreseeable future;
B. In the future, it is likely to obtain taxable income that can be used to offset the deductible temporary differences;
On the balance sheet date, if there is conclusive evidence that sufficient taxable income is likely to be obtained in the future tooffset the deductible temporary differences, the deferred income tax assets that have not been recognized in the previous period arerecognized.
On the balance sheet day, the Company re-examines the book value of the deferred income tax assets. If it is unlikely to have
adequate taxable proceeds to reduce the benefits of the deferred income tax assets, less the deferred income tax assets‘ book value.When there is adequate taxable proceeds, the lessened amount will be reversed.
(2) Deferred income tax assets
All provisional differences in taxable income of the Company shall be measured on the basis of the estimated income tax ratefor the period of transfer-back and shall be recognized as deferred income tax liabilities, except that:
At the same time, the impact on income tax of deductible temporary discrepancies resulting the initial recognition of assets orliabilities in transactions or matters with the following characteristics is inconclusive as deferred income tax Liabilities:
A. Initial recognition of goodwill;
B. Initial recognition of goodwill, or of assets or liabilities generated in transactions with the following features: the transactionis not a merger and the transaction does not affect the accounting profit or taxable proceeds;
② In the event of temporary discrepancy of deductible investment related to subsidiaries, Joint venture joint ventures, andmeeting the two conditions, the amount of impact (talent) on income tax shall be deemed as deferred income tax assets:
A. The Company is able to control the time of temporary discrepancy transfers;
B Temporary discrepancies are likely to be reversed in the foreseeable future;
(3) Deferred income tax assets
(1) Deferred income tax liabilities or assets associated with enterprise consolidation
Temporary difference of taxable tax or deductible temporary difference generated by enterprise merger under non-same control.When deferred income tax liability or deferred income tax asset is recognized, related deferred income tax expense (or income) isusually adjusted as recognized goodwill in enterprise merger.
② Amount of shares paid and accounted as owners' equity
Except for the adjustment goodwill generated by mergers or deferred income tax related to transactions or events directlyaccounted into the owners‘ equity, income tax is accounted as income tax expense into the current gain/loss account. The effects oftemporary discrepancy on income tax include the following: Other integrated benefits such as fair value change of financial assetsavailable for sale, retroactive adjustment of accounting policy changes or retroactive restatement of accounting error correctiondiscrepancy to adjust the initial retained income, and mixed financial instruments including liabilities and equity.
③ Compensation for losses and tax deductions
A. Compensable losses and tax deductions from the Company's own operations
Deductible losses refer to the losses calculated and determined in accordance with the provisions of the tax law that are allowedto be made up with the taxable income of subsequent years. The uncovered losses (deductible losses) and tax deductions that can becarried forward in accordance with the tax law are treated as deductible temporary differences. When it is expected that sufficienttaxable income is likely to be obtained in the future period when it is expected to be available to make up for losses or tax deductions,the corresponding deferred income tax assets are recognized within the limit of the taxable income that is likely to be obtained, whilereducing the current period Income tax expense in the income statement.
B. Compensable uncovered losses of the merged company due to business merger
In a business combination, if the Company obtains the deductible temporary difference of the purchased party and does notmeet the deferred income tax asset recognition conditions on the purchase date, it shall not be recognized. Within 12 months after thepurchase date, if new or further information is obtained indicating that the relevant conditions on the purchase date already exist, andthe economic benefits brought about by the temporary difference are expected to be deducted on the purchase date, confirm therelevant delivery. Deferred income tax assets, while reducing goodwill, if the goodwill is not enough to offset, the difference isrecognized as the current profit and loss; except for the above circumstances, the deferred tax assets related to the businesscombination are recognized and included in the current profit and loss.
④Temporary difference caused by merger offset
If there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet and thetaxable basis of the taxpayer due to the offset of the unrealized internal sales gain or loss, the deferred income tax asset or the
deferred income tax liability is confirmed in the consolidated balance sheet, and the income tax expense in the consolidated profitstatement is adjusted, with the exception of the deferred income tax related to the transaction or event directly included in the owner'sequity and the merger of the enterprise.
⑤ Share payment settled by equity
If the tax law provides for allowable pre-tax deduction of expenses related to share payment, within the period for which thecost and expense are recognized in accordance with the accounting standards, the Company shall calculate the tax basis andtemporary discrepancy based on the estimated pre-tax deduction amount at the end of the accounting period and confirm the relevantdeferred income tax if it meets the conditions for confirmation. Of these, the amount that can be deducted before tax in the futureexceeds the cost related to share payment recognized in accordance with the accounting standards, and the excess income tax shall bedirectly included in the owner's equity.
31. Leasing
(1) Accounting of operational leasing
① The Company as the leasor: Rentals from operational leasing are recognized as current gains on straight basis to the periodsof leasing. Where the lessor provides a lease-free period, the total rent shall be apportioned within the whole lease-free periodwithout deducting the lease-free period according to the straight line method or other reasonable method, and the rent-free periodshall be recognized as well as the corresponding liabilities. People If the charterer undertakes certain expenses, the Company shalldistribute the rent Expense balance deducted from the total rent income during the lease term.
Initial direct expenses are recorded to current income account. In the event of an agreement or rent, the current profit and lossshall be included in the actual occurrence.
② When the Company is the operating lessor, the rent received shall be recognized as income within the lease term by thestraight line method. Where the lessor provides a lease-free period, the total rent shall be apportioned within the whole lease-freeperiod without deducting the lease-free period according to the straight line method or other reasonable method, and the rent-freeperiod shall be recognized as well as the corresponding liabilities. If the charterer undertakes certain expenses, the Company shalldistribute the rent income balance deducted from the total rent income during the lease term.
Initial direct expenses are recorded to current income account. Larger amounts shall be capitalized and included in currentprofits and losses in installments on the same basis as the confirmed rental income during the entire operating lease period. In theevent of an agreement or rent, the current profit and loss shall be included in the actual occurrence.
(2) Accounting of operational leasing
None
32. Other significant accounting policies and estimates
(1) Measurement of Fair Value
Fair value refers to the amount of asset exchange or liabilities settlement by both transaction parties familiar with the situationin a fair deal on a voluntary basis.
The Company measures the fair value of related assets or liabilities at the prices in the main market. If there is no major market,the Company measures the fair value of the relevant assets or liabilities at the most favorable market prices. The Group usesassumptions that market participants use to maximize their economic benefits when pricing the asset or liability.
The main market refers to the market with the highest transaction volume and activity of the related assets or liabilities. Themost favorable market means the market that can sell the related assets at the highest amount or transfer the related liabilities at thelowest amount after considering the transaction cost and transportation cost.
For financial assets or liabilities in an active market, The Company determines their fair value based on quotations in the activemarket. If there is no active market, the Company uses evaluation techniques to determine the fair value.
For the measurement of non-financial assets at fair value, the ability of market participants to use the assets for optimalpurposes to generate economic benefits, or the ability to sell the assets to other market participants that can be used for optimalpurposes to generate economic benefits.
① Valuation technology
The Company adopts valuation techniques that are applicable in the current period and are supported by sufficient data andother information. The valuation techniques used mainly include market method, income method and cost method. The Companyuses a method consistent with one or more of the valuation techniques to measure fair value. If multiple valuation techniques are usedto measure fair value, the reasonableness of each valuation result shall be considered, and the fair value shall be selected as the mostrepresentative of fair value under the current circumstances. The amount of value is regarded as fair value.
The The Company equipment are applicable in the current circumstances and have sufficient available data and otherinformation to support the use of the relevant observable input values prioritized. Unobservable input values are used only when theobservable input value cannot be obtained or is not feasible. Observable input values are input values that can be obtained frommarket data. The Group uses assumptions that market participants use to maximize their economic benefits when pricing the asset orliability. Non-observable input values are input values that cannot be obtained from market data. The input value is obtained based onthe best information available on assumptions used by market participants in pricing the relevant asset or liability.
②Fair value hierarchy
This company divides the input value used in fair value measurement into three levels, and first uses the first level input value,then uses the second level input value, and finally uses the third level input value. First level: quotation of same assets or liabilities inan active market (unadjusted) The second level input value is a directly or indirectly observable input value of the asset or liability inaddition to the first level input value. The input value of the third level is the unobservable input value of the related asset or liability.
(2) Accounting of hedging
(2.1) Classification of inventories
The Company's hedge is a cash flow hedge.
Cash flow hedging refers to the hedging of cash flow risk. The change in cash flow is derived from specific risks associatedwith recognized assets or liabilities, expected transactions that are likely to occur, or with respect to the components of theabove-mentioned project and will affect the profits and losses of the enterprise.
(2.2) Hedging tools and hedged projects
Hedging means a financial instrument designated by the Company for the purpose of hedging, whose fair value or cash flowvariation is expected to offset the fair value or cash flow variation of the hedged item, including:
① Financial liabilities measured at fair value with variations accounted into current income account Check-out options canonly be used as a hedging tool if the option is hedged, including those embedded in a hybrid contract. Derivatives embedded in ahybrid contract but not split cannot be used as separate hedging tools.
② Non-derivative financial assets or non-derivative financial liabilities that are measured at fair value and whose changes areincluded in the current profit and loss, but designated as fair value and whose changes are included in the current profit and loss, andtheir own credit risk changes caused by changes in fair value except for financial liabilities included in other comprehensive income.
Own equity instruments are not financial assets or financial liabilities and cannot be used as hedging instruments.
A hedged item refers to an item that exposes the Company to the risk of changes in fair value or cash flow and is designated asthe hedged object and can be reliably measured. The Company designates the following individual projects, project portfolios or theircomponents as hedged projects:
① Confirmed assets or liabilities.
② Confirmed commitments that have not yet been confirmed. Confirmed commitment refers to a legally binding agreement toexchange a specific amount of resources at an agreed price on a specific date or period in the future.
③ Expected transactions that are likely to occur. Anticipated transactions refer to transactions that have not yet beencommitted but are expected to occur.
④ Net investment in overseas operations.
The above-mentioned project components refer to the parts that are less than the overall fair value or cash flow changes of theproject. The Company designates the following project components or their combinations as hedged items:
① The part of the change in fair value or cash flow (risk component) that is only caused by one or more specific risks in theoverall fair value or cash flow changes of the project. According to the assessment in a specific market environment, the riskcomponent should be able to be individually identified and reliably measured. The risk component also includes the part where thefair value or cash flow of the hedged item changes only above or below a specific price or other variables.
② One or more selected contractual cash flows.
③ The component of the nominal amount of the project, that is, the specific part of the whole amount or quantity of the project,may be a certain proportion of the whole project, or may be a certain level of the whole project. If a certain level includes earlyrepayment rights and the fair value of the early repayment rights is affected by changes in the risk of the hedge, the level shall not bedesignated as the hedged item of the fair value hedge, but in the measurement of the hedged item except when the fair value hasincluded the influence of the prepayment right.
(2.3) Evaluation of hedging relationship
When the hedging relationship is initially specified, the Group officially specifies the related hedging relationships with officialdocuments recording the hedging relationships, risk management targets and hedging strategies. This document sets out the hedgingtools, hedged items, the nature of hedged risks, and the Company's assessment of hedged effectiveness. Hedging means a financialinstrument designated by the Company for the purpose of hedging, whose fair value or cash flow variation is offset the fair value orcash flow variation of the hedged item, including: Such hedges are continuously evaluated on and after the initial specified date tomeet the requirements for hedging validity.
If the hedging instrument has expired, been sold, the contract is terminated or exercised (but the extension or replacement aspart of the hedging strategy is not treated as expired or contract termination), or the risk management objective changes, resulting inhedging The relationship no longer meets the risk management objectives, or the economic relationship between the hedged item andthe hedging instrument no longer exists, or the impact of credit risk begins to dominate in the value changes caused by the economicrelationship between the hedged item and the hedging instrument, or when the hedge no longer meets the other conditions of thehedge accounting method, the Company terminates the use of hedge accounting.
If the hedging relationship no longer meets the requirements for hedging effectiveness due to the hedging ratio, but the riskmanagement objective of the designated hedging relationship has not changed, the Company shall rebalance the hedging relationship.
(2.4) Revenue the of revenue recognition and measurement
If the strict conditions of the hedging accounting method are satisfied, the following methods shall be applied:
Cash flow hedging
The part of hedging tool gains or losses that is valid for hedging is recognized as other comprehensive income as a cash flowhedging reserve, and the part that is invalid for hedging (that is, other gains or losses after deducting other comprehensive income),are counted Into the current profit and loss. The amount of cash flow hedging reserve is determined according to the lower of theabsolute amounts of the following two items: ①accumulated gains or losses of hedging instruments since the hedging. The amountin the effective arbitrage is recognized by the accumulative gains or losses from the starting of arbitrage and accumulative changes tothe current value of future forecast cash flows from the start of arbitrage.
If the expected transaction of the hedged asset is subsequently recognized as a non-financial asset or non-financial liability, or ifthe expected transaction of the non-financial asset or non-financial liability forms a defined commitment to the applicable fair valuehedge accounting, the amount of the cash flow hedge reserve originally recognized in the other consolidated income is transferred outto account for the initial recognized amount of the asset or liability. For the remaining cash flow hedges, during the same period whenthe expected cash flow to be hedged affects the profit and loss, if the expected sales occur, the cash flow hedge reserve recognized inother comprehensive income is transferred out and included in the current profit and loss.
(3) Repurchase of the Company‘s shares
(3.1) In the event of a reduction in the Company's share capital as approved by legal procedure, the Company shall reduce theshare capital by the total amount of the written-off shares, adjust the owner's equity by the difference between the price paid by thepurchased stocks (including transaction costs) and the total amount of the written-off shares, offset the capital reserve (share capital
premium), surplus reserve and undistributed profits in turn; A portion of a capital reserve (share capital premium) that is less than thetotal face value and less than the total face value.(3.2) The total expenditure of the repurchase shares of the Company, which is managed as an inventory share before they arecancelled or transferred, is converted to the cost of the inventory shares.(3.3) Increase in the capital reserve (capital premium) at the time of transfer of an inventory unit, the portion of the transferincome above the cost of the inventory unit; Lower than the inventory stock cost, the capital reserve (share capital premium), surplusreserve, undistributed profits in turn.
(4) Significant accounting judgment and estimate
The Group continuously reviews significant accounting judgment and estimate adopted for the reasonable forecast of futureevents based on its historical experience and other factors. Significant accounting judgment and assumptions that may lead to majoradjustment of the book value of assets and liabilities in the next accounting year are listed as follows:
Classification of financial assets
The major judgements involved in the classification of financial assets include the analysis of business model and contract cashflow characteristics.
The Group determines the business mode of managing financial assets at the level of financial asset portfolio, taking intoaccount such factors as how to evaluate and report financial asset performance to key managers, the risks that affect financial assetperformance and how to manage it, and how to obtain remuneration for related business managers.
When the Group assesses whether the contractual cash flow of financial assets is consistent with the basic borrowingarrangement, there are the following main judgments: whether the principal may change due to early repayment and other reasonsduring the duration of the period or the amount of change; whether the interest Including the time value of money, credit risk, otherbasic borrowing risks, and consideration of costs and profits. For example, does the amount paid in advance reflect only the unpaidprincipal and the interest based on the unpaid principal, as well as the reasonable compensation paid for early termination of thecontract.
Measurement of expected credit losses of accounts receivable
The Group calculates the expected credit loss of accounts receivable through the risk exposure of accounts receivable defaultand the expected credit loss rate, and determines the expected credit loss rate based on the default probability and the default loss rate.When determining the expected credit loss rate, the Company uses internal historical credit loss experience and other data, combinedwith current conditions and forward-looking information to adjust the historical data. When considering forward-looking information,the indicators used by the Company include the risks of economic downturn, changes in the external market environment,technological environment, and customer conditions. The Company regularly monitors and reviews assumptions related to thecalculation of expected credit losses.
Deferred income tax assets
If there is adequate taxable profit to deduct the loss, the deferred income tax assets should be recognized by all the unused taxloss. This requires the management to make a lot of judgment to forecast the time and amount of future taxable profit and determinethe amount of the deferred tax assets based on the taxation strategy.
Revenue recognition (after January 1, 2020)
The Group's revenue from providing curtain wall construction and metro platform screen door installation services isrecognized over a period of time. The recognition of the income and profit of such engineering installation services depends on theCompany's estimation of the contract results and performance progress. If the actual amount of total revenue and total cost is higheror lower than the estimated value of the management, it will affect the amount of revenue and profit recognition of the Group in thefuture.
Construction contracts (before January 1, 2020)
The Group recognizes income based on the completion of individual construction contract. The management determines thecompletion percentage based on the actual cost in the total budget and forecasts the contract income. The starting and completion
dates of construction contracts fall in different account periods. The Group will review and adjust contract income and costestimation in budgets (if the actual contract income is less than the estimate or actual contract cost, contract estimation loss provisionwill be made).Estimate of fair valueThe Group uses fair value to measure investment real estate and needs to estimate the fair value of investment real estate atleast quarterly. This requires the management to reasonably estimate the fair value of the investment real estate with the help ofvaluation experts.
Development costFor property that has been handed over with income recognized, but whose public facilities have not been constructed or notbeen completed, the management will estimate the development cost for the part that has not been started according to the budget toreflect the operation result of the property sales.
33. Major changes in accounting policies and estimates
(1) Changes in accounting policies
√ Applicable □ Inapplicable
Account policy changes and reasons:
On July 5, 2017, the Ministry of Finance issued the accounting standards for Business Enterprises No. 14 - Revenue (CK [2017]No. 22) (hereinafter referred to as the "new revenue standards"). Domestic listed enterprises are required to implement the newincome standard from January 1, 2020. The Company implemented the new income standard on January 1, 2020 to adjust therelevant contents of accounting policies.The new income standard requires that the cumulative impact of the first implementation of the standard should be adjusted tothe amount of retained earnings and other relevant items in the financial statements at the beginning of the first implementation year(i.e. January 1, 2020), and the information of the comparable period should not be adjusted. On December 10, 2019, the Ministry ofFinance issued the interpretation of accounting standards for Business Enterprises No. 13.On December 10, 2019, the Ministry of Finance issued the interpretation of accounting standards for Business Enterprises No.
13. The Company implemented the interpretation on January 1, 2020, and did not trace back the previous years.The cumulative impact of the above new revenue standard accounting policies is as follows:
Due to the implementation of the new income standard, the Company's consolidated financial statements were adjustedaccordingly as of January 1, 2020, including accounts receivable of - 1493496313.22 yuan, contract assets of 1297743546.73 yuan,other non current assets due within one year of 50120998.68 yuan, other non current assets of 145631767.81 yuan, advances of -135007647.28 yuan, contract liabilities of 124240948.05 yuan and other current liabilities of 10766 yuan, 699.23 yuan, and therelevant adjustment has no impact on the shareholders' equity attributable to the parent company in the consolidated financialstatements of the Company.At the same time, due to the implementation of the new income standard, there is no impact on the financial statements of theparent company of the Company.
(2) Changes in major accounting estimates
√ Applicable □ Inapplicable
| Account policy changes and reasons | Approval procedure | Effective time | Remarks |
| According to the new financial instruments standards, the relevant enterprises should assess whether the credit risk of relevant financial instruments has changed significantly on each balance sheet date. The Company calculates the expected credit loss in 2020 by using the latest historical data and combining with forward-looking factors according to the method of calculating the expected credit loss. In order to objectively and truly reflect the financial situation and operating results of the Company's various businesses, the accounting estimates of the expected credit loss rate of accounts receivable and contract assets are changed. | The accounting estimate change was approved by the 22nd Meeting of the 8th board of directors on April 16, 2020 | 1 January 2020 | The statement items affected by the change of accounting estimate are as follows: increased accounts receivable by RMB24,118,098.91, increased contract assets by RMB71,658,974.92, increased other non current assets due within one year by RMB11,866,064.90, increased other non current assets by RMB3,415,296.51, decreased deferred income tax assets by RMB16,744,810.10, increased surplus reserve by RMB334.64, increased undistributed profit by RMB93,672, 139.18, increased minority shareholders' equity RMB641,151.31, increased credit impairment loss RMB24,118,098.91, increased asset impairment loss RMB86,940,336.32 yuan, increased income tax expense RMB16,744,810.10, increased minority shareholders' profit and loss RMB64,1151.31. |
(3) The first implementation of the new financial instruments guidelines, new income standards, new leasestandards, adjustments the first implementation of the financial statements at the beginning of the yearApplicableWhether to adjust the balance sheet accounts at the beginning of the year
√ Yes □ No
Consolidated Balance Sheet
In RMB
| Item | 31 December 2019 | 1 January 2020 | Adjustment |
| Current asset: | |||
| Monetary capital | 1,209,811,978.95 | 1,209,811,978.95 | |
| Settlement provision | |||
| Outgoing call loan | |||
| Transactional financial assets | 10,330,062.18 | 10,330,062.18 | |
| Derivative financial assets | |||
| Notes receivable | 305,070,930.97 | 305,070,930.97 | |
| Account receivable | 1,956,191,307.07 | 462,694,993.85 | -1,493,496,313.22 |
| Receivable financing | 2,954,029.00 | 2,954,029.00 | |
| Prepayment | 21,327,109.18 | 21,327,109.18 | |
| Insurance receivable | |||
| Reinsurance receivable | |||
| Provisions of Reinsurance contracts receivable | |||
| Other receivables | 139,947,655.35 | 139,947,655.35 | |
| Including: interest receivable | |||
| Dividend receivable | |||
| Repurchasing of financial assets | |||
| Inventory | 733,711,143.46 | 733,711,143.46 | |
| Contract assets | 1,297,743,546.73 | 1,297,743,546.73 | |
| Assets held for sales | |||
| Non-current assets due in 1 year | 50,120,998.68 | 50,120,998.68 | |
| Other current assets | 323,765,585.90 | 323,765,585.90 | |
| Total current assets | 4,703,109,802.06 | 4,557,478,034.25 | -145,631,767.81 |
| Non-current assets: | |||
| Loan and advancement provided | |||
| Debt investment | |||
| Other debt investment |
| Long-term receivables | |||
| Long-term share equity investment | 57,222,240.83 | 57,222,240.83 | |
| Investment in other equity tools | 20,660,181.44 | 20,660,181.44 | |
| Other non-current financial assets | 5,009,728.02 | 5,009,728.02 | |
| Investment real estate | 5,522,391,984.11 | 5,522,391,984.11 | |
| Fixed assets | 477,332,830.92 | 477,332,830.92 | |
| Construction in process | 129,988,982.86 | 129,988,982.86 | |
| Productive biological assets | |||
| Gas & petrol | |||
| Use right assets | |||
| Intangible assets | 78,322,265.05 | 78,322,265.05 | |
| R&D expense | |||
| Goodwill | |||
| Long-term amortizable expenses | 3,875,198.12 | 3,875,198.12 | |
| Deferred income tax assets | 343,349,564.70 | 343,349,564.70 | |
| Other non-current assets | 28,701,802.00 | 174,333,569.81 | 145,631,767.81 |
| Total of non-current assets | 6,666,854,778.05 | 6,812,486,545.86 | 145,631,767.81 |
| Total of assets | 11,369,964,580.11 | 11,369,964,580.11 | 0.00 |
| Current liabilities | |||
| Short-term loans | 724,618,197.34 | 724,618,197.34 | |
| Loans from Central Bank | |||
| Call loan received | |||
| Transactional financial liabilities | |||
| Derivative financial liabilities | 96,767.62 | 96,767.62 | |
| Notes payable | 578,816,027.44 | 578,816,027.44 | |
| Account payable | 1,190,773,300.24 | 1,190,773,300.24 | |
| Prepayment received | 136,340,104.73 | 1,332,457.45 | -135,007,647.28 |
| Contract liabilities | 124,240,948.05 | 124,240,948.05 | |
| Selling of repurchased financial assets | |||
| Deposit received and held for others | |||
| Entrusted trading of securities | |||
| Entrusted selling of securities | |||
| Employees' wage payable | 55,847,134.20 | 55,847,134.20 | |
| Taxes payable | 17,848,987.68 | 17,848,987.68 | |
| Other payables | 701,432,408.28 | 701,432,408.28 | |
| Including: interest payable | |||
| Dividend payable | |||
| Fees and commissions payable | |||
| Reinsurance fee payable | |||
| Liabilities held for sales | |||
| Non-current liabilities due in 1 year | 922,346,563.72 | 922,346,563.72 | |
| Other current liabilities | 181,694,574.47 | 192,461,273.70 | 10,766,699.23 |
| Total current liabilities | 4,509,814,065.72 | 4,509,814,065.72 | 0.00 |
| Non-current liabilities: | |||
| Insurance contract provision | |||
| Long-term loans | 546,501,491.56 | 546,501,491.56 | |
| Bond payable | |||
| Including: preferred stock | |||
| Perpetual bond | |||
| Lease liabilities | |||
| Long-term payable | |||
| Long-term employees‘ |
| wage payable | |||
| Anticipated liabilities | 7,793,527.16 | 7,793,527.16 | |
| Deferred earning | 10,817,247.40 | 10,817,247.40 | |
| Deferred income tax liabilities | 1,063,833,159.00 | 1,063,833,159.00 | |
| Other non-current liabilities | |||
| Total of non-current liabilities | 1,628,945,425.12 | 1,628,945,425.12 | |
| Total liabilities | 6,138,759,490.84 | 6,138,759,490.84 | |
| Owner‘s equity: | |||
| Share capital | 1,123,384,189.00 | 1,123,384,189.00 | |
| Other equity tools | |||
| Including: preferred stock | |||
| Perpetual bond | |||
| Capital reserves | 1,454,191.59 | 1,454,191.59 | |
| Less: Shares in stock | |||
| Other miscellaneous income | -475,409.25 | -475,409.25 | |
| Special reserves | |||
| Surplus reserve | 159,805,930.34 | 159,805,930.34 | |
| Common risk provisions | |||
| Retained profit | 3,898,626,177.99 | 3,898,626,177.99 | |
| Total of owner‘s equity belong to the parent company | 5,182,795,079.67 | 5,182,795,079.67 | |
| Minor shareholders‘ equity | 48,410,009.60 | 48,410,009.60 | |
| Total of owners‘ equity | 5,231,205,089.27 | 5,231,205,089.27 | |
| Total of liabilities and owner‘s interest | 11,369,964,580.11 | 11,369,964,580.11 |
About the adjustment:
Due to the implementation of the new income standard, the Company's consolidated financial statements were adjustedaccordingly as of January 1, 2020, including accounts receivable of - 1493496313.22 yuan, contract assets of 1297743546.73 yuan,other non current assets due within one year of 50120998.68 yuan, other non current assets of 145631767.81 yuan, advances of -135007647.28 yuan, contract liabilities of 124240948.05 yuan and other current liabilities of 10766 yuan, 699.23 yuan, and the
relevant adjustment has no impact on the shareholders' equity attributable to the parent company in the consolidated financialstatements of the Company. At the same time, due to the implementation of the new income standard, there is no impact on thefinancial statements of the parent company of the Company.
Balance Sheet of the Parent Company
In RMB
| Item | 31 December 2019 | 1 January 2020 | Adjustment |
| Current asset: | |||
| Monetary capital | 175,591,953.63 | 175,591,953.63 | |
| Transactional financial assets | |||
| Derivative financial assets | |||
| Notes receivable | |||
| Account receivable | 297,813.76 | 297,813.76 | |
| Receivable financing | |||
| Prepayment | 250,205.32 | 250,205.32 | |
| Other receivables | 1,973,381,342.74 | 1,973,381,342.74 | |
| Including: interest receivable | |||
| Dividend receivable | |||
| Inventory | |||
| Contract assets | |||
| Assets held for sales | |||
| Non-current assets due in 1 year | |||
| Other current assets | 877,430.41 | 877,430.41 | |
| Total current assets | 2,150,398,745.86 | 2,150,398,745.86 | |
| Non-current assets: | |||
| Debt investment | |||
| Other debt investment | |||
| Long-term receivables | |||
| Long-term share equity investment | 963,508,253.00 | 963,508,253.00 | |
| Investment in other equity tools | 18,604,010.22 | 18,604,010.22 |
| Other non-current financial assets | 48,831,242.35 | 48,831,242.35 | |
| Investment real estate | 295,355,002.00 | 295,355,002.00 | |
| Fixed assets | 67,361,529.52 | 67,361,529.52 | |
| Construction in process | |||
| Productive biological assets | |||
| Gas & petrol | |||
| Use right assets | |||
| Intangible assets | 1,824,589.22 | 1,824,589.22 | |
| R&D expense | |||
| Goodwill | |||
| Long-term amortizable expenses | 934,669.73 | 934,669.73 | |
| Deferred income tax assets | 44,408,630.81 | 44,408,630.81 | |
| Other non-current assets | |||
| Total of non-current assets | 1,440,827,926.85 | 1,440,827,926.85 | |
| Total of assets | 3,591,226,672.71 | 3,591,226,672.71 | |
| Current liabilities | |||
| Short-term loans | 300,442,988.19 | 300,442,988.19 | |
| Transactional financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Account payable | 606,941.85 | 606,941.85 | |
| Prepayment received | 746,761.55 | 746,761.55 | |
| Contract liabilities | |||
| Employees' wage payable | 3,215,013.16 | 3,215,013.16 | |
| Taxes payable | 312,647.89 | 312,647.89 | |
| Other payables | 109,837,934.17 | 109,837,934.17 | |
| Including: interest payable | |||
| Dividend |
| payable | |||
| Liabilities held for sales | |||
| Non-current liabilities due in 1 year | 520,872,206.95 | 520,872,206.95 | |
| Other current liabilities | |||
| Total current liabilities | 936,034,493.76 | 936,034,493.76 | |
| Non-current liabilities: | |||
| Long-term loans | 70,000,000.00 | 70,000,000.00 | |
| Bond payable | |||
| Including: preferred stock | |||
| Perpetual bond | |||
| Lease liabilities | |||
| Long-term payable | |||
| Long-term employees‘ wage payable | |||
| Anticipated liabilities | |||
| Deferred earning | |||
| Deferred income tax liabilities | 64,351,075.92 | 64,351,075.92 | |
| Other non-current liabilities | |||
| Total of non-current liabilities | 134,351,075.92 | 134,351,075.92 | |
| Total liabilities | 1,070,385,569.68 | 1,070,385,569.68 | |
| Owner‘s equity: | |||
| Share capital | 1,123,384,189.00 | 1,123,384,189.00 | |
| Other equity tools | |||
| Including: preferred stock | |||
| Perpetual bond | |||
| Capital reserves | 360,835.52 | 360,835.52 | |
| Less: Shares in stock | |||
| Other miscellaneous income | 1,287,629.38 | 1,287,629.38 |
| Special reserves | |||
| Surplus reserve | 159,805,930.34 | 159,805,930.34 | |
| Retained profit | 1,236,002,518.79 | 1,236,002,518.79 | |
| Total of owners‘ equity | 2,520,841,103.03 | 2,520,841,103.03 | |
| Total of liabilities and owner‘s interest | 3,591,226,672.71 | 3,591,226,672.71 |
About the adjustment:
In the balance sheet of the parent company, there is no adjustment of relevant items in the financial statements at the beginning of theyear due to the first implementation of the new income standard.
(4) Description of the 2020 first implementation of the new Income criteria, new lease standardretrospective adjustment of the previous period comparison data
□ Applicable √ Inapplicable
VI. Taxation
1. Major taxes and tax rates
| Tax | Tax basis | Tax rate |
| VAT | Taxable income | 3%, 5%, 6%, 9%, 10%, 11%, 13% |
| City maintenance and construction tax | Taxable turnover | 1%, 5%, 7% |
| Enterprise income tax | Taxable income | See the following table |
| Education surtax | Taxable turnover | 3% |
| Local education surtax | Taxable turnover | 2% |
Tax rates applicable for different tax payers
| Tax payer | Income tax rate |
| The Company | 25% |
| Shenzhen Fangda Jianke Co., Ltd. (hereinafter Fangda Jianke) | 15% |
| Fangda Zhichuang Technology Co., Ltd, (Fangda Zhichuang) | 15% |
| Fangda New Material (Jiangxi) Co., Ltd. (hereinafter Fangda New Material) | 15% |
| Dongguan Fangda New Material Co., Ltd. (hereinafter Dongguan New Material) | 15% |
| Chengdu Fangda Construction Technology Co., Ltd. (hereinafter Chengdu Fangda) | 15% |
| Shenzhen Fangda Property Development Co., Ltd. (hereinafter Fangda Property Development) | 25% |
| Shenzhen Fangda New Energy Co., Ltd. (hereinafter Fangda New Energy) | 25% |
| Shenzhen Fangda Property Development Co., Ltd. (hereinafter Fangda Property Development) | 25% |
| Jiangxi Fangda Property Development Co., Ltd. (hereinafter Fangda Property Development) | 25% |
| Pingxiang Fangda Luxin New Energy Co., Ltd. (hereinafter Luxin New Energy) | 25% |
| Nanchang Xinjian Fangda New Energy Co., Ltd. (hereinafter Xinjian New Energy) | 25% |
| Dongguan Fangda New Energy Co., Ltd. (hereinafter Dongguan New Energy) | 25% |
| Shenzhen QIanhai Kechuangyuan Software Co., Lt.d (hereinafter Kechuangyuan Software) | 25% |
| Fangda Zhichuang Technology (Hong Kong) Co., Ltd, (Zhichuang Hong Kong) | 16.50% |
| Shihui International Holding Co., Ltd. (hereinafter Shihui International) | 16.50% |
| Shenzhen Hongjun Investment Co., Ltd. | 25% |
| Fangda Australia Pty Ltd (hereinafter Jianke Australia) | 30% |
| Shanghai Fangda Zhijian Technology Co., Ltd. (hereinafter referred to as Fangda Zhijian company) | 15% |
| Shenzhen Fangda Cloud Rail Technology Co., Ltd. (hereinafter Fangda Cloud Rail) | 25% |
| Shanghai Fangda Jianzhi Technology Co., Ltd. (hereinafter Shanghai Fangda Jianzhi) | 25% |
| Shenzhen Zhongrong Litai Investment Co. Ltd. (Zhongrong Litai) | 25% |
| Chengdu Fangda Curtain Wall Technology Co., Ltd. (hereinafter Chengdu Curtain Wall) | 25% |
| Fangda Southeast Asia Co., Ltd. | 20% |
| Shenzhen Xunfu Investment Co., Ltd. (hereinafter referred to as Xunfu Investment) | 25% |
| Shenzhen Lifu Investment Co., Ltd. (hereinafter referred to as Lifu Investment) | 25% |
| Shenzhen Fangda Investment Partnership (Limited Partnership) (hereinafter referred to as Fangda Partnership) | 25% |
| Fangda Jianke (Hong Kong) Co., Ltd. (hereinafter Jianke Hong | 16.50% |
2. Tax preference
(1) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation,Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureau on 19.06.15, Fangda Jianke wasentitled to enjoy a tax preference of enterprise income tax of 15% for three years (2018-2017) since the qualifications were awarded.
(2) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation,Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureau on 19.06.15, Fangda Zhichuangwas entitled to enjoy a tax preference of enterprise income tax of 15% for three years (2018-2017) since the qualifications wereawarded.
(3) According to the Certification of High-tech Enterprise issued by Jiangxi Ministry of Science and Technology, JiangxiMinistry of Finance, Jiangxi National Tax Bureau, and Jiangxi Local Tax Bureau on 13.08.18, Fangda New Material was entitled toenjoy a tax preference of enterprise income tax of 15% for three years (2018-2014) since the qualifications were awarded.
(4) On November 7, 2014, Chengdu Fangda was certified by Sichuan Xinjin National Tax Bureau as an encourage industrycompany in the west China (Xin Jin National Tax Doc. [zzy024]) and started to enjoy a tax rate of 15%.
(5) On December 3, 2020, the subsidiary Chengdu Fangda obtained the ―High-tech Enterprise Certificate‖ jointly issued bySichuan Science and Technology Department, Sichuan Provincial Department of Finance, and Sichuan Provincial Taxation Bureau,within three years after obtaining the qualification of high-tech enterprises (2020 to 2022), the income tax is levied Resume at 15%.
(6) On November 2, 2015, Dongguan New Energy was certified by Dongguan National Tax Bureau Songshanhu branch as thenational supported public infrastructure project according to the Song Shan Hu Tax Doc [2015] 3305. The Company is exemptedfrom enterprise income tax for three years and halfly exempted for another three years. In 2015, the Company entered the exemptionperiod.
(7) On 02.03.16, according to the document issued by Luxi National Tax Bureau, the PV power generation project undertakenby Pingxiang Fangda Luxin New Energy Co., Ltd, became the infrastructure project supported by the central government. TheCompany enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016, the Company enteredthe exemption period.
(8) On 02.06.16, according to the document issued by Nanchang Xinjian District National Tax Bureau, the PV powergeneration project undertaken by subsidiary Xinjian New Energy Company, became the infrastructure project supported by thecentral government. The Company enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In2016, the Company entered the exemption period.
(9) On 10.03.17, according to the registration to Shenzhen National Tax Bureau, subsidiary Kechuangyuan Software became anewly established software and integrated circuit designing company and can enjoy the two-year full exemption and three-yearhalf-exemption of the enterprise income tax from the first year that the Company records profit. Kexunda started making profits in2016 and therefore starts to enjoy the exemption.
(10) On December 2, 2019, the subsidiary Dongguan New Materials Co., Ltd. obtained the certificate of high tech enterprisejointly issued by Guangdong Provincial Department of science and technology, Guangdong Provincial Department of Finance andGuangdong Provincial Taxation Bureau. Within three years (from 2019 to 2021) after obtaining the qualification of high techenterprise, the income tax will be charged at 15%.
(11) On November 12, 2020, the subsidiary Fangda Zhijian obtained the certificate of high tech enterprise jointly issued by
Shanghai Science and Technology Commission, Shanghai Finance Bureau and Shanghai Taxation Bureau. Within three years (from2020 to 2022) after obtaining the qualification of high tech enterprise, the income tax will continue to be charged at 15%.
VII. Notes to the consolidated financial statements
1. Monetary capital
In RMB
| Item | Closing balance | Opening balance |
| Inventory cash: | 482.09 | 4,244.86 |
| Bank deposits | 1,121,353,125.34 | 755,440,390.76 |
| Other monetary capital | 338,486,412.67 | 454,367,343.33 |
| Total | 1,459,840,020.10 | 1,209,811,978.95 |
| Including: total amount deposited in overseas | 45,275,606.68 | 54,640,438.33 |
| The total amount of money that has restrictions on use due to mortgage, pledge or freezing | 435,587,632.71 | 484,542,076.05 |
Others:
(1) The use of restricted funds in bank deposits is RMB111,572,213.17, of which RMB81,065,737.73 is restricted due to companylawsuits, RMB24,519,061.73 is deposited in real estate development supervision accounts, RMB5,238,816.70 is deposited in speciallabor insurance accounts and migrant workers‘ wage accounts, and other security deposit accounts. The deposit is RMB748,597.01;the restricted funds used in other currency funds are RMB324,015,419.54, mainly for draft deposits, periodic guarantee deposits,guarantee deposits for issuance of guarantees, etc. In addition, there are no other funds in the monetary funds at the end of the periodthat have restrictions on use and potential recovery risks due to mortgages, pledges or freezing.
(2) In the preparation of the cash flow statement, the above-mentioned deposits and other restricted deposits are not used as cash andcash equivalents.
(3) At the end of the period, the Group's total amount deposited abroad was RMB45,275,606.68.
2. Transactional financial assets
In RMB
| Item | Closing balance | Opening balance |
| Financial assets measured at fair value with variations accounted into current income account | 4,051,015.05 | 10,330,062.18 |
| Including: Investment of financial products | 4,051,015.05 | 10,330,062.18 |
| Total | 4,051,015.05 | 10,330,062.18 |
3. Derivative financial assets
In RMB
| Item | Closing balance | Opening balance |
| Futures contracts | 6,330,475.00 | |
| Forward foreign exchange contract | 643,973.22 | |
| Total | 6,974,448.22 |
4. Notes receivable
(1) Classification of notes receivable
In RMB
| Item | Closing balance | Opening balance |
| Bank acceptance | 21,081,547.58 | 45,540,691.10 |
| Commercial acceptance | 186,064,016.39 | 259,530,239.87 |
| Total | 207,145,563.97 | 305,070,930.97 |
In RMB
| Type | Closing balance | Opening balance | ||||||||
| Remaining book value | Bad debt provision | Book value | Remaining book value | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Provision rate | Amount | Proportion | Amount | Provision rate | |||
| Including: | ||||||||||
| Notes receivable with provision for bad debts by portfolio | 207,145,563.97 | 100.00% | 0.00 | 0.00% | 207,145,563.97 | 305,070,930.97 | 100.00% | 0.00 | 0.00% | 305,070,930.97 |
| Including: | ||||||||||
| Bank acceptance | 21,081,547.58 | 10.18% | 0.00 | 0.00% | 21,081,547.58 | 45,540,691.10 | 14.93% | 0.00 | 0.00% | 45,540,691.10 |
| Commercial acceptance | 186,064,016.39 | 89.82% | 0.00 | 0.00% | 186,064,016.39 | 259,530,239.87 | 85.07% | 0.00 | 0.00% | 259,530,239.87 |
| Total | 207,145,563.97 | 100.00% | 0.00 | 0.00% | 207,145,563.97 | 305,070,930.97 | 100.00% | 0.00 | 0.00% | 305,070,930.97 |
If the provision for bad debts of bills receivable is made in accordance with the general model of expected credit losses, please referto the disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Inapplicable
(2) The Group has no endorsed or discounted immature receivable notes at the end of the period.
In RMB
| Item | De-recognized amount | Not de-recognized amount |
| Bank acceptance | 7,699,719.55 | |
| Commercial acceptance | 79,724,095.41 | |
| Total | 87,423,814.96 |
Other note: The bank acceptance draft used for discount is accepted by the bank with low credit grade, the discount does not affectthe right of recourse, the credit risk related to the bill and the deferred payment risk are still not transferred, so the confirmation is notterminated.
5. Account receivable
(1) Account receivable disclosed by categories
In RMB
| Type | Closing balance | Opening balance | ||||||||
| Remaining book value | Bad debt provision | Book value | Remaining book value | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Provision rate | Amount | Proportion | Amount | Provision rate | |||
| Account receivable for which bad debt provision is made by group | 99,969,069.48 | 12.42% | 99,969,069.48 | 100.00% | 0.00 | 99,969,069.48 | 14.71% | 99,969,069.48 | 100.00% | 0.00 |
| Including: | ||||||||||
| 1. Customer 1 | 54,873,223.21 | 6.82% | 54,873,223.21 | 100.00% | 0.00 | 54,873,223.21 | 8.07% | 54,873,223.21 | 100.00% | 0.00 |
| 2. Customer 2 | 21,739,381.96 | 2.70% | 21,739,381.96 | 100.00% | 0.00 | 21,739,381.96 | 3.20% | 21,739,381.96 | 100.00% | 0.00 |
| 3. Customer 3 | 13,461,834.96 | 1.67% | 13,461,834.96 | 100.00% | 0.00 | 13,461,834.96 | 1.98% | 13,461,834.96 | 100.00% | 0.00 |
| 4. Customer 4 | 7,270,000.00 | 0.90% | 7,270,000.00 | 100.00% | 0.00 | 7,270,000.00 | 1.07% | 7,270,000.00 | 100.00% | 0.00 |
| 5. Customer 5 | 2,624,629.35 | 0.33% | 2,624,629.35 | 100.00% | 0.00 | 2,624,629.35 | 0.39% | 2,624,629.35 | 100.00% | 0.00 |
| Account receivable for which bad debt provision is made by group | 704,726,261.10 | 87.58% | 88,531,131.70 | 12.56% | 616,195,129.40 | 579,840,246.58 | 85.29% | 117,145,252.73 | 20.20% | 462,694,993.85 |
| Including: | ||||||||||
| 1. Portfolio 1: Engineering operations section | 513,447,094.47 | 63.81% | 78,020,444.40 | 15.20% | 435,426,650.07 | 441,439,686.38 | 64.94% | 106,296,564.15 | 24.08% | 335,143,122.23 |
| 2. Portfolio 2: Real estate business payments | 110,059,782.48 | 13.68% | 7,310,980.25 | 6.64% | 102,748,802.23 | 78,982,274.43 | 11.62% | 8,857,718.82 | 11.21% | 70,124,555.61 |
| 3. Portfolio 3: Other business models | 81,219,384.15 | 10.09% | 3,199,707.05 | 3.94% | 78,019,677.10 | 59,418,285.77 | 8.74% | 1,990,969.76 | 3.35% | 57,427,316.01 |
| Total | 804,695,330.58 | 100.00% | 188,500,201.18 | 23.43% | 616,195,129.40 | 679,809,316.06 | 100.00% | 217,114,322.21 | 31.94% | 462,694,993.85 |
Separate bad debt provision:
In RMB
| Name | Closing balance | |||
| Remaining book value | Bad debt provision | Provision rate | Reason | |
| 1. Customer 1 | 54,873,223.21 | 54,873,223.21 | 100.00% | Customer credit status deteriorates and is hard to recover |
| 2. Customer 2 | 21,739,381.96 | 21,739,381.96 | 100.00% | Customer credit status deteriorates and is hard to recover |
| 3. Customer 3 | 13,461,834.96 | 13,461,834.96 | 100.00% | Customer credit status deteriorates and is hard to recover |
| 4. Customer 4 | 7,270,000.00 | 7,270,000.00 | 100.00% | Customer credit status deteriorates and is hard to recover |
| 5. Customer 5 | 2,624,629.35 | 2,624,629.35 | 100.00% | Customer credit status deteriorates and is hard to recover |
| Total | 99,969,069.48 | 99,969,069.48 | -- | -- |
Provision for bad debts by portfolio: See Note V, 9 for the confirmation standard and explanation of withdrawing bad debt reservesby portfolio.
Portfolio 1: Engineering operations section
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Less than 1 year | 279,257,157.50 | 5,627,562.39 | 2.02% |
| 1-2 years | 84,488,951.38 | 4,785,489.32 | 5.66% |
| 2-3 years | 54,045,963.27 | 6,893,782.55 | 12.76% |
| 3-4 years | 28,674,949.21 | 5,666,399.68 | 19.76% |
| 4-5 years | 20,994,474.28 | 9,061,611.63 | 43.16% |
| Over 5 years | 45,985,598.83 | 45,985,598.83 | 100.00% |
| Total | 513,447,094.47 | 78,020,444.40 | -- |
Portfolio 2: Real estate business payments
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Less than 1 year | 49,117,547.09 | 491,175.48 | 1.00% |
| 1-2 years | 859,159.75 | 42,957.99 | 5.00% |
| 2-3 years | 22,356,145.64 | 1,117,807.28 | 5.00% |
| 3-4 years | |||
| 4-5 years | 37,726,930.00 | 5,659,039.50 | 15.00% |
| Total | 110,059,782.48 | 7,310,980.25 | -- |
Combination 3: Other business models
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Less than 1 year | 37,743,005.70 | 307,686.80 | 0.82% |
| 1-2 years | 21,256,714.56 | 436,530.16 | 2.05% |
| 2-3 years | 20,389,322.51 | 1,694,981.48 | 8.31% |
| 3-4 years | 1,418,769.99 | 351,571.20 | 24.78% |
| 4-5 years | 19,467.69 | 16,833.71 | 86.47% |
| Over 5 years | 392,103.70 | 392,103.70 | 100.00% |
| Total | 81,219,384.15 | 3,199,707.05 | -- |
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Inapplicable
Account age
In RMB
| Age | Remaining book value |
| Within 1 year (inclusive) | 463,462,150.42 |
| 1-2 years | 106,604,825.69 |
| 2-3 years | 96,791,431.42 |
| Over 3 years | 137,836,923.05 |
| 3-4 years | 30,093,719.20 |
| 4-5 years | 58,740,871.97 |
| Over 5 years | 49,002,331.88 |
| Total | 804,695,330.58 |
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
| No. | Customer | Balance of accounts receivable of over 3 years | Balance of provision for bad debts | Reason of the age | Whether there is a risk of recovery |
| 1 | Customer 1 | 17,374,148.42 | 17,263,443.48 | Customer credit status deteriorates | Yes |
| 2 | Customer 2 | 13,461,834.96 | 13,461,834.96 | Customer credit status deteriorates | Yes |
| 3 | Customer 3 | 16,840,340.70 | 16,840,340.70 | Customer credit status deteriorates | Yes |
| 4 | Customer 4 | 53,281,747.12 | 53,281,747.12 | Customer credit status deteriorates | Yes |
| Total | 100,958,071.20 | 100,847,366.26 |
(2) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
| Type | Opening balance | Change in the period | Closing balance | |||
| Provision | Written-back or recovered | Canceled | Others | |||
| Separate bad debt provision | 99,969,069.48 | 99,969,069.48 | ||||
| Provision for bad | 117,145,252.73 | -28,614,121.03 | 88,531,131.70 | |||
| debts by combination | ||||||
| Total | 217,114,322.21 | -28,614,121.03 | 188,500,201.18 |
(3) Written-off account receivable during the period
No written-off account receivable during the period
(4) Balance of top 5 accounts receivable at the end of the period
In RMB
| Entity | Closing balance of accounts receivable | Percentage (%) | Balance of bad debt provision at the end of the period |
| No.1 | 65,034,184.76 | 8.08% | 6,823,034.85 |
| No.2 | 54,873,223.21 | 6.82% | 54,873,223.21 |
| No.3 | 45,824,836.25 | 5.69% | 2,313,867.97 |
| No.4 | 39,994,441.07 | 4.97% | 784,325.36 |
| No.5 | 22,475,765.58 | 2.79% | 2,866,870.78 |
| Total | 228,202,450.87 | 28.35% |
(5) Receivables derecognized due to transfer of financial assets
| Item | Transfer method of financial assets | Derecognition of book value | Gain or loss related to the de-recognition |
| Customer 1 | Factoring | 13,546,132.64 | -572,382.02 |
| Customer 2 | Factoring | 31,828,292.28 | -1,493,323.44 |
| Customer 3 | Factoring | 8,808,006.69 | -419,423.03 |
| Customer 4 | Factoring | 1,207,422.43 | -63,617.65 |
| Customer 5 | Factoring | 8,954,349.00 | -442,279.05 |
| Customer 6 | Factoring | 10,121,434.76 | -555,927.43 |
| Customer 7 | Factoring | 481,277.51 | -19,989.14 |
| Customer 8 | Factoring | 1,843,525.06 | -79,978.85 |
| Customer 9 | Factoring | 10,919,342.60 | -668,475.92 |
| Customer 10 | Factoring | 35,254,067.35 | -1,424,470.73 |
| Customer 11 | Factoring | 9,514,419.62 | -409,100.66 |
| Total | 132,478,269.94 | -6,148,967.92 |
Note: At the end of the period, the Group factored out accounts receivable that did not have recourse, the factoring amount was
RMB135,127,383.49, and the book value of accounts receivable was derecognized as RMB132,478,269.94, of which: the bookbalance was RMB135,127,383.49, and the bad debt provision of RMB2,649,113.55.
6. Receivable financing
In RMB
| Item | Closing balance | Opening balance |
| Notes receivable | 10,727,129.28 | 2,954,029.00 |
| Total | 10,727,129.28 | 2,954,029.00 |
Increase or decrease in the current period of receivables financing and changes in fair value
□ Applicable √ Inapplicable
If the provision for financing impairment of receivables is accrued in accordance with the general expected credit loss model, pleaserefer to the disclosure of other receivables to disclose the relevant information of the impairment provision:
□ Applicable √ Inapplicable
7. Prepayment
(1) Account age of prepayments
In RMB
| Age | Closing balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Less than 1 year | 18,620,416.29 | 78.08% | 14,025,617.54 | 65.77% |
| 1-2 years | 3,080,312.85 | 12.92% | 5,895,327.15 | 27.64% |
| 2-3 years | 1,156,139.70 | 4.85% | 473,487.72 | 2.22% |
| Over 3 years | 989,094.83 | 4.15% | 932,676.77 | 4.37% |
| Total | 23,845,963.67 | -- | 21,327,109.18 | -- |
(2) Balance of top 5 prepayments at the end of the period
The total of top5 prepayments in terms of the prepaid entities in the period is RMB9,526,430.73, accounting for 39.95% of the totalprepayments at the end of the period.
8. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Other receivables | 162,145,236.85 | 139,947,655.35 |
| Total | 162,145,236.85 | 139,947,655.35 |
(1) Other receivables
1) Other receivables are disclosed by nature
In RMB
| By nature | Closing balance of book value | Opening balance of book value |
| Deposit | 101,436,213.12 | 103,782,569.80 |
| Construction borrowing and advanced payment | 35,768,993.75 | 34,052,644.05 |
| Staff borrowing and petty cash | 1,586,850.35 | 1,717,094.83 |
| Receivable refund of VAT | 3,265,790.25 | 548,129.42 |
| Debt by Luo Huichi | 12,992,291.48 | 12,992,291.48 |
| Others | 31,372,479.72 | 12,502,878.08 |
| Total | 186,422,618.67 | 165,595,607.66 |
2) Method of bad debt provision
In RMB
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit losses in the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
| Balance on Wednesday, January 1, 2020 | 2,113,622.44 | 6,415.10 | 23,527,914.77 | 25,647,952.31 |
| Balance on Wednesday, January 1, 2020 in the current period | —— | —— | —— | —— |
| Provision | 135,223.92 | 565,761.49 | -1,907,542.90 | -1,206,557.49 |
| Canceled in the current period | 164,013.00 | 164,013.00 | ||
| Balance on Thursday, December 31, 2020 | 2,248,846.36 | 572,176.59 | 21,456,358.87 | 24,277,381.82 |
Changes in book balances with significant changes in the current period
□ Applicable √ Inapplicable
Account age
In RMB
| Age | Remaining book value |
| Within 1 year (inclusive) | 48,791,636.27 |
| 1-2 years | 19,849,717.46 |
| 2-3 years | 74,696,027.39 |
| Over 3 years | 43,085,237.55 |
| 3-4 years | 20,935,832.23 |
| 4-5 years | 3,170,356.88 |
| Over 5 years | 18,979,048.44 |
| Total | 186,422,618.67 |
3) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
| Type | Opening balance | Change in the period | Closing balance | |||
| Provision | Written-back or recovered | Canceled | Others | |||
| Other receivables and bad debt provision | 25,647,952.31 | -1,206,557.49 | 164,013.00 | 24,277,381.82 | ||
| Total | 25,647,952.31 | -1,206,557.49 | 164,013.00 | 24,277,381.82 | ||
4) Other receivable written off in the current period
In RMB
| Item | Amount |
| Other receivable written off | 164,013.00 |
5) Balance of top 5 other receivables at the end of the period
In RMB
| Entity | By nature | Closing balance | Age | Percentage (%) | Balance of bad debt provision at the end of the period |
| Shenzhen Yikang Real Estate Co. Ltd. | Margin and current account | 70,000,000.00 | 2-3 years | 37.55% | 1,043,000.00 |
| Bangshen Electronics (Shenzhen) Co., Ltd. | Deposit | 20,000,000.00 | 3-4 years | 10.73% | 298,000.00 |
| Shenzhen Rijiasheng Trading Co., Ltd | Arrears | 18,808,945.57 | Less than 1 year | 10.09% | 564,268.37 |
| Luo Huichi | Debt by Luo Huichi | 12,992,291.48 | Over 5 years | 6.97% | 12,992,291.48 |
| Shenzhen Henggang Dakang Co., Ltd. | Deposit | 8,044,000.00 | 2-3 years | 4.31% | 119,855.60 |
| Total | -- | 129,845,237.05 | -- | 69.65% | 15,017,415.45 |
9. Inventories
Whether the Company needs to comply with disclosure requirements of the real estate industry.Yes
(1) Classification of inventories
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.3 – Listed Companies Engaged in Property Development.Classified by nature:
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Provision for inventory depreciation or contract performance cost impairment provision | Book value | Remaining book value | Provision for inventory depreciation or contract performance cost impairment provision | Book value | |
| Development cost | 458,032,158.63 | 458,032,158.63 | 365,194,941.67 | 365,194,941.67 | ||
| Development products | 99,012,986.31 | 99,012,986.31 | 99,770,918.78 | 99,770,918.78 | ||
| Contract performance costs | 140,403,466.43 | 464,651.43 | 139,938,815.00 | 1,430,361.92 | ||
| Raw materials | 61,682,744.96 | 55,182.86 | 61,627,562.10 | 68,623,793.04 | 563,013.42 | 68,060,779.62 |
| Product in process | 66,570,800.79 | 66,570,800.79 | 59,444,230.45 | 59,444,230.45 | ||
| Finished goods in stock | 7,784,598.06 | 7,784,598.06 | 7,500,273.11 | 7,500,273.11 | ||
| Asset formed by construction contract | 133,002,090.91 | 131,571,728.99 | ||||
| Low price consumable | 123,705.51 | 123,705.51 | 146,018.01 | 146,018.01 | ||
| OEM materials | 3,562,856.58 | 3,562,856.58 | 2,022,252.83 | 2,022,252.83 | ||
| Materials in transit | 1,178,307.90 | 1,178,307.90 | ||||
| Total | 838,351,625.17 | 519,834.29 | 837,831,790.88 | 735,704,518.80 | 1,993,375.34 | 733,711,143.46 |
Development cost and capitalization rate of its interest are disclosed as follows:
In RMB
| Item | Starting time | Estimated finish registration time | Estimated total investment | Opening balance | Transferred to development product in this period | Other decrease in this period | Increase (development cost) in this period | Closing balance | Accumulative capitalized interest | Including: capitalized interest for the current period | Capital source |
| Jiangxi Phoenix Land project | 1 May 2018 | Friday, April 30, 2021 | 670,000,000.00 | 197,466,278.49 | 52,725,340.59 | 250,191,619.08 | 8,276,086.58 | 5,477,958.23 | Bank loan and self-owned fund | ||
| Dakang Village Project in Shenzhen | 1 December 2023 | 31 December 2029 | 3,600,000,000.00 | 166,868,479.94 | 30,483,563.75 | 197,352,043.69 | Bank loan and self-owned fund | ||||
| Fangda Bangshen Industry Park | 1 December 2020 | 31 December 2022 | 870,000,000.00 | 860,183.24 | 9,628,312.62 | 10,488,495.86 | Bank loan and self-owned fund | ||||
| Total | -- | -- | 5,140,000,000.00 | 365,194,941.67 | 92,837,216.96 | 458,032,158.63 | 8,276,086.58 | 5,477,958.23 | -- |
Disclose the main project information of "Development Products" according to the following format:
In RMB
| Item | Completion time | Opening balance | Increase | Decrease | Closing balance | Accumulative capitalized interest | Including: capitalized interest for the current period |
| Phase I of Fangda Town | 29 December 2016 | 99,770,918.78 | 4,313,737.76 | 5,071,670.23 | 99,012,986.31 | 3,803,164.49 | |
| Total | -- | 99,770,918.78 | 4,313,737.76 | 5,071,670.23 | 99,012,986.31 | 3,803,164.49 |
(2) Provision for inventory depreciation and contract performance cost impairment provisionThe inventory depreciation provision is disclosed as follows:
Classified by nature:
In RMB
| Item | Opening balance | Increase in this period | Decrease in this period | Closing balance | Remarks | ||
| Provision | Others | Recover or write-off | Others | ||||
| Contract performance costs | 1,430,361.92 | 965,710.49 | 464,651.43 | ||||
| Raw materials | 563,013.42 | 507,830.56 | 55,182.86 | ||||
| Total | 1,993,375.34 | 1,473,541.05 | 519,834.29 | -- | |||
(3) Capitalization rate of interest in the closing inventory balance
As of December 31, 2020, the capitalization amount of borrowing costs in the ending inventory balance is RMB12,079,251.07.
(4) Restriction of inventory
Restricted inventory is disclosed by project
In RMB
| Item | Opening balance | Closing balance | Reason |
| Jiangxi Phoenix Land project | 99,936,207.50 | 103,973,925.13 | Loan by pledge |
| Total | 99,936,207.50 | 103,973,925.13 | -- |
10. Contract assets
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
| Sales funds with conditional collection right | 27,639,344.20 | 351,544.65 | 27,287,799.55 | 220,353,920.01 | 17,679,244.86 | 202,674,675.15 |
| Completed but unsettled assets | 1,531,697,534.72 | 145,724,350.90 | 1,385,973,183.82 | 1,268,523,793.68 | 185,324,719.03 | 1,083,199,074.65 |
| Unexpired warranty deposit | 12,105,019.23 | 325,779.33 | 11,779,239.90 | 12,116,319.35 | 246,522.42 | 11,869,796.93 |
| Total | 1,571,441,898.15 | 146,401,674.88 | 1,425,040,223.27 | 1,500,994,033.04 | 203,250,486.31 | 1,297,743,546.73 |
The amount and reasons for major changes in the book value of contract assets during the current period:
In RMB
| Item | Change | Reason |
| Sales funds with conditional collection right | -175,386,875.60 | It is mainly due to the fact that Fangda Town's house purchase customers converted the contract assets at the beginning of the year into accounts receivable with unconditional right of collection after handling the house property certificate in the reporting period. |
| Completed but unsettled assets | 302,774,109.20 | It is mainly caused by the unsettled assets with conditional collection right generated from the revenue recognized in the project contract this year |
| Total | 127,387,233.60 |
If the provision for bad debts of contract assets is made in accordance with the general model of expected credit losses, please refer tothe disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Inapplicable
Provision made for bad debts of contract assets in this period
In RMB
| Item | Provision | Transferred back in the current period | Written off in the current period | Reason |
| Sales funds with conditional collection right | -17,327,700.21 | |||
| Completed but unsettled assets | -31,328,706.53 | 8,271,661.61 | ||
| Unexpired warranty deposit | 79,256.91 | |||
| Total | -48,577,149.83 | 8,271,661.61 | -- |
Others:
Due to the poor management of the customer of Ordos curtain wall project of Jianke company, the estimated amount cannot berecovered, and the receivable contract assets of RMB8,271,661.61 are written off in the current period.
11. Non-current assets due in 1 year
In RMB
| Item | Closing balance | Opening balance |
| Contract assets due within one year | 159,119,938.94 | 63,677,981.88 |
| Less: provision for impairment | 17,438,160.59 | 13,556,983.20 |
| Total | 141,681,778.35 | 50,120,998.68 |
12. Other current assets
In RMB
| Item | Closing balance | Opening balance |
| Contract acquisition cost | 2,156,027.17 | |
| Tax to be input | 136,812,357.07 | 104,829,711.45 |
| Overpayment and prepayment of income tax | 88,741,787.42 | 10,942,500.38 |
| Other prepaid taxes | 2,373,031.15 | |
| Structural loan | 27,811.25 | 207,993,374.07 |
| Deferred discount expense | 2,644,267.12 | |
| Others | 467,803.33 | |
| Total | 233,223,084.51 | 323,765,585.90 |
13. Long-term share equity investment
In RMB
| Invested entity | Opening book value | Change (+,-) | Closing book value | Balance of impairment provision at the end of the period | |||||||
| Increased investment | Decreased investment | Investment gain and loss recognized using the equity method | Other miscellaneous income adjustment | Other equity change | Cash dividend or profit announced | Impairment provision | Others | ||||
| 1. Joint venture | |||||||||||
| 2. Associate | |||||||||||
| Shenzhen Ganshang Joint Investment Co., Ltd. | 2,360,044.01 | 4,754.64 | 2,364,798.65 | ||||||||
| Jiangxi Business Innovativ | 54,862,196.82 | -1,324,617.52 | 53,537,579.30 | ||||||||
| e Property Joint Stock Co., Ltd. | |||||||||||
| Subtotal | 57,222,240.83 | -1,319,862.88 | 55,902,377.95 | ||||||||
| Total | 57,222,240.83 | -1,319,862.88 | 55,902,377.95 |
14. Investment in other equity tools
In RMB
| Item | Closing balance | Opening balance |
| Unlisted equity instrument investment | 17,628,307.59 | 20,660,181.44 |
| Total | 17,628,307.59 | 20,660,181.44 |
Sub-disclosure of non-tradable equity instrument investment in the current period
In RMB
| Item | Dividend recognized in the period | Total gain | Total loss | Amount of other comprehensive income transferred to retained earnings | Reason for measurement at fair value with variations accounted into current income account | Reason for transfer of other miscellaneous into income |
| Shenyang Fangda | 12,170,244.23 | |||||
| Shenzhen Huihai Yirong Internet Service Co., Ltd. | 2,543,301.37 |
15. Other non-current financial assets
In RMB
| Item | Closing balance | Opening balance |
| Financial assets measured at fair value with variations accounted into current income account | 5,025,186.16 | 5,009,728.02 |
| Total | 5,025,186.16 | 5,009,728.02 |
16. Investment real estates
(1) Investment real estate measured at costs
√ Applicable □ Inapplicable
In RMB
| Item | Houses & buildings | Total |
| I. Book value | ||
| 1. Opening balance | 223,347,558.10 | 223,347,558.10 |
| 2. Increase in this period | 51,653,141.64 | 51,653,141.64 |
| (1) Transfer-in from inventory\fixed assets\construction in progress | 51,653,141.64 | 51,653,141.64 |
| 3. Decrease in this period | 264,590,007.87 | 264,590,007.87 |
| (1) Other transfer-out | 264,590,007.87 | 264,590,007.87 |
| 4. Closing balance | 10,410,691.87 | 10,410,691.87 |
| II. Accumulative depreciation and amortization | ||
| 1. Opening balance | 7,071,934.11 | 7,071,934.11 |
| 2. Increase in this period | 469,809.74 | 469,809.74 |
| (1) Provision or amortization | 469,809.74 | 469,809.74 |
| 3. Decrease in this period | 3,488,020.10 | 3,488,020.10 |
| (1) Other transfer-out | 3,488,020.10 | 3,488,020.10 |
| 4. Closing balance | 4,053,723.75 | 4,053,723.75 |
| III. Impairment provision | ||
| 1. Opening balance | ||
| 2. Increase in this period | ||
| 3. Decrease in this period | ||
| 4. Closing balance | ||
| IV. Book value | ||
| 1. Closing book value | 6,356,968.12 | 6,356,968.12 |
| 2. Opening book value | 216,275,623.99 | 216,275,623.99 |
Notes:
①The other transfer-out amount of RMB245,953,338.54 yuan is due to the completion of the completion acceptance and planningacceptance of the investment real estate used for lease in the Fenghuangzhou plot project of the subsidiary Jiangxi Property. Its fairvalue can be reliably measured, so it is due to the change from cost measurement to fair value measurement in accordance with theCompany's investment real estate accounting policy. Among the other transfers, RMB 18,636,669.33 was due to the needs ofbusiness development. Some houses of the subsidiary Zhichuang Technology Co., Ltd. were converted from external leases toself-use.
② By December 31, 2020, there is no sign of impairment to the Group‘s investment real estatement measured at costs.
(2) Investment real estate measured at fair value
√ Applicable □ Inapplicable
In RMB
| Item | Houses & buildings | Total |
| I. Opening balance | 5,306,116,360.12 | 5,306,116,360.12 |
| II. Change in this period | 322,175,088.28 | 322,175,088.28 |
| Add: Transfer-in from inventory\fixed assets\construction in progress | 62,520,582.55 | 62,520,582.55 |
| Transfer in of investment real estate with cost measurement mode | 245,953,338.54 | 245,953,338.54 |
| Change in fair value | 19,205,841.18 | 19,205,841.18 |
| Less: disposal | 5,504,673.99 | 5,504,673.99 |
| III. Closing balance | 5,628,291,448.40 | 5,628,291,448.40 |
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.3 – Listed Companies Engaged in Property Development.Disclosure of investment real estate measured at fair value by projects
In RMB
| Item | Location | Completion time | Building area | Rental income in the report period | Opening fair value | Closing fair value | Change in fair value | Reason for the change and report |
| Commercial podium of Fangda Town | Shenzhen | Sunday, October 11, 2017 | 22,565.42 | 27,309,574.42 | 1,290,742,024.00 | 1,340,385,948.00 | 3.85% | The fair value of the investment real estate is |
| Building 1# of Fangda Town | Shenzhen | Saturday, December 29, 2018 | 72,517.71 | 48,479,566.08 | 3,720,019,334.12 | 3,646,971,680.07 | -1.96% | determined based on Shenzhen Wenji Land and Property Evaluation Doc. 深文集评字SZ（2021）AF 第005 号 Real Estate Valuation Report. |
| Fangda Building | Shenzhen | 28 December 2002 | 17,792.47 | 14,976,005.26 | 295,355,002.00 | 334,498,436.00 | 13.25% | |
| Jiangxi Phoenix Land project | Nanchang | Thursday, December 10, 2020 | 32,354.44 | 0.00 | 302,854,554.33 | The fair value of the investment real estate is determined based on Shenzhen Wenji Land and Property Evaluation Doc. 深文集评字SZ（2021）AF 第004 号 Real Estate Valuation Report. | ||
| Total | —— | —— | 145,230.04 | 90,765,145.76 | 5,306,116,360.12 | 5,624,710,618.40 | 6.00% | —— |
Whether the Company has investment real estate in the current construction period
√ Yes □ No
The investment real estate in the construction period of the current period:
In RMB
| Item | Location | Date of commencement | Estimated total investment | Opening amount | Closing amount | Completion time |
| Jiangxi Phoenix Land project | Nanchang | 1 May 2018 | 670,000,000.00 | 194,300,196.90 | Thursday, December 10, 2020 | |
| Total | —— | —— | 670,000,000.00 | 194,300,196.90 | —— |
Whether there is new investment real estate measured at fair value in the report period
√ Yes □ No
Newly-added investment real estate measured by fair value in the current period:
In RMB
| Item | Original | Original book | Recorded fair | Closing fair | Change time | Different handling |
| accounting method | value | value | value | method and basis | ||
| Jiangxi Phoenix Land project | Investment real estate measured by cost model | 245,953,338.54 | 302,854,554.33 | 302,854,554.33 | Thursday, December 10, 2020 | The difference is included in the income from changes in fair value; according to the accounting standards for business enterprises, application guide, explanation and other relevant provisions, the buildings built or developed by the owner for rent after completion of the activities should be accounted as investment real estate. If the fair value of an investment real estate under construction cannot be reliably determined, but it is expected that the fair value of the real estate after completion can be obtained continuously and reliably, the investment real estate under construction shall be measured at cost, and its fair value shall be measured at fair value when it can be reliably measured or after completion (whichever is earlier). |
| Total | —— | 245,953,338.54 | 302,854,554.33 | 302,854,554.33 | —— | —— |
(3) Investment real estate without ownership certificate
In RMB
| Item | Book value | Reason |
| Jiangxi Phoenix Land project | 302,854,554.33 | Conditions for applying for property right are not met |
17. Fixed assets
In RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 481,270,562.26 | 477,332,830.92 |
| Disposal of fixed assets | 1,891,111.12 | |
| Total | 483,161,673.38 | 477,332,830.92 |
(1) Fixed assets
In RMB
| Item | Houses & buildings | Mechanical equipment | Transportation facilities | Electronics and other devices | PV power plants | Total |
| I. Original book value: | ||||||
| 1. Opening balance | 397,489,124.24 | 129,679,176.79 | 21,359,342.69 | 44,608,708.34 | 129,596,434.84 | 722,732,786.90 |
| 2. Increase in this period | 23,172,441.42 | 11,577,525.66 | 417,707.97 | 2,800,634.17 | 37,968,309.22 | |
| (1) Purchase | 4,360,920.00 | 11,487,525.66 | 278,707.97 | 2,439,672.21 | 18,566,825.84 | |
| (2) Transfer-in of construction in progress | 174,852.09 | 345,132.76 | 519,984.85 | |||
| (3) Other increases | 18,636,669.33 | 90,000.00 | 139,000.00 | 15,829.20 | 18,881,498.53 | |
| 3. Decrease in this period | 4,936,135.74 | 19,760,373.49 | 260,608.02 | 1,137,975.74 | 26,095,092.99 | |
| (1) Disposal or retirement | 4,936,135.74 | 19,760,373.49 | 260,608.02 | 1,137,975.74 | 26,095,092.99 | |
| 4. Closing | 415,725,429.92 | 121,496,328.96 | 21,516,442.64 | 46,271,366.77 | 129,596,434.84 | 734,606,003.13 |
| balance | ||||||
| II. Accumulative depreciation | ||||||
| 1. Opening balance | 75,577,918.79 | 102,194,972.59 | 15,634,519.78 | 28,429,239.34 | 22,208,915.98 | 244,045,566.48 |
| 2. Increase in this period | 14,314,412.27 | 3,882,061.64 | 695,325.33 | 1,869,773.46 | 6,148,440.12 | 26,910,012.82 |
| (1) Provision | 10,826,392.17 | 3,882,061.64 | 570,225.33 | 1,722,919.31 | 6,148,440.12 | 23,150,038.57 |
| (2) Other increases | 3,488,020.10 | 125,100.00 | 146,854.15 | 3,759,974.25 | ||
| 3. Decrease in this period | 94,984.56 | 16,406,907.76 | 232,361.13 | 984,274.48 | 17,718,527.93 | |
| (1) Disposal or retirement | 94,984.56 | 16,406,907.76 | 232,361.13 | 984,274.48 | 17,718,527.93 | |
| 4. Closing balance | 89,797,346.50 | 89,670,126.47 | 16,097,483.98 | 29,314,738.32 | 28,357,356.10 | 253,237,051.37 |
| III. Impairment provision | ||||||
| 1. Opening balance | 1,297,621.81 | 56,767.69 | 1,354,389.50 | |||
| 2. Increase in this period | ||||||
| 3. Decrease in this period | 1,256,000.00 | 1,256,000.00 | ||||
| (1) Disposal or retirement | 1,256,000.00 | 1,256,000.00 | ||||
| 4. Closing balance | 41,621.81 | 56,767.69 | 98,389.50 | |||
| IV. Book value | ||||||
| 1. Closing book value | 325,928,083.42 | 31,784,580.68 | 5,418,958.66 | 16,899,860.76 | 101,239,078.74 | 481,270,562.26 |
| 2. Opening book value | 321,911,205.45 | 26,186,582.39 | 5,724,822.91 | 16,122,701.31 | 107,387,518.86 | 477,332,830.92 |
(2) Fixed assets without ownership certificate
In RMB
| Item | Book value | Reason |
| Houses in Urumuqi for offsetting debt | 497,716.11 | Historical reasons |
| Yuehai Office Building C 502 | 124,562.61 | Historical reasons |
| Construction of Chengdu Fangda Xinjin Base | 29,615,286.96 | In the process of applying for property right certificate |
(3) Disposal of fixed assets
In RMB
| Item | Closing balance | Opening balance |
| Jiangxi new material South Korea composite aluminum plate production line | 1,891,111.12 | |
| Total | 1,891,111.12 |
18. Construction in process
In RMB
| Item | Closing balance | Opening balance |
| Construction in process | 168,626,803.01 | 129,988,982.86 |
| Total | 168,626,803.01 | 129,988,982.86 |
(1) Construction in progress
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
| Construction and decoration of self-use part of Building 1 of Fangda Town | 78,213,965.55 | 78,213,965.55 | 54,275,503.95 | 54,275,503.95 | ||
| Fangda Group East China Construction Base Project | 90,101,031.20 | 90,101,031.20 | 75,473,740.65 | 75,473,740.65 | ||
| Design of intelligent gluing robot | 23,242.53 | 23,242.53 | 23,242.53 | 23,242.53 | ||
| Standard production line | 288,563.73 | 288,563.73 | 216,495.73 | 216,495.73 | ||
| Total | 168,626,803.01 | 168,626,803.01 | 129,988,982.86 | 129,988,982.86 |
(2) Changes in major construction in process in this period
In RMB
| Item | Budget | Opening balance | Increase in this period | Amount transfer-in to fixed assets in this period | Other decrease in this period | Closing balance | Proportion of accumulative engineering investment in the budget | Project progress | Accumulative capitalized interest | Including: capitalized interest for the current period | Interest capitalization rate | Capital source |
| Construction and decoration of self-use part of Building 1 of Fangda Town | 82,840,000.00 | 54,275,503.95 | 23,938,461.60 | 78,213,965.55 | 94.42% | In construction | Self-owned fund | |||||
| Fangda Group East China Construction Base Project | 105,060,000.00 | 75,473,740.65 | 14,627,290.55 | 90,101,031.20 | 85.76% | In construction | 2,635,849.07 | 2,248,008.40 | 5.72% | Loans from financial institutions+ self-owned fund | ||
| Total | 187,900,000.00 | 129,749,244.60 | 38,565,752.15 | 168,314,996.75 | -- | -- | 2,635,849.07 | 2,248,008.40 | -- |
19. Intangible assets
(1) Intangible assets
In RMB
| Item | Land using right | Patent | Unpatented | Software | Total |
| technologies | |||||
| I. Book value | |||||
| 1. Opening balance | 78,751,482.29 | 8,966,866.05 | 17,892,864.49 | 105,611,212.83 | |
| 2. Increase in this period | 1,653,254.84 | 15,881.12 | 1,476,519.46 | 3,145,655.42 | |
| (1) Purchase | 1,653,254.84 | 15,881.12 | 1,476,519.46 | 3,145,655.42 | |
| 3. Decrease in this period | 21,144.83 | 21,144.83 | |||
| (1) Other decrease | 21,144.83 | 21,144.83 | |||
| 4. Closing balance | 80,404,737.13 | 8,982,747.17 | 19,348,239.12 | 108,735,723.42 | |
| II. Accumulative amortization | |||||
| 1. Opening balance | 12,802,236.28 | 8,028,555.36 | 6,458,156.14 | 27,288,947.78 | |
| 2. Increase in this period | 2,273,293.48 | 443,469.42 | 1,537,186.91 | 4,253,949.81 | |
| (1) Provision | 2,273,293.48 | 443,469.42 | 1,537,186.91 | 4,253,949.81 | |
| 3. Decrease in this period | |||||
| 4. Closing balance | 15,075,529.76 | 8,472,024.78 | 7,995,343.05 | 31,542,897.59 | |
| III. Impairment provision | |||||
| 1. Opening balance | |||||
| 2. Increase in this period | |||||
| 3. Decrease in this period | |||||
| 4. Closing balance | |||||
| IV. Book value | |||||
| 1. Closing book value | 65,329,207.37 | 510,722.39 | 11,352,896.07 | 77,192,825.83 | |
| 2. Opening book value | 65,949,246.01 | 938,310.69 | 11,434,708.35 | 78,322,265.05 |
(2) Failure to obtain the land use right certificates
At the end of the period, the Company had no land use right without the property right certificate.
20. Long-term amortizable expenses
In RMB
| Item | Opening balance | Increase in this period | Amortized amount in this period | Other decrease | Closing balance |
| Xuanfeng Chayuan village and Zhuyuan village land transfer compensation | 1,140,730.22 | 56,101.56 | 1,084,628.66 | ||
| Reconstruction project of sample room | 462,854.58 | 115,713.60 | 347,140.98 | ||
| Membership fee | 637,499.92 | 6,250.00 | 230,000.04 | 413,749.88 | |
| Waterproofing works for employee dormitories | 460,084.29 | 299,972.48 | 128,586.72 | 631,470.05 | |
| Management consulting service fee | 901,552.04 | 494,073.73 | 407,478.31 | ||
| Warehouse addition and renovation project | 272,477.07 | 60,550.44 | 211,926.63 | ||
| Dahuaxin Dongguan Songshanhu rubber area interlayer transformation | 541,284.40 | 180,428.16 | 360,856.24 | ||
| Premium for basic and all risks | 44,664.53 | 7,940.36 | 36,724.17 | ||
| Training management platform service fee | 101,650.94 | 101,650.94 | |||
| Factory wall painting and rolling shutter door engineering | 229,824.00 | 11,491.20 | 218,332.80 | ||
| Property insurance | 360,772.95 | 360,772.95 |
| premium | |||||
| Plant ground reconstruction project | 435,809.71 | 29,054.00 | 406,755.71 | ||
| Total | 3,875,198.12 | 2,020,229.01 | 1,313,939.81 | 4,581,487.32 |
21. Differed income tax assets and differed income tax liabilities
(1) Non-deducted deferred income tax assets
In RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Assets impairment provision | 263,315,510.54 | 38,465,248.35 | 93,590,747.27 | 23,063,418.45 |
| Unrealized investment income of internal transaction | 135,859,744.95 | 33,964,936.24 | ||
| Deductible loss | 122,522,156.58 | 29,105,371.97 | 271,310,599.01 | 67,626,700.92 |
| Credit impairment provision | 212,717,683.70 | 44,512,473.69 | 473,809,506.79 | 75,229,494.57 |
| Unrealizable gross profit | 130,105,754.96 | 31,898,500.96 | 119,543,729.80 | 29,233,320.47 |
| Provided unpaid taxes | 584,599,356.81 | 146,149,839.20 | ||
| Anticipated liabilities | 33,425,500.13 | 7,715,527.38 | 7,793,527.16 | 1,169,029.07 |
| Donation | 35,203.72 | 5,280.56 | 700,000.00 | 175,000.00 |
| Reserved expense | 1,742,978.53 | 261,446.78 | ||
| Deferred earning | 2,314,029.86 | 342,765.63 | 2,346,742.62 | 347,579.43 |
| Change in fair value | 1,520,569.70 | 228,085.49 | 96,767.62 | 14,515.14 |
| Advertising expenses can be deducted | 1,644,582.77 | 411,145.69 | 316,882.69 | 79,220.67 |
| Total | 903,460,736.91 | 186,649,335.96 | 1,555,850,838.30 | 343,349,564.70 |
(2) Non-deducted deferred income tax liabilities
In RMB
| Item | Closing balance | Opening balance |
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Change in fair value | 4,126,893,826.17 | 1,031,090,409.04 | 4,101,290,434.14 | 1,025,322,608.53 |
| Estimated gross margin when Fangda Town records income, but does not reach the taxable income level | 132,104,998.74 | 33,026,249.69 | ||
| Acquire premium to form inventory | 1,535,605.47 | 383,901.37 | 1,535,605.47 | 383,901.37 |
| Rental income | 26,439,158.17 | 6,609,789.56 | 20,401,597.60 | 5,100,399.41 |
| Total | 4,154,868,589.81 | 1,038,084,099.97 | 4,255,332,635.95 | 1,063,833,159.00 |
(3) Net deferred income tax assets or liabilities listed
In RMB
| Item | Deferred income tax assets and liabilities at the end of the period | Offset balance of deferred income tax assets or liabilities after offsetting | Deferred income tax assets and liabilities at the beginning of the period | Offset balance of deferred income tax assets or liabilities after offsetting |
| Deferred income tax assets | 186,649,335.96 | 343,349,564.70 | ||
| Deferred income tax liabilities | 1,038,084,099.97 | 1,063,833,159.00 |
(4) Details of unrecognized deferred income tax assets
In RMB
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 130,889.01 | 446,874.58 |
| Deductible loss | 7,336,111.24 | 8,983,744.38 |
| Total | 7,467,000.25 | 9,430,618.96 |
(5) Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RMB
| Year | Closing amount | Opening amount | Remarks |
| 2020 | 30,257.35 | ||
| 2021 |
| 2022 | 1,270,623.72 | 2,286,265.51 | |
| 2023 | 4,575,983.46 | 5,390,985.76 | |
| 2024 | 1,276,235.76 | 1,276,235.76 | |
| 2025 | 213,268.30 | ||
| Total | 7,336,111.24 | 8,983,744.38 | -- |
Others:
At the end of the period, the deferred income tax assets decreased by 45.64% compared with that at the beginning of the period,mainly because the subsidiary Fangda real estate company met the liquidation conditions of paying land value-added tax in thecurrent period and turned back the deferred income tax assets corresponding to the accrued and unpaid taxes.
22. Other non-current assets
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
| Contract assets | 81,416,144.83 | 6,412,571.95 | 75,003,572.88 | 160,318,405.15 | 14,686,637.34 | 145,631,767.81 |
| Prepaid house and equipment amount | 29,132,495.10 | 29,132,495.10 | 28,446,802.00 | 28,446,802.00 | ||
| Prepayment of intangible assets | 465,213.39 | 465,213.39 | ||||
| Prepaid engineering amount | 138,171.75 | 138,171.75 | 255,000.00 | 255,000.00 | ||
| Total | 111,152,025.07 | 6,412,571.95 | 104,739,453.12 | 189,020,207.15 | 14,686,637.34 | 174,333,569.81 |
23. Short-term borrowings
(1) Classification of short-term borrowings
In RMB
| Item | Closing balance | Opening balance |
| Loan by pledge | 30,045,466.66 | |
| Loan by pledge | 200,318,605.55 | |
| Guarantee loan | 200,013,291.68 | 216,287,991.79 |
| Credit borrow | 346,029,354.19 | 8,011,600.00 |
| The Group's internal acceptance bills discounted borrowings | 292,266,666.67 | 300,000,000.00 |
| The Group's external acceptance discount loan | 179,895,548.42 | |
| Total | 1,048,250,327.62 | 724,618,197.34 |
24. Transactional financial liabilities
None
25. Derivative financial liabilities
In RMB
| Item | Closing balance | Opening balance |
| Forward foreign exchange contract | 915,234.93 | 96,767.62 |
| Total | 915,234.93 | 96,767.62 |
26. Notes payable
In RMB
| Type | Closing balance | Opening balance |
| Commercial acceptance | 651,222,454.25 | 449,574,698.68 |
| Bank acceptance | 215,002,061.17 | 129,241,328.76 |
| Total | 866,224,515.42 | 578,816,027.44 |
The total amount of payable bills that have matured but not been paid at the end of the period is RMB0.00.
27. Account payable
(1) Account payable
In RMB
| Item | Closing balance | Opening balance |
| Account repayable and engineering repayable | 880,761,256.54 | 811,680,369.67 |
| Construction payable | 98,783,841.73 | 75,375,776.11 |
| Payable installation and implementation fees | 295,439,323.67 | 297,516,473.34 |
| Others | 4,450,130.01 | 6,200,681.12 |
| Total | 1,279,434,551.95 | 1,190,773,300.24 |
(2) Significant payables aging more than 1 year
In RMB
| Item | Closing balance | Reason |
| Supplier 1 | 71,125,193.51 | Not mature |
| Supplier 2 | 8,655,833.07 | Not mature |
| Supplier 3 | 7,381,161.50 | Not mature |
| Supplier 4 | 5,553,505.46 | Not mature |
| Supplier 5 | 3,128,600.54 | Not mature |
| Total | 95,844,294.08 | -- |
28. Prepayment received
(1) Prepayment received
In RMB
| Item | Closing balance | Opening balance |
| Rent and others | 1,544,655.62 | 1,332,457.45 |
| Total | 1,544,655.62 | 1,332,457.45 |
29. Contract liabilities
In RMB
| Item | Closing balance | Opening balance |
| Project funds collected in advance | 195,922,455.76 | 120,523,626.81 |
| Real estate sales payment | 62,466,576.69 | 621,697.25 |
| Material loan | 1,408,738.82 | 752,948.55 |
| Others | 5,689,341.85 | 2,342,675.44 |
| Total | 265,487,113.12 | 124,240,948.05 |
The amount and reason for the significant change in the book value during the reporting period
In RMB
| Item | Change | Reason |
| Project funds collected in advance | 75,398,828.95 | It is mainly due to the increase of advance payment for the project |
| Real estate sales payment | 61,844,879.44 | Mainly due to the pre-sale of real estate of Nanchang Fangda Center project |
30. Employees’ wage payable
(1) Employees’ wage payable
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Short-term remuneration | 55,534,644.34 | 322,671,459.63 | 318,055,744.12 | 60,150,359.85 |
| 2. Retirement pension program-defined contribution plan | 25,334.86 | 3,610,526.45 | 3,597,408.52 | 38,452.79 |
| 3. Dismiss compensation | 287,155.00 | 1,605,506.27 | 1,892,661.27 | |
| Total | 55,847,134.20 | 327,887,492.35 | 323,545,813.91 | 60,188,812.64 |
(2) Short-term remuneration
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Wage, bonus, allowance and subsidies | 54,054,805.08 | 294,141,118.68 | 288,807,784.80 | 59,388,138.96 |
| 2. Employee welfare | 14,687,862.43 | 14,687,862.43 | ||
| 3. Social insurance | 8,812.80 | 6,157,952.53 | 6,166,614.94 | 150.39 |
| Including: medical insurance | 8,812.80 | 3,928,663.65 | 3,937,476.45 | |
| Labor injury insurance | 611,366.67 | 611,216.28 | 150.39 | |
| Breeding insurance | 507,048.14 | 507,048.14 | ||
| Unemployment insurance | 1,110,874.07 | 1,110,874.07 | ||
| 4. Housing fund | 45,924.00 | 7,464,735.09 | 7,469,051.09 | 41,608.00 |
| 5. Labor union budget and staff education fund | 1,425,102.46 | 42,351.23 | 902,801.88 | 564,651.81 |
| 6. Short-term paid leave | 177,439.67 | 21,628.98 | 155,810.69 | |
| Total | 55,534,644.34 | 322,671,459.63 | 318,055,744.12 | 60,150,359.85 |
(3) Defined contribution plan
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Basic pension | 25,334.86 | 3,505,472.49 | 3,492,504.95 | 38,302.40 |
| 2. Unemployment insurance | 105,053.96 | 104,903.57 | 150.39 | |
| Total | 25,334.86 | 3,610,526.45 | 3,597,408.52 | 38,452.79 |
31. Taxes payable
In RMB
| Item | Closing balance | Opening balance |
| VAT | 3,944,275.20 | 5,138,273.83 |
| Enterprise income tax | 13,172,677.89 | 8,013,627.51 |
| Personal income tax | 1,113,797.56 | 1,111,213.06 |
| City maintenance and construction tax | 792,228.07 | 1,499,926.15 |
| Land using tax | 242,187.59 | 241,855.73 |
| Property tax | 317,791.55 | 265,016.74 |
| Education surtax | 422,865.94 | 736,138.35 |
| Local education surtax | 162,981.22 | 352,390.86 |
| Land VAT | 337,655,257.61 | 31,084.86 |
| Others | 838,881.79 | 459,460.59 |
| Total | 358,662,944.42 | 17,848,987.68 |
32. Other payables
In RMB
| Item | Closing balance | Opening balance |
| Other payables | 147,615,289.31 | 701,432,408.28 |
| Total | 147,615,289.31 | 701,432,408.28 |
(1) Other payables
1) Other payables presented by nature
In RMB
| Item | Closing balance | Opening balance |
| Performance and quality deposit | 37,119,618.56 | 46,117,111.79 |
| Deposit | 17,623,656.22 | 4,885,326.38 |
| Reserved expense | 10,861,930.30 | 17,194,987.92 |
| Tax withheld | 584,599,356.81 | |
| Pledge | 300,000.00 | |
| Others | 82,010,084.23 | 48,335,625.38 |
| Total | 147,615,289.31 | 701,432,408.28 |
Others:
1. The increase of "other" items in this year is mainly due to the sales return of real estate business and the refund of house purchasediscount, with a total amount of about RMB29.0687;
2. Other accounts payable at the end of the period decreased by 78.96% compared with that at the beginning of the period, mainlydue to the fact that the subsidiary Fangda Real Estate met the liquidation conditions of land value-added tax in the current period andtransferred the land value-added tax accrued in previous years from this subject to the tax payable.
(2) Significant payables aging more than 1 year
In RMB
| Item | Closing balance | Reason |
| Shenzhen Yikang Real Estate Co. Ltd. | 21,581,724.49 | Affiliated party payment |
| Total | 21,581,724.49 | -- |
33. Non-current liabilities due within 1 year
In RMB
| Item | Closing balance | Opening balance |
| Long-term loans due within 1 year | 103,359,833.57 | 922,346,563.72 |
| Total | 103,359,833.57 | 922,346,563.72 |
34. Other current liabilities
In RMB
| Item | Closing balance | Opening balance |
| Unterminated notes receivable | 82,447,039.97 | 169,688,481.80 |
| Substituted money on VAT | 25,241,385.72 | 22,772,791.90 |
| Total | 107,688,425.69 | 192,461,273.70 |
35. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
| Item | Closing balance | Opening balance |
| Loan by pledge | 293,978,153.39 | |
| Loan by pledge | 231,295,035.65 | 182,523,338.17 |
| Guarantee loan | 70,000,000.00 | |
| Guarantee, mortgage and pledge loan | 868,116,426.70 | |
| Total | 1,099,411,462.35 | 546,501,491.56 |
Notes to classification of long-term borrowings:
The pledge in the above guarantee, mortgage and pledge loan is based on the 100% equity of Fangda Real Estate Co., Ltd., asubsidiary of the Company, and the rent receivable pledge of Fangda Town rental property.Other note, including interest rate range:
The interest rate period of long-term loan is 3%-7%.
36. Anticipated liabilities
In RMB
| Item | Closing balance | Opening balance | Reason |
| Pending lawsuit | 27,017,023.60 | Penalty for delay in handling certificate of title | |
| Product quality warranty | 6,408,476.53 | 7,793,527.16 | Product quality warranty |
| Total | 33,425,500.13 | 7,793,527.16 | -- |
Others:
See Note XI, 2(1) ④ for details of matters involved in liquidated damages litigation
37. Deferred earning
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance | Reason |
| Government subsidy | 10,817,247.40 | 200,000.00 | 1,848,755.23 | 9,168,492.17 | See the following table |
| Total | 10,817,247.40 | 200,000.00 | 1,848,755.23 | 9,168,492.17 | -- |
Items involving government subsidies:
In RMB
| Liabilities | Opening balance | Amount of new subsidy | Amount included in | Other misc. gains | Costs offset in the period | Other change | Closing balance | Related to assets/earnin |
| non-operating revenue | recorded in this period | g | ||||||
| Railway transport screen door controlling system and information transmission technology | 77,653.85 | 18,904.32 | 58,749.53 | Assets-related | ||||
| Major investment project prize from Industry and Trade Development Division of Dongguan Finance Bureau | 1,623,809.90 | 57,142.80 | 1,566,667.10 | Assets-related | ||||
| Distributed PV power generation project subsidy sponsored by Dongguan Reform and Development Commission | 393,750.17 | 24,999.96 | 368,750.21 | Assets-related | ||||
| Subsidized land transfer | 177,278.87 | 3,725.64 | 173,553.23 | Assets-related | ||||
| Special subsidy for industrial transformation, upgrading and development | 800,000.00 | 800,000.00 | Assets-related |
| Enterprise informationization subsidy project of Shenzhen Small and Medium Enterprise Service Agency | 468,000.00 | 48,000.00 | 420,000.00 | Assets-related | ||||
| National Industry Revitalization and Technology Renovation Project fund | 7,276,754.61 | 1,591,042.51 | 5,685,712.10 | Assets-related | ||||
| Shenzhen Science and Technology Innovation Committee Technology Innovation Subsidy | 200,000.00 | 104,940.00 | 95,060.00 | Earning-related | ||||
| Total | 10,817,247.40 | 200,000.00 | 1,848,755.23 | 9,168,492.17 |
Others:
38. Other non-current liabilities
None
39. Capital share
In RMB
| Opening balance | Change (+,-) | Closing balance | |||||
| Issued new shares | Bonus shares | Transferred from reserves | Others | Subtotal | |||
| Total of capital shares | 1,123,384,189.00 | -35,105,238.00 | -35,105,238.00 | 1,088,278,951.00 | |||
Others:
① The decrease in share capital was due to the repurchase and cancellation of B shares by the Company during the reporting period.
② As of December 31, 2020, there are 2302093 shares with limited sales conditions in the closing balance, all of which are held bysenior executives.
40. Other equity instruments
None
41. Capital reserve
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Capital premium (share capital premium) | 94.24 | 10,005,396.81 | 10,005,491.05 | |
| Other capital reserves | 1,454,097.35 | 1,454,097.35 | ||
| Total | 1,454,191.59 | 10,005,396.81 | 11,459,588.40 |
Other note, including explanation about the reason of the change:
The increase of capital reserve in the current period was caused by the Company's premium transfer of part of the equity of itssubsidiary Zhichuang Technology.
42. Shares in stock
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Shares in stock | 142,134,417.40 | 99,385,887.28 | 42,748,530.12 | |
| Total | 142,134,417.40 | 99,385,887.28 | 42,748,530.12 |
Other note, including explanation about the reason of the change:
① On November 28, 2019 and December 16, 2019, the Company held the 19th meeting of the 8th board of directors and the firstextraordinary general meeting of shareholders in 2019 respectively to deliberate and approve the proposal of repurchase part of theCompany's domestic listed foreign shares (B shares) in 2019. From April 3, 2020 to May 12, 2020, a total of 35105238 shares wererepurchased through centralized competitive trading, with the highest price of HKD3.33 per share and the lowest price of HKD2.45per share. The actual payment of HK $108930044.20 (including transaction costs) was included in the treasury stock ofRMB99,385,887.28. On May 20, 2020, the Company completed the cancellation of the repurchase of 35,105,238 B shares, reducedthe share capital of 35,105,238 shares and offset the surplus reserve of RMB64,280,649.28.
② The second meeting of the ninth board of directors held by the Company on June 23, 2020 deliberated and passed the proposal ofrepurchase part of the Company's domestic listed foreign shares (B shares) in 2020. From July 23, 2020 to September 22, 2020, atotal of 14,404,724 shares were repurchased through centralized auction trading, with the highest price of HKD3.47 per share and thelowest price of KHD3.16 per share, and the actual payment of HKD48,359,819.24 (including transaction fees) , included in treasuryshares of RMB42,748,530.12, and has not been cancelled as of December 31, 2020.
43. Other miscellaneous income
In RMB
| Item | Opening balance | Amount occurred in the current period | Closing balance | |||||
| Amount before income tax | Less: amount written into other gains and transferred into gain/loss in previous terms | Less: amount written into other gains and transferred into gain/loss in previous terms | Less: Income tax expenses | After-tax amount attributed to the parent | After-tax amount attributed to minority shareholders | |||
| 1. Other misc. incomes that cannot be re-classified into gain and loss | -9,192,030.38 | -3,031,873.85 | -552,919.69 | -2,478,954.16 | -11,670,984.54 | |||
| Fair value change of investment in other equity tools | -9,192,030.38 | -3,031,873.85 | -552,919.69 | -2,478,954.16 | -11,670,984.54 | |||
| 2. Other misc. incomes that will be re-classified into gain and loss | 8,716,621.13 | 5,955,928.19 | 923,397.15 | 5,032,531.04 | 13,749,152.17 | |||
| Cash flow hedge reserve | -82,252.47 | 6,155,980.91 | 923,397.15 | 5,232,583.76 | 5,150,331.29 | |||
| Translation difference of foreign exchange statement | 42,320.14 | -200,052.72 | -200,052.72 | -157,732.58 | ||||
| Investment real estate measured at fair value | 8,756,553.46 | 8,756,553.46 | ||||||
| Other miscellaneous income | -475,409.25 | 2,924,054.34 | 370,477.46 | 2,553,576.88 | 2,078,167.63 | |||
44. Surplus reserves
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserves | 159,805,930.34 | 11,258,155.90 | 64,280,649.28 | 106,783,436.96 |
| Total | 159,805,930.34 | 11,258,155.90 | 64,280,649.28 | 106,783,436.96 |
Note, including explanation about the reason of the change:
① The increase of surplus reserve in the current period is due to the withdrawal of statutory surplus reserve by the Company at the
rate of 10% of the net profit in the current period in accordance with the Company law and the articles of association.
② The decrease of surplus reserve in the current period is caused by the write off of surplus reserve when the cost of treasury stockis higher than that of corresponding capital stock.
45. Retained profit
In RMB
| Item | Current period | Last period |
| Adjustment on retained profit of previous period | 3,898,626,177.99 | 3,921,225,872.96 |
| Total of retained profit at beginning of year adjusted (+ for increase, - for decrease) | -39,930,304.63 | |
| Retained profit adjusted at beginning of year | 3,898,626,177.99 | 3,881,295,568.33 |
| Plus: Net profit attributable to owners of the parent | 382,051,466.98 | 347,771,182.73 |
| Less: Statutory surplus reserves | 11,258,155.90 | 105,763,735.27 |
| Common share dividend payable | 54,413,947.55 | 224,676,837.80 |
| Closing retained profit | 4,215,005,541.52 | 3,898,626,177.99 |
46. Operational revenue and costs
In RMB
| Item | Amount occurred in the current period | Occurred in previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 2,859,619,810.94 | 2,386,064,610.56 | 2,908,727,515.24 | 2,153,447,678.94 |
| Other businesses | 119,676,599.22 | 22,363,581.82 | 97,022,043.42 | 15,728,616.33 |
| Total | 2,979,296,410.16 | 2,408,428,192.38 | 3,005,749,558.66 | 2,169,176,295.27 |
Is the lower of the net profit before and after deducting the non recurring profit and loss negative
□ Yes √ No
Income information:
In RMB
| Contract classification | Division 1 | Division 2 | Division 3 | Division 4 | Division 5 | Total |
| Type of product | 2,141,476,129.00 | 651,249,442.30 | 151,222,473.30 | 19,978,873.86 | 15,369,491.29 | 2,979,296,410.16 |
| Including: | ||||||
| Including: Curtain wall system and materials | 2,141,476,129.00 | 2,141,476,129.00 |
| Subway screen door and service | 651,249,442.30 | 651,249,442.30 | ||||
| Real estate sales | 151,222,473.30 | 151,222,473.30 | ||||
| PV power generation products | 19,978,873.86 | 19,978,873.86 | ||||
| Others | 15,369,491.29 | 15,369,491.29 | ||||
| Total | 2,141,476,129.00 | 651,249,442.30 | 151,222,473.30 | 19,978,873.86 | 15,369,491.29 | 2,979,296,410.16 |
Information related to performance obligations:
For curtain wall materials, real estate and other commodity sales transactions, the Company completes the performance obligationswhen the customer obtains the control of the relevant commodities; for providing building curtain wall, Metro screen door design,production and installation and other service transactions, the Company confirms the completed performance obligations accordingto the performance progress during the whole service period. The contract price of the Company is usually due within one year, andthere is no significant financing component.
Information related to the transaction price allocated to the remaining performance obligations:
The amount of revenue corresponding to the performance obligations that have been signed, but not yet performed or not yetperformed at the end of the reporting period is 5,077,713,915.37 yuan, of which 3,390,335,133.12 yuan is expected to be recognizedin 2021, and 963,868,984.14 yuan is expected to be recognized in 2022, 723,509,798.11 yuan It is expected that revenue will berecognized in 2023 and beyond.
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.3 – Listed Companies Engaged in Property Development.Top-5 projects in terms of income received and recognized in the reporting period:
In RMB
| No. | Item | Balanace |
| 1 | Fangda Town | 21,204,468.83 |
47. Taxes and surcharges
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| City maintenance and construction tax | 5,889,502.46 | 6,853,739.29 |
| Education surtax | 4,261,478.60 | 5,044,690.90 |
| Property tax | 4,396,188.94 | 4,446,647.69 |
| Land using tax | 1,544,528.60 | 1,615,266.99 |
| Stamp tax | 1,859,906.26 | 1,978,440.89 |
| Land VAT | -240,313,311.62 | 41,191,377.50 |
| Others | 38,233.02 | 833,007.72 |
| Total | -222,323,473.74 | 61,963,170.98 |
This year's taxes and surcharges decreased by 458.80% compared with the previous year, mainly due to the fact that the Fangda Townproject developed by the subsidiary Fangda Real Estate was in line with the land value-added tax liquidation in this year, and the landvalue-added tax of the Fangda Town project was liquidated according to the relevant laws and regulations on land value-added taxand liquidation methods, so the land value-added tax withdrawn in previous years was reversed.
48. Sales expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 20,507,953.03 | 30,325,279.44 |
| Sales agency fee | 4,290,201.20 | 9,693,525.80 |
| Freight and miscellaneous charges | 18,266.00 | 6,262,470.96 |
| Others | 2,396,576.25 | 2,738,809.38 |
| Entertainment expense | 3,329,604.62 | 2,614,670.15 |
| Travel expense | 1,177,774.84 | 2,159,434.19 |
| Advertisement and promotion fee | 4,848,901.77 | 2,060,937.53 |
| Rental | 1,216,955.39 | 898,832.44 |
| Office costs | 959,030.65 | 700,706.25 |
| Material consumption | 558,273.10 | 129,520.06 |
| Total | 39,303,536.85 | 57,584,186.20 |
Others:
This year's sales expenses decreased by 31.75% compared with that of the previous year, mainly due to the decrease of real estatesales, the corresponding decrease of labor and sales agency fees, and the implementation of the new revenue standard to classify thetransportation expenses belonging to the performance cost into the operating cost.
49. Management expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 86,696,446.46 | 111,321,743.46 |
| Maintenance costs | 12,178,371.33 | 14,103,293.81 |
| Agencies | 11,571,373.19 | 12,038,870.33 |
| Depreciation and amortization | 8,541,764.39 | 9,361,818.02 |
| Office expense | 6,542,048.90 | 4,978,201.91 |
| Entertainment expense | 3,656,970.00 | 4,578,811.46 |
| Rental | 3,477,061.52 | 4,131,226.97 |
| Lawsuit | 346,458.93 | 2,774,432.84 |
| Travel expense | 1,679,259.48 | 2,440,786.53 |
| Property management fee | 3,278,088.11 | 2,232,683.37 |
| Water and electricity | 482,296.26 | 588,536.13 |
| Material consumption | 245,286.34 | 470,194.27 |
| Others | 3,073,977.83 | 1,423,196.40 |
| Total | 141,769,402.74 | 170,443,795.50 |
50. R&D cost
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 73,547,580.78 | 36,774,721.22 |
| Material costs | 53,080,480.04 | 11,283,307.86 |
| Agencies | 6,368,175.89 | 5,384,796.63 |
| Others | 5,550,020.45 | 2,385,770.34 |
| Rental | 18,674.31 | 2,372,103.83 |
| Depreciation costs | 1,577,800.05 | 883,118.20 |
| Amortization of intangible assets | 1,226,447.53 | 508,353.71 |
| Travel expense | 242,760.29 | 162,799.41 |
| Total | 141,611,939.34 | 59,754,971.20 |
Others:
This year's R&D expenses increased by 136.99% over the previous year, mainly due to the increase in R&D project investment of theCompany's important subsidiaries.
51. Financial expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Interest expense | 97,682,162.85 | 90,149,816.27 |
| Less: interest capitalization | 13,189,723.94 | 5,819,400.10 |
| Less: discount government subsidies | 2,516,250.00 | 862,000.00 |
| Less: Interest income | 14,654,298.98 | 10,770,653.40 |
| Exchange net loss | 1,310,762.38 | -777,417.48 |
| Acceptant discount | 13,143,667.19 | 8,581,333.33 |
| Commission charges and others | 5,237,278.91 | 2,107,155.76 |
| Total | 87,013,598.41 | 82,608,834.38 |
52. Other gains
In RMB
| Source | Amount occurred in the current period | Occurred in previous period |
| Government subsidies related to deferred income (related to assets) | 1,743,815.23 | 233,873.90 |
| Government subsidies related to deferred income (related to income) | 104,940.00 | 130,040.00 |
| Government subsidies directly included in current profits and losses (related to income) | 12,503,764.04 | 6,915,169.59 |
| Other items related to daily activities and included in other income | 1,060,651.91 | 337,688.80 |
| Total | 15,413,171.18 | 7,616,772.29 |
53. Investment income
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Gains from long-term equity investment measured by equity | -1,319,862.88 | -2,152,583.08 |
| Investment income of trading financial assets during the holding period | -50,000.00 | 51,600,871.08 |
| Investment income from disposal of trading financial assets | 8,723,799.17 | -43,598,838.65 |
| Financial assets derecognised as a result of amortized cost | -6,148,967.92 | -8,047,524.45 |
| Others | 69,798.87 | 288,430.55 |
| Total | 1,274,767.24 | -1,909,644.55 |
54. Income from fair value fluctuation
In RMB
| Source of income from fluctuation of fair value | Amount occurred in the current period | Occurred in previous period |
| Investment real estate measured at fair value | 19,205,841.18 | 42,608,311.58 |
| Other non-current financial assets | 15,458.14 | 9,728.02 |
| Total | 19,221,299.32 | 42,618,039.60 |
55. Credit impairment loss
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Bad debt loss of other receivables | 1,206,557.48 | 12,587,644.72 |
| Bad debt loss of account receivable | 28,614,121.03 | -47,106,079.08 |
| Total | 29,820,678.51 | -34,518,434.36 |
56. Assets impairment loss
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| II. Inventory depreciation loss and contract performance cost impairment loss | 218,619.24 | |
| 12. Contract assets impairment loss | 52,970,037.82 | |
| Total | 52,970,037.82 | 218,619.24 |
57. Assets disposal gains
In RMB
| Source | Amount occurred in the current period | Occurred in previous period |
| Fixed assets impairment loss | -18,386.23 | -101,676.86 |
| Gains or losses from disposal of other non current assets | -233,876.00 | |
| Total | -252,262.23 | -101,676.86 |
58. Non-business income
In RMB
| Item | Amount occurred in the current period | Occurred in previous period | Amount accounted into the current accidental gain/loss |
| Penalty income | 251,537.00 | 778,191.18 | 251,537.00 |
| Compensation received | 61,960.00 | 13,377.69 | 61,960.00 |
| Others | 209,007.72 | 2,065,608.87 | 209,007.72 |
| Total | 522,504.72 | 2,857,177.74 | 522,504.72 |
59. Non-business expenses
In RMB
| Item | Amount occurred in the current period | Occurred in previous period | Amount accounted into the current accidental gain/loss |
| Donation | 6,000,698.10 | 2,272,000.00 | 6,000,698.10 |
| Loss from retirement os damaged non-current assets | 289,575.87 | 171,065.09 | 289,575.87 |
| Penalty and overdue fine | 14,164.60 | 117,548.22 | 14,164.60 |
| Others | 29,260,098.18 | 1,405,252.17 | 29,260,098.18 |
| Total | 35,564,536.75 | 3,965,865.48 | 35,564,536.75 |
Others:
Other items include the estimated liabilities of RMB27,017,023.60 accrued by the Company according to the most likely outcome ofthe litigation due to the delay of processing the certificate. For details, please refer to the description of ④ in XI 2(1).
60. Income tax expenses
(1) Details about income tax expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Income tax expenses in this period | -45,459,035.14 | 28,267,352.94 |
| Deferred income tax expenses | 130,580,692.26 | 42,004,335.51 |
| Total | 85,121,657.12 | 70,271,688.45 |
(2) Adjustment process of accounting profit and income tax expense
In RMB
| Item | Amount occurred in the current period |
| Total profit | 466,898,873.99 |
| Income tax expenses calculated based on the legal (or applicable) tax rates | 116,724,718.50 |
| Impacts of different tax rates applicable for some subsidiaries | -25,010,841.94 |
| Impacts of income tax before adjustment | 1,358,245.94 |
| Impacts of non-deductible cost, expense and loss | 2,144,536.65 |
| Impacts of using deductible loss of unrecognized deferred income tax assets | -405,546.59 |
| Deductible temporary difference and deductible loss of unrecognized deferred income tax assets | 1,354,735.38 |
| Additional deduction of R&D expense | -11,374,156.54 |
| Profit and loss of associates and joint ventures calculated using the equity method | 329,965.72 |
| Income tax expenses | 85,121,657.12 |
61. Other miscellaneous income
See Note VII 57.
62. Notes to the cash flow statement
(1) Other cash inflow related to operation
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Interest income | 14,653,465.65 | 10,184,892.89 |
| Subsidy income | 16,385,605.95 | 8,114,858.39 |
| Net amount of margin such as Bill of exchange | 130,234,443.34 | 40,000,000.00 |
| Retrieving of bidding deposits | 3,740,836.61 | 21,572,620.86 |
| Other operating accounts | 4,828,269.56 | 12,022,109.04 |
| Total | 169,842,621.11 | 91,894,481.18 |
(2) Other cash paid related to operation
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Sales expense | 18,795,583.82 | 26,841,869.91 |
| Management and R&D expenses | 52,371,474.66 | 60,065,704.23 |
| Bidding deposit paid | 65,260,110.98 | |
| Net draft deposit net paid | 116,999,688.37 | |
| Lawsuit freezing funds | 22,944,733.36 | |
| Other trades | 32,303,328.43 | 7,671,819.08 |
| Total | 168,730,497.89 | 234,523,814.95 |
(3) Other cash paid related to investment activities
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Cash paid for other investment activities | 135,741.00 | |
| Total | 135,741.00 |
(4) Other cash received related to financing
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Recovery of restricted funds for B-share repurchase and others | 88,312,942.36 | |
| Total | 88,312,942.36 |
(5) Other cash paid related to financing activities
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Repurchase amout of B shares | 142,856,912.25 | 88,428,226.25 |
| Money order loan margin | 121,280,000.00 | 40,000,000.00 |
| Total | 264,136,912.25 | 128,428,226.25 |
63. Supplementary data of cash flow statement
(1) Supplementary data of cash flow statement
In RMB
| Supplementary information | Amount of the Current Term | Amount of the Previous Term |
| 1. Net profit adjusted to cash flow related to business operations: | -- | -- |
| Net profit | 381,777,216.87 | 346,761,604.30 |
| Plus: Asset impairment provision | -82,790,716.33 | 34,299,815.12 |
| Fixed asset depreciation, gas and petrol depreciation, production goods depreciation | 23,619,848.31 | 24,226,272.74 |
| Amortization of intangible assets | 4,253,949.81 | 2,680,311.61 |
| Amortization of long-term amortizable expenses | 1,313,939.81 | 632,269.18 |
| Loss from disposal of fixed assets, intangible assets, and other long-term assets (―-― for gains) | 252,262.23 | 101,676.86 |
| Loss from fixed asset discard (―-― for gains) | 289,575.87 | 171,065.09 |
| Loss from fair value fluctuation (―-― for gains) | -19,221,299.32 | -42,618,039.60 |
| Financial expenses (―-― for gains) | 99,390,960.03 | 91,603,140.07 |
| Investment losses (―-― for gains) | -1,274,767.24 | -6,137,879.90 |
| Decrease of deferred income tax asset (―-― for increase) | 156,293,668.68 | 20,257,876.84 |
| Increase of deferred income tax asset (―-― for increase) | -25,749,059.03 | 21,746,458.65 |
| Decrease of inventory (―-― for increase) | -102,647,106.37 | -64,556,366.16 |
| Decrease of operational receivable items (―-― for increase) | -241,645,927.37 | -345,194,864.61 |
| Increase of operational receivable items (―-― for decrease) | 224,612,796.61 | 10,686,250.77 |
| Others | 130,234,443.34 | -99,944,421.73 |
| Cash flow generated by business operations, net | 548,709,785.90 | -5,284,830.77 |
| 2. Major investment and financing activities with no cash involved: | -- | -- |
| Debt transferred to assets | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets under finance leases | ||
| 3. Net change in cash and cash equivalents: | -- | -- |
| Balance of cash at period end | 1,024,252,387.39 | 725,269,902.90 |
| Less: Initial balance of cash | 725,269,902.90 | 956,190,890.68 |
| Add: Ending balance of cash equivalents | ||
| Less: Ending balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 298,982,484.49 | -230,920,987.78 |
(2) Composition of cash and cash equivalents
In RMB
| Item | Closing balance | Opening balance |
| I. Cash | 1,024,252,387.39 | 725,269,902.90 |
| Including: Cash in stock | 482.09 | 4,244.86 |
| Bank savings can be used at any time | 1,009,780,912.18 | 725,255,753.53 |
| Other monetary capital can be used at any time | 14,470,993.12 | 9,904.51 |
| III. Balance of cash and cash equivalents at end of term | 1,024,252,387.39 | 725,269,902.90 |
| Including: restricted cash and cash equivalent used by parent company or subsidiaries in the Group | 435,587,632.71 | 484,542,076.05 |
64. Notes to statement of change in owners’ equity
Explain the name of "other" items and the amount of adjustment for the balance at the end of last yearThere is no adjustment to the balance at the end of last year.
65. Assets with restricted ownership or use rights
In RMB
| Item | Closing book value | Reason |
| Monetary capital | 435,587,632.71 | Margin, pledge and judicial frozen deposit, etc |
| Inventory | 103,973,925.13 | Credit Mortgage, Mortgage Loan |
| Fixed assets | 63,229,493.11 | Loan by pledge |
| Intangible assets | 19,429,756.30 | Loan by pledge |
| Account receivable | 38,906,851.06 | Loan by pledge |
| Investment real estate | 2,820,277,340.71 | Loan by pledge |
| Construction in process | 44,368,937.04 | Loan by pledge |
| 100% stake in Fangda Property Development held by the Company | 200,000,000.00 | Loan by pledge |
| Total | 3,725,773,936.06 | -- |
66. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
| Item | Closing foreign currency balance | Exchange rate | Closing RMB balance |
| Monetary capital | -- | -- | 83,942,295.66 |
| Including: USD | 4,514,782.07 | 6.5249 | 29,458,501.66 |
| Euro | 0.81 | 8.0247 | 6.50 |
| HK Dollar | 41,704,372.97 | 0.8416 | 35,100,067.19 |
| INR | 15,665,670.99 | 0.0891 | 1,396,500.57 |
| Vietnamese currency | 342,105,710.00 | 0.0003 | 96,679.07 |
| SGD | 2,000.30 | 4.9314 | 9,864.28 |
| AUD | 3,564,514.96 | 5.0163 | 17,880,676.39 |
| Account receivable | -- | -- | 22,108,912.11 |
| Including: USD | 326,973.79 | 6.5249 | 2,133,471.29 |
| Euro | |||
| HK Dollar | 5,109,501.10 | 0.8416 | 4,300,360.51 |
| AUD | 3,124,829.12 | 5.0163 | 15,675,080.31 |
| Contract assets | 8,407,693.51 | ||
| Including: USD | 1,017,415.66 | 6.5249 | 6,638,535.47 |
| HK Dollar | 592,650.34 | 0.8416 | 498,798.23 |
| INR | 14,250,648.37 | 0.0891 | 1,270,359.81 |
| Other receivables | 1,087,125.02 | ||
| Including: USD | 99,109.31 | 6.5249 | 646,678.33 |
| HK Dollar | 272,085.00 | 0.8416 | 228,997.62 |
| INR | 1,803,367.00 | 0.0891 | 160,759.35 |
| AUD | 10,105.00 | 5.0163 | 50,689.71 |
| Short-term loans | 46,625,250.00 | ||
| Including: Euro | 5,810,000.00 | 8.025 | 46,625,250.00 |
| Account payable | 2,718,283.32 | ||
| Including: USD | 185,398.27 | 6.5249 | 1,209,705.17 |
| AUD | 67,927.63 | 0.8416 | 57,170.61 |
| INR | 16,281,606.64 | 0.0891 | 1,451,407.54 |
| Other payables | 393,471.22 | ||
| Including: USD | 44,289.36 | 6.5249 | 288,983.65 |
| AUD | 17,930.00 | 5.0163 | 89,942.26 |
| HK Dollar | 100.00 | 0.8416 | 84.16 |
| Vietnamese currency | 51,172,200.00 | 0.0003 | 14,461.15 |
(2) The note of overseas operating entities should include the main operation places, book keepingcurrencies and selection basis. Where the book keeping currency is changed, the reason should also beexplained.
□ Applicable √ Inapplicable
67. Hedging
Hedging items and related tools, qualitative and quantitative information about hedging risks:
| Type | Hedged item | Hedging tools | Hedged risk |
| Cash flow hedging | Forward transaction of aluminum sheet purchase; | Aluminum futures contract; | The price of raw materials has risen, leading to an increase in expected transaction procurement costs; |
| Forward foreign exchange transaction | Forward foreign exchange contract | The depreciation of foreign currency leads to the decrease of actual collection |
68. Government subsidy
(1) Government subsidy profiles
In RMB
| Type | Amount | Item | Amount accounted into the current gain/loss |
| Subsidized land transfer | 173,553.23 | Deferred earning | 3,725.64 |
| Special subsidy for industrial transformation, upgrading and development | 800,000.00 | Deferred earning | |
| Major investment project prize from Industry and Trade Development Division of Dongguan Finance Bureau | 1,566,667.10 | Deferred earning | 57,142.80 |
| Distributed PV power generation project subsidy sponsored by Dongguan Reform and Development Commission | 368,750.21 | Deferred earning | 24,999.96 |
| Railway transport screen door controlling system and information transmission technology | 58,749.53 | Deferred earning | 18,904.32 |
| National Industry Revitalization and Technology Renovation Project fund | 5,685,712.10 | Deferred earning | 1,591,042.51 |
| Shenzhen Science and Technology Innovation Committee Technology Innovation Subsidy | 95,060.00 | Deferred earning | 104,940.00 |
| Enterprise informationization subsidy project of Shenzhen Small and Medium Enterprise Service Agency | 420,000.00 | Deferred earning | 48,000.00 |
| Incentives for small and medium-sized enterprise above the stipulated scale | 200,000.00 | Other gains | 200,000.00 |
| Subsidy for foreign trade | 30,200.00 | Other gains | 30,200.00 |
| exhibition of Finance Bureau of Management Committee of Nanchang High-tech Development Zone | |||
| Technology research and development award of Finance Bureau of Management Committee of Nanchang High-tech Development Zone | 350,000.00 | Other gains | 350,000.00 |
| Nanchang High-tech Development Zone Management Committee Finance Bureau allocates industrial incentives | 145,350.00 | Other gains | 145,350.00 |
| Technical Innovation Award for Scientific Research Staff of Nanchang High-tech Development Zone Entrepreneurship Service Center | 5,000.00 | Other gains | 5,000.00 |
| Grant for Shenzhen Industrial Internet development support program | 260,000.00 | Other gains | 260,000.00 |
| Support for steady industrial growth in Shenzhen | 301,000.00 | Other gains | 301,000.00 |
| Special fund support subsidy for building energy efficiency development in Shenzhen | 980,000.00 | Other gains | 980,000.00 |
| Training subsidy for strategic management and innovative thinking project of Shenzhen Nanshan District Human Resources Bureau | 100,000.00 | Other gains | 100,000.00 |
| Shenzhen patent awards and subsidies | 457,500.00 | Other gains | 457,500.00 |
| Childbearing subsidy | 106,488.32 | Other gains | 106,488.32 |
| R&D subsidy from Shenzhen Science and Technology Innovation Commission | 379,000.00 | Other gains | 379,000.00 |
| Special fund for burden reduction support of Songshan | 358,078.44 | Other gains | 358,078.44 |
| Lake enterprises | |||
| Employment subsidy | 1,371,191.72 | Other gains | 1,371,191.72 |
| Subsidy income from sewage treatment | 126,103.20 | Other gains | 126,103.20 |
| Epidemic subsidy in Hong Kong | 960,215.04 | Other gains | 960,215.04 |
| Support funds for private economy in Xinjin Industrial Park | 139,400.00 | Other gains | 139,400.00 |
| Epidemic electricity subsidy | 470,573.00 | Other gains | 470,573.00 |
| Epidemic rent relief subsidy | 535,000.00 | Other gains | 535,000.00 |
| VAT rebated into revenue | 5,056,535.88 | Other gains | 5,056,535.88 |
| Others | 172,128.44 | Other gains | 172,128.44 |
| Discount subsidy | 2,516,250.00 | Financial expenses | 2,516,250.00 |
| Total | 24,188,506.21 | 16,868,769.27 |
(2) Government subsidy refund
□ Applicable √ Inapplicable
Others:
The value-added tax is immediately refundable income, which is mainly attributed to the fact that Sun Corporation KechuangyuanSoftware belongs to a software company and enjoys the VAT rebate policy. Since the project will not form long-term assets, theCompany will use it as a government subsidy related to income.
VIII. Change to Consolidation Scope
1. Disposal of subsidiaries
Single disposal of a subsidiary that may lead to loss of control
□ Yes √ No
Disposal of a subsidiary in multiple steps that lead to loss of control in the report period
□ Yes √ No
2. Change to the consolidation scope for other reasons
Change in the consolidation scope due to other reasons (such as new subsidiaries and liquidation of subsidiaries) and the situations:
Four new subsidiaries and grandchildren were added to the consolidated statements in the current period, of which theCompany directly controlled was Fangda Partnership, and the three indirectly controlled companies were Lifu Investment, XunfuInvestment and Jianke Hong Kong.
IX. Equity in Other Entities
1. Interests in subsidiaries
(1) Group Composition
| Company | Place of business | Registered address | Business | Shareholding percentage | Obtaining method | |
| Direct | Indirect | |||||
| Fangda Jianke | Shenzhen | Shenzhen | Designing, manufacturing, and installation of curtain walls | 98.39% | 1.61% | Incorporation |
| Fangda Zhichuang | Shenzhen | Shenzhen | Production, processing and installation of subway screen doors | 94.04% | Incorporation | |
| Fangda New Material | Nanchang | Nanchang | Prodution and sales of new-type materialsm composite materials and production of curtain walls | 75.00% | 25.00% | Incorporation |
| Fangda Property | Shenzhen | Shenzhen | Real estate development and operation | 99.00% | 1.00% | Incorporation |
| Fangda New Energy | Shenzhen | Shenzhen | Design and construction of PV power plants | 99.00% | 1.00% | Incorporation |
| Chengdu Fangda | Chengdu | Chengdu | Trusted processing of building curtain wall materials | 100.00% | Incorporation | |
| Shihui International | Virgin Islands | Virgin Islands | Investment | 100.00% | Incorporation | |
| Dongguan New Material | Dongguan | Dongguan | Installation and sales of building curtain walls | 100.00% | Incorporation | |
| Fangda Property Management | Shenzhen | Shenzhen | Property management | 100.00% | Incorporation | |
| Jiangxi Property Development | Nanchang | Nanchang | Real estate development and operation | 100.00% | Incorporation | |
| Luxin New Energy | Pingxiang | Pingxiang | Design and construction of PV power plants | 100.00% | Incorporation | |
| Xinjian New Energy | Nanchang | Nanchang | Design and construction of PV power plants | 100.00% | Incorporation | |
| Dongguan New Energy | Dongguan | Dongguan | Design and construction of PV power plants | 100.00% | Incorporation | |
| Kechuangyuan Software | Shenzhen | Shenzhen | Software development | 94.04% | Incorporation | |
| Zhichuang Technology Hong Kong | Hong Kong | Hong Kong | Metro screen door | 94.04% | Incorporation | |
| Hongjun Investment Company | Shenzhen | Shenzhen | Investment | 98.00% | 2.00% | Incorporation |
| Fangda Australia Co., Ltd. | Australia | Australia | Designing, manufacturing, and installation of curtain walls | 100.00% | Incorporation | |
| Fangda Cloud Rail | Shenzhen | Shenzhen | Design, development and sales of cloud rail transport equipment | 100.00% | Incorporation | |
| Chengda Curtain Wall Company | Chengdu | Chengdu | Building decoration and other construction industry | 100.00% | Incorporation | |
| Fangda Southeast Asia | Vietnam | Vietnam | Designing, manufacturing, and installation of curtain walls | 100.00% | Incorporation | |
| Shanghai Fangda Zhijian | Shanghai | Shanghai | Intelligent technology, new energy, automated | 30.00% | 70.00% | Incorporation |
| technology | ||||||
| Shanghai Fangda Jianzhi | Shanghai | Shanghai | Construction technology, intelligent technology, automation technology, design, production and installation of building curtain walls | - | 100.00% | Incorporation |
| Zhongrong Litai | Shenzhen | Shenzhen | Business service | 55.00% | Purchase | |
| Fangda Investment Partnership (Limited Partnership) | Shenzhen | Shenzhen | Project investment and investment consultancy | 99.00% | 0.52% | Incorporation |
| Lifu Investment Co., Ltd | Shenzhen | Shenzhen | Project investment and investment consultancy | 52.00% | Incorporation | |
| Xunfu Investment Co., Ltd | Shenzhen | Shenzhen | Project investment and investment consultancy | 100.00% | Incorporation | |
| Jianke Hong Kong Limited | Hong Kong | Hong Kong | 100.00% | Incorporation |
Note 1: Fangda Investment Partnership (limited partnership), established on August 7, 2020, has a registered capital of RMB
237.7 million subscribed by the Company and Lifu Investment Co., Ltd. as of December 31, 2020, the total paid in registered capitalof each party is RMB 237.7 million.Note 2: Lifu Investment Co., Ltd. was established on August 4, 2020. Hongjun Investment Co., Ltd., Xunfu Investment Co.,Ltd. and Shenzhen Zhuoshun Investment Co., Ltd. jointly subscribed the registered capital of RMB 1 million. As of December 31,2020, the total paid in registered capital of each party is RMB 1 million.
Note 3: Xunfu Investment Co., Ltd. was established on July 8, 2020, with the registered capital of RMB 100,000 subscribedby Fangda New Energy Co., Ltd. as of December 31, 2020, with the registered capital of RMB 100,000 paid in by Fangda NewEnergy Co., Ltd.Note 4: The registered capital of Jianke Hong Kong Co., Ltd. was subscribed by Shihui International Co., Ltd. on May 19,2020. As of December 31, 2020, the paid in registered capital of Shihui International Co., Ltd. was HKD40,000.
(2) Major non wholly-owned subsidiaries
In RMB
| Company | Shareholding of minority shareholders | Profit and loss attributed to minority shareholders | Dividend to be distributed to minority shareholders | Interest balance of minority shareholders in the end of the period |
| Zhongrong Litai | 45.00% | -7,054.01 | 48,402,955.59 | |
| Fangda Zhichuang | 5.96% | -266,664.71 | 17,203,076.60 |
(3) Financial highlights of major non wholly owned subsidiaries
In RMB
| Company | Closing balance | Opening balance | ||||||||||
| Current asset | Non-current assets | Total of assets | Current liabilities | Non-current liabilities | Total liabilities | Current asset | Non-current assets | Total of assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Zhongrong Litai | 205,837,361.25 | 30,024.88 | 205,867,386.13 | 98,305,262.61 | 98,305,262.61 | 174,827,165.52 | 30,066.12 | 174,857,231.64 | 67,279,432.54 | 67,279,432.54 | ||
| Fangda Zhichuang | 757,453,607.34 | 62,283,669.54 | 819,737,276.88 | 519,869,993.38 | 6,562,286.06 | 526,432,279.44 | ||||||
In RMB
| Company | Amount occurred in the current period | Occurred in previous period | ||||||
| Turnover | Net profit | Total of misc. incomes | Business operation cash flows | Turnover | Net profit | Total of misc. incomes | Business operation cash flows | |
| Zhongrong Litai | 601,651.38 | -15,675.58 | -15,675.58 | 166,931.72 | 39,105.50 | -2,243,507.63 | -2,243,507.63 | 124,134.62 |
| Fangda Zhichuang | 651,249,442.29 | 75,181,980.27 | 361,192.06 | 70,773,262.67 | ||||
2. Change in the ownership share of the subsidiary and control of the transaction of the subsidiary
(1) Description of changes in owner's equity shares of subsidiaries
On August 7, 2020, Fangda Jianke, a subsidiary of the Company, transferred its 5.71% equity of Zhichuang Technology toGongqingcheng Yingfa Investment Partnership (limited partnership), with the transfer amount of RMB 26,616,725.71. Inaddition, Shenzhen Zhuoshun Investment Co., Ltd. holds 0.2491% of the equity of Zhichuang Technology Co., Ltd. throughholding Lifu Investment, and the corresponding amount of equity transfer paid is RMB591,747.70.
(2) Impact of transaction on minority shareholders' equity and owner's equity attributable to parentcompany
In RMB
| Fangda Zhichuang | |
| Disposal consideration - cash | 27,208,473.41 |
| Less: share of net assets of subsidiaries calculated according to the proportion of equity acquired / disposed | 17,203,076.60 |
| Difference | 10,005,396.81 |
| Including: adjustment of capital reserve | 10,005,396.81 |
3. Interests in joint ventures or associates
(1) Financial summary of insignificant joint ventures and associates
In RMB
| Closing balance/amount occurred in this period | Opening balance/amount occurred in previous period | |
| Associate: | -- | -- |
| Total book value of investment | 55,902,377.95 | 57,222,240.83 |
| Total shareholding | -- | -- |
| Net profit | -1,319,862.88 | -2,152,583.08 |
| --Total of misc. incomes | -1,319,862.88 | -2,152,583.08 |
X. Risks of Financial Tools
The risks associated with the financial instruments of the Company arise from the various financial assets and liabilitiesrecognized by the Company in the course of its operations, including credit risks, liquidity risks and market risks.The management objectives and policies of various risks related to financial instruments are governed by the management ofthe Company. The operating management is responsible for daily risk management through functional departments (for example, theCompany's credit management department reviews the Company's credit sales on a case-by-case basis). The internal auditdepartment of the Company conducts daily supervision of the implementation of the Company's risk management policies andprocedures, and reports relevant findings to the Company's audit committee in a timely manner.
The overall goal of the Company's risk management is to formulate risk management policies that minimize the risksassociated with various financial instruments without excessively affecting the Company's competitiveness and resilience.
1. Credit risk
Credit risk is caused by the failure of one party of a financial instrument in performing its obligations, causing the risk offinancial loss for the other party. The credit risk of the Company mainly comes from monetary capital, notes receivable, accountsreceivable, other receivables, receivables financing, contract assets, etc. The credit risk of these financial assets comes from thedefault of the counterparties, and the maximum risk exposure is equal to the book amount of these instruments.
The Company's money and funds are mainly deposited in the commercial banks and other financial institutions. The Companybelieves that these commercial banks have higher reputation and asset status and have lower credit risk.For notes receivable, accounts receivable, other receivables, receivables financing and contract assets, the Company setsrelevant policies to control credit risk exposure. The Group set the credit line and term for debtors according to their financial status,external rating, and possibility of getting third-party guarantee, credit record and other factors. The Group regularly monitors debtors‘credit record. For those with poor credit record, the Group will send written payment reminders, shorten or cancel credit term tolower the general credit risk.
(1) Significant increases in credit risk
The credit risk of the financial instrument has not increased significantly since the initial confirmation. In determining whetherthe credit risk has increased significantly since the initial recognition, the Company considers reasonable and evidenced information,including forward-looking information, that can be obtained without unnecessary additional costs or effort. The Company determinesthe relative risk of default risk of the financial instrument by comparing the risk of default of the financial instrument on the balancesheet date with the risk of default on the initial recognition date to assess the credit risk of the financial instrument from initialrecognition.
When one or more of the following quantitative and qualitative criteria are triggered, the Company believes that the credit riskof financial instruments has increased significantly: the quantitative criteria are mainly the probability of default in the remaining lifeof the reporting date increased by more than a certain proportion compared with the initial recognition; the qualitative criteria are themajor adverse changes in the operation or financial situation of the major debtors, the early warning of customer list, etc.
(2) Definition of assets where credit impairment has occurred
In order to determine whether or not credit impairment occurs, the standard adopted by our company is consistent with thecredit risk management target for related financial instruments, and quantitative and qualitative indicators are considered.
Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor, such as payment ofinterest or default or overdue of principal; (B) The concession that the debtor would not make under any other circumstances foreconomic or contractual considerations relating to the financial difficulties of the debtor; The debtor is likely to be bankrupt orundertake other financial restructuring; The financial difficulties of the issuer or debtor lead to the disappearance of the active marketfor the financial asset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that a credit loss hasoccurred.
Credit impairment in financial assets may be caused by a combination of multiple events, not necessarily by events that can beidentified separately.
(3) Expected credit loss measurement
Depending on whether there is a significant increase in credit risk and whether a credit impairment has occurred, the Companyprepares different assets for a 12-month or full expected credit loss. The key parameters of expected credit loss measurement includedefault probability, default loss rate and default risk exposure. Taking into account the quantitative analysis and forward-lookinginformation of historical statistics (such as counterparty ratings, guaranty methods, collateral categories, repayment methods, etc.),the Company establishes the default probability, default loss rate and default risk exposure model.
Definition:
The probability of default refers to the possibility that the debtor will not be able to fulfil its obligation to pay in the next 12months or throughout the remaining period.
Breach Loss Rate means the extent of loss expected by the Company for breach risk exposure. Depending on the type of
counterparty, the manner and priority of recourse, and the different collateral, the default loss rate is also different. The default lossrate is the percentage of the risk exposure loss at the time of the default, calculated on the basis of the next 12 months or the entirelifetime.
Exposure to default is the amount payable to the Company at the time of default in the next 12 months or throughout theremaining life. Prospective information credit risks significantly increased and expected credit losses were calculated. Through theanalysis of historical data, the Company has identified the key economic indexes that affect the credit risk of each business type andthe expected credit loss.The largest credit risk facing the Group is the book value of each financial asset on the balance sheet. The Group makes noguarantee that may cause the Group credit risks.
Among the accounts receivable of the Company, the accounts receivable of the top five customers account for 28.36% of thetotal accounts receivable of the Company (comparison period: 17.66%); among the other accounts receivable of the Company, theaccounts receivable of the top five companies account for 69.65% of the total accounts receivable of the Company (comparisonperiod: 71.29%).
2. Liquidity risk
Liquidity risk is the risk of capital shortage when the Group needs to pay cash or settled with other financial assets. TheCompany is responsible for the cash management of its subsidiaries, including short-term investments in cash surpluses and loans tomeet projected cash requirements. The Company's policy is to regularly monitor short and long-term liquidity requirements andcompliance with borrowing agreements to ensure adequate cash reserves and readily available securities.As of December 31, 2020, the maturity of the Company's financial liabilities is as follows:
Contract amount: RMB
| Thursday, December 31, 2020 |
| Item | Less than 1 year | Within 1-3 years | Over 3 years | Total |
| Short-term loans | 104,825.03 | 104,825.03 |
| Notes payable | 86,622.45 | 86,622.45 | ||
| Account payable | 124,568.04 | 3,271.34 | 104.08 | 127,943.46 |
| Employees' wage payable | 6,018.88 | 6,018.88 |
| Other payables | 9,139.90 | 3,965.54 | 1,656.09 | 14,761.53 |
| Non-current liabilities due in 1 year | 10,335.98 | 10,335.98 | ||
| Other current liabilities | 10,768.84 | 10,768.84 | ||
| Long-term loans | 24,941.15 | 85,000.00 | 109,941.15 |
| Total liabilities | 352,279.12 | 32,178.03 | 86,760.17 | 471,217.32 |
(Continued) Amount: RMB10,000
| 31 December 2019 |
| Item | Less than 1 year | Within 1-3 years | Over 3 years | Total |
| Short-term loans | 72,461.82 | - | - | 72,461.82 |
| Notes payable | 57,881.60 | - | - | 57,881.60 |
| Account payable | 118,979.57 | 0.97 | 96.79 | 119,077.33 |
| Employees' wage payable | 5,584.71 | - | - | 5,584.71 |
| Other payables | 68,410.66 | 1,170.99 | 561.59 | 70,143.24 |
| Non-current liabilities due in 1 year | 92,234.66 | - | - | 92,234.66 |
| Other current liabilities | 18,169.46 | - | - | 18,169.46 |
| Long-term loans | - | 39,650.15 | 15,000.00 | 54,650.15 |
| Total liabilities | 433,722.48 | 40,822.11 | 15,658.38 | 490,202.97 |
3. Market risk
(1) Credit risks
The exchange rate risk of the Company mainly comes from the assets and liabilities of the Company and its subsidiaries inforeign currency not denominated in its functional currency. Except for the use of Hong Kong dollars, United States dollars,Australian dollars, Vietnamese dong, euro, Indian rupees or Singapore currencies by its subsidiaries established in and outside theHong Kong Special Administrative Region, other major businesses of the Company shall be denominated in Renminbi.As of Thursday, December 31, 2020, the foreign currency financial assets and foreign currency financial liabilities of theCompany at the end of the period are listed in the description of foreign currency monetary items in Note V, 61.The Company pays close attention to the impact of exchange rate changes on the Company's exchange rate risk. The Companycontinuously monitors the scale of foreign currency transactions and foreign currency assets and liabilities to minimize foreignexchange risks. To this end, the Company may avoid foreign exchange risks by signing forward foreign exchange contracts orcurrency swap contracts.
(2) Exchange rate risk
The Group's interest rate risk mainly arises from long-term interest-bearing debts such as long-term bank loans. Financialliabilities with floating interest rate cause cash flow interest rate risk for the Group. Financial liabilities with fixed interest rate causefair value interest rate risk for the Group. The Group decides the proportion between fixed interest rate and floating interest rateaccording to the market environment and regularly reviews and monitors the combination of fixed and floating interest rateinstruments.
The Group Finance Department of the Company continuously monitors the Group interest rate level. The rising interest ratewill increase the cost of the new interest-bearing debt and the interest expenditure on interest-bearing debt which has not yet beenpaid by the Company at the floating rate, and will have a significant adverse effect on the Company's financial performance.Management will make adjustments in time according to the latest market conditions.
As of December 31, 2020, the current floating rate loan is RMB 1.97 billion. If the loan interest rate calculated by floating rateincreases or decreases by 50 basis points, the net profit of the Company will decrease or increase by RMB 7.3875 million (December31, 2019: RMB 7.086 million) while other risk variables remain unchanged.
XI. Fair Value
1. Closing fair value of assets and liabilities measured at fair value
In RMB
| Item | Closing fair value |
| First level fair value | Second level fair value | Third level fair value | Total | |
| 1. Continuous fair value measurement | -- | -- | -- | -- |
| (3) Derivative financial assets | 6,974,448.22 | 6,974,448.22 | ||
| (3) Investment in other equity tools | 17,628,307.59 | 17,628,307.59 | ||
| 2. Leased building | 5,628,291,448.40 | 5,628,291,448.40 | ||
| Financial assets measured at fair value with changes included in current profits and losses -- investment in financial products | 4,051,015.05 | 4,051,015.05 | ||
| Receivable financing | 10,727,129.28 | 10,727,129.28 | ||
| Other non-current financial assets | 5,025,186.16 | 5,025,186.16 | ||
| Total assets measured at fair value continuously | 6,974,448.22 | 5,628,291,448.40 | 37,431,638.08 | 5,672,697,534.70 |
| Derivative financial liabilities | 915,234.93 | 915,234.93 | ||
| Total assets measured at fair value continuously | 915,234.93 | 915,234.93 | ||
| 2. Discontinuous fair value measurement | -- | -- | -- | -- |
2. Recognition basis of market value of continuous and discontinuous items measured at first level fairvalue
The Group determines the fair value using quotation in an active market for financial instruments traded in an active market;
3. Valuation technique and qualitative and quantitative information for key parameters of continuous anddiscontinuous second level fair value itemsFor investment real estate, the Company adopts valuation technology to determine its fair value. The valuation techniques used aremainly the market comparison method and the income method lease and resale model. The input value of valuation technologymainly includes comparable market unit price, market rent, vacancy rate, growth rate, rate of return, etc.
4. Valuation technique and qualitative and quantitative information for key parameters of continuous anddiscontinuous third level fair value itemsIf there is no active market, the Company uses evaluation techniques to determine the fair value. The valuation models are mainly
cash flow discount model and market comparable company model. The input value of valuation technology mainly includes risk-freeinterest rate, benchmark interest rate, exchange rate, credit point difference, liquidity premium, lack of liquidity discount, etc.
5. Switch between different levels, switch reason and switching time policy
The Company takes the occurrence date of the events leading to the transition between levels as the time point to confirm thetransition between levels. In the period, there is no switch in the financial assets measured at fair value between the first and secondlevel or transfer in or out of the third level.
6. Fair value of financial assets and liabilities not measured at fair value
Financial assets and liabilities measured at amortized cost include: monetary capital, bills receivable, accounts receivable, otherreceivables, short-term borrowings, notes payable, employee compensation payable, accounts payables, other payables, andlong-term payables.
XII. Related Parties and Transactions
1. Parent of the Company
| Parent | Registered address | Business | Registered capital | Share of the parent co. in the Company | Voting power of the parent company |
| Shenzhen Banglin Technologies Development Co., Ltd. | Shenzhen | Industrial investment | RMB30 million | 10.87% | 10.87% |
| Shengjiu Investment Ltd. | Hong Kong | Industrial investment | HKD10,000 | 9.66% | 9.66% |
Particulars about the parent of the Company:
①All of the investors of Shenzhen Banglin Technology Development Co., Ltd., the holding shareholder of the Company, arenatural persons. Among them, Chairman Xiong Jianming is holding 85％ shares, and Mr. Xiong Xi – son of Mr. Xiong Jianming, isholding 15% of the shares.
② Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd.are acting in concert.The final controller of the Company is Xiong Jianming.
2. Subsidiaries of the Company
For details of subsidiaries of the enterprise, please refer to Note VII, rights and interests in other entities.
3. Joint ventures and associates
Information about other joint ventures or associates with related transactions in this period or with balance generated by relatedtransactions in previous period:
| Joint venture or associate | Relationship with the Company |
| Ganshang Joint Investment | Associate |
4. Other associates
| Other related parties | Relationship with the Company |
| Jiangxi Business Innovative Property Joint Stock Co., Ltd. | Associate |
| Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) | Affiliated relationship with Shenzhen Banglin Technology Development Co., Ltd. |
| Shenyang Fangda | Subsidiary in liquidation |
| Shenzhen Yikang Real Estate Co. Ltd. | Controlled subsidiaries |
| Shenzhen Woke | Subsidiary in liquidation |
| Shenzhen Qijian Technology Co., Ltd. (Qijian Technology) | Common actual controller |
| Shenzhen Zhuo Shun Investment Co., Ltd. | Common actual controller |
| Director, manager and secretary of the Board | Key management |
5. Related transactions
(1) Related transactions for purchase and sale of goods, provision and acceptance of servicesSales of goods and services
In RMB
| Affiliated party | Related transaction | Amount occurred in the current period | Occurred in previous period |
| Qijian Technology | Property service and sales of goods | 51,161.39 | 49,494.36 |
| Ganshang Joint Investment | Property service and sales of goods | 9,834.99 |
(2) Related leasing
The Company is the leasor:
In RMB
| Name of the leasee | Category of asset for lease | Rental recognized in the period | Rental recognized in the period |
| Ganshang Joint Investment | Houses & buildings | 121,872.30 | |
| Qijian Technology | Houses & buildings | 384,319.68 | 414,732.00 |
(4) Related guarantees
The Company is the guarantor:
In RMB10,000
| Beneficiary party | Amount guaranteed | Start date | Due date | Completed or not |
| Fangda Jianke | 30,000.00 | 18 August 2018 | 2020.07.31 | Yes |
| Fangda Zhichuang | 21,600.00 | 6 August 2018 | 2020.07.12 | Yes |
| Fangda Property | 130,000.00 | 3 February 2015 | Wednesday, March 11, 2020 | Yes |
| Fangda Jianke | 10,000.00 | 21 June 2019 | 2020.06.20 | Yes |
| Fangda Jianke | 25,000.00 | 20 August 2019 | 2020.08.19 | Yes |
| Fangda Jianke | 40,000.00 | 26 March 2019 | 2020.03.26 | Yes |
| Fangda Jianke | 30,000.00 | 1 August 2019 | 2020.07.31 | No |
| Fangda Jianke | 40,000.00 | 17 April 2019 | 2020.04.17 | Yes |
| Fangda New Material | 6,500.00 | 27 June 2019 | 2020.06.27 | Yes |
| Fangda New Material | 8,000.00 | 24 April 2019 | 2020.04.23 | Yes |
| Fangda Zhijian | 8,000.00 | 31 July 2019 | 2024.07.10 | No |
| Fangda Zhichuang | 15,000.00 | 27 May 2019 | 2020.05.27 | Yes |
| Fangda Zhichuang | 12,000.00 | 26 March 2019 | 2020.03.26 | Yes |
| Fangda Zhichuang | 20,000.00 | 1 August 2019 | 2020.07.31 | Yes |
| Jiangxi Property Development | 20,000.00 | 19 June 2019 | 2023.06.23 | No |
| Fangda Jianke | 50,000.00 | Tuesday, July 14, 2020 | Thursday, July 8, 2021 | No |
| Fangda Jianke | 25,000.00 | Tuesday, September 22, 2020 | Tuesday, September 21, 2021 | No |
| Fangda Jianke | 15,000.00 | Friday, April 10, 2020 | Friday, March 18, 2022 | No |
| Fangda Jianke | 30,000.00 | Friday, June 12, 2020 | Wednesday, April 14, 2021 | No |
| Fangda Zhichuang | 10,000.00 | Friday, April 10, 2020 | Friday, March 18, 2022 | No |
| Fangda Zhichuang | 3,000.00 | 29 June 2020 | 23 June 2020 | No |
| Fangda Jianke | 60,000.00 | Monday, February 24, 2020 | 13 February 2021 | No |
| Fangda Jianke | 40,000.00 | 30 September 2020 | Thursday, August 19, 2021 | No |
| Fangda Zhichuang | 40,000.00 | Tuesday, July 28, 2020 | Wednesday, June 30, 2021 | No |
| Fangda Zhichuang | 15,000.00 | 30 September 2020 | Thursday, August 19, 2021 | No |
| Fangda Zhichuang | 20,000.00 | 16 June 2020 | 13 February 2021 | No |
| Fangda New Material | 6,500.00 | Tuesday, July 14, 2020 | Tuesday, July 13, 2021 | No |
| Fangda New Material | 8,000.00 | 23 May 2020 | 22 May 2021 | No |
| Fangda Property | 135,000.00 | 25 February 2020 | Sunday, February 24, 2030 | No |
| Kechuangyuan | 1,000.00 | Sunday, August 23, 2020 | 13 February 2021 | No |
| Fangda Jianke and Fangda Zhichuang | 14,000.00 | Wednesday, December 18, 2019 | For details, please refer to the following description of related party guarantee (2) | No |
| Fangda Jianke | 20,000.00 | Friday, March 6, 2020 | Friday, March 5, 2021 | No |
Note to related guarantees
(1) The above-mentioned guarantees are all associated guarantees within interested entities of the Group.
(2) HSBC has a total credit of RMB140 million to the Company, Fangda Jianke and Fangda Zhichuang and has not yet agreed on thecredit expiration date. HSBC regularly evaluates the credit status. The restriction on the use of the credit is as follows:
The Company can use non-financial bank guarantees of up to RMB140 million to grant credit;Fangda Jianke has non-committed combined revolving credits of not more than RMB140 million including revolving loans of up toRMB140 million, non-financial bank guarantees of up to RMB140 million and bank acceptances of up to RMB140 million.Fangda Jianke has non-committed combined revolving credits of not more than RMB140 million including revolving loans of up toRMB50 million, non-financial bank guarantees of up to RMB140 million and bank acceptances of up to RMB50 million.
The Company is the guarantied party:
In RMB10,000
| Guarantor | Amount guaranteed | Start date | Due date | Completed or not |
| Fangda Jianke | 50,000.00 | 26 March 2019 | 2020.03.26 | Yes |
(5) Remuneration of key management
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Directors, supervisors and senior management | 8,961,747.37 | 8,656,154.32 |
(6) Other related transactions
Hongjun Investment, Xunfu Investment and Shenzhen Zhuoshun Investment Co., Ltd. (hereinafter referred to as "ZhuoshunInvestment") jointly invested to establish Lifu Investment. The registered capital of Lifu Investment is RMB1 million, of whichHongjun Investment contributes RMB490,000, accounting for 49%, Xunfu Investment contributes RMB30000, accounting for 3%,
and Zhuoshun Investment contributes RMB480,000, accounting for 48%.
6. Receivable and payables due with related parties
(1) Receivable interest
In RMB
| Item | Affiliated party | Closing balance | Opening balance | ||
| Remaining book value | Bad debt provision | Remaining book value | Bad debt provision | ||
| Account receivable | Qijian Technology | 44,268.81 | 442.69 | 1,212.89 | 12.13 |
| Other receivables | Shenyang Fangda | 42,877.00 | 42,877.00 | 42,877.00 | 42,877.00 |
| Other receivables | Shenzhen Woke | 867,442.94 | 867,442.94 | 867,442.94 | 867,442.94 |
| Other receivables | Ganshang Joint Investment | 3,791,089.25 | 56,487.23 | 5,015,089.25 | 74,724.83 |
| Other receivables | Shenzhen Yikang Real Estate Co. Ltd. | 70,000,000.00 | 1,043,000.00 | 72,000,000.00 | 1,072,800.00 |
(2) Receivable interest
In RMB
| Item | Affiliated party | Closing balance of book value | Opening balance of book value |
| Other payables | Shenzhen Yikang Real Estate Co. Ltd. | 24,912,830.32 | 21,581,724.49 |
| Other payables | Qijian Technology | 400.00 | |
| Other payables | Ganshang Joint Investment | 3,355.36 |
XIII. Contingent events
1. Major commitments
Major commitments that exist on the balance sheet dayOn November 6, 2017, Fangda Real Estate Co., Ltd., a subsidiary of the Company, and Bangshen Electronics (Shenzhen) Co.,Ltd. signed the ―Joint Development Agreement on Fangda Bangshen Industrial Park (Temporary Name) Urban Renewal Project‖,and the two parties agreed to develop cooperatively. In order to develop urban renewing projects such as a ―renovation project‖,Fangda Real Estate provided Party A with property compensation through renovating and renovating the property allocation termsagreed upon by both parties, and obtained independent development rights of the project. As of December 31, 2020, Fangda RealEstate has paid a deposit of RMB20 million.
(2) In July 2018 ,the Company's subsidiary Fangda Real Estate Co. Ltd. (Party A) signed a contract with Shenzhen YikangReal Estate Co. Ltd. (Party B1) and Shenzhen Qianhai Zhongzheng Dingfeng No. 6 Investment Enterprise (Limited Partnership)
(Party B2), "Shenzhen Henggang Dakang Village Project Cooperation Agreement". Party B agrees to transfer the entire equity of theproject company it holds and the entire development interest of the project to Party A. Party A shall pay Party B a total of RMB600million for the cooperation price. As of December 31, 2020, Fangda Real Estate has paid Party B and the project company RMB50million of deposit, RMB20 million of service fee and RMB61.9372 million of equity transfer.As of December 31, 2020, the Group did not have other commitments that should be disclosed.
2. Contingencies
(1) Significant contingencies on the balance sheet date
(1) Contingent liabilities formed by material lawsuit or arbitration, and their influences on the financial position
① In November 2018， Fangda Jianke a subsidiary of the Group sued Fujian Huapu Real Estate Development Co. Ltd. for apayment of RMB 13810243.67 and its overdue interest of RMB 373,380.16 totaling RMB 14,183,623.83 to the Taijiang DistrictPeople's Court of Fuzhou City. The case has not been decided. On 10 May 2019, the court ruled against the prosecution; On 16 May2019, Fang Da Jianke filed an appeal; On 26 August 2019, the court of second instance ordered the court of first instance to revokethe first instance decision; On 8 October 2019, it was sent back to the court of first instance, case number: (2019) Min 0103 Republicof China 4282. In April 2020, Huapu Company filed a counterclaim application to the court, requesting Fangda Jianke Company topay a total of RMB12,746,000.00 for the construction period and quality. The two parties separately initiated project cost appraisaland project quality appraisal. As of the date of this report, the case is still under trial.
② In December 2019 Fangda Jianke sued the constructors of Shaoxing Jiayue Square Project for RMB20,158, 046.00,RMB4,660, 400.00, RMB3,699, 100.00, and RMB2,144, 400.00, totally RMB30,661, 900.00. Thereafter, Fangda Jianke increasedthe number of claims, totaling RMB32,318, 994.15. In March 2020, Jiayue Company filed a counterclaim with the court, demandingFangda Construction Company to pay a penalty of RMB 369,899.98 for the construction period, RMB 13,529,427.00 for qualitymaintenance, and a compensation of RMB 22,193,998.74 for breach of contract damages, deducting a performance bond of RMB3,699,100.00, and a fine of RMB 52,500.00 for a total of 39,844,925.72 yuan and applied to freeze RMB36.3 million of funds. InMarch 2021, the two sides reached a settlement agreement. As of the date of this report, RMB14.6 million has been recovered andRMB36.3 million of frozen funds has been released. The case is closed.
③ On June 19, 2019, Langfang Aomei Jiye Real Estate Development Co., Ltd. filed a lawsuit against Fangda Jianke in the People'sCourt of Langfang Development Zone, demanding compensation of RMB19,721,315.00, and filed an application for appraisal ofquality, repair cost and uncompleted project cost on December 26, 2019; Fangda Jianke filed a counterclaim on September 11, 2019,demanding payment of RMB13,920,000.70, and put forward the application for completed project cost appraisal on November 22,2019. As of the date of this report, the case is still in the identification process.
④ As of December 31, 2020, due to the expiration of the implementation rules of the "Shenzhen Municipal People'sGovernment on the Administration of the Transfer of Industrial Buildings (Trial)" and the "Notice of the Municipal Planning andLand Resources Commission on Matters Related to the Management of Industrial Building Transfers" and other reasons, someowners of Fangda Town failed to apply for the real estate certificate of Fangda Town project developed by Fangda Real EstateCompany as scheduled. As of the date of this report, 20 buyers have sued Fangda Real Estate for liquidated damages for overduecertification. Because both parties were dissatisfied with the results of the first instance, appeals were filed against 11 householdswhose first-instance judgments have been issued, and the first-instance judgments have not yet taken effect; another 9 buyer-relatedlawsuits are in the process of first-instance trial. As a result of the above-mentioned litigation, the owners proposed propertypreservation, and the monetary fund of RMB42,662,416.59 of Fangda Real Estate was frozen. On December 31, 2020, Fangda RealEstate drew an estimated debt of RMB27,017,023.60 according to the most likely litigation result.
(2) Pending major lawsuits
On September 6, 2017, Chenghua District People's Court of Chengdu Municipality sentenced Sichuan Chuta HengyuanIndustrial Co., Ltd. to pay construction money to Fangda Jianke within 10 days from the date of the verdict 川0108民初1828号RMB10,242,182.99. As of the date of this report, Fangda Jianke has applied for execution and has not received the relevant payment.On September 10, 2018, the People's Court of Lixia District of Jinan City sentenced Shandong Zhonghong Real Estate Co. Ltd.to the Company for payment of RMB5960429.45 within 10 days from the date of the effective date of the (2018) Lu 0102 Minchu5367 civil judgment. As of the date of this report, Fangda Jianke has applied for execution and has not received the relevant payment.On November 15, 2019, the Chengdu Chenghua District People‘s Court ruled (2019) Chuan 0108 Min Chu No. 428 thatSichuan Chuanta Hengyuan Industrial Co., Ltd. shall pay interest to the company within ten days from the effective date of thejudgment (subject to RMB6,013, 841.233 as the base, from May 29, 2015 to the day when the payment is paid; with RMB841,876.3235 as the base, from May 28, 2015 to the day when the payment is paid. Based on RMB841, 876.3235, from May 28, 2016 to theday when the payment is paid). The Company enjoys the priority of compensation for the discounted or auctioned price of BuildingC of the Chuan Tower supporting project (Film and Television Cultural Square) project within the scope of RMB 7,697,593.88.
(3) Contingent liabilities formed by providing of guarantee to other companies‘ debts and their influences on financialsituation
By December 31, 2020, the Company has provided loan guarantees for the following entities:
| Name of guaranteed entity | Guarantee | Amount (RMB10,000) | Term | Remarks |
| Fangda Zhijian | Guarantee and mortgage guarantee | 723.78 | 7/31/2019 to 7/10/2024 | |
| Fangda Zhijian | Guarantee and mortgage guarantee | 586.24 | 8/27/2019 to 7/10/2024 | |
| Fangda Zhijian | Guarantee and mortgage guarantee | 211.98 | 9/27/2019 to 7/10/2024 | |
| Fangda Zhijian | Guarantee and mortgage guarantee | 892.92 | 11/18/2019 to 7/10/2024 | |
| Fangda Zhijian | Guarantee and mortgage guarantee | 837.41 | 12/20/2019 to 7/10/2024 | |
| Fangda Zhijian | Guarantee and mortgage guarantee | 845.02 | 1/15/2020 to 7/10/2024 | |
| Fangda Property | Guarantee, pledge and mortgage guarantee | 2,500.00 | 7/22/2019 to 7/22/2023 | |
| Fangda Property | Guarantee, pledge and mortgage guarantee | 2,500.00 | 9/12/2019 to 7/22/2023 | |
| Fangda Property | Guarantee, pledge and mortgage guarantee | 3,000.00 | 9/26/2019 to 7/22/2023 | |
| Fangda Property | Guarantee, pledge and mortgage guarantee | 2,000.00 | 9/29/2019 to 7/22/2023 | |
| Fangda Property | Guarantee, pledge and mortgage guarantee | 5,000.00 | 10/31/2019 to 7/22/2023 |
| Fangda Property | Guarantee, pledge and mortgage guarantee | 4,032.15 | 3/9/2020 to 7/22/2023 | |
| Fangda Property | Guarantee and mortgage guarantee | 97,147.63 | 3/13/2020 to 3/12/2030 | |
| Fangda Zhichuang | Pledge guarantee | 3,004.55 | 6/29/2020 to 6/23/2021 | |
| Kechuangyuan | Guarantee | 1,001.33 | 8/23/2020 to 2/13/2021 | |
| Total | 124,283.01 |
Note 1: Contingent liabilities caused by guarantees provided for other entities are all related guarantees between interestedentities in the Group.Notes 2: The Group‘s property business provides periodic mortgage guarantee for property purchasers. The term of theperiodic guarantee lasts from the effectiveness of guarantee contracts to the completion of mortgage registration and transfer ofhousing ownership certificates to banks. As of December 31, 2020, the Company assumed the above-mentioned phased guaranteeamount of RMB 176 million.
(3) Other contingent liabilities and their influences
As of December 31, 2020, the Group did not have other commitments that should be disclosed.
3. Others
Status of non-revocation of company as at December 31, 2020：
| Currency | Guarantee balance (original currency) | Deposit (RMB) | Credit line used (RMB) |
| RMB yuan | 565,822,445.92 | 608,750.00 | 565,213,695.92 |
| INR | 87,299,635.00 | 688,522.32 | 7,093,716.34 |
| HK $(HKD) | 15,349,982.00 | - | 12,919,158.85 |
| United States dollars (USD) | 9,118,856.22 | 2,542,479.27 | 56,957,145.68 |
| Total | 3,839,751.59 | 642,183,716.79 |
XIV. Post-balance-sheet events
1. Profit distribution
In RMB
| Profit or dividend to be distributed | 0.00 |
| Profit or dividend approved to be distributed | 0.00 |
2. Notes to other issues in post balance sheet period
As of March 19, 2021 (the report date approved by the board of directors), the Company has no other events after the balancesheet date that should be disclosed.
XV. Other material events
1. Suspension of operations
There is no net profit from discontinued operations in the current period.
2. Segment information
(1) Recognition basis and accounting policy for segment report
The Group divides its businesses into five reporting segments. The reporting segments are determined based on financialinformation required by routine internal management. The Group‘s management regularly review the operating results of thereporting segments to determine resource distribution and evaluate their performance.
The reporting segments are:
(1) Curtain wall segment, production and sales of curtain wall materials, construction curtain wall design, production andinstallation;
(2) Rail transport segment: assembly and processing of metro screen doors;
(3) Real estate segment: development and operating of real estate on land of which land use right is legally obtained by theCompany; property management;
(4) New energy segment: photovoltaic power generation, photovoltaic power plant sales, photovoltaic equipment R & D,installation, and sales, and photovoltaic power plant engineering design and installation
(5) Others
The segment report information is disclosed based on the accounting policies and measurement standards used by thesegments when reporting to the management. The policies and standards should be consistent with those used in preparing thefinancial statement.
(2) Financial information
In RMB
| Item | Curtain wall | Rail transport | Real estate | New energy | Others | Offset between segments | Total |
| Turnover | 2,145,502,203.32 | 651,249,442.29 | 154,796,147.79 | 20,793,720.48 | 24,854,861.48 | 17,899,965.20 | 2,979,296,410.16 |
| Including: external transaction income | 2,141,476,129.47 | 651,249,442.29 | 151,222,473.25 | 19,978,873.86 | 15,369,491.29 | 2,979,296,410.16 | |
| Inter-segment transaction income | 4,026,073.85 | 3,573,674.54 | 814,846.62 | 9,485,370.19 | 17,899,965.20 |
| Including: major business turnover | 2,114,735,373.48 | 650,229,832.44 | 78,249,405.70 | 20,793,720.48 | 4,388,521.16 | 2,859,619,810.94 | |
| Operating cost | 1,775,011,443.03 | 515,384,288.26 | 118,261,840.46 | 7,703,442.37 | 549,538.73 | 8,482,360.47 | 2,408,428,192.38 |
| Including: major business cost | 1,758,564,624.45 | 515,183,608.76 | 113,064,904.92 | 7,535,695.83 | 8,284,223.40 | 2,386,064,610.56 | |
| Operation cost | 144,743,016.91 | 46,775,657.21 | -163,373,503.21 | -48,896.88 | -126,143,961.94 | -166,974,999.67 | 68,927,311.76 |
| Operating profit/(loss) | 225,747,743.38 | 89,089,496.82 | 199,907,810.54 | 13,139,174.99 | 150,449,284.69 | 176,392,604.40 | 501,940,906.02 |
| Total assets | 3,868,365,355.92 | 819,737,276.88 | 6,484,074,654.46 | 164,233,550.71 | 3,051,473,881.42 | 2,521,027,469.00 | 11,866,857,250.39 |
| Total liabilities | 2,435,131,053.01 | 526,432,279.44 | 3,938,256,749.09 | 66,413,211.24 | 710,149,093.75 | 1,256,921,127.62 | 6,419,461,258.91 |
(3) Others
① Large negative amount of operating expenses of real estate segment in current period is mainly due to the fact that the FangdaTown project developed by the subsidiary Fangda Real Estate was in line with the land value-added tax liquidation in this year, andthe land value-added tax of the Fangda Town project was liquidated according to the relevant laws and regulations on landvalue-added tax and liquidation methods, so the land value-added tax withdrawn in previous years was reversed.
② Since more than 90% of the Group‘s revenue comes from Chinese customer and 90% of the Group‘s assets are in China, nodetailed regional information is needed.XVI. Notes to Financial Statements of the Parent
1. Account receivable
(1) Account receivable disclosed by categories
In RMB
| Type | Closing balance | Opening balance | ||||||||
| Remaining book value | Bad debt provision | Book value | Remaining book value | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Provision rate | Amount | Proportion | Amount | Provision rate | |||
| Including: | ||||||||||
| Account receivable for which bad debt | 892,363. | 100.00% | 6,514.35 | 0.73% | 885,849.0 | 301,522.4 | 100.00% | 3,708.73 | 1.23% | 297,813.76 |
| provision is made by group | 43 | 8 | 9 | |||||||
| Including: | ||||||||||
| Total | 892,363.43 | 100.00% | 6,514.35 | 0.73% | 885,849.08 | 301,522.49 | 100.00% | 3,708.73 | 1.23% | 297,813.76 |
Provision for bad debts by combination:
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Portfolio 3. Others | 892,363.43 | 6,514.35 | 0.73% |
| Total | 892,363.43 | 6,514.35 | -- |
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, pleaserefer to the disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Inapplicable
Account age
In RMB
| Age | Remaining book value |
| Within 1 year (inclusive) | 892,363.43 |
| Total | 892,363.43 |
(2) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
| Type | Opening balance | Change in the period | Closing balance | |||
| Provision | Written-back or recovered | Canceled | Others | |||
| Portfolio 3. Others | 3,708.73 | 2,805.62 | 6,514.35 | |||
| Total | 3,708.73 | 2,805.62 | 6,514.35 | |||
(3) Balance of top 5 accounts receivable at the end of the period
In RMB
| Entity | Closing balance of accounts receivable | Percentage (%) | Balance of bad debt provision at the end of the period |
| Top five summary | 854,694.97 | 95.78% | 6,239.27 |
| Total | 854,694.97 | 95.78% |
2. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Other receivables | 1,156,802,204.91 | 1,973,381,342.74 |
| Total | 1,156,802,204.91 | 1,973,381,342.74 |
(1) Other receivables
1) Other receivables are disclosed by nature
In RMB
| By nature | Closing balance of book value | Opening balance of book value |
| Deposit | 150,699.54 | 70,699.54 |
| Staff borrowing and petty cash | 15,881.12 | |
| Debt by Luo Huichi | 12,992,291.48 | 12,992,291.48 |
| Others | 975,476.54 | 983,435.52 |
| Accounts between related parties within the scope of consolidation | 1,156,587,949.46 | 1,973,222,410.41 |
| Total | 1,170,706,417.02 | 1,987,284,718.07 |
2) Method of bad debt provision
In RMB
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit losses in the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
| Balance on Wednesday, January 1, 2020 | 2,403.91 | 13,900,971.42 | 13,903,375.33 | |
| Balance on Wednesday, January 1, 2020 in the current period | —— | —— | —— | —— |
| Provision | 836.78 | 836.78 | ||
| Balance on Thursday, December 31, 2020 | 3,240.69 | 13,900,971.42 | 13,904,212.11 |
Changes in book balances with significant changes in the current period
□ Applicable √ Inapplicable
Account age
In RMB
| Age | Remaining book value |
| Within 1 year (inclusive) | 1,156,734,746.06 |
| Over 3 years | 13,971,670.96 |
| 3-4 years | 42,877.00 |
| 4-5 years | 865,802.94 |
| Over 5 years | 13,062,991.02 |
| Total | 1,170,706,417.02 |
3) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
| Type | Opening balance | Change in the period | Closing balance | |||
| Provision | Written-back or recovered | Canceled | Others | |||
| Other receivables and bad debt provision | 13,903,375.33 | 836.78 | 13,904,212.11 | |||
| Total | 13,903,375.33 | 836.78 | 13,904,212.11 | |||
4) Balance of top 5 other receivables at the end of the period
In RMB
| Entity | By nature | Closing balance | Age | Percentage (%) | Balance of bad debt provision at the end of the period |
| Fangda Property | Associate accounts | 903,710,133.45 | Less than 1 year | 77.19% | |
| Fangda New Material | Associate accounts | 74,130,005.26 | Less than 1 year | 6.33% | |
| Fangda New Energy | Associate accounts | 63,752,804.89 | Less than 1 year | 5.45% | |
| Fangda Property Development | Associate accounts | 48,839,038.54 | Less than 1 year | 4.17% | |
| Fangda Jianke | Associate accounts | 34,443,444.67 | Less than 1 year | 2.94% | |
| Total | -- | 1,124,875,426.81 | -- | 96.09% |
3. Long-term share equity investment
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
| Investment in subsidiaries | 1,196,831,253.00 | 1,196,831,253.00 | 963,508,253.00 | 963,508,253.00 | ||
| Total | 1,196,831,253.00 | 1,196,831,253.00 | 963,508,253.00 | 963,508,253.00 | ||
(1) Investment in subsidiaries
In RMB
| Invested entity | Opening book value | Change (+,-) | Closing book value | Balance of impairment provision at the end of the period | |||
| Increased investment | Decreased investment | Impairment provision | Others | ||||
| Fangda Jianke | 491,950,000.00 | 491,950,000.00 | |||||
| Fangda New Material | 74,496,600.00 | 74,496,600.00 | |||||
| Fangda Property | 200,000,000.00 | 2,000,000.00 | 198,000,000.00 | ||||
| Shihui International | 61,653.00 | 61,653.00 | |||||
| Fangda New Energy | 99,000,000.00 | 99,000,000.00 | |||||
| Hongjun Investment Company | 98,000,000.00 | 98,000,000.00 | |||||
| Fangda Property | 235,323,000.00 | 235,323,000.00 | |||||
| Total | 963,508,253.00 | 235,323,000.00 | 2,000,000.00 | 1,196,831,253.00 | |||
4. Operational revenue and costs
In RMB
| Item | Amount occurred in the current period | Occurred in previous period | ||
| Income | Cost | Income | Cost | |
| Other businesses | 24,471,432.70 | 549,538.73 | 28,729,890.94 | 773,571.29 |
| Total | 24,471,432.70 | 549,538.73 | 28,729,890.94 | 773,571.29 |
Income information:
In RMB
| Contract classification | Division 1 | Division 2 | Total | |
| Type of product | 24,471,432.70 | 24,471,432.70 | ||
| Including: | ||||
| Other businesses | 24,471,432.70 | 24,471,432.70 | ||
| Total | 24,471,432.70 | 24,471,432.70 |
Information related to performance obligations:
The Company's operating income is derived from property rental income.Information related to the transaction price allocated to the remaining performance obligations:
The amount of revenue corresponding to the performance obligations that have been signed, but not yet performed or not yetperformed at the end of the reporting period is 37,519,109.00 yuan, of which 21,644,236.55 yuan is expected to be recognized in2021, and 13,256,342.81 yuan is expected to be recognized in 2022, 2,618,529.64 yuan is expected to be recognized in 2023 andbeyond.
5. Investment income
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Gains from long-term equity investment measured by costs | 1,084,912,000.00 | |
| Investment gain obtained from disposal of long-term equity investment | 135,159,744.95 | |
| Investment income from disposal of trading financial assets | 3,057,897.96 | 2,221,456.16 |
| Total | 138,217,642.91 | 1,087,133,456.16 |
XVII. Supplementary Materials
1. Detailed accidental gain/loss
√ Applicable □ Inapplicable
In RMB
| Item | Amount | Notes |
| Gain/loss of non-current assets | -541,838.10 | |
| Subsidies accounted into the current income account (except the government subsidy closely related to the enterprise‘s business | 12,872,885.30 |
| and based on unified national standard quota) | ||
| Gain/loss from change of fair value of transactional financial asset and liabilities, and investment gains from disposal of transactional and derivative financial assets and liabilities and sellable financial assets, other than valid period value instruments related to the Company‘s common businesses | 8,759,056.18 | |
| Write-back of impairment provision of receivables and contract assets for which impairment test is performed individually | 0.00 | |
| Gain/loss from commissioned loans | 393,485.98 | |
| Gain/loss from change of fair value of investment property measured at fair value in follow-up measurement | 19,205,841.18 | |
| Other non-business income and expenditures other than the above | -34,752,456.16 | |
| Less: Influenced amount of income tax | 778,490.70 | |
| Influenced amount of minority shareholders‘ equity | 75,746.32 | |
| Total | 5,082,737.36 | -- |
Explanation statement should be made for accidental gain/loss items defined and accidental gain/loss items defined as regulargain/loss items according to the Explanation Announcement of Information Disclosure No. 1 - Non-recurring gain/loss mentioned.
□ Applicable √ Inapplicable
2. Net income on asset ratio and earning per share
| Profit of the report period | Weighted average net income/asset ratio | Earning per share | |
| Basic earnings per share (yuan/share) | Diluted Earnings per share (yuan/share) | ||
| Net profit attributable to common shareholders of the Company | 7.26% | 0.35 | 0.35 |
| Net profit attributable to the common owners of the PLC after deducting of non-recurring gains/losses | 7.16% | 0.34 | 0.34 |
3. Differences in accounting data under domestic and foreign accounting standards
(1) Differences in net profits and assets in financial statements disclosed according to the international andChinese account standards
□ Applicable √ Inapplicable
(2) Differences in net profits and assets in financial statements disclosed according to the international andChinese account standards
□ Applicable √ Inapplicable
(3) Differences in financial data using domestic and foreign accounting standards, the overseas institutionname should be specified if the difference in data audited by an overseas auditor is adjusted
None
Chapter 13 Documents for Reference
1. The Annual Report 2020 and the Summary with signature of the legal representative (Chinese and English);
2. Accounting Statements with signatures and seals of the legal representative and financial principal and chief of accountingdepartment;
3. Original copy of the Auditors‘ Report under the seal of the CPA and signed by and under the seal of certified accountants;
4. Originals of all documents and manuscripts of Public Notices of the Company disclosed in public in the newspapers as designatedby China Securities Regulatory Commission.