China Fangda Group Co., Ltd.
2021 Annual Report
March 2022
Chapter I Important Statement, Table of Contents and DefinitionsThe 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 the disclosure requirements of thedecoration and decoration industry and the real estate industry in the Guidelinesfor the Self-discipline and Supervision of Listed Companies of Shenzhen StockExchange No. 3 - Industry Information Disclosure.
The company has described the existing market risks, management risksand production and operation risks in this report. Please refer to the risks thatmay be faced mentioned in10. Prospects for the Company's Future Development
in ChapterIII Management Discussion and Analysis.
The Board meeting reviewed and approved the profit distribution preplan:
distributing cash dividend of RMB0.50 (tax included) for each ten shares to allshareholders on the basis of 1,073,874,227 shares of the Company and nodividend share is issued to shareholders. No reserve is capitalized. After theannouncement of the Company’s profit distribution plan to the time ofimplementation, if the total share capital changes, in accordance with theprinciple of “distributing cash dividends of RMB 0.50 (tax included) for every 10shares”, the total share capital after the market closes on the equity registrationdate when the profit distribution plan is implemented shall be used. The totalamount of cash dividends will be disclosed in the Company's profit distributionimplementation announcement.
Contents
Chapter I Important Statement, Table of Contents and Definitions ...... 2
Chapter II About the Company and Financial Highlights ...... 8
Chapter III Management Discussion and Analysis ...... 14
Chapter IV Corporation Governance ...... 46
Chapter V Environmental and social responsibility ...... 65
Chapter VI Significant Events ...... 68
Chapter VII Changes in Share Capital and Shareholders ...... 80
Chapter VIII Preferred Shares ...... 87
Chapter IX Information about the Company’s Securities ...... 88
Chapter X Financial Statements ...... 89
Reference
1. Financial statements stamped and signed by the legal representative, CFO and accounting manager;
2. Original copy of the Auditors’ Report under the seal of the CPA and signed by and under the seal of certified accountants;
3. Originals of all documents and manuscripts of Public Notices of the Company disclosed in public.
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 | The original name was Fangda Zhichuang Technology Co., Ltd., now it is renamed Fangda Zhiyuan Technology Co., Ltd. |
| Fangda Jiangxi New Material | Refers to | Fangda New Materials (Jiangxi) Co., Ltd. |
| Fangda New Resource | Refers to | Shenzhen Fangda New Energy Co., Ltd. |
| Fangda Property | Refers to | Shenzhen Fangda Property Development Co., Ltd. |
| Fangda Chengdu Technology | Refers to | Chengda Fangda Construction Technology Co., Ltd. |
| Fangda Dongguan New Material | Refers to | Dongguan Fangda New Material Co., Ltd. |
| Kechuangyuan Software | Refers | Shenzhen Qianhai Kechuangyuan Software Co., Ltd. |
| to | ||
| Fangda Property | Refers to | Shenzhen Fangda Property Management Co., Ltd. |
| Fangda Jiangxi Property | Refers to | Fangda (Jiangxi) Property Development Co., Ltd. |
| Fangda Hongjun Investment | Refers to | Shenzhen Hongjun Investment Co., Ltd. |
| Fangda Investment | Refers to | Shenzhen Fangda Investment Partnership (Limited Partnership) |
| Fangda Lifu Investment | Refers to | Shenzhen Lifu Investment Co., Ltd |
| Fangda Xunfu Investment | Refers to | Shenzhen Xunfu Investment Co., Ltd |
| Yunzhu | Refers to | The original name is Shenzhen Yunzhu Industrial Co., Ltd., now it is renamed Shenzhen Fangda Yunzhu Technology Co., Ltd. |
| SZSE | Refers to | Shenzhen Stock Exchange |
Chapter II 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, Nanshan District, Shenzhen, PR China. | ||
| Zip code | 518057 | ||
| Changes in the Company's registered address | None | ||
| Office address | 39th Floor, Building T1, Fangda Town, No.2, Longzhu 4th Road, Nanshan District, Shenzhen | ||
| Zip code | 518055 | ||
| 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 | 39th Floor, Building T1, Fangda Town, No.2, Longzhu 4th Road, Nanshan District, Shenzhen | 39th Floor, Building T1, Fangda Town, No.2, Longzhu 4th Road, Nanshan District, Shenzhen |
| 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
| Website of the stock exchange where the company | Shenzhen Stock Exchange http://www.szse.cn |
| discloses its annual report | |
| Names and websites of the media where the Company discloses its annual report | China Securities Journal, Security Times, Shanghai Securities Daily, Securities Daily, Hong Kong Commercial Daily and www.cninfo.com.cn |
| Place for information inquiry | 39th Floor, Building T1, Fangda Town, No.2, Longzhu 4th Road, Nanshan District, Shenzhen |
4. Registration changes
| Organization code | None |
| Changes in main businesses since the listing of the Company | None |
| Changes in the controlling shareholders (if any) | 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 | Xie Peiren, 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
Retroactive adjustment or restatementConsolidation of entities under common control
| 2021 | 2020 | Increase/decrease | 2019 | |||
| Before adjustment | After adjustment | After adjustment | Before adjustment | After adjustment | ||
| Turnover (yuan) | 3,557,724,397.54 | 2,979,296,410.16 | 3,000,191,773.63 | 18.58% | 3,005,749,558.66 | 3,025,276,905.82 |
| Net profit attributable to shareholders of the listed | 222,168,142.53 | 382,051,466.98 | 389,344,290.74 | -42.94% | 347,771,182.73 | 354,342,005.33 |
| company (yuan) | ||||||
| Net profit attributable to the shareholders of the listed company and after deducting of non-recurring gain/loss (yuan) | 167,650,395.54 | 376,968,729.62 | 376,968,729.62 | -55.53% | 291,449,314.27 | 291,449,314.27 |
| Net cash flow generated by business operation (yuan) | -63,425,296.29 | 548,709,785.90 | 554,967,948.96 | -111.43% | -5,284,830.77 | -516,693.04 |
| Basic earnings per share (yuan/share) | 0.21 | 0.35 | 0.35 | -40.00% | 0.31 | 0.31 |
| Diluted Earnings per share (yuan/share) | 0.21 | 0.35 | 0.35 | -40.00% | 0.31 | 0.31 |
| Weighted average net income/asset ratio | 4.09% | 7.26% | 7.37% | -3.28% | 6.82% | 6.93% |
| End of 2021 | End of 2020 | Increase/decrease from the end of last year | End of 2019 | |||
| Before adjustment | After adjustment | After adjustment | Before adjustment | After adjustment | ||
| Total asset (yuan) | 12,261,338,518.66 | 11,866,857,250.39 | 11,891,623,391.03 | 3.11% | 11,369,964,580.11 | 11,395,464,044.45 |
| Net profit attributable to the shareholders of the listed company (RMB) | 5,524,039,886.94 | 5,380,857,155.39 | 5,392,694,939.64 | 2.44% | 5,182,795,079.67 | 5,203,037,880.44 |
Note: 1. The net profit attributable to the owners of the parent company this year decreased by 42.94% compared with the sameperiod of the previous year, mainly because: (1) The expected credit loss rate of accounts receivable and contract assets wasestimated according to the accounting standards in the previous year. The change resulted in an increase of RMB 93,672,500 in netprofit in the previous year; (2) the settlement of land value-added tax and settlement of construction contracts for the ShenzhenFangda Town project caused a net profit increase of RMB 107,382,800 in the previous year. After deducting the impacts, the netprofit attributable to shareholders of the listed company for the current year increased by 17.99% over the same period of theprevious year.
2. The net cash flow from operating activities in the current year decreased by 111.43% compared with the same period of last year,mainly due to the decrease of cash flow from operating activities compared with the same period of last year due to the settlementand payment of land value-added tax of RMB349,316,800 yuan in the reporting period of Shenzhen Fangda Town project of realestate business.
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 | 646,737,766.14 | 922,041,068.84 | 871,353,200.73 | 1,117,592,361.83 |
| Net profit attributable to the shareholders of the listed company | 75,170,490.26 | 36,318,211.07 | 65,539,582.16 | 45,139,859.04 |
| Net profit attributable to the shareholders of the listed company and after deducting of non-recurring gain/loss | 58,982,525.69 | 38,113,269.26 | 57,157,352.87 | 13,397,247.72 |
| Cash flow generated by business operations, net | -426,501,733.83 | -74,422,811.17 | 9,031,184.97 | 428,468,063.74 |
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 | 2021 | 2020 | 2019 | Notes |
| Non-current asset disposal gain/loss (including the write-off part for which assets | -2,291,048.05 | -541,838.10 | -101,676.86 |
| impairment provision is made) | ||||
| Government subsidies accounted into current gain/loss account, other than those closely related to the Company’s common business, comply with the national policy and continues to enjoy at certain fixed rate or amount. | 12,459,417.63 | 12,872,885.30 | 5,411,736.29 | |
| Capital using expense charged to non-financial enterprises and accounted into the current income account | 585,760.51 | |||
| Net gain between the beginning and merger day of subsidiaries generated by merger of companies under common control | 18,912.61 | 7,705,820.11 | 6,715,508.62 | |
| Gain/loss from change of fair value of transactional financial asset and liabilities, and investment gains from disposal of transactional financial assets and liabilities and sellable financial assets, other than valid period value instruments related to the Company’s common businesses | 8,060,481.70 | 8,759,056.18 | 9,236,658.20 | |
| Write-back of impairment provision of receivables for which impairment test is performed individually | 31,951,043.05 | 100,023.62 | RMB 31,951,043.05 was reversed this year. During the previous period, the credit status of the two customers involved in the receivables had deteriorated significantly. The impairment test has been conducted separately and the impairment provision has been made separately. As a result, the company has endeavored relentlessly to ensure that the case is successful and the bankruptcy of the other party is applied to obtain the priority |
| of repayment of the project funds, etc., and finally recover the aforementioned funds. | ||||
| 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 in follow-up measurement | 20,921,813.65 | 19,205,841.18 | 42,608,311.58 | |
| Other non-business income and expenditures other than the above | -3,897,195.15 | -34,752,456.16 | -1,108,687.74 | |
| Other gain/loss items satisfying the definition of non-recurring gain/loss account | -936,467.20 | |||
| Less: Influenced amount of income tax | 12,358,051.51 | 778,490.70 | 164,700.18 | |
| Influenced amount of minority shareholders’ equity (after-tax) | 347,626.94 | 488,742.67 | -104,163.98 | |
| Total | 54,517,746.99 | 12,375,561.12 | 62,892,691.06 | -- |
Other gain/loss items satisfying the definition of non-recurring gain/loss account:
□ Applicable √ Inapplicable
The Company has no other gain/loss items satisfying the definition of non-recurring gain/loss accountCircumstance that should be defined as recurrent profit and loss to Explanation Announcement of Information Disclosure No. 1 -Non-recurring gain/loss
□ Applicable √ Inapplicable
The Company has no circumstance that should be defined as recurrent profit and loss to Explanation Announcement of InformationDisclosure No. 1 - Non-recurring gain/loss
Chapter III Management Discussion and Analysis
1. Major businesses of the Company during the report period
Founded in 1991 in Shenzhen Special Economic Zone, the company is based in Nanshan District, Shenzhen. The Company's Bshares were listed on the Shenzhen Stock Exchange on November 29, 1995, and its A shares were listed on the Shenzhen StockExchange on April 15, 1996.2021 marks the 30th anniversary of the Company. In the past thirty years, the Company has remained committed to its corebusiness and adhered to its original mission of green, low-carbon and environmental protection, and has successively developedproducts such as smart curtain walls, solar photovoltaic curtain walls, PVDF aluminum veneer, and rail transit screen doors. Since itsconception, the company has always adhered to the philosophy "technology-based, innovation-based", and has created Fangda'scraftsmanship in pursuit of outstanding quality. Our smart curtain wall system, PVDF aluminum veneer, rail transit screen doorsystem, and other products have become global industry benchmarks. In the period under review, the Company's "Urban Rail TransitPlatform Safety Door" product was identified as the single champion of manufacturing by the Ministry of Industry and InformationTechnology of the People's Republic of China, and its subsidiary Shanghai Zhijian Technology Co., Ltd. was rated as a "specialized,special, and new" enterprise in Songjiang District, Shanghai. Currently, the company has 7 national-level high-tech enterprises andtwo provincial-level enterprise technology research centers. The Company has established an industrial layout with its headquarterslocated in Shenzhen and its manufacturing bases in Dongguan, Foshan, Nanchang, Shanghai, and Chengdu and has establishedbranches in the "Belt and Road" regions including HKSAR, Singapore, India, Australia and Bangladesh. A new development strategypattern with domestic circulation as the main body and dual circulations within each country and region has been actively promoted.In 2021, the domestic and foreign environment remained complex, with many uncertain and unstable factors. There is still ahigh level of COVID-10 disease epidemics in the world, and domestic epidemics continue to occur widely and frequently. Bulk rawmaterial prices fluctuate greatly. The operations are extremely challenging. Through the joint efforts of all employees, the companyhas completed its 2021 business goals primarily under the leadership of the Board of Directors and management team. An operatingincome of 3,557,724,400 yuan was realized by the Company during the reporting period, which represents an increase of 18.58%over the same period last year; the net profit attributable to the owners of the parent company was 222,168,100 yuan, whichrepresents a decrease of 42.94% over the same period last year. The main reasons for the decline were: (1) In the same period of theprevious year, the accounting estimates were changed in accordance with the accounting standards for the expected credit loss rate ofaccounts receivable and contract assets, resulting in an increase of RMB 93.6725 million in net profit for the same period of theprevious year; (2) The Shenzhen Fangda Town project in the same period of the previous year underwent land value-added taxliquidation and the settlement of the engineering contract caused an increase of RMB 107,382,800 in net profit in the same period ofthe previous year. After deducting the impact, the net profit attributable to shareholders of the listed company for the reporting periodincreased by 17.99% over the same period of the previous year. By the end of the reporting period, the company's order reservereached 6,988.2372 million yuan (excluding real estate pre-sale). This represents an increase of 41.86% over the same period in theprevious year, which was 1.96 times the operating income in 2021, laying the foundation for the Company's production and operationin 2022.
(1) Smart curtain wall system and material
1. Industry development
This 14th Five-Year Plan and 2035 Vision Outline outlines the general direction of the future development of green, low-carbon,prefabricated, information-based and new-type industrialization in the construction industry. As part of the "dual carbon" policy andthe energy structure adjustment, the curtain wall industry is facing the need to conserve energy and reduce emissions from the source.As one of the main technologies of photovoltaic buildings, building-integrated photovoltaic (BIPV) curtain walls are becoming
increasingly popular among the industry and receiving market attention. This is expected to bring about new opportunities in thecurtain wall industry. The Company began investing in building-integrated photovoltaic (BIPV) product research and development in2002, and the product began going into use in 2003 after maturing technologically and accumulating experience.In light of China's new infrastructure and urban construction, as well as the dividends brought by theconstruction of the Guangdong-Hong Kong-Macao Greater Bay Area and the Shenzhen Demonstration Zone, theconstruction of large-scale public buildings has been vigorously driven. The curtain wall market has also seena large increase in demand. The Company will continue to take advantage of the industry's regional leadership,grasp the policy dividend, and follow the national development strategy to promote the Company's rapiddevelopment.
2. Business
(1) Main products and purpose
Smart curtain walls are among the Company's major products and have been widely used in high-end officebuildings, corporate headquarters, urban complexes, high-end residences and hotels, urban public buildings, andother applications. The Company has participated in the construction of Shenzhen International Convention and ExhibitionCenter, Shenzhen Hanking Center, Shenzhen Tencent Digital Building, Beijing Yanqi Lake International Capital, Shanghai BundSOHO, Chengdu Tianfu International Conference Center, Nanjing Alibaba Jiangsu headquarters, Guangzhou International FinancialForum (IFF) permanent venue, Wuhan Hubei Radio and Television Media Building, Angola Luanda Airport, Australia VictoriaSquare and other landmark buildings smart curtain wall projects
(2) Main business modes, specific risks and changes;
During the reporting period, the Company's main business model did not change. The Company's smart curtainwall design and construction contract orders are mainly obtained through the bidding mode (open bidding,invitational bidding). Based on the orders, the Company provides the overall solution of design, raw materialprocurement, production and processing, construction and installation and after-sales service. Due to the longperiod of order implementation, it is greatly affected by national industrial policies, raw material prices,and fluctuations in the labor market. Different orders have different technical requirements. It is impossibleto simply copy the existing experience, and the requirements for technology and management are relatively high.
(3) Market competition pattern in which the Company is located and the Company's market position
The domestic building curtain wall market is relatively competitive, and the market competition pattern haschanged in recent years. High-quality enterprises with stable cash flow, strong technological innovation ability,high comprehensive management level and strong brand have been continuously developed and expanded, and the marketshare of leading enterprises in the industry has continued to expand.
Shenzhen Fangda Jianke Co., Ltd., a wholly-owned subsidiary of the Company, has the highest qualificationsfor curtain wall design and construction enterprises in China - the first-class qualification for professionalcontracting of architectural curtain wall engineering and the first-class qualification for architectural curtainwall engineering design. It is the leading enterprise in China's curtain wall industry. According to the "2020Comprehensive Statistics of Building Decoration Industry (Curtain Wall)" compiled by the China Building Decoration Association,Fangda Jianke ranked third. Since it was established 30 years ago, Fangda Jianke has won the highest awards in the nationalconstruction industry, including "Luban Award", "National Quality Engineering Award", "Zhan Tianyou Civil Engineering Award","China Building Decoration Award", and over 200 provincial and ministerial awards. Fangda trademark was named a "China FamousTrademark" and won "International Credit Brand". The Company has participated in drafting more than 20 national or industrystandards, including "Energy-saving Design Standards for Public Buildings", setting 18 Chinese enterprise records.
(4) Business drive
As of the end of the reporting period, the Company's curtain wall system and material industry realized an operating income ofRMB 2,584,704,000, an increase of 19.53% over the same period of the previous year; a net profit of RMB 64,339,000 and a gross
profit margin of 14.49%. The key drivers of performance are as follows:
① By relying on the quality of the product, the technical strength, and the brand's influence, the markethas achieved remarkable growthIn 2021, the Company overcame multiple obstacles and relied on strong performance, technical strength, and brand influence toachieve notable results in market development. During the reporting period, the Company's curtain wall system and material industrywon new bids and signed more than 50 high-end curtain wall projects with a total order value of RMB5.02 billion, an increase of
67.95% over the same period of the previous year, creating a record for the Company. A total of 15 projects have a contract valueexceeding RMB100 million, with the single order amount being large and the order quality being high. The smart curtain wallsprojects that the company won and signed include Tianyin Building, Shenzhen Bay Super Headquarters, Shenzhen Kingdee SoftwarePark, Shenzhen Kangtai Group Building, Shenzhen Youbixuan Building, Wuhan Hubei Radio and Television Media Building,Alibaba Jiangsu Headquarters, Foshan Shunde Rural Commercial Bank Headquarters, Shenzhen Qianhai Kerry Center, ShenzhenExhibition Bay Xingang Plaza, Xi'an Wanda ONE, Melbourne Domain House, and IGLU Russell Street. By the end of the reportingperiod, the Company's order reserve of curtain wall system and materials industry was RMB5,402,710,100, an increase of 62.68%over the same period of the previous year, which was 2.09 times the operating revenue of curtain wall system and materials industryin 2021, laying a solid foundation for the sustainable and healthy development of the Company.
② Strengthen project plan management and improve execution efficiency
Over the reporting period, the Company continued to improve the contract-centered project planning management,optimized the organizational structure, enhanced work guidelines for each link of the project execution process,and further promoted refined micro-circulation management. The efficiency and quality of project execution werecontinuously improved. During the period under reporting, more than 30 curtain wall projects around the world were successfullycompleted and accepted, and the projects under construction all achieved "zero accident" safety, providing high-efficiency andhigh-quality development services. As an example, the Shenzhen International Hotel project has created a miracle in the industry,breaking new heights in production, construction and installation. The installation of 11,375 units was completed in 55 days, creatinga "new speed record". During the reporting period, eight high-end curtain wall projects undertaken by the Company won nationalawards, among which Shenzhen Qianhai International Conference Center and Chengdu Fangda Chengda Center won the LubanAward; Shenzhen Energy Building, Shenzhen Zhuoyuebaozhong Times Square, the second bid section of Xi'an Laian Center Phase 1and the green energy and environmental protection project in Haining won the National Quality Engineering Award; ShenzhenInternational Convention and Exhibition Center and Shenzhen Bay Innovation and Technology Center won the China ConstructionEngineering Decoration Award, showing the Company's leading position and brand competitiveness in the industry.
③ With the smart factory as the core, promote a leap from "manufacturing" to "intelligent manufacturing".
The Company deeply focuses on high-quality development, and promotes intelligent and digital constructionin a variety of work links such as design, production, and construction, and takes the lead in building anintelligent production line in the industry. BIM technology, self-developed project management systems, productionmanagement systems, and other information management tools for curtain wall design and construction management as well asapplication of advanced technologies such as robot intelligent welding and automatic glue, enabled by Internet technology track theCompany's products and continuously improve efficiency, ensure quality, and realize data-based management of the intelligentmanufacturing process.
④ Strengthen technological innovation and improve market competitiveness
As a leading enterprise in the curtain wall industry, the Company has adhered to the principle of "technology-based, innovationas its source" and has been recognized as one of the first national high-tech enterprises in the same industry in China. In addition, theCompany has set up R&D institutions such as enterprise post-doctoral workstations, engineering technology centers, and curtain wallresearch and design centers. During the reporting period, 14 patents were granted, including a modular frame curtain wall system, aprefabricated ceiling curtain wall, and other patents. Using innovative technology has enhanced the efficiency ofproduction, construction and installation, and improved the project quality and safety. Furthermore, the Company's
patent for the "unitized porcelain panel curtain wall" won the honorary certificate of the 19th Shenzhen Enterprise Innovation Recordand the Science and Technology Innovation Achievement Award of the Guangdong Architectural Decoration Industry. During thereporting period, the Company has successively acquired 548 patents for curtain wall products, 19 software patents, and participatedin the compilation of 22 national technical specifications and standards. Its independent innovation capacity and technology havereached the advanced level in the same industry in China, which has effectively promoted the technological progress anddevelopment of the high-end curtain wall industry.
(5) Industry qualification types and validity period
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 andconstruction companies in China. During the reporting period, the Company's relevant qualifications have not changedsignificantly, and the validity period has not expired. The detail can be found in Chapter VI, XVI, and Other material events of thisreport.
(6) Quality control system, implementation standards, control measures and overall evaluation
Quality control system: As a leading enterprise of high-end curtain wall, the Company pays attention to quality management. Itis the first in the industry to pass ISO9001, ISO14001, OHSAS18001 international and domestic dual certification, GB/T29490intellectual property management system certification, and is the first to establish sales, design, supply, production, one-stop qualitycontrol system such as construction, after-sales, customer service, etc., implement strict quality control and supervision for each link,and create a strong quality management system.
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 managementorganization, introduced digital information management, and digitally coded the company's businesses, various raw materials,factory workshop and construction site operation procedures through computer information integration system, The eight systems(CRM customer relationship management system, OA office system, HR human resources system, ERP financial managementsystem, MES production management system, PMS engineering management system, VPO supply management system and QASquality safety management system) realize the rapid transmission, sharing and collaborative application of information through cloudterminal technology. Strictly implement various quality management and control measures to provide customers withhigh-quality products and services.
Overall evaluation: The Company's quality control system and executive standards meet the relevantrequirements of the current relevant national norms and standards, maintain good operation, and provide customerswith stable and reliable products and services.
(7) Major project quality problem during the reporting period
None.
(2) Rail transport screen door business
1. Industry development
As an important part of high-end manufacturing equipment, rail transit equipment is closely related to thenational economic development, urban rail transit development and construction planning. In recent years, railtransit has become more and more important in urban development. On March 5, 2021, the 14th Five Year Plan for NationalEconomic and Social Development of the People's Republic of China and the Outline of Long-Term Objectives for 2035 proposed to"accelerate the construction of a transportation power". The Modern Comprehensive Transportation System in the 14th Five YearPlan issued by the State Council clearly defined "building a metropolitan area on the track". The National Development andReform Commission has successively approved the establishment of theGuangdong-Hong Kong-Macao Greater Bay Area(Intercity) Railway Construction Plan, theYangtze River Delta Region Multi-level Rail Transit Plan, and the
Chengdu-Chongqing Economic Circle Multi-level Rail Transit Plan, among others. These plans apply to intercitytransportation and suburban (regional) railways within metropolitan areas. Focusing on the general goal of "buildingurban agglomerations and metropolitan areas on track", the rail transit of urban agglomerations and metropolitan areas such asGuangdong, Hong Kong, Macao, Yangtze River Delta, Beijing, Tianjin, Hebei and Chengdu Chongqing will usher in an importantperiod of inter city railway and municipal (suburban) railway construction. With the rapid development of cities, theoperation demand of urban rail transit in China will grow continuously in the future, which is conducive to thesustainable development of rail transit related industries. While the mileage of rail transit lines continuesto grow, some rail transit PSD projects built in the early stage have also entered the maintenance period, andthe maintenance service business will also usher in sustained and stable development space in the future. Itis worth mentioning that rail transit safety doors may be widely used in high-speed rail platforms in the future,and high-speed rail transit safety doors belong to the same category of products as the Company's existing metrorail transit screen doors. Therefore, rail transit screen doors will open new application scenarios and opena new broad market space.
2. Business
(1) Main products and purpose
The Company's main product is the rail transit platform screen door system, which is installed at the edgeof the platform of the urban rail transit station to isolate the train from the platform waiting room. The producttypes include closed screen door, full height non closed screen door and half height screen door. It plays animportant role in the operation of rail transit and has the functions of safety, environmental protection andenergy saving.
(2) Main business model
The Company is a supplier and service provider of rail transit PSD system integrating R&D, design,manufacturing, installation and commissioning and technical services, with a complete industrial chain. TheCompany mainly obtains orders by participating in project bidding, carries out customized design, processtreatment, raw material procurement, production and installation of equipment system and provides technicalmaintenance services on the basis of independent research and development according to the requirements ofdifferent customers. The business model has not changed during the reporting period. Focusing on the whole lifecycle service of rail transit platform screen door system, the Company promotes the application of new technologyin the planning stage, provides high-quality products in the construction stage, improves customer operationefficiency in the maintenance stage, and develops into an overall solution provider of rail transit platformscreen door system in the whole life cycle.
(3) Market competition pattern in which the Company is located and the Company's market position
The Company is a leader and promoter in the field of construction, operation and maintenance of PSD systemin urban rail transit. The Company's rail transit PSD system products have independent intellectual propertyrights, and the total number of patents and software copyrights ranks in the forefront of the same industry.The Company is the first enterprise in the same industry in China to pass the compliance certification of RAMS standard system. Ithas presided over the preparation of the first domestic industry standard Platform Screen Door of Urban Rail Transit, which hasfilled the gap in China. The Company has been forging ahead in the domestic and foreign markets with its technical advantages formore than 20 years through continuous research and development. It has undertaken 104 subway platform door projects in 43 citiesaround the world, and has become the largest rail transit platform screen door system supplier and service provider in the world.During the reporting period, the Company's "urban rail transit platform safety door" was recognized as the single champion productof the manufacturing industry by the Ministry of Industry and Information Technology, and the "intelligent rail transit platform doorsystem engineering technology research center" built by its subsidiary Fangda Zhiyuan technology was rated as the "GuangdongEngineering Technology Research Center". The Company is a comprehensive leading enterprise in the field of technology,
market and brand in the construction, operation and maintenance of PSD system of urban rail transit.
(4) Business drive
① High customer recognition and steady development of the Company
Through years of dedicated operation, the Company can independently provide customers with integratedprofessional services of rail transit PSD system products integrating R&D, design, manufacturing, installationand commissioning, technical services and maintenance. It has outstanding advantages such as safety, reliability,availability and maintainability, has been highly recognized by customers and has accumulated extensive customerresources. Qingdao Metro Line 2 and Xiamen Metro Line 1 have signed orders for the reconstruction of Xi'an Metro Line 4 andShenzhen Metro Line 8, and other urban shielding projects of Xi'an Metro Line 4 and Xiamen Metro Line 1. By the end of thereporting period, the Company's rail transit PSD industry had achieved an operating revenue of RMB534,310,600 and an orderreserve of RMB1,585,527,100, which was 2.97 times of the operating revenue. During the reporting period, the Company hasbeen honored by many owners such as Hong Kong Railway Co., Ltd., Nanning Rail Transit Group and Wuhan Metro GroupCo., Ltd., which shows the high recognition and affirmation of the owner for the Company's high-quality performanceand first-class service.
② Continue to strengthen technological innovation and become a technology leader in the industry
In recent years, the Company has grasped the development trend of the rail transit industry at home and abroad,actively adapted to the changes of the industry market, maintained the global leading position of the rail transitplatform screen door system business, insisted on putting the enhancement of independent innovation ability inthe primary position of the Company's development, and promoted the Company's development with independentinnovation. During the reporting period, the Company's "urban rail transit platform safety door" was recognized as the singlechampion of the manufacturing industry by the Ministry of Industry and Information Technology of the People's Republic of China.The company added 6 patents in the field of rail transit screen doors, completed 14 new product development and 5 softwarecopyrights. At the same time, the construction of 11 domestic rail transit PSD systems has been completed and successfully opened totraffic. Among them, Shenzhen line 20, Wuhan line 5 and phase I of Nanning Metro Line 5 are driverless rail transit lines, equippedwith the PSD system with the highest automation level independently developed by the Company, which reflects the leading level ofintelligence and digitization of Fangda's PSD system and contributes to the construction level of smart city rail transit in China.Breakthroughs have been made in the research and development of high-speed railway platform door system, withmature technology and basically finalized products, laying a foundation for seizing market opportunities in thefuture.
(3) New energy industry
In 2021, the state promulgated and implemented the major strategy of carbon peaking and carbon neutralization. The newenergy photovoltaic industry is an important industry for the implementation of the dual carbon strategy and a track with long-termsustainable development. The Company has been practicing the concepts of low-carbon, energy saving, green and environmentalprotection. It is an early developer and application of photovoltaic building integration (BIPV) and photovoltaic power generationsystem design, manufacturing, integration and operation, and has mature technology. The Company has successively completed anumber of photovoltaic building integration (BIPV) projects such as Shenzhen Fangda building (roof), Nanjing Jiangsu bankbuilding (wall), Dongguan Songshan Lake base (roof), Jiangxi Isuzu car parking lot (roof) in Nanchang, and Jiangxi Pingxiangdistributed photovoltaic power station project. The above projects have been put into use.
As one of the key development industries of the company in the future, the new energy photovoltaic industryis a new profit growth point planned by the Company. During the reporting period, in order to implement the national carbonpeak and carbon neutralization strategy and help rural revitalization, the Company signed the cooperation framework agreement onWan'an Fangda photovoltaic building integration (BIPV) and distributed photovoltaic power generation project with the People'sGovernment of Wan'an County, Jiangxi Province, and developed photovoltaic building integration (BIPV) and distributedphotovoltaic power generation projects within the agreed scope of Wan'an county.
(4) Real Estate
1. Changes of macroeconomic situation and industrial policy environment related to the real estate industry; industrialdevelopment status and policies of the city where the Company's main projects are located, and its impact on the future operatingperformance and profitability of the listed company;In 2021, with the intensive introduction of local real estate market regulation policies, China's real estate market has entered theadjustment channel. At the same time, as a pillar industry, the steady and healthy development of real estate hasbecome the goal and consensus. According to the requirements of the notice of the National Development and ReformCommission on promoting consumption in the near future at the beginning of 2022, support the commercial housing market to bettermeet the reasonable housing needs of buyers, and implement policies to promote the virtuous circle and healthy development of thereal estate industry. Therefore, it is expected that in 2022, China's economy will face new challenges and pressures, but macropolicies will continue to make efforts to stabilize the economy. There are still expectations for the reduction of reserve requirementsand interest rates. Under the guidance of the general tone of "no housing speculation", it is expected that there is still room forimprovement in regulation and control policies.The Company's real estate projects are in Shenzhen and Nanchang. Shenzhen's urban fundamentals are stableand well oriented, and the construction of Guangdong, Hong Kong and Macao Bay area is further promoted. The strongdevelopment trend will be concerned by more investors. In the long run, the first tier cities such as Shenzhenare short of land resources, the population will continue to grow in the future, the real estate still has roomfor appreciation, and there is regional differentiation.Under the policy environment, Nanchang's real estate market is generally stable in 2021, but the transaction of commercialhousing market is low. In 2022, the supply and demand structure of the real estate market will be gradually reasonable. With thegradual improvement of the credit environment, the transaction scale may increase.Affected by the macro-economy and the regulation of the real estate industry, the sales volume and businessgross profit margin of the Company's real estate sector will be affected to a certain extent, but it is expectedto contribute profits to the Company.
2. The Company's main business model, business project format, market position and competitive advantage, main risksand countermeasures
The Company's real estate business mainly adopts the business model of self-development, partial sales andpartial self-supporting. At present, the Company mainly develops, sells and rents office, commercial and apartmentproducts. The Company has established a professional team to operate and manage the Company's commercial andproperty.
At present, the real estate projects operated by the Company are in Shenzhen and Nanchang.
Shenzhen is located in the core area of Guangdong, Hong Kong and Macao Great BayDistrict.The Company's ShenzhenFangda Town project has a rapid sales and leasing rate and has been highly recognized by the Shenzhen market.At the end of the reporting period, the sales rate of Shenzhen Fangda Town project was 95.72%, and the leasing rate of self ownedproperties was 86.08%. During the reporting period, the wholly-owned subsidiary of the Company was rated as "Development PowerEnterprise of Shenzhen Real Estate Development Industry". The Company's Fangda Center project is located in Honggutan,Nanchang, with obvious location advantages. The introduced international famous brand hotel - Holiday Inn Express has officiallyopened, and some government agencies in Honggutan District of Nanchang have settled in. The Nanchang Fangda Center projecthas good market expectations, but due to the large inventory of commercial office buildings in Nanchang and thedownward trend in volume and price, the sales have slowed down. At the end of the reporting period, the salerate of Nanchang Fangda Center project was 28.79%, and the occupancy rate of self-owned properties was 77.12%.
The Company's real estate industry will still face risks such as national macro policy regulation, marketcompetition, and the impact of the new crown epidemic in the future. The Company will comply with policy changes,continue to in-depth optimization in brand building, marketing and promotion, reduce operational and management
risks, and maintain the Company's steady development.
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 |
4. Total land reserve
| Project/region name | Floor area (10,000 m2) | Total building area (10,000 m2) | Remaining building area (10,000 m2) |
| None |
5. Main production development status
| City/region | Project name | 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 District, Nanchang | Fangda Center | No.1516 Ganjiang North Avenue Fangda Center | Office commercial complex | 100.00% | 1 May 2018 | 100% | 100.00% | 16,608.55 | 66,432.61 | 0 | 65,376.94 | 67,000 | 66,992.35 |
6. Main project sales
| City/region | Project name | 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 | 88,884.82 | 2,504.89 | 13,016.82 | 88,884.82 | 2,504.89 | 13,016.82 |
| Honggutan New District, Nanchang | Fangda Center | No.1516 Ganjiang North Avenue Fangda Center | Office commercial complex | 100.00% | 65,376.94 | 26,883.98 | 7,554.39 | 3,168.63 | 4,253.80 | 7,554.39 | 7,554.39 | 10,107.02 |
7. Main project lease
| Project name | 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 | 59,345.24 | 81.84% |
| Shenzhen Fangda Town | Shenzhen Nanshan District | Commercial shop | 100.00% | 22,775.52 | 22,682.85 | 99.59% |
| Fangda Building | Shenzhen Nanshan District | Office building | 100.00% | 17,432.38 | 14,517.06 | 83.28% |
| Jiangxi Nanchang Science and Technology Park | Nanchang, Jiangxi Province | Plant and office building | 100.00% | 17,517.20 | 17,517.20 | 100.00% |
| Jiangxi Nanchang Fangda Center | Nanchang, Jiangxi Province | Commercial and office building | 100.00% | 37,876.98 | 29,211.33 | 77.12% |
8. First-level development of land
□ Applicable √ Inapplicable
9. Financing channel
| Financing source | Ending financing balance (in RMB10,000) | Financing cost range / average financing cost | Term structure (monetary unit: RMB10,000) | |||
| Within 1 year | 1-2 years | 2-3 years | Over 3 years | |||
| Bank loan | 139,700.00 | During the same period, the benchmark interest rate of the loan was adjusted at the agreed rate to 5.715% | 6,350.00 | 7,000.00 | 17,650.00 | 108,700.00 |
| Total | 139,700.00 | 6,350.00 | 7,000.00 | 17,650.00 | 108,700.00 | |
10. Development strategy and operation plan in next year
Shenzhen's urban fundamentals are stable and well oriented, and the original driving force of the industryis strong. At the same time, the concept of Guangdong Hong Kong Macao Bay Area has matured, and the integrationof Shenzhen and Hong Kong is continuing, which contains huge investment potential. In the future, the Companywill continue to expand the brand effect, deepen the local market, and effectively improve the Company's operatingperformance.The main task of the Company's real estate sector in 2022 is to realize the complete sale of Shenzhen Fangda Town project andvigorously promote the sales of Nanchang Fangda Center project. At the same time, according to the latest policies, theCompany will integrate and optimize the existing resources of the Company and steadily promote the applicationof Shenzhen Fuyong Fangda Bangshen project and Shenzhen Henggang Dakang urban renewal project.
11. Bank mortgage loan guarantee provided for commercial housing purchasers
√ Applicable □ Inapplicable
As of December 31, 2021, the balance of the Company's guarantee for commercial housing offenders due to bank mortgageloans was RMB140,203,100.
12. Co-investment between Directors, supervisors and senior management and listed companies
□ Applicable √ Inapplicable
II. Core Competitiveness Analysis
(1) Smart curtain wall system and material
1. Advantages of technology and industry experience
Through 30 years of hard work in the field of high-end smart curtain wall and the development of environmental protection andenergy-saving curtain wall products through technological innovation, the Company has grasped the development trend of curtainwall industry in the process of meeting market demand, improved the competitiveness of the Company's products, solutions andservices, and accumulated rich experience in project design and implementation and well-known cases.
As the leading enterprise in the curtain wall industry, the Company took the lead in setting up enterprise postdoctoralworkstation, engineering technology center, Curtain Wall Research and Design Institute and other R&D institutions in the sameindustry in China, and was selected as the "top 500 innovation index of Chinese listed companies" for three consecutive years. Ithas created many firsts in the industry and is one of the preferred brands in the domestic high-end curtain wallsystem material industry. The six wholly-owned subsidiaries of the Company engaged in smart curtain wall system and materialindustry are national high-tech enterprises. During the reporting period, the subsidiary was recognized as "Guangdong IntellectualProperty Demonstration Enterprise", "Shenzhen Intellectual Property Advantage Unit", "Jiangxi Enterprise Technology Center" and"Nanchang Engineering Technology Research Center". 14 curtain wall patent applications were authorized. The Company'sindependent innovation and continuous innovation have created the Company's leading technical level and manufacturing capacity.
2. Advantages of product service and refined management
With years of technical precipitation and experience accumulation, the Company's smart curtain wall systemand material industry has formed an overall solution integrating R&D, design, production, project management,construction and maintenance services. The industry is complete and has strong comprehensive strength in termsof quality, cost and service.
The Company has vigorously promoted intelligent construction and fine management in various business modules,effectively improved the quality of products and services and enhanced the competitiveness of the Company. BIMTechnology, PMS project management platform, MES production management system and other information management tools areapplied to curtain wall design, manufacturing and construction management, combined with cloud computing, big data, mobileapplication, Internet of things and other technologies to realize the rapid transmission and sharing of information, collaborativeapplication, open up various management modules, improve the efficiency of decision-making, speed up the response and execution
ability of business, and improve the fine management.
3. Brand competitiveness
Over the past 30 years since its establishment, the Company has been highly recognized by many industries and professionalsand has a good reputation by virtue of its advantages in products, technology and comprehensive services. The Company has won"National Quality Award", "National Quality Engineering Award", Luban Award, Zhan Tianyou award, China ArchitecturalDecoration Award and more than 200 provincial and ministerial awards. Fangda trademark has been recognized as "China'swell-known trademark" and won the title of "international reputable brand". It has created thousands of landmark projects and hasbecome one of the leading brands in the field of curtain wall in China.During the reporting period, the high-end curtain walls projects of Chongqing Raffles Plaza and Shenzhen Hanjing Centerundertaken by the Company were selected into the world's best High-rise Building Award (300-399 meters), and eight curtain wallprojects won national awards. The curtain wall industry and market usually have high requirements for the engineeringperformance of enterprises participating in bidding, forming a certain threshold. Especially in the difficultprojects such as super high-rise buildings, large public buildings and special-shaped external maintenancestructures, the Company has rich industry experience and well-known case reputation, high brand reputation andstrong market competitiveness.
4. Industrial layout advantages
In order to better serve the market and meet the growing demand for orders, after years of accumulation andcontinuous investment in facilities and equipment, the curtain wall system and material industry of the Companyhas built a domestic industrial layout with Shenzhen as the headquarters and production bases in Shanghai, Chengdu,Nanchang, Dongguan, Foshan and other places. Among them, Dongguan Songshanhu base is one of the most modernhigh-end curtain wall system production bases in the industry, it has industry-leading R&D, design, manufacturingand curtain wall system delivery capabilities. The Company's production base continues to increase digital andintelligent construction, introduces intelligent equipment, and uses Internet technology to track the Company'sproducts and continuously improve efficiency. The layout of the production base provides an important guaranteefor improving the market share and comprehensive competitiveness.
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 executionability, as well as a complete talent training system and talent reserve. This year, we continuously optimizedthe effective incentive and assessment system and implemented quantitative management. In order to meet the needsof the Company's business development, the Company continued to introduce outstanding fresh graduates, buildan industry university research integration platform, promote school-enterprise cooperation andindustry-university combination mechanism, and ensure that the Company's scientific research strength in thefield of high-end curtain wall is at the leading level in the industry. Over the years, it has always paid attention tothe cultivation of "craftsman spirit". It has held "Fangda Craftsman" skill competition every year and "Fangda Lecture Hall" trainingfrom time to time, continuously improved the theoretical knowledge and operation skill level of employees, created a skilled talentteam with reasonable structure, exquisite technology and excellent style, cultivated a number of "Shenzhen 100 excellent craftsmen",and has been rated as "Shenzhen craftsman cultivation demonstration unit" for many times.
(2) Rail transport screen door business
1. Expertise competitiveness
The Company has always attached importance to technological innovation, took the lead in developing the railtransit PSD system with independent intellectual property rights in China, broke the monopoly of foreignenterprises in the field of China's rail transit PSD, and the product performance is at the international leading
level. China's first industry standard of platform screen doors for rail transit edited by the Company was implemented on March 1,2007, filling the gap in this field in China and guiding the development of platform screen doors for rail transit in China. InNovember 2021, the Company's "urban rail transit platform safety door" was recognized as the single champion product ofmanufacturing industry by the Ministry of Industry and Information Technology.
2. market advantage
The Company is a pioneer and leader among China's rail transit platform screen door manufacturers. The Company's productsare used in 43 cities around the world, including the first subway line in 11 cities which has applied the company's products for theplatform screen doors. In China, Fangda's products have opened subway operation cities with a coverage rate of 70%. The companyactively develops one overseas market, and one belt, one road, and other countries and regions along the "Belt and Road" initiative inSingapore, Malaysia, Thailand and India have obtained important project orders. Overseas projects have been implemented with richexperience and a strong market brand awareness. The Company has become the largest manufacturer and service providerof rail transit PSD system in the world.The operation and maintenance of rail transit have high requirements for the safety and reliability of productsand equipment. The Company's leading technology, reliable product quality and efficient service have won a goodmarket reputation, maintained a stable cooperative relationship with customers and accumulated rich marketresources.
3. Industry chain advantage
As the first enterprise to enter the subway platform screen door in China, the Company has an overall solutionindustrial chain of rail transit platform screen door integrating R&D, design, manufacturing, engineeringconstruction and technical services. The complete industrial chain helps the Company realize resource sharingat all stages, so as to effectively reduce production and management costs, improve profitability, meet the marketdemand for specialized products and services, and has a strong competitive advantage.
With many domestic metro platform screen door systems entering the maintenance period, the Company activelyexpands the industrial chain and takes the lead in developing Metro maintenance business in China. The intelligentmaintenance management system developed by the Company can count and analyze the operation status of site equipmentin real time, remotely guide the on-site technical service team, and provide professional technical support tocustomers in a timely and efficient manner.
(3) New energy industry
The Company's new energy industry mainly focuses on the development of new energy-saving technology applications such assolar photovoltaic application and photovoltaic building integration (BIPV), and its business scope covers two major industries:
construction and photovoltaic power generation. The Company actively developed solar photovoltaic power generation curtain wallsystem technology 20 years ago. It is one of the earliest enterprises in China that independently mastered and had independentintellectual property rights to engage in the design, manufacturing and integration of solar photovoltaic building integration (BIPV)system. The Company benefits from product R&D and cost advantages brought by industrial integration.
Distributed solar power PV power generation is closely related to the Company's curtain wall business. Partof the distributed solar power PV systems are closely related to construction. Moreover, the Company has morethan 20 years' experience in electrical product integration. The Company also has more than 30 years' experiencein construction management and has the level-1 construction curtain wall engineering qualification and electricalinstallation engineering qualification.
(4) Real Estate
1. The Company is located in the core area of Dawan District, Guangdong, Hong Kong and Macao. It adopts differentiatedcompetition strategy and focuses on the development of urban renewal projects in Shenzhen. Benefiting from the dividend ofShenzhen's rapid economic development and the opportunity of further promotion of Shenzhen-Hong Kong integration,it is expected that the company'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. During the reporting period, the wholly-owned subsidiary of the Company was rated as"Development Power Enterprise of Shenzhen Real Estate Development Industry".III. Core business analysis
1. Summary
See "I. Main Business Conditions of the Company During the Reporting Period" in Chapter III Management Discussion andAnalysis.
2. Income and costs
(1) Turnover composition
In RMB
| 2021 | 2020 | YOY change (%) | |||
| Amount | Proportion in operating costs (%) | Amount | Proportion in operating costs (%) | ||
| Total turnover | 3,557,724,397.54 | 100% | 3,000,191,773.63 | 100% | 18.58% |
| Industry | |||||
| Metal production | 2,584,704,014.98 | 72.65% | 2,162,371,492.94 | 72.07% | 19.53% |
| Railroad industry | 534,310,567.88 | 15.02% | 651,249,442.29 | 21.71% | -17.96% |
| New energy industry | 19,285,405.44 | 0.54% | 19,978,873.86 | 0.67% | -3.47% |
| Real estate | 407,329,798.11 | 11.45% | 151,222,473.25 | 5.04% | 169.36% |
| Others | 12,094,611.13 | 0.34% | 15,369,491.29 | 0.51% | -21.31% |
| Product | |||||
| Curtain wall system and materials | 2,584,704,014.98 | 72.65% | 2,162,371,492.94 | 72.07% | 19.53% |
| Subway screen door and service | 534,310,567.88 | 15.02% | 651,249,442.29 | 21.71% | -17.96% |
| PV power generation products | 19,285,405.44 | 0.54% | 19,978,873.86 | 0.67% | -3.47% |
| Real estate sales | 407,329,798.11 | 11.45% | 151,222,473.25 | 5.04% | 169.36% |
| Others | 12,094,611.13 | 0.34% | 15,369,491.29 | 0.51% | -21.31% |
| District | |||||
| In China | 3,366,465,225.36 | 94.62% | 2,846,753,096.09 | 94.89% | 18.26% |
| Out of China | 191,259,172.18 | 5.38% | 153,438,677.54 | 5.11% | 24.65% |
| Sub-sales mode | |||||
| Direct sales | 3,557,724,397.54 | 100.00% | 3,000,191,773.63 | 100.00% | 18.58% |
(2) Industry, product, region and sales mode accounting for more than 10% of the Company's operatingrevenue or operating profit
√ 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 | 2,584,704,014.98 | 2,210,110,734.13 | 14.49% | 19.53% | 24.00% | -3.08% |
| Real estate | 407,329,798.11 | 158,976,059.02 | 60.97% | 169.36% | 38.46% | 36.90% |
| Railroad industry | 534,310,567.88 | 383,601,296.64 | 28.21% | -17.96% | -24.98% | 6.73% |
| Product | ||||||
| Curtain wall system and materials | 2,584,704,014.98 | 2,210,110,734.13 | 14.49% | 19.53% | 24.00% | -3.08% |
| Real estate sales | 407,329,798.11 | 158,976,059.02 | 60.97% | 169.36% | 38.46% | 36.90% |
| Metro screen door | 534,310,567.88 | 383,601,296.64 | 28.21% | -17.96% | -24.98% | 6.73% |
| District | ||||||
| In China | 3,366,465,225.36 | 2,605,880,179.02 | 22.59% | 18.26% | 12.72% | 3.80% |
| Sub-sales mode | ||||||
| Direct sales | 3,557,724,397.54 | 2,761,300,557.48 | 22.39% | 18.58% | 14.27% | 2.93% |
Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable √ Inapplicable
The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the Guidelines for theSelf-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
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 | 2,584,704,014.98 | 2,210,110,734.13 | 14.49% | 19.53% | 24.00% | -3.08% |
| Product | ||||||
| Curtain wall system and | 2,584,704,014.98 | 2,210,110,734.13 | 14.49% | 19.53% | 24.00% | -3.08% |
| materials | ||||||
| District | ||||||
| In China | 2,497,116,583.17 | 2,138,906,596.63 | 14.34% | 21.43% | 24.49% | -2.10% |
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 | 2,584,704,014.98 | 2,210,110,734.13 | 14.49% |
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 | 4 | 8,458.10 |
| 2 | Middle East | 1 | 820.87 |
| Total | 5 | 9,278.97 |
(3) The physical sales revenue is high the labor service revenue
□ Yes √ No
(4) Performance of major sales contracts and major purchase contracts signed by the Company as of thereporting period
□ Applicable √ Inapplicable
(5) Operation cost composition
In RMB
| Industry | Item | 2021 | 2020 | YOY change (%) | ||
| Amount | Proportion in operating costs (%) | Amount | Proportion in operating costs (%) | |||
| Metal production | Raw materials | 1,390,170,739.40 | 62.90% | 1,126,817,073.72 | 63.22% | -0.32% |
| Metal production | Installation and engineering costs | 539,914,574.90 | 24.43% | 449,443,748.31 | 25.22% | -0.79% |
| Metal production | Labor cost | 146,644,527.60 | 6.64% | 101,353,319.08 | 5.69% | 0.95% |
| Railroad industry | Raw materials | 241,731,373.92 | 63.02% | 318,518,796.97 | 62.29% | 0.73% |
| Railroad industry | Installation and engineering costs | 73,430,526.18 | 19.14% | 75,861,403.42 | 14.84% | 4.30% |
| Railroad industry | Labor cost | 38,231,345.27 | 9.97% | 32,435,591.19 | 6.34% | 3.63% |
| Real estate | Construction and installation cost | 49,779,295.03 | 31.31% | 64,064,455.04 | 55.80% | -24.49% |
| Real estate | Land cost | 33,068,762.42 | 20.80% | 2,998,466.20 | 2.61% | 18.19% |
| Real estate | Loan interest | 3,704,260.45 | 2.33% | 33,180.45 | 0.03% | 2.30% |
| Real estate | Labor cost | 16,716,890.93 | 10.52% | 12,855,369.02 | 11.20% | -0.68% |
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 | 2021 | 2020 | YOY change (%) | ||
| Amount | Proportion in operating costs (%) | Amount | Proportion in operating costs (%) | |||
| Raw materials | Curtain wall system and materials | 1,390,170,739.40 | 62.90% | 1,126,817,073.72 | 63.22% | -0.32% |
| Installation and engineering costs | Curtain wall system and materials | 539,914,574.90 | 24.43% | 449,443,748.31 | 25.22% | -0.79% |
| Labor cost | Curtain wall system and materials | 146,644,527.60 | 6.64% | 101,353,319.08 | 5.69% | 0.95% |
(6) Change to the consolidation scope in the report period
√ Yes □ No
There are 6 newly added companies within the scope of merger of the Company in this period, including 4 newly added companies inthe way of establishment: Fangda Zhichuang Technology Singapore Company, Fangda Zhichuang Technology Wuhan Company,Fangda Zhichuang Technology Nanchang Company and Fangda Zhichuang Technology Dongguan Company; two new companieswere added to the business merger under the same control: Shenzhen Yunzhu Industrial Co., Ltd. and Shenzhen Yunzhu TestingTechnology Co., Ltd.
(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) | 557,764,662.58 |
| Proportion of sales to top 5 customers in the annual sales | 15.68% |
| 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 | China Construction Science and Engineering Group Shenzhen Co., Ltd. | 142,565,566.39 | 4.01% |
| 2 | 2nd customer | 123,377,513.25 | 3.47% |
| 3 | 3rd customer | 108,893,185.38 | 3.06% |
| 4 | 4th customer | 93,486,406.76 | 2.63% |
| 5 | 5th customer | 89,441,990.80 | 2.51% |
| Total | -- | 557,764,662.58 | 15.68% |
Other information about major customers
□ Applicable √ Inapplicable
Main suppliers
| Purchase amount of top 5 suppliers (RMB) | 485,046,033.85 |
| Proportion of purchase amount of top 5 suppliers in the total annual purchase amount | 17.50% |
| 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 | 1st supplier | 120,812,211.95 | 4.36% |
| 2 | 2nd supplier | 118,681,902.98 | 4.28% |
| 3 | 3rd supplier | 97,421,958.29 | 3.52% |
| 4 | 4th supplier | 73,303,733.49 | 2.65% |
| 5 | 5th supplier | 74,826,227.14 | 2.70% |
| Total | -- | 485,046,033.85 | 17.50% |
Other information about major suppliers
□ Applicable √ Inapplicable
3. Expenses
In RMB
| 2021 | 2020 | YOY change (%) | Notes | |
| Sales expense | 59,877,614.73 | 39,801,205.56 | 50.44% | It is mainly due to the increase of labor costs, sales agency fees of real estate business and the reclassification of quality assurance expenses from management expenses to sales expenses this year |
| Administrative expense | 169,443,658.83 | 143,365,324.03 | 18.19% | |
| Financial expenses | 103,001,595.93 | 87,013,083.43 | 18.37% | |
| R&D cost | 152,973,582.38 | 143,592,870.45 | 6.53% | |
| Taxes and surcharges | 72,326,973.99 | -222,120,890.04 | 132.56% | It is mainly because the Company's real estate industry Shenzhen Fangda Town project carried out land value-added tax liquidation in 2020, and the original land value-added tax withdrawn was reversed in 2020. |
4. R&D investment
√ Applicable □ Inapplicable
| R&D project name | Purpose | Progress | Objective | Expected impact on the future development of the Company |
| Research and development of new industrialized curtain wall system | Improve product quality, improve installation efficiency, improve construction safety and reduce energy consumption in the construction process. | In development | Improve the development level of assembly and maintain the leading position in the industry. | In line with the national policy guidance, it has good market prospects and can adapt to the development trend of building curtain wall in the future. |
| Research and development of intelligent curtain wall system | Reduce energy consumption and improve the performance of intelligent products. | In development | Improve the intelligent level of the system and meet the needs of market development. | Achieve the design concept of energy-saving, emission reduction and green buildings, and improve the market competitiveness of products |
| Research and | Improve production | In the process of | Improve production | Improve the production |
| development of smart factory flexible production system | efficiency and adapt to customized production. | R&D promotion, the intelligent construction of some production lines has been completed | capacity, output and product quality, and reduce production costs. | support capacity and improve the automation and intelligence level of production equipment. |
| Research and development of new generation rail transit PSD control system | Enhance product safety, reliability and availability to meet the advanced requirements of the core system. | In development | Optimize product system performance and maintain industry leadership. | Further enhance the independent R&D capability and improve the market competitiveness of the Company in the field of PSD. |
| Research and development of new generation full height platform door | Research and development of new products to improve market competitiveness. | In development | Optimize the product structure to meet the needs of market development. | Expand the application scenarios of the Company's products and enhance the leading edge of industry technology. |
| Study on nano composite thermal insulation aluminum veneer | Research and development of new products to meet market demand. | In development | Diversify product categories and respond to national energy conservation and environmental protection policies. | Develop products that conform to the concept of green and environmentally friendly buildings, save energy and reduce emissions, and enhance competitiveness. |
R&D personnel
| 2021 | 2020 | Change | |
| R&D staff number | 563 | 565 | -0.35% |
| R&D staff percentage | 19.03% | 25.17% | -6.14% |
| Academic structure of R&D personnel | —— | —— | —— |
| Bachelor | 324 | 283 | 14.49% |
| Master’s degree | 7 | 6 | 16.67% |
| Age composition of R&D personnel | —— | —— | —— |
| Under 30 | 235 | 254 | -7.48% |
| 30-40 | 221 | 199 | 11.06% |
R&D investment
| 2021 | 2020 | Change |
| R&D investment amount (RMB) | 152,973,582.38 | 143,592,870.45 | 6.53% |
| Investment percentage in operation turnover | 4.30% | 4.79% | -0.49% |
| Capitalization of R&D investment amount (RMB) | 0.00 | 0.00 | |
| Percentage of capitalization of R&D investment in the R&D investment | 0.00% | 0.00% |
Reasons and effects of major changes in the composition of R&D personnel of the Company
□ Applicable √ Inapplicable
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 | 2021 | 2020 | YOY change (%) |
| Sub-total of cash inflow from business operations | 3,615,387,540.90 | 3,578,489,341.41 | 1.03% |
| Sub-total of cash outflow from business operations | 3,678,812,837.19 | 3,023,521,392.45 | 21.67% |
| Cash flow generated by business operations, net | -63,425,296.29 | 554,967,948.96 | -111.43% |
| Sub-total of cash inflow generated from investment | 2,578,992,220.76 | 9,159,184,240.33 | -71.84% |
| Subtotal of cash outflows | 2,695,492,878.10 | 9,032,785,558.83 | -70.16% |
| Cash flow generated by investment activities, net | -116,500,657.34 | 126,398,681.50 | -192.17% |
| Subtotal of cash inflow from financing activities | 2,360,667,296.03 | 2,748,060,091.27 | -14.10% |
| Subtotal of cash outflow from financing activities | 2,311,447,620.31 | 3,130,218,820.25 | -26.16% |
| Net cash flow generated by financing activities | 49,219,675.72 | -382,158,728.98 | 112.88% |
| Net increase in cash and cash equivalents | -136,135,458.15 | 297,453,047.55 | -145.77% |
Explanation of major changes in related data from the same period last year
√ Applicable □ Inapplicable
The net cash flow from operating activities in the reporting period of the Company decreased by 111.43% compared with last year,mainly due to the settlement and payment of land value-added tax of RMB349,316,800 in the reporting period of Shenzhen FangdaTown project of real estate business; The net cash flow from investment activities decreased by 192.17% compared with last year,mainly due to the net cash inflow from the recovery of the balance of early financial investment in 2020 and the basic balance of netinvestment revenue and expenditure in 2021; The net cash flow from financing activities increased by 112.88% compared with lastyear, mainly due to the increase of net bank loan income and expenditure in the current period, as well as the receipt of some equityfunds from the transferor Dazhi Chuang company and the payment for business merger under the same control; The net increase incash and cash equivalents decreased by 145.77% compared with last year, mainly due to the comprehensive impact of the changes inthe net cash flow of the above-mentioned operating activities, investment activities and financing activities.
Explanation of major difference between the cash flow generated by operating activities and the net profit in the year
√ Applicable □ Inapplicable
The difference between the net cash flow from the Company's operating activities during the reporting period and the net profit ofthis year is mainly due to the land value-added tax of RMB349,316,800 paid by the real estate industry Shenzhen Fangda Townproject during the reporting period.IV. Non-core business analysis
√ Applicable □ Inapplicable
In RMB
| Amount | Profit percentage | Reason | Whether continuous | |
| Investment income | -1,459,334.05 | -0.54% | No | |
| Gain/loss caused by changes in fair value | 23,422,035.73 | 8.74% | Mainly due to adjustment of fair value of investment real estate | No |
| Assets impairment | 7,181,339.41 | 2.68% | It is mainly the provision for impairment of contract assets reversed | No |
| Non-operating revenue | 2,209,180.56 | 0.82% | No | |
| Non-business expenses | 6,087,375.71 | 2.27% | Mainly due to donations | No |
| Credit impairment loss | -7,923,995.43 | -2.96% | Mainly bad debt provision corresponding to accounts receivable | No |
V. Assets and Liabilities
1. Major changes in assets composition
In RMB
| End of 2021 | Beginning of 2021 | Change (% ) | Notes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary capital | 1,287,563,759.32 | 10.50% | 1,463,974,162.45 | 12.30% | -1.80% | |
| Account receivable | 556,453,824.20 | 4.54% | 616,960,252.54 | 5.19% | -0.65% | |
| Contract assets | 1,782,947,673.13 | 14.54% | 1,433,963,300.50 | 12.05% | 2.49% | |
| Inventory | 733,280,924.98 | 5.98% | 837,831,790.88 | 7.04% | -1.06% | |
| Investment real estate | 5,765,352,393.13 | 47.02% | 5,634,648,416.52 | 47.36% | -0.34% | |
| Long-term share equity investment | 55,218,946.14 | 0.45% | 55,902,377.95 | 0.47% | -0.02% | |
| Fixed assets | 663,414,297.61 | 5.41% | 483,217,323.75 | 4.06% | 1.35% | |
| Construction in process | 11,642,444.21 | 0.09% | 168,626,803.01 | 1.42% | -1.33% | |
| Use right assets | 31,440,856.54 | 0.26% | 5,844,154.69 | 0.05% | 0.21% | |
| Short-term loans | 1,287,474,398.65 | 10.50% | 1,048,250,327.62 | 8.81% | 1.69% | |
| Contract liabilities | 180,186,877.15 | 1.47% | 265,487,113.12 | 2.23% | -0.76% | |
| Long-term loans | 1,333,500,000.00 | 10.88% | 1,099,411,462.35 | 9.24% | 1.64% | |
| Lease liabilities | 19,152,093.31 | 0.16% | 5,844,154.69 | 0.05% | 0.11% | |
| Non-current liabilities due in 1 year | 78,418,557.76 | 0.64% | 103,359,833.57 | 0.87% | -0.23% | |
The proportion of overseas assets is relatively high
□ Applicable √ Inapplicable
2. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
In RMB
| Item | Opening amount | Gain/loss caused by changes in | Accumulative changes in fair value | Impairment provided | Amount purchased in the period | Amount sold | Other change | Closing amount |
| fair value | accounting into the income account | in the period | in the period | |||||
| Financial assets | ||||||||
| 1. Transactional financial assets (excluding derivative financial assets) | 14,382,896.04 | 25,135,241.89 | ||||||
| 2. Derivative financial assets | 6,974,448.22 | 1,069,587.62 | ||||||
| 3. Investment in other equity tools | 17,628,307.59 | -3,447,654.94 | -18,161,200.54 | 14,180,652.65 | ||||
| 4. Receivable financing | 10,727,129.28 | 4,263,500.00 | ||||||
| 5. Other non-current financial assets | 5,025,186.16 | 2,500,222.08 | 7,525,408.24 | |||||
| Subtotal | 54,737,967.29 | -947,432.86 | -18,161,200.54 | 0.00 | 0.00 | 0.00 | 0.00 | 52,174,390.40 |
| Investment real estate | 5,628,291,448.40 | 20,921,813.65 | 67,142,127.21 | 2,805,641.38 | 103,197,676.67 | 5,755,216,580.10 | ||
| Total | 5,683,029,415.69 | 19,974,380.79 | 48,980,926.67 | 2,805,641.38 | 103,197,676.67 | 5,807,390,970.50 | ||
| Financial liabilities | 915,234.93 | 11,871.20 | ||||||
Other changeOther changes are mainly due to the change of some inventories for sale of Nanchang Fangda center project toexternal rental, which is measured at fair value, and the inventory measured at cost is changed to investment
real estate measured at fair value.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 Friday, December 31, 2021 (RMB) | Reason |
Monetary capital
| Monetary capital | 395,312,687.73 | Various deposits |
| Notes receivable | 25,964,425.17 | Bills endorsed or discounted but not yet due |
Account receivable
| Account receivable | 45,503,561.84 | Loan by pledge |
| Fixed assets | 115,695,967.29 | Loan by pledge |
| Investment real estate | 3,633,265,958.13 | Loan by pledge |
| Other non-current assets | 306,738,886.82 | Loan by pledge |
| Equity pledge | 200,000,000.00 | 100% stake in Fangda Property Development held by the Company |
Total
| Total | 4,722,481,486.98 |
VI. Investment
1. General situation
√ Applicable □ Inapplicable
| Investment (yuan) in the report period | Investment (yuan) in the previous period | Change |
| 125,388,100.00 | 0.00 |
2. Major equity investment in the report period
√ Applicable □ Inapplicable
In RMB
| Invested company | Main business | Method of investment | Investment amount | Shareholding percentage | Capital source | Partner | Term of investment | Type of product | Progress as of the balance sheet date | Estimate return | Current investment profit and loss | Whether litigation is involved | Disclosure date (if any) | Disclosure source (if any) |
| Shenzhen Yunzhu Industrial Co., | Technical services, inspecti | Acquisition | 125,388,100.00 | 100.00% | Self-owned fund | Inapplicable | Long-term | Building inspection and technic | 100% equity has been transfer | 7,901,328.01 | No | Tuesday, March 23, 2021 | Announcement on Acquisition of |
| Ltd. | on, maintenance and function transformation services of existing building external maintenance system, as well as building waterproof, anti-corrosion and thermal insulation business. | al services | red and control has been transferred to the Company | Equity and Related Party Transactions by Wholly Owned Subsidiaries on Http//www.cninfo.com (http://www.cninfo.com.cn/) | ||||||||||
| Total | -- | -- | 125,388,100.00 | -- | -- | -- | -- | -- | -- | 7,901,328.01 | -- | -- | -- |
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 net assets in the report period | Actual gain/loss in the report period |
| Shanghai Futures Exchange | No | No | Shanghai aluminum | 8,112.09 | Friday, April 17, 2020 | Friday, December 31, 2021 | 8,112.09 | 500.55 | 8,112.09 | 0 | 500.55 | 0.09% | 2,043.02 |
| Banks | No | No | Forward foreign exchange | 5,803.03 | Wednesday, July 29, 2020 | Friday, December 31, 2021 | 5,803.03 | 1,851.9 | 6,200.71 | 0 | 1,454.22 | 0.26% | 207.27 |
| Total | 13,915.12 | -- | -- | 13,915.12 | 2,352.45 | 14,312.8 | 0 | 1,954.77 | 0.35% | 2,250.29 | |||
| Capital source | Self-owned fund | ||||||||||||
| Lawsuit (if any) | None | ||||||||||||
| Disclosure date of derivative investment approval by the Board of Directors | Saturday, October 30, 2021 | ||||||||||||
| Disclosure date of derivative investment approval by the shareholders’ meeting | Inapplicable | ||||||||||||
| Risk analysis and control measures for the derivative holding in the report period (including without limitation market, liquidity, credit, operation and | The Company's aluminum futures hedging and foreign exchange derivatives trading business are all derivatives investment business. The Company has established and implemented the "Derivatives Investment Business Management Measures" and "Commodity Futures Hedging Business Internal Control and Risk Management System". It has made clear regulations on the approval authority, business management, risk | ||||||||||||
| legal risks) | management, information disclosure and file management of derivatives trading business, which can effectively control the risk of the Company's derivatives holding positions. |
| 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 compared to last period | None |
| 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.
VII. 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
VIII. 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
| Company | Type | Main business | Registered capital | Total assets | Net assets | Turnover | Operation profit | Net profit |
| Fangda Property | Subsidiaries | Real estate | 200,000,000.00 | 5,923,715,031.83 | 2,483,697,423.98 | 234,263,889.22 | 36,782,934.30 | 26,324,703.96 |
| Fangda | Subsidiaries | Curtain wall | 500,000,000. | 3,935,886,86 | 1,220,709,35 | 2,276,548,34 | 141,026,573. | 127,913,366. |
| Jianke | system and materials | 00 | 9.87 | 7.74 | 8.13 | 90 | 34 | |
| Fangda Zhichuang | Subsidiaries | Subway screen door and service | 105,000,000.00 | 809,238,393.41 | 258,063,936.24 | 533,910,384.84 | 85,511,234.22 | 83,616,668.62 |
| Kechuangyuan Software | Subsidiaries | Subway screen door and service | 5,000,000.00 | 64,555,347.84 | 47,710,965.76 | 47,635,181.38 | 45,142,603.90 | 38,815,162.69 |
| Jiangxi Property Development | Subsidiaries | Real estate | 100,000,000.00 | 644,743,678.97 | 195,677,861.24 | 92,987,001.20 | 35,372,969.80 | 24,033,884.92 |
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 |
| Fangda Zhichuang Technology (Singapore) Co., Ltd. | Newly set | None |
| Fangda Zhichuang Technology (Wuhan) Co., Ltd. | Newly set | None |
| Fangda Zhichuang Technology (Nanchang) Co., Ltd. | Newly set | None |
| Fangda Zhichuang Technology (Dongguan) Co., Ltd. | Newly set | None |
| Shenzhen Yunzhu Industrial Co., Ltd. | Consolidation of entities under common control | None |
| Shenzhen Yunzhu Testing Technology Co., Ltd. | Consolidation of entities under common control | None |
Major joint-stock companiesNoneIX. Structural entities controlled by the Company
□ Applicable √ Inapplicable
X. Future Prospect
(1) Competition map and development trend
1. Smart curtain wall and material system industry
In the context of carbon peak and carbon neutralization, China is accelerating the formation of an industrialstructure, mode of production, lifestyle and spatial pattern that saves resources and protects the environment,and unswervingly follows the high-quality development path of ecological priority, green and low-carbon. Green
buildings meet the requirements of energy conservation, environmental protection and carbon reduction, which is the general trend.Prefabricated building curtain wall and photovoltaic building integration (BIPV) are expected to usher in new developmentopportunities. At the same time, with the rapid growth of China's economy, China takes promoting new infrastructureas an important part of expanding investment space and constructing a new development pattern. New urbanization,one belt, one road construction, and the construction of Guangdong, Hong Kong and Macau will become the important driving forceand precious opportunity for the future development of smart curtain wall system and material industry.
2. Rail transport screen door business
From the perspective of the global urban rail transit industry, the construction of urban rail transit inemerging countries and regions is in the ascendant, while the rail transit systems of major cities in developedcountries are constantly being updated and upgraded. From the perspective of domestic urban rail transit industry,in recent years, the urbanization development strategy at the national level has also continuously injected powerinto the urban rail transit industry. Some large cities have successively built a number of rail transit projects,which has significantly improved the urban traffic situation and played an important role in giving full playto urban functions, improving the environment and promoting economic and social development. The 14th Five YearPlan for National Economic and Social Development of the People's Republic of China and the Outline of Long-Term Objectives for2035, the Outline for the Construction of a Powerful Transportation Country and the Development Plan of Modern ComprehensiveTransportation System in the 14th Five Year Plan clearly put forward "Accelerating the Rail Transit Network in UrbanAgglomerations and Metropolitan Areas". As one of the "new infrastructure", urban rail transit will receive key national support.According to the forecast data of 2021 China Urban Rail Transit Market Development Report, 101 rail transit lines in 34 cities suchas Hangzhou, Shenzhen, Guangzhou, Zhengzhou and Beijing will be newly opened and operated in 2022-2023, with a total mileageof 2175.63 kilometers, 1243 stations and a total investment of RMB1,549.64 billion.
3. New energy industry
In 2021, relevant national departments successively issued relevant policy documents such as the guiding opinions onaccelerating the establishment and improvement of a green and low-carbon circular development economic system, the guidingopinions on energy work in 2021, and the notice on submitting the pilot scheme for the development of roof distributed photovoltaicin the whole county (city, district), etc. With the introduction of national policies, provincial energy and new energyplans have been issued one after another, including photovoltaic subsidies, bidding for Internet access, projectplanning, industrial planning and many other contents, covering a wide range. During the "14th five-year plan" period,the development of photovoltaic power generation will enter a new stage of large-scale, high proportion, marketization andhigh-quality development. By accelerating the construction of a new power system with new energy as the main body and improvingthe consumption and storage capacity of photovoltaic power generation, we can not only realize the large-scale development ofphotovoltaic power generation, but also achieve a high level of consumption and utilization. The Company's photovoltaic powergeneration, as a green and environment-friendly power generation method, will give full play to its industrialadvantages, actively expand photovoltaic business and promote the high-quality development of new energy industryin the future.
4. Real estate
It is expected that in 2022, under the guidance of the general tone of "no speculation in housing", China's real estate market isexpected to have room for improvement in regulation and control policies. In the context of the continuous promotion of newurbanization, key resources such as population and land will accelerate the aggregation to urban agglomerationsand central cities. Regional differentiation will bring new development opportunities to Guangdong, Hong Kongand Macao Dawan district. The industry is mature, the population is attractive, the demand of the real estatemarket is strong, the integration of Shenzhen and Hong Kong is continuing, and the Shenzhen market still hasgreat potential in the future.
(2) Company development strategy and business plan
In 2022, the Company will be standing at a new starting point and will continue to concentrate on promoting the high-qualitydevelopment of the Company. Fully promote the two systems of high-tech industry and service industry, seek development ininnovation, and strive for Fangda to build a century old store.
(1) We will continue to develop high-tech industries. Focus on innovation, vigorously promote the upgrading of Companymanagement from informatization to digitization, and make full use of big data, 5g, Internet, robot and other modern technologies topromote the intelligent process of factories and construction sites; Make full use of BIM, AR, VR and other new technologies, newmaterials, new structures and new processes to promote the upgrading and iteration of high-tech products such as high-end curtainwall, PVDF aluminum veneer and rail transit PSD system, and expand the sales scale. At the same time, vigorously develop theperipheral products of the above industries, enrich the product structure and prevent the risks brought by a single product. Seize thestrategic opportunities of the times such as "carbon neutralization and carbon peak", develop photovoltaic building integration,photovoltaic power stations and other new energy industries, and comprehensively control risks. Adhere to the "eight modules" toreduce product costs, comprehensively improve the competitiveness of the company, further strengthen procurement, bidding andsupply chain management, continue to consolidate the leading position in the industry and strive to promote the leapfrogdevelopment of the Company.
(2) Promote the development of service industry. Software development, building maintenance and testing, businessmanagement and property management are the service industries formed by the Company in recent years. The Companywill innovate ideas, adhere to accurate service and reputation service, form a large characteristic service andbrand for promotion, and further expand the scale of the service industry, reduce energy consumption and operatingcosts, ensure safe service and enhance the competitiveness of the company's service industry.
(3) Capital demand and source for projects in progress
To realize the business target in 2022, 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
1. Risks of macro environment and policy changes
The Company's main business segments are closely related to macroeconomic and industrial policies and aregreatly affected by the overall macro environment. In recent years, domestic and international risk challengeshave increased significantly, and the downward pressure on economic growth has increased. If there are adversechanges in the international and domestic macroeconomic environment, slow economic development and reducedinvestment in fixed assets in the future, which will affect the demand of public building curtain wall industryand rail transit equipment industry, or face industry depression or excessive competition, which will have anadverse impact on the Company's future profitability, even project delay or suspension, deferred payment ofprojects under construction, etc., thus affecting the Company's operating performance.
In order to better cope with the opportunities and challenges brought by changes in the economic environmentand policies, the Company will pay close attention to the changes in the macroeconomic and policy situation athome and abroad, timely adjust the Company's business strategy, further enhance the product competitiveness andoperation and management ability, improve the market share, and deal with the risks brought by changes in themacro environment and policies.
2. Market competition risks
In the rail transit PSD market, the technology of other domestic manufacturers is becoming more and moremature, and the company may face the risk of intensified market competition. If the Company cannot maintain aleading position in the market, it will have a certain adverse impact on the development and benefits of theCompany's rail transit PSD business. In this regard, the Company will continue to adopt a stable business policy,improve the competitive advantage of products through technological innovation and fine management, accelerate
the return of funds, and improve the operation efficiency and market competitiveness of the Company.In this regard, the Company will continue to adopt a stable business policy, improve the competitive advantageof products through technological innovation and fine management, accelerate the return of funds, and improvethe operation efficiency and market competitiveness of the Company. While consolidating the domestic market,the Company will step up the efforts in exploring overseas markets, thus elevating our competitiveness in globalmarkets and improving our resistance to risks.
3. Production and operation risks
The macro-economy and market demand have added to the fluctuation in prices of main raw materials and labor,affecting the Company’s profitability and creating additional production and operation risks for the Company.
The Company will hedge and transfer the price fluctuation risk of some raw materials by using futures producthedging, negotiating with partners to supplement the contract amount, reasonably arranging material procurementplan and other measures; The Company implements a strict supplier management mechanism, actively improves thescientific and technological level of production management, increases technology research and development, iscommitted to process improvement, landing smart factories, improves the automation and intelligence of productionequipment, and reduces the loss of raw materials. The Company will continue to promote intelligent and informationconstruction system, widely apply new technologies and processes, strengthen staff skill training, and improvequality and efficiency on the basis of ensuring safety.
4. Management risks
In recent years, with the expansion of the Company's business scale and the increase of the number ofsubsidiaries, the daily management of the company is becoming more and more difficult, which may face themanagement risk of industrial scale expansion. In addition, in recent years, the regulatory requirements forlisted companies have been continuously improved and deepened. The Company needs to further strengthen management,continue to promote management reform, constantly optimize process and organizational structure, improve variousrules and regulations, and vigorously introduce high-quality, highly skilled and multidisciplinary technologyand management talents to improve the core competitiveness of the Company.
5. Uncertain risk of epidemic impact
The impact of COVID-19 on the global social economy is still continuing. The risk of repeated outbreak maybring uncertainty to the future business development of the Company. The Company will continue to strengthenepidemic prevention and control, strictly implement various epidemic prevention measures, and ensure the orderlyproduction and operation of the Company.XI. 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 |
| Thursday, March 25, 2021 | Research network platform appointment | Others | Individual | Investors participating in the Company's 2020 Performance Presentation | Business and future development | Investor Relationship Record Form on www.cninfo.com.cn |
| Tuesday, November 30, 2021 | http://rs.p5w.net/ | Others | Individual | Investors participating in the Company's collective reception day | Business and future development | https://rs.p5w.net/html/130758.shtml |
Chapter IV 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.
Any significant difference between the actual situation of corporate governance and the laws, administrative regulations and theprovisions on the governance of listed companies issued by the CSRC
□ Yes √ No
There is no significant difference between the actual situation of corporate governance and the laws, administrative regulations andthe provisions on the governance of listed companies issued by the CSRC.
2、 The independence of the Company relative to the controlling shareholders and actualcontrollers in ensuring the company's assets, personnel, finance, institutions, business, etc.
(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 equipment 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 investors | Date | Date of disclosure | Meeting resolution |
| 2020 Annual Shareholder Meeting | Annual shareholders’ meeting | 25.33% | Monday, April 12, 2021 | Tuesday, April 13, 2021 | The following proposals were considered and adopted: 1. 2020 work report of the Board of Directors; 2. 2020 work report of the Board of Supervisors; 3. Full text and summary of 2020 annual report; 4. 2020 financial final accounts report; 5. 2020 profit distribution plan; 6. Proposal on applying for credit and providing guarantee to banks and other financial institutions; 7. Proposal on hiring an audit institution in 2021; 8. Proposal on cancellation of B shares repurchased in 2020, reduction of registered capital and amendment of the articles of association. |
2. Shareholders of preference shares of which voting right resume convening an extraordinaryshareholders’ meeting
□ Applicable √ Inapplicable
5. Particulars about the Directors, Supervisors, and Senior Management
1. Profiles
| 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 | Stock option | Number of restricted shares granted (share) | 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 | Reasons |
| Xiong Jianming | Chairman, president | In office | M | 64 | Monday, November 20, 1995 | Monday, May 8, 2023 | 3,060,657 | 3,060,657 | ||||||
| Xiong Jianwei | Director | In office | M | 53 | Friday, April 16, 1999 | Monday, May 8, 2023 | ||||||||
| Zhou Zhigang | Director | In office | M | 59 | Monday, April 9, 2007 | Monday, May 8, 2023 | ||||||||
| Zhou Zhigang | Vice president | In office | M | 59 | Tuesday, April 11, 2017 | Monday, May 8, 2023 | ||||||||
| Lin Kebin | Director | In office | M | 44 | Tuesday, April 11, 2017 | Monday, May 8, 2023 | ||||||||
| Lin Kebin | Vice president | In office | M | 44 | Friday, June 6, 2008 | Monday, May 8, 2023 | ||||||||
| Guo Jinlong | Independent director | In office | M | 60 | Tuesday, April 11, 2017 | Monday, May 8, 2023 | ||||||||
| Huang Yaying | Independent director | In office | M | 59 | 8 May 2020 | Monday, May 8, 2023 |
| Cao Zhongxiong | Independent director | In office | M | 43 | 8 May 2020 | Monday, May 8, 2023 | ||||||||
| Dong Gelin | Supervisory Committee meeting convener | In office | M | 43 | Friday, December 28, 2018 | Monday, May 8, 2023 | ||||||||
| Cao Naisi | Supervisor | In office | F | 43 | Tuesday, April 11, 2017 | Monday, May 8, 2023 | ||||||||
| Fan Xiaodong | Supervisor | In office | M | 35 | 8 May 2020 | Monday, May 8, 2023 | 8,800 | 8,800 | ||||||
| Wei Yuexing | Vice president | In office | M | 53 | Friday, July 29, 2011 | Monday, May 8, 2023 | ||||||||
| Xiao Yangjian | Secretary of the Board | In office | M | 37 | Tuesday, June 23, 2020 | Monday, May 8, 2023 | ||||||||
| Total | -- | -- | -- | -- | -- | -- | 3,069,457 | 0 | 0 | 0 | 0 | 0 | 3,069,457 | -- |
During the reporting period, whether there was any resignation of directors and supervisors and dismissal of senior managers duringtheir term of office
□ Yes √ No
Changes in the Directors, Supervisors and Senior Executives
□ Applicable √ Inapplicable
2. Office Description
Professional background, work experience and main duties in the Company of existing directors, supervisors and senior management
1. Mr. Xiong Jianming: Ph.D. in business administration, senior engineer. He is currently the chairman and President of the companyand a deputy to the 13th National People's Congress. He was once employed by Jiangxi Provincial Machinery Design Academe,Administration Bureau of Shekou District of Shenzhen government, etc., deputy to the 10th People’s Congressof Guangdong Province, deputy to the 2nd, 3rd and 6th 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 the
board of directors.
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 currentlythe deputy to the sixth session of the People's Congress of Shenzhen, vice chairman of Guangdong Certified PublicAccountants Association (limited liability partnership), partner of ShineWing Certified Public Account, and anindependent director of the Company, Shenzhen Sanlipu Photoelectric Technology Co., Ltd. and Inner Mongolia FuruiMedical Technology Co., Ltd. He was a former member of the 5th CPPCC Shenzhen.
6. Mr. Huang YAYING: Master, Professor, part-time lawyer. He is currently a professor of Shenzhen University and anindependent director of the Company, Shenzhen BAOYING Construction Holding Group Co., Ltd., Shenzhen Lihe KechuangCo., Ltd., Shennan Circuit Co., Ltd. and Huafu Fashion Co., Ltd. He was once a professor of Northwest Universityof 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 enterprisestrategy. He is an independent director of the Company. He was once a technician of China National ChemicalCorporation Bluestar Cleaning Agent Co., Ltd. of China National Chemical Corporation.
8. Mr. Dong Gelin: Bachelor degree, senior engineer. He is currently the convener of the board of supervisors and the assistant to thepresident of the company. He was once a designer of Shenzhen Fangda Jianke, a wholly-owned subsidiary of the Company,chief engineer of the designing institution, assistant to the general manager, and general manager of Beijingbranch of Fangda Jianke. He is now the vice general manager 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 auditand supervision department, the deputy director of the human resources department, the general manager of FangdaJianke Beijing Branch, the general 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 managerof Fangda Jianke.
12. Mr. Xiao Yangjian: Bachelor degree. Now he is the Secretary of the board of directors of the Company. He once served asdeputy general manager and Secretary of the board of directors of Shenzhen Xiongtao Power Technology Co., Ltd.and deputy general manager and Secretary of the board of directors of Shenzhen Guangfeng Technology Co., Ltd.
Offices held at shareholders entities
√ 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 | Thursday, October 6, 2011 | No | |
| Wei Yuexing | Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise | Executive partner | Tuesday, December 20, | No |
| (limited partner) | 2016 | |||
| 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 | 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 | |
| Huang Yaying | Shennan Circuits Co., Ltd. | Independent director | Tuesday, April 6, 2021 | Yes | |
| Huang Yaying | Huafu Fashion Co., Ltd. | Independent director | Thursday, December 16, 2021 | Yes | |
| Cao Zhongxiong | General Development Research Institute (Shenzhen, China) | Executive director of New Economy Research Institute | Thursday, January 15, 2015 | Friday, December 31, 2021 | 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
III. 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 Committeeof the Board, and implemented upon approval of the Board and the Shareholders’ Meetings; the remuneration schemesfor executives are approved and implemented by the Board.Remuneration for directors and supervisors are decided by the shareholders’ meeting. Remunerations forexecutives are composed of wages 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 | 64 | In office | 224.70 | No |
| Xiong Jianwei | Director | M | 53 | In office | 116.63 | No |
| Zhou Zhigang | Director, vice president | M | 59 | In office | 90.39 | No |
| Lin Kebin | Director, vice president | M | 44 | In office | 114.26 | No |
| Guo Jinlong | Independent director | M | 60 | In office | 8 | No |
| Huang Yaying | Independent director | M | 59 | In office | 8 | No |
| Cao Zhongxiong | Independent director | M | 43 | In office | 8 | No |
| Dong Gelin | Supervisory Committee meeting convener | M | 43 | In office | 75.33 | No |
| Cao Naisi | Supervisor | F | 43 | In office | 62.66 | No |
| Fan Xiaodong | Supervisor | M | 35 | In office | 46.39 | No |
| Wei Yuexing | Vice president | M | 53 | In office | 114.26 | No |
| Xiao Yangjian | Secretary of the Board | M | 37 | In office | 77.78 | No |
| Total | -- | -- | -- | -- | 946.40 | -- |
VI. Performance of directors during the report period
1. Board of Directors in the reporting period
| Meeting | Date | Date of disclosure | Meeting resolution |
| 6th Meeting of the 9th Board of Directors | Friday, March 19, 2021 | Tuesday, March 23, 2021 | Deliberated and adopted: 1. 2020 president's work report; 2. 2020 work report of the board of directors; 3. Full text and summary of 2020 annual report; 4. 2020 annual financial statement report; 5. 2020 profit distribution plan; 6. Proposal on the self-evaluation report of internal control in 2020; 7. Proposal on applying for credit and providing guarantee to banks and other financial institutions; 8. Proposal on hiring an audit institution in 2021; 9. Feasibility analysis on carrying out foreign exchange derivatives trading business; 10. Proposal on carrying out foreign exchange derivatives trading business; 11. 2020 social responsibility report; 12. Proposal on the acquisition of equity and related party transactions by wholly-owned subsidiaries; 13. Proposal on cancellation of B shares repurchased in 2020, reduction of registered capital and amendment of the articles of Association; 14. Proposal on Revising the information disclosure management system; 15. Proposal on Amending the registration system for insiders of inside information; 16. Proposal on Revising the internal audit system; 17. Proposal on convening the 2020 annual general meeting of shareholders. |
| 7th meeting of the 9th Supervisory Committee | Monday, April 26, 2021 | Wednesday, April 28, 2021 | Reviewed the 2021 Q1 Report and Text; |
| 8th Meeting of the 9th Board of Directors | Friday, May 14, 2021 | Monday, May 17, 2021 | Deliberated and passed: 1. The proposal on Authorizing the company's management to start the planning of domestic listing of spin off holding subsidiaries; 2. Proposal on transferring part of the equity of the holding subsidiary; 3. Proposal on changing the use of some houses in Fangda building. |
| 9th Meeting of the 9th Board of Directors | Monday, August 16, 2021 | Wednesday, August 18, 2021 | Reviewed the Interim Report 2021 and the Summary. |
| 110th meeting of the 9th Board of Directors | Wednesday, September 29, 2021 | The proposal on changing the use of some houses of Nanchang Fangda Center project was deliberated and passed. (Note: this meeting did not meet the disclosure standard and need not be disclosed) | |
| 11th Meeting of Meeting of the 9th Board of Directors | Thursday, October 28, 2021 | Saturday, October 30, 2021 | Reviewed and approved: 1. The third quarter report of the Company in 2021; 2. Feasibility analysis on carrying out derivatives hedging business; 3. Proposal on developing derivatives hedging business; 4. Proposal on using some idle self owned funds for cash management. |
2. Directors’ presenting of board meetings and shareholders’ meetings in the report period
| Name of 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 |
| Xiong Jianming | 6 | 3 | 3 | 0 | 0 | No | 1 |
| Xiong Jianwei | 6 | 3 | 3 | 0 | 0 | No | 1 |
| Zhou Zhigang | 6 | 3 | 3 | 0 | 0 | No | 1 |
| Lin Kebin | 6 | 3 | 3 | 0 | 0 | No | 1 |
| Guo Jinlong | 6 | 3 | 3 | 0 | 0 | No | 1 |
| Huang Yaying | 6 | 3 | 3 | 0 | 0 | No | 1 |
| Cao Zhongxiong | 6 | 3 | 3 | 0 | 0 | No | 1 |
Statement for absence for two consecutive board meetingsNone
3. Objection raised by directors
Any objection raised by directors against the Company’s related issues
□ Yes √ No
Directors made no objection on related issued of the Company in the report period.
4. Other statement for performance of directors
Adoption of suggestion proposed by directors
√ Yes □ No
Statement for suggestion adopted or not by the CompanyThe directors of the Company shall perform their duties in strict accordance with the provisions of the CompanyLaw, the Securities Law, the Guidelines for the Governance of Listed Companies, the Stock Listing Rules of ShenzhenStock Exchange, the Articles of Association and other laws and regulations and the Company's system. During thereporting period, the directors of the Company attended the meetings of the board of directors and the generalmeeting of shareholders, and expressed their views and in-depth discussions on various proposals submitted tothe board of directors for consideration, made suggestions for the healthy development of the Company, fullyconsidered the interests and demands of minority shareholders when making decisions, and effectively strengthenedthe feasibility of the decision-making of the board of directors. At the same time, the directors of the Company activelyparticipate in relevant training, improve their ability to perform their duties, actively pay attention to the company's operation andmanagement information, financial status and major events, and promote the sustainable, stable and healthy development of theCompany's production and operation. The independent directors are diligent and conscientious, carefully deliberatingvarious proposals of the board of directors of the Company, and expressing independent opinions on the improvementof the Company's system, major operation and management matters, company guarantee, profit distribution and otherrelated matters. The relevant suggestions of the independent directors to the Company have been adopted by thecompany, which has played a positive role in safeguarding the interests of the Company and minority shareholders.
VII. Special committees under the board of directors during the reporting period
| Committee name | Membership | Number of meetings held | Date | Meeting content | Important opinions and suggestions put forward | Other performance of duties | Details of objections (if any) |
| Development Strategy Committee | Xiong Jianming, Cao Zhongxiong, Lin kebing, Zhou Zhigang | 2 | Friday, March 19, 2021 | Heard and considered: 1. Review of the Company's production and operation in 2020; 2. The Company's 2021 annual production and operation work plan. | After full communication and discussion, all proposals were unanimously passed. | ||
| Monday, August 16, 2021 | Listened to and reviewed the review of the Company's production and operation in the first half of 2021 and the main work in the second half of 2021; | After full communication and discussion, all proposals were unanimously passed. | |||||
| Audit Committee | Guo Jinlong, Huang Yaying, Lin kebing | 5 | Monday, March 15, 2021 | ||||
Listened to and reviewed thefinancial statements of theCompany in 2020 after thepreliminary opinions issued by theannual audit accountant
| The financial and accounting report of the Company for 2020 has been prepared in accordance with the new accounting standards for business enterprises and relevant financial regulations of the Company, which truly reflects the financial status of the Company as of December 31, 2020 and the operating results and cash flow in 2020. It is agreed to determine the final financial report for 2020 on this basis. | ||||
| Friday, March 19, 2021 | After listening to the financial work report and internal audit work report of 2020, the Company reviewed and approved: 1. The audited financial and accounting statements of 2020; 2. Proposal for the Company to hire an audit institution in 2021; 3. Feasibility analysis on carrying | After full communication and discussion, it was unanimously approved and agreed to submit all proposals to the board of directors of the company for deliberation. |
| out foreign exchange derivatives trading business; 4. Proposal on carrying out foreign exchange derivatives trading business; 5. The Company's internal audit work plan for 2021; 6. the Company's self-evaluation report on internal control in 2020. | |||||||
| Monday, April 26, 2021 | The financial statements of the Company for the first quarter of 2021 were reviewed and approved. | After full communication and discussion, the proposal was unanimously adopted and agreed to be submitted to the board of directors of the Company for deliberation. | |||||
| Monday, August 16, 2021 | The financial statements of the Company for the half year of 2021 were reviewed and approved. | After full communication and discussion, the proposal was unanimously adopted and agreed to be submitted to the board of directors of the Company for deliberation. | |||||
| Thursday, October 28, 2021 | Reviewed and approved: 1. Unaudited financial statements of the company for the third quarter of 2021; 2. Feasibility analysis on carrying out derivatives hedging business; 3. Proposal on developing derivatives hedging business; | After full communication and discussion, it was unanimously approved and agreed to submit all proposals to the board of directors of the company for deliberation. | |||||
| Remuneration and Assessment Committee | Huang Yaying, Cao Zhongxiong, Xiong Jianwei | 1 | Friday, March 19, 2021 | The proposal on the remuneration of directors and senior managers in 2020 was considered and adopted. | In 2020, the directors and senior managers of the Company have diligently and conscientiously completed the business objectives and other work tasks in 2020. The remuneration of directors and senior managers in 2020 is in line with the management plan of directors' allowance and senior managers' |
VIII. 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 2021
In 2021, the Supervisory Committee performed its duties and obligations in supervision and protect allshareholders’ and the Company’s interests in accordance with the Company Law, Share Listing Rules, Articlesof Association and Rules of the Procedure of the Supervisory Committee. The 2021 supervisory committee's workplan is as follows:
1. Opinions
(1) Legal compliance
In 2021, the Board of Supervisors of the Company supervised the operation of the Company in accordance withthe law. In the report period, the Company has been operated in accordance with law. The convening of meetingof the Board and the decision-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. Noviolation against law, regulations, Articles of Association and interests of the Company and shareholders wasdiscovered.
(2) Financial condition
In 2021, the Board of Supervisors supervised the financial affairs of the Company. The accounting managementhas been compliant with the Accounting Law, Enterprise Accounting Standard. No false, misleading statement orsignificant omission was found in financial statements. The financial reports of the Company reflect theCompany’s financial position, operation performance, cash flows and major risks truthfully, accurately andcompletely. The CPA has issued the standard auditor's report in 2021, 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 andmeets the Company's management and development requirements. It can ensure the truthfulness, lawfulness,completeness of the financial materials and ensure the safety and completeness of the Company’s property. In2021, the company did not violate the securities law, the standards for the governance of listed companies, the self regulatoryguidelines for listed companies of Shenzhen Stock Exchange No. 1 - standardized operation of listed companies on the main boardand the Company's internal control system. The 2021 Internal Control Self-evaluation Report truthfully and objectivelyreflects the establishment, implementation and improvement of the Company’s internal control system. There areno significant or important problems in the financial and non-financial reports in the report period.
(4) Associated Transactions
The Board of Supervisors held that the related transactions of the Company were carried out in strictaccordance with the related transaction rules and agreements, in line with the principle of fairness andrationality, and did not damage the interests of the Company and shareholders.
(5) Fulfillment of social responsibilities
In 2021, the Company has made due contributions to economic development and environmental protection, activelyparticipated in public welfare and charity, conscientiously fulfilled its due social responsibility, andsafeguarded the interests of shareholders, customers and employees.
2. Meetings and resolutions of the supervisory meeting in the report period
Four meetings were held in 2021, all of which are on-site meetings. All proposals were approved and disclosedas required:
remuneration of theCompany.No.
| No. | Meeting | Date | Convening method | Topic |
| 1 | 4th meeting of the 9th Supervisory Committee | Friday, March 19, 2021 | On-site | 1. Reviewing the Company's 2020 Supervisory Committee’s Work Report;?2. Reviewing the Company's 2020 Annual Report and Summary?3. Reviewing the Company's 2020 Financial Settlement Report;?4. Reviewing the Company's Proposal of Profit Distribution in 2020;?5. Reviewing the Company's Proposal of Engaging Auditor for 2021;?6. Reviewing the Company's 2020 Internal Control Self-evaluation Report; |
| 2 | 5th meeting of the 9th Supervisory Committee | Monday, April 26, 2021 | On-site | 2021 Q1 Report and Text; |
| 3 | 6th meeting of the 9th Supervisory Committee | Monday, August 16, 2021 | On-site | 2021 Interim Report and the Summary of the Company |
| 4 | 7th meeting of the 9th Supervisory Committee | Thursday, October 28, 2021 | On-site | Proposal regarding the Company's 2021 Q3 Report |
(III) The Supervisory Committee's Work Report 2022In 2022, the Supervisory Committee of the Company will closely focus on the overall business objectives ofthe Company, actively perform the supervision function of the Supervisory Committee and supervise the standardizedoperation of the Company in accordance with the Company Law and other laws and regulations, the articles ofassociation and the rules of procedure of the Supervisory Committee; at the same time, it will continuouslystrengthen its professional quality, strive to improve its professional ability and performance level; andstrengthen the supervision of major projects and related parties of the Company, pay attention to the Company'srisk management and internal control system construction, ensure that the Company implements effective internalcontrol measures, and further promote the Company's standardized operation.IX. Employees
1. Staff number, professional composition and education
| Staff number of the parent at the end of the reporting period | 63 |
| Number of on-the-job employees of major subsidiaries at the end of the reporting period (person) | 2,331 |
| Total number of active employees at the end of the reporting period (person) | 2,959 |
| Number of employees receiving remuneration in the period | 2,959 |
| 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 | 1,433 |
| Sales & Marketing | 85 |
| Technicians | 1,170 |
| Finance & Accounting | 78 |
| Administration | 193 |
| Total | 2,959 |
| Education | |
| Categories of education | Number of people |
| High school or below | 1,459 |
| College diploma | 560 |
| Bachelor | 913 |
| Master’s degree | 25 |
| Doctor’s degree | 2 |
| Total | 2,959 |
2. Remuneration policy
Staff remuneration policy: The Company’s staff remuneration comprises post wage, performance wage, allowanceand annual bonus. The Company has set up an economic responsibility assessment system according to the annualoperation target and responsibility indicators for all departments. The performance wage is determined by theeconomic indicators, management indicators, optimization indicators and internal control. The annual bonus isdetermined by the Company's annual profit and fulfillment of targets set for various departments. The staffremuneration and welfare will be adjusted according to the Company’s business operation and changes in the localstandard of living and price index.
3. Training program
Staff training plan: The Company has paid continuous attention to training and development of the staff andintroduces innovative learning as part of the long-term strategy. We provide training programs through differentchannels and in different fields for different employees will help them fulfill their works, including new stafftraining, on-the-job training, operation and management training programs. These programs have largely elevatedcapabilities of the staff and underpin the success of the Company.
4. Labor outsourcing
√ Applicable □ Inapplicable
| Total number of hours of labor outsourcing | 14,995,732.36 |
| Total remuneration paid for labor outsourcing (RMB) | 535,066,113.25 |
X. Profit distribution of the Company and conversion of capital reserve into share capital
Establishment, implementation or adjustment of profit distribution policies especially the cash dividend policy during the reportperiod
√ Applicable □ Inapplicable
According to the deliberation and approval of the Company's 2020 annual general meeting of shareholders,no cash dividend, bonus shares, capital reserve is not transferred to share capital in 2020, and undistributedprofits are carried forward to the next year. The reason why there is no profit distribution in 2020 is thataccording to the development needs of the Company, the undistributed profits in 2020 will be used for the operationand development of the Company. 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 annualnet profit attributable to the shareholders of the listed company in recent three years. There is no significantdifference between the cash dividend of the Company and the average of the listed companies in the industry.
| 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 |
The company made profits during the reporting period and the profit available to shareholders of the parent company was positive,but no cash dividend distribution plan was proposed
□ Applicable √ Inapplicable
Profit Distribution and Reserve Capitalization in the Report Period
√ Applicable □ Inapplicable
| Bonus shares for every ten shares | 0 |
| Cash dividend for every ten shares (yuan, tax-included) | 0.50 |
| A total number of shares as the distribution basis | 1,073,874,227 |
| Cash dividend (including tax) | 53,693,711.35 |
| Cash dividend paid in other manners (such as repurchase of shares) | 0.00 |
| Total cash dividend (including other manners) | 53,693,711.35 |
| Distributable profit (yuan) | 1,290,879,760.71 |
| Proportion of cash dividend in the distributable profit (including other manners) | 100% |
| Cash dividend |
| The Company is in a fast growth stage. Therefore, the cash dividend will reach 20% of the profit distribution at least. |
| Details of profit distribution or reserve capitalization plan |
| The profit distribution plan for 2021 approved by the board of directors of the Company is: The Company plans to distribute cash dividends of RMB0.50 (tax included) for every 10 shares to all shareholders based on the total share capital of 1,073,874,227 shares on December 31, 2021, with a total cash distribution of RMB53,693,711.35. No dividend shares or capitalization share was issued in the year. After the announcement of the Company’s profit distribution plan to the time of implementation, if the total share capital changes, in accordance with the principle of ―distributing cash dividends of RMB 0.50 (tax included) for every 10 shares‖, the total share capital after the market closes on the equity registration date when the profit distribution plan is implemented shall be used. The total amount of cash dividends will be disclosed in the Company's profit distribution implementation announcement. |
XI. Share incentive schemes, staff shareholding program or other incentive plans
□ Applicable √ Inapplicable
There are no share incentive schemes, staff shareholding program or other incentive plans in the report periodXII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control
The Company has established and improved the Company's internal control system in accordance with the provisionsof the basic norms of enterprise internal control and its supporting guidelines and other internal controlsupervision requirements, combined with the actual situation of the Company, and has been effectively implemented.The audit committee and the internal audit department jointly form the Company's risk internal control managementorganization system to supervise and evaluate the Company's internal control management, The Company'sself-evaluation report on internal control in 2021 comprehensively, truly and accurately reflects the actualsituation of the company's internal control. During the reporting period, the Company has no major defects andimportant defects in internal control.
2. Major problems in internal control discovered in the report period
□ Yes √ No
XIII. Management and control of subsidiaries during the reporting period
| Company | Integration plan | Integration progress | Problems encountered in integration | Solutions taken | Solution progress | Follow up solution plan |
| Yunzhu | Integrate and standardize the organizational structure, internal control system, financial system and information disclosure of subsidiaries in accordance | Completed | None | Inapplicable | Inapplicable | Inapplicable |
XIV. Internal control self-evaluation report or internal control audit report
1. Internal control self-evaluation report
with relevant laws and regulations and the articles ofassociation.Date of disclosure of the internal controlevaluation report
| Date of disclosure of the internal control evaluation report | Wednesday, March 30, 2022 | |
| 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 | 91.35% | |
| Percentage of operation income in the evaluation scope in the total operation income in the consolidated financial statements | 92.18% | |
| 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 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 | 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 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 |
| implemented for accounts of irregular or special transactions 3. Other problems are considered normal problems. | 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 | |
2. 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 Friday, December 31, 2021. | |
| Disclosure of internal auditor’s report | Disclosed |
| Date of disclosure of the internal control audit report | Wednesday, March 30, 2022 |
| 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
XV. Rectification of problems in self inspection of special actions for governance of listedcompaniesNone
Chapter V Environmental and social responsibility
1. Major environmental problem
Whether the Company and its subsidiaries are key polluting companies disclosed by the environmental protection authority
□ Yes √ No
Administrative penalties for environmental problems during the reporting period
| Company or subsidiary | Reason | Violations | Punishment result | Impact on the production and operation of listed companies | Rectification measures of the Company |
| None | None | None | None | None | None |
Refer to other environmental information disclosed by key pollutant discharge unitsDuring the reporting period, the listed company and its subsidiaries were not key pollutant discharge unitsannounced by the environmental protection department, and there were no administrative penalties forenvironmental problems.
Measures and effects taken to reduce carbon emissions during the reporting period
√ Applicable □ Inapplicable
The Company pays attention to global climate change and actively explores the path of environmentalfriendliness and enterprise development. Since its inception, the Company has been accompanied by a sense ofmission of green environmental protection. The Company's smart curtain wall, photovoltaic building integration(BIPV) project, rail transit PSD system, solar photovoltaic power station and other industries have environmentalprotection genes. Combined with the characteristics of the industry, the Company integrates the concept ofenvironmental protection into technological innovation, successively develops national and provincial keyenvironmental protection new products such as ventilated and photovoltaic curtain walls, nano self-cleaning andfireproof honeycomb aluminum composite plates, and takes the lead in developing the subway PSD system withindependent intellectual property rights in China. The Company's "full height open platform screen door of railtransit" technology has reduced the energy consumption of air conditioning and ventilation system by more than20%, and the products of double-layer breathing curtain wall system save energy by more than 30% compared withthe traditional curtain wall. The annual emission reduction of solar photovoltaic power station in new energyindustry is equivalent to the amount of carbon dioxide absorbed by more than 100 hectares of forest, which hascontributed to the realization of the goal of "carbon peak and carbon neutralization".
The Company has established an environmental management system, and many subordinate companies have passedthe ISO14001 environmental system certification. In their daily production and operation, they seriouslyimplement the environmental protection laws and regulations such as the environmental protection law of thePeople's Republic of China, the water pollution prevention and control law of the People's Republic of China,the air pollution prevention and control law of the People's Republic of China, and the solid waste pollutionprevention and control law of the People's Republic of China. In 2021, the Company and its subsidiaries are notamong the key pollutant discharge units announced by the environmental protection department.
The Company advocates energy conservation and emission reduction, safety and environmental protection, andadheres to the comprehensive implementation of "green environmental protection" measures from the aspects ofinfrastructure construction, waste water treatment, lighting and greening of office areas, so as to create agood, green and healthy office environment. The Company advocates green office, reduces the standby energyconsumption of air conditioners, computers and other electrical equipment, and reasonably sets the airconditioning temperature in the office area to save energy. At the same time, the Company has established acombination of electronic, networked and remote office mode, promoted "paperless office" by improving OA systemand ERP system, and actively used video conference and teleconference to replace on-site meetings, so as to improvework efficiency and reduce various costs of on-site meetings.
Reasons for non-disclosure of other environmental informationNone
2. Social responsibilities
Over the past 30 years since its establishment, the Company has adhered to its original mission and actively fulfilled its socialresponsibility while creating enterprise value. The Company has earnestly performed social responsibilities in regulating governanceand operation, protecting the rights and interests of shareholders and creditors, safe production, environmental protection, energyconservation and emission reduction, protecting the rights and interests of employees, protecting the rights and interests of suppliers,customers and consumers, public relations and social public welfare undertakings. See cninfo.com for detailshttp://www.cninfo.com.cn for the 2021 social responsibility report of China Fangda Group Co., Ltd.
3. Consolidate and expand the achievements of poverty alleviation and rural revitalization
Over the past 30 years since its establishment, while creating enterprise value, the Company has adheredto its original mission, actively fulfilled its social responsibility, gave full play to the advantages ofenterprise assistance, contributed a lot to the overall victory of China's anti-poverty campaign in 2020, anddemonstrated a high degree of family and country feelings and responsibility. The Company actively participatedin various public welfare activities, involving public welfare, anti SARS, funding for rural health care, disasterrelief, environmental protection, precision poverty alleviation, prevention and control against COVID-19 andmany other aspects. During the reporting period, the Company spent a total of RMB3.3792 yuan on social welfareundertakings, including RMB3 million donated to the education development foundation of Nanchang University forthe construction, transformation and upgrading of the library of Nanchang University. At the same time, the Companyactively responded to the national call to consolidate the achievements of poverty alleviation and help ruralrevitalization, and donated RMB100,000 yuan to Nanshan District Charity Society of Shenzhen for povertyalleviation activities in Guangdong Province; RMB269,200 was invested to build a new plastic runway, parkingshed, teaching equipment and improve educational facilities and equipment in Nanchang Fangda Hope Primary School.In July 2021, Zhengzhou suffered a severe rainstorm, and the subway line was flooded. The subsidiary Fangda Zhiyuanset up a flood fighting and rescue commando overnight, fought day and night, and made great efforts to restorethe normal operation of Zhengzhou subway.
In the future, on the way of realizing the dream of becoming a powerful country, the Company will activelyassume social responsibility, be a good corporate citizen, actively help rural revitalization, carry out publicwelfare actions in rural development, education, health and other dimensions, help consolidate the achievements
of poverty eradication, and make new contributions to comprehensively promoting the cause of rural revitalization.
Chapter VI Significant Events
I. 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
II. Non-operating capital use by the controlling shareholder or related parties in the reportingterm
□ Applicable √ Inapplicable
The controlling shareholder and its affiliates occupied no capital for non-operating purpose of the Company during the report period.III. Incompliant external guarantee
□ Applicable √ Inapplicable
The Company made no incompliant external guarantee in the report period.IV. Description of the board of directors on the latest "non-standard audit report"
□ Applicable √ Inapplicable
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. Description of changes in accounting policies, accounting estimates or correction of majoraccounting errors compared with the financial report of the previous year
√ Applicable □ Inapplicable
1. Changes in important accounting policies
(1) Implementation of new lease guidelines
On December 7, 2018, the Ministry of Finance issued the accounting standards for Business Enterprises No.21 - leasing (hereinafter referred to as the "new leasing standards"). The Company has implemented the new leasingstandards since January 1, 2021 and adjusted the relevant contents of accounting policies. See Chapter X, V.Changes in important accounting policies and accounting estimates in 35. Changes in important accounting policiesand accounting estimates.For contracts existing before the first execution date, the Company chooses not to re-evaluate whetherthey are leases or include leases on the first execution date.For contracts signed or changed after the first execution date, the Company evaluates whether the contractis a lease or includes a lease according to the definition of lease in the new lease standards.Due to the implementation of the new lease standards, the consolidated financial statements of the Companyadjusted the use right assets of RMB5,844,154.69 and lease liabilities of RMB5,844,154.69 on January 1, 2021accordingly. Relevant adjustments have no impact on shareholders' equity in the Company's consolidated financialstatements. Due to the implementation of the new lease standard, there is no impact on the financial statementsof the parent company of the Company.
(2) Implement the interpretation of accounting standards for Business Enterprises No. 14On January 26, 2021, the Ministry of Finance issued the interpretation of accounting standards for BusinessEnterprises No. 14 (CAI Kuai [2021] No. 1) (hereinafter referred to as "Interpretation No. 14"), which shallcome into force as of the date of promulgation. The Company implemented Interpretation No. 14 on January 26,2021. Explanation No. 14 has no significant impact on the Company.
(3) Implement the provisions of "relevant presentation of centralized fund management" in the interpretationof accounting standards for Business Enterprises No. 15On December 30, 2021, the Ministry of Finance issued the interpretation of accounting standards for BusinessEnterprises No. 15 (CAI Kuai [2021] No. 35) (hereinafter referred to as "Interpretation No. 15"), in which thecontent of "relevant presentation of centralized fund management" shall be implemented from the date ofpromulgation, and the Company shall implement the provision from December 30, 2021, which has no significantimpact on the Company.VII. Statement of change in the financial statement consolidation scope compared with theprevious financial report
√ Applicable □ Inapplicable
There are 6 newly added companies within the scope of merger of the Company in this period, including 4 newlyadded companies in the way of establishment: Fangda Zhichuang Technology Singapore Company, Fangda ZhichuangTechnology Wuhan Company, Fangda Zhichuang Technology Nanchang Company and Fangda Zhichuang Technology DongguanCompany; two new companies were added to the business merger under the same control: Shenzhen Yunzhu IndustrialCo., Ltd. and Shenzhen Yunzhu Testing Technology Co., Ltd.VIII. Engaging and dismissing of CPACPA 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 | 3 |
| Name of certified accountants of the domestic public accountants | Xie Peiren, Zeng Hui, Hu Gaosheng |
| Consecutive years of service by the domestic public accountants | Xie Peiren provided audit services for 2 years, Zeng Hui for 4 years and Hu Gaosheng for 2 years from 2016 to 2017. |
| 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 statementand internal control auditing CPA with a fee of RMB1.5 million.
IX. Delisting after disclosure of annual report
□ Applicable √ Inapplicable
X. Bankruptcy and capital reorganizing
□ Applicable √ Inapplicable
The Company has no bankruptcy or reorganization events in the report period.XI. Significant lawsuit and arbitration
□ Applicable √ Inapplicable
The Company has no significant lawsuit or arbitration affair in the report period.
XII. Punishment and rectification
□ Applicable √ Inapplicable
The Company received no penalty and made no correction in the report period.
XIII. Credibility of the Company, controlling shareholder and actual controller
√ Applicable □ Inapplicable
The Company and its controlling shareholders and actual controllers do not fail to perform the effective judgment of the court, andthe debts with a large amount are not paid off when due.XIV. 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. Transactions with related financial companies
□ Applicable √ Inapplicable
There is no deposit, loan, credit or other financial business between the company and the related financial company.
6. Transactions between financial companies controlled by the company and related parties
□ Applicable √ Inapplicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the company and its relatedparties.
7. Other major related transactions
□ Applicable √ Inapplicable
The Company has no other significant related transaction in the report period.
XV. 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
In RMB10,000
| External guarantees made by the Company and subsidiaries (exclude those made for subsidiaries) | ||||||||||
| Guarantee provided to | Date of disclosure | Guarantee amount | Actual date | Actual amount of guarantee | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term | Completed or not | Related party |
| None | ||||||||||
| Guarantee provided to subsidiaries | ||||||||||
| Guarantee provided to | Date of disclosure | Guarantee amount | Actual date | Actual amount of guarantee | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term | Completed or not | Related party |
| Fangda Jianke | Tuesday, March 23, 2021 | 50,000 | Tuesday, July 27, 2021 | 49,331.87 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | Saturday, April 18, | 30,000 | Wednesday, March 17, | 21,679.8 | Joint liability | No | None | since engage of | No | Yes |
| 2020 | 2021 | contract to 3 years upon due of debt | ||||||||
| Fangda Jianke | Saturday, April 18, 2020 | 30,000 | Friday, January 29, 2021 | 10,739.27 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | Tuesday, March 23, 2021 | 40,000 | Sunday, September 5, 2021 | 14,266.23 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | Tuesday, March 23, 2021 | 30,000 | Wednesday, August 18, 2021 | 25,675.7 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | Tuesday, March 23, 2021 | 25,000 | Wednesday, November 17, 2021 | 33,228.97 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | Wednesday, January 30, 2019 | 15,000 | Wednesday, March 18, 2020 | 10,000 | Joint liability | No | None | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Jianke | Tuesday, March 23, 2021 | 48,000 | Friday, December 17, 2021 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes | |
| Fangda Jianke and | Wednesday, January 30, | 14,000 | Wednesday, December | 8,070.82 | Joint liability | No | None | since engage of | No | Yes |
| Fangda Zhichuang | 2019 | 18, 2019 | contract to 3 years upon due of debt | |||||||
| Fangda Zhiyuan | Tuesday, March 23, 2021 | 40,000 | Wednesday, July 7, 2021 | 12,837.07 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhiyuan | Tuesday, March 23, 2021 | 15,000 | Wednesday, March 31, 2021 | 3,076.4 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhiyuan | Saturday, April 18, 2020 | 20,000 | Friday, January 29, 2021 | 2,774.26 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhiyuan | Tuesday, March 23, 2021 | 15,000 | Tuesday, September 28, 2021 | 5,399.67 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhiyuan | Wednesday, January 30, 2019 | 10,000 | Wednesday, March 18, 2020 | Joint liability | No | None | since engage of contract to 2 years upon due of debt | No | Yes | |
| Fangda Zhiyuan | Tuesday, March 23, 2021 | 5,000 | Thursday, August 12, 2021 | 5,000 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Kechuangyuan | Tuesday, March 23, | 1,000 | Thursday, September | 1,000 | Joint liability | No | None | since engage of | No | Yes |
| Software | 2021 | 30, 2021 | contract to 3 years upon due of debt | |||||||
| Fangda Jiangxi New Material | Tuesday, March 23, 2021 | 6,500 | Friday, July 30, 2021 | 2,631.04 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jiangxi New Material | Tuesday, March 23, 2021 | 10,000 | Wednesday, May 26, 2021 | 2,837.44 | Joint liability | No | None | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Property | Wednesday, December 4, 2019 | 135,000 | 25 February 2020 | 93,000 | Joint liability | No | None | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Property | Saturday, April 18, 2020 | 47,000 | Wednesday, December 16, 2020 | 46,700 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhijian | Tuesday, March 23, 2021 | 3,500 | Thursday, June 3, 2021 | 2,538.13 | Joint liability | No | None | since engage of contract to 3 years upon due of debt | No | Yes |
| Total of guarantee to subsidiaries approved in the report term (B1) | 369,000 | Total of guarantee to subsidiaries actually occurred in the report term (B2) | 426,509.21 | |||||||
| Total of guarantee to subsidiaries approved as of the report term (B3) | 590,000 | Total of balance of guarantee actually provided to the subsidiaries as of end of | 350,786.67 | |||||||
| report term (B4) | |||||||||||
| Guarantee provided to subsidiaries | |||||||||||
| Guarantee provided to | Date of disclosure | Guarantee amount | Actual date | Actual amount of guarantee | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term | Completed or not | Related party | |
| None | |||||||||||
| Total of guarantee to subsidiaries approved in the report term (C1) | 0 | Total of guarantee to subsidiaries actually occurred in the report term (C2) | 0 | ||||||||
| Total of guarantee provided by the Company (total of the above three) | |||||||||||
| Total of guarantee approved in the report term (A1+B1+C1) | 369,000 | Total of guarantee occurred in the report term (A2+B2+C2) | 426,509.21 | ||||||||
| Total of guarantee approved as of end of report term (A3+B3+C3) | 590,000 | Total of guarantee occurred as of the end of report term (A4+B4+C4) | 350,786.67 | ||||||||
| Percentage of the total guarantee occurred (A4+B4+C4) on net asset of the Company | 63.50% | ||||||||||
| 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) | 0 | ||||||||||
| Amount of guarantee over 50% of the net asset (F) | 74,584.68 | ||||||||||
| Total of the above 3 (D+E+F) | 74,584.68 | ||||||||||
| For the unexpired guarantee contract, the guarantee liability has occurred during the reporting period or there is evidence that it is possible to bear joint and several repayment liability (if any) | None | ||||||||||
| Statement of external guarantees violating the procedure (if any) | None | ||||||||||
Note of compound guaranteeNone
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 | Accrued impairment amount of overdue unrecovered financial management |
| Bank financial products | Self-owned fund | 78,468.29 | 2,513.52 | 0 | 0 |
| Total | 78,468.29 | 2,513.52 | 0 | 0 | |
Details of high-risk entrusted financial management with significant single amount or low security and poor liquidity
□ Applicable √ Inapplicable
Entrusted financial management expected to fail to recover the principal or likely result in impairment
□ Applicable √ Inapplicable
(2) Trusted loans
□ Applicable √ Inapplicable
The Company borrowed no trust loan in the report period.
4. Other significant contract
□ Applicable √ Inapplicable
The Company entered into no other significant contract in the report.XVI. Other material events
√ Applicable □ Inapplicable
1. From July 23, 2020 to September 22, 2020, the Company completed the repurchase of some domestic listedforeign shares (B shares) in 2020 through centralized bidding, and the cumulative number of B shares with unlimitedsales conditions was 14,404,724. On April 23, 2021, the Company completed the share repurchase cancellationprocedures in Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, and the B shareswith unlimited sales conditions were reduced by 14,404,724. The total share capital of the Company was reducedfrom 1,088,278,951 shares to 1,073,874,227 shares. The Company disclosed the Announcement on the Completion ofShare Repurchase Cancellation and Share Change on April 27, 2021.
2. The Company signed the investment framework agreement with the People's Government of Xiegang Town,Dongguan City, Guangdong Province on May 21, 2021. The Company plans to invest in the development of Fangda Bay
District Headquarters project in Xiegang Town, Dongguan City, Guangdong Province. The Company disclosed theannouncement on signing the project investment framework agreement on May 22, 2021 and communicated and negotiatedon specific matters. After careful consideration and comprehensive evaluation, based on commercial considerations,the Company decided not to promote the signing of formal agreements with Xiegang town government. Subsequently,the Company will continue to look for investment and construction sites to promote the sustainable and healthydevelopment of the company and enhance the comprehensive competitiveness of the Company.
3. According to the Company's development strategy and in combination with the development needs of the holdingsubsidiary Fangda Zhichuang Technology rail transit PSD system industry, the board of directors of the Companyagreed to plan the domestic listing of Fangda Zhichuang Technology, and authorized the Company and Fangda ZhichuangTechnology management to start the planning of the domestic listing of Fangda Zhichuang Technology. On May 14,2021, the company disclosed the suggestive announcement on Authorizing the management of the Company to startthe planning of domestic listing of spin off holding subsidiaries. As of the disclosure date of this report,Fangda Zhichuang Technology has completed the joint-stock transformation of the Company and has been renamed"Fangda Zhiyuan Technology Co., Ltd.". Other planning work for the spin off and listing continues to be promoted,and the company will timely fulfill its obligation of information disclosure according to the progress of theproject.
4. In order to promote the development of new energy photovoltaic industry, the Company signed the cooperation frameworkagreement on Wan'an Fangda photovoltaic building integration (BIPV) and distributed photovoltaic power generation project withthe People's Government of Wan'an County, Jiangxi Province, to develop photovoltaic building integration (BIPV) and distributedphotovoltaic power generation projects within the agreed scope of Wan'an county. On October 25, 2021, the Company disclosed theannouncement on signing the cooperation framework agreement on Wan'an Fangda photovoltaic building integration (BIPV) anddistributed photovoltaic power generation project. As of the disclosure date of this report, the Company is actively discussing thedetails of photovoltaic cooperation with relevant departments of Wan'an county government, implementing the framework agreementsigned with Wan'an County People's government, and actively carrying out photovoltaic industry business in other regions. TheCompany will timely perform the obligation of information disclosure in accordance with the requirements ofrelevant laws, regulations and normative documents.
The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the
Guidelines for the Self-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - IndustryInformation Disclosure.During the reporting period, the Company's relevant qualifications have not changed significantly, and thevalidity period has not expired.
| No. | Qualification | Valid period |
| 1 | Construction curtain wall designing class A | By Sunday, March 16, 2025 |
| 2 | Construction curtain wall contracting class A | By Saturday, December 31, 2022 |
| 3 | Construction mechanical and electric equipment installation contracting class A | By Tuesday, February 25, 2025 |
| 4 | Construction decoration contracting class | By Saturday, December 31, 2022 |
| B | ||
| 5 | Steel structure engineering contracting class B | By Saturday, December 31, 2022 |
| 6 | City and road lighting engineering contracting class C | By Saturday, December 31, 2022 |
| 7 | Design and construction of metal roof (wall) surface of building | By Friday, January 12, 2024 |
In the report period, the Company’s safety management is normal. The Company pays large attention toemployees’ safety awareness and capabilities of emergency processing. The Company has strengthened safetyproduction and investigation of safety risks. The Company has formulated safety management guidelines to guidesafety management. There were no significant safety accidents in the report period.XVII. Material events of subsidiaries
□ Applicable √ Inapplicable
Chapter VII Changes in Share Capital and ShareholdersI. 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 | 2,302,093 | 0.21% | 2,302,093 | 0.21% | |||||
| 1. State-owned shares | |||||||||
| 2. State-owned legal person shares | |||||||||
| 3. Other domestic shares | 2,302,093 | 0.21% | 2,302,093 | 0.21% | |||||
| Including: Shares held by domestic legal persons | |||||||||
| Domestic natural person shares | 2,302,093 | 0.21% | 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 | 1,085,976,858 | 99.79% | -14,404,724 | -14,404,724 | 1,071,572,134 | 99.79% | |||
| 1. Common shares in RMB | 677,413,379 | 62.25% | 677,413,379 | 63.08% | |||||
| 2. Foreign shares in domestic market | 408,563,479 | 37.54% | -14,404,724 | -14,404,724 | 394,158,755 | 36.71% | |||
| 3. Foreign shares in overseas market | |||||||||
| 4. Others | |||||||||
| III. Total of capital shares | 1,088,278,951 | 100.00% | -14,404,724 | -14,404,724 | 1,073,874,227 | 100.00% |
Reasons
√ Applicable □ Inapplicable
In order to protect the Company's value and shareholders' rights and interests, the Company repurchased some domestic listed foreignshares (B shares) by means of centralized competitive trading, and completed the share repurchase cancellation procedures inShenzhen Branch of China Securities Depository and Clearing Corporation Limited on April 23, 2021. The B shares of shares withunlimited conditions were reduced by 14,404,724, and the total share capital of the Company was reduced from 1,088,278,951 to1,073,874,227 shares.
Approval of the change
√ Applicable □ Inapplicable
The Company's repurchase of some domestic listed foreign shares (B shares) in 2020 was reviewed and approved at the secondmeeting of the ninth board of directors and the 2020 annual general meeting of shareholders held by the Company on June 23, 2020and April 12, 2021 respectively.
Share transfer
√ Applicable □ Inapplicable
The Company repurchased some 14,404,724 shares of domestically listed foreign shares (B shares) in 2020, and completed the sharerepurchase and cancellation procedures at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited onApril 23, 2021.
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
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 | 59,903 | Total number of ordinary share shareholders at the end of the month before the disclosure date of the annual report | 57,298 | 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 | Pledge, marking or freezing | |||||||
| Share status | Quantity | |||||||||||||
| Shenzhen Banglin Technologies Development Co., Ltd. | Domestic non-state legal person | 11.11% | 119,332,846 | 1,025,300 | 0 | 119,332,846 | ||||||||
| Shengjiu Investment Ltd. | Foreign legal person | 10.04% | 107,862,104 | 2,727,542 | 0 | 107,862,104 | ||||||||
| Fang Wei | Domestic natural person | 3.06% | 32,908,178 | 2,585,741 | 0 | 32,908,178 | ||||||||
| Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited | Domestic non-state legal person | 1.48% | 15,860,609 | 0 | 0 | 15,860,609 | ||||||||
| partner) | ||||||||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | Foreign legal person | 0.59% | 6,312,683 | 0 | 0 | 6,312,683 | ||
| VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND | Foreign legal person | 0.58% | 6,247,740 | 0 | 0 | 6,247,740 | ||
| Shenwan Hongyuan Securities (Hong Kong) Co., Ltd. | Foreign legal person | 0.54% | 5,781,300 | -2,596 | 0 | 5,781,300 | ||
| Qu Chunlin | Domestic natural person | 0.44% | 4,737,100 | -929,761 | 0 | 4,737,100 | ||
| First Shanghai Securities Limited | Foreign legal person | 0.37% | 3,938,704 | 0 | 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 | 0 | 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 | |||||||
| Special instructions on the existence of special repurchase account among the top 10 shareholders | 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. | 119,332,846 | RMB common shares | 119,332,846 |
| Shengjiu Investment Ltd. | 107,862,104 | Domestically listed foreign shares | 107,862,104 |
| Fang Wei | 32,908,178 | RMB common shares | 32,908,178 |
| 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. | 5,781,300 | Domestically listed foreign shares | 5,781,300 |
| Qu Chunlin | 4,737,100 | RMB common shares | 4,737,100 |
| 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 | Shanghai Yinye Investment Co., Ltd. - Yinye quantitative hedge phase 2 private securities investment fund holds 3,755,500 shares of the company through the customer credit transaction guarantee securities account of Xiangcai Securities Co., Ltd. | ||
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 | Thursday, June 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. The cumulative number of Pledged Shares of the Company's controlling shareholder or the largestshareholder and its concerted actors accounts for 80% of the Company's shares
□ Applicable √ Inapplicable
5. Other legal person shareholders with over 10% of total shares
□ Applicable √ Inapplicable
6. Conditional decrease of shareholding by controlling shareholder, actual controller, reorganizer andother entities
□ Applicable √ Inapplicable
IV. Specific implementation of share repurchase in the reporting periodProgress in the implementation of share repurchase
□ Applicable √ Inapplicable
Progress in the implementation of the reduction of shareholding shares by means of centralized bidding
□ Applicable √ Inapplicable
Chapter VIII Preferred Shares
□ Applicable √ Inapplicable
The Company had no preferred share in the report period.
Chapter IX Information about the Company’s Securities
□ Applicable √ Inapplicable
Chapter X Financial Statements
I. Auditor’s report
| Type | Standard opinion auditor’s report |
| Issued on | Monday, March 28, 2022 |
| Auditor | RSM Thornton (limited liability partnership) |
| Report No. | RSM[2022] No.361Z0068 |
| CPA names | Xie Peiren, Zeng Hui, Hu Gaosheng |
Auditors’ Report
Auditors’ Report
RSM[2022] No.361Z0068
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 groupcompany), including the consolidated and parent company's balance sheet as of Friday, December 31, 2021, theconsolidated and parent company's income statement, consolidated and parent company's cash flow statement,consolidated and parent company's statement of changes in owner's equity and notes to relevant financialstatements in 2021.
We believe that Fangda Group has been following with the Enterprise Accounting Standard in preparing ofthe Financial Statements. The Financial Statements is reflecting, in all important aspects, the financialsituation of Fangda Group as of Friday, December 31, 2021, and the business performance and cash flow of year2021.
2. Basis of the Opinions
We carried out the auditing works with compliance to Chinese CPA Auditing Standard, the"CPA's Responsibilityfor Auditing Financial Statements" section of the audit report further elaborated our responsibilities underthese guidelines. In accordance with the Code of Ethics for Chinese Certified Public Accountants, we areindependent of Fangda Group and perform other professional ethics duties. We believe that the audit evidencewe 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 financialstatements based on professional judgment. The response to these matters is based on the overall audit of thefinancial statements and the formation of an 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, 46 and Note XIII, 2 of the financialstatements.
1. Description
In 2021, the operating revenue of Fangda Group is 3.558 billion yuan, of which the revenue of curtain wallsand metro platform screen door accounts for 87.67% of the total revenue of the Group.
Fangda Group's performance obligations related to the construction subcontracting contract include buildingcurtain wall and metro platform screen door. As the customer can control the commodity under construction inthe process of performance of Fangda group, the Company regards it as the performance obligation within a certainperiod of time, and recognizes the revenue according to the performance progress. The Company shall determinethe performance schedule of services according to the input method. The performance schedule shall be determinedaccording to the proportion of the actual contract cost to the estimated total contract cost. Management needsto 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, whichinvolves significant accounting 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 mainlyinclude:
(1) Understand and evaluate the design of internal control related to management contract and engineeringsubcontracting contract 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 keycontract terms. Check the engineering contracting contract and cost budget information on which management expectstotal revenue and estimated total cost.
(3) Obtain the construction subcontracting contract account and project revenue and cost summary table,carry out analytical review on the gross profit of the project, and recalculate the performance progress andrevenue in the construction subcontracting contract account to verify its accuracy.
(4) Select samples to check the project engineering details of the main project, subcontracted labor approvalforms, and the owner’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 thereasonableness of the project's performance 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, 54 and Note IXof the financial statements.
1. Description
As of Friday, December 31, 2021, the book balance of the investment real estate of Fangda group which adopts the fair value
model for subsequent measurement is 5.755 billion yuan, accounting for 46.94% of the total assets. The income from changes in fairvalue realized in the current period is 21 million yuan, which has a great impact on the financial indicators of the Group'sconsolidated statements.
The management of Fangda Group annually employs a third-party assessment agency with relevant qualificationsto evaluate the fair value of the investment real estate. The evaluation adopts the market comparison methodand the income method to comprehensively analyze various factors that affect the real estate price of the appraisalsubject. The assessment of the fair value of investment real estate involves many estimates and assumptions,such as the analysis of the economic environment and future trends of the real estate where the investment realestate is located, discount rates, etc. The changes in estimates and assumptions will have big impacts on thefair 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 assessmentagencies employed by the management.
(2) Review the relevant considerations and objective evidence of the management's credit risk assessmentof accounts receivable and contract assets, and evaluate whether the management has properly identified the creditrisk characteristics of various accounts receivable.
(3) Review the measurement, presentation and disclosure of fair value of investment real estate in thefinancial statements.
(III) Measurement of expected credit loss of accounts receivable and contract assets
For related information disclosure, please refer to Note III, 9, Note V, 5, Note V, 10, and Note V, 23of the financial statements.
1. Description
As of December 31, 2021, the total amount of accounts receivable of the Company is 749 million yuan, theprovision for bad debts has been withdrawn is 192 million yuan, the total amount of contract assets of the Companyis 2.011 billion yuan, the provision for impairment has been withdrawn is 163 million yuan, and the total amountof accounts receivable and contract assets accounts for 19.60% of the total assets. Due to the large amount ofaccounts receivable and contract assets of Fangda group, the management needs to use important accountingestimation and judgment when determining the expected recoverable amount of accounts receivable and contractassets, and the expected credit loss of accounts receivable and contract assets is important for financialstatements. Therefore, we determine the measurement of expected credit loss of accounts receivable and contractassets as the key audit accounting matters.
2. Audit response
(1) Understand and evaluate the effectiveness of internal control design related to the provision for baddebts of accounts receivable and provision for impairment of contract assets of Fangda Group, and test theeffectiveness of key control operation.
(2) Examining the expected credit loss measurement model, assessing the rationality of the major assumptions
and key parameters in the model and the appropriateness of the credit risk combination method. Sample the keydata of the expected credit loss model, and test the integrity and accuracy of the historical data used by themanagement.
(3) Review the management's accrual process of bad debt provision for accounts receivable and contractassets impairment provision, including: ① For the accounts receivable and contract assets that measure theexpected credit loss on the basis of portfolio, evaluate the rationality of the management's division of portfolioaccording to the characteristics of credit risk; Check the measurement model of expected credit loss and evaluatethe rationality of major assumptions and key parameters in the model; Obtain the comparison table between theaging of accounts receivable and the expected credit loss rate for the whole duration prepared by the management,and test the accuracy and integrity of the data used by the management and whether the calculation of bad debtreserves is accurate (2) for the accounts receivable and contract assets with single provision for impairment,review the accuracy and rationality of the information and relevant assumptions used by the management in thetesting process, and check the provision for impairment for the accounts receivable and contract assets withlong accounting age, the accounts receivable and contract assets involving litigation matters.
(4) According to the characteristics and nature of customer transactions, select samples to implement theaccounts receivable confirmation procedure and check the collection after the period, and evaluate the rationalityof the provision for bad debts of accounts receivable.
4. Other information
The management of Fangda Group (hereinafter referred to as management) is responsible for other information.The other information includes the information covered in Fangda Group's 2021 annual report, but does not includethe financial statements and our audit report.
Our audit opinions published in the financial statements do not cover other information and we do not publishany form of assurance conclusion on other information.
In connection with our audit of the financial statements, our responsibility is to read other information.In the process, we consider whether there is a material inconsistency or other material misstatement of otherinformation whether it is in the financial statements 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 otherinformation, we should report 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 Enterprisesand presenting them fairly; (2) designing, implementing and maintaining necessary internal control to make surethat these financial statements are free from material misstatement, whether due to fraud or error.
In the preparation of the financial statements, the management is responsible for assessing Fangda Group'sability to continue as a going concern, disclosing issues related to going concern (if applicable), and applyingthe going concern assumption unless management plans to liquidate Fangda Group, terminate operations or thereare 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 freefrom material misstatement due to fraud or error and to issue an audit report containing audit opinions. Reasonableassurance is a high level of assurance, but it does not guarantee that an audit performed in accordance withauditing standards can always be discovered when a major misstatement exists. The report may be due to fraudor mistakes, and if a reasonable expectation of misstatement alone or aggregated may affect the economicdecision-making made by users of financial statements based on the financial statements, the misstatement isgenerally considered to be material.
In the process of conducting audit work in accordance with auditing standards, we use professional judgmentand maintain professional 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 audit procedures to address these risks, and obtain adequate and appropriate audit evidenceas a basis for issuing audit opinions. As fraud may involve collusion, forgery, willful omission,misrepresentation or override of internal control, the risk of not discovering a material misstatement due tofraud 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 reasonablenessof accounting estimates and related disclosures.
(4) Conclude on the appropriateness of management's use of continuing operations assumptions. At the sametime, based on the audit evidence obtained, it concludes that whether there are major uncertainties in the mattersor circumstances that may cause major doubts about the ability of the Company’s continuing operations. If weconclude that there are significant uncertainties, the auditing standards require us to request the users ofthe report to pay attention to the relevant disclosures in the financial statements in the audit report; if thedisclosure 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 resultin Fangda Group's inability to continue operating.
(5) Evaluate the overall presentation, structure, and content of the financial statements and evaluatewhether the financial statements fairly reflect the relevant transactions and events.
(6) Obtain sufficient and appropriate audit evidence on the financial information of entity or businessactivities in Fangda Group to express opinions on the financial statements. We are responsible for directing,supervising and executing group audits and assume full responsibility for audit opinions.
We communicate with the governance team on planned audit scope, timing, and major audit findings, includingcommunication of 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,and communicate with the management on all relationships and other matters that may reasonably be consideredto affect our independence, 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 thefinancial statements of the current period and thus constitute the key audit matters. We describe these mattersin our audit report, unless laws and regulations prohibit the public disclosure of these matters, or in rarecases, if it is reasonably expected that the negative consequences of communicating something in the audit report
will outweigh the benefits in the public interest, we determine that such matter should not be communicated inthe audit report.
| RSM China (limited liability partnership) | CPA: Xie Peiren (Project Partner) CPA: Zeng Hui | |
| Beijing, China | CPA: Hu Gaosheng | |
| March 28, 2022 |
II. Financial statementsUnit for statements in notes to financial statements: RMB yuan
1. Consolidated Balance Sheet
Prepared by: China Fangda Group Co., Ltd.
Friday, December 31, 2021
In RMB
| Item | Friday, December 31, 2021 | Thursday, December 31, 2020 |
| Current asset: | ||
| Monetary capital | 1,287,563,759.32 | 1,463,974,162.45 |
| Settlement provision | ||
| Outgoing call loan | ||
| Transactional financial assets | 25,135,241.89 | 14,382,896.04 |
| Derivative financial assets | 1,069,587.62 | 6,974,448.22 |
| Notes receivable | 166,377,880.01 | 207,165,063.97 |
| Account receivable | 556,453,824.20 | 616,960,252.54 |
| Receivable financing | 4,263,500.00 | 10,727,129.28 |
| Prepayment | 23,022,485.03 | 23,940,064.88 |
| Insurance receivable |
| Reinsurance receivable | ||
| Provisions of Reinsurance contracts receivable | ||
| Other receivables | 165,093,406.23 | 162,284,588.59 |
| Including: interest receivable | ||
| Dividend receivable | ||
| Repurchasing of financial assets | ||
| Inventory | 733,280,924.98 | 837,831,790.88 |
| Contract assets | 1,782,947,673.13 | 1,433,963,300.50 |
| Assets held for sales | ||
| Non-current assets due in 1 year | 141,681,778.35 | |
| Other current assets | 264,786,506.29 | 233,395,117.10 |
| Total current assets | 5,009,994,788.70 | 5,153,280,592.80 |
| Non-current assets: | ||
| Loan and advancement provided | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term share equity investment | 55,218,946.14 | 55,902,377.95 |
| Investment in other equity tools | 14,180,652.65 | 17,628,307.59 |
| Other non-current financial assets | 7,525,408.24 | 5,025,186.16 |
| Investment real estate | 5,765,352,393.13 | 5,634,648,416.52 |
| Fixed assets | 663,414,297.61 | 483,217,323.75 |
| Construction in process | 11,642,444.21 | 168,626,803.01 |
| Productive biological assets | ||
| Gas & petrol | ||
| Use right assets | 31,440,856.54 | |
| Intangible assets | 75,199,712.83 | 77,201,610.87 |
| R&D expense | ||
| Goodwill | ||
| Long-term amortizable expenses | 5,388,770.22 | 4,581,487.32 |
| Deferred income tax assets | 214,123,733.00 | 186,689,823.51 |
| Other non-current assets | 407,856,515.39 | 104,821,461.55 |
| Total of non-current assets | 7,251,343,729.96 | 6,738,342,798.23 |
| Total of assets | 12,261,338,518.66 | 11,891,623,391.03 |
| Current liabilities | ||
| Short-term loans | 1,287,474,398.65 | 1,048,250,327.62 |
| Loans from Central Bank | ||
| Call loan received | ||
| Transactional financial liabilities | ||
| Derivative financial liabilities | 11,871.20 | 915,234.93 |
| Notes payable | 849,445,299.09 | 866,224,515.42 |
| Account payable | 1,343,123,485.97 | 1,282,682,418.40 |
| Prepayment received | 1,280,482.93 | 1,544,655.62 |
| Contract liabilities | 180,186,877.15 | 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 | 69,071,013.95 | 60,894,196.78 |
| Taxes payable | 67,280,647.22 | 360,295,879.85 |
| Other payables | 126,903,098.08 | 153,635,067.86 |
| Including: interest payable | ||
| Dividend payable | 6,000,000.00 | |
| Fees and commissions payable | ||
| Reinsurance fee payable | ||
| Liabilities held for sales | ||
| Non-current liabilities due in 1 year | 78,418,557.76 | 103,359,833.57 |
| Other current liabilities | 48,098,361.77 | 107,688,425.69 |
| Total current liabilities | 4,051,294,093.77 | 4,250,977,668.86 |
| Non-current liabilities: | ||
| Insurance contract provision | ||
| Long-term loans | 1,333,500,000.00 | 1,099,411,462.35 |
| Bond payable | ||
| Including: preferred stock | ||
| Perpetual bond |
| Lease liabilities | 19,152,093.31 | |
| Long-term payable | 183,640,219.18 | |
| Long-term employees' wage payable | ||
| Anticipated liabilities | 6,347,809.40 | 33,425,500.13 |
| Deferred earning | 9,566,525.60 | 9,168,492.17 |
| Deferred income tax liabilities | 1,066,631,858.80 | 1,038,091,182.43 |
| Other non-current liabilities | ||
| Total of non-current liabilities | 2,618,838,506.29 | 2,180,096,637.08 |
| Total liabilities | 6,670,132,600.06 | 6,431,074,305.94 |
| Owner's equity: | ||
| Share capital | 1,073,874,227.00 | 1,088,278,951.00 |
| Other equity tools | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 11,459,588.40 | 20,459,588.40 |
| Less: Shares in stock | 42,748,530.12 | |
| Other miscellaneous income | 35,325,871.78 | 2,078,167.63 |
| Special reserves | ||
| Surplus reserve | 79,324,940.43 | 106,783,436.96 |
| Common risk provisions | ||
| Retained profit | 4,324,055,259.33 | 4,217,843,325.77 |
| Total of owner's equity belong to the parent company | 5,524,039,886.94 | 5,392,694,939.64 |
| Minor shareholders' equity | 67,166,031.66 | 67,854,145.45 |
| Total of owners' equity | 5,591,205,918.60 | 5,460,549,085.09 |
| Total of liabilities and owner's interest | 12,261,338,518.66 | 11,891,623,391.03 |
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua
2. Balance Sheet of the Parent Company
In RMB
| Item | Friday, December 31, 2021 | Thursday, December 31, 2020 |
| Current asset: | ||
| Monetary capital | 111,848,536.84 | 204,828,995.78 |
| Transactional financial assets | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Account receivable | 585,936.30 | 885,849.08 |
| Receivable financing | ||
| Prepayment | 212,807.30 | 1,323,361.34 |
| Other receivables | 1,276,731,665.95 | 1,156,802,204.91 |
| Including: interest receivable | ||
| Dividend receivable | ||
| Inventory | ||
| Contract assets | ||
| Assets held for sales | ||
| Non-current assets due in 1 year | ||
| Other current assets | 1,460,846.55 | 1,071,138.13 |
| Total current assets | 1,390,839,792.94 | 1,364,911,549.24 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term share equity investment | 1,196,831,253.00 | 1,196,831,253.00 |
| Investment in other equity tools | 14,180,652.65 | 16,392,331.44 |
| Other non-current financial assets | 30,000,001.00 | 30,000,001.00 |
| Investment real estate | 329,471,982.00 | 334,498,436.00 |
| Fixed assets | 71,830,252.61 | 65,157,481.98 |
| Construction in process | ||
| Productive biological assets | ||
| Gas & petrol | ||
| Use right assets | 17,224,771.47 | |
| Intangible assets | 1,219,737.85 | 1,521,975.72 |
| R&D expense | ||
| Goodwill | ||
| Long-term amortizable expenses | 218,563.44 | 687,202.16 |
| Deferred income tax assets | 27,079,997.63 | 26,592,617.26 |
| Other non-current assets |
| Total of non-current assets | 1,688,057,211.65 | 1,671,681,298.56 |
| Total of assets | 3,078,897,004.59 | 3,036,592,847.80 |
| Current liabilities | ||
| Short-term loans | 300,351,666.67 | 491,503,263.89 |
| Transactional financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Account payable | 606,941.85 | 606,941.85 |
| Prepayment received | 858,019.63 | 927,674.32 |
| Contract liabilities | ||
| Employees' wage payable | 3,909,857.23 | 3,440,073.04 |
| Taxes payable | 3,447,040.12 | 2,993,196.12 |
| Other payables | 233,531,740.37 | 28,068,648.70 |
| Including: interest payable | ||
| Dividend payable | ||
| Liabilities held for sales | ||
| Non-current liabilities due in 1 year | 4,264,397.66 | |
| Other current liabilities | ||
| Total current liabilities | 546,969,663.53 | 527,539,797.92 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bond payable | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Lease liabilities | 13,560,947.50 | |
| Long-term payable | ||
| Long-term employees' wage payable | ||
| Anticipated liabilities | ||
| Deferred earning | ||
| Deferred income tax liabilities | 74,447,416.01 | 73,837,511.85 |
| Other non-current liabilities | ||
| Total of non-current liabilities | 88,008,363.51 | 73,837,511.85 |
| Total liabilities | 634,978,027.04 | 601,377,309.77 |
| Owner's equity: | ||
| Share capital | 1,073,874,227.00 | 1,088,278,951.00 |
| 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 | -520,786.11 | -371,129.71 |
| Special reserves | ||
| Surplus reserve | 79,324,940.43 | 106,783,436.96 |
| Retained profit | 1,290,879,760.71 | 1,282,911,974.38 |
| Total of owners' equity | 2,443,918,977.55 | 2,435,215,538.03 |
| Total of liabilities and owner's interest | 3,078,897,004.59 | 3,036,592,847.80 |
3. Consolidated Income Statement
In RMB
| Item | 2021 | 2020 |
| 1. Total revenue | 3,557,724,397.54 | 3,000,191,773.63 |
| Incl. Business income | 3,557,724,397.54 | 3,000,191,773.63 |
| Interest income | ||
| Insurance fee earned | ||
| Fee and commission received | ||
| 2. Total business cost | 3,318,923,983.34 | 2,608,226,478.75 |
| Incl. Business cost | 2,761,300,557.48 | 2,416,574,885.32 |
| 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 | 72,326,973.99 | -222,120,890.04 |
| Sales expense | 59,877,614.73 | 39,801,205.56 |
| Administrative expense | 169,443,658.83 | 143,365,324.03 |
| R&D cost | 152,973,582.38 | 143,592,870.45 |
| Financial expenses | 103,001,595.93 | 87,013,083.43 |
| Including: interest cost | 101,722,768.10 | 84,492,438.91 |
| Interest income | 16,575,629.28 | 14,660,320.28 |
| Add: other gains | 14,032,939.09 | 15,626,450.81 |
| Investment gains (―-‖ for loss) | -1,459,334.05 | 1,416,240.16 |
| Incl. Investment gains from affiliates and joint ventures | -683,431.81 | -1,319,862.88 |
| Financial assets derecognised as a result of amortized cost | -6,336,161.86 | -6,148,967.92 |
| Exchange gains ("-" for loss) | ||
| Net open hedge gains (―-‖ for loss) | ||
| Gains from change of fair value (―-― for loss) | 23,422,035.73 | 19,268,515.74 |
| Credit impairment ("-" for loss) | -7,923,995.43 | 29,697,546.57 |
| Investment impairment loss ("-" for loss) | 7,181,339.41 | 53,075,851.07 |
| Investment gains ("-" for loss) | -2,291,048.05 | -252,262.23 |
| 3. Operational profit ("-" for loss) | 271,762,350.90 | 510,797,637.00 |
| Plus: non-operational income | 2,209,180.56 | 522,505.00 |
| Less: non-operational expenditure | 6,087,375.71 | 35,564,536.75 |
| 4. Gross profit ("-" for loss) | 267,884,155.75 | 475,755,605.25 |
| Less: Income tax expenses | 41,085,548.73 | 86,272,568.27 |
| 5. Net profit ("-" for net loss) | 226,798,607.02 | 389,483,036.98 |
| (1) By operating consistency | ||
| 1. Net profit from continuous operation ("-" for net loss) | 226,798,607.02 | 389,483,036.98 |
| 2. Net profit from discontinuous operation ("-" for net loss) | ||
| (2) By ownership | ||
| 1. Net profit attributable to the shareholders of the parent company | 222,168,142.53 | 389,344,290.74 |
| 2. Minor shareholders’ equity | 4,630,464.49 | 138,746.24 |
| 6. After-tax net amount of other misc. incomes | 33,206,426.49 | 2,553,576.88 |
| After-tax net amount of other misc. incomes attributed to parent's owner | 33,247,704.15 | 2,553,576.88 |
| (1) Other misc. incomes that cannot be re-classified into gain and loss | -2,894,735.24 | -2,478,954.16 |
| 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 | -2,894,735.24 | -2,478,954.16 |
| 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 | 36,142,439.39 | 5,032,531.04 |
| 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 | -4,224,144.67 | 5,232,583.76 |
| 6. Translation difference of foreign exchange statement | -1,233,457.89 | -200,052.72 |
| 7. Others | 41,600,041.95 | |
| After-tax net of other misc. income attributed to minority shareholders | -41,277.66 | |
| 7. Total of misc. incomes | 260,005,033.51 | 392,036,613.86 |
| Total of misc. incomes attributable to the owners of the parent company | 255,415,846.68 | 391,897,867.62 |
| Total misc gains attributable to the | 4,589,186.83 | 138,746.24 |
| minor shareholders | ||
| 8. Earnings per share: | ||
| (1) Basic earnings per share | 0.21 | 0.35 |
| (2) Diluted earnings per share | 0.21 | 0.35 |
Net profit contributed by entities merged under common control in the report period was RMB18,912.61, net profit realized byparties merged during the previous period is RMB7,705,820.11.Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua
4. Income Statement of the Parent Company
In RMB
| Item | 2021 | 2020 |
| 1. Turnover | 24,953,602.85 | 24,471,432.70 |
| Less: Operation cost | 460,120.74 | 549,538.73 |
| Taxes and surcharges | 1,324,210.97 | 1,160,449.37 |
| Sales expense | ||
| Administrative expense | 32,607,874.44 | 25,339,223.31 |
| R&D cost | ||
| Financial expenses | 14,039,379.48 | 25,294,329.52 |
| Including: interest cost | 13,931,266.37 | 25,864,986.10 |
| Interest income | 695,036.74 | 2,892,457.34 |
| Add: other gains | 97,873.78 | 678,793.43 |
| Investment gains (―-‖ for loss) | 33,994,681.44 | 138,217,642.91 |
| 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) | 1,743,238.00 | 39,143,434.00 |
| Credit impairment ("-" for loss) | -3,072.04 | -3,642.40 |
| Investment impairment loss ("-" for loss) | ||
| Investment gains ("-" for loss) | 2,654.87 | -2,253.68 |
| 2. Operational profit (―-‖ for loss) | 12,357,393.27 | 150,161,866.03 |
| Plus: non-operational income | 32,837.61 | 51,867.27 |
| Less: non-operational expenditure | 110,348.37 | 2,592.22 |
| 3. Gross profit ("-" for loss) | 12,279,882.51 | 150,211,141.08 |
| Less: Income tax expenses | 3,426,786.59 | 37,629,582.04 |
| 4. Net profit (―-‖ for net loss) | 8,853,095.92 | 112,581,559.04 |
| (1) Net profit from continuous operation ("-" for net loss) | 8,853,095.92 | 112,581,559.04 |
| (2) Net profit from discontinuous operation ("-" for net loss) | ||
| 5. After-tax net amount of other misc. incomes | -149,656.40 | -1,658,759.09 |
| (1) Other misc. incomes that cannot be re-classified into gain and loss | -1,658,759.09 | -1,658,759.09 |
| 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 | -1,658,759.09 |
| 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 | 1,509,102.69 | |
| 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 | 1,509,102.69 | |
| 6. Total of misc. incomes | 8,703,439.52 | 110,922,799.95 |
| 7. Earnings per share: | ||
| (1) Basic earnings per share | ||
| (2) Diluted earnings per share |
5. Consolidated Cash Flow Statement
In RMB
| Item | 2021 | 2020 |
| 1. Net cash flow from business operations: | ||
| Cash received from sales of products and providing of services | 3,472,283,389.16 | 3,388,618,864.67 |
| 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 | 23,051,730.15 | 19,611,621.78 |
| Other cash received from business operation | 120,052,421.59 | 170,258,854.96 |
| Sub-total of cash inflow from business operations | 3,615,387,540.90 | 3,578,489,341.41 |
| Cash paid for purchasing products and services | 2,549,580,998.25 | 2,356,389,232.50 |
| 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 | 393,791,110.72 | 327,234,573.88 |
| Taxes paid | 518,942,250.11 | 169,689,261.48 |
| Other cash paid for business activities | 216,498,478.11 | 170,208,324.59 |
| Sub-total of cash outflow from business operations | 3,678,812,837.19 | 3,023,521,392.45 |
| Cash flow generated by business operations, net | -63,425,296.29 | 554,967,948.96 |
| 2. Cash flow generated by investment: | ||
| Cash received from investment recovery | 2,569,989,730.43 | 9,142,420,331.13 |
| Cash received as investment profit | 5,258,238.74 | 16,736,972.11 |
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 3,744,251.59 | 26,937.09 |
| Net cash received from disposal of subsidiaries or other operational units | ||
| Other investment-related cash received | ||
| Sub-total of cash inflow generated from investment | 2,578,992,220.76 | 9,159,184,240.33 |
| Cash paid for construction of fixed assets, intangible assets and other long-term assets | 114,032,878.10 | 124,957,960.11 |
| Cash paid as investment | 2,581,410,000.00 | 8,907,691,857.72 |
| Net increase of loan against pledge | ||
| Net cash paid for acquiring subsidiaries and other operational units | ||
| Other cash paid for investment | 50,000.00 | 135,741.00 |
| Subtotal of cash outflows | 2,695,492,878.10 | 9,032,785,558.83 |
| Cash flow generated by investment activities, net | -116,500,657.34 | 126,398,681.50 |
| 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 | 2,185,667,296.03 | 2,746,860,091.27 |
| Other cash received from financing activities | 175,000,000.00 | |
| Subtotal of cash inflow from financing activities | 2,360,667,296.03 | 2,748,060,091.27 |
| Cash paid to repay debts | 1,712,441,117.35 | 2,689,787,953.39 |
| Cash paid as dividend, profit, or interests | 131,745,861.24 | 176,293,954.61 |
| Incl. Dividend and profit paid by subsidiaries to minority shareholders | 4,560,100.00 | 90,000.00 |
| Other cash paid for financing activities | 467,260,641.72 | 264,136,912.25 |
| Subtotal of cash outflow from financing activities | 2,311,447,620.31 | 3,130,218,820.25 |
| Net cash flow generated by financing activities | 49,219,675.72 | -382,158,728.98 |
| 4. Influence of exchange rate changes on cash and cash equivalents | -5,429,180.24 | -1,754,853.93 |
| 5. Net increase in cash and cash equivalents | -136,135,458.15 | 297,453,047.55 |
| Plus: Balance of cash and cash equivalents at the beginning of term | 1,028,386,529.74 | 730,933,482.19 |
| 6. Balance of cash and cash equivalents at the end of the period | 892,251,071.59 | 1,028,386,529.74 |
6. Cash Flow Statement of the Parent Company
In RMB
| Item | 2021 | 2020 |
| 1. Net cash flow from business operations: | ||
| Cash received from sales of products and providing of services | 22,551,848.92 | 25,311,576.38 |
| Tax refunded | 232,652.87 | |
| Other cash received from business operation | 4,603,033,499.14 | 5,923,588,766.78 |
| Sub-total of cash inflow from business operations | 4,625,585,348.06 | 5,949,132,996.03 |
| Cash paid for purchasing products and services | 1,432,078.40 | 1,296,998.99 |
| Cash paid to and for the staff | 19,382,565.12 | 17,120,262.06 |
| Taxes paid | 5,394,999.41 | 9,529,518.44 |
| Other cash paid for business activities | 4,519,631,300.00 | 5,193,502,562.12 |
| Sub-total of cash outflow from business operations | 4,545,840,942.93 | 5,221,449,341.61 |
| Cash flow generated by business operations, net | 79,744,405.13 | 727,683,654.42 |
| 2. Cash flow generated by investment: | ||
| Cash received from investment | 476,800,000.00 | 3,561,034,532.05 |
| recovery | ||
| Cash received as investment profit | 33,994,681.44 | 138,917,642.91 |
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 29,891.50 | 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 | 510,824,572.94 | 3,699,958,410.46 |
| Cash paid for construction of fixed assets, intangible assets and other long-term assets | 310,178.66 | 58,173.88 |
| Cash paid as investment | 476,800,000.00 | 3,775,526,290.70 |
| Net cash paid for acquiring subsidiaries and other operational units | ||
| Other cash paid for investment | ||
| Subtotal of cash outflows | 477,110,178.66 | 3,775,584,464.58 |
| Cash flow generated by investment activities, net | 33,714,394.28 | -75,626,054.12 |
| 3. Cash flow generated by financing activities: | ||
| Cash received from investment | ||
| Cash received from borrowed loans | 300,090,000.00 | 690,000,000.00 |
| Other cash received from financing activities | ||
| Subtotal of cash inflow from financing activities | 300,090,000.00 | 690,000,000.00 |
| Cash paid to repay debts | 490,090,000.00 | 1,090,000,000.00 |
| Cash paid as dividend, profit, or interests | 16,439,258.35 | 80,238,023.19 |
| Other cash paid for financing activities | 142,820,271.29 | |
| Subtotal of cash outflow from financing activities | 506,529,258.35 | 1,313,058,294.48 |
| Net cash flow generated by financing | -206,439,258.35 | -623,058,294.48 |
| activities | ||
| 4. Influence of exchange rate changes on cash and cash equivalents | 237,736.33 | |
| 5. Net increase in cash and cash equivalents | -92,980,458.94 | 29,237,042.15 |
| Plus: Balance of cash and cash equivalents at the beginning of term | 204,578,995.78 | 175,341,953.63 |
| 6. Balance of cash and cash equivalents at the end of the period | 111,598,536.84 | 204,578,995.78 |
7. Statement of Change in Owners’ Equity (Consolidated)
Amount of the Current Term
In RMB
| Item | 2021 | ||||||||||||||
| 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 | 1,088,278,951.00 | 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 | ||||||
| Plus: Changes in accounting policies | |||||||||||||||
| Correction of previous errors | |||||||||||||||
| Consolidation of entities under common control | 9,000,000.00 | 2,837,784.25 | 11,837,784.25 | 1,315,309.36 | 13,153,093.61 | ||||||||||
| Others | |||||||||||||||
| 2. Balance at the beginning of current year | 1,088,278,951.00 | 20,459,588.40 | 42,748,530.12 | 2,078,167.63 | 106,783,436.96 | 4,217,843,325.77 | 5,392,694,939.64 | 67,854,145.45 | 5,460,549,085.09 | ||||||
| 3. Change amount in the current period (―-― for decrease) | -14,404,724.00 | -9,000,000.00 | -42,748,530.12 | 33,247,704.15 | -27,458,496.53 | 106,211,933.56 | 131,344,947.30 | -688,113.79 | 130,656,833.51 | ||||||
| (1) Total of misc. incomes | 33,247,704.15 | 222,168,142.53 | 255,415,846.68 | 4,589,186.83 | 260,005,033.51 | ||||||||||
| (2) Investment or decreasing of capital by owners | -14,404,724.00 | -9,000,000.00 | -42,748,530.12 | -28,343,806.12 | -115,070,899.38 | -124,070,899.38 | -1,317,200.62 | -125,388,100.00 | |||||||
| 1. Common shares invested by owners | -14,404,724.00 | -42,748,530.12 | -28,343,806.12 | - | - | - | - | ||||||||
| 2. Capital contributed by other equity instrument holders | - | - | |||||||||||||
| 3. Amount of shares paid and accounted as owners' equity | - | - | |||||||||||||
| 4. Others | -9,000,000.0 | - | -115,070,899 | -124,070, | -1,317,2 | -125,388, |
| 0 | .38 | 899.38 | 00.62 | 100.00 | |||||||||||
| (3) Profit allotment | 885,309.59 | -885,309.59 | - | -3,960,100.00 | -3,960,100.00 | ||||||||||
| 1. Provision of surplus reserves | 885,309.59 | -885,309.59 | |||||||||||||
| 2. Common risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | - | -3,960,100.00 | -3,960,100.00 | ||||||||||||
| 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 | |||||||||||||||
| 4. Balance at the end of this period | 1,073,874,227.00 | 11,459,588.40 | 35,325,871.78 | 79,324,940.43 | 4,324,055,259.33 | 5,524,039,886.94 | 67,166,031.66 | 5,591,205,918.60 |
Amount of the Previous 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 | 9,900,000.00 | 10,342,800.77 | 20,242,800.77 | 204,472.73 | 20,447,273.50 | ||||||||||
| Others | |||||||||||||||
| 2. Balance at the beginning of current year | 1,123,384,189.00 | 11,354,191.59 | -475,409.25 | 159,805,930.34 | 3,908,968,978.76 | 5,203,037,880.44 | 48,614,482.33 | 5,251,652,362.77 | |||||||
| 3. Change amount in the current period (―-― for decrease) | -35,105,238.00 | 9,105,396.81 | 42,748,530.12 | 2,553,576.88 | -53,022,493.38 | 308,874,347.01 | 189,657,059.20 | 19,239,663.12 | 208,896,722.32 | ||||||
| (1) Total of misc. incomes | 2,553,576.88 | 389,344,290.74 | 391,897,867.62 | 138,746.24 | 392,036,613.86 | ||||||||||
| (2) Investment or decreasing of capital by owners | -35,105,238.00 | -900,000.00 | 42,748,530.12 | -64,280,649.28 | -487,840.28 | -143,522,257.68 | 8,837,840.28 | -134,684,417.40 | |||||||
| 1. Common shares invested by owners | -35,105,238.00 | -900,000.00 | 42,748,530.12 | -64,280,649.28 | -487,840.28 | -143,522,257.68 | 8,837,840.28 | -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 | -79,982,103.45 | -68,723,947.55 | -690,000.00 | -69,413,947.55 | ||||||||||
| 1. Provision of surplus reserves | 11,258,155.9 | -11,258,155. |
| 0 | 90 | ||||||||||||||
| 2. Common risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -68,723,947.55 | -68,723,947.55 | -690,000.00 | -69,413,947.55 | |||||||||||
| 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 | 1,088 | 20,459 | 42,748 | 2,078, | 106,78 | 4,217, | 5,392, | 67,854, | 5,460,5 |
| the end of this period | ,278,951.00 | ,588.40 | ,530.12 | 167.63 | 3,436.96 | 843,325.77 | 694,939.64 | 145.45 | 49,085.09 |
8. Statement of Change in Owners’ Equity (Parent Company)
Amount of the Current Term
In RMB
| Item | 2021 | |||||||||||
| 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 | 1,088,278,951.00 | 360,835.52 | 42,748,530.12 | -371,129.71 | 106,783,436.96 | 1,282,911,974.38 | 2,435,215,538.03 | |||||
| Plus: Changes in accounting policies | ||||||||||||
| Correction of previous errors | ||||||||||||
| Others | ||||||||||||
| 2. Balance at the beginning of current year | 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 | |||||
| 3. Change amount in the current period (―-― for decrease) | -14,404,724.00 | -42,748,530.12 | -149,656.40 | -27,458,496.53 | 7,967,786.33 | 8,703,439.52 | ||||||
| (1) Total of misc. incomes | -149,656.40 | 8,853,095.92 | 8,703,439.52 | |||||||||
| (2) Investment or decreasing of capital by owners | -14,404,724.00 | -42,748,530.12 | -28,343,806.12 | |||||||||
| 1. Common shares invested | -14,404,724.00 | -42,748,530.12 | -28,343,806.12 | |||||||||
| by owners | ||||||||||||
| 2. Capital contributed by other equity instrument holders | ||||||||||||
| 3. Amount of shares paid and accounted as owners' equity | ||||||||||||
| 4. Others | ||||||||||||
| (3) Profit allotment | 885,309.59 | -885,309.59 | ||||||||||
| 1. Provision of surplus reserves | 885,309.59 | -885,309.59 | ||||||||||
| 2. Distribution to owners (or shareholders) | ||||||||||||
| 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 | 1,073,874,227.00 | 360,835.52 | -520,786.11 | 79,324,940.43 | 1,290,879,760.71 | 2,443,918,977.55 |
Amount of the Previous 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 | -1,658,7 | 112,581,5 | 110,922,79 | |||||||||
| misc. incomes | 59.09 | 59.04 | 9.95 | |||||||||
| (2) Investment or decreasing of capital by owners | -35,105,238.00 | 42,748,530.12 | -64,280,649.28 | -142,134,417.40 | ||||||||
| 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 |
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 2016. According to the 2016 Annual Profit Allocation Scheme, which was approved by the 2016 Annual Shareholders'Congress, the Company has a total share capital of 789, 094, 836 shares as the basis and a capital reserve fund of 5 shares per 10shares to all shareholders. The registered capital at the end of 2017 was RMB 1,183,642,254.00. The Company repurchased andcancelled 28,160,568.00 B shares in August 2018, 32,097,497.00 B shares in January 2019, 35,105,238.00 B shares in May 2020,14404724.00 B shares in April 2021 and cancelled in April 2021. The existing registered capital is RMB1,073,874,227.00 yuan.
The Company has established a corporate governance structure that comprises shareholders’ meeting, boardof directors and supervisory committee. Currently, the Company sets up the President Office, AdministrativeDepartment, HR Department, Enterprise Management Department, Financial Department, Audit and SupervisoryDepartment, Securities Department, Technology Innovation Department and IT Department and has establishedsubsidiaries including Fangda Decoration, Fangda Chuangzhi, Fangda Jiangxi New Material, Fangda Property andFangda New Energy.
The business nature and main business operations of the Company and subsidiaries include (1) production and sales of curtainwall materials, design, production and installation of construction curtain walls; (2) assembly and production of subway screen doors;
(3) development and operation of real estate projects on land, of which rights have been obtained lawfully; (4) R&D, installation andsales 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 March 28,2022.
2. Consolidation Scope and Change
The Company in the current period includes a total of 33 subsidiaries, of which 6 have been added this year and2 have been reduced this year. For details, please refer to "Chapter X 8.Change of the scope of merger" and "ChapterX 9. 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 actualtransactions and events, with figures confirmed and measured in compliance with the Accounting Standards forBusiness Enterprises and other specific account standards, application guide and interpretations. The Companyhas also disclosed related financial information according to the requirement of the Regulations of InformationDisclosure 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 reporting period.No matters were found that would affect the Company's ability to continue as a going concern. It is reasonable for the Company toprepare financial statements based on continuing operations.
V. Significant Account Policies and Estimates
Specific accounting policy and estimate prompt:
The following major accounting policies and accounting estimates shall be formulated in accordance with theaccounting standards of the enterprise. Unmentioned operations are carried out in accordance with the relevantaccounting policies in the enterprise accounting standards.
1. Statement of compliance to the Enterprise Accounting Standard
These financial statements meet the requirements of the Accounting Standards for Business Enterprises andtruly and fully reflect the Company’s financial status, performance result, changes in shareholders’ equityand 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 currencyof the main economic 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 valueof the combined party in the consolidated financial statements of the ultimate controlling party on the dateof combination. Among them, if the accounting policy adopted by the merger party is different from that adoptedby the Company before the merger, the accounting policy is unified based on the principle of importance, thatis, the book value of the assets and liabilities of the merger party is adjusted according to the accountingpolicy of the Company. If there is a difference between the book value of the net assets acquired by the Companyin the business combination and the book value of the consideration paid, first adjust the balance of the capitalreserve (capital premium or equity premium), the balance of the capital reserve (capital premium or equity premium)If it is insufficient to offset, the surplus reserve and undistributed profits will be offset in sequence.
For the accounting treatment method of business combination under the same control through step-by-steptransactions, see Chapter X, V. important accounting policies and accounting estimates. 6. Preparation methodof consolidated financial statements (5) accounting treatment of special transactions.
(2) Consolidation of entities under different control
All identifiable assets and liabilities acquired by the Company during the merger shall be measured atits fair value on the date of purchase. Among them, if the accounting policy adopted by the merger party is differentfrom that adopted by the Company before the merger, the accounting policy is unified based on the principle ofimportance, that is, the book value of the assets and liabilities of the merger party is adjusted according tothe accounting policy of the Company. The merger cost of the Company on the date of purchase is greater thanthe 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 ofthe liabilities obtained by the purchaser in the enterprise merger, the merger cost and the fair value of theidentifiable assets and the liabilities obtained by the purchaser in the enterprise merger are reviewed, andthe merger cost is still less than the fair value of the identifiable assets and liabilities obtained by thepurchaser after the review, the difference is considered as the profit and loss of the current period of themerger.
For the accounting treatment method of business combination not under the same control through step-by-steptransactions, see Chapter X, V. important accounting policies and accounting estimates. 6. Preparation method
of consolidated financial statements (5) accounting treatment of special transactions.
(3) Treatment of related transaction fee in enterprise merger
Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal servicesoccurred relating to the merger of entities are accounted into current income account when occurred. Thetransaction fees of equity certificates or liability certificates issued by the purchaser for payment for theacquisition 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 includesnot only subsidiaries determined on the basis of voting rights (or similar voting rights) themselves or inconjunction with other arrangements, but also structured subjects determined on the basis of one or morecontractual arrangements.
Control means the power possessed by the Company on invested entities to share variable returns byparticipating in related activities of the invested entities and to impact the amount of the returns by usingthe power. The subsidiary company is the subject controlled by the Company (including the enterprise, the divisiblepart of the invested unit and the structured subject controlled by the enterprise, etc.). The structured subjectis the subject which is not designed to determine the controlling party by taking the voting right or similarright as the decisive factor.
(2) Preparation of Consolidated Financial Statements
The Company prepares consolidated financial statements based on the financial statements of itself andits subsidiaries and based on other relevant information.
The Company compiles consolidated financial statements, regards the whole enterprise group as an accountingentity, reflects the overall financial status, operating results and cash flow of the enterprise group accordingto the confirmation, measurement and presentation 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 parentcompany and subsidiary company.
② Offset the long-term equity investment of the parent company to the subsidiary company and the shareof the parent company in the ownership rights of the subsidiary company.
③ Offset the influence of internal transaction between parent company, subsidiary company and subsidiarycompany. If an internal transaction indicates that the relevant asset has suffered an impairment loss, the partof 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 the related items of the comparative statement. The same report entity as the consolidated balancesheet will exist from the time of the final control party.(B) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the businesscombination from the beginning of the current period to the end of the reporting period are included in theconsolidated cash flow statement, and the related items of the comparative statement are adjusted, which isregarded as the combined report body since the final The controller has been there since the beginning of control.
(C) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the businesscombination from the beginning of the current period to the end of the reporting period are included in theconsolidated cash flow statement, and the related items of the comparative statement are adjusted, which isregarded as the combined report body since the final The controller has 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 sheetis not adjusted.
(B) When preparing the consolidated profit statement, the income, expense and profit of the subsidiarycompany and the business 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 thesubsidiary to the end of the 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 sheetis not adjusted.
B. When preparing the consolidated profit statement, the income, expense and profit of the subsidiary companyand the business 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 periodof the subsidiary to the 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 sharesof the Company as a subtraction of the owner's rights and interests, which shall be listed under the item of"subtraction: Stock shares" under the item of owner'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 shareholdersof the subsidiaries.
② The "special reserve" and "general risk preparation" projects, because they are neither real capital(or share capital) nor capital reserve, but also different from the retained income and undistributed profits,are restored according to the ownership of the parent company after the long-term equity investment is offsetby 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 consolidatedbalance sheet and the taxable basis of the taxpayer due to the offset of the unrealized internal sales gain orloss, the deferred income tax asset or the deferred income tax liability is confirmed in the consolidated balancesheet, and the income tax expense in the consolidated profit statement is adjusted, with the exception of thedeferred income tax related to the transaction or event directly included in the owner's equity and the merger
of the enterprise.
④ The unrealized internal transaction gains and losses incurred by the Company from selling assets tosubsidiaries shall be fully offset against the "net profit attributable to the owners of the parent company".The unrealized internal transaction gains and losses arising from the sale of assets by the subsidiary to theCompany shall be offset between the “net profit attributable to the owners of the parent company” and the“minority shareholder gains and losses” in accordance with the Company’s distribution ratio to the subsidiary.The unrealized internal transaction gains and losses arising from the sale of assets between subsidiaries shallbe offset between the "net profit attributable to the owners of the parent company" and the "minority shareholders'gains and losses" in accordance 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 minorityshareholders in the owner ’s equity of the subsidiary at the beginning of the period, the balance should stillbe offset against the minority shareholders ’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 individual financial statements, the investment costs of the newly acquired long-term investments of theminority shares shall be measured at the fair value of the price paid. In the consolidated financial statements,the difference between the newly acquired long-term equity investment due to the purchase of minority equityand the share of net assets that should be continuously calculated by the subsidiary since the purchase dateor the merger date should be adjusted according to the new shareholding ratio. The product (capital premium orequity premium), if the capital reserve is insufficient to offset, the surplus reserve and undistributed profitsare 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 equityinvestment in the individual financial statements based on the share of the subsidiary ’s net assets that shouldbe enjoyed after the merger in the final controller ’s consolidated financial statements; the initial investmentcost and the difference between the book value of the long-term equity investment before the merger plus thebook value of the consideration paid for new shares acquired on the merger date, the capital reserve (capitalpremium or equity premium) is adjusted, and the capital reserve (capital premium or equity premium) is insufficientto 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 mergedparty should be measured at the book value in the final controlling party’s consolidated financial statementsother than the adjustment made due to differences in accounting policies; adjust the capital surplus (share premium)according to the difference between the initial investment cost and the book value of the held investment beforemerger plus the book value of the consideration paid on the merger date. 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 isaccounted for according to the equity method, the date of acquiring the original equity and the merging partyand the merged party are in the same party's final control from the later date to the merger date The relevantgains and losses, other comprehensive income and other changes in owner's equity have been confirmed between
them, and the retained earnings at the beginning of the comparative statement period should be offset separately.A. Enterprise merger under common control through multiple transactionsOn the merger day, in individual financial statements, the initial investment cost of the long-term equityinvestment on the merger day is based on the book value of the long-term equity investment previously held plusthe sum of the additional investment costs on the merger day.In the consolidated financial statements, the equity of the purchaser held prior to the date of purchaseis revalued according to the fair value of the equity at the date of purchase, and the difference between thefair value and its book value is credited to the current investment income; If the shares held by the purchaserprior to the date of purchase involve other consolidated gains under the equity law accounting, the otherconsolidated gains related thereto shall be converted to the current gains on the date of purchase, with theexception of the other consolidated gains arising from the remeasurement of the net assets or net liabilitiesof the merged party. The Company disclosed in the notes the fair value of the equity of the purchased party heldbefore the purchase date and the amount of related gains or losses remeasured according to the fair value.
(3) The Company disposes of long-term equity investment in subsidiaries without losing controlThe parent company partially disposes of the long-term equity investment in the subsidiary company withoutlosing control. In the consolidated financial statements, the disposal price corresponds to the disposal of thelong-term equity investment. The difference between the shares is adjusted for the capital reserve (capitalpremium or equity premium). If the capital reserve is insufficient 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 the remaining equity according to its fair value at the date of loss of control when compilingthe consolidated financial statement. The sum of the consideration obtained from the disposal of equity and thefair value of the remaining equity minus the difference between the share of the original subsidiary 's net assetsthat should be continuously calculated from the purchase date or the merger date, calculated as the loss of controlThe investment income of the current period.Other comprehensive income and other owner's equity changes related to the equity investment of the atomiccompany are transferred to the current profit and loss when the control is lost, except for other comprehensiveincome arising from the remeasurement 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 isa "blanket transaction".If the step-by-step transaction does not belong to a "package deal", in the individual financial statements,for each transaction before the loss of control of the subsidiary, the book value of the long-term equity investmentcorresponding to each disposal of equity is carried forward, the price received and the disposal The differencebetween the book value of the long-term equity investment is included in the current investment income; in theconsolidated financial statements, it should be handled in accordance with the relevant provisions of "the parentcompany disposes of the long-term equity investment in the subsidiary without losing control."If a step-by-step transaction belongs to a "blanket transaction", the transaction shall be treated as a
transaction that disposes of the subsidiary and loses control; In individual financial statements, the differencebetween each disposal price before the loss of control and the book value of the long-term equity investmentcorresponding to the equity being disposed of is first recognized as other consolidated gains and then convertedto the current loss of control at the time of the loss of control; In the consolidated financial 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 recognizedas other consolidated gains and shall, at the time of the loss of control, be transferred to the loss of controlfor the current period.
Where the terms, conditions, and economic impact of each transaction meet one or more of the followingconditions, usually multiple 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 occurrence 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 ofparent companiesProportion of Others （ minority shareholders in factor companies who increase capital , dilute Subsidiariesof parent companies. In the consolidated financial statements, the share of the parent company in the net bookassets of the former subsidiary of the capital increase is calculated according to the share ratio of the parentcompany before the capital increase, the difference between the share and the net book assets of the lattersubsidiary after the capital increase is calculated according to the share ratio of the parent company, the capitalreserve (capital premium or capital premium), the capital reserve (capital premium or capital premium) is notoffset, 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 toinvestments with a short holding period (generally referring to expiry within three months from the date ofpurchase), strong liquidity, easy to convert to a 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 thebookkeeping standard currency at the spot exchange rate on the transaction date.
(2) Methods of conversion of foreign currency items on balance sheet days
At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balancesheet date. The exchange differences caused by the difference in exchange rates on the balance sheet date andinitial recognizing date or previous balance sheet date are included in the current profits and losses.Non-monetary items accounted in foreign currency and on historical costs are exchanged with the spot exchangerate on the transaction date. Non-monetary items accounted in foreign currency and on fair 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 thecurrent profits and losses.
(3) Translation of foreign exchange statements
Prior to the conversion of the financial statements of an enterprise's overseas operations, the accountingperiod and policy of the overseas operations should be adjusted to conform to the accounting period and policyof the enterprise. The financial statements of the corresponding currency (other than the functional currency)should be prepared according to the adjusted accounting policy and the accounting period. The financial statementsof the overseas operations should be converted according to the following methods:
① The assets and liabilities items in the balance sheet are translated at the spot exchange rate on thebalance sheet date. Except for the "undistributed profits" items, the owner's equity items are translated atthe spot exchange rate when they occur.
② The income and expense items in the profit statement are converted at the spot exchange rate on thetransaction date or the approximate exchange rate of the spot exchange rate.
③ The foreign currency cash flow and the foreign subsidiary's cash flow are converted using the immediateexchange rate or the approximate exchange rate at the date of the cash flow. The impact of exchange rate changeson cash should be used as an adjustment item and presented separately in the cash flow statement.
④ During the preparation of the consolidated financial statements, the resulting foreign currency financialstatement conversion variance is presented separately under the owner's equity item in the consolidated balancesheet.When foreign operations are disposed of and the control rights are lost, the difference in foreign currencystatements related to the overseas operations that are listed in the shareholders' equity items in the balancesheet is transferred to the profit or loss for the current period, either in whole or in proportion to the disposalof the foreign operations.
9. Financial instrument
Financial instrument refers to a company’s financial assets and contracts that form other units of financialliabilities or equity instruments.
(1) Recognition and de-recognition of financial instrument
The Company recognizes a financial asset or liability when it becomes one party in the financial instrumentcontract.
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 Companyderecognises the financial liability (or part of the financial liability). When the Company (borrower) and lenderenter into an agreement to replace the original financial liabilities by undertaking new financial liabilitiesand the contract terms for the new financial liabilities are essentially different from those for the originalone, 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 (orpart thereof), it shall terminate the original financial liability and confirm a new financial liability inaccordance with the amended terms.
Financial asset transactions in regular ways are recognized and de-recognized on the transaction date.The conventional sale of financial assets means the delivery of financial assets in accordance with the contractualterms and conditions, at the time set out in the regulations or market practices. Transaction date refers tothe 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 basedon the business model of managing financial assets and the contractual cash flow characteristics of financialassets: financial assets measured at amortized cost are measured at fair value and their changes are includedin other financial assets with current profit and loss and financial assets measured at fair value through profitor loss. Unless the Company changes the business model for managing financial assets, in this case, all affectedfinancial 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 measuredat fair value with variations accounted into current income account, related transaction expenses are accountedinto the current income. For other financial assets, the related transaction expenses are accounted into theinitial recognized amounts. Bills receivable and accounts receivable arising from the sale of commodities orthe provision of labor services that do not contain or do not consider significant financing components, theCompany 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 assetsmeasured at amortized cost: The Company's business model for managing this financial asset is to collectcontractual cash flows as its goal; the contract terms of the financial asset stipulate that Cash flow is onlythe payment of principal and interest based on the outstanding principal amount. For such financial assets, theactual interest rate method is used for subsequent measurement according to the amortized cost. The gains orlosses arising from the termination of recognition, amortization or impairment based on the actual interest ratemethod are included 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 assetsmeasured at fair value and their changes are included in other comprehensive income: The Company's business modelfor managing this financial asset is to both target the collection of contractual cash flows and the sale offinancial assets. Objective; The contractual terms of the financial asset stipulate that the cash flow generatedon a specific date is only for the payment of principal and interest based on the outstanding principal amount.For such financial assets, fair value is used for subsequent measurement. Except for impairment losses or gainsand exchange gains and losses recognized as current gains and losses, changes in the fair value of such financialassets are recognized as other comprehensive income. Until the financial asset is derecognized, its accumulatedgains or losses are transferred to current gains and losses. However, the relevant interest income of the financialasset calculated by the actual interest rate method is included in the current profit and loss.
The Company irrevocably chooses to designate a portion of non-tradable equity instrument investment asa financial asset measured at fair value and whose variation is included in other consolidated income. Only therelevant dividend income is included in the current profit and loss, and the variation of fair value is recognizedas 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 valueand whose changes are included in other comprehensive income are classified as financial assets measured at fairvalue and whose changes are included in the current profit and loss. For such financial assets, fair value isused for subsequent measurement, and all changes in fair value are included 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 theirchanges included in the current profit and loss, loan commitments and financial guarantee contract liabilitiesfor loans below market interest rates, and financial 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 arefinancial liabilities) and financial liabilities designated as at fair value through profit or loss. After theinitial recognition, the financial liabilities are subsequently measured at fair value. Except for the hedgeaccounting, the gains or losses (including interest expenses) are recognized in profit or loss. However, forthe financial liabilities designated as fair value and whose variations are included in the profits and lossesof the current period, the variable amount of the fair value of the financial liability due to the variationof credit risk of the financial liability shall be included in the other consolidated income. When the financialliability is terminated, the cumulative gains and losses previously included in the other consolidated incomeshall be transferred out of the other consolidated income and shall be included 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 withestablished contract terms within the commitment period. Loan commitments are provided for impairment lossesbased on the expected credit loss model.
A financial guarantee contract refers to a contract that requires the Company to pay a specific amountof compensation to the contract holder who suffered a loss when a specific debtor is unable to repay the debtin accordance with the original or modified debt instrument terms. Financial guarantee contract liabilities aresubsequently measured based on the higher of the loss reserve amount determined in accordance with the principleof impairment of financial instruments and the initial recognition amount after deducting the accumulatedamortization 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 effectiveinterest method.
Except in special circumstances, financial liabilities and equity instruments are distinguished accordingto the following principles:
a. If the Company cannot unconditionally avoid delivering cash or other financial assets to fulfill acontractual obligation, the contractual obligation meets the definition of financial liability. While somefinancial instruments do not explicitly contain terms and conditions for the delivery of cash or other financialassets, they may indirectly form contractual obligations through other terms and conditions.B. If a financial instrument is required to be settled with or can be settled with the Company's own equityinstruments, the Company's own equity instrument used to settle the instrument needs to be considered as asubstitute for cash or other financial assets or for the holder of the instrument to enjoy the remaining equityin the assets after all liabilities are deducted. If it is the former, the instrument is the financial liabilitiesof the issuer; if it is the latter, the instrument is the equity instrument of the issuer. In some cases, a financialinstrument contract provides that the Company shall or may use its own instrument of interest, in which the amountof a contractual right or obligation is equal to the amount of the instrument of its own interest which may beacquired or delivered multiplied by its fair value at the time of settlement, whether the amount of the contractualright or obligation is fixed or is based entirely or in part on a variation of a variable other than the marketprice of the instrument of its own interest, such as the rate of interest, the price of a commodity or the priceof 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 derivativetransaction contract is signed, and are subsequently measured at their fair values. Derivative financialinstruments with a positive fair value are recognized as asset, and instruments with a negative fair value arerecognized as liabilities.
The gains and losses arising from the change in fair value of derivatives are directly included in theprofits and losses of the current period, except that the part of the cash flow that is valid in the hedge isincluded in the other consolidated income and transferred out when the hedged item affects the gain and lossof the current period.
For a hybrid instrument containing an embedded derivative instrument, if the principal contract is afinancial asset, the hybrid instrument as a whole applies the relevant provisions of the financial assetclassification. If the main contract is not a financial asset, and the hybrid instrument is not measured at fairvalue and its changes are included in the current profit and loss for accounting, the embedded derivative doesnot 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 embedded derivative instruments are separated from the mixed instruments and treated as separate derivativefinancial instruments. If the fair value of the embedded derivative on the acquisition date or the subsequentbalance sheet date cannot be measured separately, the hybrid instrument as a whole is designated as a financialasset or financial liability measured at fair value and whose changes are included 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 assetsmeasured at amortization costs, creditor's rights investments measured at fair value, contractual assets, leasingreceivables, loan commitments and financial 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 thatare weighted by the risk of default. Credit loss refers to the difference between all contractual cash flows
receivable from the contract and all cash flows expected to be received by the Company at the original actualinterest rate, that is, the present value of all cash shortages. Among them, the financial assets which havebeen purchased or born by the Company shall be discounted according to the actual rate of credit adjustment ofthe financial assets.The expected lifetime credit loss is the expected credit loss due to all possible default events duringthe entire expected life of the financial instrument.Expected credit losses in the next 12 months are expected to result from possible defaults in financialinstruments within 12 months after the balance sheet date (or estimated duration of financial instruments ifthe 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 atdifferent stages. Where the credit risk has not increased significantly since the initial confirmation of thefinancial instrument, it is in the first stage. The Company measures the preparation for loss according to theexpected credit loss in the next 12 months. Where the credit risk has increased significantly since the initialconfirmation but the credit impairment has not occurred, the financial instrument is in the second stage. Wherea credit impairment has occurred since the initial confirmation of the financial instrument, it shall be in thethird stage, and the Company shall prepare for measuring the expected credit loss of the whole survival periodof the instrument.For financial instruments with low credit risk on the balance sheet date, the Company assumes that thecredit risk has not increased significantly since the initial recognition, and measures the loss provision basedon the expected credit losses in the next 12 months.For financial instruments that are in the first and second stages and with lower credit risk, the Companycalculates interest income based on their book balances and actual interest rates without deduction for impairmentprovision. For financial instruments in the third stage, interest income is calculated based on the amortizedcost and the actual interest rate after the book balance minus the provision for impairment.Regarding bills receivable, accounts receivable and financing receivables, regardless of whether thereis a significant financing component, the Company measures the loss provision based on the expected credit lossesthroughout the duration.Accounts receivable/contract assetsWhere 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 to confirm 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 when individual financial assetscannot 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 basedon credit risk characteristics, and calculates expected credit losses on the basis of the combination. The basisfor determining the combination is as follows:
The basis for determining the combination of notes receivable is as follows:
Notes Receivable Combination 1 Commercial Acceptance BillNotes Receivable Combination 2 Bank Acceptance Bill
For Notes receivable divided into portfolios, the Company refers to historical credit loss experience,combined with current conditions and predictions of future economic conditions, and calculates through defaultrisk exposure and expected credit loss rate within the next 12 months or the entire duration Expected creditlosses.The basis for determining the combination of accounts receivable is as follows:
Accounts receivable combination 1 Accounts receivable business
Accounts receivable combination 2 Real estate receivable business
Accounts receivable combination 3 Others receivable business
Other receivable portfolio 4 Receivables from related parties within the scope of consolidation
For the accounts receivable divided into a combination, the Company refers to the historical credit lossexperience, combined with the current situation and the forecast of the future economic situation, compiles theaccount receivable age and the whole expected 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 receivable
Portfolio of other receivables 2 Dividends receivable
Other combinations of receivables 3 Deposit and margin receivable
Other receivable portfolio 4 Receivable advances
Combination of other receivables 5 Value-added tax receivable is increased and refunded
Other receivable portfolio 6 Receivables from related parties within the scope of consolidation
Other receivables portfolio 7 Other receivables
For 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 defaultrisk exposure and expected credit loss rate within the next 12 months or the entire duration Expected creditlosses.
The basis for determining the combination of receivables financing is as follows:
Receivables financing portfolio 1 bank acceptance bill
For Notes receivable divided into portfolios, the Company refers to historical credit loss experience,combined with current conditions and predictions of future economic conditions, and calculates through defaultrisk exposure and expected credit loss rate within the next 12 months or the entire duration Expected creditlosses.
The basis for determining the portfolio of contract assets is as follows:
Contract assets portfolio 1 conditional collection right of sales
Contract assets portfolio 2 Completed and unsettled project not meeting collection conditions
Contract assets portfolio 3 Quality guarantee deposit not meeting collection conditions
For contract assets 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 rate within the next 12 months or the entire duration Expected creditlosses.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 defaultrisk exposure and expected credit loss rate within the next 12 months or the entire duration Expected creditlosses.
② Lower credit risk
If the risk of default on financial instruments is low, the borrower’s ability to meet its contractualcash flow obligations in the short term is strong, and even if the economic situation and operating environmentare adversely changed over a long period of time, it may not necessarily reduce the receivables' performanceof their contractual cash. The ability of the flow obligation, the financial instrument is considered to havea lower credit risk.
③ Significant increase in credit risk
The Company compares the default probability of the financial instrument during the expected lifetimedetermined by the balance sheet date with the default probability of the expected lifetime during the initialconfirmation to determine the relative probability of the default probability of the financial instrument duringthe expected lifetime Changes to assess whether the credit risk of financial instruments has increasedsignificantly since initial recognition.
In determining whether the credit risk has increased significantly since the initial recognition, theCompany considers reasonable and evidenced information, including forward-looking information, that can beobtained without unnecessary additional costs 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 significantchanges in the debtor’s ability to perform its debt service obligations;
C. Whether the actual or expected operating results of the debtor have changed significantly; whether theregulatory, economic or 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 theguarantee provided by a third party or the quality of credit enhancement. These changes are expected to reducethe debtor’s economic motivation for repayment within the time limit specified in the contract or affect theprobability of default;
E. Whether there is a significant change in the economic motivation that is expected to reduce the debtor'srepayment according to the contractual deadline;
F. Anticipated changes to the loan contract, including whether the expected violation of the contract mayresult in the exemption or revision of contract obligations, granting interest-free periods, rising interestrates, requiring additional collateral or guarantees, or making other changes to the contractual framework offinancial 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 increasedsignificantly on the basis of a single financial instrument or combination of financial instruments. Whenconducting an assessment based on a combination of financial instruments, the Company can classify financialinstruments based on common credit risk characteristics, such as overdue information and credit risk ratings.
If the overdue period exceeds 30 days, the Company has determined that the credit risk of financialinstruments has increased significantly. Unless the Company does not have to pay excessive costs or efforts toobtain reasonable and warranted information, it proves that although it has exceeded the time limit of 30 daysagreed upon in the Contract, credit risks have not increased significantly 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 andcredit investments measured at fair value and whose changes are included in other comprehensive income haveundergone credit impairment. When one or more events that adversely affect the expected future cash flows ofa financial asset occur, the financial asset becomes a financial asset that has suffered a credit impairment.Evidence that credit impairment has occurred in financial assets includes the following observable information:
Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor,such as payment of interest or default or overdue of principal; (B) The concession that the debtor would notmake under any other circumstances for economic or contractual considerations relating to the financialdifficulties of the debtor; The debtor is likely to be bankrupt or undertake other financial restructuring; Thefinancial difficulties of the issuer or debtor lead to the disappearance of the active market for the financialasset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that a creditloss has occurred.
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-measures the expected credit losses on each balance sheet date, and the increase or reversal ofthe loss provision resulting therefrom is included as an impairment loss or gain. Current profit and loss. Forfinancial assets measured at amortized cost, the loss allowance offsets the book value of the financial assetlisted on the balance sheet; for debt investments measured at fair value and whose changes are included in othercomprehensive income, the Company Recognition of its loss provisions in gains does not offset the book valueof the financial asset.
⑥ Canceled
If it is no longer reasonably expected that the contract cash flow of the financial assets will be fullyor partially recovered, the book balance of the financial assets will be directly reduced. Such write-offconstitutes the derecognition of related financial assets. This usually occurs when the Company determines thatthe debtor has no assets or sources of income that generate sufficient cash flow to cover the amount that willbe written down.
If the financial assets that have been written down are recovered in the future, the reversal of theimpairment loss is included in the 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 contractualright to collect the cash flow of the financial assets and undertakes the contractual obligation to pay thecollected 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 neither transferred nor retained almost all the risks and rewards in the ownership of financial assets,but have given up control of the financial assets, terminate the confirmation The financial asset.
In determining whether control over the transferred financial asset has been waived, the actual capacityof the transferor to sell the financial asset is determined. If the transferor is able to sell the transferredfinancial assets wholly to a third party that does not have a relationship with them, and has no additionalconditions to limit the sale, it indicates ds has waived control over the financial assets.
The Company pays attention to the essence of financial asset transfer when judging whether financial assettransfer meets the condition of financial asset termination.
If the overall transfer of financial assets meets the conditions for termination of confirmation, thedifference between the following 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 theentire transferred financial assets will be included in the derecognized part and the unterminated part (in thiscase, the retained service assets are regarded as part of the continued recognition of financial assets) Betweenthem, they are apportioned according to their respective relative fair values on the transfer date, and thedifference 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, andhave not given up control of the financial assets, the relevant financial assets should be confirmed accordingto the extent of their continued involvement in the transferred financial assets, and the relevant liabilitiesshould be recognized accordingly.
The extent to which the transferred financial assets continue to be involved refers to the extent to whichthe enterprise undertakes 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 areretained, the whole of the transferred financial assets shall continue to be recognized and the considerationreceived shall be recognized as a financial liability.The financial asset and the recognized related financial liabilities shall not offset each other. In thesubsequent accounting period, the enterprise shall continue to recognize the income (or gain) generated by thefinancial 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 cannotbe offset against each other. However, if the following conditions are met, the net amount offset by each otheris listed in the balance sheet:
The Company has a statutory right to offset the confirmed amount, and such legal right is currentlyenforceable;
The Company plans to settle the net assets or realize the financial assets and liquidate the financialliabilities at the same time.
The transferring party shall not offset the transferred financial assets and related liabilities if itdoes not meet the conditions for terminating the recognition.
(8) Recognition of fair value of Finance instruments
For the method of determining the fair value of financial assets and financial liabilities, see Chapter X,V. important accounting policies and accounting estimates 34. Other important accounting policies and accountingestimates (1) fair value measurement.
10. Notes receivable
See Chapter X, V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.
11. Account receivable
See Chapter X, V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the Guidelines for theSelf-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
12. Receivable financing
See Chapter X, 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 MethodsSee Chapter X, 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 in process of production, the materials and materials consumed in the process of production orproviding labor services, including entrusted processing materials, raw materials, products in process, materialsin transit, stored goods, low value consumables, development costs, development products and contract performancecosts, etc.
(2) Pricing of delivering inventory
Inventories are measured at cost when procured. Raw materials, products in process and commodity stocksin transit are measured by the weighted average method.
The real estate business inventory mainly includes inventory materials, products under development,completed development products, and development products intended to be sold but temporarily rented out. Inventoryis measured at the actual costs when the fixed assets are obtained The actual costs of development products includeland transfer payment, infrastructure and facility costs, installation engineering costs, borrows beforecompletion of the development and other costs during the development process. The special maintenance fundscollected in the first period are included in the development overheads. The actual costs of the developmentproduct are priced using the separate pricing method.
(3) Inventory system
The Company inventory adopts the perpetual inventory system, counting at least once a year, the inventoryprofit and loss amount 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 thenet 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 ofthe inventory and after-balance-sheet-date events taken into consideration.
(1) In the course of normal production and operation, the net realizable value of finished goods, commoditiesand materials directly used for sale shall be determined by the estimated price of the inventory minus the estimatedcost of sale and related taxes. The inventory held for the execution of a sales contract or a labor contractshall be measured on the basis of the contract price as its net realizable value; If the quantity held is greaterthan the quantity ordered under the sales contract, the net realizable value of the excess inventory is measuredon 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 processedis determined by the amount of the estimated selling price of the finished product minus the estimated cost tobe incurred at the time of completion, estimated sales expenses and related taxes Realize the net value. If thenet realizable value of the finished product produced by it is higher than the cost, the material is measuredat cost; If the decrease in the price of the material indicates that the net realizable value of the finishedproduct is lower than the cost, the material is measured as the net realizable value and the inventory is preparedfor a decrease based on its difference.
③ Depreciation preparation of inventory is generally based on a single inventory item; For a large numberof inventories with a 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 balancesheet date, the amount of the write-down will be restored and transferred back within the amount of inventorydepreciation reserve that has been accrued, and the amount returned will be included in the current profit andloss.
(5) Methods of amortization of swing materials
Low-value consumables are amortized on on-off amortization basis at using.
15. Contract assets
The Company presents contract assets or liabilities in the balance sheet according to the relationshipbetween performance obligation and customer payment. The consideration for which the Company is entitled toreceive (subject to factors other than the passage of time) for the transfer of goods or the provision of servicesto customers is listed as contract assets. The Company's obligation to transfer goods or provide services tocustomers for consideration received or receivable from customers is listed as contractual liabilities.
For the determination method and accounting treatment method of the Company's expected credit loss ofcontract assets, see 9. Financial instruments in Chapter X, V. Important accounting policies and accountingestimates.Contract assets and contract liabilities are listed separately in the balance sheet. Contract assets andcontract liabilities under the same contract are listed in net amount. If the net amount is the debit balance,it shall be listed in "contract assets" or "other non-current assets" according to its liquidity; if the netamount is the credit balance, it shall be listed in "contract liabilities" or "other non-current liabilities"according to its liquidity. Contract assets and contract liabilities under different contracts cannot offseteach other.
16. Contract costs
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 followingconditions are met simultaneously:
① The cost is directly related to a current or expected contract, including direct labor, direct materials,manufacturing expenses (or similar expenses), clearly borne by the customer, and other costs incurred only dueto 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, itshall be recognized as an asset as the contract acquisition cost.
The assets related to the contract cost shall be amortised on the same basis as the income from goods orservices related to the assets; however, if the amortization period of the contract acquisition cost is less
than one year, the Company shall include it in the current profit and loss when it occurs.
If the book value of the assets related to the contract cost is higher than the difference between thefollowing two items, the Company will make provision for impairment for the excess part and recognize it as theloss of asset impairment, and further consider whether the estimated liabilities related to the loss contractshould be made:
① The residual consideration expected to be obtained due to the transfer of goods or services relatedto 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 afterreversal shall not exceed 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 yearor one normal business cycle at the time of initial recognition shall be listed in the "inventory" item, andthe amortization period of no more than one year or one normal business cycle at the time of initial recognitionshall 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 amortization period does not exceed one year or one normal business cycle at the time of initialrecognition, and listed in the item of "other non-current assets" when the amortization period exceeds one yearor 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 onequity 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 relevant activities of the arrangement must be agreed upon by the participants who share control. Indetermining whether there is common control, the first step is to determine whether all or a group of participantscollectively control the arrangement, which is considered collective control by all or a group of participantsif all or a group of participants must act together to determine the activities associated with the arrangement.Secondly, it is judged whether the decision on related activities of the arrangement must be agreed by theparticipants who collectively control the arrangement. If there is a combination of two or more parties thatcan collectively control an arrangement, it does not constitute joint control. When judging whether there isjoint control, the protective rights enjoyed are not considered.
Major influence refers to the power to participate in decision-making of financial and operation policiesof a company, but cannot control or jointly control the making of the policies. When considering whether theCompany can impose significant impacts on the invested entity, impacts of conversion of shares with voting rightsheld directly or indirectly by the investor and voting rights that can be executed in this period held by theinvestor 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 theshares with voting rights of the invested entity, unless there is clear evidence proving that the Company cannot
participate the decision-making of production and operation of the invested entity, the Company has majorinfluence on the invested entity.
(2) Recognition of initial investment costs
Long-term equity investments formed by merger of enterprises shall be determined in accordance withthe following provisions:
A. In the case of an enterprise merger under the same control, where the merging party makes a valuationof the merger by payment of cash, transfer of non-cash assets or undertaking liabilities, the share of thebook value of the owner's interest in the final controlling party's consolidated financial statements asthe initial investment cost of the long-term equity investment at the date of the merger. The differencebetween 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 reserveis insufficient to offset, the retained earnings shall be adjusted;
Long-term equity investment generated by enterprise merger: for long-term equity investment obtainedby merger of enterprises under common control, the obtained share of book value of the interests of the mergedparty’s owner in the consolidate financial statements on the merger date is costs; for long-term equityinvestment obtained by merger of enterprises not under common control, the merger cost is the investmentcost. Adjust the capital reserve according to the difference between the initial investment cost of long-termequity 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 equity securities issued for exchanging of control power over the entities at theday of acquisition. Agency expenses and other administrative expenses such as auditing, legal consulting,or appraisal services occurred relating to the merger of entities are accounted into current income accountwhen occurred.
Long-term equity investments formed by merger of enterprises shall be determined in accordance with thefollowing provisions:
For long-term equity investment obtained by cash, the actually paid consideration is the initial investmentcost. Initial investment costs include expenses, taxes and other necessary expenditures directly related to theacquisition of long-term equity investments;B. Long-term equity investments acquired from the issuance of interest securities are the initial investmentcosts based on the fair value of the issue interest securities;C. For long-term equity investments obtained through non-monetary asset exchanges, if the exchange hascommercial substance and the fair value of the exchanged assets or exchanged assets can be reliably measured,the fair value of the exchanged assets and relevant taxes shall be used as the initial Investment cost, thedifference between the fair value and book value of the swapped-out asset is included in the current profit andloss; if the non-monetary asset exchange does not meet the above two conditions at the same time, the book valueof 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 thefair value of the waived claims and other costs such as taxes directly attributable to the assets and accountfor the difference between the fair value and 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 cancontrol the invested entity; and uses the equity method to measure long-term share equity investment in whichthe Company has substantial influence on the invested entity.
① Cost
For the long-term equity investment measured on the cost basis, except for the announced cash dividendor profit included in the practical cost or price when the investment was made, the cash dividends or profitdistributed by the invested entity are recognized 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 beadjusted if the investment cost of the long-term equity investment is larger than the share of fair value ofthe recognizable assets of the invested entity. When it is smaller than the share of fair value of the recognizableassets of the invested entity, the book value will be adjusted and the difference is included in the currentgains of the investment.
When the equity method is used, the current investment gain is the share of the net gain realized in thecurrent year that can be shared or borne, recognized as investment gain and other misc. income. The book valueof the long-term equity investment is adjusted accordingly. The book value of the long-term equity investmentshould be accordingly decreased based on the share of profit or 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 profitdistribution of the invested entity, adjust the book value of the long-term equity investment and record it inthe capital surplus (other capital surplus). When the share of the net gains that can be enjoyed is recognized,it is recognized after the net profit of the invested entity is adjusted based on the fair value of the recognizeableassets of the invested entity according to the Company's accounting policies and accounting period. Where theaccounting policy and accounting period adopted by the Invested unit are inconsistent with the Company, thefinancial statements of the Invested unit shall be adjusted in accordance with the accounting policy and accountingperiod of the Company, and the investment income and other consolidated income shall be recognized. Internaltransaction gains 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 lossbetween the Company and the invested entity is the impairment loss of transferred assets and should not be writtenoff.
Where substantial influence on invested entities is imposed or joint control is implemented due to increasein investment, the sum of the fair value of the original equity and increased investment on the conversion dateis the initial investment cost under the equity method. If the equity investment originally held is classifiedas other equity instrument investment, the difference between the fair value and the book value, as well as theaccumulated gains or losses originally included in other comprehensive income, shall be transferred out of othercomprehensive income and included in retained income in the current period when the equity method is adopted.
Where joint control or substantial influence on invested entities is lost due to disposal of part ofinvestment, the remaining equity after the disposal should be treated according to the Enterprise AccountingStandard No.22 – Recognition and Measurement of Financial Instruments from the date of losing the joint controlor substantial influence. The difference between the fair value and book value should be accounted the profit
and loss of the current period. For other misc. incomes of original share equity investment determined usingthe equity method, when the equity method is no longer used, it should be treated based on the same basis ofthe treatment of related assets or liability of the invested entities; the other owners' interests related tothe original share equity investment 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 adoptedfor accounting treatment.Equity investments classified as held for sale to associates that are no longer eligible to hold classifiedassets for sale are retrospectively adjusted using the equity method starting from the date that they areclassified as held for sale. The classification is adjusted to hold the financial statements for the period tobe sold.
(5) Impairment examination and providing of impairment provision
For the investment in subsidiaries and associated enterprises, the method of withdrawing asset impairmentis shown in Chapter X, V. important accounting policies and accounting estimates. 24. Impairment of long-termassets.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 marketprice and other information of same or similar real estates to reasonably estimate the investment real estates’fair value, the Company will use the fair value mode to measure the investment real estate subsequently. Variationsin fair value are accounted into the current gain/loss account.
The fair value of investment real estates is determined with reference to the current market prices ofsame or similar real estates in active markets; when no such price is available, with reference to the recenttransaction prices and consideration of factors including transaction background, date and district to reasonablyestimate the fair value; or based on the estimated lease gains and present value of related cash flows.
For investment real estate under construction (including investment real estate under construction forthe first time), if the fair value cannot be reliably determined but the expected fair value of the real estateafter completion is continuously and reliably obtained, the investment real estate under construction is measuredby cost. When the fair value can be measured reliably or after completion (the earlier one), it is measured atfair value. For an investment real estate whose fair value is proven unable to be obtained continuously and reliablyby objective evidence, the real estate will be measured at cost basis until it is disposed and no residual valueremains as assumed.
If the cost model is used for subsequent measurement of investment real estate, depreciation or amortizationis calculated according to the straight-line method after the cost of investment real estate minus accumulatedimpairment and net residual value. See this Chapter X V. Important accounting policies, for the method of accruingasset impairment 24. Impairment of long-term assets in accounting estimates.
The types of investment real estate, estimated economic useful life and estimated net residual value rateare determined as follows:
| Type | Service year (year) | Residual rate % | Annual depreciation rate % |
| Houses & buildings | 20-50 | 10.00 | 1.80-4.50 |
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.Fixed assets are recognized at the actual cost of acquisition when the following conditions are met: (1) The economic benefitsassociated with the fixed assets are likely to flow into the enterprise.
② The cost of the fixed assets can be measured reliably.
Overhaul cost generated by regular examination on fixed assets is recognized as fixed assets costs when there is evidence provingthat it meets fix assets recognition conditions. If not, it will be accounted into the current gain/loss account.
(2) Depreciation method
The types of investment real estate, estimated economic useful life and estimated net residual value rate are determined asfollows:
| Type | Depreciation method | Service year (year) | Residual rate % | Annual depreciation rate % |
| Houses & buildings | Average age | 20-50 | 10.00 | 1.80-4.50 |
| Mechanical equipment | Average age | 10.00 | 10.00 | 9.00 |
| Transportation facilities | Average age | 5.00 | 10.00 | 18.00 |
| Electronics and other devices | Average age | 5.00 | 10.00 | 18.00 |
| PV power plants | Average age | 20.00 | 5.00 | 4.75 |
For fixed assets for which depreciation provision is made, the depreciation rate will be determined afterthe accumulative depreciation provision amount is deducted.
At end of each fiscal year, verification will be made on the useful life, predicted retained value, anddepreciation basis. The useful life will be adjusted if the useful life is different from the predicted one;
the net residual value will be adjusted if the net residual value is different from the predicted one.
20. Construction in process
Construction in progress is accounted for by project classification.Standard and timing for transferring construction in process into fixed assetsThe full expenditure incurred on the construction-in-progress project as a fixed asset is recorded as thevalue of the asset before the asset is constructed to the intended usable state. This includes construction costs,the original cost of equipment, other necessary expenditures incurred in order to enable the construction worksto reach the intended usable status and the borrowing costs incurred for the specific borrowing of the projectand the general borrowing expenses incurred before the assets reach the intended usable status. Constructionin process will be transferred to fixed assets when it reaches the preset service condition. The fixed assetsthat have reached the intended usable state but have not been completed shall be transferred to the fixed assetsaccording to the estimated value according to the estimated value according to the estimated value accordingto the project budget, cost or actual project cost, etc. The depreciation of the fixed assets shall be accruedaccording to the Company's fixed assets depreciation policy. The original estimated value shall be adjustedaccording 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 assetsatisfying the conditions 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, hasalready started.
Other interest on loans, discounts or premiums and exchange differences are included in the income andloss incurred in the current period.
If the construction or production of assets satisfying the capitalizing conditions is suspended abnormallyfor over 3 months, capitalizing of borrowing expenses shall be suspended. During the normal suspension period,borrowing expenses will be capitalized continuously.
When the asset satisfying the capitalizing conditions has reached its usable or sellable status,capitalizing of borrowing expenses shall be terminated.
(2) Calculation of the capitalization amount of borrowing expense
Interest expenses generated by special borrowings less the interest income obtained from the deposit ofunused borrowings or investment gains from temporary investment is capitalized; the capitalization amount forgeneral borrowing is determined based on the capitalization rate which is the exceeding part of the accumulativeassets expense over weighted average of the assets expense of the special borrowing/used general borrowing.If the assets that are constructed or produced under the condition of capitalization occupy the general borrowing,the interest amount to be capitalized in the general borrowing shall be calculated and determined by multiplying
the capital rate of the general borrowing by the weighted average of the asset expenditure of the accumulatedassets whose expenditure exceeds that of the specialized borrowing. The capitalization ratio is the weightedaverage interest rate of general borrowings.
22. Use right assets
The term "right to use assets" refers to the right of the lessee to use the leased assets during the leaseterm.At the beginning of the lease term, the right of use assets is initially measured at cost. This cost includes:
(1) The initial measurement amount of lease liabilities;
(2) For the lease payment paid on or before the beginning of the lease term, if there is lease incentive,the relevant amount of lease incentive enjoyed shall be deducted;
(3) Initial direct expenses incurred by the lessee;
(4) The estimated cost incurred by the lessee for dismantling and removing the leased assets, restoring thesite where the leased assets are located or restoring the leased assets to the state agreed in the lease terms.The Company recognizes and measures the cost in accordance with the recognition standards and measurement methodsof estimated liabilities. See 29. Estimated liabilities in Chapter X, V. important accounting policies andaccounting estimates for details. If the above costs are incurred for the production of inventories, they willbe included in the cost of inventories.Depreciation of right of use assets is accrued by using the straight-line method. If it can be reasonablydetermined that the ownership of the leased asset will be obtained at the expiration of the lease term, thedepreciation rate shall be determined according to the asset category of the right to use and the estimated netresidual value rate within the expected remaining service life of the leased asset; If it is impossible toreasonably determine that the ownership of the leased asset will be obtained at the expiration of the lease term,the depreciation rate shall be determined according to the asset category of the right of use within the shorterof the lease term and the remaining service life of the leased asset.
23. 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 intangibleassets with limited useful life. Upon review, the service life and amortization methods of intangible assetsat the end of the period are not different from those previously estimated.
(2) Intangible assets which cannot be foreseeable to bring economic benefits to enterprises shall be regardedas intangible assets whose useful life is uncertain. For intangible assets with uncertain service life, the Companyreviews the service life of intangible assets with uncertain service life at the end of each year. If it is stilluncertain after rechecking, it shall conduct an impairment test on the 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 ofacquisition, and shall use the straight line method system to reasonably amortize their service life, and theamortization amount shall be included in the profit and loss of the current period according to the beneficialitems. The specific amortization amount is the amount after the cost is deducted from the estimated residualvalue. For fixed assets for which depreciation provision is made, the depreciation rate will be determined afterthe accumulative depreciation provision amount is deducted. The residual value of an intangible asset with limiteduseful life is treated as zero, except where a third party undertakes to purchase the intangible asset at theend of its useful life or to obtain expected residual value information based on the active market, which islikely to exist at the end of its 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 activitiesas the research stage, and the intangible assets expenditure in the research stage is included in the currentprofit and loss period.
② The development activities carried out after the Company has completed the research stage as thedevelopment 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 followingconditions 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 productsproduced by the intangible assets exist in the market or the intangible assets themselves exist in the market,and the intangible assets will be used internally, which can prove their usefulness;
D. Have sufficient technical, financial and other resource support to complete the development of theintangible asset, and have the ability to use or sell the intangible asset;
E. The expenditure attributable to the development stage of the intangible asset can be reliably measured.
24. Assets impairment
The Group uses the cost mode to continue measuring the assets impairment to investment real estate, fixedassets construction in progress, intangible assets and goodwill (except for the inventories, investment realestate measured by the fair value mode, deferred income tax assets and financial assets). The method is determinedas follows:
The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such signexists, the Company estimates the recoverable amount and conducts the impairment test. Impairment test isconducted annually for goodwill generated by mergers and intangible assets that have not reached the usefulcondition no matter whether the impairment sign exists.
The recoverable amount is determined by the higher of the net of fair value minus disposal expense andthe present value of the predicted future cash flow. The Company estimates the recoverable amount on the individualasset item basis; whether it is hard to estimate the recoverable amount on the individual asset item basis,determine the recoverable amount based on the asset group that the assets belong to. The assets group is determinedby whether the main cash flow generated by the Group is independent from those generated by other assets or assetsgroups.
When the recoverable amount of the assets or assets group is lower than its book value, the Company writesdown the book value to the recoverable amount, the write-down amount is accounted into the current income accountand the assets impairment provision is made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized through reasonablemeasures since the purchase day to related asset groups; those cannot be amortized to related assets groups areamortized to related combination of asset groups. The related asset groups or combination of asset groups referto those that can benefit from the synergistic effect of mergers and must not exceed to the reporting rangedetermined by the Company.
When the impairment test is conducted, if there is sign of impairment to the asset group or combinationof asset groups related to goodwill, first perform impair test for asset group or combination of asset groupswithout goodwill and calculate the recoverable amount and recognize the related impairment loss. Then conductimpairment test on those with goodwill, compare the book value with recoverable amount. If the recoverable amountis 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.
25. Long-term amortizable expenses
The long-term deferred expenses shall be used to calculate the expenses that have occurred but should be borneby the Company in the current and subsequent periods with an amortization period of more than one year. TheCompany's long-term deferred expenses are amortized averagely during the benefit period.
26. Contract liabilities
See 15. Contract assets in Chapter X, V. Important Accounting Policies and Accounting Estimates for details.
27. 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 theactual short-term remuneration as liabilities and shall account for the current income and loss, except as requiredor permitted by other accounting standards.
② Employee welfare
The employee benefits incurred by the Company shall be included in the current profit and loss or relatedasset costs according to the actual amount incurred. Where the employee's benefit is non-monetary, it shall bemeasured on the basis of fair value.
③ Social insurance premiums and housing accumulation funds such as health insurance premiums, work injurypremiums, 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. social insurance premiums and housing accumulation funds for the staff and workers, as well as the unionfunds and the staff and workers education funds according to the regulations, in the accounting period for whichthe staff and workers provide services, the corresponding salary amount of the staff and workers, and confirmsthe corresponding liabilities, which are included in the current profit 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 employeesprovide service, thus increasing their future right of absence with pay. The Company confirms the salary of theemployee related to the absence 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 thesalary payable to the staff and workers:
A. The legal or presumptive obligation of the enterprise to pay the remuneration of its employees as aresult 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 Company's post-employment benefit plan is defined contribution plan. Defined contribution plans include basicendowment insurance, unemployment insurance, etc. During the accounting period when employees provide servicesfor them, the Company shall recognize the deposit amount calculated according to the defined deposit plan asliabilities and include it in the current profits and 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 termination benefits shall be recognized at the earliest of the following two and shall be includedin the current profit and loss:
① An enterprise may not unilaterally withdraw the resignation benefits provided for by the dismissal planor reduction proposal;
② When the enterprise recognizes the costs or expenses related to the reorganization involving the paymentof resignation benefits.
28. Lease liabilities
The lease liabilities are initially measured Company shall according to the present value of the unpaidlease payments at the beginning of the lease term. The lease payment includes the following five items:
(1) Fixed payment amount and substantial fixed payment amount. If there is lease incentive, the relevantamount of lease incentive shall be deducted;
(2) Variable lease payments depending on index or ratio;
(3) The exercise price of the purchase option, provided that the lessee reasonably determines that the optionwill be exercised;
(4) The amount to be paid for exercising the option to terminate the lease, provided that the lease termreflects that the lessee will exercise the option to terminate the lease;
(5) The amount expected to be paid according to the residual value of the guarantee provided by the lessee.When calculating the present value of lease payments, the implicit interest rate of the lease is used asthe discount rate. If the implicit interest rate of the lease cannot be determined, the incremental borrowinginterest rate of the company is used as the discount rate. The difference between the lease payment amount andits present value is regarded as unrecognized financing expenses, and the interest expenses are recognizedaccording to the discount rate of the present value of the lease payment amount during each period of the leaseterm and included in the current profit and loss. The amount of variable lease payments not included in themeasurement of lease liabilities shall be included in the current profit and loss when actually incurred.After the beginning date of the lease term, when the actual fixed payment amount changes, the expectedpayable amount of the guaranteed residual value changes, the index or ratio used to determine the lease paymentamount changes, the evaluation results or actual exercise of the purchase option, renewal option or terminationoption changes, the Company remeasures the lease liability according to the present value of the changed leasepayment amount, And adjust the book value of the right to use assets accordingly.
29. Anticipated liabilities
(1) Recognition standards of anticipated liabilities
When responsibilities occurred in connection to contingent issues, and all of the following conditionsare satisfied, they are recognized 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 currentresponsibility, and with considerations to the relative risks, uncertainty, and periodic value of currency. Oneach balance sheet date, review the book value of the estimated liabilities. Where there is conclusive evidencethat the book value does not reflect the current best estimate, the book value is adjusted to the current bestestimate.
30. Revenue
The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the
Guidelines for the Self-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - IndustryInformation Disclosure.
(1) General principles
Income is the total inflow of economic benefits formed in the daily activities of the Company, which willlead to the increase of shareholders' 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 recognizedwhen the customer obtains the control right of relevant goods. To obtain the control right of the relevant commoditymeans to be able to dominate the use 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 transactionprice to each single performance obligation according to the relative proportion of the separate selling priceof the goods or services promised by each single performance obligation on the start date of the contract, andmeasure the income according to the transaction price allocated to each single performance obligation.
The transaction price refers to the amount of consideration that the Company is expected to be entitledto receive due to the transfer of goods or services to customers, excluding the amount collected on behalf ofa third party. When determining the contract transaction price, if there is a variable consideration, the Companyshall determine the best estimate of the variable consideration according to the expected value or the most likelyamount, and include it in the transaction price with the amount not exceeding the accumulated recognized incomewhen the relevant uncertainty is eliminated, which is most likely not to have a significant reversal. If thereis a significant financing component in the contract, the Company will determine the transaction price accordingto the amount payable in cash when the customer obtains the control right of the commodity. The difference betweenthe transaction price and the contract consideration will be amortised by the effective interest method duringthe contract period. If the interval between the control right transfer and the customer's payment is less thanone year, the Company will not consider the financing component Points.
If one of the following conditions is met, the performance obligation shall be performed within a certainperiod 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 benefitsbrought by the Company'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 Companyhas the right to collect money for the performance part that has been completed so far during the whole contractperiod.
For the performance obligations performed within a certain period of time, the Company shall recognizethe revenue according to the performance progress within that period, except that the performance progress cannotbe reasonably determined. The Company determines the performance schedule of providing services according tothe input method. When the progress of performance cannot be reasonably determined, if the cost incurred by theCompany is expected to be compensated, the revenue shall be recognized according to the amount of cost incurreduntil the progress of performance can be reasonably determined.For the performance obligation performed at a certain time point, the Company recognizes the revenue atthe time point when the customer obtains the control right of relevant goods. In determining whether a customerhas 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 theobligation to pay for the goods;
② The Company has transferred the legal ownership of the goods to the customer, that is, the customerhas the legal ownership of the goods;
③ The Company has transferred the goods in kind to the customer, that is, the customer has possessed thegoods in kind;
④ The Company has transferred the main risks and rewards of the ownership of the goods to the customer,that is, the customer 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 shall recognize the revenue according to the amount of consideration it is entitled to obtain dueto the transfer of the goods to the customer, and recognize the amount expected to be returned due to the salesreturn as the estimated liability; at the same time, the Company shall deduct the estimated cost of recoveringthe goods according to the book value of the expected returned goods at the time of transfer（ The balance afterdeducting 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 transferredgoods at the time of transfer. On each balance sheet date, the Company re estimates the return of future salesand re measures the above assets and liabilities.
Warranty obligations
According to the contract and legal provisions, the Company provides quality assurance for the goods soldand the projects constructed. For the guarantee quality assurance to ensure that the goods sold meet theestablished standards, the Company conducts accounting treatment in accordance with the accounting standardsfor Business Enterprises No. 13 - contingencies. For the service quality assurance which provides a separateservice in addition to guaranteeing that the goods sold meet the established standards, the Company takes itas a single performance obligation, allocates part of the transaction price to the service quality assuranceaccording to the relative proportion of the separate selling price of the goods and service quality assurance,and recognizes the revenue when the customer obtains the service control right. When evaluating whether the qualityassurance provides a separate service in addition to assuring customers that the goods sold meet the establishedstandards, the Company considers whether the quality assurance is a statutory requirement, the quality assuranceperiod, and the nature of the Company's commitment to perform the task.
Customer consideration payableIf there is consideration payable to the customer in the contract, unless the consideration is to obtainother clearly distinguishable goods or services from the customer, the Company will offset the transaction pricewith the consideration payable, and offset the current income at the later time of confirming the relevant incomeor paying (or promising to pay) the customer's consideration.Contractual rights not exercised by customersIf the Company advances sales of goods or services to customers, the amount shall be recognized as liabilitiesfirst, and then converted into income when relevant performance obligations are fulfilled. When the Company doesnot need to return the advance payment and the customer may give up all or part of the contract rights, if theCompany expects to have the right to obtain the amount related to the contract rights given up by the customer,the above amount shall be recognized as income in proportion according to the mode of the customer exercisingthe contract rights; otherwise, the Company only has the very low possibility of the customer requiring to performthe remaining performance obligations The relevant balance of the above liabilities is converted into income.Contract changeWhen 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 contract price reflects the separate price of the new construction service, the Company will treatthe contract change as a separate contract for accounting;
② If the contract change does not belong to the above-mentioned situation (1), and there is a cleardistinction between the transferred construction service and the non transferred construction service on thedate of contract change, the Company will regard it as the termination of the original contract, and at the sametime, combine the non-performance part of the original contract and the contract change part into a new contractfor accounting treatment;
③ If the contract change does not belong to the above situation (1), and there is no clear distinctionbetween the transferred construction services and the non transferred construction services on the date ofcontract change, the Company will take the contract change part as an integral part of the original contractfor accounting treatment, and the resulting impact on the recognized income will be adjusted to the current incomeon 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 transferringcurtain wall materials, electric energy, etc., which belongs to the performance obligation at a certain timepoint.
Revenue from domestic sales of products is recognized at the time when the customer obtains the right ofcontrol of the goods on the basis of comprehensive consideration of the following factors: the Company hasdelivered the products to the customer according to the contract, the customer has accepted the goods, the paymentfor goods has been recovered or the receipt has been obtained, and the relevant economic benefits are likelyto flow in, the main risks and rewards of the ownership of the goods have been transferred, the legal ownership
has been transferred;The following conditions should be met for the recognition of export product revenue: The Company hasdeclared the product according to the contract, obtained the bill of lading, collected the payment for goodsor obtained the receipt certificate, and the relevant economic benefits are likely to flow in, the main risksand rewards of the ownership of goods have been transferred, and the legal ownership of goods has been transferred.
② Service contract
The service contract between the Company and its customers includes the performance obligations of metroplatform screen door operation maintenance, curtain wall maintenance and property services. As the Company'sperformance at the same time, the customers obtain and consume the economic benefits brought by the Company'sperformance, the Company takes it as the performance obligation within a certain period of time and allocatesit equally during the service provision period.
③ Engineering contract
The project contract between the Company and the customer includes the performance obligations of curtainwall project and metro platform screen door project construction. As the customer can control the goods underconstruction in the process of the Company's performance, the Company takes them as the performance obligationswithin a certain period of time, and recognizes the income according to the performance progress, except thatthe performance progress cannot be reasonably determined. The Company determines the performance schedule ofproviding services according to the input method. The performance schedule shall be determined according to theproportion of the actual contract cost to the estimated total contract cost. On the balance sheet date, the Companyre 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 propertyis transferred to the customer. Based on the terms of the sales contract and the legal provisions applicableto the contract, the control of the property can be transferred within a certain period of time or at a certainpoint in time. Only if the goods produced by the Company during the performance of the contract have irreplaceableuses, and the Company has the right to collect payment for the cumulative performance part that has been completedduring the entire contract period, the performance obligation has been completed during the 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 theperformance obligations to the estimated total cost of the contract. Otherwise, the income is recognized whenthe customer obtains the physical ownership or legal ownership of the completed property and the Company hasobtained the current right of collection and is likely to recover the consideration. When confirming the contracttransaction price, if the financing component is significant, the Company will adjust the contract commitmentconsideration according to the financing component of the contract.
(3)Differences in revenue recognition accounting policies caused by different business models of similarbusinessesThere is no difference in revenue recognition due to the adoption of different accounting policies for similarbusinesses.
31. 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. Nonemonetary capital is measured 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 othermanners long-term assets; or subsidies related to benefits. If the asset-related government subsidy is recognizedas deferred gain, should be recorded in gain and loss in the service life. Government subsidy measured at thenominal amount is accounted into current income account. If the relevant assets are sold, transferred, scrappedor damaged before the end of their useful life, the unallocated relevant deferred income balance shall betransferred 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-related government subsidy should be accounted as follows:
Subsidy that will be used to compensate related future costs or losses should be recognized as deferredgain and recorded in the gain 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 thecurrent period or offset related cost.
For government subsidies that include both asset-related and income-related parts, separate different partsfor accounting treatment; It is difficult to distinguish between the overall classification of governmentsubsidies related to benefits.
Government subsidy related to routine operations should be recorded in other gains or offset related cost.Government subsidy not 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 theinterest-subsidy funds to the lending bank, the loan amount actually received will be used as the entry valueof the loan, and the borrowing cost will be calculated based on the loan principal and policy-based preferentialinterest rate.
If the government allocates the interest-bearing funds directly to the Group, discount interest will offsetthe borrowing costs.
④ Government subsidy refund
When a confirmed government subsidy needs to be returned, the book value of the asset is adjusted against thebook value of the relevant asset at initial recognition. If there is a related deferred income balance, the bookbalance of the related deferred income is 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.
32. 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 balancesheet day and the tax base and the liabilities method to recognize the deferred income tax. 26. Deferred incometax assets and deferred income tax liabilities
(1) Deferred income tax assets
For deductible temporary discrepancies, deductible losses and tax offsets that can be carried forward forfuture years, the impact on income tax is calculated at the estimated income tax rate for the transfer-back periodand the impact is recognized as deferred income tax assets, provided that the Company is likely to obtain futuretaxable income for deductible temporary discrepancies, deductible losses and tax offsets.
At the same time, the impact on income tax of deductible temporary discrepancies resulting from the initialrecognition of assets or liabilities in transactions or matters with the following characteristics is inconclusiveas 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 taxableproceeds;
In the event of temporary discrepancy of deductible investment related to subsidiaries, joint venturesand joint ventures, and meeting the following two conditions, the amount of impact (talent) on income tax shallbe 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 temporarydifferences;
On the balance sheet date, if there is conclusive evidence that sufficient taxable income is likely tobe obtained in the future to offset the deductible temporary differences, the deferred income tax assets thathave not been recognized in the previous period are recognized.
On the balance sheet day, the Company re-examines the book value of the deferred income tax assets. Ifit is unlikely to have adequate taxable proceeds to reduce the benefits of the deferred income tax assets, lessthe deferred income tax assets’ book value. When there are adequate taxable proceeds, the lessened amount willbe reversed.
(2) Deferred income tax assets
All provisional differences in taxable income of the Company shall be measured on the basis of the estimatedincome tax rate for the period of transfer-back and shall be recognized as deferred income tax liabilities, exceptthat:
At the same time, the impact on income tax of deductible temporary discrepancies resulting the initial
recognition of assets or liabilities in transactions or matters with the following characteristics is inconclusiveas deferred income tax Liabilities:
A. Initial recognition of goodwill;B. Initial recognition of goodwill, or of assets or liabilities generated in transactions with the followingfeatures: the transaction is not a merger and the transaction does not affect the accounting profit or taxableproceeds;
② In the event of temporary discrepancy of deductible investment related to subsidiaries, Joint venturejoint ventures, and meeting the two conditions, the amount of impact (talent) on income tax shall be deemed asdeferred 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 undernon-same control. When deferred income tax liability or deferred income tax asset is recognized, related deferredincome tax expense (or income) is usually 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 transactionsor events directly accounted into the owners’ equity, income tax is accounted as income tax expense into thecurrent gain/loss account. The effects of temporary discrepancy on income tax include the following: Otherintegrated benefits such as fair value change of financial assets available for sale, retroactive adjustmentof accounting policy changes or retroactive restatement of accounting error correction discrepancy to adjustthe 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 thetax law that are allowed to be made up with the taxable income of subsequent years. The uncovered losses (deductiblelosses) and tax deductions that can be carried forward in accordance with the tax law are treated as deductibletemporary differences. When it is expected that sufficient taxable income is likely to be obtained in the futureperiod when it is expected to be available to make up for losses or tax deductions, the corresponding deferredincome 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 purchasedparty and does not meet the deferred income tax asset recognition conditions on the purchase date, it shall notbe recognized. Within 12 months after the purchase date, if new or further information is obtained indicatingthat the relevant conditions on the purchase date already exist, and the economic benefits brought about by thetemporary difference are expected to be deducted on the purchase date, confirm the relevant delivery. Deferredincome tax assets, while reducing goodwill, if the goodwill is not enough to offset, the difference is recognized
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 consolidatedbalance sheet and the taxable basis of the taxpayer due to the offset of the unrealized internal sales gain orloss, the deferred income tax asset or the deferred income tax liability is confirmed in the consolidated balancesheet, and the income tax expense in the consolidated profit statement is adjusted, with the exception of thedeferred income tax related to the transaction or event directly included in the owner's equity and the mergerof 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 periodfor which the cost and expense are recognized in accordance with the accounting standards, the Company shallcalculate the tax basis and temporary discrepancy based on the estimated pre-tax deduction amount at the endof the accounting period and confirm the relevant deferred income tax if it meets the conditions for confirmation.Of these, the amount that can be deducted before tax in the future exceeds the cost related to share paymentrecognized in accordance with the accounting standards, and the excess income tax shall be directly includedin the owner's equity.
33. Leasing
Applicable from Friday, January 1, 2021
(1) Identification of lease
On the commencement date of the contract, the company evaluates whether the contract is a lease or includesa lease. If one party in the contract transfers the right to control the use of one or more identified assetswithin a certain period in exchange for consideration, the contract is a lease or includes a lease. In orderto determine whether the contract transfers the right to control the use of the identified assets within a certainperiod, the company evaluates whether the customers in the contract have the right to obtain almost all the economicbenefits arising from the use of the identified assets during the use period, and have the right to dominatethe use of the identified assets during the use period.
(2) Separate identification of lease
If the contract includes multiple separate leases at the same time, the company will split the contractand conduct accounting treatment for each separate lease. If the following conditions are met at the same time,the right to use the identified asset constitutes a separate lease in the contract: ① the lessee can profitfrom using the asset alone or together with other easily available resources; ② The asset is not highly dependentor highly related to other assets in the contract.
(3) Accounting treatment method of the Company as lessee
On the beginning date of the lease term, the Company recognizes the lease with a lease term of no morethan 12 months and excluding the purchase option as a short-term lease; When a single leased asset is a brand-newasset, the lease with lower value is recognized as a low value asset lease. If the Company sublets or expectsto sublet the leased assets, the original lease is not recognized as a low value asset lease.
For all short-term leases and low value asset leases, the Company will record the lease payment amount
into the relevant asset cost or current profit and loss according to the straight-line method (or other systematicand reasonable methods) in each period of the lease term.
In addition to the above short-term leases and low value asset leases with simplified treatment, the Companyrecognizes the right to use assets and lease liabilities for the lease on the beginning date of the lease term.The recognition and measurement of right of use assets and lease liabilities are detailed in Chapter X, V. Importantaccounting policies and accounting estimates. 22. Right of use assets and 28. Lease liabilities.
(4) Accounting treatment method of the Company as lessor
On the lease commencement date, the Company classifies leases that have substantially transferred almostall the risks and rewards related to the ownership of the leased assets as financial leases, and all other leasesare operating leases.
① Operating lease
During each period of the lease term, the Company recognizes the lease receipts as rental income accordingto the straight-line method (or other systematic and reasonable methods), and the initial direct expenses incurredare capitalized, amortized on the same basis as the recognition of rental income, and included in the currentprofit and loss by stages. The variable lease payments obtained by the Company related to operating leases thatare not included in the lease receipts are included in the current profits and losses when actually incurred.
② Finance lease
On the lease beginning date, the Company recognizes the financial lease receivables according to the netamount of the lease investment (the sum of the unsecured residual value and the present value of the lease receiptsnot received on the lease beginning date discounted according to the lease embedded interest rate), and terminatesthe recognition of the financial lease assets. During each period of the lease term, the Company calculates andrecognizes the interest income according to the interest rate embedded in the lease.
The amount of variable lease payments obtained by the Company that are not included in the measurementof net lease investment shall be included in the current profit and loss when actually incurred.
(5) Accounting treatment of lease change
① Change of lease as a separate lease
If the lease changes and meets the following conditions at the same time, the Company will treat the leasechange as a separate lease for accounting: a. the lease change expands the lease scope by increasing the useright of one or more leased assets; B. The increased consideration is equivalent to the amount adjusted accordingto the conditions of the contract at the separate price for most of the expansion of the lease scope.
② The lease change is not treated as a separate lease
A. The Company as lessee
On the effective date of the lease change, the Company reconfirmed the lease term and discounted the changedlease payment at the revised discount rate to re-measure the lease liability. When calculating the present valueof the lease payment after the change, the implicit interest rate of the lease during the remaining lease periodshall be used as the discount rate; If it is impossible to determine the implicit interest rate of the leasefor the remaining lease period, the incremental loan interest rate on the effective date of the lease changeshall be used as the discount rate.
The impact of the above lease liability adjustment shall be accounted for according to the following
circumstances:
If the lease scope is reduced or the lease term is shortened due to the lease change, the book value ofthe right to use assets shall be reduced, and the relevant gains or losses of partial or complete terminationof the lease shall be included in the current profits and losses;For other lease changes, the book value of theright to use assets shall be adjusted accordingly.The Company as leasorIf the operating lease is changed, the Company will treat it as a new lease for accounting from the effectivedate of the change, and the amount of lease receipts received in advance or receivable related to the lease beforethe change is regarded as the amount of new lease receipts.
If the change of financial lease is not accounted for as a separate lease, the Company will deal with thechanged lease under the following circumstances: if the change of lease takes effect on the lease commencementdate and the lease will be classified as an operating lease, the Company will account for it as a new lease fromthe effective date of lease change, and take the net lease investment before the effective date of lease changeas the book value of leased assets; If the lease change takes effect on the lease commencement date, the leasewill be classified as a financial lease, and the Company will conduct accounting treatment in accordance withthe provisions on modifying or renegotiating the contract.
(6) Sale and lease-back
The Company assesses and determines whether the asset transfer in the sale and leaseback transaction isa sale in accordance with the provisions of 30. Income in Chapter X, V, Important accounting policies and accountingestimates.
① The Company as seller (lessee)
If the asset transfer in the sale and leaseback transaction does not belong to sales, the Company willcontinue to recognize the transferred assets, recognize a financial liability equal to the transfer income, andconduct accounting treatment for the financial liability in accordance with 9。 Financial instruments in ChapterX, V, Important accounting policies and accounting estimates. If the asset transfer belongs to sales, the Companymeasures the right to use assets formed by sale and leaseback according to the part of the book value of theoriginal assets related to the right to use obtained by leaseback, and only recognizes the relevant gains orlosses on the rights transferred to the lessor.
② The Company as buyer (lessor)
If the asset transfer in the sale and leaseback transaction does not belong to sales, the company doesnot recognize the transferred asset, but recognizes a financial asset equal to the transfer income, and carriesout accounting treatment on the financial asset in accordance with 9. Financial instruments in Chapter X, V.Important accounting policies and accounting estimates. If the asset transfer belongs to sales, the Company shallconduct accounting treatment for asset purchase and asset lease in accordance with other applicable accountingstandards for business enterprises.
The following accounting policies for operating leases and financial leases are applicable to 2020 andbefore
The Company transfers all the risks and rewards attached to the asset at substantially transferred to thelessee, it is recognized as financial leasing, and the others are operational leasing.
(1) Accounting of operational leasing
① The Company as the leasor: Rentals from operational leasing are recognized as current gains on straightbasis to the periods of leasing. Where the lessor provides a lease-free period, the total rent shall be apportionedwithin the whole lease-free period without deducting the lease-free period according to the straight line methodor other reasonable method, and the rent-free period shall be recognized as well as the corresponding liabilities.People If the charterer undertakes certain expenses, the Company shall distribute the rent Expense balancededucted 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, thecurrent profit and loss shall be included in the actual occurrence.
② When the Company is the operating lessor, the rent received shall be recognized as income within thelease term by the straight line method. Where the lessor provides a lease-free period, the total rent shall beapportioned within the whole lease-free period without deducting the lease-free period according to the straightline method or other reasonable method, and the rent-free period shall be recognized as well as the correspondingliabilities. If the charterer undertakes certain expenses, the Company shall distribute the rent income balancededucted from the total rent income during the lease term.
Initial direct expenses are recorded to current income account. Larger amounts shall be capitalized andincluded in current profits and losses in installments on the same basis as the confirmed rental income duringthe entire operating lease period. In the event of an agreement or rent, the current profit and loss shall beincluded in the actual occurrence.
The Company does not have financial leasing business.
34. 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 partiesfamiliar with the situation in 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 themost favorable market prices. The Group uses assumptions that market participants use to maximize their economicbenefits when pricing the asset or liability.
The main market refers to the market with the highest transaction volume and activity of the related assetsor liabilities. The most favorable market means the market that can sell the related assets at the highest amountor transfer the related liabilities at the lowest amount after considering the transaction cost and transportationcost.
For financial assets or liabilities in an active market, The Company determines their fair value basedon quotations in the active market. If there is no active market, the Company uses evaluation techniques todetermine the fair value.
For the measurement of non-financial assets at fair value, the ability of market participants to use theassets for optimal purposes to generate economic benefits, or the ability to sell the assets to other marketparticipants that can be used for optimal purposes to generate economic benefits.
① Valuation technology
The Company adopts valuation techniques that are applicable in the current period and are supported bysufficient data and other information. The valuation techniques used mainly include market method, income methodand cost method. The Company uses a method consistent with one or more of the valuation techniques to measurefair value. If multiple valuation techniques are used to measure fair value, the reasonableness of each valuationresult shall be considered, and the fair value shall be selected as the most representative of fair value underthe current circumstances. The amount of value is regarded as fair value.The Company equipment are applicable in the current circumstances and have sufficient available data andother information to support the use of the relevant observable input values prioritized. Unobservable inputvalues are used only when the observable input value cannot be obtained or is not feasible. Observable inputvalues are input values that can be obtained from market data. The Group uses assumptions that market participantsuse to maximize their economic benefits when pricing the asset or liability. Non-observable input values areinput values that cannot be obtained from market data. The input value is obtained based on the best informationavailable 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 firstlevel input value, then uses the second level input value, and finally uses the third level input value. Firstlevel: quotation of same assets or liabilities in an active market (unadjusted) The second level input valueis a directly or indirectly observable input value of the asset or liability in addition to the first level inputvalue. 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 specificrisks associated with recognized assets or liabilities, expected transactions that are likely to occur, or withrespect to the components of the above-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 valueor cash flow variation 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 accountCheck-out options can only be used as a hedging tool if the option is hedged, including those embedded in a hybridcontract. Derivatives embedded in a hybrid 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 valueand whose changes are included in the current profit and loss, but designated as fair value and whose changesare included in the current profit and loss, and their own credit risk changes caused by changes in fair valueexcept for financial liabilities included in other comprehensive income.
Own equity instruments are not financial assets or financial liabilities and cannot be used as hedginginstruments.
A hedged item refers to an item that exposes the Company to the risk of changes in fair value or cash flowand is designated as the hedged object and can be reliably measured. The Company designates the followingindividual projects, project portfolios or their components as hedged projects:
① Confirmed assets or liabilities.
② Confirmed commitments that have not yet been confirmed. Confirmed commitment refers to a legally bindingagreement to exchange 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 thathave not yet been committed 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 orcash flow changes of the project. The Company designates the following project components or their combinationsas hedged items:
① The part of the change in fair value or cash flow (risk component) that is only caused by one or morespecific risks in the overall fair value or cash flow changes of the project. According to the assessment ina specific market environment, the risk component should be able to be individually identified and reliablymeasured. The risk component also includes the part where the fair value or cash flow of the hedged item changesonly 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 orquantity of the project, may be a certain proportion of the whole project, or may be a certain level of the wholeproject. If a certain level includes early repayment rights and the fair value of the early repayment rightsis affected by changes in the risk of the hedge, the level shall not be designated as the hedged item of thefair value hedge, but in the measurement of the hedged item except when the fair value has included the influenceof the prepayment right.
(2.3) Evaluation of hedging relationship
When the hedging relationship is initially specified, the Group officially specifies the related hedgingrelationships with official documents recording the hedging relationships, risk management targets and hedgingstrategies. This document sets out the hedging tools, hedged items, the nature of hedged risks, and the Company'sassessment of hedged effectiveness. Hedging means a financial instrument designated by the Company for the purposeof hedging, whose fair value or cash flow variation is offset the fair value or cash flow variation of the hedgeditem, including: Such hedges are continuously evaluated on and after the initial specified date to meet therequirements for hedging validity.
If the hedging instrument has expired, been sold, the contract is terminated or exercised (but the extensionor replacement as part of the hedging strategy is not treated as expired or contract termination), or the riskmanagement objective changes, resulting in hedging The relationship no longer meets the risk management objectives,or the economic relationship between the hedged item and the hedging instrument no longer exists, or the impactof credit risk begins to dominate in the value changes caused by the economic relationship between the hedgeditem and the hedging instrument, or when the hedge no longer meets the other conditions of the hedge accountingmethod, 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 risk management objective of the designated hedging relationship has not changed, the Companyshall rebalance the hedging relationship.
(2.4) Revenue the of revenue recognition and measurementIf the conditions for applying hedge accounting method are met, it shall be handled according to the followingmethods:
Cash flow hedgingThe part of hedging tool gains or losses that is valid for hedging is recognized as other comprehensiveincome as a cash flow hedging reserve, and the part that is invalid for hedging (that is, other gains or lossesafter deducting other comprehensive income), are counted into the current profit and loss. The amount of cashflow hedging reserve is determined according to the lower of the absolute amounts of the following two items:
①accumulated gains or losses of hedging instruments since the hedging. The amount in the effective arbitrageis 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 ornon-financial liability, or if the expected transaction of the non-financial asset or non-financial liabilityforms a defined commitment to the applicable fair value hedge accounting, the amount of the cash flow hedge reserveoriginally recognized in the other consolidated income is transferred out to account for the initial recognizedamount of the asset or liability. For the remaining cash flow hedges, during the same period when the expectedcash flow to be hedged affects the profit and loss, if the expected sales occur, the cash flow hedge reserverecognized in other 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 Companyshall reduce the share capital by the total amount of the written-off shares, adjust the owner's equity by thedifference between the price paid by the purchased stocks (including transaction costs) and the total amountof the written-off shares, offset the capital reserve (share capital premium), surplus reserve and undistributedprofits in turn; A portion of a capital reserve (share capital premium) that is less than the total face valueand less than the total face value.(3.2) The total expenditure of the repurchase shares of the Company, which is managed as an inventory sharebefore they are cancelled 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, theportion of the transfer income above the cost of the inventory unit; Lower than the inventory stock cost, thecapital reserve (share capital premium), surplus reserve, undistributed profits in turn.
(4) Significant accounting judgment and estimate
The Company continuously reviews significant accounting judgment and estimate adopted for the reasonableforecast of future events based on its historical experience and other factors. Significant accounting judgmentand assumptions that may lead to major adjustment of the book value of assets and liabilities in the next accountingyear 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 cash flow characteristics.The company determines the business mode of managing financial assets at the level of financial assetportfolio, taking into account such factors as how to evaluate and report financial asset performance to keymanagers, the risks that affect financial asset performance and how to manage it, and how to obtain remunerationfor related business managers.When the company assesses whether the contractual cash flow of financial assets is consistent with thebasic borrowing arrangement, there are the following main judgments: whether the principal may change due toearly repayment and other reasons during the duration of the period or the amount of change; whether the interestIncluding the time value of money, credit risk, other basic borrowing risks, and consideration of costs and profits.For example, does the amount paid in advance reflect only the unpaid principal and the interest based on theunpaid principal, as well as the reasonable compensation paid for early termination of the contract.Measurement of expected credit losses of accounts receivableThe Company calculates the expected credit loss of accounts receivable through the risk exposure of accountsreceivable default and the expected credit loss rate, and determines the expected credit loss rate based on thedefault probability and the default loss rate. When determining the expected credit loss rate, the Company usesinternal historical credit loss experience and other data, combined with current conditions and forward-lookinginformation to adjust the historical data. When considering forward-looking information, the indicators usedby the Company include the risks of economic downturn, changes in the external market environment, technologicalenvironment, and customer conditions. The Company regularly monitors and reviews assumptions related to thecalculation of expected credit losses.
Deferred income tax assetsIf there is adequate taxable profit to deduct the loss, the deferred income tax assets should be recognizedby all the unused tax loss. This requires the management to make a lot of judgment to forecast the time and amountof future taxable profit and determine the amount of the deferred tax assets based on the taxation strategy.Income recognitionThe Company's revenue from providing curtain wall construction and metro platform screen door installationservices is recognized over a period of time. The recognition of the income and profit of such engineeringinstallation services depends on the Company's estimation of the contract results and performance progress. Ifthe actual amount of total revenue and total cost is higher or lower than the estimated value of the management,it will affect the amount of revenue and profit recognition of the Company in the future.Engineering contractThe management shall make relevant judgment to confirm the income and expenses of project contractingbusiness according to the performance progress. If losses are expected to occur in the project contract, suchlosses shall be recognized as current expenses. The management of the Company estimates the possible lossesaccording to the budget of the project contract. The Company determines the transaction price according to theterms of the contract and in combination with previous customary practices, and considers the influence of variableconsideration, major financing components in the contract and other factors. During the performance of thecontract, the Company continuously reviews the estimated total contract revenue and the estimated total contractcost. When the initial estimate changes, such as contract changes, claims and awards, the estimated total contractrevenue and the estimated total contract cost are revised. When the estimated total contract cost exceeds thetotal contract revenue, the main business cost and estimated liabilities shall be recognized according to the
loss contract to be executed.
Estimate of fair valueThe Company uses fair value to measure investment real estate and needs to estimate the fair value ofinvestment real estate at least quarterly. This requires the management to reasonably estimate the fair valueof the investment real estate with the help of valuation experts.Development costFor property that has been handed over with income recognized, but whose public facilities have not beenconstructed or not been completed, the management will estimate the development cost for the part that has notbeen started according to the budget to reflect the operation result of the property sales.
35. Major changes in accounting policies and estimates
(1) Changes in accounting policies
√ Applicable □ Inapplicable
Account policy changes and reasons:
(1.1) Implementation of new lease guidelinesOn December 7, 2018, the Ministry of Finance issued the accounting standards for Business Enterprises No.21 - leasing (hereinafter referred to as the "new leasing standards"). The Company has implemented the new leasingstandards since January 1, 2021 and adjusted the relevant contents of accounting policies. See 33. Lease in ChapterX, V. Changes in important accounting policies and accounting estimates.
For contracts existing before the first execution date, the Company chooses not to re-evaluate whetherthey are leases or include leases on the first execution date.For contracts signed or changed after the first execution date, the Company evaluates whether the contractis a lease or includes a lease according to the definition of lease in the new lease standards.
① The Company as leasee
The Company chooses the cumulative impact of the first implementation of the new leasing standards to adjustthe amount of retained earnings and other relevant items in the financial statements at the beginning of theyear of the first implementation (i.e. January 1, 2021), and does not adjust the information of comparable periods:
A. For the financial lease before the first execution date, the Company measures the right of use assetsand lease liabilities respectively according to the original book value of the financial lease in assets andthe financial lease payable on the first execution date;
B. For the operating lease before the first execution date, the Company measures the lease liability onthe first execution date according to the remaining lease payment and the present value discounted by the lessee'sincremental loan interest rate on the first execution date, and measures the right to use asset according tothe amount equal to the lease liability and prepaid rent for each lease;
C. On the first implementation date, the Company conducts impairment test on the right to use assets andcarries out corresponding accounting treatment in accordance with 24. Impairment of long-term assets in ChapterX, V. Important accounting policies and accounting estimates.
The operating lease of leased assets belonging to low value assets before the first execution date of theCompany adopts simplified treatment, and the right to use assets and lease liabilities are not recognized. Inaddition, the Company adopts one or more of the following simplified treatments for operating leases before thefirst execution date:
Leases to be completed within 12 months after the first execution date shall be treated as short-term leases;
When measuring lease liabilities, leases with similar characteristics adopt the same discount rate;
The measurement of right of use assets does not include initial direct expenses;
If there is an option to renew or terminate the lease, the Company determines the lease term accordingto the actual exercise of the option before the first execution date and other latest conditions;
As an alternative to the impairment test of right of use assets, the Company evaluates whether the contractincluding lease is a loss contract before the first execution date according to the accounting standards forBusiness Enterprises No. 13 - contingencies, and adjusts the right of use assets according to the amount of lossreserves recorded in the balance sheet before the first execution date;
If a lease change occurs before the first execution date, the Company will conduct accounting treatmentaccording to the final arrangement of the lease change.
② The Company as leasor
For subleases classified as operating leases before the first execution date and still existing after thefirst execution date, the company, as a sublease, reassesses and classifies them on the first execution datebased on the remaining contract term and terms of the original lease and sublease. In addition, the Company hasnot adjusted the lease as the lessor in accordance with the connection provisions, but has conducted accountingtreatment in accordance with the new lease standards since the first implementation date.
③ Sale and leaseback transaction
For the sale and leaseback transactions existing before the first execution date, the Company will notre-evaluate whether the asset transfer meets the provisions of 30. Accounting treatment of income as sales inChapter X, V. Important accounting policies and accounting estimates on the first execution date. For the saleand leaseback transactions that should be accounted for as sales and financial leases before the first executiondate, the Company, as the seller (lessee), will account for leaseback in the same way as other financial leases,and continue to amortize relevant deferred income or loss within the lease term. For the sale and leasebacktransactions that are accounted for as sales and operating leases before the first execution date, the Company,as the seller (lessee), shall account for the leaseback in the same way as other operating leases, and adjustthe right to use assets according to the relevant deferred income or loss recorded in the balance sheet beforethe first execution date.
Due to the implementation of the new lease standards, the consolidated financial statements of the Companyadjusted the use right assets of RMB5,844,154.69 and lease liabilities of RMB5,844,154.69 on January 1, 2021accordingly. Relevant adjustments have no impact on shareholders' equity in the Company's consolidated financialstatements. Due to the implementation of the new lease standard, there is no impact on the financial statementsof the parent company of the Company.(1.2) Implement the interpretation of accounting standards for Business Enterprises No. 14On January 26, 2021, the Ministry of Finance issued the interpretation of accounting standards for BusinessEnterprises No. 14 (CAI Kuai [2021] No. 1) (hereinafter referred to as "Interpretation No. 14"), which shall
come into force as of the date of promulgation. The Company implemented Interpretation No. 14 on January 26,2021. Explanation No. 14 has no significant impact on the Company.(1.3) Implement the provisions of "relevant presentation of centralized fund management" in theinterpretation of accounting standards for Business Enterprises No. 15On December 30, 2021, the Ministry of Finance issued the interpretation of accounting standards for BusinessEnterprises No. 15 (CAI Kuai [2021] No. 35) (hereinafter referred to as "Interpretation No. 15"), in which thecontent of "relevant presentation of centralized fund management" shall be implemented from the date ofpromulgation, and the Company shall implement the provision from December 30, 2021, which has no significantimpact on the Company.
(2) Changes in major accounting estimates
□ Applicable √ Inapplicable
(3) The first implementation of the new financial instruments guidelines, new lease standards, adjustments thefirst implementation of the financial statements at the beginning of the year 2021
√ Applicable □ Inapplicable
Whether to adjust the balance sheet accounts at the beginning of the year
√ Yes □ No
Consolidated Balance Sheet
In RMB
| Item | Thursday, December 31, 2020 | Friday, January 1, 2021 | Adjustment |
| Current asset: | |||
| Monetary capital | 1,463,974,162.45 | 1,463,974,162.45 | |
| Settlement provision | |||
| Outgoing call loan | |||
| Transactional financial assets | 14,382,896.04 | 14,382,896.04 | |
| Derivative financial assets | 6,974,448.22 | 6,974,448.22 | |
| Notes receivable | 207,165,063.97 | 207,165,063.97 | |
| Account receivable | 616,960,252.54 | 616,960,252.54 | |
| Receivable financing | 10,727,129.28 | 10,727,129.28 | |
| Prepayment | 23,940,064.88 | 23,940,064.88 | |
| Insurance receivable | |||
| Reinsurance receivable | |||
| Provisions of Reinsurance contracts |
| receivable | |||
| Other receivables | 162,284,588.59 | 162,284,588.59 | |
| Including: interest receivable | |||
| Dividend receivable | |||
| Repurchasing of financial assets | |||
| Inventory | 837,831,790.88 | 837,831,790.88 | |
| Contract assets | 1,433,963,300.50 | 1,433,963,300.50 | |
| Assets held for sales | |||
| Non-current assets due in 1 year | 141,681,778.35 | 141,681,778.35 | |
| Other current assets | 233,395,117.10 | 233,395,117.10 | |
| Total current assets | 5,153,280,592.80 | 5,153,280,592.80 | |
| Non-current assets: | |||
| Loan and advancement provided | |||
| Debt investment | |||
| Other debt investment | |||
| Long-term receivables | |||
| Long-term share equity investment | 55,902,377.95 | 55,902,377.95 | |
| Investment in other equity tools | 17,628,307.59 | 17,628,307.59 | |
| Other non-current financial assets | 5,025,186.16 | 5,025,186.16 | |
| Investment real estate | 5,634,648,416.52 | 5,634,648,416.52 | |
| Fixed assets | 483,217,323.75 | 483,217,323.75 | |
| Construction in process | 168,626,803.01 | 168,626,803.01 | |
| Productive biological assets | |||
| Gas & petrol | |||
| Use right assets | 5,844,154.69 | 5,844,154.69 | |
| Intangible assets | 77,201,610.87 | 77,201,610.87 | |
| R&D expense |
| Goodwill | |||
| Long-term amortizable expenses | 4,581,487.32 | 4,581,487.32 | |
| Deferred income tax assets | 186,689,823.51 | 186,689,823.51 | |
| Other non-current assets | 104,821,461.55 | 104,821,461.55 | |
| Total of non-current assets | 6,738,342,798.23 | 6,744,186,952.92 | 5,844,154.69 |
| Total of assets | 11,891,623,391.03 | 11,897,467,545.72 | 5,844,154.69 |
| Current liabilities | |||
| Short-term loans | 1,048,250,327.62 | 1,048,250,327.62 | |
| Loans from Central Bank | |||
| Call loan received | |||
| Transactional financial liabilities | |||
| Derivative financial liabilities | 915,234.93 | 915,234.93 | |
| Notes payable | 866,224,515.42 | 866,224,515.42 | |
| Account payable | 1,282,682,418.40 | 1,282,682,418.40 | |
| Prepayment received | 1,544,655.62 | 1,544,655.62 | |
| Contract liabilities | 265,487,113.12 | 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 | 60,894,196.78 | 60,894,196.78 | |
| Taxes payable | 360,295,879.85 | 360,295,879.85 | |
| Other payables | 153,635,067.86 | 153,635,067.86 | |
| Including: interest payable | |||
| Dividend payable | 6,000,000.00 | 6,000,000.00 |
| Fees and commissions payable | |||
| Reinsurance fee payable | |||
| Liabilities held for sales | |||
| Non-current liabilities due in 1 year | 103,359,833.57 | 103,359,833.57 | |
| Other current liabilities | 107,688,425.69 | 107,688,425.69 | |
| Total current liabilities | 4,250,977,668.86 | 4,250,977,668.86 | |
| Non-current liabilities: | |||
| Insurance contract provision | |||
| Long-term loans | 1,099,411,462.35 | 1,099,411,462.35 | |
| Bond payable | |||
| Including: preferred stock | |||
| Perpetual bond | |||
| Lease liabilities | 5,844,154.69 | 5,844,154.69 | |
| Long-term payable | |||
| Long-term employees' wage payable | |||
| Anticipated liabilities | 33,425,500.13 | 33,425,500.13 | |
| Deferred earning | 9,168,492.17 | 9,168,492.17 | |
| Deferred income tax liabilities | 1,038,091,182.43 | 1,038,091,182.43 | |
| Other non-current liabilities | |||
| Total of non-current liabilities | 2,180,096,637.08 | 2,185,940,791.77 | 5,844,154.69 |
| Total liabilities | 6,431,074,305.94 | 6,436,918,460.63 | 5,844,154.69 |
| Owner's equity: | |||
| Share capital | 1,088,278,951.00 | 1,088,278,951.00 | |
| Other equity tools | |||
| Including: preferred stock | |||
| Perpetual bond |
| Capital reserves | 20,459,588.40 | 20,459,588.40 | |
| Less: Shares in stock | 42,748,530.12 | 42,748,530.12 | |
| Other miscellaneous income | 2,078,167.63 | 2,078,167.63 | |
| Special reserves | |||
| Surplus reserve | 106,783,436.96 | 106,783,436.96 | |
| Common risk provisions | |||
| Retained profit | 4,217,843,325.77 | 4,217,843,325.77 | |
| Total of owner's equity belong to the parent company | 5,392,694,939.64 | 5,392,694,939.64 | |
| Minor shareholders' equity | 67,854,145.45 | 67,854,145.45 | |
| Total of owners' equity | 5,460,549,085.09 | 5,460,549,085.09 | |
| Total of liabilities and owner's interest | 11,891,623,391.03 | 11,897,467,545.72 | 5,844,154.69 |
About the adjustmentOn January 1, 2021, for the operating lease before the first execution date, the Company adopts the present value after discountingthe incremental loan interest rate before the first execution date to measure the lease liability, with an amount of RMB5,844,154.69;The right to use assets are measured according to the amount equal to the lease liabilities and necessary adjustments are madeaccording to the prepaid rent, and the amount is RMB5,844,154.69.Balance Sheet of the Parent Company
In RMB
| Item | Thursday, December 31, 2020 | Friday, January 1, 2021 | Adjustment |
| Current asset: | |||
| Monetary capital | 204,828,995.78 | 204,828,995.78 | |
| Transactional financial assets | |||
| Derivative financial assets | |||
| Notes receivable | |||
| Account receivable | 885,849.08 | 885,849.08 | |
| Receivable financing | |||
| Prepayment | 1,323,361.34 | 1,323,361.34 | |
| Other receivables | 1,156,802,204.91 | 1,156,802,204.91 | |
| 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 | 1,071,138.13 | |
| Total current assets | 1,364,911,549.24 | 1,364,911,549.24 | |
| Non-current assets: | |||
| Debt investment | |||
| Other debt investment | |||
| Long-term receivables | |||
| Long-term share equity investment | 1,196,831,253.00 | 1,196,831,253.00 | |
| Investment in other equity tools | 16,392,331.44 | 16,392,331.44 | |
| Other non-current financial assets | 30,000,001.00 | 30,000,001.00 | |
| Investment real estate | 334,498,436.00 | 334,498,436.00 | |
| Fixed assets | 65,157,481.98 | 65,157,481.98 | |
| Construction in process | |||
| Productive biological assets | |||
| Gas & petrol | |||
| Use right assets | |||
| Intangible assets | 1,521,975.72 | 1,521,975.72 | |
| R&D expense | |||
| Goodwill | |||
| Long-term amortizable expenses | 687,202.16 | 687,202.16 | |
| Deferred income tax assets | 26,592,617.26 | 26,592,617.26 | |
| Other non-current assets | |||
| Total of non-current assets | 1,671,681,298.56 | 1,671,681,298.56 | |
| Total of assets | 3,036,592,847.80 | 3,036,592,847.80 | |
| Current liabilities |
| Short-term loans | 491,503,263.89 | 491,503,263.89 | |
| Transactional financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Account payable | 606,941.85 | 606,941.85 | |
| Prepayment received | 927,674.32 | 927,674.32 | |
| Contract liabilities | |||
| Employees' wage payable | 3,440,073.04 | 3,440,073.04 | |
| Taxes payable | 2,993,196.12 | 2,993,196.12 | |
| Other payables | 28,068,648.70 | 28,068,648.70 | |
| Including: interest payable | |||
| Dividend payable | |||
| Liabilities held for sales | |||
| Non-current liabilities due in 1 year | |||
| Other current liabilities | |||
| Total current liabilities | 527,539,797.92 | 527,539,797.92 | |
| Non-current liabilities: | |||
| Long-term loans | |||
| Bond payable | |||
| Including: preferred stock | |||
| Perpetual bond | |||
| Lease liabilities | |||
| Long-term payable | |||
| Long-term employees' wage payable | |||
| Anticipated liabilities | |||
| Deferred earning | |||
| Deferred income tax | 73,837,511.85 | 73,837,511.85 |
| liabilities | |||
| Other non-current liabilities | |||
| Total of non-current liabilities | 73,837,511.85 | 73,837,511.85 | |
| Total liabilities | 601,377,309.77 | 601,377,309.77 | |
| Owner's equity: | |||
| Share capital | 1,088,278,951.00 | 1,088,278,951.00 | |
| Other equity tools | |||
| Including: preferred stock | |||
| Perpetual bond | |||
| Capital reserves | 360,835.52 | 360,835.52 | |
| Less: Shares in stock | 42,748,530.12 | 42,748,530.12 | |
| Other miscellaneous income | -371,129.71 | -371,129.71 | |
| Special reserves | |||
| Surplus reserve | 106,783,436.96 | 106,783,436.96 | |
| Retained profit | 1,282,911,974.38 | 1,282,911,974.38 | |
| Total of owners' equity | 2,435,215,538.03 | 2,435,215,538.03 | |
| Total of liabilities and owner's interest | 3,036,592,847.80 | 3,036,592,847.80 |
About the adjustment:
The implementation of the new leasing standards for the first time has no impact on the balance sheet of the parent company.
(4) Description of the 2021 first implementation of the new lease standard retrospective adjustment of theprevious 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%, 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. (renamed Fangda Zhiyuan Technology Co., Ltd. in January 2022, hereinafter referred to as Fangda Zhichuang Technology Co., Ltd.) | 15% |
| Fangda New Material (Jiangxi) Co., Ltd. (hereinafter Fangda Jiangxi New Material) | 15% |
| Dongguan Fangda New Material Co., Ltd. (hereinafter Fangda Dongguan New Material) | 15% |
| Chengdu Fangda Construction Technology Co., Ltd. (hereinafter Fangda Chengdu Technology) | 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 Jiangxi Property Development) | 25% |
| Pingxiang Fangda Luxin New Energy Co., Ltd. (hereinafter Fangda Luxin New Energy) | 25% |
| Nanchang Xinjian Fangda New Energy Co., Ltd. (hereinafter Fangda Xinjian New Energy) | 25% |
| Dongguan Fangda New Energy Co., Ltd. (hereinafter Fangda Dongguan New Energy) | 25% |
| Shenzhen Qianhai Kechuangyuan Software Co., Ltd (hereinafter Kechuangyuan Software) | 25% |
| Fangda Zhichuang Technology (Hong Kong) Co., Ltd, (Fangda Zhichuang Hong Kong) | 16.50% |
| Fangda Zhichuang Technology (Wuhan) Co., Ltd, (Fangda Wuhan Zhichuang) | 25% |
| Fangda Zhichuang Technology (Nanchang) Co., Ltd, (Fangda Nanchang Zhichuang) | 25% |
| Fangda Zhichuang Technology (Dongguan) Co., Ltd, (Fangda Dongguan Zhichuang) | 25% |
| Fangda Zhichuang Technology (Singapore) Co., Ltd. | 17% |
| Shihui International Holding Co., Ltd. (hereinafter Fangda Shihui International) | 16.50% |
| Shenzhen Hongjun Investment Co., Ltd. (hereinafter Fangda Hongjun Investment) | 25% |
| Fangda Australia Pty Ltd (hereinafter Fangda Australia) | 30% |
| Shanghai Fangda Zhijian Technology Co., Ltd. (hereinafter referred to as Fangda Shanghai Zhijian company) | 15% |
| Shenzhen Fangda Cloud Rail Technology Co., Ltd. (hereinafter Fangda Cloud Rail) | 25% |
| Shanghai Fangda Jianzhi Technology Co., Ltd. (hereinafter Fangda Shanghai Jianzhi) | 25% |
| Shenzhen Zhongrong Litai Investment Co. Ltd. (Zhongrong Litai) | 25% |
| Chengdu Fangda Curtain Wall Technology Co., Ltd. (hereinafter Fangda Chengdu Curtain Wall) | 25% |
| Fangda Southeast Asia Co., Ltd. (hereinafter Fangda Southeast Asia) | 20% |
| Shenzhen Xunfu Investment Co., Ltd. (hereinafter referred to as Fangda Xunfu Investment) | 25% |
| Shenzhen Lifu Investment Co., Ltd. (hereinafter referred to as Fangda Lifu Investment) | 25% |
| Shenzhen Fangda Investment Partnership (Limited Partnership) (hereinafter referred to as Fangda Investment) | Inapplicable |
| Fangda Jianke (Hong Kong) Co., Ltd. (hereinafter Fangda Jianke Hong Kong) | 16.50% |
| Shenzhen Yunzhu Industrial Co., Ltd. (Hereinafter Yunzhu Industrial) | 15% |
| Shenzhen Yunzhu Testing Technology Co., Ltd. (Hereinafter Fangda Yunzhu Testing) | 25% |
2. Tax preference
(1) On December 23, 2021, the subsidiary Fangda Jianke obtained the certificate of high-tech enterprise jointly issued byShenzhen Science and Technology Innovation Commission, Shenzhen Finance Bureau, State Administration of Taxation andShenzhen Taxation Bureau. The certificate number is GR202144200527. Within three years after obtaining the qualification ofhigh-tech enterprise (from 2021 to 2023), the income tax will be levied at 15%.
(2) On December 23, 2021, the subsidiary Fangda Zhichuang Technology Co., Ltd. obtained the certificate of high techenterprise jointly issued by Shenzhen Science and Technology Innovation Commission, Shenzhen Finance Bureau, StateAdministration of Taxation and Shenzhen Taxation Bureau. The certificate number is GR202144205924. Within three years afterobtaining the qualification of high tech enterprise (from 2021 to 2023), the income tax will be levied at 15%.
(3) On November 3, 2021, the subsidiary Fangda Jiangxi new material Co., Ltd. obtained the certificate of high tech enterprise
jointly issued by Jiangxi Provincial Department of Science and Technology, Jiangxi Provincial Department of Finance, StateAdministration of Taxation and Jiangxi Provincial Bureau of Taxation. The certificate number is GR202136000174. Within threeyears after obtaining the qualification of high tech enterprise (2021-2023), the income tax will continue to be levied at 15%.
(4) On December 3, 2020, the subsidiary Fangda Chengdu Technology obtained the certificate of high tech enterprise jointlyissued by the Department of Science and Technology of Sichuan Province, the Department of Finance of Sichuan Province, the StateAdministration of Taxation and the Sichuan Provincial Taxation Bureau. Within three years after obtaining the qualification of hightech enterprise (2020-2022), the income tax will continue to be levied at 15%.
(5) On March 2, 2016, according to the document issued by Luxi National Tax Bureau, the PV power generation projectundertaken by Subsidiary Pingxiang Fangda Luxin New Energy Co., Ltd, became the infrastructure project supported by the centralgovernment. the Company enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016, theCompany entered the exemption period.
(6) On June 2, 2016, according to the document issued by Nanchang Xinjian District National Tax Bureau, the PV powergeneration project undertaken by Subsidiary Nanchang Xinjian Fangda New Energy Co., Ltd, became the infrastructure projectsupported by the central government. the Company enjoys a three-year enterprise income tax relief and 50% reduction for anotherthree years. In 2016, the Company entered the exemption period.
(7) The subsidiary KechuangyuanSoftware is an enterprise located in Qianhai Shenzhen Hong Kong Modern Service IndustryCooperation Zone. Its main business meets the conditions of Preferential Catalogue of Enterprise Income Tax in Qianhai ShenzhenHong Kong Modern Service Industry Cooperation Zone (2021), and the income tax is levied at 15%.
(8) On December 2, 2019, the subsidiary Dongguan Fangda New Materials Co., Ltd. obtained the ―High-tech EnterpriseCertificate‖ jointly issued by Guangdong Science and Technology Department, Guangdong Provincial Department of Finance, andGuangdong Provincial Taxation Bureau. The income tax shall be levied at 15% within three years after the qualification of thehigh-tech enterprise is recognized (2019 to 2021).
(9) On November 12, 2020, the subsidiary Fangda Shanghai Zhijian obtained the certificate of high tech enterprise jointlyissued by Shanghai Science and Technology Commission, Shanghai Finance Bureau and Shanghai Taxation Bureau. Within threeyears (from 2020 to 2022) after obtaining the qualification of high tech enterprise, the income tax will continue to be charged at 15%.
(10) On December 11, 2020, the subsidiary Yunzhu Industrial obtained the certificate of high tech enterprise jointly issued byShenzhen Science and Technology Innovation Commission, Shenzhen Finance Commission and Shenzhen State Administration oftaxation. The certificate number is GR202044202438. Within three years after obtaining the qualification of high tech enterprise(2020-2022), the income tax will be levied at 15%.
(11) According to the Notice on the Implementation of Preferential Tax Reduction and Exemption Policies for Small andMicro Enterprises (CS [2019] No. 13) and the Announcement on the Implementation of Preferential Income Tax Policies for Smalland Micro Enterprises and Individual Industrial and Commercial Households (Announcement No. 12 of the State Administration ofTaxation of the Ministry of Finance in 2021) issued by the Ministry of Finance and the State Administration of Taxation, somecompanies belong to small and low profit enterprises in 2021, and their income is subject to enterprise income tax in accordance withthe provisions of the above documents.VII. Notes to the consolidated financial statements
1. Monetary capital
In RMB
| Item | Closing balance | Opening balance |
| Inventory cash: | 3,192.76 | 482.09 |
| Bank deposits | 910,763,535.83 | 1,124,691,012.59 |
| Other monetary capital | 376,797,030.73 | 339,282,667.77 |
| Total | 1,287,563,759.32 | 1,463,974,162.45 |
| Including: total amount deposited in overseas | 43,244,091.68 | 45,275,606.68 |
| The total amount of money that has restrictions on use due to mortgage, pledge or freezing | 395,312,687.73 | 435,587,632.71 |
Others:
(1) The use of restricted funds in bank deposits is RMB34,878,861.73, of which RMB7,154,713.67 is restricted due to lawsuits,RMB24,518,660.11 is deposited in real estate development supervision accounts, RMB3,138,069.65 is deposited in special laborinsurance accounts and migrant workers’ wage accounts, and other security deposit accounts. The deposit is RMB67,418.30; therestricted funds used in other currency funds are RMB360,433,826.00, 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 Company's total amount deposited abroad was RMB43,244,091.68.
2. Transactional financial assets
In RMB
| Item | Closing balance | Opening balance |
| Financial assets measured at fair value with variations accounted into current income account | 25,135,241.89 | 14,382,896.04 |
| Including: Investment of financial products | 25,135,241.89 | 14,382,896.04 |
| Total | 25,135,241.89 | 14,382,896.04 |
3. Derivative financial assets
In RMB
| Item | Closing balance | Opening balance |
| Futures contracts | 310,325.00 | 6,330,475.00 |
| Forward foreign exchange contract | 759,262.62 | 643,973.22 |
| Total | 1,069,587.62 | 6,974,448.22 |
4. Notes receivable
(1) Classification of notes receivable
In RMB
| Item | Closing balance | Opening balance |
| Bank acceptance | 32,759,446.43 | 21,081,547.58 |
| Commercial acceptance | 133,618,433.58 | 186,083,516.39 |
| Total | 166,377,880.01 | 207,165,063.97 |
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 | 168,962,589.90 | 100.00% | 2,584,709.89 | 1.53% | 166,377,880.01 | 207,165,063.97 | 100.00% | 207,165,063.97 | ||
| Including: Commercial acceptance | 136,203,143.47 | 80.61% | 2,584,709.89 | 1.90% | 133,618,433.58 | 186,083,516.39 | 89.82% | 186,083,516.39 | ||
| Bank acceptance | 32,759,446.43 | 19.39% | 32,759,446.43 | 21,081,547.58 | 10.18% | 21,081,547.58 | ||||
| Total | 168,962,589.90 | 100.00% | 2,584,709.89 | 1.53% | 166,377,880.01 | 207,165,063.97 | 100.00% | 207,165,063.97 | ||
Provision for bad debts by combination: trade acceptance
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Commercial acceptance | 136,203,143.47 | 2,584,709.89 | 1.90% |
| Total | 136,203,143.47 | 2,584,709.89 | -- |
Provision for bad debts by combination: bank acceptance
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Bank acceptance | 32,759,446.43 | 0.00 | 0.00% |
| Total | 32,759,446.43 | 0.00 | -- |
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) 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 | |||
| Commercial acceptance | 0.00 | 2,584,709.89 | 2,584,709.89 | |||
| Total | 0.00 | 2,584,709.89 | 2,584,709.89 | |||
Including significant recovery or reversal:
□ Applicable √ Inapplicable
(3) 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 | 20,277,605.65 | |
| Commercial acceptance | 5,686,819.52 | |
| Total | 25,964,425.17 |
(4) Notes transferred to accounts receivable due to default of the issue at the end of period
In RMB
| Item | Amount transferred to accounts receivable at the end of the period |
| Commercial acceptance | 42,492,227.62 |
| Total | 42,492,227.62 |
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 | 83,718,640.09 | 11.18% | 78,221,018.60 | 93.43% | 5,497,621.49 | 99,969,069.48 | 12.42% | 99,969,069.48 | 100.00% | |
| Including: | ||||||||||
| 1. Customer 1 | 54,873,223.21 | 7.32% | 54,873,223.21 | 100.00% | 54,873,223.21 | 6.82% | 54,873,223.21 | 100.00% | ||
| 2. Customer 2 | 4,388,338.91 | 0.59% | 4,388,338.91 | 100.00% | 21,739,381.96 | 2.70% | 21,739,381.96 | 100.00% | ||
| 3. Customer 3 | 13,461,834.96 | 1.80% | 13,461,834.96 | 100.00% | 13,461,834.96 | 1.67% | 13,461,834.96 | 100.00% | ||
| 4. Customer 4 | 5,996,382.91 | 0.80% | 2,998,191.46 | 50.00% | 2,998,191.45 | |||||
| 5. Customer 5 | 4,998,860.10 | 0.67% | 2,499,430.06 | 50.00% | 2,499,430.04 | |||||
| 6. Customer 6 | 7,270,000.00 | 0.90% | 7,270,000.00 | 100.00% | ||||||
| 7. Customer 7 | 2,624,629.35 | 0.33% | 2,624,629.35 | 100.00% | ||||||
| Account receivable for which bad debt provision is made by group | 664,994,519.44 | 88.82% | 114,038,316.73 | 17.15% | 550,956,202.71 | 705,506,680.47 | 87.58% | 88,546,427.93 | 12.55% | 616,960,252.54 |
| Including: | ||||||||||
| 1. Portfolio 1: Engineering operations section | 414,989,471.61 | 55.43% | 101,816,476.32 | 24.53% | 313,172,995.29 | 514,227,513.84 | 63.84% | 78,035,740.63 | 15.18% | 436,191,773.21 |
| 2. Portfolio 2: Real estate business payments | 153,920,735.18 | 20.56% | 7,774,660.29 | 5.05% | 146,146,074.89 | 110,059,782.48 | 13.66% | 7,310,980.25 | 6.64% | 102,748,802.23 |
| 3. Portfolio 3: Other business models | 96,084,312.65 | 12.83% | 4,447,180.12 | 4.63% | 91,637,132.53 | 81,219,384.15 | 10.08% | 3,199,707.05 | 3.94% | 78,019,677.10 |
| Total | 748,713,159.53 | 100.00% | 192,259,335.33 | 25.68% | 556,453,824.20 | 805,475,749.95 | 100.00% | 188,515,497.41 | 23.40% | 616,960,252.54 |
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 | 4,388,338.91 | 4,388,338.91 | 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 | 5,996,382.91 | 2,998,191.46 | 50.00% | Customer credit status deteriorates |
| 5. Customer 5 | 4,998,860.10 | 2,499,430.06 | 50.00% | Customer credit status deteriorates |
| Total | 83,718,640.09 | 78,221,018.60 | -- | -- |
Provision for bad debts by combination: Portfolio 1: Engineering business
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Less than 1 year | 187,157,282.84 | 3,668,200.50 | 1.96% |
| 1-2 years | 66,463,262.26 | 3,761,820.65 | 5.66% |
| 2-3 years | 42,849,368.69 | 5,467,579.44 | 12.76% |
| 3-4 years | 23,310,625.66 | 4,606,179.61 | 19.76% |
| 4-5 years | 19,170,014.14 | 8,273,778.10 | 43.16% |
| Over 5 years | 76,038,918.02 | 76,038,918.02 | 100.00% |
| Total | 414,989,471.61 | 101,816,476.32 | -- |
Group recognition basis:
See 9. Financial Tools in Chapter X, V, Important Accounting Policies and Accounting Estimates for the recognition criteria andinstructions for withdrawing bad debt reserves by portfolioBad debt provision by portfolio: portfolio 2: real estate business funds
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Less than 1 year | 108,962,815.87 | 1,089,670.11 | 1.00% |
| 1-2 years | 523,295.66 | 26,164.78 | 5.00% |
| 2-3 years | 63,681.46 | 3,184.07 | 5.00% |
| 3-4 years | 22,273,070.00 | 3,340,960.50 | 15.00% |
| 4-5 years | |||
| Over 5 years | 22,097,872.19 | 3,314,680.83 | 15.00% |
| Total | 153,920,735.18 | 7,774,660.29 | -- |
Provision for bad debts by combination: portfolio 3: Others business
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Less than 1 year | 59,223,651.59 | 432,332.65 | 0.73% |
| 1-2 years | 13,391,961.60 | 281,231.19 | 2.10% |
| 2-3 years | 14,678,253.25 | 1,235,909.34 | 8.42% |
| 3-4 years | 8,272,851.42 | 2,050,012.57 | 24.78% |
| 4-5 years | 516,632.82 | 446,732.40 | 86.47% |
| Over 5 years | 961.97 | 961.97 | 100.00% |
| Total | 96,084,312.65 | 4,447,180.12 | -- |
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) | 428,499,793.69 |
| 1-2 years | 80,378,519.52 |
| 2-3 years | 59,663,001.60 |
| Over 3 years | 180,171,844.72 |
| 3-4 years | 60,998,124.22 |
| 4-5 years | 20,532,393.07 |
| Over 5 years | 98,641,327.43 |
| Total | 748,713,159.53 |
The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the Guidelines for the
Self-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
| 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 |
| Customer 1 | 54,873,223.21 | 54,873,223.21 | Customer credit status deteriorates | Yes |
| Customer 2 | 25,889,547.93 | 22,645,148.93 | Customer credit status deteriorates | Yes |
| Customer 3 | 17,374,148.42 | 17,295,727.82 | Customer credit status deteriorates | Yes |
| Customer 4 | 13,461,834.96 | 13,461,834.96 | Customer credit status deteriorates | Yes |
(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 | 5,497,621.52 | 24,621,043.05 | 2,624,629.35 | 78,221,018.60 | |
| Provision for bad debts by combination | 88,546,427.93 | 25,868,992.41 | 377,103.61 | 114,038,316.73 | ||
| Total | 188,515,497.41 | 31,366,613.93 | 24,621,043.05 | 3,001,732.96 | 192,259,335.33 | |
Including significant recovery or reversal:
In RMB
| Entity | Written-back or recovered amount | Method |
| Customer 1 | 17,351,043.05 | After applying for bankruptcy liquidation, the customer shall have priority to receive compensation and be recovered by bank transfer |
| Customer 2 | 7,270,000.00 | After the prosecution, a settlement was finally reached through negotiation and mediation, and the bank transfer was recovered |
| Total | 24,621,043.05 | -- |
Reason for recovery and basis for the original bad debt provision ratioAfter the Company verified that 100% of the bad debt reserves were withdrawn in the early stage, it was difficult for the managementto recover the original accounts receivable in full. In the follow-up, the Company made unremitting efforts to obtain the priority ofproject payment through litigation and applying for bankruptcy liquidation of the customer, and finally recovered the above amount
through priority compensation after the bankruptcy liquidation of customer 1, and finally recovered the above amount throughlitigation, negotiation and mediation with customer 2.
(3) Written-off account receivable during the period
In RMB
| Item | Amount |
| Account receivable written off | 3,001,732.96 |
(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 | 54,873,223.21 | 7.33% | 54,873,223.21 |
| No.2 | 46,066,573.06 | 6.15% | 6,672,597.64 |
| No.3 | 32,238,838.02 | 4.31% | 631,881.23 |
| No.4 | 31,500,000.00 | 4.21% | 2,912,732.66 |
| No.5 | 26,002,530.93 | 3.47% | 22,647,363.40 |
| Total | 190,681,165.22 | 25.47% |
(5) Amount of assets and liabilities formed by transferring accounts receivable and continuing involvement
| Item | Transfer method of assets | Amount of assets formed by continued involvement | Amount of liabilities formed by continued involvement |
| Customer 1 | Recourse factoring | 600,000.00 | 600,000.00 |
| Customer 2 | Credit discount | 5,000,000.00 | 5,000,000.00 |
| Customer 3 | Credit discount | 2,781,343.60 | 2,781,343.60 |
| Total | 8,381,343.60 | 8,381,343.60 |
(6) Receivables derecognized due to transfer of financial assets
| Item | Transfer method of financial assets | De-recognized amount | Gain or loss related to the de-recognition |
| Customer 1 | Factoring | 3,242,714.47 | -126,141.59 |
Customer 2
| Customer 2 | Factoring | 12,080,425.76 | -480,319.06 |
| Customer 3 | Factoring | 5,997,891.92 | -284,496.62 |
| Customer 4 | Factoring | 16,897,439.00 | -1,351,795.12 |
Customer 5
| Customer 5 | Factoring | 9,652,568.98 | -370,002.07 |
| Customer 6 | Factoring | 21,246,635.90 | -1,248,279.11 |
Customer 7
| Customer 7 | Factoring | 736,895.96 | -28,783.97 |
| Customer 8 | Factoring | 14,522,294.67 | -557,208.89 |
| Customer 9 | Factoring | 11,897,246.28 | -496,531.57 |
Customer 10
| Customer 10 | Factoring | 5,666,673.70 | -216,061.79 |
| Customer 11 | Factoring | 10,803,986.61 | -405,489.87 |
Customer 12
| Customer 12 | Factoring | 1,608,410.51 | -66,671.30 |
| Total | 114,353,183.76 | -5,631,780.96 |
6. Receivable financing
In RMB
| Item | Closing balance | Opening balance |
| Notes receivable | 4,263,500.00 | 10,727,129.28 |
| Total | 4,263,500.00 | 10,727,129.28 |
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 | 18,013,831.62 | 78.24% | 18,708,517.50 | 78.15% |
| 1-2 years | 805,756.05 | 3.50% | 3,086,312.85 | 12.89% |
| 2-3 years | 2,467,980.33 | 10.72% | 1,156,139.70 | 4.83% |
| Over 3 years | 1,734,917.03 | 7.54% | 989,094.83 | 4.13% |
| Total | 23,022,485.03 | -- | 23,940,064.88 | -- |
Explanation of non-settlement of significant prepayments with an accounting age of more than 1 year:
At the end of the period, there is no significant prepayment with an aging of more than one year.
(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 RMB9,744,576.22, accounting for 42.33% of the total
prepayments at the end of the period.
8. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Other receivables | 165,093,406.23 | 162,284,588.59 |
| Total | 165,093,406.23 | 162,284,588.59 |
(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 | 106,427,141.89 | 101,542,363.12 |
| Construction borrowing and advanced payment | 31,857,018.14 | 35,803,075.11 |
| Staff borrowing and petty cash | 1,828,554.92 | 1,586,850.35 |
| VAT refund receivable | 4,903,075.25 | 3,265,790.25 |
| Debt by Luo Huichi | 12,992,291.48 | 12,992,291.48 |
| Others | 29,074,979.66 | 31,373,713.44 |
| Total | 187,083,061.34 | 186,564,083.75 |
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 Friday, January 1, 2021 | 2,250,959.70 | 572,176.59 | 21,456,358.87 | 24,279,495.16 |
| Balance on Friday, January 1, 2021 in the current period | —— | —— | —— | —— |
| Provision | -34,045.62 | 1,691.78 | -1,389,580.37 | -1,421,934.21 |
| Canceled in the current period | 462.90 | 867,442.94 | 867,905.84 |
| Balance on Friday, December 31, 2021 | 2,216,451.18 | 573,868.37 | 19,199,335.56 | 21,989,655.11 |
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) | 29,909,781.48 |
| 1-2 years | 25,899,832.55 |
| 2-3 years | 18,676,618.97 |
| Over 3 years | 112,596,828.34 |
| 3-4 years | 73,350,354.72 |
| 4-5 years | 20,644,766.51 |
| Over 5 years | 18,601,707.11 |
| Total | 187,083,061.34 |
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 | 24,279,495.16 | -1,421,934.21 | 867,905.84 | 21,989,655.11 | ||
| Total | 24,279,495.16 | -1,421,934.21 | 867,905.84 | 21,989,655.11 | ||
4) Other receivable written off in the current period
In RMB
| Item | Amount |
| Other receivable written off | 867,905.84 |
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 | 70,062,675.83 | 3-4 years | 37.45% | 1,043,933.87 |
| Bangshen Electronics (Shenzhen) Co., Ltd. | Deposit | 20,000,000.00 | 4-5 years | 10.69% | 298,000.00 |
| Shenzhen Rijiasheng Trading Co., Ltd | Arrears | 18,808,945.57 | 1-2 years | 10.05% | 564,268.37 |
| Luo Huichi | Arrears | 12,992,291.48 | Over 5 years | 6.94% | 12,992,291.48 |
| Shenzhen Henggang Dakang Co., Ltd. | Deposit | 8,000,000.00 | 3-4 years | 4.28% | 119,200.00 |
| Total | -- | 129,863,912.88 | -- | 69.41% | 15,017,693.72 |
6) Items involving government subsidies:
In RMB
| Entity | Governmental subsidy | Closing balance | Closing age | Estimated time, amount and basis of receipt |
| Shenzhen Tax Bureau of State Administration of Taxation | Receivable refund of VAT | 617,821.41 | Less than 1 year | Full recovered in less than 1 year |
9. Inventories
Whether the Company needs to comply with disclosure requirements of the real estate industry.Yes
(1) Classification of inventories
The Company needs to comply with the disclosure requirements of the real estate industry in the Guidelines for the Self-disciplineand Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.Classified by nature:
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Provision for inventory depreciation or contract performance cost impairment | Book value | Remaining book value | Provision for inventory depreciation or contract performance cost impairment | Book value | |
| provision | provision | |||||
| Development cost | 214,159,331.62 | 214,159,331.62 | 458,032,158.63 | 458,032,158.63 | ||
| Development products | 215,045,857.53 | 215,045,857.53 | 99,012,986.31 | 99,012,986.31 | ||
| Contract performance costs | 120,770,607.88 | 120,770,607.88 | 140,403,466.43 | 464,651.43 | 139,938,815.00 | |
| Raw materials | 87,964,749.50 | 87,964,749.50 | 61,682,744.96 | 55,182.86 | 61,627,562.10 | |
| Product in process | 71,066,791.34 | 71,066,791.34 | 66,570,800.79 | 66,570,800.79 | ||
| Finished goods in stock | 7,514,662.13 | 7,514,662.13 | 7,784,598.06 | 7,784,598.06 | ||
| Low price consumable | 190,365.86 | 190,365.86 | 123,705.51 | 123,705.51 | ||
| OEM materials | 16,568,559.12 | 16,568,559.12 | 3,562,856.58 | 3,562,856.58 | ||
| Materials in transit | 1,178,307.90 | 1,178,307.90 | ||||
| Total | 733,280,924.98 | 733,280,924.98 | 838,351,625.17 | 519,834.29 | 837,831,790.88 |
Development cost and capitalization rate of its interest are disclosed as follows:
In RMB
| Item | Starting time | Completion filing / estimated completion 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 |
| Nanchang Fangda Center | Tuesday, May 1, 2018 | Tuesday, April 27, 2021 | 670,000,000.00 | 250,191,619.08 | 266,413,169.86 | 10,926,706.01 | 27,148,256.79 | Bank loan+ self-owned fund | |||
| Dakang Village Project in Shenzhen | 1 December 2023 | 31 December 2029 | 3,600,000,000.00 | 197,352,043.69 | 1,671,440.59 | 199,023,484.28 | |||||
| Fangda Bangshen Industry Park | Thursday, December 1, 2022 | Tuesday, December 31, 2024 | 870,000,000.00 | 10,488,495.86 | 4,647,351.48 | 15,135,847.34 | |||||
| Total | -- | -- | 5,140,000 | 458,032,1 | 266,413,1 | 10,926,70 | 33,467,04 | 214,159,3 | -- |
| ,000.00 | 58.63 | 69.86 | 6.01 | 8.86 | 31.62 |
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 | Thursday, December 29, 2016 | 99,012,986.31 | 36,082,808.94 | 62,930,177.37 | 2,417,765.48 | ||
| Nanchang Fangda Center | Tuesday, April 27, 2021 | 266,413,169.86 | 114,297,489.70 | 152,115,680.16 | 5,594,318.36 | 877,836.18 | |
| Total | -- | 99,012,986.31 | 266,413,169.86 | 150,380,298.64 | 215,045,857.53 | 8,012,083.84 | 877,836.18 |
(2) Provision for inventory depreciation and contract performance cost impairment provision
The 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 | 464,651.43 | 464,651.43 | |||||
| Raw materials | 55,182.86 | 55,182.86 | |||||
| Total | 519,834.29 | 519,834.29 | -- | ||||
(3) Capitalization rate of interest in the closing inventory balance
As at 31 December 2021, the amount of the capitalization of borrowing costs in the balance of the end-of-period inventory wasRMB8,012,083.84.
10. Contract assets
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book | Impairment | Book value | Remaining | Impairment | Book value | |
| value | provision | book value | provision | |||
| Completed and unsettled project funds | 1,840,664,586.03 | 144,079,042.31 | 1,696,585,543.72 | 1,540,868,199.19 | 145,971,938.14 | 1,394,896,261.05 |
| Warranty | 63,551,208.32 | 10,907,883.76 | 52,643,324.56 | 12,105,019.23 | 325,779.33 | 11,779,239.90 |
| Sales funds with conditional collection right | 34,103,742.16 | 384,937.31 | 33,718,804.85 | 27,639,344.20 | 351,544.65 | 27,287,799.55 |
| Total | 1,938,319,536.51 | 155,371,863.38 | 1,782,947,673.13 | 1,580,612,562.62 | 146,649,262.12 | 1,433,963,300.50 |
The amount and reasons for major changes in the book value of contract assets during the current period:
In RMB
| Item | Change | Reason |
| Completed and unsettled project funds | 301,689,282.67 | This is mainly due to the unsettled project funds with conditional collection rights arising from the revenue recognized in the project contract this year |
| Warranty | 40,864,084.66 | This is mainly due to the unified classification of the warranty deposit due within one year into the contract asset items |
| Total | 342,553,367.33 | —— |
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 |
| Completed but unsettled assets | 5,437,104.17 | 7,330,000.00 | After the prosecution, a settlement was finally reached through negotiation and mediation, and the bank transfer was recovered | |
| Unexpired warranty deposit | 10,582,104.43 | |||
| Sales funds with conditional collection right | 33,392.66 | |||
| Total | 16,052,601.26 | 7,330,000.00 | -- |
11. Non-current assets due in 1 year
In RMB
| Item | Closing balance | Opening balance |
| Contract assets due within one year | 141,681,778.35 | |
| Total | 141,681,778.35 |
说明：根据《关于严格执行企业会计准则切实做好企业2021年年报工作的通知》财会〔2021〕32号，本公司将一年内到期的合同资产统一分类至合同资产项目列报。
12. Other current assets
In RMB
| Item | Closing balance | Opening balance |
| Contract acquisition cost | 2,156,027.17 | |
| Tax to be input | 145,743,267.08 | 136,984,389.66 |
| Overpayment and prepayment of income tax | 98,092,258.00 | 88,741,787.42 |
| Other prepaid taxes | 8,520,856.65 | 2,373,031.15 |
| Deferred discount expense | 12,428,625.55 | 2,644,267.12 |
| Others | 1,499.01 | 495,614.58 |
| Total | 264,786,506.29 | 233,395,117.10 |
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 | |||||||||||
| Ganshang Joint Investment | 2,364,798.65 | 600.66 | 2,365,399.31 | ||||||||
| Jiangxi Business Innovative Property Joint Stock (Jiangxi Business Innovation) | 53,537,579.30 | -684,032.47 | 52,853,546.83 | ||||||||
| Subtotal | 55,902,377.95 | -683,431.81 | 55,218,946.14 | ||||||||
| Total | 55,902,377.95 | -683,431.81 | 55,218,946.14 |
14. Investment in other equity tools
In RMB
| Item | Closing balance | Opening balance |
| Unlisted equity instrument investment | 14,180,652.65 | 17,628,307.59 |
| Total | 14,180,652.65 | 17,628,307.59 |
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 Semi-conductor Lighting Co., Ltd. (hereinafter Shenyang Fangda) | 14,381,923.02 | |||||
| Shenzhen Huihai Yirong Internet Service Co., Ltd. | 3,779,277.52 |
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 | 7,525,408.24 | 5,025,186.16 |
| Total | 7,525,408.24 | 5,025,186.16 |
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 | 10,410,691.87 | 10,410,691.87 |
| 2. Increase in this period | 6,978,132.52 | 6,978,132.52 |
| (1) Transfer-in from inventory\fixed assets\construction in progress | 6,978,132.52 | 6,978,132.52 |
| 3. Decrease in this period | 0.00 | 0.00 |
| 4. Closing balance | 17,388,824.39 | 17,388,824.39 |
| II. Accumulative depreciation and amortization | ||
| 1. Opening balance | 4,053,723.75 | 4,053,723.75 |
| 2. Increase in this period | 3,199,287.61 | |
| (1) Provision or amortization | 434,384.89 | 434,384.89 |
| (2) Fixed assets | 2,764,902.72 | 2,764,902.72 |
| 3. Decrease in this period | 0.00 | 0.00 |
| 4. Closing balance | 7,253,011.36 | 7,253,011.36 |
| 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 | 10,135,813.03 | 10,135,813.03 |
| 2. Opening book value | 6,356,968.12 | 6,356,968.12 |
(2) Investment real estate measured at fair value
√ Applicable □ Inapplicable
In RMB
| Item | Houses & buildings | Total |
| I. Opening balance | 5,628,291,448.40 | 5,628,291,448.40 |
| II. Change in this period | 126,925,131.70 | 126,925,131.70 |
| Add: external purchase | 2,805,641.38 | 2,805,641.38 |
| Transfer-in from inventory\fixed assets\construction in progress | 63,880,340.74 | 63,880,340.74 |
| Less: other transfer-out | 16,149,386.67 | 16,149,386.67 |
| Change in fair value | 76,388,536.25 | 76,388,536.25 |
| III. Closing balance | 5,755,216,580.10 | 5,755,216,580.10 |
The Company needs to comply with the disclosure requirements of the real estate industry in the Guidelines for the Self-disciplineand Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.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 | 11 October 2017 | 22,565.42 | 33,262,694.93 | 1,340,385,948.00 | 1,344,899,032.00 | 0.34% | The main recognition basis of the fair value is the real estate appraisal report "SWJPZ [2022] SZ No. 009" issued by Shenzhen Wenji Land Real Estate Appraisal Engineering Consulting Co., Ltd |
| Building 1# of Fangda Town | Shenzhen | 29 December 2018 | 72,517.71 | 67,113,139.02 | 3,646,971,680.07 | 3,640,588,848.63 | -0.18% | |
| Fangda Building | Shenzhen | 28 December 2002 | 17432.38 | 15,177,308.23 | 334,498,436.00 | 329,471,982.00 | -1.50% | |
| Nanchang Fangda Center | Nanchang | Thursday, December 10, 2020 | 37,876.98 | 262,081.92 | 302,854,554.33 | 436,493,838.47 | 44.13% | The main recognition basis of fair value is: the real estate appraisal report (SWJPZ [2022] SZ |
| No. 005) issued by Shenzhen Wenji Land Real Estate Appraisal Engineering Consulting Co., Ltd; The change of 44.13% in fair value in the current period is mainly due to the change of some inventories for sale into investment real estate for external lease. For details, see "New Investment Real Estate Measured by Fair Value in the Current Period". | ||||||||
| Total | —— | —— | 150,392.49 | 115,815,224.10 | 5,624,710,618.40 | 5,751,453,701.10 | 2.25% | —— |
Whether the Company has investment real estate in the current construction period
□ Yes √ No
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 accounting method | Original book value | Recorded fair value | Closing fair value | Change time | Different handling method and basis |
| Commercial building 1# and commercial building 2# of Nanchang Fangda Center Project | Inventory, measured at cost | 44,670,673.42 | 98,125,259.10 | 100,963,907.00 | Wednesday, September 29, 2021 | According to the relevant provisions of the standards for investment real estate, when the inventory is converted into investment real estate measured at fair value, the difference of RMB534585.68 between |
| the fair value on the date of conversion and the original book value is included in other comprehensive income | ||||||
| Total | —— | 44,670,673.42 | 98,125,259.10 | 100,963,907.00 | —— | —— |
(3) Investment real estate without ownership certificate
In RMB
| Item | Book value | Reason |
| Nanchang Fangda Center project 4# building commercial | 17,371,062.04 | The acceptance record is being handled |
Others:
① On December 31, 2021, the fair value of Fangda Science and Technology Building in the Company's investment real estate wasRMB329,471,982.00, which was mortgaged to the loan of China Construction Bank Shenzhen OCT sub branch. The loan has beenrepaid and released on January 21, 2022; The fair value of some real estate in Fangda Town is RMB19,588,944.13, which has beenmortgaged to the loan of China Construction Bank Shenzhen OCT sub branch. The loan has not expired and has not been released;The fair value of some real estate in Fangda Town is RMB1,344,899,032.00, which has been mortgaged to the loan of ShenzhenDongbin branch of Huaxia Bank. The loan has not expired and has not been released.
② Other transfers out in the current period are due to the needs of business development. The Company has transferred some housesof Fangda Science and Technology Building from external rental to self use.
17. Fixed assets
In RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 663,414,297.61 | 481,326,212.63 |
| Disposal of fixed assets | 1,891,111.12 | |
| Total | 663,414,297.61 | 483,217,323.75 |
(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 | 415,725,429.92 | 121,496,328.96 | 21,516,442.64 | 46,349,557.98 | 129,596,434.84 | 734,684,194.34 |
| 2. Increase in this period | 210,692,277.09 | 4,542,539.93 | 441,482.29 | 6,187,268.00 | 221,863,567.31 | |
| (1) Purchase | 4,146,026.89 | 441,482.29 | 5,691,896.11 | 10,279,405.29 | ||
| (2) Transfer-in of construction in progress | 182,117,539.73 | 495,371.89 | 182,612,911.62 | |||
| (3) Other increases | 28,574,737.36 | 396,513.04 | 28,971,250.40 | |||
| 3. Decrease in this period | 15,853,235.89 | 5,399,995.61 | 566,996.24 | 1,666,720.21 | 23,486,947.95 | |
| (1) Disposal or retirement | 8,013,215.89 | 5,399,995.61 | 543,548.97 | 1,298,348.77 | 15,255,109.24 | |
| (2) Other decrease | 7,840,020.00 | 23,447.27 | 368,371.44 | 8,231,838.71 | ||
| 4. Closing balance | 610,564,471.12 | 120,638,873.28 | 21,390,928.69 | 50,870,105.77 | 129,596,434.84 | 933,060,813.70 |
| II. Accumulative depreciation | ||||||
| 1. Opening balance | 89,797,346.50 | 89,670,126.47 | 16,097,483.98 | 29,337,279.16 | 28,357,356.10 | 253,259,592.21 |
| 2. Increase in this period | 11,438,347.53 | 6,109,360.61 | 871,783.29 | 2,718,833.70 | 6,148,440.12 | 27,286,765.25 |
| (1) Provision | 11,438,347.53 | 5,912,674.41 | 871,783.29 | 2,013,898.65 | 6,148,440.12 | 26,385,144.00 |
| (2) Other increases | 196,686.20 | 704,935.05 | 901,621.25 | |||
| 3. Decrease in this period | 4,682,165.10 | 4,692,811.64 | 496,471.24 | 1,124,862.89 | 10,996,310.87 | |
| (1) Disposal or retirement | 2,915,726.93 | 4,692,811.64 | 494,524.56 | 1,120,083.99 | 9,223,147.12 | |
| (2) Other decrease | 1,766,438.17 | 1,946.68 | 4,778.90 | 1,773,163.75 | ||
| 4. Closing balance | 96,553,528.93 | 91,086,675.44 | 16,472,796.03 | 30,931,249.97 | 34,505,796.22 | 269,550,046.59 |
| III. Impairment provision | ||||||
| 1. Opening | 41,621.81 | 56,767.69 | 98,389.50 |
| balance | ||||||
| 2. Increase in this period | 40,141.39 | 40,141.39 | ||||
| (1) Provision | ||||||
| (2) Other increases | 40,141.39 | 40,141.39 | ||||
| 3. Decrease in this period | 1,920.00 | 40,141.39 | 42,061.39 | |||
| (1) Disposal or retirement | 1,920.00 | 1,920.00 | ||||
| (2) Other decrease | 40,141.39 | 40,141.39 | ||||
| 4. Closing balance | 79,843.20 | 16,626.30 | 96,469.50 | |||
| IV. Book value | ||||||
| 1. Closing book value | 514,010,942.19 | 29,472,354.64 | 4,918,132.66 | 19,922,229.50 | 95,090,638.62 | 663,414,297.61 |
| 2. Opening book value | 325,928,083.42 | 31,784,580.68 | 5,418,958.66 | 16,955,511.13 | 101,239,078.74 | 481,326,212.63 |
(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 |
Others:
①On December 31, 2021, the net value of the Company's houses and buildings of RMB115,695,967.29 has been mortgaged to theloan of China Construction Bank Shenzhen OCT sub branch; of which RMB69,852,869.05 was released on January 21, 2022because the corresponding loan had been repaid.
② In the change of the current period, houses and other buildings increased by RMB28,574,737.36, of which RMB15,757,032.00was increased due to the need of the Company's operation and development; The subsidiary Fangda Jianke received the mortgagedproperty and completed the property right certificate, resulting in an increase of RMB12,817,705.36 yuan.
③ In the change of the current period, houses and other buildings decreased by RMB7,840,020.00, which was caused by the transferof some houses from self use to external lease due to the needs of the Company's business development.
(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 | 11,642,444.21 | 168,626,803.01 |
| Total | 11,642,444.21 | 168,626,803.01 |
(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 Nanchang Fangda Center | 11,642,444.21 | 11,642,444.21 | ||||
| Construction and decoration of self-use part of Building 1 of Fangda Town | 78,213,965.55 | 78,213,965.55 | ||||
| Fangda Group East China Construction Base Project | 90,101,031.20 | 90,101,031.20 | ||||
| Others | 311,806.26 | 311,806.26 | ||||
| Total | 11,642,444.21 | 11,642,444.21 | 168,626,803.01 | 168,626,803.01 | ||
(2) Changes in major construction in process in this period
In RMB
| Item | Budget | Opening | Increase in | Amount | Other decrea | Closing | Proportion of | Project progre | Accumulative | Including: | Interest | Capital source |
| balance | this period | transfer-in to fixed assets in this period | se in this period | balance | accumulative engineering investment in the budget | ss | capitalized interest | capitalized interest for the current period | capitalization rate | |||
| Construction and decoration of self use part of Nanchang Fangda Center | 13,000,000.00 | 11,642,444.21 | 11,642,444.21 | 89.56% | In construction | 282,357.24 | 44,306.27 | 5.42% | Loans from financial institutions+ self-owned fund | |||
| Construction and decoration of self-use part of Building 1 of Fangda Town | 82,840,000.00 | 78,213,965.55 | 3,541,287.56 | 81,755,253.11 | 98.69% | Completed | ||||||
| Fangda Group East China Construction Base Project | 105,060,000.00 | 90,101,031.20 | 11,184,191.20 | 100,362,286.62 | 922,935.78 | 95.53% | Completed | 3,862,501.30 | 1,226,652.23 | 5.72% |
| Total | 200,900,000.00 | 168,314,996.75 | 26,367,922.97 | 182,117,539.73 | 922,935.78 | 11,642,444.21 | -- | -- | 4,144,858.54 | 1,270,958.50 | -- |
19. Use right assets
Note: to be filled in by the company implementing the new leasing standards.
In RMB
| Item | Houses & buildings | Transportation facilities | Total |
| I. Original book value: | |||
| 1. Opening balance | 4,524,903.57 | 1,319,251.12 | 5,844,154.69 |
| 2. Increase in this period | 32,550,386.60 | 32,550,386.60 | |
| 3. Decrease in this period | |||
| 4. Closing balance | 37,075,290.17 | 1,319,251.12 | 38,394,541.29 |
| II. Accumulative depreciation | |||
| 1. Opening balance | |||
| 2. Increase in this period | 6,344,621.50 | 609,063.25 | 6,953,684.75 |
| (1) Provision | 6,344,621.50 | 609,063.25 | 6,953,684.75 |
| 3. Decrease in this period | |||
| 4. Closing balance | 6,344,621.50 | 609,063.25 | 6,953,684.75 |
| 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 | 30,730,668.67 | 710,187.87 | 31,440,856.54 |
| 2. Opening book value | 4,524,903.57 | 1,319,251.12 | 5,844,154.69 |
Others:
The depreciation amount of use right assets in 2021 is RMB6,953,684.75.
20. Intangible assets
(1) Intangible assets
In RMB
| Item | Land using right | Patent | Software | Total |
| I. Book value | ||||
| 1. Opening balance | 80,404,737.13 | 8,982,747.17 | 19,358,441.10 | 108,745,925.40 |
| 2. Increase in this period | 6,603.77 | 2,274,654.85 | 2,281,258.62 | |
| (1) Purchase | 6,603.77 | 2,274,654.85 | 2,281,258.62 | |
| 3. Decrease in this period | 5,257.52 | 5,257.52 | ||
| (1) Disposal | 5,257.52 | 5,257.52 | ||
| 4. Closing balance | 80,404,737.13 | 8,989,350.94 | 21,627,838.43 | 111,021,926.50 |
| II. Accumulative amortization | ||||
| 1. Opening balance | 15,075,529.76 | 8,472,024.78 | 7,996,759.99 | 31,544,314.53 |
| 2. Increase in this period | 2,295,341.24 | 180,605.15 | 1,801,952.75 | 4,277,899.14 |
| (1) Provision | 2,295,341.24 | 180,605.15 | 1,801,952.75 | 4,277,899.14 |
| 3. Decrease in this period | ||||
| 4. Closing balance | 17,370,871.00 | 8,652,629.93 | 9,798,712.74 | 35,822,213.67 |
| 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 | 63,033,866.13 | 336,721.01 | 11,829,125.69 | 75,199,712.83 |
| 2. Opening book value | 65,329,207.37 | 510,722.39 | 11,361,681.11 | 77,201,610.87 |
21. 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 | 1,084,628.66 | 56,101.56 | 1,028,527.10 |
| compensation | |||||
| Reconstruction project of sample room | 347,140.98 | 115,713.60 | 231,427.38 | ||
| Membership fee | 413,749.88 | 15,000.00 | 235,000.08 | 193,749.80 | |
| Waterproofing works for employee dormitories | 631,470.05 | 158,583.96 | 472,886.09 | ||
| Management consulting service fee | 407,478.31 | 194,690.26 | 423,702.49 | 178,466.08 | |
| Warehouse addition and renovation project | 211,926.63 | 60,550.44 | 151,376.19 | ||
| Dahuaxin Dongguan Songshanhu rubber area interlayer transformation | 360,856.24 | 180,428.16 | 180,428.08 | ||
| Training management platform service fee | 101,650.94 | 101,650.94 | |||
| Factory wall painting and rolling shutter door engineering | 218,332.80 | 45,964.80 | 172,368.00 | ||
| Property insurance premium | 397,497.12 | 84,625.00 | 244,752.13 | 237,369.99 | |
| Plant ground reconstruction project | 406,755.71 | 87,162.00 | 319,593.71 | ||
| High voltage network access fee of East China base | 922,935.78 | 128,185.55 | 794,750.23 | ||
| Others | 1,718,368.74 | 290,541.17 | 1,427,827.57 | ||
| Total | 4,581,487.32 | 2,935,619.78 | 2,128,336.88 | 5,388,770.22 |
22. 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 | 257,631,149.84 | 48,121,014.85 | 263,568,017.94 | 38,503,124.46 |
| Unrealized profit of internal transactions | 281,712,399.14 | 55,842,834.37 | 135,859,744.95 | 33,964,936.24 |
| Deductible loss | 194,235,656.90 | 44,060,479.20 | 122,522,156.58 | 29,105,371.97 |
| Credit impairment provision | 216,539,086.13 | 34,918,828.89 | 212,735,093.27 | 44,515,085.13 |
| Unrealizable gross profit | 114,199,793.34 | 27,967,001.62 | 130,105,754.96 | 31,898,500.96 |
| Anticipated liabilities | 6,347,809.40 | 1,161,300.00 | 33,425,500.13 | 7,715,527.38 |
| Deferred earning | 3,674,964.26 | 551,244.65 | 2,314,029.86 | 342,765.63 |
| Change in fair value | 1,079,130.19 | 161,869.53 | 1,520,569.70 | 228,085.49 |
| Accrued expenses and others | 8,914,405.11 | 1,339,159.89 | 1,679,786.49 | 416,426.25 |
| Total | 1,084,334,394.31 | 214,123,733.00 | 903,730,653.88 | 186,689,823.51 |
(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 | 4,199,023,889.76 | 1,049,649,013.70 | 4,126,941,042.59 | 1,031,097,491.50 |
| Acquire premium to form inventory | 1,535,605.47 | 383,901.37 | 1,535,605.47 | 383,901.37 |
| Estimated gross margin when Fangda Town records income, but does not reach the taxable income level | 31,539,658.09 | 7,884,914.52 | ||
| Rental income | 34,856,116.84 | 8,714,029.21 | 26,439,158.17 | 6,609,789.56 |
| Total | 4,266,955,270.16 | 1,066,631,858.80 | 4,154,915,806.23 | 1,038,091,182.43 |
(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 | 214,123,733.00 | 186,689,823.51 | ||
| Deferred income tax liabilities | 1,066,631,858.80 | 1,038,091,182.43 |
(4) Details of unrecognized deferred income tax assets
In RMB
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 554,677.54 | 130,889.01 |
| Deductible loss | 10,345,101.90 | 7,336,481.23 |
| Total | 10,899,779.44 | 7,467,370.24 |
(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 |
| 2022 | 1,233,589.22 | 1,270,623.72 | |
| 2023 | 4,575,983.46 | 4,575,983.46 | |
| 2024 | 1,276,235.76 | 1,276,235.76 | |
| 2025 | 213,129.83 | 213,638.29 | |
| 2026 | 3,046,163.63 | ||
| Total | 10,345,101.90 | 7,336,481.23 | -- |
23. 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 | 72,288,658.32 | 7,952,729.45 | 64,335,928.87 | 81,503,073.42 | 6,417,492.11 | 75,085,581.31 |
| Prepaid house and equipment amount | 35,693,402.77 | 35,693,402.77 | 29,132,495.10 | 29,132,495.10 | ||
| Certificate of deposit | 306,738,886.82 | 306,738,886.82 | ||||
| Others | 1,088,296.93 | 1,088,296.93 | 603,385.14 | 603,385.14 | ||
| Total | 415,809,244.84 | 7,952,729.45 | 407,856,515.39 | 111,238,953.66 | 6,417,492.11 | 104,821,461.55 |
Others:
Other non-current assets at the end of the period increased by 289.10% compared with the beginning of the period, mainly due to theincrease of long-term large amount certificates of deposit.
24. Short-term borrowings
(1) Classification of short-term borrowings
In RMB
| Item | Closing balance | Opening balance |
| Loan by pledge | 58,450,232.49 | 30,045,466.66 |
| Guarantee loan | 10,013,291.67 | 200,013,291.68 |
| Credit borrow | 302,354,444.46 | 346,029,354.19 |
| Discount borrowing of acceptance bills | 916,656,430.03 | 472,162,215.09 |
| Total | 1,287,474,398.65 | 1,048,250,327.62 |
Notes to classification of short-term borrowingsAt the end of the period, the Company provides guarantee for the subsidiary Kechuangyuan Software; Among the pledged loans atthe end of the period, the balance of RMB50,068,888.89 was guaranteed by the subsidiary Fangda Zhichuang Technology Co., Ltd.with three invention patents and the guarantee provided by Shenzhen Hi-tech Financing Investment Guarantee Co., Ltd., and thebalance of RMB8,381,343.60 yuan was guaranteed by the pledge of accounts receivable provided by the subsidiary FangdaZhichuang Technology Co., Ltd.
25. Derivative financial liabilities
In RMB
| Item | Closing balance | Opening balance |
| Forward foreign exchange contract | 11,871.20 | 915,234.93 |
| Total | 11,871.20 | 915,234.93 |
26. Notes payable
In RMB
| Type | Closing balance | Opening balance |
| Commercial acceptance | 185,747,490.66 | 215,002,061.17 |
| Bank acceptance | 663,697,808.43 | 651,222,454.25 |
| Total | 849,445,299.09 | 866,224,515.42 |
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 | 942,689,466.48 | 884,009,122.99 |
| Construction payable | 58,406,046.64 | 98,783,841.73 |
| Payable installation and implementation fees | 327,879,727.83 | 295,439,323.67 |
| Others | 14,148,245.02 | 4,450,130.01 |
| Total | 1,343,123,485.97 | 1,282,682,418.40 |
(2) Significant payables aging more than 1 year
In RMB
| Item | Closing balance | Reason |
| Supplier 1 | 30,659,989.51 | Not mature |
| Supplier 2 | 7,322,582.41 | Not mature |
| Supplier 3 | 5,357,978.21 | Not mature |
| Supplier 4 | 3,414,887.79 | Not mature |
| Supplier 5 | 3,298,479.36 | Not mature |
| Total | 50,053,917.28 | -- |
28. Prepayment received
(1) Prepayment received
In RMB
| Item | Closing balance | Opening balance |
| Rental | 1,280,482.93 | 1,544,655.62 |
| Total | 1,280,482.93 | 1,544,655.62 |
29. Contract liabilities
In RMB
| Item | Closing balance | Opening balance |
| Project funds collected in advance | 172,696,504.61 | 195,922,455.76 |
| Real estate sales payment | 4,082,802.11 | 62,466,576.69 |
| Material loan | 2,485,989.04 | 1,408,738.82 |
| Others | 921,581.39 | 5,689,341.85 |
| Total | 180,186,877.15 | 265,487,113.12 |
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 | -23,225,951.15 | It is mainly due to the decrease of advance receipts due to the performance of engineering contract obligations |
| Real estate sales payment | -58,383,774.58 | This is mainly due to the recognition of income when Nanchang Fangda Center project meets the conditions for occupation in this period |
| Total | -81,609,725.73 | —— |
The Company needs to comply with the disclosure requirements of the real estate industry in the Guidelines for the Self-disciplineand Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.Payment received from top 5 presales projects:
There are no pre-sale projects in this period.
30. Employees’ wage payable
(1) Employees’ wage payable
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Short-term remuneration | 60,855,743.99 | 384,920,078.63 | 376,986,073.01 | 68,789,749.61 |
| 2. Retirement pension program-defined contribution plan | 38,452.79 | 16,510,121.43 | 16,394,179.88 | 154,394.34 |
| 3. Dismiss compensation | 944,562.29 | 817,692.29 | 126,870.00 | |
| Total | 60,894,196.78 | 402,374,762.35 | 394,197,945.18 | 69,071,013.95 |
(2) Short-term remuneration
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Wage, bonus, allowance and subsidies | 60,093,523.10 | 351,256,656.43 | 343,862,435.61 | 67,487,743.92 |
| 2. Employee welfare | 14,282,804.33 | 13,909,540.13 | 373,264.20 |
| 3. Social insurance | 150.39 | 9,466,815.81 | 9,419,801.98 | 47,164.22 |
| Including: medical insurance | 5,937,400.83 | 5,895,981.71 | 41,419.12 | |
| Labor injury insurance | 150.39 | 261,078.55 | 258,180.74 | 3,048.20 |
| Breeding insurance | 683,578.57 | 680,881.67 | 2,696.90 | |
| Unemployment insurance | 2,584,757.86 | 2,584,757.86 | ||
| 4. Housing fund | 41,608.00 | 8,410,342.22 | 8,374,708.22 | 77,242.00 |
| 5. Labor union budget and staff education fund | 564,651.81 | 1,411,872.28 | 1,407,081.59 | 569,442.50 |
| 6. Short-term paid leave | 155,810.69 | 91,587.56 | 12,505.48 | 234,892.77 |
| Total | 60,855,743.99 | 384,920,078.63 | 376,986,073.01 | 68,789,749.61 |
(3) Defined contribution plan
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Basic pension | 38,302.40 | 16,000,671.30 | 15,888,450.66 | 150,523.04 |
| 2. Unemployment insurance | 150.39 | 509,450.13 | 505,729.22 | 3,871.30 |
| Total | 38,452.79 | 16,510,121.43 | 16,394,179.88 | 154,394.34 |
31. Taxes payable
In RMB
| Item | Closing balance | Opening balance |
| VAT | 7,130,265.98 | 4,413,646.55 |
| Enterprise income tax | 32,790,801.61 | 14,293,844.57 |
| Personal income tax | 1,525,425.02 | 1,118,590.56 |
| City maintenance and construction tax | 1,153,514.56 | 814,163.97 |
| Land using tax | 257,316.97 | 242,187.59 |
| Property tax | 1,133,817.11 | 317,791.55 |
| Education surtax | 582,762.56 | 432,267.04 |
| Local education surtax | 246,199.28 | 169,248.62 |
| Land VAT | 22,186,857.45 | 337,655,257.61 |
| Others | 273,686.68 | 838,881.79 |
| Total | 67,280,647.22 | 360,295,879.85 |
Others:
The tax payable at the end of the period decreased by 81.33% compared with that at the beginning of the period, which is mainly dueto the payment of land value-added tax by the subsidiary Fangda Real Estate, which meets the liquidation conditions for paying landvalue-added tax.
32. Other payables
In RMB
| Item | Closing balance | Opening balance |
| Dividend payable | 6,000,000.00 | |
| Other payables | 126,903,098.08 | 147,635,067.86 |
| Total | 126,903,098.08 | 153,635,067.86 |
(1) Dividend payable
In RMB
| Item | Closing balance | Opening balance |
| Common share dividend | 6,000,000.00 | |
| Total | 6,000,000.00 |
(2) Other payables
1) Other payables presented by nature
In RMB
| Item | Closing balance | Opening balance |
| Performance and quality deposit | 47,863,587.46 | 37,137,147.11 |
| Deposit | 20,376,442.13 | 17,623,656.22 |
| Reserved expense | 4,048,028.82 | 10,861,930.30 |
| Others | 54,615,039.67 | 82,012,334.23 |
| Total | 126,903,098.08 | 147,635,067.86 |
(2) Significant payables aging more than 1 year
In RMB
| Item | Closing balance | Reason |
| Shenzhen Yikang Real Estate Co. Ltd. | 24,912,830.32 | Payment paid as agreed in the contract |
| Total | 24,912,830.32 | -- |
33. Non-current liabilities due within 1 year
In RMB
| Item | Closing balance | Opening balance |
| Long-term loans due within 1 year | 65,634,120.55 | 103,359,833.57 |
| Lease liabilities due within one year | 12,784,437.21 | |
| Total | 78,418,557.76 | 103,359,833.57 |
34. Other current liabilities
In RMB
| Item | Closing balance | Opening balance |
| Unterminated notes receivable | 25,877,995.14 | 82,447,039.97 |
| Substituted money on VAT | 22,220,366.63 | 25,241,385.72 |
| Total | 48,098,361.77 | 107,688,425.69 |
Others:
Other current liabilities at the end of the period decreased by 55.34% compared with that at the beginning of the period, mainly dueto the decrease of notes receivable not derecognized this year.
35. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
| Item | Closing balance | Opening balance |
| Loan by pledge | 231,295,035.65 | |
| Guaranteed and mortgage loans | 467,742,011.11 | |
| Guarantee, mortgage and pledge loan | 931,392,109.44 | 971,476,260.27 |
| Less: Long-term loans due within 1 year | 65,634,120.55 | 103,359,833.57 |
| Total | 1,333,500,000.00 | 1,099,411,462.35 |
Notes to classification of long-term borrowings:
The pledge in the above guarantee, mortgage and pledge loans is the pledge of 100% equity of Fangda Real Estate, a subsidiary heldby the Company, and the rent receivable of the leased property of Fangda Town, a self-held party; The above guarantee and mortgageloans are guaranteed by the company and its subsidiary Fangda Real Estate, and some properties of Fangda Plaza held by itssubsidiary Fangda Real Estate.Other note, including interest rate range:
The interest rate period of long-term loan is 3%-7%.
36. Lease liabilities
In RMB
| Item | Closing balance | Opening balance |
| Rental payments for houses, buildings and means of transport | 19,152,093.31 | 5,844,154.69 |
| Total | 19,152,093.31 | 5,844,154.69 |
37. Long-term payables
In RMB
| Item | Closing balance | Opening balance |
| Long-term payable | 183,640,219.18 | |
| Total | 183,640,219.18 |
(1) Long term accounts payable listed by nature
In RMB
| Item | Closing balance | Opening balance |
| Disposal of equity repurchase | 183,640,219.18 |
Others:
For details of the disposal of equity repurchase funds, see 2. Description in the transaction in which the owner's equity shares of thesubsidiary changes and still controls the subsidiary in Chapter X, IX. equity in other entities.
38. Anticipated liabilities
In RMB
| Item | Closing balance | Opening balance | Reason |
| Pending lawsuit | 2,091,286.00 | 27,017,023.60 | Delay in handling certificate of |
| Product quality warranty | 4,256,523.40 | 6,408,476.53 | Product quality warranty |
| Total | 6,347,809.40 | 33,425,500.13 | -- |
Note: including related significant assumptions and estimates for anticipated liabilitiesFor details of the matters involved in delaying the handling of the property right certificate, see ③ of 2. Contingencies (1) in XIII.Commitments and contingencies.
39. Deferred earning
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance | Reason |
| Government subsidy | 9,168,492.17 | 1,000,000.00 | 601,966.57 | 9,566,525.60 | See the following table |
| Total | 9,168,492.17 | 1,000,000.00 | 601,966.57 | 9,566,525.60 | -- |
Items involving government subsidies:
In RMB
| Liabilities | Opening balance | Amount of new subsidy | Amount included in non-operating revenue | Other misc. gains recorded in this period | Costs offset in the period | Other change | Closing balance | Related to assets/earning |
| Railway transport screen door controlling system and information transmission technology | 58,749.53 | 18,904.32 | 39,845.21 | Assets-related | ||||
| Major investment project prize from Industry and Trade Development Division of Dongguan Finance Bureau | 1,566,667.10 | 57,142.80 | 1,509,524.30 | Assets-related | ||||
| Distributed PV power generation project subsidy sponsored by Dongguan Reform and Development Commission | 368,750.21 | 24,999.96 | 343,750.25 | Assets-related | ||||
| Subsidized land | 173,553.23 | 3,725.64 | 169,827.59 | Assets-rel |
| transfer | ated | |||||||
| Special subsidy for industrial transformation, upgrading and development | 800,000.00 | 33,333.35 | 766,666.65 | Assets-related | ||||
| Enterprise informationization subsidy project of Shenzhen Small and Medium Enterprise Service Agency | 420,000.00 | 48,000.00 | 372,000.00 | Assets-related | ||||
| National Industry Revitalization and Technology Renovation Project fund | 5,685,712.10 | 307,728.60 | 5,377,983.50 | Assets-related | ||||
| Shenzhen Science and Technology Innovation Committee Technology Innovation Subsidy | 95,060.00 | 95,060.00 | Earning-related | |||||
| Energy saving and environmental protection metal curtain wall production technology transformation project | 1,000,000.00 | 13,071.90 | 986,928.10 | Assets-related |
40. Capital share
In RMB
| Opening balance | Change (+,-) | Closing balance | |||||
| Issued new shares | Bonus shares | Transferred from reserves | Others | Subtotal | |||
| Total of | 1,088,278,951. | -14,404,724. | -14,404,724. | 1,073,874,22 | |||
| capital shares | 00 | 00 | 00 | 7.00 |
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, 2021, there are 2,302,093 shares with limited sales conditions in the closing balance, all of which are held bysenior executives.
41. Capital reserve
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Capital premium (share capital premium) | 19,005,491.05 | 9,000,000.00 | 10,005,491.05 | |
| Other capital reserves | 1,454,097.35 | 1,454,097.35 | ||
| Total | 20,459,588.40 | 9,000,000.00 | 11,459,588.40 |
Other note, including explanation about the reason of the change:
The decrease of capital reserve in the current period was caused by the acquisition of equity of Yunzhu Industrialunder the same control.
42. Shares in stock
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Shares in stock | 42,748,530.12 | 42,748,530.12 | ||
| Total | 42,748,530.12 | 42,748,530.12 |
Other note, including explanation about the reason of the change:
At the second meeting of the ninth board of directors held on June 23, 2020, the Company considered and approved the proposal torepurchase part of the Company's domestic listed foreign shares (B shares) in 2020. From July 23, 2020 to September 22, 2020,14,404,724 shares were repurchased through centralized competitive bidding, the highest price was HK $3.47/share and the lowestprice was HK $3.16/share. The actual payment was HK $48,359,819.24 (including transaction costs), which was included in treasuryshares of RMB 42,748,530.12. On April 23, 2021, the Company completed the cancellation of the repurchase of 14,404,724 B shares,reduced the share capital of 14,404,724 shares and offset the surplus reserve of RMB28,343,806.12.
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 | Less: amount written | Less: Income tax | After-tax amount attributed | After-tax amount attributed | |||
| and transferred into gain/loss in previous terms | into other gains and transferred into gain/loss in previous terms | expenses | to the parent | to minority shareholders | ||||
| 1. Other misc. incomes that cannot be re-classified into gain and loss | -11,670,984.54 | -3,447,654.94 | -552,919.70 | -2,894,735.24 | -14,565,719.78 | |||
| Fair value change of investment in other equity tools | -11,670,984.54 | -3,447,654.94 | -552,919.70 | -2,894,735.24 | -14,565,719.78 | |||
| 2. Other misc. incomes that will be re-classified into gain and loss | 13,749,152.17 | 49,217,617.84 | 13,116,456.11 | 36,142,439.39 | -41,277.66 | 49,891,591.56 | ||
| Cash flow hedge reserve | 5,150,331.29 | -5,001,496.87 | -750,224.54 | -4,224,144.67 | -27,127.66 | 926,186.62 | ||
| Translation difference of foreign exchange statement | -157,732.58 | -1,247,607.89 | -1,233,457.89 | -14,150.00 | -1,391,190.47 | |||
| Investment real estate measured at fair value | 8,756,553.46 | 55,466,722.60 | 13,866,680.65 | 41,600,041.95 | 50,356,595.41 | |||
| Other miscellaneous income | 2,078,167.63 | 45,769,962.90 | 12,563,536.41 | 33,247,704.15 | -41,277.66 | 35,325,871.78 |
44. Surplus reserves
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserves | 106,783,436.96 | 885,309.59 | 28,343,806.12 | 79,324,940.43 |
| Total | 106,783,436.96 | 885,309.59 | 28,343,806.12 | 79,324,940.43 |
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 therate 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 due to the decrease of surplus reserve of RMB28,343,806.12 when thecost of treasury shares is higher than the corresponding share capital.
45. Retained profit
In RMB
| Item | Current period | Last period |
| Adjustment on retained profit of previous period | 4,215,005,541.52 | 3,898,626,177.99 |
| Total of retained profit at beginning of year adjusted (+ for increase, - for decrease) | 2,837,784.25 | 10,342,800.77 |
| Retained profit adjusted at beginning of year | 4,217,843,325.77 | 3,908,968,978.76 |
| Plus: Net profit attributable to owners of the parent | 222,168,142.53 | 389,344,290.74 |
| Less: Statutory surplus reserves | 885,309.59 | 11,258,155.90 |
| Common share dividend payable | 68,723,947.55 | |
| Others | 115,070,899.38 | 487,840.28 |
| Closing retained profit | 4,324,055,259.33 | 4,217,843,325.77 |
Notes:
(1) Details of retained profit adjusted at beginning of the period: Due to the change of merger scope caused by the acquisition ofYunzhu Industrial under the same control, the undistributed profit at the beginning of 2021 is RMB2837784.25 yuan and theundistributed profit at the beginning of 2020 is RMB 10342800.77.
(2) Other decreases of RMB115,070,899.38 in the current period are due to the acquisition of the equity of Yunzhu IndustrialCompany under the same control.
46. Operational revenue and costs
In RMB
| Item | Amount occurred in the current period | Occurred in previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 3,409,535,038.10 | 2,737,323,045.81 | 2,880,515,174.41 | 2,394,211,303.50 |
| Other businesses | 148,189,359.44 | 23,977,511.67 | 119,676,599.22 | 22,363,581.82 |
| Total | 3,557,724,397.54 | 2,761,300,557.48 | 3,000,191,773.63 | 2,416,574,885.32 |
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 | Segment 1-curtain wall | Segment 2 - rail transit division | Segment 3 - real estate segment | Segment 4 - new energy | Segment 5 - other segments | Total |
| Type of product | 2,584,704,014.98 | 534,310,567.88 | 407,329,798.11 | 19,285,405.44 | 12,094,611.13 | 3,557,724,397.54 |
| Including: | ||||||
| Curtain wall | 2,584,704,014.9 | 2,584,704,014.9 |
| system and materials | 8 | 8 | ||||
| Subway screen door and service | 534,310,567.88 | 534,310,567.88 | ||||
| Real estate sales | 407,329,798.11 | 407,329,798.11 | ||||
| PV power generation products | 19,285,405.44 | 19,285,405.44 | ||||
| Others | 12,094,611.13 | 12,094,611.13 | ||||
| Total | 2,584,704,014.98 | 534,310,567.88 | 407,329,798.11 | 19,285,405.44 | 12,094,611.13 | 3,557,724,397.54 |
Information related to performance obligations:
For curtain wall materials, real estate and other commodity sales transactions, the Company completes theperformance obligations when the customer obtains the control of the relevant commodities; for providing buildingcurtain wall, Metro screen door design, production and installation and other service transactions, the Companyconfirms the completed performance obligations according to the performance progress during the whole serviceperiod. The contract price of the Company is usually due within one year, and there is no significant financingcomponent.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 7,405,953,774.36 yuan, of which 3,837,706,200.29 yuan is expected to be recognizedin 2022, and 2,306,269,667.21 yuan is expected to be recognized in 2023, 1,261,977,906.86 yuan is expected to be recognized in2024 and beyond.Others:
The Company needs to comply with the disclosure requirements of the real estate industry in the Guidelines for the Self-disciplineand Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.Top-5 projects in terms of income received and recognized in the reporting period:
In RMB
| No. | Item | Balance |
| 1 | Fangda Town | 124,071,281.08 |
| 2 | Nanchang Fangda Center | 92,724,919.28 |
47. Taxes and surcharges
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| City maintenance and construction tax | 6,814,244.49 | 6,001,565.57 |
| Education surtax | 4,880,262.78 | 4,341,523.68 |
| Property tax | 6,799,263.40 | 4,396,188.94 |
| Land using tax | 1,642,629.16 | 1,544,528.60 |
| Stamp tax | 2,798,854.45 | 1,870,381.77 |
| Land VAT | 49,306,779.63 | -240,313,311.62 |
| Others | 84,940.08 | 38,233.02 |
| Total | 72,326,973.99 | -222,120,890.04 |
Others:
The increase of taxes and surcharges in this year over the previous year is mainly due to the land value-addedtax liquidation of Fangda Town project developed by Fangda Real Estate, a subsidiary of the Company, and thereversal of the land value-added tax accrued in previous years.
48. Sales expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 26,549,119.18 | 20,873,521.84 |
| Sales agency fee | 9,750,617.96 | 4,290,201.20 |
| Entertainment expense | 4,798,777.96 | 3,368,656.72 |
| Travel expense | 1,662,959.19 | 1,210,588.86 |
| Advertisement and promotion fee | 1,673,817.72 | 4,848,901.77 |
| Rental | 361,878.16 | 1,251,225.57 |
| Amortization of right of use assets | 1,021,131.68 | |
| Office costs | 1,040,668.24 | 983,040.25 |
| Material consumption | 412,933.68 | 559,077.10 |
| Warranty expense | 9,276,474.69 | |
| Others | 3,329,236.27 | 2,415,992.25 |
| Total | 59,877,614.73 | 39,801,205.56 |
Others:
The sales expenses of this year increased by 50.44% over the previous year, mainly due to the increase of salary, the increase of realestate sales agency fees of the subsidiary Jiangxi Real Estate and the reclassification of quality assurance expenses from managementexpenses to sales expenses this year.
49. Management expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 106,520,063.46 | 87,804,788.88 |
| Maintenance costs | 835,325.05 | 12,178,371.33 |
| Agencies | 20,495,270.86 | 11,615,777.26 |
| Depreciation and amortization | 11,344,295.40 | 8,541,764.39 |
| Office expense | 5,510,310.38 | 6,606,019.03 |
| Entertainment expense | 4,984,309.28 | 3,813,438.99 |
| Rental | 1,911,070.57 | 3,527,230.36 |
| Amortization of right of use assets | 2,603,309.92 | |
| Lawsuit | 540,860.07 | 346,458.93 |
| Travel expense | 2,208,994.72 | 1,757,640.29 |
| Property management fee | 1,836,776.97 | 3,278,088.11 |
| Water and electricity | 925,114.24 | 490,992.10 |
| Material consumption | 1,161,107.24 | 245,286.34 |
| Others | 8,566,850.67 | 3,159,468.02 |
| Total | 169,443,658.83 | 143,365,324.03 |
50. R&D cost
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 86,627,499.60 | 75,317,110.43 |
| Material costs | 49,445,691.44 | 53,248,838.53 |
| Agencies | 5,384,263.67 | 6,368,175.89 |
| Depreciation costs | 1,487,661.18 | 1,584,926.61 |
| Amortization of intangible assets | 1,003,289.28 | 1,226,447.53 |
| Travel expense | 476,622.69 | 242,760.29 |
| Rental | 55,053.80 | 18,674.31 |
| Others | 8,493,500.72 | 5,585,936.86 |
| Total | 152,973,582.38 | 143,592,870.45 |
51. Financial expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Interest expense | 106,019,889.08 | 97,682,162.85 |
| Including: interest expense of lease | 931,218.41 |
| liabilities | ||
| Less: interest capitalization | 4,297,120.98 | 13,189,723.94 |
| Less: discount government subsidies | 3,853,900.00 | 2,516,250.00 |
| Less: Interest income | 16,575,629.28 | 14,660,320.28 |
| Net interest expenditure | 81,293,238.82 | 67,315,868.63 |
| Exchange net loss | 1,933,113.39 | 1,310,762.38 |
| Acceptant discount | 13,489,673.65 | 13,143,667.19 |
| Commission charges and others | 6,285,570.07 | 5,242,785.23 |
| Total | 103,001,595.93 | 87,013,083.43 |
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) | 506,906.57 | 1,743,815.23 |
| Government subsidies related to deferred income (related to income) | 104,940.00 | |
| Government subsidies directly included in current profits and losses (related to income) | 12,813,082.60 | 12,712,264.04 |
| Other items related to daily activities and included in other income | 712,949.92 | 1,065,431.54 |
| Total | 14,032,939.09 | 15,626,450.81 |
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 | -683,431.81 | -1,319,862.88 |
| Investment income of trading financial assets during the holding period | 72,364.60 | -50,000.00 |
| Investment income from disposal of trading financial assets | 5,487,895.02 | 8,865,272.09 |
| Financial assets derecognised as a result of amortized cost | -6,336,161.86 | -6,148,967.92 |
| Others | 69,798.87 |
| Total | -1,459,334.05 | 1,416,240.16 |
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 |
| Transactional financial assets | 47,216.42 | |
| Investment real estate measured at fair value | 20,921,813.65 | 19,205,841.18 |
| Other non-current financial assets | 2,500,222.08 | 15,458.14 |
| Total | 23,422,035.73 | 19,268,515.74 |
55. Credit impairment loss
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Bad debt loss of other receivables | 1,421,794.98 | 1,175,666.47 |
| Bad debt loss of notes receivable | -2,584,709.89 | |
| Bad debt loss of account receivable | -6,761,080.52 | 28,521,880.10 |
| Total | -7,923,995.43 | 29,697,546.57 |
Others:
The decrease of credit impairment loss in this year compared with that in the previous year is mainly due tothe increase of changes in accounting estimates of the Company in the previous year.
56. Assets impairment loss
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Contract asset impairment loss | 7,181,339.41 | 53,075,851.07 |
| Total | 7,181,339.41 | 53,075,851.07 |
Others:
The decrease of asset impairment loss in this year compared with that in the previous year is mainly due to theincrease of changes in accounting estimates of the Company in the previous year.
57. Assets disposal gains
In RMB
| Source | Amount occurred in the current period | Occurred in previous period |
| Disposition not classified as possession of fixed assets to be sold, construction in progress, productive biological assets and intangible assets | -2,291,048.05 | -18,386.23 |
| Including: Fixed assets | -2,291,048.05 | -18,386.23 |
| Gains or losses from disposal of other non-current assets | -233,876.00 | |
| Total | -2,291,048.05 | -252,262.23 |
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 | 420,185.19 | 251,537.00 | 420,185.19 |
| Compensation received | 31,106.99 | 61,960.00 | 31,106.99 |
| Payable account not able to be paid | 1,089,259.90 | 1,089,259.90 | |
| Others | 668,628.48 | 209,008.00 | 668,628.48 |
| Total | 2,209,180.56 | 522,505.00 | 2,209,180.56 |
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 | 3,379,215.24 | 6,000,698.10 | 3,379,215.24 |
| Loss from retirement os damaged non-current assets | 324,982.26 | 289,575.87 | 324,982.26 |
| Penalty and overdue fine | 71,556.64 | 14,164.60 | 71,556.64 |
| Others | 2,311,621.57 | 29,260,098.18 | 2,311,621.57 |
| Total | 6,087,375.71 | 35,564,536.75 | 6,087,375.71 |
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 | 52,589,592.74 | -44,337,868.47 |
| Deferred income tax expenses | -11,504,044.01 | 130,610,436.74 |
| Total | 41,085,548.73 | 86,272,568.27 |
(2) Adjustment process of accounting profit and income tax expense
In RMB
| Item | Amount occurred in the current period |
| Total profit | 267,884,155.75 |
| Income tax expenses calculated based on the legal (or applicable) tax rates | 66,971,038.92 |
| Impacts of different tax rates applicable for some subsidiaries | -11,214,813.81 |
| Impacts of income tax before adjustment | -588,013.19 |
| Impacts of non-deductible cost, expense and loss | 4,415,279.62 |
| Impacts of using deductible loss of unrecognized deferred income tax assets | -9,309.46 |
| Deductible temporary difference and deductible loss of unrecognized deferred income tax assets | 692,310.25 |
| Additional deduction of R&D expense | -19,351,801.55 |
| Profit and loss of associates and joint ventures calculated using the equity method | 170,857.95 |
| Income tax expenses | 41,085,548.73 |
61. Other miscellaneous income
See Note VII 43.
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 | 9,836,742.46 | 14,659,486.95 |
| Subsidy income | 17,767,508.18 | 16,385,605.95 |
| Net amount of margin such as Bill of exchange | 72,723,783.94 | 130,234,443.34 |
| Retrieving of bidding deposits | 13,479,226.26 | 3,740,836.61 |
| Other operating accounts | 6,245,160.75 | 5,238,482.11 |
| Total | 120,052,421.59 | 170,258,854.96 |
(2) Other cash paid related to operation
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Pocket expenses | 149,859,536.10 | 72,644,885.18 |
| Bidding deposit paid | 32,427,745.97 | 65,260,110.98 |
| Other trades | 34,211,196.04 | 32,303,328.43 |
| Total | 216,498,478.11 | 170,208,324.59 |
(3) Other cash paid related to investment activities
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Investment commission | 50,000.00 | 135,741.00 |
| Total | 50,000.00 | 135,741.00 |
(4) Other cash received related to financing
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Cash received from disposal of equity of Fangda Zhichuang Technology Co., Ltd | 175,000,000.00 | |
| Total | 175,000,000.00 |
(5) Other cash paid related to financing activities
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Certificate of deposit | 300,000,000.00 | |
| Acquisition of equity of Yunzhu Industrial under the same control | 125,388,100.00 | |
| Financing fee | 2,739,530.00 | |
| Principal and interest of lease liabilities | 6,684,172.76 | |
| Bill of exchange, letter of credit and loan deposit | 32,448,838.96 | 121,280,000.00 |
| Repurchase amount of B shares | 142,856,912.25 | |
| Total | 467,260,641.72 | 264,136,912.25 |
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 | 226,798,607.02 | 389,483,036.98 |
| Plus: Asset impairment provision | 742,656.02 | -82,773,397.64 |
| Fixed asset depreciation, gas and petrol depreciation, production goods depreciation | 26,819,528.89 | 23,642,389.15 |
| Depreciation of right to use assets | 6,953,684.75 | |
| Amortization of intangible assets | 4,277,899.14 | 4,255,366.75 |
| Amortization of long-term amortizable expenses | 2,128,336.88 | 1,313,939.81 |
| Loss from disposal of fixed assets, intangible assets, and other long-term assets (―-― for gains) | 2,291,048.05 | 252,262.23 |
| Loss from fixed asset discard (―-― for gains) | 324,982.26 | 289,575.87 |
| Loss from fair value fluctuation (―-― for gains) | -23,422,035.73 | -19,268,515.74 |
| Financial expenses (―-― for gains) | 120,641,621.99 | 99,390,960.03 |
| Investment losses (―-― for gains) | 1,459,334.05 | -1,416,240.16 |
| Decrease of deferred income tax asset (―-― for increase) | 41,347,864.62 | 156,316,330.70 |
| Increase of deferred income tax asset (―-― for increase) | -29,843,820.61 | -25,741,976.57 |
| Decrease of inventory (―-― for increase) | 48,193,389.26 | -102,647,106.37 |
| Decrease of operational receivable items (―-― for increase) | -132,061,193.74 | -243,340,854.10 |
| Increase of operational receivable items (―-― for decrease) | -432,800,983.13 | 224,977,734.68 |
| Others | 72,723,783.99 | 130,234,443.34 |
| Cash flow generated by business | -63,425,296.29 | 554,967,948.96 |
| operations, net | ||
| 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 | 892,251,071.59 | 1,028,386,529.74 |
| Less: Initial balance of cash | 1,028,386,529.74 | 730,933,482.19 |
| Add: Ending balance of cash equivalents | ||
| Less: Ending balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -136,135,458.15 | 297,453,047.55 |
(2) Composition of cash and cash equivalents
In RMB
| Item | Closing balance | Opening balance |
| I. Cash | 892,251,071.59 | 1,028,386,529.74 |
| Including: Cash in stock | 3,192.76 | 482.09 |
| Bank savings can be used at any time | 875,884,674.10 | 1,013,915,054.53 |
| Other monetary capital can be used at any time | 16,363,204.73 | 14,470,993.12 |
| III. Balance of cash and cash equivalents at end of term | 892,251,071.59 | 1,028,386,529.74 |
64. Assets with restricted ownership or use rights
In RMB
| Item | Closing book value | Reason |
| Monetary capital | 395,312,687.73 | Various deposits |
| Notes receivable | 25,964,425.17 | Bills endorsed or discounted but not yet due |
| Fixed assets | 115,695,967.29 | Loan by pledge |
| Account receivable | 45,503,561.84 | Loan by pledge |
| Investment real estate | 3,633,265,958.13 | Loan by pledge |
| Other non-current assets | 306,738,886.82 | Loan by pledge |
| Equity pledge | 200,000,000.00 | 100% stake in Fangda Property Development held by the Company |
| Total | 4,722,481,486.98 | -- |
65. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
| Item | Closing foreign currency balance | Exchange rate | Closing RMB balance |
| Monetary capital | -- | -- | 113,442,883.87 |
| Including: USD | 5,088,612.57 | 6.3757 | 32,443,467.16 |
| Euro | 2,514,424.27 | 7.2197 | 18,153,388.90 |
| HK Dollar | 45,651,878.18 | 0.8176 | 37,324,975.60 |
| INR | 18,431,685.37 | 0.0857 | 1,579,189.94 |
| Vietnamese currency | 235,116,660.00 | 0.0003 | 65,833.70 |
| SGD | 1,122,646.39 | 4.7179 | 5,296,533.40 |
| AUD | 4,019,795.58 | 4.6220 | 18,579,495.17 |
| Account receivable | -- | -- | 8,352,172.01 |
| Including: USD | 660,998.44 | 6.3757 | 4,214,327.75 |
| AUD | 699,878.45 | 4.6220 | 3,234,838.20 |
| SGD | 191,400.00 | 4.7179 | 903,006.06 |
| Contract assets | 6,184,563.06 | ||
| Including: USD | 946,121.67 | 6.3757 | 6,032,187.93 |
| HK Dollar | 186,368.80 | 0.8176 | 152,375.13 |
| Other receivables | 2,917,371.86 | ||
| Including: USD | 360,335.34 | 6.3757 | 2,297,390.03 |
| HK Dollar | 377,064.66 | 0.8176 | 308,288.07 |
| INR | 3,335,599.00 | 0.0857 | 285,787.45 |
| AUD | 5,605.00 | 4.6220 | 25,906.31 |
| Account payable | 6,904,570.90 | ||
| Including: USD | 998,696.58 | 6.3757 | 6,367,389.79 |
| HK Dollar | 47,031.03 | 0.8176 | 38,452.57 |
| INR | 5,820,963.89 | 0.0857 | 498,728.54 |
| Other payables | 439,985.55 | ||
| Including: USD | 2,139.94 | 6.3757 | 13,643.62 |
| AUD | 66,610.65 | 4.6220 | 307,874.42 |
| HK Dollar | 124,955.10 | 0.8176 | 102,163.29 |
| Vietnamese currency | 58,228,425.00 | 0.0003 | 16,304.22 |
(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
66. 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 |
67. Government subsidy
(1) Government subsidy profiles
In RMB
| Type | Amount | Item | Amount accounted into the current gain/loss |
| Major investment project prize from Industry and Trade Development Division of Dongguan Finance Bureau | 1,509,524.30 | Deferred earning | 57,142.80 |
| Distributed PV power generation project subsidy sponsored by Dongguan Reform and Development Commission | 343,750.25 | Deferred earning | 24,999.96 |
| Subsidized land transfer | 169,827.59 | Deferred earning | 3,725.64 |
| Special subsidy for industrial transformation, upgrading and development | 766,666.65 | Deferred earning | 33,333.35 |
| National Industry Revitalization and Technology | 5,377,983.50 | Deferred earning | 307,728.60 |
| Renovation Project fund | |||
| Enterprise informationization subsidy project of Shenzhen Small and Medium Enterprise Service Agency | 372,000.00 | Deferred earning | 48,000.00 |
| Railway transport screen door controlling system and information transmission technology | 39,845.21 | Deferred earning | 18,904.32 |
| Energy saving and environmental protection metal curtain wall production technology transformation project | 986,928.10 | Deferred earning | 13,071.90 |
| VAT rebated into revenue | 4,733,471.54 | Other gains | 4,733,471.54 |
| Employment subsidy | 109,458.39 | Other gains | 109,458.39 |
| Technology research and development award of Finance Bureau of Management Committee of Nanchang High-tech Development Zone | 825,500.00 | Other gains | 825,500.00 |
| Childbearing subsidy | 83,994.84 | Other gains | 83,994.84 |
| Shenzhen R&D subsidy | 956,000.00 | Other gains | 956,000.00 |
| Shenzhen patent awards and subsidies | 55,000.00 | Other gains | 55,000.00 |
| Support for steady industrial growth in Shenzhen | 637,000.00 | Other gains | 637,000.00 |
| Shenzhen industrial added value award | 664,600.00 | Other gains | 664,600.00 |
| Reward for major taxpayers in Nanchang High Tech Zone | 200,000.00 | Other gains | 200,000.00 |
| Nanchang High Tech Zone Engineering Technology Center award | 200,000.00 | Other gains | 200,000.00 |
| Recognition and warehousing subsidy of high-tech enterprises | 317,500.00 | Other gains | 317,500.00 |
| Shenzhen intellectual property subsidy | 200,000.00 | Other gains | 200,000.00 |
| Subsidy of Shenzhen science and technology support plan | 200,000.00 | Other gains | 200,000.00 |
| Dongguan market development support subsidy | 846,932.19 | Other gains | 846,932.19 |
| Subsidy for integration of industrialization and industrialization | 262,200.00 | Other gains | 262,200.00 |
| Subsidy for capacity expansion in Shenzhen | 2,070,000.00 | Other gains | 2,070,000.00 |
| Discount subsidy | 3,853,900.00 | Financial expenses | 3,853,900.00 |
| Others | 451,425.64 | Other gains | 451,425.64 |
| Total | 26,233,508.20 | 17,173,889.17 |
(2) Government subsidy refund
□ Applicable √ Inapplicable
Note: The value-added tax is immediately refundable income, which is mainly attributed to the fact that Sun CorporationKechuangyuan Software belongs to a software company and enjoys the VAT rebate policy. Since the project will not formlong-term assets, the Company will use it as a government subsidy related to income.
68. Leasing
(1) The Company as leasee
| Item | 2021 |
| Short term lease expenses with simplified treatment included in current profit and loss | 32,344,895.47 |
| Lease expenses of low value assets with simplified treatment included in current profit and loss (except short-term lease) | 190,056.19 |
| Interest expense on lease liabilities | 931,218.41 |
| Total cash outflow related to leasing | 37,426,107.95 |
(2) The Company is the leasor
Operating lease: A. lease income
| Item | 2021 |
| Rental income | 126,420,568.95 |
| Including: income related to variable lease payments not included in the measurement of lease receipts | 283,825.76 |
B. Undiscounted lease receipts to be received in each of the five consecutive fiscal years after the balance sheet date, and thetotal undiscounted lease receipts to be received in the remaining years
| Year | Amount (in RMB) |
| 2022 | 147,885,877.18 |
| 2023 | 128,082,364.87 |
| 2024 | 86,739,590.85 |
| 2025 | 74,098,974.63 |
| 2026 | 57,564,299.41 |
| Total undiscounted lease receipts to be received after 2026 | 155,880,077.52 |
| Including Within 1 year (inclusive) | 33,017,947.39 |
| 1-2 years | 30,461,785.74 |
| 2-3 years | 18,211,425.07 |
| Over 3 years | 74,188,919.32 |
VIII. Change to Consolidation Scope
1. Consolidation of entities under common control
(1) Merger of companies under the common control during the report period
In RMB
| Consolidated party | Proportion of equity obtained in business consolidation | Basis for judgment of merger of companies under the common control | Consolidation date | Determination basis of consolidation date | Income of the consolidated party from the beginning of the current period to the consolidation date | Net profit of the consolidated party from the beginning of the current period to the consolidation date | Income of the consolidated party during the consolidation period | Net profit of the consolidated party during the consolidation period |
| Yunzhu Industrial | 100.00% | The ultimate controlling party before and after the merger is Mr. Xiong Jianming | Thursday, April 8, 2021 | Complete industrial and commercial change registration | 3,390,588.25 | 18,912.61 | 20,895,363.47 | 7,705,820.11 |
Other notes: Yunzhu Industrial includes Yunzhu Industrial and its subsidiary Fangda Yunzhu Testing. Yunzhu Industrial holds 100%equity of its subsidiary Fangda Yunzhu Testing.
(2) Consolidation costs
In RMB
| Combination costs | Yunzhu Industrial |
| --Cash | 125,388,100.00 |
Other notes: through deliberation and approval at the 6th meeting of the 9th board of directors held on March 19, 2021, the companyFangda Jianke and Fangda Hongjun Investment acquired 100% equity of Yunzhu Industrial held by related parties ShenzhenYingxiang Investment Co., Ltd. (hereinafter referred to as "Yingxiang Investment") and Shenzhen Mingjiu Investment Co., Ltd.(hereinafter referred to as "Mingjiu Investment") in cash. The purchase price shall be determined by both parties through negotiationaccording to the appraisal value of RMB125,388,100 in the asset appraisal report of Shenzhen Fangda Jianke Group Co., Ltd. on theequity project of Shenzhen Yunzhu Industrial Co., Ltd. (Zhonglian pingbao Zi [2021] No. 530) issued by Zhonglian Asset AppraisalGroup Co., Ltd.
(3) Book value of assets and liabilities of the consolidated party on the consolidation date
In RMB
| Yunzhu Industrial | ||
| Consolidation date | End of last period | |
| Monetary capital | 2,128,872.26 | 4,134,142.35 |
| Receivables | 7,258,493.18 | 9,847,052.11 |
| Inventory | 1,276,334.40 | |
| Fixed assets | 52,890.36 | 55,650.37 |
| Intangible assets | 7,934.87 | 8,785.04 |
| Transactional financial assets | 3,155,680.40 | 10,331,880.99 |
| Prepayment | 333,438.89 | 94,101.21 |
| Other current assets | 714,404.24 | 172,032.59 |
| Deferred income tax assets | 158,781.77 | 40,487.55 |
| Other non-current assets | 86,928.59 | 82,008.43 |
| Borrowing | 37,186.48 | |
| Payable | 1,964,566.26 | 11,605,964.57 |
| Deferred income tax liabilities | 7,082.46 | |
| Net assets | 13,172,006.22 | 13,153,093.61 |
| Less: minor shareholders’ equity | 1,317,200.62 | 1,315,309.36 |
| Acquired net assets | 11,854,805.60 | 11,837,784.25 |
Contingent liabilities of the consolidated party assumed in the business consolidation: None.
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:
In the change of consolidation scope in this period, four new subsidiaries were added in the way of establishment: Fangda ZhichuangTechnology Singapore, Fangda Zhichuang Technology Wuhan, Fangda Zhichuang Technology Nanchang and Fangda ZhichuangTechnology Dongguan.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 Technology | Shenzhen | Shenzhen | Production, processing and installation of subway screen doors | 83.10% | Incorporation | |
| Fangda Jiangxi New Material | Nanchang | Nanchang | Productionand sales of new-type materials 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 |
| Fangda Chengdu Technology | Chengdu | Chengdu | Trusted processing of building curtain wall materials | 100.00% | Incorporation | |
| Shihui International | Virgin Islands | Virgin Islands | Investment | 100.00% | Incorporation | |
| Fangda 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 | |
| Fangda Jiangxi Property Development | Nanchang | Nanchang | Real estate development and operation | 100.00% | Incorporation | |
| Fangda Luxin New Energy | Pingxiang | Pingxiang | Design and construction of PV power plants | 100.00% | Incorporation | |
| Fangda Xinjian New Energy | Nanchang | Nanchang | Design and construction of PV power plants | 100.00% | Incorporation | |
| Fangda Dongguan New Energy | Dongguan | Dongguan | Design and construction of PV power plants | 100.00% | Incorporation | |
| Kechuangyuan Software | Shenzhen | Shenzhen | Software development | 83.10% | Incorporation | |
| Fangda Zhichuang Technology Hong Kong | Hong Kong | Hong Kong | Metro screen door | 83.10% | Incorporation |
| Fangda Hongjun Investment | Shenzhen | Shenzhen | Investment | 98.00% | 2.00% | Incorporation |
| Fangda Australia | 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 | |
| Fangda Shanghai Zhijian | Shanghai | Shanghai | Intelligent technology, new energy, automated technology | 30.00% | 70.00% | Incorporation |
| Fangda Shanghai 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 | Shenzhen | Shenzhen | Project investment and investment consultancy | 99.00% | 0.52% | Incorporation |
| Fangda Lifu Investment | Shenzhen | Shenzhen | Project investment and investment consultancy | 52.00% | Incorporation | |
| Fangda Xunfu Investment | Shenzhen | Shenzhen | Project investment and investment consultancy | 100.00% | Incorporation | |
| Fangda Jianke Hong Kong | Hong Kong | Hong Kong | Design, sale and installation of building curtain wall | 100.00% | Incorporation | |
| Yunzhu Industrial | Shenzhen | Shenzhen | Inspection, technical service and consultation of building safety and building energy saving system | 100.00% | Consolidation of entities under common control | |
| Fangda Yunzhu Testing | Shenzhen | Shenzhen | Inspection, technical service and consultation of building safety and building energy saving system | 100.00% | Consolidation of entities under common control | |
| Fangda Zhichuang | Singapore | Singapore | Production, processing and installation of subway screen | 83.10% | Incorporation |
| Technology Singapore | doors | |||||
| Fangda Zhichuang Technology Wuhan | Wuhan | Wuhan | Production, processing and installation of subway screen doors | 83.10% | Incorporation | |
| Fangda Zhichuang Technology Nanchang | Nanchang | Nanchang | Production, processing and installation of subway screen doors | 83.10% | Incorporation | |
| Fangda Zhichuang Technology Dongguan | Dongguan | Dongguan | Production, processing and installation of subway screen doors | 83.10% | Incorporation |
Others:
① Fangda Zhichuang Technology Singapore has subscribed a registered capital of SGD10,000. As of December 31, 2021, the totalpaid in registered capital is SGD10000.
② Fangda Zhichuang Technology Wuhan was established on February 8, 2021. Fangda Zhichuang Technology has subscribed aregistered capital of RMB10 million. As of December 31, 2021, the paid in registered capital is RMB0.00 in total.
③ Founded on November 10, 2021, Fangda Zhichuang Technology Nanchang has subscribed a registered capital of RMB1 million.As of December 31, 2021, the paid in registered capital is RMB0.00 in total.Fangda Zhichuang Technology Dongguan was established on July 9, 2021. Fangda Zhichuang Technology has subscribed aregistered capital of RMB50 million. As of December 31, 2021, the total paid in registered capital is RMB0.00.
(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% | 6,809.98 | 48,409,765.57 | |
| Fangda Zhichuang Technology | 5.96% | 4,464,178.97 | 17,533,613.20 |
Other notes: The Company's subsidiaries Fangda Construction Technology Co., Ltd. and Jiangxi Fangda New Material Co., Ltd.transfer 10.9375% of the equity of Fangda Zhichuang Technology Co., Ltd. because the Company cannot unconditionally avoidperforming its contractual obligations by delivering cash or other financial assets, the Company recognizes the contractualobligations as financial liabilities, and accordingly does not recognize minority shareholders' equity. See Chapter X, 9. Equity inother subjects. 2 It is described in the transaction in which the owner's equity shares of the subsidiary changes and still controls thesubsidiary.
(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 | 207,592,402.32 | 455,315.59 | 208,047,717.91 | 100,106,531.59 | 363,929.52 | 100,470,461.11 | 205,837,361.25 | 30,024.88 | 205,867,386.13 | 98,305,262.61 | 98,305,262.61 | |
| Fangda Zhichuang Technology | 725,006,361.40 | 84,470,404.66 | 809,476,766.06 | 485,329,720.83 | 23,847,519.22 | 509,177,240.05 | 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 | 284,747.73 | 15,133.28 | 15,133.28 | 87,201.58 | 601,651.38 | -15,675.58 | -15,675.58 | 166,931.72 |
| Fangda Zhichuang Technology | 534,310,567.88 | 78,123,193.66 | 77,400,836.63 | 28,889,669.10 | 651,249,442.29 | 75,181,980.27 | 75,543,172.33 | 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
In May 2021, the subsidiaries Fangda Jianke, Fangda Jiangxi New Material and CITIC Securities Investment Co., Ltd., Shenzhen HiTech Investment Venture Capital Co., Ltd., Shenzhen Qianhai Pengchen Investment Partnership (limited partnership),Gongqingcheng Longrun Spring Investment Partnership (limited partnership), Shenzhen Jiayuan Capital Management Co., Ltd andGongqingcheng Huasheng Botai Investment Partnership (limited partnership) (hereinafter referred to as the "Transferee") signedequity transfer agreements to transfer 10.9375% of the total equity of Fangda Zhichuang Technology, with the transfer amount ofRMB 175 million. The agreement also stipulates that if Fangda Zhichuang Technology fails to start and complete the qualified listingbefore May 31, 2025, the transferee has the right to require Fangda Jianke and Fangda Jiangxi New Material to repurchase or transferall or part of the equity of Fangda Zhichuang Technology held by the transferee. Since the Company cannot unconditionallyavoid performing the above contractual obligations by delivering cash or other financial assets, the Companyrecognizes the contractual obligations as financial liabilities.
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 | 55,218,946.14 | 55,902,377.95 |
| Total shareholding | -- | -- |
| Net profit | -683,431.81 | -1,319,862.88 |
| --Total of misc. incomes | -683,431.81 | -1,319,862.88 |
X. Risks of Financial ToolsThe risks associated with the financial instruments of the Company arise from the various financial assetsand liabilities recognized by the Company in the course of its operations, including credit risks, liquidityrisks and market risks.The management objectives and policies of various risks related to financial instruments are governed bythe management of the Company. The operating management is responsible for daily risk management throughfunctional departments (for example, the Company's credit management department reviews the Company's creditsales on a case-by-case basis). The internal audit department of the Company conducts daily supervision of theimplementation of the Company's risk management policies and procedures, and reports relevant findings to theCompany's audit committee in a timely manner.
The overall goal of the Company's risk management is to formulate risk management policies that minimizethe risks associated with various financial instruments without excessively affecting the Company'scompetitiveness 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 of financial loss for the other party. The credit risk of the Company mainly comes from monetarycapital, notes receivable, accounts receivable, other receivables, receivables financing, contract assets, etc.The credit risk of these financial assets comes from the default of the counterparties, and the maximum riskexposure 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 Company believes that these commercial banks have higher reputation and asset status and have lower creditrisk.
For notes receivable, accounts receivable, other receivables, receivables financing and contract assets,the Company sets relevant policies to control credit risk exposure. The Group set the credit line and term fordebtors 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 to lower the general creditrisk.
(1) Significant increases in credit risk
The credit risk of the financial instrument has not increased significantly since the initial confirmation.In determining whether the credit risk has increased significantly since the initial recognition, the Companyconsiders reasonable and evidenced information, including forward-looking information, that can be obtainedwithout unnecessary additional costs or effort. The Company determines the relative risk of default risk of thefinancial instrument by comparing the risk of default of the financial instrument on the balance sheet date withthe risk of default on the initial recognition date to assess the credit risk of the financial instrument frominitial recognition.When one or more of the following quantitative and qualitative criteria are triggered, the Company believesthat the credit risk of financial instruments has increased significantly: the quantitative criteria are mainlythe probability of default in the remaining life of the reporting date increased by more than a certain proportioncompared with the initial recognition; the qualitative criteria are the major adverse changes in the operationor 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 isconsistent with the credit risk management target for related financial instruments, and quantitative andqualitative indicators are considered.
Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor,such as payment of interest or default or overdue of principal; (B) The concession that the debtor would notmake under any other circumstances for economic or contractual considerations relating to the financialdifficulties of the debtor; The debtor is likely to be bankrupt or undertake other financial restructuring; Thefinancial difficulties of the issuer or debtor lead to the disappearance of the active market for the financialasset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that a creditloss has occurred.
Credit impairment in financial assets may be caused by a combination of multiple events, not necessarilyby events that can be identified separately.
(3) Expected credit loss measurement
Depending on whether there is a significant increase in credit risk and whether a credit impairment has occurred, theCompany prepares different assets for a 12-month or full expected credit loss. The key parameters of expected credit lossmeasurement include default probability, default loss rate and default risk exposure. Taking into account thequantitative analysis and forward-looking information 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 riskexposure 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 onthe type of counterparty, the manner and priority of recourse, and the different collateral, the default loss
rate is also different. The default loss rate is the percentage of the risk exposure loss at the time of the default, calculated on thebasis of the next 12 months or the entire lifetime.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 werecalculated. Through the analysis of historical data, the Company has identified the key economic indexes thataffect the credit risk of each business type and the 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 no guarantee that may cause the Group credit risks.Among the Group’s receivables, accounts receivable from top 5 customers account for 25.47% of the total accountsreceivable (beginning of the period: 28.33%); among other receivables, other receivables from top 5 customers account for 69.41%of the total other receivables (beginning of the period: 69.60%).
2. Liquidity risk
Liquidity risk is the risk of capital shortage when the Group needs to pay cash or settled with other financialassets. The Company is responsible for the cash management of its subsidiaries, including short-term investmentsin cash surpluses and loans to meet projected cash requirements. The Company's policy is to regularly monitorshort and long-term liquidity requirements and compliance with borrowing agreements to ensure adequate cashreserves and readily available securities.As of December 31, 2021, the maturity of the Company's financial liabilities is as follows:
Amount: in RMB10,000
| Item | December 31, 2021 | |||
| Less than 1 year | Within 1-3 years | Over 3 years | Total | |
| Short-term loans | 128,747.44 | 128,747.44 | ||
| Derivative financial liabilities | 1.19 | 1.19 | ||
| Notes payable | 84,944.53 | 84,944.53 | ||
| Account payable | 132,966.88 | 870.87 | 474.60 | 134,312.35 |
| Employees' wage payable | 6,907.10 | 6,907.10 | ||
| Other payables | 6,998.63 | 1,707.20 | 3,984.48 | 12,690.31 |
| Non-current liabilities due in 1 year | 7,841.86 | 7,841.86 | ||
| Other current liabilities | 4,809.84 | 4,809.84 | ||
| Long-term loans | - | 24,650.00 | 108,700.00 | 133,350.00 |
| Lease liabilities | - | 1,886.82 | 28.39 | 1,915.21 |
| Long-term payable | 18,364.02 | 18,364.02 | ||
| Total liabilities | 373,217.47 | 29,114.89 | 131,551.49 | 533,883.85 |
(Continued)
| 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 | ||
| Derivative financial liabilities | 91.52 | 91.52 | ||
| Notes payable | 86,622.45 | 86,622.45 | ||
| Account payable | 124,892.82 | 3,271.34 | 104.08 | 128,268.24 |
| Employees' wage payable | 6,089.42 | 6,089.42 | ||
| Other payables | 9,741.88 | 3,965.54 | 1,656.09 | 15,363.51 |
| 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 | 353,367.94 | 32,178.03 | 86,760.17 | 472,306.14 |
3. Market risk
(1) Credit risks
The exchange rate risk of the Company mainly comes from the assets and liabilities of the Company and itssubsidiaries in foreign currency not denominated in its functional currency. Except for the use of Hong Kongdollars, United States dollars, Australian dollars, Vietnamese dong, euro, Indian rupees or Singapore currenciesby its subsidiaries established in and outside the Hong Kong Special Administrative Region, other major businessesof the Company shall be denominated in Renminbi.As of December 31, 2021, the Company's foreign currency financial assets and liabilities at the end of the period are listed inChapter X, VII, item note 66 of consolidated financial statements and description of foreign currency monetary items.The Company pays close attention to the impact of exchange rate changes on the Company's exchange raterisk. The Company continuously monitors the scale of foreign currency transactions and foreign currency assetsand liabilities to minimize foreign exchange risks. To this end, the Company may avoid foreign exchange risksby signing forward foreign exchange contracts or currency swap contracts.
(2) Interest risk
The Group's interest rate risk mainly arises from long-term interest-bearing debts such as long-term bankloans. Financial liabilities with floating interest rate cause cash flow interest rate risk for the Group.Financial liabilities with fixed interest rate cause fair value interest rate risk for the Group. The Group decidesthe proportion between fixed interest rate and floating interest rate according to the market environment andregularly reviews and monitors the combination of fixed and floating interest rate instruments.
The Group Finance Department of the Company continuously monitors the Group interest rate level. The risinginterest rate will increase the cost of the new interest-bearing debt and the interest expenditure oninterest-bearing debt which has not yet been paid by the Company at the floating rate, and will have a significantadverse effect on the Company's financial performance. Management will make adjustments in time according tothe latest market conditions.
As of December 31, 2021, when other risk variables remain unchanged, if the loan interest rate calculated by floating interest
rate increases or decreases by 50 basis points, the net profit of the Company in that year will decrease or increase by RMB6.8294million (December 31, 2020: RMB7.3875 million).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 | -- | -- | -- | -- |
| (I) Transactional financial assets | 1,069,587.62 | 25,135,241.89 | 26,204,829.51 | |
| 1. Financial assets measured at fair value with variations accounted into current income account | 1,069,587.62 | 25,135,241.89 | 26,204,829.51 | |
| (1) Investment of financial products | 25,135,241.89 | 25,135,241.89 | ||
| (2) Derivative financial assets | 1,069,587.62 | 1,069,587.62 | ||
| (2) Receivable financing | 4,263,500.00 | 4,263,500.00 | ||
| (3) Investment in other equity tools | 14,180,652.65 | 14,180,652.65 | ||
| (4) Investment real estate | 5,755,216,580.10 | 5,755,216,580.10 | ||
| 1. Leased building | 5,755,216,580.10 | 5,755,216,580.10 | ||
| (5) Other non-current financial assets | 7,525,408.24 | 7,525,408.24 | ||
| Total assets measured at fair value continuously | 1,069,587.62 | 5,755,216,580.10 | 51,104,802.78 | 5,807,390,970.50 |
| (6) Transactional financial liabilities | 11,871.20 | 11,871.20 | ||
| 1. Derivative financial liabilities | 11,871.20 | 11,871.20 | ||
| Total assets measured at fair value continuously | 11,871.20 | 11,871.20 | ||
| 2. Discontinuous fair value measurement | -- | -- | -- | -- |
2. Recognition basis of market value of continuous and discontinuous items measured at first level fairvalueThe Group determines the fair value using quotation in an active market for financial instruments traded in anactive market;
3. Valuation technique and qualitative and quantitative information for key parameters of continuous anddiscontinuous second level fair value items
For investment real estate, the Company adopts valuation technology to determine its fair value. The valuationtechniques adopted are mainly the market comparison method and the income method, and the rent and resale model.The input value of valuation technology mainly 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 valuationmodels are mainly cash flow discount model and market comparable company model. The input value of valuationtechnology mainly includes risk-free interest rate, benchmark interest rate, exchange rate, credit pointdifference, 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 pointto confirm the transition between levels. In the period, there is no switch in the financial assets measuredat fair value between the first and second level 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, accountsreceivable, other receivables, short-term borrowings, notes payable, employee compensation payable, accountspayables, other payables, and long-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 | 11.11% | 10.87% |
| Shengjiu Investment Ltd. | Hong Kong | Industrial investment | HKD1 million | 9.89% | 9.89% |
Particulars about the parent of the Company
①All of the investors of Shenzhen Banglin Technology Development Co., Ltd., the holding shareholder of the Company, are naturalpersons. Among them, Chairman Xiong Jianming is holding 85％ shares, and Mr. Xiong Xi – son of Mr. Xiong Jianming, is holding
15% of the shares.
② Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. areacting 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 IX, rights and interests in other entities.
3. Joint ventures and associates
See Note for details of significant joint ventures and associates of the Company.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 | Affiliates of the Company |
4. Other associates
| Other related parties | Relationship with the Company |
| Jiangxi Business Innovative Property Joint Stock Co., Ltd. | Affiliates of the Company |
| 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 | Sub-subsidiary under liquidation has completed the tax cancellation procedures in November 2021 |
| Shenzhen Qijian Technology Co., Ltd. (Qijian Technology) | Common actual controller |
| Shenzhen Mingjiu Investment Co., Ltd | Common actual controller |
| Shenzhen Yingxiang Investment Co., Ltd | Company with significant influence of actual controllers |
| 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 | 119,618.74 | 51,161.39 |
(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 |
| Qijian Technology | Houses & buildings | 962,580.65 | 384,319.68 |
(3) Related guarantees
The Company is the guarantor:
In RMB
| Beneficiary party | Amount guaranteed | Start date | Due date | Completed or not |
| Fangda Shanghai Zhijian | 80,000,000.00 | Wednesday, July 31, 2019 | Thursday, August 19, 2021 | Yes |
| Jiangxi Property Development | 200,000,000.00 | 19 June 2019 | Thursday, September 16, 2021 | Yes |
| Fangda Jianke | 500,000,000.00 | Tuesday, July 14, 2020 | Thursday, July 8, 2021 | Yes |
| Fangda Jianke | 250,000,000.00 | Tuesday, September 22, 2020 | Tuesday, September 21, 2021 | Yes |
| Fangda Jianke | 150,000,000.00 | Friday, April 10, 2020 | Friday, March 18, 2022 | No |
| Fangda Jianke | 300,000,000.00 | Friday, June 12, 2020 | Wednesday, April 14, 2021 | Yes |
| Fangda Zhichuang Technology | 100,000,000.00 | Friday, April 10, 2020 | Friday, March 18, 2022 | No |
| Fangda Zhichuang Technology | 30,000,000.00 | 29 June 2020 | 23 June 2020 | Yes |
| Fangda Jianke | 600,000,000.00 | Monday, February 24, 2020 | 13 February 2021 | Yes |
| Fangda Jianke | 400,000,000.00 | 30 September 2020 | Thursday, August 19, 2021 | Yes |
| Fangda Zhichuang Technology | 400,000,000.00 | Tuesday, July 28, 2020 | Wednesday, June 30, 2021 | Yes |
| Fangda Zhichuang Technology | 100,000,000.00 | 30 September 2020 | Thursday, August 19, 2021 | Yes |
| Fangda Zhichuang Technology | 200,000,000.00 | 16 June 2020 | 13 February 2021 | Yes |
| Fangda Jiangxi New Material | 65,000,000.00 | Tuesday, July 14, 2020 | Tuesday, July 13, 2021 | Yes |
| Fangda Jiangxi New Material | 80,000,000.00 | 23 May 2020 | 22 May 2021 | Yes |
| Fangda Property | 1,350,000,000.00 | 25 February 2020 | Sunday, February 24, 2030 | No |
| Kechuangyuan Software | 10,000,000.00 | Sunday, August 23, 2020 | 13 February 2021 | Yes |
| Fangda Jianke and Fangda Zhichuang Technology | 140,000,000.00 | Wednesday, December 18, 2019 | For details, please refer to the following description of related party guarantee (2) | No |
| Fangda Jianke | 200,000,000.00 | Friday, March 6, 2020 | Friday, March 5, 2021 | Yes |
| Fangda Jianke | 500,000,000.00 | Tuesday, July 27, 2021 | Sunday, June 11, 2023 | No |
| Fangda Jianke | 300,000,000.00 | Wednesday, March 17, 2021 | Thursday, February 17, 2022 | No |
| Fangda Jianke | 300,000,000.00 | Friday, January 29, 2021 | Friday, January 28, 2022 | No |
| Fangda Jianke | 400,000,000.00 | Saturday, September 18, 2021 | Monday, September 5, 2022 | No |
| Fangda Jianke | 300,000,000.00 | Wednesday, August 18, 2021 | Wednesday, August 17, 2022 | No |
| Fangda Jianke | 250,000,000.00 | Wednesday, November 17, 2021 | Wednesday, November 16, 2022 | No |
| Fangda Jianke | 480,000,000.00 | Friday, December 17, 2021 | Friday, December 16, 2022 | No |
| Fangda Zhichuang Technology | 400,000,000.00 | Wednesday, July 7, 2021 | Wednesday, July 6, 2022 | No |
| Fangda Zhichuang Technology | 150,000,000.00 | Wednesday, March 31, 2021 | Thursday, February 17, 2022 | No |
| Fangda Zhichuang Technology | 200,000,000.00 | Friday, January 29, 2021 | Friday, January 28, 2022 | No |
| Fangda Zhichuang Technology | 150,000,000.00 | Tuesday, September 28, 2021 | Friday, September 2, 2022 | No |
| Fangda Zhichuang Technology | 50,000,000.00 | Thursday, August 12, 2021 | Sunday, August 7, 2022 | No |
| Kechuangyuan Software | 10,000,000.00 | Thursday, September 30, 2021 | Friday, September 30, 2022 | No |
| Fangda Jiangxi New Material | 65,000,000.00 | Friday, July 30, 2021 | Friday, July 29, 2022 | No |
| Fangda Jiangxi New Material | 100,000,000.00 | Wednesday, May 26, 2021 | Tuesday, April 12, 2022 | No |
| Fangda Property | 470,000,000.00 | Thursday, March 18, 2021 | Tuesday, March 18, 2031 | No |
| Fangda Shanghai Zhijian | 35,000,000.00 | Thursday, June 3, 2021 | Saturday, March 18, 2023 | No |
The Company is the guarantied party:
In RMB
| Guarantor | Amount guaranteed | Start date | Due date | Completed or not |
| Fangda Jianke | 100,000.00 | Wednesday, November 10, 2021 | Friday, December 10, 2021 | Yes |
Note to related guarantees
1. The above-mentioned guarantees are all associated guarantees within interested entities of the Company.
2. HSBC has a total credit of RMB 90 million to the Company, Fangda Jianke and Fangda Zhichuang Technology and has not yetagreed on the credit expiration date. HSBC regularly evaluates the credit status. The restriction on the use of the credit isas follows:
The Company can use non-financial bank guarantees of up to 90 million yuan to grant credit;Fangda Jianke has non-committed combined revolving credits of not more than RMB90 million including revolving loans of upto RMB90 million, non-financial bank guarantees of up to RMB90 million and bank acceptances of up to RMB90 million.Fangda Zhichuang Technology has non-committed combined revolving credits of not more than RMB140 million includingrevolving loans of up to RMB50 million, non-financial bank guarantees of up to RMB140 million and bank acceptances of up toRMB140 million.
(4) Remuneration of key management
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Directors, supervisors and senior management | 9,463,963.93 | 8,961,747.37 |
(5) Other related transactions
The Company's subsidiaries Fangda Jianke and Fangda Hongjun Investment acquired 100% equity of Yunzhu Industrial held byShenzhen Mingjiu Investment Co., Ltd. and Shenzhen Yingxiang Investment Co., Ltd. in cash. The total transaction amount is RMBRMB125.3881 million. After the completion of the transaction, Fangda Jianke and Fangda Hongjun Investment hold 99% and 1%shares of Yunzhu Industrial respectively.
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 | 4,194.54 | 41.95 | 44,268.81 | 442.69 |
| 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 | ||
| Other receivables | Ganshang Joint Investment | 3,791,089.25 | 56,487.23 | 3,791,089.25 | 56,487.23 |
| Other receivables | Shenzhen Yikang Real Estate Co. Ltd. | 70,062,675.83 | 1,043,933.87 | 70,000,000.00 | 1,043,000.00 |
(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. | 25,116,052.92 | 24,912,830.32 |
| Other payables | Qijian Technology | 400.00 | 400.00 |
| Other payables | Ganshang Joint Investment | 3,355.36 | 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, 2021, 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 RMB600
million for the cooperation price. As of December 31, 2021, 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.
(3) In May 2021, the subsidiaries Fangda Jianke and Fangda Jiangxi New Material transferred 10.9375% of the total equity ofFangda Zhichuang Technology, with a transfer amount of RMB 175 million. The agreement also stipulates that if Fangda ZhichuangTechnology fails to start and complete the qualified listing before May 31, 2025, the transferee has the right to require Fangda Jiankeand Fangda Jiangxi New Material to repurchase or transfer all or part of the equity of Fangda Zhichuang Technology held by thetransferee. See Chapter X, IX. rights and interests in other subjects. 2 It is explained in the transactions in which the owner's equityshares of the subsidiary changes and still controls the subsidiary.As of December 31, 2021, the Company 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 On June 19, 2019, Langfang Aomei Jiye Real Estate Development Co., Ltd. filed a lawsuit against Fangda Jianke in thePeople's Court of Langfang Development Zone, demanding compensation of RMB19,721,315.00, and filed an application forappraisal of quality, repair cost and uncompleted project cost on December 26, 2019; Fangda Jianke filed a counterclaim onSeptember 11, 2019, demanding payment of RMB13,920,000.70, and put forward the application for completed project costappraisal on November 22, 2019. As of the date of this report, the case is still in the identification process.
② In September 2021, Fangda Jianke sued Qianhai Junlin Industrial Development (Shenzhen) Co., Ltd. and Evergrande RealEstate Group (Shenzhen) Co., Ltd. for paying RMB7096421.00 yuan of project payment and overdue interest, and claimed thepriority of project payment. Shenzhen Nanshan District People's court accepted the case on December 3, 2021. The case number is(2021) Yue 0305 Min Chu No. 23883. As of the date of this report, no notice of the hearing of the case has beenreceived.
③ For the Fangda Town project developed by Fangda Real Estate, some owners of Fangda Town failed to handle the realestate ownership certificate on schedule due to the expiration of the Detailed Rules for the Implementation of the AdministrativeMeasures of Shenzhen Municipality on the Transfer of Industrial Buildings (for Trial Implementation) implemented by ShenzhenMunicipal People's Government and the Notice of the Municipal Planning and Land Resources Commission on Matters Related tothe Transfer Management of Industrial Buildings, some buyers sued Fangda Real Estate to pay liquidated damages for overduecertificate processing. Due to the above litigation and the property preservation proposed by the owner, as of December 31, 2021, themonetary capital of Fangda Real Estate was frozen, with an amount of RMB7,154,713.67. At the same time, Fangda Real Estateaccrued an estimated liability of RMB2,091,286.00 according to the most likely litigation results.
(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 receivedthe 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. In November 2019, the People's Court of Lixia District of Jinan city ruled that Zhonghong would pay theCompany the project payment of RMB24,787,204.36 yuan (including (2018) Lu 0102 Min Chu No. 5367) in the civil judgment
(2019) Lu 01 Min Chu No. 2023), including RMB24,765,343.91 of creditor's right to priority payment of construction project priceand RMB21,860.45 of ordinary creditor's right. Zhonghong has been applied for bankruptcy liquidation by the Company andis currently in liquidation. As of the date of this report, the Company has received the project payment of RMB17,351,043.05,and the remaining amount is pending distribution.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 RMB6,013,841.23 as the base, from May 29, 2015 to the day when the payment is paid; with RMB841,876.32as the base, from May 28, 2015 to the day when the payment is paid. Based on 841876.32 yuan, from May 28, 2016 to the date ofpayment). The Company enjoys the priority of compensation for the discounted or auctioned price of Building C of the Chuan Towersupporting project (Film and Television Cultural Square) project within the scope of RMB 7,697,593.88. As of the date of thisreport, Fangda Jianke has not received relevant funds.In November 2018, the Company's subsidiary, Fangda Jianke, sued Fujian Huapu Real Estate Development Co., Ltd.(hereinafter referred to as Huapu company) to the People's Court of Taijiang District, Fuzhou City for paying RMB13,810,243.67 ofproject payment and RMB373,380.16 of overdue interest, totaling RMB14,183,623.83. Case No.: (2019) Min 0103 Min Chu No.4282. In April 2020, Huapu Company filed a counterclaim application to the court, requesting Fangda Jianke Company to pay a totalof RMB12,746,000.00 for the construction period and quality. In October 2021, the court ruled that Huapu should pay the projectpayment of RMB10,683,952.00 and overdue payment interest to Fangda Jianke, of which the project payment of RMB10,683,952.00has the priority to be paid, and the judgment has come into force. As of the date of this report, Huapu has been applied forbankruptcy liquidation, and Fangda Jianke has declared priority creditor's rights.
(3) Contingent liabilities formed by providing of guarantee to other companies’ debts and their influences on financialsituationAs of June 30, 2021, the Company provided guarantees for the following unit loans:
| Name of guaranteed entity | Guarantee | Amount (RMB10,000) | Term | Remarks |
| Fangda Property | Guarantee and mortgage guarantee | 93,000.00 | 2020/3/13-2030/03/12 | |
| Fangda Property | Guarantee | 46,700.00 | 2021/03/18-2031/03/18 | |
| Kechuangyuan Software | Guarantee | 1,000.00 | 2021/09/30-2022/09/30 | |
| Fangda Zhichuang Technology | Guarantee | 5,000.00 | 2021/08/12-2022/08/07 | |
| Total | 145,700.00 |
Notes:
Contingent liabilities caused by guarantees provided for other entities are all related guarantees between interested entities in theCompany.The Company's property business provides periodic mortgage guarantee for property purchasers. The term ofthe periodic guarantee lasts from the effectiveness of guarantee contracts to the completion of mortgageregistration and transfer of housing ownership certificates to banks. As of December 31, 2021, the Company assumedthe above-mentioned phased guarantee amount of RMB140,203,100.
(4) Other contingent liabilities and their influences
As of December 31, 2021, the Company has no other contingencies that should be disclosed.
3. Others
As of December 31, 2021, the Company has not cancelled the letter of guarantee:
| Currency | Guarantee balance (original currency) | Deposit (RMB) | Credit line used (RMB) |
| RMB (CNY) | 758,318,158.29 | - | 758,318,158.29 |
| Indian rupee (INR) | 87,107,132.78 | 495,801.30 | 6,967,363.62 |
| HK $(HKD) | 15,349,982.00 | - | 12,550,145.28 |
| United States dollars (USD) | 7,455,636.33 | 3,962,708.91 | 43,572,191.64 |
| SGD | 2,700,000.00 | - | 12,738,330.00 |
| Euro (EUR) | 3,921,764.01 | - | 28,313,959.62 |
| Total | 4,458,510.21 | 862,460,148.45 |
XIV. Post-balance-sheet events
1. Profit distribution
In RMB
| Profit or dividend to be distributed | 53,693,711.35 |
| Profit or dividend approved to be distributed | 53,693,711.35 |
2. Notes to other issues in post balance sheet period
As of March 28, 2022 (the report date approved by the board of directors), the Company has no other events after the balance sheetdate that should be disclosed.
XV. Other material events
1. 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 basedon financial information required by routine internal management. The Group’s management regularly review theoperating results of the reporting 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 and installation;
(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 legallyobtained by the Company; property management;
(4) New energy segment: photovoltaic power generation, photovoltaic power plant sales, photovoltaicequipment 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 standardsused by the segments when reporting to the management. The policies and standards should be consistent with thoseused in preparing the financial statement.
(2) Financial information
In RMB
| Item | Curtain wall | Rail transport | Real estate | New energy | Others | Offset between segments | Total |
| Turnover | 2,592,418,696.70 | 534,310,567.88 | 411,193,195.27 | 20,077,200.97 | 24,943,545.65 | 25,218,808.93 | 3,557,724,397.54 |
| Including: external transaction income | 2,584,704,014.98 | 534,310,567.88 | 407,329,798.11 | 19,285,405.44 | 12,094,611.13 | 3,557,724,397.54 | |
| Inter-segment transaction income | 7,714,681.72 | 3,863,397.16 | 791,795.53 | 12,848,934.52 | 25,218,808.93 | ||
| Including: major business turnover | 2,563,404,720.63 | 534,299,120.77 | 300,448,029.78 | 20,077,200.97 | 8,694,034.05 | 3,409,535,038.10 | |
| Operating cost | 2,210,997,578.54 | 387,875,376.88 | 161,597,097.69 | 8,173,207.23 | 460,120.74 | 7,802,823.60 | 2,761,300,557.48 |
| Including: major business cost | 2,197,446,382.21 | 387,875,376.88 | 151,630,903.09 | 8,173,207.23 | 7,802,823.60 | 2,737,323,045.81 | |
| Operation cost | 141,484,467.98 | 60,194,961.65 | 9,659,447.40 | 1,136,692.73 | -51,043,894.97 | -363,229,814.37 | 524,661,489.16 |
| Operating profit/(loss) | 239,936,650.18 | 86,240,229.35 | 239,936,650.18 | 10,767,301.01 | 75,527,319.88 | 380,645,799.70 | 271,762,350.90 |
| Total assets | 4,562,330,159.89 | 809,476,509.02 | 6,551,584,867.59 | 156,122,491.73 | 3,141,301,937.93 | 2,959,477,447.50 | 12,261,338,518.66 |
| Total liabilities | 3,024,060,127. | 509,177,240.05 | 3,893,858,631. | 49,300,830.26 | 736,143,806.65 | 1,542,408,036. | 6,670,132,600. |
| 45 | 99 | 34 | 06 |
(3) Others
Since more than 90% of the Group’s revenue comes from Chinese customer and 90% of the Group’s assets are in China, no detailedregional 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 provision is made by group | 595,366.68 | 100.00% | 9,430.38 | 1.58% | 585,936.30 | 892,363.43 | 100.00% | 6,514.35 | 0.73% | 885,849.08 |
| Including: | ||||||||||
| Portfolio 3. Others | 595,366.68 | 100.00% | 9,430.38 | 1.58% | 585,936.30 | 892,363.43 | 100.00% | 6,514.35 | 0.73% | 885,849.08 |
| Total | 595,366.68 | 100.00% | 9,430.38 | 1.58% | 585,936.30 | 892,363.43 | 100.00% | 6,514.35 | 0.73% | 885,849.08 |
Provision for bad debts by combination:
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Portfolio 3. Others | 595,366.68 | 9,430.38 | 1.58% |
| Total | 595,366.68 | 9,430.38 | -- |
Group recognition basis:
See 9. Financial Tools in Chapter X, V, Important Accounting Policies and Accounting Estimates for the recognition criteria andinstructions for withdrawing bad debt reserves by portfolioIf 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) | 224,256.68 |
| 1-2 years | 371,110.00 |
| Total | 595,366.68 |
(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 | 6,514.35 | 2,916.03 | 9,430.38 | |||
| Total | 6,514.35 | 2,916.03 | 9,430.38 | |||
(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 | 585,442.96 | 98.33% | 9,357.94 |
| Total | 585,442.96 | 98.33% | -- |
2. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Other receivables | 1,276,731,665.95 | 1,156,802,204.91 |
| Total | 1,276,731,665.95 | 1,156,802,204.91 |
(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 | 150,699.54 |
| Debt by Luo Huichi | 12,992,291.48 | 12,992,291.48 |
| Others | 120,143.89 | 975,476.54 |
| Accounts between related parties within the scope of consolidation | 1,276,507,096.22 | 1,156,587,949.46 |
| Total | 1,289,770,231.13 | 1,170,706,417.02 |
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 Friday, January 1, 2021 | 3,240.69 | 13,900,971.42 | 13,904,212.11 | |
| Balance on Friday, January 1, 2021 in the current period | —— | —— | —— | —— |
| Provision | 156.01 | 156.01 | ||
| Canceled in the current period | 865,802.94 | 865,802.94 | ||
| Balance on Friday, December 31, 2021 | 3,396.70 | 13,035,168.48 | 13,038,565.18 |
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) | 764,146,855.14 |
| 1-2 years | 512,517,507.97 |
| 2-3 years | 0.00 |
| Over 3 years | 13,105,868.02 |
| 3-4 years | 0.00 |
| 4-5 years | 42,877.00 |
| Over 5 years | 13,062,991.02 |
| Total | 1,289,770,231.13 |
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 | 13,904,212.11 | 156.01 | 865,802.94 | 13,038,565.18 | ||
| Total | 13,904,212.11 | 156.01 | 865,802.94 | 13,038,565.18 | ||
4) Other receivable written off in the current period
In RMB
| Item | Amount |
| Other receivable written off | 865,802.94 |
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 |
| Fangda Property | Affiliated party payment | 538,579,120.00 | Less than 1 year | 41.76% | 0.00 |
| Fangda Property | Affiliated party payment | 390,473,301.45 | 1-2 years | 30.27% | 0.00 |
| Fangda Jiangxi Property Development | Affiliated party payment | 188,300,000.00 | Less than 1 year | 14.60% | 0.00 |
| Fangda Jiangxi Property Development | Affiliated party payment | 39,839,038.54 | 1-2 years | 3.09% | 0.00 |
| Fangda New Energy | Affiliated party payment | 46,905,949.29 | Less than 1 year | 3.64% | 0.00 |
| Fangda Jiangxi New Material | Affiliated party payment | 41,097,401.50 | Less than 1 year | 3.19% | 0.00 |
| Shihui International | Affiliated party payment | 30,459,793.09 | 1-2 years | 2.36% | 0.00 |
| Total | -- | 1,275,654,603.87 | -- | 98.91% | 0.00 |
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 | 0.00 | 1,196,831,253.00 | 1,196,831,253.00 | 0.00 | 1,196,831,253.00 |
| Total | 1,196,831,253.00 | 0.00 | 1,196,831,253.00 | 1,196,831,253.00 | 0.00 | 1,196,831,253.00 |
(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 Jiangxi New Material | 74,496,600.00 | 74,496,600.00 | |||||
| Fangda Property | 198,000,000.00 | 198,000,000.00 | |||||
| Shihui International | 61,653.00 | 61,653.00 | |||||
| Fangda New Energy | 99,000,000.00 | 99,000,000.00 | |||||
| Fangda Hongjun Investment | 98,000,000.00 | 98,000,000.00 | |||||
| Fangda Investment | 235,323,000.00 | 235,323,000.00 | |||||
| Total | 1,196,831,253.00 | 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 | 24,953,602.85 | 460,120.74 | 24,471,432.70 | 549,538.73 |
| Total | 24,953,602.85 | 460,120.74 | 24,471,432.70 | 549,538.73 |
Income information:
In RMB
| Contract classification | Segment 1 - other segments | Total |
| Including: | ||
| Other businesses | 24,953,602.85 | 24,953,602.85 |
| Total | 24,953,602.85 | 24,953,602.85 |
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 35,668,375.40 yuan, of which 24,337,334.19 yuan is expected to be recognized in2022, and 5,892,501.23 yuan is expected to be recognized in 2023, 5,438,539.98 yuan is expected to be recognized in 2024 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 | 33,660,000.00 | |
| Investment gain obtained from disposal of long-term equity investment | 135,159,744.95 | |
| Investment income from disposal of trading financial assets | 334,681.44 | 3,057,897.96 |
| Total | 33,994,681.44 | 138,217,642.91 |
XVII. Supplementary Materials
1. Detailed accidental gain/loss
√ Applicable □ Inapplicable
In RMB
| Item | Amount | Notes |
| Gain/loss of non-current assets | -2,291,048.05 | |
| Government subsidies accounted into current gain/loss account, other than those closely related to the Company’s common business, comply with the national policy and continues to enjoy at certain fixed rate or amount. | 12,459,417.63 | |
| Net gain between the beginning and merger day of subsidiaries generated by merger of companies under common control | 18,912.61 | |
| Gain/loss from change of fair value of transactional financial asset and liabilities, and investment gains from disposal of transactional financial assets and liabilities and sellable financial assets, other than valid period value instruments related to the Company’s common businesses | 8,060,481.70 | |
| Write-back of impairment provision of receivables for which impairment test is performed individually | 31,951,043.05 | |
| Gain/loss from change of fair value of investment property measured at fair value in follow-up measurement | 20,921,813.65 | |
| Other non-business income and expenditures other than the above | -3,897,195.15 | |
| Other gain/loss items satisfying the definition of non-recurring gain/loss account | 0.00 | |
| Less: Influenced amount of income tax | 12,358,051.51 | |
| Influenced amount of minority shareholders’ equity | 347,626.94 | |
| Total | 54,517,746.99 | -- |
Other gain/loss items satisfying the definition of non-recurring gain/loss account:
□ Applicable √ Inapplicable
The Company has no other gain/loss items satisfying the definition of non-recurring gain/loss accountCircumstance that should be defined as recurrent profit and loss to Explanation Announcement of Information Disclosure No. 1 -Non-recurring gain/loss
□ Applicable √ Inapplicable
2. Net income on asset ratio and earning per share
| Profit of the report period | Weighted average net income/asset ratio | Earnings per share | |
| Basic earnings per share (yuan/share) | Diluted Earnings per share (yuan/share) | ||
| Net profit attributable to common shareholders of the Company | 4.09% | 0.21 | 0.21 |
| Net profit attributable to the common owners of the PLC after deducting of non-recurring | 3.08% | 0.16 | 0.16 |
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 adjustedNone
China Fangda Group Co., Ltd.Legal representative: Xiong JianmingWednesday, March 30, 2022