China Fangda Group Co., Ltd.
2023 Interim Report
August 2023
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.This semi-annual report contains forward-looking statements such asfuture plans, which do not constitute a substantial commitment by theCompany to investors. Investors and related parties should maintain sufficientrisk awareness and understand the differences between plans, forecasts, andcommitments.
The Company has specified market, management and production andoperation risks in this report. Please review the 10. Risks Facing the Companyand Measures in Chapter 3 Management Discussion and Analysis.
The Company will distribute no cash dividends or bonus shares and hasno reserve capitalization plan.
Table of Contents
Chapter I Important Statement, Table of Contents and Definitions ...... 2
Chapter II About the Company and Financial Highlights ...... 7
I. Company Profile ...................................................................................................................................... 7
II. Contacts and Liaisons ................................................................................................................................ 7
III. Other Information ..................................................................................................................................... 7
IV. Financial Highlight .................................................................................................................................... 8
V. Differences in Accounting Data under Domestic and Foreign Accounting Standards .......................... 8
VI. Accidental Gain/Loss Item and Amount.................................................................................................. 8
Chapter III Management Discussion and Analysis ...... 10
I. Major businesses of the Company during the report period .................................................................. 10
II. Core Competitiveness Analysis ................................................................................................................ 17
III. Core Business Analysis ........................................................................................................................... 20
IV. Non-core Business Analysis ..................................................................................................................... 22
V. Assets and Liabilities ................................................................................................................................. 23
VI. Investment ................................................................................................................................................ 25
VII. Major Assets and Equity Sales.............................................................................................................. 29
VIII. Analysis of Major Joint Stock Companies ......................................................................................... 29
IX. Structural Entities Controlled by the Company ................................................................................... 29
X. Risks Facing the Company and Measures .............................................................................................. 29
Chapter IV Corporation Governance ...... 31
I. Annual and Extraordinary Shareholder Meetings Held During the Report Period ............................ 31
II. Changes in the Directors, Supervisors and Senior Executives ............................................................. 31
III. Profit Distribution and Reserve Capitalization in the Report Period ................................................ 32
IV. Share Incentive Schemes, Staff Shareholding Program or Other Incentive Plans ............................ 32
Chapter V Environmental and Social Responsibility ...... 33
I. Environmental Protection ......................................................................................................................... 33
II. Social Responsibilities .............................................................................................................................. 34
Chapter VI Significant Events ...... 35
I. Commitments that Have Been Fulfilled and Not Fulfilled by Actual Controller, Shareholders,Related Parties, Acquirers of the Company ...... 35
II. Non-operating Capital Use by the Controlling Shareholder or Related Parties in the ReportingTerm ...... 35
III. Incompliant External Guarantee ........................................................................................................... 35
IV. Engaging and Dismissing of CPA ........................................................................................................... 35V. Statement of the Board on the “Non-Standard Auditors' Report” Issued by the CPA on theCurrent Report Period ...... 35
VI. Statement of the Board of Directors on the Non-standard Auditor's Report for H1 2014 ............... 35
VII. Bankruptcy and Capital Reorganizing ................................................................................................ 35
VIII. Lawsuit .................................................................................................................................................. 35
IX. Punishment and Rectification ................................................................................................................ 36
X. Credibility of the Company, Controlling Shareholder and Actual Controller .................................... 36
XI. Material Related Transactions ............................................................................................................... 36
XII. Significant Contracts and Performance............................................................................................... 37
XIII. Other material events ........................................................................................................................... 43
XIV. Material Events of Subsidiaries ........................................................................................................... 44
Chapter VII Changes in Share Capital and Shareholders ...... 45
I. Changes in shares ....................................................................................................................................... 45
II. Share placing and listing .......................................................................................................................... 47
III. Shareholders and shareholding .............................................................................................................. 47
IV. Changes in shareholding of Directors, Supervisors and Senior Management ................................... 49
V. Changes in controlling shareholder or actual controller ....................................................................... 50
Chapter VIII Preferred Shares ...... 52
Chapter IX Information about the Company's Securities ...... 53
Chapter X Financial Statements ...... 54
I. Auditor's report .......................................................................................................................................... 54
II. Financial statements ................................................................................................................................. 54
III. General Information ............................................................................................................................... 72
IV. Basis for the preparation of financial statements .................................................................................. 74
V. Significant Account Policies and Estimates ............................................................................................. 74
VI. Taxation .................................................................................................................................................. 132
VII. Notes to the consolidated financial statements .................................................................................. 134
VIII. Change to Consolidation Scope ......................................................................................................... 173
IX. Equity in Other Entities ........................................................................................................................ 173
X. Risks of Financial Tools .......................................................................................................................... 176
XI. Fair Value ............................................................................................................................................... 180
XII. Related Parties and Transactions ....................................................................................................... 181
XIII. Contingent Events .............................................................................................................................. 184
XIV. Post-balance-sheet events ................................................................................................................... 188
XV. Other material events ........................................................................................................................... 188
XVI. Notes to Financial Statements of the Parent .................................................................................... 189
XVII. Supplementary Materials ................................................................................................................. 194
Reference
1. Financial statements stamped and signed by the legal representative, CFO and accounting manager;
2. 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 Zhiyuan | Refers to | Fangda Zhichuang 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 to | Shenzhen Qianhai Kechuangyuan Software Co., Ltd. |
| 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 |
| Fangda Yunzhu | Refers to | Shenzhen Fangda Yunzhu Technology Co., Ltd. |
| Fangda Zhijian | Refers to | Shanghai Fangda Zhijian Technology Co., Ltd |
| SZSE | Refers to | Shenzhen Stock Exchange |
Chapter II About the Company and Financial Highlights
I. Company Profile
| Stock ID | Fangda Group, Fangda B | Stock code | 000055, 200055 |
| Modified stock ID (if any) | No | ||
| Stock Exchange | Shenzhen Stock Exchange | ||
| Chinese name | China Fangda Group Co., Ltd. | ||
| English name (if any) | Fangda Group | ||
| English name (if any) | CHINA FANGDA GROUP CO., LTD. | ||
| English abbreviation (if any) | CFGC | ||
| Legal representative | Xiong Jianming | ||
II. Contacts and Liaisons
| Secretary of the Board | Representative of Stock Affairs | |
| Name | Xiao Yangjian | Guo Linchen |
| Address | 39th Floor, Building T1, Fangda City, No.2, Longzhu 4th Road, Nanshan District, Shenzhen | 39th Floor, Building T1, Fangda City, 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 |
III. Other Information
1. Liaison
Changes to the Company's registration address, office address, post code, website or email during the report period
□ Applicable ? Inapplicable
Company's registration address, office address, post code, website or email have not changed during the report period. See AnnualReport 2022 for details.
2. Information disclosure and inquiring
Changes to the information disclosure and inquiring place
□ Applicable ? Inapplicable
The names and websites of the securities exchange websites and media where the company discloses its semi-annual report, aswell as the location of the company's semi-annual report, remain unchanged during the reporting period. Please refer to the 2022annual report for specific details.
3. Other information
Whether other relevant information has changed during the reporting period
□ Applicable ? Inapplicable
IV. Financial Highlight
Whether the Company needs to make retroactive adjustment or restatement of financial data of previous years
□ Yes ? No
| This report period | Same period last year | Year-on-year change (%) | |
| Turnover (yuan) | 2,078,846,877.32 | 1,613,063,315.30 | 28.88% |
| Net profit attributable to shareholders of the listed company (yuan) | 182,155,268.18 | 112,685,273.77 | 61.65% |
| Net profit attributable to the shareholders of the listed company and after deducting of non-recurring gain/loss (yuan) | 172,484,336.75 | 105,117,575.02 | 64.09% |
| Net cash flow generated by business operation (yuan) | -37,313,711.13 | -306,580,793.04 | 87.83% |
| Basic earnings per share (yuan/share) | 0.17 | 0.10 | 70.00% |
| Diluted Earnings per share (yuan/share) | 0.17 | 0.10 | 70.00% |
| Weighted average net income/asset ratio | 3.14% | 2.03% | 1.11% |
| End of the report period | End of last year | Year-on-year change | |
| Total asset (yuan) | 12,939,324,425.23 | 12,745,185,294.02 | 1.52% |
| Net profit attributable to the shareholders of the listed company (RMB) | 5,868,299,387.85 | 5,749,940,874.92 | 2.06% |
V. 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.
VI. Accidental Gain/Loss Item and Amount
? Applicable □ Inapplicable
In RMB
| Item | Amount | Notes |
| Non-current asset disposal gain/loss (including the write-off part for which assets impairment provision is made) | 373,352.08 | |
| Government subsidies accounted into current gain/loss account, other | 6,748,993.91 |
| 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. | ||
| 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 | 7,782.60 | |
| Write-back of impairment provision of receivables for which impairment test is performed individually | 4,750,256.42 | |
| Gain/loss from change of fair value of investment property measured at fair value in follow-up measurement | 122,109.40 | |
| Other non-business income and expenditures other than the above | -365,816.05 | |
| Less: Influenced amount of income tax | 1,835,470.87 | |
| Influenced amount of minority shareholders' equity (after-tax) | 130,276.06 | |
| Total | 9,670,931.43 |
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 ofInformation Disclosure No. 1 - Non-recurring gain/loss
Chapter III Management Discussion and Analysis
I. Major businesses of the Company during the report periodThe Company mainly engages in high-end smart curtain wall systems and new materials, rail transit screen door equipment,new energy, and commercial real estate businesses. The Company fully utilizes its technological and brand advantages tovigorously promote intelligent manufacturing and green manufacturing. Products such as Fangda Smart Curtain Wall, PhotovoltaicBuilding Integrated Curtain Wall (BIPV), PVDF Aluminum Veneer, and Rail Transit Screen Door System have become globalindustry benchmarks. Fangda Rail Transit Station Screen Door System has been recognized as a "single champion product in themanufacturing industry" by the Ministry of Industry and Information Technology of China. Currently, the Company has 7 nationalhigh-tech enterprises, 6 "specialized, special and new" enterprises, and 2 provincial engineering technology research centers. It hasformed a layout with Shenzhen as its headquarters, Dongguan, Foshan, Nanchang, Shanghai, Chengdu, and Ganzhou (underconstruction) as its industrial bases, and has set up branches in Singapore, India, Australia, Bangladesh, Hong Kong and othercountries and regions along the "the Belt and Road".
In the first half of 2023, faced with a complex and volatile macroeconomic environment and numerous risks and challenges,the Company, under the leadership of the board of directors and the management team, overcame difficulties and continued tovigorously develop its core business. Leveraging its competitive advantages in technology and brand, the company strengthenedits fine-grained management, further improved quality and efficiency, and enhanced its profitability. During the reporting period,the Company achieved operating income of RMB2,078,846,900, an increase of 28.88% over the same period of the previous year;the net profit attributable to the parent Company's owner was RMB182,155,300, an increase of 61.65% over the same period of theprevious year. Net profit after recurring gains and losses was RMB172,484,300, an increase of 64.09% over the same period of theprevious year. By the end of the reporting period, the Company's order reserve reached RMB8,485,525,800 (excludingcommercial real estate pre-sale). This represents an increase of 6.69% over the same period in the previous year, which was 4.08times the operating income in 2023 H1, laying the foundation for the Company's production and operation.(I) Smart curtain wall system and new materials
1. Industry development
In recent years, the construction curtain wall industry has been closely linked to China's macroeconomic development. Thedevelopment of China's macro economy provides a guarantee for the development of China's building curtain wall industry.According to data from the National Bureau of Statistics, the gross domestic product in the first half of 2023 was RMB59,303.4billion, a year-on-year increase of 5.5%, and the total output value of the construction industry was RMB13,226.1 billion, a year-on-year increase of 5.9%. As a pillar industry of the national economy, the total output value of the construction industry stillmaintains steady growth.
As China enters a stage of high-quality development, the construction of key areas has flourished. Large high-end curtainwall projects in key areas such as the Guangdong Hong Kong Macao Greater Bay Area, the Yangtze River Delta, and ChengduChongqing are gradually increasing, and the pace of regional central city construction is accelerating. The construction of urbansupporting infrastructure will also play a strong supporting role in the development of the building curtain wall industry. Under thebackground of carbon peak and carbon neutrality, taking green development as the main line and comprehensively and deeplypromoting green, low-carbon, and sustainable development of green buildings will become a consensus for the development andupgrading of the building curtain wall industry. Under the encouragement of policies and the continuous updating and iteration ofnew technologies, digital and intelligent development will also become one of the goals for the development of building curtainwall enterprises.
2. Business Status
(1) Main products and purposes
Smart curtain wall is one of the Company's main products, widely used for the exterior walls of various buildings such ashigh-end office buildings, corporate headquarters, urban complexes, hotels, urban public buildings, high-end residential buildings,etc. It can effectively improve the energy conservation and environmental protection of buildings, and improve the visualaesthetics of buildings.
By focusing on intelligence, low-carbon, environmental protection, and sustainability, the smart curtain wall and newmaterial industry fosters the development of curtain walls and innovative materials in China. The Company has a strong R&Dcapability as well as a sophisticated PVDF aluminum veneer production and manufacturing base. The intelligent curtain walltechnology has been widely deployed in significant projects in more than 160 cities around the world, integrating energy reduction,environmental protection, and intelligence. It has numerous times received the Luban Award (National Excellent EngineeringAward), China's highest construction award. Its competitiveness is among the highest in the world, and it is a well-known brand inthe worldwide curtain wall business.
(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 curtain wall designand construction contract orders are mainly obtained through the bidding mode (open bidding, invitational bidding). Based on theorders, the Company provides the overall solution of design, raw material procurement, production and processing, constructionand installation and after-sales service. Due to the long period of order implementation, it is greatly affected by national industrialpolicies, raw material prices, and fluctuations in the labor market. Different orders have different technical requirements. It isimpossible to simply copy the existing experience, and the requirements for technology and management are relatively high. Theengineering payment settlement process for orders is divided into stages such as engineering advance payment, engineeringprogress payment, completion acceptance, completion settlement payment, and quality guarantee deposit. The specific settlementsituation depends on the completion progress and contract agreement.
(3) Market competition pattern in which the Company is located and the Company's market position
In recent years, the domestic construction curtain wall market has gradually matured, industry competition has intensified,and the degree of industry concentration and scale will continue to deepen. Industry leading enterprises are expanding their marketshare in the high-end curtain wall market and establishing a new competitive environment. Scientific and technological innovationbased on intelligence, assembly, BIM, VR and other technologies continues to deepen. In the future, along with the wave ofindustrial upgrading, green building, scientific and technological innovation, information technology, etc. will become animportant driving force for the new round of growth cycle of the industry. The domestic building curtain wall market still hasbright prospects for the development of leading companies in the industry.
The Company has been deeply involved in the curtain wall industry for 32 years and has a profound technical accumulation.Fangda Jianke Co., Ltd., a wholly-owned subsidiary of the Company, has the highest qualifications for curtain wall design andconstruction enterprises in China - the first-class qualification for professional contracting of architectural curtain wall engineeringand the first-class qualification for architectural curtain wall engineering design. It is the leading enterprise in China's curtain wallindustry. Fangda Jianke has won the highest awards in the national construction industry, including "Luban Award", "NationalQuality Engineering Award", "Zhan Tianyou Civil Engineering Award", "China Building Decoration Award", and over 200provincial and ministerial awards. Fangda Jianke has participated in the preparation of more than 22 national or industrialstandards such as the Design Standard for Energy Efficiency of Public Buildings, and has created 18 new records for Chineseenterprises. It is an intellectual property demonstration enterprise in Guangdong Province. In the industry across the country, theCompany is the earliest to establish R&D institutions such as corporate postdoctoral workstations, engineering technology centers,and research and design institutes. The autonomous innovation capacity and technical level of the high-end curtain wall industryhave reached the advanced level of the same industry in China, promoting technological progress and development.
(4) Business drive
During the reporting period, the Company's curtain wall system and new material industry achieved a revenue ofRMB1,654,849,200, an increase of 43.80% compared to the same period last year; The net profit achieved was RMB101,940,000,an increase of 75.67% compared to the same period last year. The key drivers of performance are as follows:
① Focusing on high-end markets both domestically and internationally, with ample reserves of high-quality ordersIn the first half of 2023, the Company continued to focus on the Chinese and international high-end curtain wall market,relying on excellent brand influence, exquisite technical quality, good project implementation ability, and a complete industrialchain to maintain a strong competitive advantage. It is one of the preferred brands in the Chinese high-end curtain wall systemindustry. During the reporting period, the Company actively pursued high-quality clients and continued to optimize its customerportfolio. The awarded and contracted curtain wall engineering projects maintained the characteristics of numerous projects at theenterprise's headquarters, consisting of large-scale individual projects and premium orders. Additionally, overseas orders alsodemonstrated sustained growth. Notable curtain wall projects that were successfully bid for and signed contracts include DY01-04neighborhood cloud building at Tencent Shenzhen headquarters, Shenzhen Qianhai Financial Holding Building, ShenzhenMerchants Prince Bay Building, Shenzhen China Resources Snow Flower Science and Technology City, Shenzhen TEDAXiaomeisha Jinhai Plaza, Shenzhen Jiantao Headquarters Building, Shenzhen Bantian Street Recreation and Sports Center, SouthChina International Electronic Industrial Materials Logistics Zone in Dongguan, OPPO Intelligent Manufacturing Center Phase IIin Foshan Haitian Group Headquarters Building, Midea Global Innovation Park in Shanghai, Alibaba Central China Headquartersin Wuhan, Tianfu Headquarters Base in Chengdu, Taihu Bay Information Technology Industrial Park in Wuxi, 3 McNabApartment in Melbourne, Neue Grand Apartment,Bangladesh Pinnacle high-end office project, etc. By the end of the reportingperiod, the Company's order reserve of curtain wall system and materials industry was RMB6,625,545,800, an increase of 4.10%over the same period of the previous year, which was 4 times the operating revenue of curtain wall system and materials industryin 2023 H1, laying a solid foundation for the sustainable and healthy development of the Company.
② Continuous technological innovation capabilities, consolidating technological leadership advantagesSince its establishment for 32 years, the Company has always adhered to the business philosophy of "technology first,innovation as the source", continuously breaking through and innovating in curtain wall technology. The Company has obtained620 patent technologies for curtain wall products, 19 software copyrights, and participated in the development of 22national/industry technical specifications and standards. The six subsidiaries of the Company engaged in smart curtain wall systemand new material industry are all national high-tech enterprises, five of which are "specialized and new" enterprises, and have beenawarded the honors of "National Intellectual Property Advantage Enterprise", "Specialized" Little Giant "Enterprise, "JiangxiIntelligent Manufacturing Benchmark Enterprise", and enterprise innovation record. During the reporting period, the GuangdongProvincial Department of Science and Technology recognized Fang Dajian's "Guangdong Prefabricated Building Curtain WallEngineering Technology Research Center" as the "Guangdong Provincial Engineering Technology Research Center". FangdaJianke was awarded the honors of "2022 Shenzhen Industry Special Contribution Enterprise", demonstrating the Company'sleading position and technological innovation strength in curtain wall product design and construction technology.During the reporting period, in order to better implement the goal of "contract management as the center", the Companyadhered to a dual flow driven strategy of business flow and data flow, focusing on various links such as digital marketing, digitaldesign, digital supply chain, digital factory, digital construction site, smart office, etc., and vigorously promoted the digitalconstruction of project control system, allowing data to continue to empower the business. In addition, the Company has taken thelead in building intelligent production lines in the industry, applying information management tools such as BIM technology, PMSproject management platform, and MES production management platform to the construction of intelligent factories, andconducting refined management of curtain wall production, achieving comprehensive monitoring from material production status,factory processing progress, to project management status. And use information technology to trace the information of all factoryproducts, in order to achieve scientific and efficient management.
③ Strengthen the construction of talent team and promote high-quality development
The essence of modern enterprise competition is talent competition. The company practices the people-oriented talentconcept, focuses on introducing and cultivating various professional technical and management talents, and is committed tobuilding an efficient management and operation team. During the reporting period, the Company carried out refined talentmanagement, strengthened the optimization and upgrading of talent team structure, expanded employee promotion channels,optimized skill training models, continuously introduced outstanding fresh university graduates, promoted the mechanism ofschool enterprise cooperation and industry learning integration, and enhanced the company's scientific research strength in thehigh-end curtain wall field. In addition, to meet the needs of overseas market development, the Company accelerates the selectionand cultivation of overseas business talents, providing a strong talent reserve for the company's high-quality development.
(5) Industry qualification types and validity period
The Company has a Class A qualification for building curtain wall engineering contracting and class A qualification forbuilding curtain wall engineering design. It is the highest level for curtain wall design and construction companies in China.During the reporting period, the Company's relevant qualifications have not changed significantly, and the validity period has notexpired.
(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.It is 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-stopquality control system such as construction, after-sales, customer service, etc., implement strict quality control and supervision foreach 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 throughcloud terminal technology. Strictly implement various quality management and control measures to provide customers with high-quality products and services.
Overall evaluation: The Company's quality control system and executive standards meet the relevant requirements of thecurrent relevant national norms and standards, maintain good operation, and provide customers with stable and reliable productsand services.
(7) Major project quality problem during the reporting period
None.
(II) Rail transport screen door business
1. Industry development
Urban rail transit screen doors are a component of the urban rail transit industry chain, closely related to the development ofurban rail transit and intercity (city) railway construction. 2023 is the beginning year of fully implementing the spirit of the 20thNational Congress of the Communist Party of China, and also a key year for implementing the 14th Five Year Plan and promotingthe construction of a high-quality transportation country. The "14th Five Year Plan for the Development of ModernComprehensive Transportation System" proposes that by 2035, China should basically establish a modern and high-qualitynational comprehensive three-dimensional transportation network that is convenient, smooth, cost-effective, safe, reliable, green,intensive, and intelligent, as well as the "National 123 Travel Transport Circle" (1 hour commuting in urban areas, 2 hours
commuting in urban agglomerations, and 3 hours coverage in major cities across the country); Accelerate the formation of urbanrail transit networks in mega cities, and develop urban rail transit in a scientific and orderly manner; The operating mileage ofurban rail transit will continue to grow, and by 2025, the operating mileage of urban rail transit will reach 10000 kilometers. Asone of the seven major areas of "new infrastructure", urban rail transit is expected to achieve rapid development.According to data from the Ministry of Transport, in June 2023, a total of 295 urban rail transit lines with an operatingmileage of 9728.3 kilometers were opened and operated in 54 cities of 31 provinces (regions, cities) and Xinjiang Production andConstruction Corps, indicating a good momentum of urban rail transit development. With the development of urban rail transitsystems and the increase in operational demand, the demand for equipment updates, renovations, and maintenance of rail transitscreen doors products will show an increasing trend.
2. Business Status
(1) Main products and purposes
The Company's main products are platform screen door systems applied to urban rail transit, and also provide operation andmaintenance services for the above products. The platform screen door system of urban rail transit is installed at the edge of theplatform of urban rail transit station to isolate the running track area from the waiting area of the platform. It is equipped with acontinuous movable door body barrier corresponding to the train door, which can be opened and closed by multi-level control,including the full-height closed screen door system, the full-height non-closed screen door system, and the half-height screen doorsystem. In addition, the Company has successfully developed the platform safety door system that can be applied to the complexenvironment of high-speed railway, and can realize the intelligent opening of the platform safety door according to the differentmodels of high-speed railway entering the station. At present, the Company is in the stage of market promotion and verification,and has not yet realized external sales.The platform screen door system plays a very important role in the operation of urban rail transit. The platform screen doorsystem isolates the track from the platform waiting area, effectively ensuring the safety of passengers, preventing them fromfalling off the track, and also preventing unauthorized entry into the tunnel; In case of fire or other fault modes, it can be linkedand controlled with relevant systems to achieve rapid smoke exhaust and passenger evacuation and escape functions. At the sametime, the platform screen door system can effectively reduce the dust, noise, and tunnel wind pressure entering the platform fromthe tunnel, providing passengers with a quiet, comfortable, and safe riding environment. In addition, the platform screen doorsystem also has a passenger flow counting function, which can guide passengers to low-density carriages during peak passengerhours. The platform screen door system can also serve as a platform for passenger consultation systems, achieving multimediainteraction functions such as information broadcasting, consultation dissemination, and commercial promotion for passengers.
(2) Main business model
The operating entity of the Company's rail transit screen door equipment business is its holding subsidiary, Fangda Zhiyuan.Fangda Zhiyuan is a supplier and service provider of rail transit screen door systems that integrates research and development,design, manufacturing, installation and debugging, and technical services, with a complete industrial chain. A mature andcomplete management system for research and development, procurement, production, and sales has been established. In terms ofresearch and development, the Company has formed a research and development project initiation mechanism that combinesindependent basic research with project needs; In terms of procurement, suppliers are mainly selected and purchased by the project,and a special procurement team is set up to carry out the procurement work; In terms of production, manage the Company'sproduction activities according to contract requirements and customer's production instructions; In terms of sales, the Company'scustomers are metro companies around the world and electromechanical general contracting units in the rail transit industry, all ofwhich are direct sales, and there is no distribution.
(3) Market competition pattern in which the Company is located and the Company's market position
The Company is an early enterprise in China engaged in the research and development, design, manufacturing, installation,and operation of subway platform screen door systems. The Company led the drafting and revision of the first national industrystandard for platform screen doors in rail transit, "Urban Rail Transit Platform Screen Doors" (CJ/T236-2022), and participated in
the preparation of the group standard "Acceptance Specification for Fully Automatic Operation System of Urban Rail Transit"(T/URTA0009-2022). In 2021, the Ministry of Industry and Information Technology of the People's Republic of China awardedthe Company the "Manufacturing Industry Single Champion Product" for the safety door product of urban rail transit platforms.Fangda Zhiyuan has successively won many honors and qualifications, such as the Guangdong Provincial Science and TechnologyAward, the National Key New Product Certificate, the National Torch Plan Industrialization Demonstration Project Certificate, theGuangdong Intelligent Rail Transit Platform Gate Engineering Technology Research Center, the Shenzhen Science andTechnology Progress Award, and the Shenzhen "Specialization and Innovation" Enterprise title. The Company has domestic andforeign patents and computer software copyrights, forming a core technology group and intellectual property system withindependent intellectual property rights.Through 20 years of intensive work in the field of platform screen doors of rail transit, the Company has occupied a highmarket share in the domestic market. The Company has undertaken over 100 subway platform door projects worldwide, totalingover 80000 platform door units, and has become a global supplier of platform screen door systems for urban rail transit.
(4) Business drive
① Relying on industry-leading advantages and leveraging domestic and international marketsAs a leader in the rail transit screen door industry, the Company has accumulated over the years and possesses industry-leading advantages in technology, brand, and service, which have been widely recognized by customers at home and abroad. TheCompany has been actively responding to the national "the Belt and Road" initiative, taking the lead in crossing the border, andhas successively won the rail transit shelter door system projects in Singapore, Malaysia, Thailand, India, Colombia and othercountries along the "Belt and Road", forming a good brand influence in the international market. During the reporting period, theCompany won and signed contracts for shield door system projects such as Singapore Metro CRL152 project, Qingdao Metro Line6, Suzhou Metro Line 8, and Xi'an Metro Line 15 Phase 1. At the same time, it also obtained professional technical maintenanceservice orders for shield doors for Xiamen Metro Line 1 and 3, Nanning Metro Line 2 and 4, Wuhan Metro Line 7, Line 8, andLine 11, totaling 765.9948 million yuan, The company's technological and brand advantages in the field of subway screen doorsystems have been further demonstrated by exceeding the order amount obtained throughout 2022. As of the end of the reportingperiod, the Company's order reserve for the rail transit screen door industry reached RMB1,859,980,000, an increase of 17.04%compared to the same period last year. During the reporting period, the operating revenue was RMB291,615,500, and the orderreserve was 6.38 times the operating revenue in the first half of 2023. The sufficient order reserve laid a solid foundation forensuring the continuous release of subsequent performance.
② Continuous technological innovation, leading industry growth
The Company is an early domestic enterprise engaged in the research and development, design, manufacturing, installation,and operation of platform screen door systems for urban rail transit. Since its establishment, the company has always adhered totechnology as the guide, innovation as the banner, and technology research and development to promote continuous improvementof business performance. The Company has combined its own technological accumulation and continuous technological researchand development, mastered multiple core technologies, and continuously carried out technological innovation to enhance producttechnical performance while optimizing operation and production models. As of the end of 2022, it has 135 domestic and foreignpatents for the urban rail transit screen door industry (including 47 invention patents and 20 international PCT patents), and 8computer software copyrights. The Company led the drafting and revision of China's first industry standard "Platform ScreenDoors for Urban Rail Transit" (CJ/T236-2022). During the reporting period, Fangda Zhiyuan participated in the publication andimplementation of the group standard "Acceptance Specification for Fully Automatic Operation System of Urban Rail Transit"(T/URTA0009-2022), and is the only platform screen door system enterprise that participated in the preparation of this standard.During the reporting period, the modular assembly platform door independently developed and designed by the company wassuccessfully installed on site in Shenzhen Metro Line 8. It is the first modular assembly platform door landing application inShenzhen urban rail transit, and has important demonstration significance for promoting the construction of smart subways andleading the transformation and upgrading of the rail transit industry.
During the reporting period, the Company's new fully open mobile platform door was awarded the "21st Shenzhen EnterpriseInnovation Record". This project is mainly aimed at high-speed trains or intercity platforms with multiple vehicle types. The dooropening position and size between door units can be arbitrarily set according to the opening needs of different trains. It is an idealplatform door solution for high-speed trains or intercity platforms with multiple or uncertain vehicle types. To meet the needs ofautomatic door opening and closing at any position, as well as passenger safety protection at station platforms, in the context of theintegration and connection of trunk railways, intercity railways, urban (suburban) railways, and urban rail transit, it is the first inthe same industry in China and leads the growth of the industry.
③ Good reputation and market awareness, continuously improving the Company's competitiveness
The urban rail transit platform is an important display window for the city's image, and the platform screen door system, as adevice that passengers come into contact with and use every day, is one of the core carriers of the urban rail transit platform image.The excellent quality and stable performance of the Company's full height and half height PSD systems have been recognized bymany owners, and have been awarded "Outstanding Contribution Award of Rail Transit", "exemplary organization of EngineeringConstruction" and other awards by customers for many times. Relying on its good brand image and market awareness, thecompany won the bid and signed contracts for the CRL152 project of the Singapore Metro, the procurement and installationproject of the screen door system for Suzhou Metro Line 8 and Xi'an Metro Line 15 Phase I, and the maintenance project of thescreen door for Xiamen Metro Lines 1 and 3 during the reporting period. The Company has been constantly moving into theinternational market, and has obtained many projects in Hong Kong, Taiwan, China, Singapore, Malaysia, India and othercountries and regions. The company's product design ability, delivery timeliness, product quality stability and other capabilitieshave been fully recognized by overseas customers.
The Company's good brand image and market awareness contribute to the continuous improvement of its competitiveness andcontribute to the growth of its performance.
④ The demand for maintenance is constantly expanding, and the maintenance business is growing year by year
With the continuous expansion of urban rail transit network and the increasing service life of existing subway screen doors,professional maintenance and upkeep have become a key link in rail transit operation. As an important equipment for ensuringpassenger safety, shielded doors require regular maintenance, repair, and upkeep to ensure their normal operation and reliability.The screen door system belongs to a highly specialized equipment system, and maintenance work must be guaranteed by aprofessional company with a solid technical foundation for its services. The Company has the advantage of providing full industrychain technical services for rail transit screen door systems, and has an intelligent operation and maintenance support system forplatform screen door systems. It can monitor and record the health level of equipment systems in real time, achieve real-timecommunication with products, and transmit product operation data to the data processing center. Through intelligent operation andmaintenance professional software, the operation data is analyzed. With the continuous growth of urban rail transit lines put intooperation, the demand market for maintenance services continues to expand, and the Company's maintenance business will alsohave more development opportunities.
(3) New energy industry
The Company's photovoltaic building integration (BIPV) and distributed solar photovoltaic power plants are importantcomponents of the company's new energy business. Against the backdrop of the national dual carbon strategy and greendevelopment, the Company has been practicing the concepts of low-carbon, energy saving, green and environmental protection. Itis an early developer and application of photovoltaic building integration (BIPV) and photovoltaic power generation system design,manufacturing, integration and operation, and has mature technology. In China, the Company has completed the first batch ofintegrated photovoltaic buildings (BIPV) and multiple distributed solar photovoltaic power stations. Jiangxi Pingxiang distributedphotovoltaic power station, Jiangxi Isuzu automobile parking lot photovoltaic power station in Nanchang City, and Songshan LakeBase photovoltaic power station in Dongguan, Guangdong, have all operated efficiently, contributing to the Company's stableprofitability and cash flow.
(4) Commercial real estate industry
At present, the company operates commercial real estate projects in Shenzhen and Nanchang. As a special economic zone andleading demonstration zone, Shenzhen has a relatively concentrated market heat and demand. With the deepening of the
construction of the Guangdong Hong Kong Macao Greater Bay Area, Shenzhen's strong development trend is highly recognizedby the market, and the company's sales and rental rate of the Shenzhen Fangdacheng project is relatively fast. At the end of thereporting period, the sales rate of Shenzhen Fangda City project was 98.50%, and the leasing rate of self owned properties was
86.31%. The company's Fangda Center project is located in Honggutan New District, Nanchang City, with obvious geographicaladvantages and good market expectations. At the end of the reporting period, the sale rate of Nanchang Fangda Center project was
40.92%, and the occupancy rate of self-owned properties was 84.83%. In addition, the company continues to implement adifferentiated competition strategy, integrate and optimize existing resources, and in accordance with the latest policyrequirements, continues to promote the application and approval of the Henggang Dakang project in Shenzhen and the FuyongFang Dabang Shenzhen urban renewal projects.
II. Core Competitiveness Analysis
(I) Smart curtain wall system and new materials
1. Advantages of technology and industry experience
Through over 32 years of hard work in the field of high-end smart curtain wall and the development of environmentalprotection and energy-saving curtain wall products through technological innovation, the Company has grasped the developmenttrend of curtain wall industry in the process of meeting market demand, improved the competitiveness of the Company's products,solutions and services, 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 wall system materialindustry. The Company's subsidiaries engaged in the smart curtain wall system and material industry are all national high-techenterprises, five subsidiaries are selected as "specialized, special and innovative" enterprises, and many subsidiaries are recognizedas "Guangdong Intellectual Property Demonstration Enterprise", "Shenzhen Intellectual Property Advantage unit", "Jiangxienterprise technology center" and "Nanchang engineering technology research center". The Company's independent innovationand 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 system and newmaterial industry has formed an overall solution integrating R&D, design, production, project management, construction andmaintenance services. The industry is complete and has strong comprehensive strength in terms of quality, cost and service.
The Company continues to promote digital and intelligent construction in various business modules, utilizing moderninformation technologies such as 5G, cloud computing, big data, mobile applications, and the Internet of Things to empower theentire production and operation process management, achieving rapid transmission and sharing of information throughcollaborative applications, accelerating business response and execution capabilities, and improving the refined management. By
using parameterized design to improve design quality, intelligent manufacturing to improveproduction efficiency and reduce labor intensity, digital technology to achieve the collection andanalysis of business data, improve enterprise management efficiency, effectively improve productand service quality, and enhance the Company's core competitiveness.
3. Brand equity
Since its establishment, the company has been highly recognized by the industry and many professionals with its own productand technical advantages and comprehensive service strength, and has a good reputation. The Company has won "National Quality
Award", "National Quality Engineering Award", Luban Award, Zhan Tianyou award, China Architectural Decoration Award andmore than 200 provincial and ministerial awards. Fangda trademark has been recognized as "China's well-known trademark" andwon the title of "international reputable brand". It has created thousands of landmark projects and has become one of the leadingbrands in the field of high-end curtain wall in China.During the reporting period, multiple curtain wall projects of the Company were highly praised and commended by customers,and its subsidiary, Fangda Jianke, was awarded honors such as "Shenzhen Industry Special Contribution Enterprise", "ExcellentSupplier", and "Excellent Cooperative Unit".
4. Industrial layout advantages
In order to better serve the market and meet the growing demand for orders, after years of accumulation and continuousinvestment in facilities and equipment, the curtain wall system and new material industry of the Company has built a domesticindustrial layout with Shenzhen as the headquarters and production bases in Shanghai, Chengdu, Nanchang, Dongguan, Foshanand other places. Among them, Dongguan Songshanhu base is one of the most modern high-end curtain wall system productionbases in the industry, It has industry-leading R&D, design, manufacturing and curtain wall system delivery capabilities. In addition,according to the Company's strategic planning and development needs, the Company will invest in the construction of Fangda(Ganzhou) low-carbon intelligent headquarters base in Ganzhou City, Jiangxi Province, further promoting the development of thecompany's smart curtain wall system manufacturing business, PVDF aluminum veneer and other new material businesses. TheCompany's scientific and comprehensive production base layout provides an important guarantee for improving market share andcomprehensive competitiveness.
5. Talent
Talents are the core competitiveness of enterprises. The Company adheres to the people-oriented talent concept, activelyintroduces and cultivates various professional technical and management talents, and is committed to building an efficientmanagement and operation team. After years of development, the Company has an experienced senior management team andmiddle-level managers with strong execution ability, as well as a complete talent training system and talent reserve. During thereporting period, we continuously optimized the effective incentive and assessment system and implemented quantitativemanagement. In order to meet the needs of the Company's business development, the Company continued to introduce outstandingfresh graduates, build an industry university research integration platform, promote school-enterprise cooperation and industry-university combination mechanism, and ensure that the Company's scientific research strength in the field of high-end curtain wallis at the leading level in the industry. Over the years, it has always paid attention to the cultivation of "craftsman spirit". It has held"Fangda Craftsman" skill competition every year and "Fangda Lecture Hall" training from time to time, continuously improved thetheoretical knowledge and operation skill level of employees, created a skilled talent team with reasonable structure, exquisitetechnology and excellent style, cultivated a number of "Shenzhen 100 excellent craftsmen", and has been rated as "Shenzhencraftsman cultivation demonstration unit" for many times.
(II) Rail transport screen door business
1. Technical advantage
The company is one of the earliest national high-tech enterprises engaged in the research and development, design,manufacturing, installation, and operation of subway platform screen doors in China. It has led the drafting and revision of the firstnational industry standard for subway platform screen doors, "Urban Rail Transit Platform Screen Doors," and participated in thepreparation of the group standard "Acceptance Specification for Fully Automatic Operation System of Urban Rail Transit"(CJ/T236-2022). In 2021, the Ministry of Industry and Information Technology awarded the Company's urban rail transit platformsafety door product as the national "single champion product in the manufacturing industry". Fang Dazhiyuan, a controllingsubsidiary, was selected as a "specialized, refined, and innovative" enterprise in Shenzhen. Fangda Zhiyuan has successively wonmany honors and qualifications, such as the Guangdong Provincial Science and Technology Award, the National Key NewProduct Certificate, the National Torch Plan Industrialization Demonstration Project Certificate, the Guangdong Intelligent RailTransit Platform Gate Engineering Technology Research Center, the Shenzhen Science and Technology Progress Award, and the
Shenzhen "Specialization and Innovation" Enterprise title. As of the end of 2022, the Company has 135 domestic and foreignpatents for the screen door system (including 47 invention patents and 20 international PCT patents), and 8 computer softwarecopyrights, forming a core technology group and intellectual property system with independent intellectual property rights. TheCompany is a domestic enterprise with a large number of patents related to platform screen doors for urban rail transit.
The Company has developed a technical solution for installing high-speed railway platform doors on existing high-speedrailway platforms, which can be applied to existing high-speed railway platforms. Compared to urban rail transit, there aredifferences in the position, shape, and size of train doors among different models of high-speed trains, and high-speed trainsgenerally operate at high speeds. As of the end of 2022, the Company has submitted and applied for over 61 patents in the field ofhigh-speed rail platform safety doors, and has obtained 29 authorized patents. The above patents can be applied to the Company'scurrent main business of urban rail platform screen doors, enhancing the competitiveness of the Company's urban rail transitplatform screen door products. The research on the implementation plan of high-speed railway station platform door system jointlycompleted by China Railway Design Group Co., Ltd. and Fangda Zhiyuan has passed the scientific and technologicalachievements appraisal organized by the Tianjin Science and Technology Evaluation Center by technical experts from BeijingTianjin Intercity, Beijing Railway Bureau, Nanchang Railway Bureau, and other units. The comprehensive evaluation is at theleading level in China. The Company's rail transit screen door products will also open up new application scenarios and marketspace as a result.
2. Brand equity
The Company has continuously cultivated and refined in the field of platform screen doors for rail transit for 20 years, andhas already occupied a high market share in the domestic market. It is also one of the few Chinese manufacturers and serviceproviders with experience in overseas urban rail transit platform screen door engineering projects, and has a high brand awarenessand recognition in the domestic and international urban rail transit platform screen door market. In China, the Company's platformscreen door system products have opened urban rail transit cities with a coverage rate of over 60%; Overseas, the company hassuccessively obtained orders for platform screen door system products of urban rail transit in many "the Belt and Road" countriesand other regions. Currently, the Company has undertaken over 100 subway platform door projects worldwide, totaling over80000 platform door units, and has become a global supplier of platform screen door systems for urban rail transit.
With reliable product quality, efficient service, and years of technical accumulation, the Company has maintained a stablecooperative relationship with customers, won a good market reputation, and accumulated rich market resources. The Company hasbeen awarded the titles of "Outstanding Equipment Supplier of Shenzhen Metro in 2019", "Outstanding Contribution Unit ofShenzhen Metro Phase III and Phase II Project Construction", "Outstanding Equipment Manufacturer of Nanning Metro Line 4Phase I Project in 2020", "Outstanding Member Unit of Shenzhen Urban Rail Transit Association in 2020", and "OutstandingConstruction Unit of Safety and Quality Management in 2021" for Nanning Metro Construction The "Wuhan Metro Line 5 ProjectConstruction Meritorious Unit" was awarded the "Excellent Supplier of Hohhot Metro Line 1 Construction Management Co.,Ltd." in 2022, the "Collaborative Unit Advanced Collective" of Tianjin Metro Line 3 Operation Co., Ltd., and the "ExcellentOutsourcing Unit Award" of Chengdu Metro Operation Co., Ltd. Operation Branch in 2022 Wuhan Wuhan Railway TravelService Media Co., Ltd. Customer Service Maintenance Branch has won multiple honors such as "Excellent OutsourcingMaintenance Project".
3. Industry chain advantage
The Company has the ability to provide a full industry chain solution for rail transit platform screen doors that integratesresearch and development, design, manufacturing, engineering construction, technical services, technical training, systemmaintenance, and spare parts supply. A complete industrial chain can meet the market's demand for specialized products andservices, effectively reducing production and management costs, enhancing profitability and competitive advantage.
The Company has outstanding professional and research and development capabilities, which can meet the diverse needs ofcustomers for products and provide technical solutions. In terms of product design, the Company's technical team has richexperience; In terms of product testing, the company has complete and professional testing equipment and methods; In terms of
installation, the Company has a national first level qualification for professional contracting of building mechanical and electricalinstallation engineering, and can independently undertake the installation work of the project; In terms of maintenance, theCompany has an operation and maintenance center with a professional maintenance team, and a maintenance center located atcustomers and project locations, which can provide faster and more thoughtful services. The intelligent maintenance managementsystem developed by the Company can count and analyze the operation status of site equipment in real time, remotely guide theon-site technical service team, and provide professional technical support to customers in a timely and efficient manner. TheCompany's operation and maintenance management service team is now located in more than 30 cities worldwide.
(3) New energy industry
The Company's new energy industry mainly focuses on the development of new energy-saving technology applications suchas solar 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 curtainwall system 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.
Distributed solar power PV power generation is closely related to the Company's curtain wall business. Part of the distributedsolar power PV systems are closely related to construction. Moreover, the Company has more than 20 years' experience inelectrical product integration. The Company also has more than 30 years' experience in construction management and has thelevel-1 construction curtain wall engineering qualification and electrical installation engineering qualification.
(4) Commercial real estate industry
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. As a special economic zone andleading demonstration zone, Shenzhen has a relatively concentrated market heat and demand. With the deepening of theconstruction of the Guangdong Hong Kong Macao Greater Bay Area, Shenzhen's strong development trend is highly recognizedby the market, and it is expected that the company's commercial real estate business will still have development space in the future.III. Core Business Analysis
OverviewSee I. Major businesses of the Company during the Report PeriodYear-on-year changes in major financial data
In RMB
| This report period | Same period last year | YOY change (%) | Reason | |
| Turnover | 2,078,846,877.32 | 1,613,063,315.30 | 28.88% | |
| Operating cost | 1,624,230,468.63 | 1,259,515,842.60 | 28.96% | |
| Sales expense | 28,143,556.79 | 23,296,105.78 | 20.81% | |
| Administrative expense | 79,590,941.46 | 74,193,251.57 | 7.28% | |
| Financial expenses | 33,743,857.79 | 39,629,782.88 | -14.85% | |
| Income tax expenses | 28,189,905.44 | 13,005,121.74 | 116.76% | Mainly due to an increase in total profit |
| R&D investment | 88,989,510.66 | 72,809,311.17 | 22.22% | |
| Cash flow generated by business operations, net | -37,313,711.13 | -306,580,793.04 | 87.83% | Mainly due to the improvement in cash flow from operating activities of curtain wall and new materials |
| business and screen door business compared to the previous period | ||||
| Cash flow generated by investment activities, net | -60,178,421.86 | -123,073,771.02 | 51.10% | The net outflow of RMB60,178,400 from investment activities in this period is mainly due to production base construction expenses, settlement payments for Fangda City project, and quality assurance deposit expenses |
| Net cash flow generated by financing activities | 58,776,644.90 | 127,563,558.23 | -53.92% | Mainly due to a decrease in net inflows from bank fundraising activities compared to the previous period |
| Net increase in cash and cash equivalents | -35,005,223.01 | -298,333,058.20 | 88.27% | Mainly due to the improvement in cash flow from operating activities in the current period |
| Credit impairment ("-" for loss) | 20,274,577.59 | 25,016,298.34 | -18.95% | |
| Investment impairment loss ("-" for loss) | -14,673,904.92 | -27,659,612.75 | 46.95% | Mainly due to the decrease in the provision for impairment of contract assets in the current period |
Major changes in profit composition or sources during the report period
□ Applicable ? Inapplicable
The profit composition or sources of the Company have remained largely unchanged during the report period.Turnover composition
In RMB
| This report period | Same period last year | YOY change (%) | |||
| Amount | Proportion in operating costs (%) | Amount | Proportion in operating costs (%) | ||
| Total turnover | 2,078,846,877.32 | 100% | 1,613,063,315.30 | 100% | 28.88% |
| Industry | |||||
| Metal production | 1,654,849,166.62 | 79.60% | 1,150,768,372.43 | 71.34% | 43.80% |
| Railroad industry | 291,615,462.85 | 14.03% | 300,269,751.24 | 18.61% | -2.88% |
| Commercial real estate | 115,913,190.77 | 5.58% | 144,893,896.06 | 8.98% | -20.00% |
| New energy industry | 8,947,285.78 | 0.43% | 8,159,691.65 | 0.51% | 9.65% |
| Others | 7,521,771.30 | 0.36% | 8,971,603.92 | 0.56% | -16.16% |
| Product | |||||
| Curtain wall | 1,654,849,166.62 | 79.60% | 1,150,768,372.43 | 71.34% | 43.80% |
| system and new materials | |||||
| Subway screen door and service | 291,615,462.85 | 14.03% | 300,269,751.24 | 18.61% | -2.88% |
| Commercial real estate leasing and property services | 115,913,190.77 | 5.58% | 144,893,896.06 | 8.98% | -20.00% |
| PV power generation products | 8,947,285.78 | 0.43% | 8,159,691.65 | 0.51% | 9.65% |
| Others | 7,521,771.30 | 0.36% | 8,971,603.92 | 0.56% | -16.16% |
| District | |||||
| In China | 1,831,339,689.35 | 88.09% | 1,486,925,226.37 | 92.18% | 23.16% |
| Out of China | 247,507,187.97 | 11.91% | 126,138,088.93 | 7.82% | 96.22% |
Industries, products or districts that take more than 10% of the Company's business turnover or profit? Applicable □ Inapplicable
In RMB
| Turnover | Operating cost | Gross margin | Year-on-year change in operating revenue | Year-on-year change in operating costs | Year-on-year change in gross margin | |
| Industry | ||||||
| Metal production | 1,654,849,166.62 | 1,384,109,670.97 | 16.36% | 43.80% | 42.64% | 0.69% |
| Railroad industry | 291,615,462.85 | 207,642,390.41 | 28.80% | -2.88% | -11.87% | 7.26% |
| Commercial real estate | 115,913,190.77 | 28,541,731.76 | 75.38% | -20.00% | -42.08% | 9.39% |
| Product | ||||||
| Curtain wall system and new materials | 1,654,849,166.62 | 1,384,109,670.97 | 16.36% | 43.80% | 42.64% | 0.69% |
| Subway screen door and service | 291,615,462.85 | 207,642,390.41 | 28.80% | -2.88% | -11.87% | 7.26% |
| Commercial real estate leasing and property services | 115,913,190.77 | 28,541,731.76 | 75.38% | -20.00% | -42.08% | 9.39% |
| District | ||||||
| In China | 1,831,339,689.35 | 1,460,551,119.75 | 20.25% | 23.16% | 26.40% | -2.04% |
Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable ? Inapplicable
IV. Non-core Business Analysis? Applicable □ Inapplicable
In RMB
| Amount | Profit percentage | Reason | Whether continuous |
| Investment income | -2,361,833.19 | -1.11% | No | |
| Gain/loss caused by changes in fair value | 129,892.00 | 0.06% | No | |
| Assets impairment | -14,673,904.92 | -6.87% | Provision for impairment of contract assets | No |
| Non-operating revenue | 204,046.54 | 0.10% | No | |
| Non-business expenses | 569,862.59 | 0.27% | No | |
| Credit impairment loss | 20,274,577.59 | 9.49% | Mainly used for offsetting bad debt reserves of accounts receivable | No |
V. Assets and Liabilities
1. Major changes in assets composition
In RMB
| End of the report period | End of last year | Change (% ) | Notes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary capital | 1,286,506,293.96 | 9.94% | 1,238,754,216.50 | 9.72% | 0.22% | |
| Account receivable | 639,885,280.36 | 4.95% | 832,292,348.17 | 6.53% | -1.58% | |
| Contract assets | 2,542,073,692.15 | 19.65% | 2,158,860,658.43 | 16.94% | 2.71% | |
| Inventory | 676,008,744.99 | 5.22% | 710,532,397.32 | 5.57% | -0.35% | |
| Investment real estate | 5,760,292,920.72 | 44.52% | 5,760,517,577.11 | 45.20% | -0.68% | |
| Long-term share equity investment | 54,969,336.56 | 0.42% | 54,969,042.14 | 0.43% | -0.01% | |
| Fixed assets | 636,359,361.87 | 4.92% | 646,812,853.36 | 5.07% | -0.15% | |
| Construction in process | 272,641.50 | 0.00% | 0.00 | 0.00% | 0.00% | |
| Use right assets | 19,572,056.81 | 0.15% | 19,449,693.40 | 0.15% | 0.00% | |
| Short-term loans | 1,575,882,917.01 | 12.18% | 1,318,238,522.78 | 10.34% | 1.84% | |
| Contract liabilities | 111,056,258.14 | 0.86% | 207,993,671.55 | 1.63% | -0.77% | |
| Long-term loans | 1,193,000,000.00 | 9.22% | 1,263,500,000.00 | 9.91% | -0.69% | |
| Lease liabilities | 8,553,119.00 | 0.07% | 6,907,456.55 | 0.05% | 0.02% | |
2. Major foreign assets
□ Applicable ? Inapplicable
3. Assets and liabilities measured at fair value
? Applicable □ Inapplicable
In RMB
| Item | Opening amount | Gain/loss caused by changes in fair value | Accumulative changes in fair value accounting into the income account | Impairment provided in the period | Amount purchased in the period | Amount sold in the period | Other change | Closing amount |
| Financial assets | ||||||||
| 1. Transactional financial assets (excluding derivative financial assets) | 0.00 | 0.00 | ||||||
| 2. Derivative financial assets | 789,205.34 | 77,586.17 | ||||||
| 3. Receivable financing | 1,338,202.01 | 9,703,929.82 | ||||||
| 4. Investment in other equity tools | 11,968,973.86 | -11,968,973.86 | -32,341,853.19 | 0.00 | ||||
| 5. Other non-current financial assets | 7,507,434.68 | 7,782.60 | 7,515,217.28 | |||||
| Subtotal | 21,603,815.89 | -11,961,191.26 | -32,341,853.19 | 0.00 | 0.00 | 0.00 | 0.00 | 17,296,733.27 |
| Investment real estate | 5,750,831,172.12 | 122,109.40 | 63,887,326.00 | 0.00 | 0.00 | 0.00 | -122,109.40 | 5,750,831,172.12 |
| Total | 5,772,434,988.01 | -11,839,081.86 | 31,545,472.81 | 0.00 | 0.00 | 0.00 | -122,109.40 | 5,768,127,905.39 |
| Financial liabilities | 293,400.00 | 1,439,675.00 | ||||||
Other changeOther changes are caused by adjustments to the settlement cost differences related to investment real estate construction contracts.Major changes in the assets measurement property of the Company in the report period
□ Yes ? No
4. Right restriction of assets at the end of the period
| Project | Closing book value (RMB) | Reason |
| Monetary capital | 537,833,587.91 | Various deposits |
| Notes receivable | 27,805,230.54 | Bills endorsed or discounted but not yet due |
| Account receivable | 39,547,042.05 | Loan by pledge |
| Fixed assets | 43,896,677.62 | Loan by pledge |
| Investment real estate | 3,293,733,474.51 | Loan by pledge |
| Non-current assets due in 1 year | 321,983,047.30 | Loan by pledge |
| Equity pledge | 200,000,000.00 | 100% stake in Fangda Property Development held by the Company |
| Total | 4,464,799,059.93 |
VI. Investment
1. General situation
? Applicable □ Inapplicable
| Investment (yuan) in the report period | Investment (yuan) in the previous period | Change |
| 29,500,000.00 | 0.00 | Inapplicable |
2. Major equity investment in the report period
□ Applicable ? Inapplicable
3. Major non-equity investment in the report period
? Applicable □ Inapplicable
In RMB
| Project name | Method of investment | Whether it is fixed assets investment | Industries involved in investment projects | Investment in the report period | Actual investment by the end of the report period | Capital source | Progress | Estimate return | Accumulated income realized by the end of the reporting period | Reasons for failing to reach the planned progress and expected income | Date of disclosure | Index for information disclosure |
| Fangda | Self-built | Yes | Mainly produc | 29,500,000.0 | 30,000,000.0 | Self-owned | 1.36% | -- | -- | -- | December 17, | Announceme |
| (Ganzhou) Low Carbon Intelligent Manufacturing Headquarters Base | e PVDF aluminum veneer, nano aluminum veneer and other new materials, smart curtain wall system, photovoltaic building integration system, aluminum alloy components, and precision steel components. | 0 | 0 | fund | 2022 | nt on Investment and Construction of Fangda (Ganzhou) Low Carbon Intelligent Manufacturing Headquarters Base released on http://www.cninfo.com.cn/ | ||||||
| Total | -- | -- | -- | 29,500,000.00 | 30,000,000.00 | -- | -- | -- | -- | -- | -- | -- |
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
1) Derivative investments for hedging purposes during the reporting period
? Applicable □ Inapplicable
In RMB10,000
| Type | Initial investment amount | Gain/loss caused by changes in fair value | Accumulative changes in fair value accounting into the income account | Amount in this period | Amount sold in this period | Closing amount | Proportion of closing investment amount in the closing net assets in the report period |
| Shanghai aluminum | 449.25 | -114.63 | -143.97 | 11,244.10 | 6,389.13 | 5,304.23 | 0.90% |
| Forward foreign exchange | 3,087.95 | -71.16 | 7.76 | 3,466.93 | 4,819.00 | 1,735.88 | 0.30% |
| Total | 3,537.20 | -185.79 | -136.21 | 14,711.03 | 11,208.13 | 7,040.11 | 1.20% |
| Accounting policies and specific accounting principles of hedging business during the reporting period, as well as whether there are significant changes compared with the previous reporting period | The aluminum futures and forward foreign exchange businesses of the Company meet the applicable conditions of hedge accounting specified in the accounting standards and are applicable to hedge accounting, which are classified as cash flow hedging. The corresponding accounting policies and accounting principles have not changed from the previous reporting period. | ||||||
| Description of actual profit and loss during the reporting period | Aluminum futures achieved a profit of RMB35,600. The actual income of the aluminum futures hedging instrument and the spot value change of the hedged aluminum ingot in the reporting period is RMB-501,500; The gains and losses arising from forward foreign exchange hedging instruments offset the value changes of the hedged items due to exchange rate fluctuations. | ||||||
| Description of hedging effect | The profit and loss generated by the company's hedging instrument can offset the value change of the hedged item, and the hedging effect of the hedging business is good. | ||||||
| Capital source | Self-owned fund | ||||||
| Risk analysis and control measures for the derivative holding in the report period (including without limitation market, liquidity, credit, operation and | The aluminum futures hedging and foreign exchange derivatives trading businesses carried out by the Company are derivative investment businesses. The derivative investment business carried out by the Company follows the basic principle of locking the price and exchange rate of raw materials, does not carry out speculative trading operations, and carries out strict risk control when signing hedging contracts and closing positions. 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 management, information disclosure and file management of derivatives trading business, which can effectively control the risk of the Company's derivatives holding positions. | ||||||
| legal risks) | |
| 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 |
| Lawsuit (if any) | No |
| Disclosure date of derivative investment approval by the Board of Directors (if any) | October 28, 2022 |
| Opinions of independent directors on the Company's derivative investment and risk controlling | The relevant approval procedures for the Company's foreign exchange derivatives trading business comply with relevant national laws, regulations and the relevant provisions of the Articles of Association. The Company has formulated the Management Measures for Derivatives Investment Business, which is conducive to strengthening the risk management and risk control of the Company's foreign exchange derivatives transactions. The Company's foreign exchange derivatives trading business follows the principles of legality, prudence, safety and effectiveness, and the Company does not carry out foreign exchange transactions solely for profit. All foreign exchange derivatives trading businesses are based on normal production and operation, rely on specific business operations, and aim at avoiding and preventing exchange rate risks, which meet the needs of the Company's business development. There is no speculative operation or situation that damages the interests of the company and all shareholders, especially minority shareholders. The independent directors agreed that the Company should carry out derivative hedging business. |
2) Derivative investment for the purpose of speculation during the reporting period
□ Applicable ? Inapplicable
During the reporting period, there was no derivative investment for the purpose of speculation.
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 □ InapplicableMajor 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 Jianke | Subsidiaries | Curtain wall system and new materials | 600,000,000.00 | 4,897,728,695.51 | 1,724,751,343.22 | 1,512,415,598.77 | 97,559,391.52 | 90,927,712.00 |
| Fangda Zhiyuan | Subsidiaries | Subway screen door and service | 105,000,000.00 | 960,076,223.74 | 322,905,846.94 | 285,276,452.10 | 54,306,435.30 | 46,942,135.52 |
Acquisition and disposal of subsidiaries in the report period
□ Applicable ? Inapplicable
Major joint-stock companiesDuring the reporting period, the operating income of Fangda Jianke was RMB1,512,415,598.77, of which the main businessincome was RMB1,511,439,722.89, the operating profit was RMB97,559,391.52, and the main business profit wasRMB96,701,362.21; During this reporting period, the operating income of Zhiyuan Technology was RMB285,276,452.10, ofwhich the main business income was RMB285,199,333.45, the operating profit was RMB54,306,435.30, and the main businessprofit was RMB54,229,316.65.IX. Structural Entities Controlled by the Company
□ Applicable ? Inapplicable
X. Risks Facing the Company and Measures
1. Risks of macro environment and policy changes
Due to the complex and ever-changing international situation and other factors, the uncertainty of macroeconomicdevelopment has increased, and domestic and foreign risks and challenges have significantly increased. The Company's main
business segments are closely related to macroeconomic and industrial policies and are greatly affected by the overall macroenvironment. If there are adverse changes in the international and domestic macroeconomic environment, slow economicdevelopment and reduced investment in fixed assets in the future, which will affect the demand of public building curtain wallindustry and rail transit equipment industry, or face industry depression or excessive competition, which will have an adverseimpact on the Company's future profitability, even project delay or suspension, deferred payment of projects 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 environment and policies,the Company will pay close attention to the changes in the macroeconomic and policy situation at home and abroad, timely adjustthe Company's business strategy, further enhance the product competitiveness and operation and management ability, improve themarket share, and deal with the risks brought by changes in the macro environment and policies.
2. Market competition risks
In the rail transit PSD market, the technology of other domestic manufacturers is becoming more and more mature, and thecompany may face the risk of intensified market competition. If the Company cannot maintain a leading position in the market, itwill have a certain adverse impact on the development and benefits of the Company's rail transit PSD business. In this regard, theCompany will continue to adopt a stable business policy, improve the competitive advantage of products through technologicalinnovation and fine management, accelerate the return of funds, and improve the operation efficiency and market competitivenessof the Company.In this regard, the Company will continue to adopt a stable business policy, improve the competitive advantage of productsthrough technological innovation and fine management, accelerate the return of funds, and improve the operation efficiency andmarket competitiveness of the Company. While consolidating the domestic market, the Company will step up the efforts inexploring overseas markets, thus elevating our competitiveness in global markets 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 such as aluminum andsteel and labor, affecting the Company’s profitability and creating additional production and operation risks for the Company.
The Company will use futures products for hedging, negotiate additional contract amounts with partners, and reasonablyarrange material procurement plans to hedge and transfer some of the risks of raw material price fluctuations; The Companyimplements a strict supplier management mechanism, actively improves the technological level of production management,increases technological research and development efforts, and is committed to improving technological processes, implementingdigital system construction, improving the automation and intelligence of production equipment, and reducing raw materialconsumption. The Company will widely apply new technologies and processes, strengthen employee skill training, and improvequality and efficiency while ensuring safety.
4. Management risks
In recent years, with the expansion of the Company's business scale and the increase of the number of subsidiaries, the dailymanagement of the company is becoming more and more difficult, which may face the management risk of industrial scaleexpansion. In addition, in recent years, the regulatory requirements for listed companies have been continuously improved anddeepened. The Company needs to further strengthen management, continue to promote management reform, constantly optimizeprocess and organizational structure, improve various rules and regulations, and vigorously introduce high-quality, highly skilledand multidisciplinary technology and management talents, gradually optimize the allocation of human resources, optimize theechelon structure, and effectively reduce the management risks brought by business development.
Chapter IV Corporation GovernanceI. 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 |
| 2022 Annual Shareholder Meeting | Annual shareholders' meeting | 25.46% | March 20, 2023 | March 21, 2023 | 1. Board of Directors' Work Report 2022; 2. Supervisory Committee' Work Report 2022; 3. Annual Report 2022 and the Summary; 4. Financial Settlement Report 2022; 5. 2022 Profit Distribution Plan; 6. Proposal on Applying for Credit Guarantee from Banks and Other Financial Institutions (special resolution); 7. Proposal on engaging of the CPA for Year 2023; Proposal on Re-electing the 10th Board of Directors of the Company (item by item); 8.1 The Proposal of Electing Mr. Xiong Jianming An Independent Director of the 10th Board of Directors; 8.2 Proposal of Electing Mr. Lin Kebin A Non-independent Director of the 10th Board of Directors; 8.3 Proposal of Electing Mr. Huang Yaying An Independent Director of the 10th Board of Directors; 8.4 Proposal on Electing Mr. Cao Zhongxiong as An Independent Director of the 10th Board of Directors; 8.5 Proposal on Electing Mr. Zhan Weizai as An Independent Director of the 10th Board of Directors; 9. Proposal on Re-electing the 10th Supervisory Committee of the Company (item by item); 9.1 Proposal of Electing Ms. Cao Naisi A Supervisor of the 10th Supervisory Committee of the Company; 9.2 Proposal on Electing Mr. Ye Zhiqing A Supervisor of the 10th Supervisory Committee of the Company; 10. Reviewing the remuneration plan for the 10th Board of Directors (including independent directors) and Supervisory Committee |
2. Shareholders of preference shares of which voting right resume convening an extraordinaryshareholders' meeting
□ Applicable ? Inapplicable
II. Changes in the Directors, Supervisors and Senior Executives? Applicable □ Inapplicable
| Name | Job | Type | Date | Reason |
| Xiong Jianming | Chairman | Elected | March 20, 2023 | Re-elected |
| Xiong Xi | Chairman, President | Elected | March 20, 2023 | Re-elected |
| Xiong Jianwei | Director | Elected | March 20, 2023 | Re-elected |
| Lin Kebin | Director, vice president | Elected | March 20, 2023 | Re-elected |
| Huang Yaying | Independent director | Elected | March 20, 2023 | Re-elected |
| Cao Zhongxiong | Independent director | Elected | March 20, 2023 | Re-elected |
| Zhan Weizai | Independent director | Elected | March 20, 2023 | Re-elected |
| Cao Naisi | Supervisory Committee meeting convener | Elected | March 20, 2023 | Re-elected |
| Fan Xiaodong | Supervisor | Elected | March 20, 2023 | Re-elected |
| Ye Zhiqing | Supervisor | Elected | March 20, 2023 | Re-elected |
| Wei Yuexing | Vice president | Engaged | March 20, 2023 | Re-elected |
| Dong Gelin | Vice president | Engaged | March 20, 2023 | Re-elected |
| Xiao Yangjian | Secretary of the Board | Engaged | March 20, 2023 | Re-elected |
| Zhou Zhigang | Director, vice president | Leaving office | March 20, 2023 | Office term expires |
| Guo Jinlong | Independent director | Leaving office | March 20, 2023 | Office term expires |
| Dong Gelin | Supervisory Committee meeting convener | Leaving office | March 20, 2023 | Office term expires |
III. Profit Distribution and Reserve Capitalization in the Report Period
□ Applicable ? Inapplicable
The Company distributed no cash dividends or bonus shares and has no reserve capitalization plan.IV. Share Incentive Schemes, Staff Shareholding Program or Other Incentive Plans
□ Applicable ? Inapplicable
There is no share incentive schemes, staff shareholding program or other incentive plans in the report period
Chapter V Environmental and Social Responsibility
I. Environmental ProtectionWhether 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 |
| No | No | No | No | No | No |
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 units announced by theenvironmental protection department, and there were no administrative penalties for environmental problems.Measures and effects taken to reduce carbon emissions during the reporting period? Applicable □ InapplicableThe Company has long been committed to green and sustainable development, and its industries such as smart curtain walls,photovoltaic building integration (BIPV), rail transit screen door systems, and solar photovoltaic power stations all carryenvironmental genes. The Company combines its own industry characteristics and integrates green, low-carbon, andenvironmental protection concepts into technological innovation. It has successively developed national and provincial keyenvironmental protection new products such as ventilated and photovoltaic (BIPV) curtain walls, as well as nano self-cleaning andfireproof honeycomb aluminum composite panels. The subway screen door system developed by the Company with independentintellectual property rights has been awarded the "Manufacturing Single Champion Product" by the Ministry of Industry andInformation Technology of the People's Republic of China. The aluminum plate products produced have been awarded the "GreenBuilding Selection Product Certificate" by the National Building Materials Testing Center and have been selected into the "GreenBuilding Selection Product Guidance Catalogue". The Company has also taken the lead in adopting the prefabricated concept inthe industry for the design and installation of building curtain walls and subway screen doors, greatly improving installationefficiency, shortening construction cycles, and reducing construction waste, effectively promoting the green and low-carbondevelopment of urban construction. In the first half of 2023, the new energy business's solar photovoltaic power generationreached 9.0146 million kilowatt hours, reducing carbon dioxide emissions by nearly 10,000 tons, and continuously contributing toachieving carbon peak and carbon neutrality goals. The Company was awarded the first batch of carbon emission measurementpilot enterprises for building decoration in Shenzhen.The Company has established an environmental management system, and many subordinate companies have passed theISO14001 environmental system certification. In their daily production and operation, they seriously implement the environmentalprotection laws and regulations such as the environmental protection law of the People's Republic of China, the water pollutionprevention and control law of the People's Republic of China, the air pollution prevention and control law of the People's Republicof China, and the solid waste pollution prevention and control law of the People's Republic of China. The Company and itssubsidiaries are not key polluting companies disclosed by the environmental protection authorityThe Company advocates energy conservation and emission reduction, safety and environmental protection, and adheres to thecomprehensive implementation of "green environmental protection" measures. The Company plans its production line reasonably,uses efficient and low consumption equipment, introduces advanced technology, and creates a good, green, and healthy office
environment. The Company advocates green office, reduces the standby energy consumption of air conditioners, computers andother electrical equipment, and reasonably sets the air conditioning temperature in the office area to save energy. At the same time,the Company has established an electronic, networked, and remote office model, actively utilizing communication meetings, OAsystems, and ERP systems to promote "paperless office", improve work efficiency, and reduce carbon emissions and various costs.
Reasons for non-disclosure of other environmental informationInapplicableII. Social Responsibilities
For many years, while creating corporate value, the Company has adhered to its original mission and fulfilled the socialresponsibility of listed companies. The Company actively assists in rural revitalization and has carried out industrial assistance inGuangdong, Jiangxi, Tibet, and other places. It has tailored measures to local conditions to help impoverished areas groweconomic crops such as tea mushrooms and lilies, and built rural industrial "hematopoietic" projects such as greenhousephotovoltaic power stations and distributed photovoltaic power stations. The Company also actively participates in various publicwelfare activities, involving public welfare education assistance, rural medical assistance, disaster relief, environmental protection,public health, and many other aspects. The Company has been awarded honors such as "Advanced Private Enterprise in theNational 'Ten Thousand Enterprises Helping Ten Thousand Villages' Precision Poverty Alleviation Action", "OutstandingEnterprise in Fulfilling Social Responsibility in China", "National Excellent Foreign Investment Enterprise - Top Ten TaxableEnterprises in Shenzhen", and "Guangdong May Day Labor Medal".During the reporting period, the Company made a total of 217900 yuan in public welfare donations to the Shenzhen Workers'Relief Fund, the Jiangxi Provincial Travel Association, Zhuyuan Village and Chayuan Village in Luxi County, Pingxiang City,Jiangxi Province, respectively, for social welfare activities such as employee relief, care and assistance, and rural revitalization.
Chapter VI Significant EventsI. 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
II. Non-operating Capital Use by the Controlling Shareholder or Related Parties in theReporting Term
□ Applicable ? Inapplicable
The controlling shareholder and its affiliates occupied no capital for non-operating purpose of the Company during the reportperiod.III. Incompliant External Guarantee
□ Applicable ? Inapplicable
The Company made no incompliant external guarantee in the report period.IV. Engaging and Dismissing of CPAWhether the interim financial report is audited
□ Yes ? No
The interim report for H1 2015 has not been audited.V. Statement of the Board on the “Non-Standard Auditors' Report” Issued by the CPA onthe Current Report Period
□ Applicable ? Inapplicable
VI. Statement of the Board of Directors on the Non-standard Auditor's Report for H1 2014
□ Applicable ? Inapplicable
VII. Bankruptcy and Capital Reorganizing
□ Applicable ? Inapplicable
The Company has no bankruptcy or reorganization events in the report period.VIII. LawsuitSignificant lawsuit and arbitration
□ Applicable ? Inapplicable
The Company has no significant lawsuit or arbitration affair in the report period.
Other lawsuit? Applicable □ Inapplicable
| Basic information of litigation (arbitration) | Amount (in RMB10,000) | Whether estimated liabilities are formed | Progress of litigation (arbitration) | Litigation (arbitration) hearing results and impact | Enforcement of litigation (arbitration) judgment | Date of disclosure | Index for information disclosure |
| Summary of matters in which the subsidiaries as the plaintiff fail to meet the disclosure standards of major litigation (arbitration) | 34,194.53 | No | At trial | The case has not been closed yet, and it is not expected to have a significant impact on the company's operation and financial status | Inapplicable | ||
| Summary of matters where the Company and its subsidiaries as defendants fail to meet the disclosure standards of major litigation (arbitration) | 8,656.46 | No | At trial | The case has not been closed yet, and it is not expected to have a significant impact on the company's operation and financial status | Inapplicable |
IX. Punishment and Rectification
□ Applicable ? Inapplicable
X. 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.
XI. 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 itsrelated parties.
7. Other major related transactions
□ Applicable ? Inapplicable
The Company has no other significant related transaction in the report period.XII. 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 | Date of disclosur | Guarantee | Actual date | Actual amount | Type of guarante | Collateral (if any) | Counter guarante | Term | Completed or not | Related party |
| provided to | e | amount | of guarantee | e | e (if any) | |||||
| No | ||||||||||
| 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 | March 30, 2022 | 86,000 | November 24, 2022 | 58,107.52 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | February 28, 2023 | 24,000 | May 5, 2023 | 16,698.58 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | March 30, 2022 | 30,000 | October 19, 2022 | 13,064.46 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | March 30, 2022 | 50,000 | September 20, 2022 | 27,165.2 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | March 30, 2022 | 30,000 | September 20, 2022 | 21,350 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | March 30, 2022 | 39,000 | December 9, | 30,203.73 | Joint and several | No | No | since engage | No | Yes |
| 2022 | liability guarantee | of contract to 3 years upon due of debt | ||||||||
| Fangda Jianke | March 30, 2022 | 15,000 | May 23, 2022 | 14,000 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | March 30, 2022 | 48,000 | December 15, 2022 | 34,404.31 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | February 28, 2023 | 20,000 | March 31, 2023 | 10,000 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke and Fangda Zhichuang | January 30, 2019 | 15,400 | December 18, 2019 | 5,402.61 | Joint and several liability guarantee | No | No | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Jianke | March 30, 2022 | 20,000 | August 10, 2022 | 8,424 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | March 30, 2022 | 4,000 | September 8, 2022 | 4,000 | Joint and several liability guarantee | No | No | since engage of contract to 3 years | No | Yes |
| upon due of debt | ||||||||||
| Fangda Jianke | February 28, 2023 | 4,000 | May 15, 2023 | 4,000 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Jianke | March 30, 2022 | 60,000 | January 21, 2023 | 5,000 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhiyuan | February 28, 2023 | 36,000 | June 20, 2023 | 10,788.09 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhiyuan | March 21, 2021 | 15,000 | March 9, 2022 | 3,373.52 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhiyuan | March 30, 2022 | 20,000 | October 19, 2022 | 3,890.73 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhiyuan | March 30, 2022 | 15,000 | November 1, 2022 | 3,652.92 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhiyuan | March 30, 2022 | 10,000 | May 23, 2022 | 1,549.07 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhiyuan | February 28, 2023 | 18,000 | March 22, 2023 | 20.87 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Yunzhu | February 28, 2023 | 600 | May 11, 2023 | 51.85 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Yunzhu | March 30, 2022 | 800 | August 19, 2022 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes | |
| Fangda Yunzhu | February 28, 2023 | 1,000 | March 30, 2023 | 988.8 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda New Material | March 30, 2022 | 8,500 | September 6, 2022 | 2,617.98 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda New Material | February 28, 2023 | 10,000 | April 18, 2023 | 1,703.9 | Joint and several liability guarante | No | No | since engage of contract | No | Yes |
| e | to 3 years upon due of debt | |||||||||
| Fangda Property | December 4, 2019 | 135,000 | February 25, 2020 | 87,000 | Joint and several liability guarantee | No | No | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Property | April 18, 2020 | 47,000 | December 16, 2020 | 42,850 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Fangda Zhijian | February 28, 2023 | 7,000 | May 15, 2023 | 2,999.85 | Joint and several liability guarantee | No | No | since engage of contract to 3 years upon due of debt | No | Yes |
| Total of guarantee to subsidiaries approved in the report term (B1) | 571,900 | Total of guarantee to subsidiaries actually occurred in the report term (B2) | 219,173.36 | |||||||
| Total of guarantee to subsidiaries approved as of the report term (B3) | 769,300 | Total of balance of guarantee actually provided to the subsidiaries as of end of report term (B4) | 413,307.99 | |||||||
| 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 |
| No | ||||||||||
| Total of guarantee provided by the Company (total of the above three) | ||||||||||
| Total of guarantee approved in the report term (A1+B1+C1) | 571,900 | Total of guarantee occurred in the report term (A2+B2+C2) | 219,173.36 | |||||||
| Total of guarantee | 769,300 | Total of guarantee | 413,307.99 | |||||||
| approved as of end of report term (A3+B3+C3) | occurred as of the end of report term (A4+B4+C4) | ||
| Percentage of the total guarantee occurred (A4+B4+C4) on net asset of the Company | 70.43% | ||
| 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) | 119,893.02 | ||
| Total of the above 3 (D+E+F) | 119,893.02 | ||
| 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 | No | ||
| Statement of external guarantees violating the procedure | No | ||
Note of compound guaranteeNo
3. Entrusted wealth management
□ Applicable ? Inapplicable
The Company made no trust investment in the report period
4. Other significant contract
□ Applicable ? Inapplicable
The Company entered into no other significant contract in the report.
XIII. Other material events
? Applicable □ Inapplicable
1. According to the Company's development strategy and in combination with the development needs of the rail transit screendoor system industry of its subsidiary, Fangda Zhiyuan Technology Co., Ltd., the Company plans to spin off Fangda ZhiyuanTechnology Co., Ltd. and list it on the Shenzhen Stock Exchange Growth Enterprise Board. On December 29, 2022, we received anotice from the Shenzhen Stock Exchange regarding the acceptance of the application documents for Fangda Zhiyuan TechnologyCo., Ltd.'s initial public offering of shares and listing on the Growth Enterprise Market (SZSS [2022] No. 577). As of thedisclosure date of this report, the matter is in a normal review state.
2. To meet the needs of future business development, the company has invested in the construction of the Fangda (Ganzhou)low-carbon intelligent headquarters base project in Zhanggong District, Ganzhou City, Jiangxi Province. The specific situation is
detailed in the relevant announcement disclosed by the Company on December 17, 2022 on CNINFO. As of the disclosure date ofthis report, the company has obtained the construction land planning permit, land use certificate, construction project planningpermit, etc., and all work is continuously progressing.XIV. Material Events of Subsidiaries
□ Applicable ? Inapplicable
Chapter VII Changes in Share Capital and Shareholders
I. Changes in shares
1. Changes in shares
In share
| Before the change | Change (+,-) | After the change | |||||||
| Quantity | Proportion | Issued new shares | Bonus shares | Transferred from reserves | Others | Subtotal | Quantity | Proportion | |
| I. Shares with trade restriction conditions | 3,839,293 | 0.36% | 21,750 | 21,750 | 3,861,043 | 0.36% | |||
| 1. State-owned shares | |||||||||
| 2. State-owned legal person shares | |||||||||
| 3. Other domestic shares | 3,839,293 | 0.36% | 21,750 | 21,750 | 3,861,043 | 0.36% | |||
| Including: Shares held by domestic legal persons | |||||||||
| Domestic natural person shares | 3,839,293 | 0.36% | 21,750 | 21,750 | 3,861,043 | 0.36% | |||
| 4. Shares held by foreign investors | |||||||||
| Including: Shares held by foreign legal persons | |||||||||
| Domestic natural person shares | |||||||||
| II. Unrestricted shares | 1,070,034,934 | 99.64% | -21,750 | -21,750 | 1,070,013,184 | 99.64% | |||
| 1. Common shares in RMB | 675,876,179 | 62.94% | -21,750 | -21,750 | 675,854,429 | 62.94% | |||
| 2. Foreign | 394,158,755 | 36.70% | 394,158,755 | 36.70% | |||||
| shares in domestic market | |||||||||
| 3. Foreign shares in overseas market | |||||||||
| 4. Others | |||||||||
| III. Total of capital shares | 1,073,874,227 | 100.00% | 0 | 0 | 1,073,874,227 | 100.00% |
Reasons? Applicable □ InapplicableMr. Ye Zhiqing, a supervisor elected at the 2022 shareholders' meeting of the company on March 20, 2023, holds 29,000 A-sharesof the Company. According to relevant regulations, 21750 shares are executive lock-in shares with limited sales conditions.Therefore, the Company added 21750 shares with limited sales conditions and reduced 21750 shares with limited sales conditions.Approval of the change
□ Applicable ? Inapplicable
Share transfer
□ Applicable ? Inapplicable
Progress 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
Impacts on financial indicators including basic and diluted earnings per share, net assets per share attributable to commonshareholders of the Company in the most recent year and period
□ Applicable ? Inapplicable
Others that need to be disclosed as required by the securities supervisor
□ Applicable ? Inapplicable
2. Changes in conditional shares
? Applicable □ Inapplicable
In share
| Shareholder name | Conditional shares at beginning of the period | Released this period | Increased this period | Conditional shares at end of the period | Reason of condition | Date of releasing |
| Ye Zhiqing | 0 | 0 | 21,750 | 21,750 | Newly elected supervisors during the reporting period | 25% of the annual shareholding is released from the sale |
| Total | 0 | 0 | 21,750 | 21,750 | -- | -- |
II. Share placing and listing
□ Applicable ? Inapplicable
III. Shareholders and shareholding
In share
| Number of shareholders of common shares at the end of the report period | 52,993 | Number of shareholders of preferred stocks of which voting rights recovered in the report period | 0 | |||||
| Shareholders holding 5% of the Company's common shares or top-10 shareholders | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Number of common shares held at the end of the report period | Change in the reporting period | Conditional common shares | Unconditional common shares | Pledge, marking or freezing | |
| Share status | Quantity | |||||||
| Shenzhen Banglin Technologies Development Co., Ltd. | Domestic non-state legal person | 11.11% | 119,332,846 | - | 119,332,846 | |||
| Shengjiu Investment Ltd. | Foreign legal person | 10.25% | 110,116,276 | 1,536,958 | 110,116,276 | |||
| Fang Wei | Domestic natural person | 4.48% | 48,142,197 | 11,667,809 | 48,142,197 | |||
| Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) | Domestic non-state legal person | 1.48% | 15,860,609 | - | 15,860,609 | |||
| Shenwan Hongyuan Securities (Hong Kong) Co., Ltd. | Foreign legal person | 0.51% | 5,508,790 | - | 5,508,790 | |||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | Foreign legal person | 0.49% | 5,276,390 | -133,222 | 5,276,390 | |||
| Zhou Youming | Domestic natural person | 0.49% | 5,234,660 | 2,351,400 | 5,234,660 | |||
| VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND | Foreign legal person | 0.48% | 5,124,227 | -139,212 | 5,124,227 | |||
| Xiong Jianming | Domestic natural person | 0.48% | 5,110,257 | - | 3,832,693 | 1,277,564 | ||
| Qu Chunlin | Domestic natural person | 0.41% | 4,397,100 | - | 4,397,100 | |||
| A strategic investor or ordinary legal person becomes the Top10 shareholder due a stock issue. | No | |||||||
| 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 with Xiong Jianming. Shenzhen Banglin Technology Development Co., Ltd. and its parties action-in-concert 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. | |||||||
| Description of the above shareholders involved in entrusted / entrusted voting right and waiver of voting right | No | |||||||
| Special instructions on the existence of special repurchase account among the top 10 shareholders | No | |||||||
| Top 10 shareholders of unconditional common shares | ||||||||
| Name of shareholder | Amount of common 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. | 110,116,276 | Domestically listed foreign shares | 110,116,276 | |||||
| Fang Wei | 48,142,197 | RMB common shares | 48,142,197 | |||||
| Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) | 15,860,609 | RMB common shares | 15,860,609 | |||||
| Shenwan Hongyuan Securities (Hong Kong) Co., Ltd. | 5,508,790 | Domestically listed foreign | 5,508,790 | |||||
| shares | |||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | 5,276,390 | Domestically listed foreign shares | 5,276,390 |
| Zhou Youming | 5,234,660 | RMB common shares | 5,234,660 |
| VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND | 5,124,227 | Domestically listed foreign shares | 5,124,227 |
| Qu Chunlin | 4,397,100 | RMB common shares | 4,397,100 |
| First Shanghai Securities Limited | 3,938,704 | Domestically listed foreign shares | 3,938,704 |
| No action-in-concert or related parties among the top10 unconditional common share shareholders and between the top10 unconditional common share shareholders and the top10 common share shareholders | Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. are parties action-in-concert with Xiong Jianming. Shenzhen Banglin Technology Development Co., Ltd. and its parties action-in-concert 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. | ||
| Top-10 common share shareholders participating in margin trade | 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
□ Yes ? No
No agreed re-purchasing by the Company's top 10 shareholders of common shares and top 10 shareholders of unconditionalcommon shares in the report period
IV. Changes in shareholding of Directors, Supervisors and Senior Management? Applicable □ Inapplicable
| Name | Position | Job status | Number of shares held at beginning of the period | Increased shares in this period (share) | Decreased shares in this period (share) | Number of shares held at end of the period | Number of restricted shares granted at the beginning of the period | Number of restricted shares granted in this period | Number of restricted shares granted at the end of the period |
| Xiong Jianming | Chairman | In office | 5,110,257 | 5,110,257 |
| Xiong Xi | Chairman, President | In office | 0 | 0 | |||||
| Xiong Jianwei | Director | In office | 0 | 0 | |||||
| Lin Kebin | Chairman, vice president | In office | 0 | 0 | |||||
| Huang Yaying | Independent director | In office | 0 | 0 | |||||
| Cao Zhongxiong | Independent director | In office | 0 | 0 | |||||
| Zhan Weizai | Independent director | In office | 0 | 0 | |||||
| Cao Naisi | Supervisory Committee meeting convener | In office | 0 | 0 | |||||
| Fan Xiaodong | Supervisor | In office | 8,800 | 8,800 | |||||
| Ye Zhiqing | Supervisor | In office | 29,000 | 29,000 | |||||
| Wei Yuexing | Vice president | In office | 0 | 0 | |||||
| Dong Gelin | Vice president | In office | 0 | 0 | |||||
| Xiao Yangjian | Secretary of the Board | In office | 0 | 0 | |||||
| Zhou Zhigang | Director, vice president | Resigned | 0 | 0 | |||||
| Guo Jinlong | Independent director | Resigned | 0 | 0 | |||||
| Dong Gelin | Supervisory Committee meeting convener | Resigned | 0 | 0 | |||||
| Total | -- | -- | 5,148,057 | 0 | 0 | 5,148,057 | 0 | 0 | 0 |
V. Changes in controlling shareholder or actual controllerChanges in the controlling shareholder in the reporting period
□ Applicable ? Inapplicable
No change in the controlling shareholder in the report periodChange in the actual controller in the report period
□ Applicable ? Inapplicable
No change in the actual shareholder in the report period
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 StatementsI. Auditor's reportWhether the interim report is audited
□ Yes ? No
The financial statements for H1 2014 have not been audited.
II. Financial statements
Unit for statements in notes to financial statements: RMB yuan
1. Consolidated Balance Sheet
Prepared by: China Fangda Group Co., Ltd.
June 30, 2023
In RMB
| Item | June 30, 2023 | January 1, 2023 |
| Current asset: | ||
| Monetary capital | 1,286,506,293.96 | 1,238,754,216.50 |
| Settlement provision | ||
| Outgoing call loan | ||
| Transactional financial assets | ||
| Derivative financial assets | 77,586.17 | 789,205.34 |
| Notes receivable | 53,200,336.92 | 130,428,554.49 |
| Account receivable | 639,885,280.36 | 832,292,348.17 |
| Receivable financing | 9,703,929.82 | 1,338,202.01 |
| Prepayment | 24,606,127.42 | 20,631,650.59 |
| Insurance receivable | ||
| Reinsurance receivable | ||
| Provisions of Reinsurance contracts receivable | ||
| Other receivables | 163,623,479.94 | 155,379,024.22 |
| Including: interest receivable | ||
| Dividend receivable | ||
| Repurchasing of financial assets | ||
| Inventory | 676,008,744.99 | 710,532,397.32 |
| Contract assets | 2,542,073,692.15 | 2,158,860,658.43 |
| Assets held for sales | ||
| Non-current assets due in 1 year | 321,983,047.30 | |
| Other current assets | 227,624,785.92 | 200,981,963.60 |
| Total current assets | 5,945,293,304.95 | 5,449,988,220.67 |
| Non-current assets: |
| Loan and advancement provided | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term share equity investment | 54,969,336.56 | 54,969,042.14 |
| Investment in other equity tools | 11,968,973.86 | |
| Other non-current financial assets | 7,515,217.28 | 7,507,434.68 |
| Investment real estate | 5,760,292,920.72 | 5,760,517,577.11 |
| Fixed assets | 636,359,361.87 | 646,812,853.36 |
| Construction in process | 272,641.50 | |
| Productive biological assets | ||
| Gas & petrol | ||
| Use right assets | 19,572,056.81 | 19,449,693.40 |
| Intangible assets | 94,437,660.64 | 72,679,444.26 |
| R&D expense | ||
| Goodwill | ||
| Long-term amortizable expenses | 8,167,568.78 | 9,744,661.01 |
| Deferred income tax assets | 224,275,866.64 | 220,060,976.88 |
| Other non-current assets | 188,168,489.48 | 491,486,416.65 |
| Total of non-current assets | 6,994,031,120.28 | 7,295,197,073.35 |
| Total of assets | 12,939,324,425.23 | 12,745,185,294.02 |
| Current liabilities | ||
| Short-term loans | 1,575,882,917.01 | 1,318,238,522.78 |
| Loans from Central Bank | ||
| Call loan received | ||
| Transactional financial liabilities | ||
| Derivative financial liabilities | 1,439,675.00 | 293,400.00 |
| Notes payable | 761,789,844.33 | 734,890,208.56 |
| Account payable | 1,687,628,665.10 | 1,718,036,375.78 |
| Prepayment received | 2,640,045.93 | 1,439,653.84 |
| Contract liabilities | 111,056,258.14 | 207,993,671.55 |
| Selling of repurchased financial assets | ||
| Deposit received and held for others | ||
| Entrusted trading of securities | ||
| Entrusted selling of securities | ||
| Employees' wage payable | 36,639,314.27 | 67,150,863.91 |
| Taxes payable | 59,751,167.49 | 85,827,331.09 |
| Other payables | 109,992,243.02 | 113,425,377.70 |
| Including: interest payable | ||
| Dividend payable | ||
| Fees and commissions payable | ||
| Reinsurance fee payable |
| Liabilities held for sales | ||
| Non-current liabilities due in 1 year | 118,865,039.42 | 83,778,647.06 |
| Other current liabilities | 50,689,992.84 | 48,133,198.49 |
| Total current liabilities | 4,516,375,162.55 | 4,379,207,250.76 |
| Non-current liabilities: | ||
| Insurance contract provision | ||
| Long-term loans | 1,193,000,000.00 | 1,263,500,000.00 |
| Bond payable | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Lease liabilities | 8,553,119.00 | 6,907,456.55 |
| Long-term payable | 204,640,219.18 | 197,640,219.18 |
| Long-term employees' wage payable | ||
| Anticipated liabilities | 5,520,119.55 | 3,372,553.84 |
| Deferred earning | 8,716,557.86 | 8,999,880.44 |
| Deferred income tax liabilities | 1,060,525,339.35 | 1,065,172,771.00 |
| Other non-current liabilities | ||
| Total of non-current liabilities | 2,480,955,354.94 | 2,545,592,881.01 |
| Total liabilities | 6,997,330,517.49 | 6,924,800,131.77 |
| Owner's equity: | ||
| Share capital | 1,073,874,227.00 | 1,073,874,227.00 |
| Other equity tools | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 11,459,588.40 | 11,459,588.40 |
| Less: Shares in stock | ||
| Other miscellaneous income | 21,883,672.89 | 31,986,716.79 |
| Special reserves | ||
| Surplus reserve | 79,324,940.43 | 79,324,940.43 |
| Common risk provisions | ||
| Retained profit | 4,681,756,959.13 | 4,553,295,402.30 |
| Total of owner's equity belong to the parent company | 5,868,299,387.85 | 5,749,940,874.92 |
| Minor shareholders' equity | 73,694,519.89 | 70,444,287.33 |
| Total of owners' equity | 5,941,993,907.74 | 5,820,385,162.25 |
| Total of liabilities and owner's interest | 12,939,324,425.23 | 12,745,185,294.02 |
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua
2. Balance Sheet of the Parent Company
In RMB
| Item | June 30, 2023 | January 1, 2023 |
| Current asset: | ||
| Monetary capital | 23,334,355.42 | 87,710,288.64 |
| Transactional financial assets | ||
| Derivative financial assets | ||
| Notes receivable |
| Account receivable | 484,193.88 | 647,944.58 |
| Receivable financing | ||
| Prepayment | 25,828.57 | 277,763.31 |
| Other receivables | 1,073,141,303.92 | 1,046,500,428.02 |
| Including: interest receivable | ||
| Dividend receivable | ||
| Inventory | ||
| Contract assets | ||
| Assets held for sales | ||
| Non-current assets due in 1 year | ||
| Other current assets | 1,610,485.59 | 1,395,020.37 |
| Total current assets | 1,098,596,167.38 | 1,136,531,444.92 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term share equity investment | 1,486,831,253.00 | 1,457,331,253.00 |
| Investment in other equity tools | 11,968,973.86 | |
| Other non-current financial assets | 30,000,001.00 | 30,000,001.00 |
| Investment real estate | 333,236,768.00 | 333,236,768.00 |
| Fixed assets | 64,892,170.19 | 66,203,194.37 |
| Construction in process | ||
| Productive biological assets | ||
| Gas & petrol | ||
| Use right assets | 10,201,006.25 | 12,055,734.65 |
| Intangible assets | 887,443.37 | 1,038,211.65 |
| R&D expense | ||
| Goodwill | ||
| Long-term amortizable expenses | 295,311.04 | 393,807.16 |
| Deferred income tax assets | 34,531,293.77 | 30,304,587.98 |
| Other non-current assets | ||
| Total of non-current assets | 1,960,875,246.62 | 1,942,532,531.67 |
| Total of assets | 3,059,471,414.00 | 3,079,063,976.59 |
| Current liabilities | ||
| Short-term loans | 300,050,833.33 | 300,247,500.00 |
| Transactional financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Account payable | 823,993.04 | 803,645.08 |
| Prepayment received | 788,550.45 | 820,758.71 |
| Contract liabilities | ||
| Employees' wage payable | 1,248,465.49 | 3,444,985.79 |
| Taxes payable | 868,784.39 | 353,816.35 |
| Other payables | 360,226,113.08 | 308,443,521.52 |
| Including: interest payable | ||
| Dividend payable | ||
| Liabilities held for sales | ||
| Non-current liabilities due in 1 year | 3,747,236.76 | 3,613,300.13 |
| Other current liabilities | 27,859.15 | 25,213.92 |
| Total current liabilities | 667,781,835.69 | 617,752,741.50 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bond payable | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Lease liabilities | 7,481,056.95 | 9,401,331.72 |
| Long-term payable | ||
| Long-term employees' wage payable | ||
| Anticipated liabilities | ||
| Deferred earning | ||
| Deferred income tax liabilities | 73,837,939.59 | 74,007,022.67 |
| Other non-current liabilities | ||
| Total of non-current liabilities | 81,318,996.54 | 83,408,354.39 |
| Total liabilities | 749,100,832.23 | 701,161,095.89 |
| Owner's equity: | ||
| Share capital | 1,073,874,227.00 | 1,073,874,227.00 |
| Other equity tools | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 360,835.52 | 360,835.52 |
| Less: Shares in stock | ||
| Other miscellaneous income | -10,082,945.37 | -1,106,214.97 |
| Special reserves | ||
| Surplus reserve | 79,324,940.43 | 79,324,940.43 |
| Retained profit | 1,166,893,524.19 | 1,225,449,092.72 |
| Total of owners' equity | 2,310,370,581.77 | 2,377,902,880.70 |
| Total of liabilities and owner's interest | 3,059,471,414.00 | 3,079,063,976.59 |
3. Consolidated Income Statement
In RMB
| Item | H1 2023 | H1 2022 |
| 1. Total revenue | 2,078,846,877.32 | 1,613,063,315.30 |
| Incl. Business income | 2,078,846,877.32 | 1,613,063,315.30 |
| Interest income | ||
| Insurance fee earned | ||
| Fee and commission received | ||
| 2. Total business cost | 1,877,202,076.89 | 1,492,648,248.55 |
| Incl. Business cost | 1,624,230,468.63 | 1,259,515,842.60 |
| Interest expense | ||
| Fee and commission paid | ||
| Insurance discharge payment | ||
| Net claim amount paid | ||
| Net insurance policy responsibility reserves provided | ||
| Insurance policy dividend paid | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 22,503,741.56 | 23,203,954.56 |
| Sales expense | 28,143,556.79 | 23,296,105.78 |
| Administrative expense | 79,590,941.46 | 74,193,251.57 |
| R&D cost | 88,989,510.66 | 72,809,311.17 |
| Financial expenses | 33,743,857.79 | 39,629,782.88 |
| Including: interest cost | 48,188,161.19 | 50,244,714.46 |
| Interest income | 12,097,319.82 | 19,918,179.96 |
| Add: other gains | 8,563,782.32 | 6,768,907.75 |
| Investment gains ("-" for loss) | -2,361,833.19 | 4,595,678.43 |
| Incl. Investment gains from affiliates and joint ventures | 294.42 | -32,974.15 |
| Financial assets derecognised as a result of amortized cost | -2,362,127.61 | -1,859,057.85 |
| Exchange gains ("-" for loss) | ||
| Net open hedge gains ("-" for loss) | ||
| Gains from change of fair value ("-" for loss) | 129,892.00 | 1,180,840.01 |
| Credit impairment ("-" for loss) | 20,274,577.59 | 25,016,298.34 |
| Investment impairment loss ("-" for loss) | -14,673,904.92 | -27,659,612.75 |
| Investment gains ("-" for loss) | 373,352.08 | -815,581.50 |
| 3. Operational profit ("-" for loss) | 213,950,666.31 | 129,501,597.03 |
| Plus: non-operational income | 204,046.54 | 446,386.82 |
| Less: non-operational expenditure | 569,862.59 | 2,578,001.31 |
| 4. Gross profit ("-" for loss) | 213,584,850.26 | 127,369,982.54 |
| Less: Income tax expenses | 28,189,905.44 | 13,005,121.74 |
| 5. Net profit ("-" for net loss) | 185,394,944.82 | 114,364,860.80 |
| (1) By operating consistency | ||
| 1. Net profit from continuous operation ("-" for net loss) | 185,394,944.82 | 114,364,860.80 |
| 2. Net profit from discontinuous operation ("-" for net loss) | ||
| (2) By ownership | ||
| 1. Net profit attributable to the shareholders of the parent company | 182,155,268.18 | 112,685,273.77 |
| 2. Gains and losses of minority shareholders (net losses are shown in "-") | 3,239,676.64 | 1,679,587.03 |
| 6. After-tax net amount of other misc. incomes | -10,092,487.98 | -427,835.59 |
| After-tax net amount of other misc. incomes attributed to parent's owner | -10,103,043.90 | -450,330.27 |
| (1) Other misc. incomes that cannot be re-classified into gain and loss | -8,976,730.40 | |
| 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 | -8,976,730.40 | |
| 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 | -1,126,313.50 | -450,330.27 |
| 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 | -1,579,210.04 | -960,094.83 |
| 6. Translation difference of foreign exchange statement | 452,896.54 | 509,764.56 |
| 7. Others | ||
| After-tax net of other misc. income attributed to minority shareholders | 10,555.92 | 22,494.68 |
| 7. Total of misc. incomes | 175,302,456.84 | 113,937,025.21 |
| Total of misc. incomes attributable to the owners of the parent company | 172,052,224.28 | 112,234,943.50 |
| Total misc gains attributable to the minor shareholders | 3,250,232.56 | 1,702,081.71 |
| 8. Earnings per share: | ||
| (1) Basic earnings per share | 0.17 | 0.10 |
| (2) Diluted earnings per share | 0.17 | 0.10 |
Net profit contributed by entities merged under common control in the report period was RMB0.00, net profit realized by partiesmerged during the previous period is RMB0.00.Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua
4. Income Statement of the Parent Company
In RMB
| Item | H1 2023 | H1 2022 |
| 1. Turnover | 12,358,317.34 | 14,705,232.50 |
| Less: Operation cost | 0.00 | 418,824.01 |
| Taxes and surcharges | 659,523.84 | 655,596.71 |
| Sales expense | ||
| Administrative expense | 14,762,448.49 | 15,050,027.61 |
| R&D cost | ||
| Financial expenses | 3,690,612.01 | 6,762,805.90 |
| Including: interest cost | 3,898,333.33 | 5,419,166.67 |
| Interest income | 404,455.21 | 216,667.03 |
| Add: other gains | 78,916.83 | 72,308.39 |
| Investment gains ("-" for loss) | 431,992.15 | |
| 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) |
| Credit impairment ("-" for loss) | 398,974.45 | -12,016.02 |
| Investment impairment loss ("-" for loss) | ||
| Investment gains ("-" for loss) | -26,723.69 | |
| 2. Operational profit ("-" for loss) | -6,276,375.72 | -7,716,460.90 |
| Plus: non-operational income | 44,168.06 | 0.84 |
| Less: non-operational expenditure | 33,194.93 | 47,636.27 |
| 3. Gross profit ("-" for loss) | -6,265,402.59 | -7,764,096.33 |
| Less: Income tax expenses | -1,403,545.41 | -1,872,231.86 |
| 4. Net profit ("-" for net loss) | -4,861,857.18 | -5,891,864.47 |
| (1) Net profit from continuous operation ("-" for net loss) | -4,861,857.18 | -5,891,864.47 |
| (2) Net profit from discontinuous operation ("-" for net loss) | ||
| 5. After-tax net amount of other misc. incomes | -8,976,730.40 | |
| (1) Other misc. incomes that cannot be re-classified into gain and loss | -8,976,730.40 | |
| 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 | -8,976,730.40 | |
| 4. Fair value change of the Company's credit risk | ||
| 5. Others | ||
| (2) Other misc. incomes that will be re-classified into gain and loss | ||
| 1. Other comprehensive income that can be transferred to profit or loss under the equity method | ||
| 2. Fair value change of other debt investment | ||
| 3. Gains and losses from changes in fair value of available-for-sale financial assets | ||
| 4. Other credit investment credit impairment provisions | ||
| 5. Cash flow hedge reserve | ||
| 6. Translation difference of foreign exchange statement | ||
| 7. Others | ||
| 6. Total of misc. incomes | -13,838,587.58 | -5,891,864.47 |
| 7. Earnings per share: | ||
| (1) Basic earnings per share | ||
| (2) Diluted earnings per share |
5. Consolidated Cash Flow Statement
In RMB
| Item | H1 2023 | H1 2022 |
| 1. Net cash flow from business operations: | ||
| Cash received from sales of products and providing of services | 1,920,455,087.38 | 1,404,641,263.99 |
| 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 | 4,515,868.70 | 13,589,221.42 |
| Other cash received from business operation | 43,447,921.80 | 101,615,328.20 |
| Sub-total of cash inflow from business operations | 1,968,418,877.88 | 1,519,845,813.61 |
| Cash paid for purchasing products and services | 1,366,927,959.80 | 1,218,828,059.03 |
| 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 | 238,020,813.88 | 224,849,803.47 |
| Taxes paid | 136,324,121.29 | 88,742,682.58 |
| Other cash paid for business activities | 264,459,694.04 | 294,006,061.57 |
| Sub-total of cash outflow from business operations | 2,005,732,589.01 | 1,826,426,606.65 |
| Cash flow generated by business operations, net | -37,313,711.13 | -306,580,793.04 |
| 2. Cash flow generated by investment: | ||
| Cash received from investment recovery | 2,282,234,066.40 | |
| Cash received as investment profit | 2,513,790.26 | |
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 27,880.04 | 2,041,120.00 |
| Net cash received from disposal of subsidiaries or other operational units | ||
| Other investment-related cash received | ||
| Sub-total of cash inflow generated from investment | 27,880.04 | 2,286,788,976.66 |
| Cash paid for construction of fixed assets, intangible assets and other long-term assets | 60,206,301.90 | 19,887,603.68 |
| Cash paid as investment | 2,389,975,144.00 | |
| Net increase of loan against pledge | ||
| Net cash paid for acquiring subsidiaries and other operational units | ||
| Other cash paid for investment | ||
| Subtotal of cash outflows | 60,206,301.90 | 2,409,862,747.68 |
| Cash flow generated by investment activities, net | -60,178,421.86 | -123,073,771.02 |
| 3. Cash flow generated by financing activities: | ||
| Cash received from investment | ||
| Incl. Cash received from investment attracted by subsidiaries from minority shareholders | ||
| Cash received from borrowed loans | 1,173,858,273.98 | 1,168,411,688.20 |
| Other cash received from financing activities | ||
| Subtotal of cash inflow from financing activities | 1,173,858,273.98 | 1,168,411,688.20 |
| Cash paid to repay debts | 946,000,000.00 | 328,500,000.00 |
| Cash paid as dividend, profit, or interests | 100,394,812.98 | 102,751,331.27 |
| Incl. Dividend and profit paid by subsidiaries to minority shareholders | ||
| Other cash paid for financing activities | 68,686,816.10 | 609,596,798.70 |
| Subtotal of cash outflow from financing activities | 1,115,081,629.08 | 1,040,848,129.97 |
| Net cash flow generated by financing activities | 58,776,644.90 | 127,563,558.23 |
| 4. Influence of exchange rate changes on cash and cash equivalents | 3,710,265.08 | 3,757,947.63 |
| 5. Net increase in cash and cash equivalents | -35,005,223.01 | -298,333,058.20 |
| Plus: Balance of cash and cash equivalents at the beginning of term | 783,677,929.06 | 892,251,071.59 |
| 6. Balance of cash and cash equivalents at the end of the period | 748,672,706.05 | 593,918,013.39 |
6. Cash Flow Statement of the Parent Company
In RMB
| Item | H1 2023 | H1 2022 |
| 1. Net cash flow from business operations: | ||
| Cash received from sales of products and providing of services | 9,210,418.74 | 10,460,521.63 |
| Tax refunded | ||
| Other cash received from business operation | 2,268,519,986.44 | 1,764,596,018.97 |
| Sub-total of cash inflow from business operations | 2,277,730,405.18 | 1,775,056,540.60 |
| Cash paid for purchasing products and services | 1,697,321.13 | 981,699.47 |
| Cash paid to and for the staff | 10,382,381.77 | 11,795,461.40 |
| Taxes paid | 928,005.61 | 3,942,572.28 |
| Other cash paid for business activities | 2,241,886,586.57 | 1,647,625,265.89 |
| Sub-total of cash outflow from business operations | 2,254,894,295.08 | 1,664,344,999.04 |
| Cash flow generated by business operations, net | 22,836,110.10 | 110,711,541.56 |
| 2. Cash flow generated by investment: | ||
| Cash received from investment recovery | 845,000,000.00 | |
| Cash received as investment profit | 431,992.15 | |
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 675,000.00 | |
| Net cash received from disposal of subsidiaries or other operational units | ||
| Other investment-related cash received | ||
| Sub-total of cash inflow generated from investment | 846,106,992.15 | |
| Cash paid for construction of fixed assets, intangible assets and other long-term assets | 1,350.00 | 113,230.00 |
| Cash paid as investment | 29,500,000.00 | 845,000,000.00 |
| Net cash paid for acquiring subsidiaries and other operational units | ||
| Other cash paid for investment | ||
| Subtotal of cash outflows | 29,501,350.00 | 845,113,230.00 |
| Cash flow generated by investment activities, net | -29,501,350.00 | 993,762.15 |
| 3. Cash flow generated by financing activities: | ||
| Cash received from investment | ||
| Cash received from borrowed loans | 300,000,000.00 | 300,000,000.00 |
| Other cash received from financing activities | ||
| Subtotal of cash inflow from financing activities | 300,000,000.00 | 300,000,000.00 |
| Cash paid to repay debts | 300,000,000.00 | 300,000,000.00 |
| Cash paid as dividend, profit, or interests | 57,788,711.35 | 60,578,669.24 |
| Other cash paid for financing activities | ||
| Subtotal of cash outflow from financing activities | 357,788,711.35 | 360,578,669.24 |
| Net cash flow generated by financing activities | -57,788,711.35 | -60,578,669.24 |
| 4. Influence of exchange rate changes on cash and cash equivalents | 78,018.03 | -22,654.47 |
| 5. Net increase in cash and cash equivalents | -64,375,933.22 | 51,103,980.00 |
| Plus: Balance of cash and cash equivalents at the beginning of term | 87,460,288.64 | 111,598,536.84 |
| 6. Balance of cash and cash equivalents at the end of the period | 23,084,355.42 | 162,702,516.84 |
7. Statement of Change in Owners' Equity (Consolidated)
Amount of the Current Term
In RMB
| Item | H1 2023 | ||||||||||||||
| 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 | 1,073,874,227.00 | 11,459,588.40 | 31,986,716.79 | 79,324,940.43 | 4,553,295,402.30 | 5,749,940,874.92 | 70,444,287.33 | 5,820,385,162.25 | |||||||
| Plus: Changes in accounting policies | |||||||||||||||
| Correction of previous errors | |||||||||||||||
| Consolidation of entities under common control | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance at the beginning of current year | 1,073,874,227.00 | 11,459,588.40 | 31,986,716.79 | 79,324,940.43 | 4,553,295,402.30 | 5,749,940,874.92 | 70,444,287.33 | 5,820,385,162.25 | |||||||
| 3. Change amount in the current period (“-“ for decrease) | -10,103,043.90 | 128,461,556.83 | 118,358,512.93 | 3,250,232.56 | 121,608,745.49 | ||||||||||
| (1) Total of misc. incomes | -10,103,043.90 | 182,155,268.18 | 172,052,224.28 | 3,250,232.56 | 175,302,456.84 | ||||||||||
| (2) Investment or decreasing of capital by owners | |||||||||||||||
| 1. Common | |||||||||||||||
| shares invested 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 | -53,693,711.35 | -53,693,711.35 | -53,693,711.35 | ||||||||||||
| 1. Provision of surplus reserves | |||||||||||||||
| 2. Common risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -53,693,711.35 | -53,693,711.35 | -53,693,711.35 | ||||||||||||
| 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 | 21,883,672.89 | 79,324,940.43 | 4,681,756,959.13 | 5,868,299,387.85 | 73,694,519.89 | 5,941,993,907.74 |
Amount of Last Year
In RMB
| Item | H1 2022 | ||||||||||||||
| 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 | 1,073,874,227.00 | 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 | |||||||
| Plus: Changes in accounting policies | |||||||||||||||
| Correction of previous errors | |||||||||||||||
| Consolidation of entities under common control | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance at the beginning of | 1,073,874,22 | 11,459,588.4 | 35,325,871.7 | 79,324,940.4 | 4,324,055,25 | 5,524,039,88 | 67,166,031.6 | 5,591,205,91 | |||||||
| current year | 7.00 | 0 | 8 | 3 | 9.33 | 6.94 | 6 | 8.60 | |||||||
| 3. Change amount in the current period (“-“ for decrease) | -450,330.27 | 58,991,562.42 | 58,541,232.15 | 1,702,081.71 | 60,243,313.86 | ||||||||||
| (1) Total of misc. incomes | -450,330.27 | 112,685,273.77 | 112,234,943.50 | 1,702,081.71 | 113,937,025.21 | ||||||||||
| (2) Investment or decreasing of capital by owners | |||||||||||||||
| 1. Common shares invested 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 | -53,693,711.35 | -53,693,711.35 | -53,693,711.35 | ||||||||||||
| 1. Provision of surplus reserves | |||||||||||||||
| 2. Common risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -53,693,711.35 | -53,693,711.35 | -53,693,711.35 | ||||||||||||
| 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 | 34,875,541.51 | 79,324,940.43 | 4,383,046,821.75 | 5,582,581,119.09 | 68,868,113.37 | 5,651,449,232.46 |
8. Statement of Change in Owners' Equity (Parent Company)
Amount of the Current Term
In RMB
| Item | H1 2023 | |||||||||||
| 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 | 1,073,874,227.00 | 360,835.52 | -1,106,214.97 | 79,324,940.43 | 1,225,449,092.72 | 2,377,902,880.70 | ||||||
| Plus: Changes in accounting policies | ||||||||||||
| Correction of previous errors | ||||||||||||
| Others | ||||||||||||
| 2. Balance at the beginning of current year | 1,073,874,227.00 | 360,835.52 | -1,106,214.97 | 79,324,940.43 | 1,225,449,092.72 | 2,377,902,880.70 | ||||||
| 3. Change amount in the current period (“-“ for decrease) | -8,976,730.40 | -58,555,568.53 | -67,532,298.93 | |||||||||
| (1) Total of misc. incomes | -8,976,730.40 | -4,861,857.18 | -13,838,587.58 | |||||||||
| (2) Investment or decreasing of capital by owners | ||||||||||||
| 1. Common shares invested 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 | -53,693,711.35 | -53,693,711.35 | ||||||||||
| 1. Provision of surplus reserves | ||||||||||||
| 2. Distribution to owners (or | -53,693,711. | -53,693,711. |
| shareholders) | 35 | 35 | ||||||||||
| 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 | -10,082,945.37 | 79,324,940.43 | 1,166,893,524.19 | 2,310,370,581.77 |
Amount of Last Year
In RMB
| Item | H1 2022 | |||||||||||
| 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 | 1,073,874,227.00 | 360,835.52 | -520,786.11 | 79,324,940.43 | 1,290,879,760.71 | 2,443,918,977.55 | ||||||
| Plus: Changes in accounting policies | ||||||||||||
| Correction of previous errors | ||||||||||||
| Others | ||||||||||||
| 2. Balance at the beginning of current year | 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 | ||||||
| 3. Change amount in the current period (“-“ for decrease) | -59,585,575.82 | -59,585,575.82 | ||||||||||
| (1) Total of misc. incomes | -5,891,864.47 | -5,891,864.47 | ||||||||||
| (2) Investment or decreasing of capital by owners | ||||||||||||
| 1. Common shares invested 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 | -53,693,711.35 | -53,693,711.35 | ||||||||||
| 1. Provision of surplus |
| reserves | ||||||||||||
| 2. Distribution to owners (or shareholders) | -53,693,711.35 | -53,693,711.35 | ||||||||||
| 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 | 1,231,294,184.89 | 2,384,333,401.73 |
III. General Information
China Fangda Group Co., Ltd. (the "Company" or the "Group") is a joint stock company registered in Shenzhen,Guangdong and was approved by the Government of Shenzhen with Document 深府办函 (1995) 194号, and was founded, on the
basis of Shenzhen Fangda Construction Material Co., Ltd., by way of share issuing in October 1995. The unified social credit codeis: 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 1995and April 1996 respectively in Shenzhen Stock Exchange. The Company received the Reply to the Non-public Share Issuance ofFangda China Group Co., Ltd. (CSRC License [2016] No.825) to allow the Company to conduct non-public issuance of32,184,931 A-shares in June 20116. According to the profit distribution plan for 2016 approved by the 2016 general shareholders'meeting, the Company issued five shares for every ten shares to all shareholders through surplus capitalization based on the total789,094,836 shares on December 31, 2016. The registered capital at the end of 2017 was RMB 1,183,642,254.00. The Companyrepurchased and cancelled 28,160,568.00 B shares in August 2018, 32,097,497.00 B shares in January 2019, 35,105,238.00 Bshares in May 2020, 14404724.00 B shares in April 2021 and cancelled in April 2021. The existing registered capital isRMB1,073,874,227.00 yuan.The Company has established the corporate governance structure of the General Meeting of Shareholders, the Board ofDirectors and the Board of Supervisors. At present, it has set up the President's Office, the Administration Department, the HumanResources Department, the Enterprise Management Department, the Finance Department, the Audit and Supervision Department,the Securities Department, the Legal Department, the Information Management Department, the Technology InnovationDepartment, the Development Planning Department and other departments, and has Shenzhen Fangda Construction TechnologyGroup Co., Ltd. (hereinafter referred to as Fangda Construction Technology Co., Ltd.) Fangda Zhiyuan Technology Co., Ltd.(hereinafter referred to as Fangda Zhiyuan Technology Co., Ltd.), Fangda Jiangxi New Materials Co., Ltd., Fangda Real EstateCo., Ltd., Fangda New Energy Co., Ltd. and other subsidiaries.The business nature and main business activities of the Company and its subsidiaries include: (1) curtain wall division,production and sales of curtain wall materials, design, production and installation of building curtain walls, and curtain wall testingand maintenance services; (2) Rail transit branch, assembly and processing of subway screen doors, screen door detection andmaintenance services; (3) The real estate division is engaged in real estate development, operation and property management onthe land that has legally obtained the right to use; (4) New energy division, photovoltaic power generation and sales; R&D,installation and sales of photovoltaic equipment, design and installation of photovoltaic power station project.Date of financial statement approval: This financial statement is approved by the Board of Directors of the Company onAugust 25, 2023.
The total number of subsidiaries included in the consolidation scope of the Company in this period is 34, and there are nochange and subsidiaries in consolidation scope in this period. Please refer to "Section X, VIII. Changes in the ConsolidationScope" and "Section X, IX. Interests in Other Entities" for details.IV. Basis for the preparation of financial statements
1. Preparation basis
The Company prepares the financial statements based on continuous operation and according to actual transactions andevents, with figures confirmed and measured in compliance with the Accounting Standards for Business Enterprises and otherspecific account standards, application guide and interpretations. The Company has also disclosed related financial informationaccording to the requirement of the Regulations of Information Disclosure No.15 – General Provisions for Financial Statements(Revised in 2014) issued by the CSRC.
2. Continuous operation
The Company assessed the continuing operations capability of the Company for the 12 months from the end of the reportingperiod. No matters were found that would affect the Company's ability to continue as a going concern. It is reasonable for theCompany to prepare financial statements based on continuing operations.
V. Significant Account Policies and EstimatesSpecific accounting policy and estimate prompt:
The following major accounting policies and accounting estimates shall be formulated in accordance with the accountingstandards of the enterprise. Unmentioned operations are carried out in accordance with the relevant accounting policies in theenterprise accounting standards.
1. Statement of compliance to the Enterprise Accounting Standard
These financial statements meet the requirements of the Accounting Standards for Business Enterprises and truly and fullyreflect the Company's financial status, performance result, changes in shareholders' equity and cash flows.
2. Fiscal Period
The Company The fiscal period ranges between January 1 and December 31 of the Gregorian calendar.
3. Operation period
Our normal business cycle is one year
4. Bookkeeping standard money
The Company's bookkeeping standard currency is Renminbi, and overseas subsidiaries are based on the currency of themain 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 value of thecombined party in the consolidated financial statements of the ultimate controlling party on the date of combination. Among them,if the accounting policy adopted by the merger party is different from that adopted by the Company before the merger, theaccounting policy is unified based on the principle of importance, that is, the book value of the assets and liabilities of the mergerparty is adjusted according to the accounting policy of the Company. If there is a difference between the book value of the netassets acquired by the Company in the business combination and the book value of the consideration paid, first adjust the balanceof the capital reserve (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-step transactions, seeChapter X, V. important accounting policies and accounting estimates. 6. Preparation method of 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 at its fair value on thedate of purchase. Among them, if the accounting policy adopted by the merger party is different from that adopted by theCompany before the merger, the accounting policy is unified based on the principle of importance, that is, the book value of theassets and liabilities of the merger party is adjusted according to the accounting policy of the Company. The merger cost of theCompany on the date of purchase is greater than the fair value of the assets and liabilities recognized by the purchaser in themerger, and is recognized as goodwill. If the merger cost is less than the difference between the identifiable assets and the fairvalue of the liabilities obtained by the purchaser in the enterprise merger, the merger cost and the fair value of the identifiableassets and the liabilities obtained by the purchaser in the enterprise merger are reviewed, and the merger cost is still less than the
fair value of the identifiable assets and liabilities obtained by the purchaser after the review, the difference is considered as theprofit and loss of the current period of the merger.For the accounting treatment method of business combination not under the same control through step-by-step transactions,see Chapter X, V. important accounting policies and accounting estimates. 6. Preparation method of consolidated financialstatements (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 services occurred relatingto the merger of entities are accounted into current income account when occurred. The transaction fees of equity certificates orliability certificates issued by the purchaser for payment for the acquisition are accounted at the initial amount of the certificates.
6. Preparation of Consolidated Financial Statements
(1) Consolidation scope
The consolidated scope of the consolidated financial statements is determined on a control basis and includes not onlysubsidiaries determined on the basis of voting rights (or similar voting rights) themselves or in conjunction with otherarrangements, but also structured subjects determined on the basis of one or more contractual arrangements.Control means the power possessed by the Company on invested entities to share variable returns by participating in relatedactivities of the invested entities and to impact the amount of the returns by using the power. The subsidiary company is thesubject controlled by the Company (including the enterprise, the divisible part of the invested unit and the structured subjectcontrolled by the enterprise, etc.). The structured subject is the subject which is not designed to determine the controlling party bytaking the voting right or similar right as the decisive factor.
(2) Preparation of Consolidated Financial Statements
The Company prepares consolidated financial statements based on the financial statements of itself and its subsidiaries andbased on other relevant information.
The Company compiles consolidated financial statements, regards the whole enterprise group as an accounting entity,reflects the overall financial status, operating results and cash flow of the enterprise group according to the confirmation,measurement and presentation requirements of the relevant enterprise accounting standards, and the unified accounting policy andaccounting period.
① Merge the assets, liabilities, owner's rights and interests, income, expenses and cash flow of parent company andsubsidiary company.
② Offset the long-term equity investment of the parent company to the subsidiary company and the share of the parentcompany in the ownership rights of the subsidiary company.
③ Offset the influence of internal transaction between parent company, subsidiary company and subsidiary company. If aninternal transaction indicates that the relevant asset has suffered an impairment loss, the part of the loss shall be confirmed in full.
④ adjust the special transaction from the angle of enterprise group.
(3) Processing of subsidiaries during the reporting period
① Increase of subsidiaries or business
A. Subsidiary or business increased by business combination under the same control
(A) When preparing the consolidated balance sheet, adjust the opening number of the consolidated balance sheet and adjustthe related items of the comparative statement. The same report entity as the consolidated balance sheet will exist from the time ofthe final control party.
(B) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the business combinationfrom the beginning of the current period to the end of the reporting period are included in the consolidated cash flow statement,and the related items of the comparative statement are adjusted, which is regarded as the combined report body since the final Thecontroller has been there since the beginning of control.
(C) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the business combinationfrom the beginning of the current period to the end of the reporting period are included in the consolidated cash flow statement,and the related items of the comparative statement are adjusted, which is regarded as the combined report body since the final Thecontroller 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 sheet is not adjusted.
(B) When preparing the consolidated profit statement, the income, expense and profit of the subsidiary company and thebusiness Purchase date and Closing balance shall be included in the consolidated profit statement.
(C) When the consolidated cash flow statement is prepared, the cash flow from the purchase date of the subsidiary to theend 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 sheet is not adjusted.
B. When preparing the consolidated profit statement, the income, expense and profit of the subsidiary company and thebusiness opening and disposal date shall be included in the consolidated profit statement.
C. When the consolidated cash flow statement is prepared, the cash flow from the Beginning of the period of the subsidiaryto 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 shares of the Companyas a subtraction of the owner's rights and interests, which shall be listed under the item of "subtraction: Stock shares" under theitem 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 shareholders of the subsidiaries.
② The "special reserve" and "general risk preparation" projects, because they are neither real capital (or share capital) norcapital reserve, but also different from the retained income and undistributed profits, are restored according to the ownership of theparent company after the long-term equity investment is offset by the ownership rights and interests of the subsidiary company.
③ If there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet andthe taxable basis of the taxpayer due to the offset of the unrealized internal sales gain or loss, the deferred income tax asset or thedeferred income tax liability is confirmed in the consolidated balance sheet, and the income tax expense in the consolidated profitstatement is adjusted, with the exception of the deferred income tax related to the transaction or event directly included in theowner's equity and the merger of the enterprise.
④ The unrealized internal transaction gains and losses incurred by the Company from selling assets to subsidiaries shall befully offset against the "net profit attributable to the owners of the parent company". The unrealized internal transaction gains andlosses arising from the sale of assets by the subsidiary to the Company shall be offset between the "net profit attributable to theowners of the parent company" and the "minority shareholder gains and losses" in accordance with the Company's distributionratio to the subsidiary. The unrealized internal transaction gains and losses arising from the sale of assets between subsidiaries
shall be offset between the "net profit attributable to the owners of the parent company" and the "minority shareholders' gains andlosses" 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 minority shareholders inthe owner 's equity of the subsidiary at the beginning of the period, the balance should still be offset against the minorityshareholders 'equity.
(5) Accounting treatment of special transactions
① Purchase minority shareholders' equity
The Company purchases the shares of the subsidiaries owned by the minority shareholders of the subsidiaries. In theindividual financial statements, the investment costs of the newly acquired long-term investments of the minority shares shall bemeasured at the fair value of the price paid. In the consolidated financial statements, the difference between the newly acquiredlong-term equity investment due to the purchase of minority equity and the share of net assets that should be continuouslycalculated by the subsidiary since the purchase date or the merger date should be adjusted according to the new shareholding ratio.The product (capital premium or equity premium), if the capital reserve is insufficient to offset, the surplus reserve andundistributed profits are offset in turn.
② Step-by-step acquisition of control of the subsidiary through multiple transactions
A. Enterprise merger under common control through multiple transactions
On the date of the merger, the Company determines the initial investment cost of the long-term equity investment in theindividual financial statements based on the share of the subsidiary 's net assets that should be enjoyed after the merger in the finalcontroller 's consolidated financial statements; the initial investment cost and the The difference between the book value of thelong-term equity investment before the merger plus the book value of the consideration paid for new shares acquired on the mergerdate, the capital reserve (capital premium or equity premium) is adjusted, and the capital reserve (capital premium or equitypremium) is insufficient to offset Reduced, in turn offset the surplus reserve and undistributed profits.
In consolidated financial statements, assets and liabilities obtained by the merging party from the merged party should bemeasured at the book value in the final controlling party's consolidated financial statements other than the adjustment made due todifferences in accounting policies; adjust the capital surplus (share premium) according to the difference between the initialinvestment cost and the book value of the held investment before merger plus the book value of the consideration paid on themerger 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 is accounted foraccording to the equity method, the date of acquiring the original equity and the merging party and the merged party are in thesame party's final control from the later date to the merger date The relevant gains and losses, other comprehensive income andother changes in owner's equity have been confirmed between them, and the retained earnings at the beginning of the comparativestatement period should be offset separately.A. Enterprise merger under common control through multiple transactionsOn the merger day, in individual financial statements, the initial investment cost of the long-term equity investment on themerger day is based on the book value of the long-term equity investment previously held plus the sum of the additionalinvestment costs on the merger day.
In the consolidated financial statements, the equity of the purchaser held prior to the date of purchase is revalued accordingto the fair value of the equity at the date of purchase, and the difference between the fair value and its book value is credited to thecurrent investment income; If the shares held by the purchaser prior to the date of purchase involve other consolidated gains underthe equity law accounting, the other consolidated gains related thereto shall be converted to the current gains on the date ofpurchase, with the exception of the other consolidated gains arising from the remeasurement of the net assets or net liabilities ofthe merged party. The Company disclosed in the notes the fair value of the equity of the purchased party held before the purchasedate 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 control
The parent company partially disposes of the long-term equity investment in the subsidiary company without losing control.In the consolidated financial statements, the disposal price corresponds to the disposal of the long-term equity investment. Thedifference between the shares is adjusted for the capital reserve (capital premium or equity premium). If the capital reserve isinsufficient to offset, the retained earnings are adjusted.
④ The Company disposes of long-term equity investment in subsidiaries and loses control
A. One transaction disposition
If the Company loses control over the Invested Party due to the disposal of part of the equity investment, it shall remeasurethe remaining equity according to its fair value at the date of loss of control when compiling the consolidated financial statement.The sum of the consideration obtained from the disposal of equity and the fair value of the remaining equity minus the differencebetween the share of the original subsidiary 's net assets that should be continuously calculated from the purchase date or themerger date, calculated as the loss of control The investment income of the current period.
Other comprehensive income and other owner's equity changes related to the equity investment of the atomic company aretransferred to the current profit and loss when the control is lost, except for other comprehensive income arising from theremeasurement of the net benefits or net assets of the defined benefit plan by the investee. .B. Multi-transaction step-by-step dispositionIn consolidated financial statements, you should first determine whether a step-by-step transaction is a "blanket transaction".If the step-by-step transaction does not belong to a "package deal", in the individual financial statements, for eachtransaction before the loss of control of the subsidiary, the book value of the long-term equity investment corresponding to eachdisposal of equity is carried forward, the price received and the disposal The difference between the book value of the long-termequity investment is included in the current investment income; in the consolidated financial statements, it should be handled inaccordance with the relevant provisions of "the parent company disposes of the long-term equity investment in the subsidiarywithout losing control."If a step-by-step transaction belongs to a "blanket transaction", the transaction shall be treated as a transaction that disposesof the subsidiary and loses control; In individual financial statements, the difference between each disposal price before the loss ofcontrol and the book value of the long-term equity investment corresponding to the equity being disposed of is first recognized asother consolidated gains and then converted to the current loss of control at the time of the loss of control; In the consolidatedfinancial statements, for each transaction prior to the loss of control, the difference between the disposition of the price and thedisposition of the investment corresponding to the share in the net assets of the subsidiary shall be recognized as otherconsolidated gains and shall, at the time of the loss of control, be transferred to the loss of control for the current period.Where the terms, conditions, and economic impact of each transaction meet one or more of the following conditions,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 occurance of at least another transaction;
(d) A single transaction is not economic and is economic when considered together with other transactions.
(5) Proportion of minority shareholders in factor companies who increase capital and dilute ownership of parent companies
Proportion of Others ( minority shareholders in factor companies who increase capital , dilute Subsidiaries of parentcompanies. In the consolidated financial statements, the share of the parent company in the net book assets of the former
subsidiary of the capital increase is calculated according to the share ratio of the parent company before the capital increase, thedifference between the share and the net book assets of the latter subsidiary after the capital increase is calculated according to theshare ratio of the parent company, the capital reserve (capital premium or capital premium), the capital reserve (capital premium orcapital premium) is not offset, and the retained income is adjusted.
7. Recognition of cash and cash equivalents
Cash refers to cash in stock and deposits that can be used for payment at any time. Cash equivalents refer to investmentswith a short holding period (generally referring to expiry within three months from the date of purchase), strong liquidity, easy toconvert 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 the bookkeepingstandard currency at the spot exchange rate on the transaction date.
(2) Methods of conversion of foreign currency currency currency items on balance sheet days
At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balance sheet date. Theexchange differences caused by the difference in exchange rates on the balance sheet date and initial recognizing date or previousbalance sheet date are included in the current profits and losses. Non-monetary items accounted in foreign currency and onhistorical costs are exchanged with the spot exchange rate on the transaction date. Non-monetary items accounted in foreigncurrency and on fair value are exchanged with the spot exchange rate on the determination date of the fair value. The exchangedifference between the accounting standard-currency amount and the original accounting standard-currency amount are includedin the current profits and losses.
(3) Translation of foreign exchange statements
Prior to the conversion of the financial statements of an enterprise's overseas operations, the accounting period and policy ofthe overseas operations should be adjusted to conform to the accounting period and policy of the enterprise. The financialstatements of the corresponding currency (other than the functional currency) should be prepared according to the adjustedaccounting policy and the accounting period. The financial statements of the overseas operations should be converted according tothe following methods:
① The assets and liabilities items in the balance sheet are translated at the spot exchange rate on the balance sheet date.Except for the "undistributed profits" items, the owner's equity items are translated at the spot exchange rate when they occur.
② The income and expense items in the profit statement are converted at the spot exchange rate on the transaction date orthe 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 immediate exchange rateor the approximate exchange rate at the date of the cash flow. The impact of exchange rate changes on cash should be used as anadjustment item and presented separately in the cash flow statement.
④ During the preparation of the consolidated financial statements, the resulting foreign currency financial statementconversion variance is presented separately under the owner's equity item in the consolidated balance sheet.
When foreign operations are disposed of and the control rights are lost, the difference in foreign currency statements relatedto the overseas operations that are listed in the shareholders' equity items in the balance sheet is transferred to the profit or loss forthe current period, either in whole or in proportion to the disposal of the foreign operations.
9. Financial instrument
Financial instrument refers to a company's financial assets and contracts that form other units of financial liabilities orequity 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 instrument contract.
Financial asset is derecognized when:
① The contractual right to receive the cash flows of the financial assets is terminated;
② The financial asset is transferred and meets the following derecognition condition.
If the current obligation of a financial liability (or part of it) has been discharged, the Company derecognises the financialliability (or part of the financial liability). When the Company (borrower) and lender enter into an agreement to replace theoriginal financial liabilities by undertaking new financial liabilities and the contract terms for the new financial liabilities areessentially different from those for the original one, the original financial liabilities will be derecognized and new financialliabilities will be recognized. Where the Company makes substantial amendments to the contract terms of the original financial
liability (or part thereof), it shall terminate the original financial liability and confirm a new financial liability in accordance withthe amended terms.Financial asset transactions in regular ways are recognized and de-recognized on the transaction date. The conventional saleof financial assets means the delivery of financial assets in accordance with the contractual terms and conditions, at the time setout in the regulations or market practices. Transaction date refers to the date when the Company promises to buy or sell financialassets.
(2) Classification and subsequent measurement of financial assets
At initial recognition, the Company classifies financial assets into the following three categories based on the businessmodel of managing financial assets and the contractual cash flow characteristics of financial assets: financial assets measured atamortized cost are measured at fair value and their changes are included in other financial assets with current profit and loss andfinancial assets measured at fair value through profit or loss. Unless the Company changes the business model for managingfinancial assets, in this case, all affected financial assets are reclassified on the first day of the first reporting period after thebusiness model changes, otherwise the financial assets may not be initially confirmed.Financial assets are measured at the fair value at the initial recognition. For financial assets measured at fair value withvariations accounted into current income account, related transaction expenses are accounted into the current income. For otherfinancial assets, the related transaction expenses are accounted into the initial recognized amounts. Bills receivable and accountsreceivable arising from the sale of commodities or the provision of labor services that do not contain or do not consider significantfinancing components, the Company performs initial measurement according to the transaction price defined by the incomestandard.The subsequent measurement of financial assets depends on their classification:
① Financial assets measured at amortized cost
Financial assets that meet the following conditions at the same time are classified as financial assets measured at amortizedcost: The Company 's business model for managing this financial asset is to collect contractual cash flows as its goal; the contractterms of the financial asset stipulate that Cash flow is only the payment of principal and interest based on the outstanding principalamount. For such financial assets, the actual interest rate method is used for subsequent measurement according to the amortizedcost. The gains or losses 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 assets measured at fair valueand their changes are included in other comprehensive income: The Company's business model for managing this financial asset isto both target the collection of contractual cash flows and the sale of financial assets. Objective; The contractual terms of thefinancial asset stipulate that the cash flow generated on a specific date is only for the payment of principal and interest based onthe outstanding principal amount. For such financial assets, fair value is used for subsequent measurement. Except for impairmentlosses or gains and 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 accumulated gains or losses aretransferred to current gains and losses. However, the relevant interest income of the financial asset calculated by the actual interestrate method is included in the current profit and loss.The Company irrevocably chooses to designate a portion of non-tradable equity instrument investment as a financial assetmeasured at fair value and whose variation is included in other consolidated income. Only the relevant dividend income isincluded in the current profit and loss, and the variation of fair value is recognized as other consolidated income.
③ Financial assets measured at fair value with variations accounted into current income account
The above financial assets measured at amortized cost and other financial assets measured at fair value and whose changesare included in other comprehensive income are classified as financial assets measured at fair value and whose changes areincluded in the current profit and loss. For such financial assets, fair value is used for subsequent measurement, and all changes infair 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 their changes included in thecurrent profit and loss, loan commitments and financial guarantee contract liabilities for loans below market interest rates, andfinancial liabilities measured at amortized cost.
The subsequent measurement of financial liabilities depends on their classification:
① Financial liabilities measured at fair value with variations accounted into current income account
Such financial liabilities include transactional financial liabilities (including derivatives that are financial liabilities) andfinancial liabilities designated as at fair value through profit or loss. After the initial recognition, the financial liabilities aresubsequently measured at fair value. Except for the hedge accounting, the gains or losses (including interest expenses) arerecognized in profit or loss. However, for the financial liabilities designated as fair value and whose variations are included in theprofits and losses of the current period, the variable amount of the fair value of the financial liability due to the variation of credit
risk of the financial liability shall be included in the other consolidated income. When the financial liability is terminated, thecumulative gains and losses previously included in the other consolidated income shall be transferred out of the other consolidatedincome 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 with establishedcontract terms within the commitment period. Loan commitments are provided for impairment losses based on the expected creditloss model.A financial guarantee contract refers to a contract that requires the Company to pay a specific amount of compensation tothe contract holder who suffered a loss when a specific debtor is unable to repay the debt in accordance with the original ormodified debt instrument terms. Financial guarantee contract liabilities are subsequently measured based on the higher of the lossreserve amount determined in accordance with the principle of impairment of financial instruments and the initial recognitionamount after deducting the accumulated amortization amount determined in accordance with the revenue recognition principle.
③ Financial liabilities measured at amortized cost
After initial recognition, other financial liabilities are measured at amortized cost using the effective interest method.
Except in special circumstances, financial liabilities and equity instruments are distinguished according to the followingprinciples:
① If the Company cannot unconditionally avoid delivering cash or other financial assets to fulfill a contractual obligation,the contractual obligation meets the definition of financial liability. While some financial instruments do not explicitly containterms and conditions for the delivery of cash or other financial assets, they may indirectly form contractual obligations throughother terms and conditions.
If a financial instrument is required to be settled with or can be settled with the Company's own equity instruments, theCompany's own equity instrument used to settle the instrument needs to be considered as a substitute for cash or other financialassets or for the holder of the instrument to enjoy the remaining equity in the assets after all liabilities are deducted. If it is theformer, the instrument is the financial liabilities of the issuer; if it is the latter, the instrument is the equity instrument of the issuer.In some cases, a financial instrument contract provides that the Company shall or may use its own instrument of interest, in whichthe amount of a contractual right or obligation is equal to the amount of the instrument of its own interest which may be acquiredor delivered multiplied by its fair value at the time of settlement, whether the amount of the contractual right or obligation is fixed
or is based entirely or in part on a variation of a variable other than the market price of the instrument of its own interest, such asthe rate of interest, the price of a commodity or the price of a financial instrument, the contract is classified as a financial liability.
(4) Derivative financial instruments and embedded derivatives
Derivative financial instruments are initially measured at the fair value of the day when the derivative transaction contract issigned, and are subsequently measured at their fair values. Derivative financial instruments with a positive fair value arerecognized as asset, and instruments with a negative fair value are recognized as liabilities.The gains and losses arising from the change in fair value of derivatives are directly included in the profits and losses of thecurrent period, except that the part of the cash flow that is valid in the hedge is included in the other consolidated income andtransferred out when the hedged item affects the gain and loss of the current period.
For a hybrid instrument containing an embedded derivative instrument, if the principal contract is a financial asset, thehybrid instrument as a whole applies the relevant provisions of the financial asset classification. If the main contract is not afinancial asset, and the hybrid instrument is not measured at fair value and its changes are included in the current profit and lossfor accounting, the embedded derivative does not have a close relationship with the main contract in terms of economiccharacteristics and risks, and it is If the instruments with the same conditions and exist separately meet the definition of derivativeinstruments, 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 subsequent balance sheet datecannot be measured separately, the hybrid instrument as a whole is designated as a financial asset or financial liability measured atfair 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 assets measured atamortization costs, creditor's rights investments measured at fair value, contractual assets, leasing receivables, loan commitmentsand 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 that are weighted by therisk of default. Credit loss refers to the difference between all contractual cash flows receivable from the contract and all cashflows expected to be received by the Company at the original actual interest rate, that is, the present value of all cash shortages.Among them, the financial assets which have been purchased or born by the Company shall be discounted according to the actualrate of credit adjustment of the financial assets.
The expected lifetime credit loss is the expected credit loss due to all possible default events during the entire expected lifeof the financial instrument.Expected credit losses in the next 12 months are expected to result from possible defaults in financial instruments within 12months after the balance sheet date (or estimated duration of financial instruments if the expected duration is less than 12 months)Credit losses are part of the expected lifetime credit loss.On each balance sheet day, the Company measures the expected credit losses of financial instruments at different stages.Where the credit risk has not increased significantly since the initial confirmation of the financial instrument, it is in the first stage.The Company measures the preparation for loss according to the expected credit loss in the next 12 months. Where the credit riskhas increased significantly since the initial confirmation but the credit impairment has not occurred, the financial instrument is inthe second stage. Where a credit impairment has occurred since the initial confirmation of the financial instrument, it shall be inthe third stage, and the Company shall prepare for measuring the expected credit loss of the whole survival period of theinstrument.For financial instruments with low credit risk on the balance sheet date, the Company assumes that the credit risk has notincreased significantly since the initial recognition, and measures the loss provision based on the expected credit losses in the next12 months.For financial instruments that are in the first and second stages and with lower credit risk, the Company calculates interestincome based on their book balances and actual interest rates without deduction for impairment provision. For financialinstruments in the third stage, interest income is calculated based on the amortized cost and the actual interest rate after the bookbalance minus the provision for impairment.Regarding bills receivable, accounts receivable and financing receivables, regardless of whether there is a significantfinancing component, the Company measures the loss provision based on the expected credit losses throughout 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 toconfirm expected credit losses and prepare individual impairment. For notes receivable, accounts receivable, other receivables,financing of receivables, long-term receivables, and contract assets for which there is no objective evidence of impairment, orwhen individual financial assets cannot be assessed at a reasonable cost, the Company divides bills receivable, accounts receivable,other receivables, receivable financing, long-term receivables, and contract assets into several combinations based on credit risk
characteristics, and calculates expected credit losses on the basis of the combination. The basis for determining the combination isas 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 BillFor Notes receivable divided into portfolios, the Company refers to historical credit loss experience, combined with currentconditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit lossrate within the next 12 months or the entire duration Expected credit losses.The basis for determining the combination of accounts receivable is as follows:
Accounts receivable combination 1 Accounts receivable businessAccounts receivable combination 2 Real estate receivable businessAccounts receivable combination 3 Others receivable businessOther receivable portfolio 4 Receivables from related parties within the scope of consolidationFor the accounts receivable divided into a combination, the Company refers to the historical credit loss experience,combined with the current situation and the forecast of the future economic situation, compiles the account receivable age and thewhole 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 receivablePortfolio of other receivables 2 Dividends receivableOther combinations of receivables 3 Deposit and margin receivableOther receivable portfolio 4 Receivable advancesCombination of other receivables 5 Value-added tax receivable is increased and refundedOther receivable portfolio 6 Receivables from related parties within the scope of consolidationOther receivables portfolio 7 Other receivables
For other receivables divided into portfolios, the Company refers to historical credit loss experience, combined with currentconditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit lossrate within the next 12 months or the entire duration Expected credit losses.
The basis for determining the combination of receivables financing is as follows:
Receivables financing portfolio 1 bank acceptance bill
For Notes receivable divided into portfolios, the Company refers to historical credit loss experience, combined with currentconditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit lossrate within the next 12 months or the entire duration Expected credit losses.
The basis for determining the portfolio of contract assets is as follows:
Contract assets portfolio 1 conditional collection right of 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 currentconditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit lossrate within the next 12 months or the entire duration Expected credit losses.
Other debt investment
For other receivables divided into portfolios, the Company refers to historical credit loss experience, combined with currentconditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit lossrate within the next 12 months or the entire duration Expected credit losses.
② Lower credit risk
If the risk of default on financial instruments is low, the borrower's ability to meet its contractual cash flow obligations inthe short term is strong, and even if the economic situation and operating environment are adversely changed over a long period oftime, it may not necessarily reduce the receivables' performance of their contractual cash. The ability of the flow obligation, thefinancial instrument is considered to have a lower credit risk.
③ Significant increase in credit risk
The Company compares the default probability of the financial instrument during the expected lifetime determined by thebalance sheet date with the default probability of the expected lifetime during the initial confirmation to determine the relativeprobability of the default probability of the financial instrument during the expected lifetime Changes to assess whether the creditrisk of financial instruments has increased significantly since initial recognition.In determining whether the credit risk has increased significantly since the initial recognition, the Company considersreasonable and evidenced information, including forward-looking information, that can be obtained without unnecessaryadditional 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 significant changes in thedebtor's ability to perform its debt service obligations;
C. Whether the actual or expected operating results of the debtor have changed significantly; whether the regulatory,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 the guarantee provided by athird party or the quality of credit enhancement. These changes are expected to reduce the debtor's economic motivation forrepayment within the time limit specified in the contract or affect the probability of default;
E. Whether there is a significant change in the economic motivation that is expected to reduce the debtor's repaymentaccording to the contractual deadline;
F. Anticipated changes to the loan contract, including whether the expected violation of the contract may result in theexemption or revision of contract obligations, granting interest-free periods, rising interest rates, requiring additional collateral orguarantees, or making other changes to the contractual framework of financial instruments change;
G. Whether the expected performance and repayment behavior of the debtor has changed significantly;
H. Whether the contract payment is overdue for more than (including) 30 days.
Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantly on thebasis of a single financial instrument or combination of financial instruments. When conducting an assessment based on acombination of financial instruments, the Company can classify financial instruments 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 financial instruments hasincreased significantly. Unless the Company does not have to pay excessive costs or efforts to obtain reasonable and warrantedinformation, it proves that although it has exceeded the time limit of 30 days agreed upon in the Contract, credit risks have notincreased 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 and credit investmentsmeasured at fair value and whose changes are included in other comprehensive income have undergone credit impairment. Whenone or more events that adversely affect the expected future cash flows of a financial asset occur, the financial asset becomes afinancial asset that has suffered a credit impairment. Evidence that credit impairment has occurred in financial assets includes thefollowing observable information:
Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor, such as payment ofinterest or default or overdue of principal; (B) The concession that the debtor would not make under any other circumstances foreconomic or contractual considerations relating to the financial difficulties of the debtor; The debtor is likely to be bankrupt orundertake other financial restructuring; The financial difficulties of the issuer or debtor lead to the disappearance of the activemarket for the financial asset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that acredit loss 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 of the loss provision resultingtherefrom is included as an impairment loss or gain. Current profit and loss. For financial assets measured at amortized cost, theloss allowance offsets the book value of the financial asset listed on the balance sheet; for debt investments measured at fair valueand whose changes are included in other comprehensive income, the Company Recognition of its loss provisions in gains does notoffset the book value of the financial asset.
⑥ Canceled
If it is no longer reasonably expected that the contract cash flow of the financial assets will be fully or partially recovered,the book balance of the financial assets will be directly reduced. Such write-off constitute the derecognition of related financialassets. This usually occurs when the Company determines that the debtor has no assets or sources of income that generatesufficient cash flow to cover the amount that will be written down.
If the financial assets that have been written down are recovered in the future, the reversal of the impairment loss is includedin 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 contractual right to collect the cashflow of the financial assets and undertakes the contractual obligation to pay the collected cash flow to one or more recipients.
① De-identification of transferred financial assets
Those who have transferred almost all risks and rewards in the ownership of financial assets to the transferee, or haveneither transferred nor retained almost all the risks and rewards in the ownership of financial assets, but have given up control ofthe financial assets, terminate the confirmation The financial asset.
In determining whether control over the transferred financial asset has been waived, the actual capacity of the transferor tosell the financial asset is determined. If the transferor is able to sell the transferred financial assets wholly to a third party that doesnot have a relationship with them, and has no additional conditions to limit the sale, it indicates ds has waived control over thefinancial assets.
The Company pays attention to the essence of financial asset transfer when judging whether financial asset transfer meetsthe condition of financial asset termination.
If the overall transfer of financial assets meets the conditions for termination of confirmation, the difference between thefollowing two amounts is included in the current profit and loss:
A. Continuing identification of transferred Book value；
B. The sum of the amount received as a result of the transfer and the amount accrued as a result of the change in the fairvalue of the transfer in respect of the termination recognized portion of the amount previously charged directly to the otherconsolidated proceeds (the financial assets involved in the transfer are those classified in accordance with Article 18 of EnterpriseAccounting Standard No. 22 - Financial Instruments Recognition and Measurement as measured by the fair value and whosechange is charged to the other consolidated proceeds).
If the partial transfer of financial assets meets the conditions for derecognition, the book value of the entire transferredfinancial assets will be included in the derecognized part and the unterminated part (in this case, the retained service assets are
regarded as part of the continued recognition of financial assets) Between them, they are apportioned according to their respectiverelative fair values on the transfer date, and the difference between the following two amounts is included in the current profit andloss:
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 fairvalue of the transfer in respect of the termination recognized portion of the amount previously charged 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 chargedto the other consolidated proceeds).
② Continue to be involved in the transferred financial assets
If neither transfer nor retain almost all the risks and rewards of the ownership of financial assets, and have not given upcontrol of the financial assets, the relevant financial assets should be confirmed according to the extent of their continuedinvolvement in the transferred financial assets, and the relevant liabilities should be recognized accordingly.The extent to which the transferred financial assets continue to be involved refers to the extent to which the enterpriseundertakes the risk or compensation of the value change of the transferred financial assets.(III) Continuing identification of transferred financial assetsWhere almost all risks and remuneration in relation to ownership of the transferred financial assets are retained, the wholeof the transferred financial assets shall continue to be recognized and the consideration received shall be recognized as a financialliability.The financial asset and the recognized related financial liabilities shall not offset each other. In the subsequent accountingperiod, the enterprise shall continue to recognize the income (or gain) generated by the financial asset and the costs (or losses)incurred by the financial liability.
(7) Deduction of financial assets and liabilities
Financial assets and financial liabilities should be listed separately in the balance sheet, and cannot be offset against eachother. However, if the following conditions are met, the net amount offset by each other is listed in the balance sheet:
The Company has a statutory right to offset the confirmed amount, and such legal right is currently enforceable;
The Company plans to settle the net assets or realize the financial assets and liquidate the financial liabilities at the sametime.The transferring party shall not offset the transferred financial assets and related liabilities if it does not meet the conditionsfor 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. importantaccounting policies and accounting estimates 34. Other important accounting policies and accounting estimates.
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
See 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 inprocess of production, the materials and materials consumed in the process of production or providing labor services, includingentrusted processing materials, raw materials, products in process, materials in transit, stored goods, low value consumables,development costs, development products and contract performance costs, etc.
(2) Pricing of delivering inventory
Inventories are measured at cost when procured. Raw materials, products in process and commodity stocks in transit aremeasured by the weighted average method.
The inventory of real estate business mainly includes inventory materials, development costs, development products, etc.The actual costs of development products include land transfer payment, infrastructure and facility costs, installation engineeringcosts, borrows before completion of the development and other costs during the development process. The special maintenancefunds collected in the first period are included in the development overheads. When the control right of development products istransferred, the individual valuation method is used to determine its actual cost.
(3) Inventory system
The Company inventory adopts the perpetual inventory system, counting at least once a year, the inventory profit and lossamount is included in the current year's profit and loss.
(4) Recognition of inventory realizable value and providing of impairment provision
On the balance sheet date, inventories are accounted depending on which is lower between the cost and the net realizablevalue. If the cost is higher than the net realizable value, the impairment provision will be made.
The realizable net value of inventory should be recognized based on solid evidence with the purpose of the inventory andafter-balance-sheet-date events taken into consideration.
(1) In the course of normal production and operation, the net realizable value of finished goods, commodities and materialsdirectly used for sale shall be determined by the estimated price of the inventory minus the estimated cost of sale and related taxes.The inventory held for the execution of a sales contract or a labor contract shall be measured on the basis of the contract price asits net realizable value; If the quantity held is greater than the quantity ordered under the sales contract, the net realizable value ofthe excess inventory is measured on the basis of the general sales price. For materials used for sale, the market price shall be usedas the measurement basis for the net realizable value.
②In the normal production and operation process, the inventory of materials that need to be processed is determined by theamount of the estimated selling price of the finished product minus the estimated cost to be incurred at the time of completion,estimated sales expenses and related taxes Realize the net value. If the net realizable value of the finished product produced by it ishigher than the cost, the material is measured at cost; If the decrease in the price of the material indicates that the net realizablevalue of the finished product is lower than the cost, the material is measured as the net realizable value and the inventory isprepared for a decrease based on its difference.
③ Depreciation preparation of inventory is generally based on a single inventory item; For a large number of inventorieswith 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 balance sheet date, theamount of the write-down will be restored and transferred back within the amount of inventory depreciation reserve that has beenaccrued, and the amount returned will be included in the current profit and loss.
(5) Methods of amortization of swing materials
Low-value consumables are amortized on on-off amortization basis at using.
Packages 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 relationship between performanceobligation and customer payment. The consideration for which the Company is entitled to receive (subject to factors other than thepassage of time) for the transfer of goods or the provision of services to customers is listed as contract assets. The Company'sobligation to transfer goods or provide services to customers for consideration received or receivable from customers is listed ascontractual liabilities.
For the determination method and accounting treatment method of the Company's expected credit loss of contract assets, see
9. Financial instruments in Chapter X, V. Important accounting policies and accounting estimates.
Contract assets and contract liabilities are listed separately in the balance sheet. Contract assets and contract liabilities underthe same contract are listed in net amount. If the net amount is the debit balance, it shall be listed in "contract assets" or "other noncurrent assets" according to its liquidity; if the net amount is the credit balance, it shall be listed in "contract liabilities" or "othernon current liabilities" according to its liquidity. Contract assets and contract liabilities under different contracts cannot offset eachother.
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 following conditionsare met simultaneously:
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 due to the contract;
② This cost increases the Company's future resources for fulfilling its performance obligations.
③ The cost is expected to be recovered.
If the incremental cost incurred by the Company to obtain the contract is expected to be recovered, it shall be recognized asan 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 or services related tothe assets; however, if the amortization period of the contract acquisition cost is less than one year, the Company shall include it inthe 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 the following two items, theCompany will make provision for impairment for the excess part and recognize it as the loss of asset impairment, and furtherconsider whether the estimated liabilities related to the loss contract should be made:
① The residual consideration expected to be obtained due to the transfer of goods or services related to the asset;
② The estimated cost to be incurred for the transfer of the relevant goods or services.
If the above provision for impairment of assets is subsequently reversed, the book value of the asset after reversal shall notexceed the book value of the asset on the reversal date without provision for impairment.
The contract performance cost recognized as an asset with an amortization period of no more than one year or one normalbusiness cycle at the time of initial recognition shall be listed in the "inventory" item, and the amortization period of no more thanone year or one normal business cycle at the time of initial recognition shall be listed in the "other non current assets" item.
The contract acquisition cost recognized as an asset shall be listed in the item of "other current assets" when theamortization period does not exceed one year or one normal business cycle at the time of initial recognition, and listed in the itemof "other non current assets" when the amortization period exceeds one year or one normal business cycle at the time of initialrecognition.
17. Long-term share equity investment
The Group's long-term equity investment includes control on invested entities and significant impacts on equity investment.Invested entities on which the Group has significant impacts are associates of the Group.
(1) Basis for recognition of common control and major influence on invested entities
Common control refers to the common control of an arrangement in accordance with the relevant agreement, and therelevant activities of the arrangement must be agreed upon by the participants who share control. In determining whether there iscommon control, the first step is to determine whether all or a group of participants collectively control the arrangement, which is
considered collective control by all or a group of participants if all or a group of participants must act together to determine theactivities associated with the arrangement. Secondly, it is judged whether the decision on related activities of the arrangement mustbe agreed by the participants who collectively control the arrangement. If there is a combination of two or more parties that cancollectively control an arrangement, it does not constitute joint control. When judging whether there is joint control, the protectiverights enjoyed are not considered.Major influence refers to the power to participate in decision-making of financial and operation policies of a company, butcannot control or jointly control the making of the policies. When considering whether the Company can impose significantimpacts on the invested entity, impacts of conversion of shares with voting rights held directly or indirectly by the investor andvoting rights that can be executed in this period held by the investor and other party into shares of the invested entity should beconsidered.If the Company directly or through subsidiaries holds more than 20% (inclusive) but less than 50% of the shares with votingrights of the invested entity, unless there is clear evidence proving that the Company cannot participate the decision-making ofproduction and operation of the invested entity, the Company has major influence on the invested entity.
(2) Recognition of initial investment costs
? Long-term equity investments formed by merger of enterprises shall be determined in accordance with the followingprovisions:
A. In the case of an enterprise merger under the same control, where the merging party makes a valuation of the merger bypayment of cash, transfer of non-cash assets or undertaking liabilities, the share of the book value of the owner's interest in thefinal controlling party's consolidated financial statements as the initial investment cost of the long-term equity investment at thedate of the merger. The difference between the initial investment cost of long-term equity investment and the cash paid, thetransferred non-cash assets and the book value of the debt assumed shall be adjusted to the capital reserve; if the capital reserve isinsufficient to offset, the retained earnings shall be adjusted;Long-term equity investment generated by enterprise merger: for long-term equity investment obtained by merger ofenterprises under common control, the obtained share of book value of the interests of the merged party's owner in the consolidatefinancial statements on the merger date is costs; for long-term equity investment obtained by merger of enterprises not undercommon control, the merger cost is the investment cost. Adjust the capital reserve according to the difference between the initialinvestment cost of long-term equity investment and the total face value of the issued shares. If the capital reserve is insufficient tooffset or reduce, the retained income shall be adjusted;
For merger of entities under different control, the merger cost is the fair value of the asset paid, liability undertaken, andequity securities issued for exchanging of control power over the entities at the day of acquisition. Agency expenses and otheradministrative expenses such as auditing, legal consulting, or appraisal services occurred relating to the merger of entities areaccounted into current income account when occurred.? Long-term equity investments formed by merger of enterprises shall be determined in accordance with the followingprovisions:
For long-term equity investment obtained by cash, the actually paid consideration is the initial investment cost. Initialinvestment costs include expenses, taxes and other necessary expenditures directly related to the acquisition of long-term equityinvestments;
B. Long-term equity investments acquired from the issuance of interest securities are the initial investment costs based onthe fair value of the issue interest securities;
C. For long-term equity investments obtained through non-monetary asset exchanges, if the exchange has commercialsubstance and the fair value of the exchanged assets or exchanged assets can be reliably measured, the fair value of the exchangedassets and relevant taxes shall be used as the initial Investment cost, the difference between the fair value and book value of theswapped-out asset is included in the current profit and loss; if the non-monetary asset exchange does not meet the above twoconditions at the same time, the book value of the swapped-out asset and relevant taxes will be used as the initial investment cost.
D. Long-term equity investments acquired through debt restructuring determine their recorded value at the fair value of thewaived claims and other costs such as taxes directly attributable to the assets and account for the difference between the fair valueand the book value of the waived claims.
(3) Subsequent measurement and recognition of gain/loss
The Company uses the cost method to measure long-term share equity investment in which the Company can control theinvested entity; and uses the equity method to measure long-term share equity investment in which the Company has substantialinfluence on the invested entity.
① Cost
For the long-term equity investment measured on the cost basis, except for the announced cash dividend or profit includedin the practical cost or price when the investment was made, the cash dividends or profit distributed by the invested entity arerecognized as investment gains in the current gain/loss account.
EquityGains from long-term equity investment measured by equityWhen the equity method is used to measure long-term equity investment, the investment cost will not be adjusted if theinvestment cost of the long-term equity investment is larger than the share of fair value of the recognizable assets of the investedentity. When it is smaller than the share of fair value of the recognizable assets of the invested entity, the book value will beadjusted and the difference is included in the current gains of the investment.
When the equity method is used, the current investment gain is the share of the net gain realized in the current year that canbe shared or borne, recognized as investment gain and other misc. income. The book value of the long-term equity investment isadjusted accordingly. The book value of the long-term equity investment should be accordingly decreased based on the share ofprofit or cash dividend announced by the invested entity; according to other changes in the owner's equity except for net profit andloss, other misc income and profit distribution of the invested entity, adjust the book value of the long-term equity investment andrecord it in the capital surplus (other capital surplus). When the share of the net gains that can be enjoyed is recognized, it isrecognized after the net profit of the invested entity is adjusted based on the fair value of the recognizeable assets of the investedentity according to the Company's accounting policies and accounting period. Where the accounting policy and accounting periodadopted by the Invested unit are inconsistent with the Company, the financial statements of the Invested unit shall be adjusted inaccordance with the accounting policy and accounting period of the Company, and the investment income and other consolidatedincome shall be recognized. Internal transaction gain not realized between the Company and affiliates is measured according to theshareholding proportion and the investment gains is recoginzied after deduction. The unrealized internal transaction loss betweenthe Company and the invested entity is the impairment loss of transferred assets and should not be written off.Where substantial influence on invested entities is imposed or joint control is implemented due to increase in investment,the sum of the fair value of the original equity and increased investment on the conversion date is the initial investment cost underthe equity method. If the equity investment originally held is classified as other equity instrument investment, the differencebetween the fair value and the book value, as well as the accumulated gains or losses originally included in other comprehensiveincome, shall be transferred out of other comprehensive income and included in retained income in the current period when theequity method is adopted.Where joint control or substantial influence on invested entities is lost due to disposal of part of investment, the remainingequity after the disposal should be treated according to the Enterprise Accounting Standard No.22 – Recognition and Measurementof Financial Instruments from the date of losing the joint control or 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 equityinvestment determined using the equity method, when the equity method is no longer used, it should be treated based on the samebasis of the treatment of related assets or liability of the invested entities; the other owners' interests related to the original shareequity 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 adopted for accountingtreatment.Equity investments classified as held for sale to associates that are no longer eligible to hold classified assets for sale areretrospectively adjusted using the equity method starting from the date that they are classified as held for sale. The classification isadjusted to hold the financial statements for the period to be sold.
(5) Impairment examination and providing of impairment provision
For the investment in subsidiaries and associated enterprises, the method of withdrawing asset impairment is shown inChapter X, V. important accounting policies and accounting estimates. 24. Impairment of long-term assets.XVIII. Investment real estates
(1) Classification of investment real estate
Investment real estates are held for rent or capital appreciation, or both. These include, inter alia:
① Leased land using right
(2) the right to use the land that is transferred after holding and preparing for the increment.
③ Leased building
(2) Measurement of investment real estate
For investment real estates with an active real estate transaction market and the Company can obtain market price and otherinformation of same or similar real estates to reasonably estimate the investment real estates' fair value, the Company will use thefair value mode to measure the investment real estates subsequently. Variations in fair value are accounted into the currentgain/loss account.
The fair value of investment real estate is determined with reference to the current market prices of same or similar realestates in active markets; when no such price is available, with reference to the recent transaction prices and consideration of
factors including transaction background, date and district to reasonably estimate the fair value; or based on the estimated leasegains and present value of related cash flows.For investment real estate under construction (including investment real estate under construction for the first time), if thefair value cannot be reliably determined but the expected fair value of the real estate after completion is continuously and reliablyobtained, the investment real estate under construction is measured by cost. When the fair value can be measured reliably or aftercompletion (the earlier one), it is measured at fair value. For an investment real estate whose fair value is proven unable to beobtained continuously and reliably by objective evidence, the real estate will be measured at cost basis until it is disposed and noresidual value remains as assumed.If the cost model is used for subsequent measurement of investment real estate, depreciation or amortization is calculatedaccording to the straight-line method after the cost of investment real estate minus accumulated impairment and net residual value.See this Chapter X V. Important accounting policies, for the method of accruing asset impairment 24. Impairment of long-termassets in accounting estimates.The types of investment real estate, estimated economic useful life and estimated net residual value rate are determined asfollows:
| Type | Service year (year) | Residual rate % | Annual depreciation rate % |
| Houses & buildings | 20-50 | 10.00 | 1.80-4.50 |
19. Fixed assets
(1) Recognition conditions
Fixed assets are recognized at the actual cost of acquisition when the following conditions are met: (1) The economicbenefits associated with the fixed assets are likely to flow into the enterprise.
① The economic benefits related to this fixed asset are likely to flow into the enterprise.
② The cost of fixed assets can be reliably measured.
Overhaul cost generated by regular examination on fixed assets is recognized as fixed assets costs when there is evidenceproving that it meets fix assets recognition conditions. If not, it will be accounted into the current gain/loss account.
(2) Depreciation method
| Type | Depreciation method | Service year | Residual rate | Annual depreciation rate % |
| Houses & buildings | Average age | 20-50 years | 10% | 1.8%-4.5% |
| Mechanical equipment | Average age | 10 | 10% | 9% |
| Transportation facilities | Average age | 5 | 10% | 18% |
| Electronics and other devices | Average age | 5 | 10% | 18% |
| PV power plants | Average age | 20 | 5% | 4.75% |
For fixed assets for which depreciation provision is made, the depreciation rate will be determined after the accumulativedepreciation provision amount is deducted.At end of each fiscal year, verification will be made on the useful life, predicted retained value, and depreciation basis. Theuseful life will be adjusted if the useful life is different from the predicted one; the net residual value will be adjusted if the netresidual value is different from the predicted one.
20. Construction in process
(1) Construction in progress is accounted for by project classification.
(2) Standard and timing for transferring construction in process into fixed assets
The full expenditure incurred on the construction-in-progress project as a fixed asset is recorded as the value of the assetbefore the asset is constructed to the intended usable state. This includes construction costs, the original cost of equipment, othernecessary expenditures incurred in order to enable the construction works to reach the intended usable status and the borrowingcosts incurred for the specific borrowing of the project and the general borrowing expenses incurred before the assets reach theintended usable status. Construction in process will be transferred to fixed assets when it reaches the preset service condition. Thefixed assets that 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 according to the project budget,cost or actual project cost, etc. The depreciation of the fixed assets shall be accrued according to the Company's fixed assetsdepreciation policy. The original estimated value shall be adjusted according to the actual cost after the completion.XXI. Borrowing expenses
(1) Recognition principles for capitalization of borrowing expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or production of asset satisfying theconditions of capitalizing, are capitalized and accounted as cost of related asset.
(1) Asset expenditure has occurred;
② The borrowing expense has already occurred;
③ Purchasing or production activity, which is necessary for the asset to reach the useful status, has already started.Other interest on loans, discounts or premiums and exchange differences are included in the income and loss incurred in thecurrent period.
If the construction or production of assets satisfying the capitalizing conditions is suspended abnormally for over 3 months,capitalizing of borrowing expenses shall be suspended. During the normal suspension period, borrowing expenses will becapitalized continuously.
When the asset satisfying the capitalizing conditions has reached its usable or sellable status, capitalizing of borrowingexpenses shall be terminated.
(2) Calculation of the capitalization amount of borrowing expense
Interest expenses generated by special borrowings less the interests income obtained from the deposit of unused borrowingsor investment gains from temporary investment is capitalized; the capitalization amount for general borrowing is determined basedon the capitalization rate which is the exceeding part of the accumulative assets expense over weighted average of the assetsexpense 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 interestamount to be capitalized in the general borrowing shall be calculated and determined by multiplying the capital rate of the generalborrowing by the weighted average of the asset expenditure of the accumulated assets whose expenditure exceeds that of thespecialized borrowing. The capitalization ratio is the weighted average interest rate of general borrowings.
22. Use right assets
The term "right to use assets" refers to the right of the lessee to use the leased assets during the lease term.
At the beginning of the lease term, the right of use assets are 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 oflease 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 the site where theleased assets are located or restoring the leased assets to the state agreed in the lease terms. The Company recognizes and measuresthe cost in accordance with the recognition standards and measurement methods of estimated liabilities. See 29. Estimatedliabilities in Chapter X, V. important accounting policies and accounting estimates for details. If the above costs are incurred forthe production of inventories, they will be included in the cost of inventories.Depreciation of right of use assets is accrued by using the straight-line method. If it can be reasonably determined that theownership of the leased asset will be obtained at the expiration of the lease term, the depreciation rate shall be determinedaccording to the asset category of the right to use and the estimated net residual value rate within the expected remaining servicelife of the leased asset; If it is impossible to reasonably determine that the ownership of the leased asset will be obtained at theexpiration of the lease term, the depreciation rate shall be determined according to the asset category of the right of use within theshorter of the lease term and the remaining service life of the leased asset.
23. Intangible assets
(1) Pricing method, service life and depreciation test
The valuation method of intangible assets: recorded at the actual cost at the time of acquisition.Amortization of intangible assets:
① Useful life of intangible assets with limited useful life
| Item | Estimated useful life | Basis |
| Land using right | Term | Use right assets |
| Trademarks and patents | 10 | Reference to determine the lifetime of a company for which it can bring economic benefits |
| Proprietary technology | 10 | Reference to determine the lifetime of a company for which it can bring economic benefits |
| Software | 5. 10 years | Reference to determine the lifetime of a company for which it can bring economic benefits |
At the end of each year, the Company will reexamine the useful life and amortization basis of intangible assets with limiteduseful life. Upon review, the service life and amortization methods of intangible assets at the end of the period are not differentfrom those previously estimated.
② Intangible assets which cannot be foreseeable to bring economic benefits to enterprises shall be regarded as intangibleassets whose useful life is uncertain. For intangible assets with uncertain service life, the Company reviews the service life ofintangible assets with uncertain service life at the end of each year. If it is still uncertain after rechecking, it shall conduct animpairment 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 of acquisition, andshall use the straight line method system to reasonably amortize their service life, and the amortization amount shall be included inthe profit and loss of the current period according to the beneficial items. The specific amortization amount is the amount after thecost is deducted from the estimated residual value. For fixed assets for which depreciation provision is made, the depreciation ratewill be determined after the accumulative depreciation provision amount is deducted. The residual value of an intangible assetwith limited useful life is treated as zero, except where a third party undertakes to purchase the intangible asset at the end of itsuseful life or to obtain expected residual value information based on the active market, which is likely to exist at the end of itsuseful life.
Intangible assets with uncertain service life will not be amortized. At the end of each year, the useful life of intangible assetswith uncertain useful life is reviewed, and if there is evidence that the useful life of intangible assets is limited, the useful life isestimated and the system is reasonably amortized within the expected useful life.
(2) Accounting policies for internal R&D expenses
Specific standard for distinguish between research and development stage：
① The Company takes the information and related preparatory activities for further development activities as the researchstage, and the intangible assets expenditure in the research stage is included in the current profit and loss period.
② The development activities carried out after the Company has completed the research stage as the development stage.
Expenditures in the development phase can be recognized as intangible assets only when the following conditions are met:
A. It is technically feasible to complete the intangible asset so that it can be used or sold;
B. Have the intention to complete the intangible asset and use or sell it;
C. The way intangible assets generate economic benefits, including the ability to prove that the products produced by theintangible assets exist in the market or the intangible assets themselves exist in the market, and the intangible assets will be usedinternally, which can prove their usefulness;D. Have sufficient technical, financial and other resource support to complete the development of the intangible asset, andhave 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, fixed assetsconstruction in progress, intangible assets and goodwill (except for the inventories, investment real estate measured by the fairvalue mode, deferred income tax assets and financial assets). The method is determined as follows:
The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists, theCompany estimates the recoverable amount and conducts the impairment test. Impairment test is conducted annually for goodwillgenerated by mergers and intangible assets that have not reached the useful condition no matter whether the impairment sign exists.
The recoverable amount is determined by the higher of the net of fair value minus disposal expense and the present value ofthe predicted future cash flow. The Company estimates the recoverable amount on the individual asset item basis; whether it ishard to estimate the recoverable amount on the individual asset item basis, determine the recoverable amount based on the assetgroup that the assets belong to. The assets group is determined by whether the main cash flow generated by the Group isindependent from those generated by other assets or assets groups.
When the recoverable amount of the assets or assets group is lower than its book value, the Company writes down the bookvalue to the recoverable amount, the write-down amount is accounted into the current income account and the assets impairmentprovision is made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized through reasonable measuressince the purchase day to related asset groups; those cannot be amortized to related assets groups are amortized to relatedcombination of asset groups. The related asset groups or combination of asset groups refer to those that can benefit from thesynergistic effect of mergers and must not exceed to the reporting range determined by the Company.
When the impairment test is conducted, if there is sign of impairment to the asset group or combination of asset groupsrelated to goodwill, first perform impair test for asset group or combination of asset groups without goodwill and calculate the
recoverable amount and recognize the related impairment loss. Then conduct impairment test on those with goodwill, compare thebook value with recoverable amount. If the recoverable amount is lower than the book value, recognize the impairment loss of thegoodwill.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 borne by theCompany in the current and subsequent periods with a amortization period of more than one year. The Company's long-termdeferred 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 the actual short-termremuneration as liabilities and shall account for the current income and loss, except as required or permitted by other accountingstandards.
② Employee welfare
The employee benefits incurred by the Company shall be included in the current profit and loss or related asset costsaccording to the actual amount incurred. Where the employee's benefit is non-monetary, it shall be measured on the basis of fairvalue.
③ Social insurance premiums and housing accumulation funds such as health insurance premiums, work injury premiums,birth insurance premiums, trade union funds and staff and education funds
The Company pays the medical insurance premiums, work injury insurance premiums, birth insurance premiums, etc. socialinsurance premiums and housing accumulation funds for the staff and workers, as well as the union funds and the staff andworkers education funds according to the regulations, in the accounting period for which the staff and workers provide services,
the corresponding salary amount of the staff and workers, and confirms the corresponding liabilities, which are included in thecurrent 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 employees provideservice, thus increasing their future right of absence with pay. The Company confirms the salary of the employee related to theabsence of non-cumulative salary during the actual absence accounting period.
⑤ Short-term profit share program
If the profit-sharing plan meets the following conditions at the same time, the Company shall confirm the salary payable tothe staff and workers:
A. The legal or presumptive obligation of the enterprise to pay the remuneration of its employees as a result of past matters;
B. The amount of employee compensation obligations due to the profit sharing plan can be reliably estimated.
(2) Accounting of post-employment welfare
The 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 services for them, theCompany shall recognize the deposit amount calculated according to the defined deposit plan as liabilities and include it in thecurrent 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 thetermination benefits shall be recognized at the earliest of the following two and shall be included in the current profit and loss:
① When the enterprise cannot unilaterally withdraw the termination benefits provided due to the termination of laborrelations plan or layoff proposal; ② When the enterprise confirms the costs or expenses related to restructuring involving thepayment of dismissal benefits.
28. Lease liabilities
The lease liabilities are initially measured Company shall according to the present value of the unpaid lease payments at thebeginning 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 relevant amount of leaseincentive 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 option will be exercised;
(4) The amount to be paid for exercising the option to terminate the lease, provided that the lease term reflects that the lesseewill 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 as the discount rate. If theimplicit interest rate of the lease cannot be determined, the incremental borrowing interest rate of the company is used as thediscount rate. The difference between the lease payment amount and its present value is regarded as unrecognized financingexpenses, and the interest expenses are recognized according to the discount rate of the present value of the lease payment amountduring each period of the lease term and included in the current profit and loss. The amount of variable lease payments notincluded in the measurement 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 expected payable amount ofthe guaranteed residual value changes, the index or ratio used to determine the lease payment amount changes, the evaluationresults or actual exercise of the purchase option, renewal option or termination option changes, the Company remeasures the leaseliability according to the present value of the changed lease payment amount, And adjust the book value of the right to use assetsaccordingly.
29. Anticipated liabilities
(1) Recognition standards of anticipated liabilities
When responsibilities occurred in connection to contingent issues, and all of the following conditions are satisfied, they arerecognized as expectable liability in the balance sheet:
① This responsibility is a current responsibility undertaken by the Company;
② Execution of this responsibility may cause financial benefit outflow from the Company;
③ Amount of the liability can be reliably measured.
(2) Measurement of anticipated liabilities
Expected liabilities are initially measured at the best estimation on the expenses to exercise the current responsibility, andwith considerations to the relative risks, uncertainty, and periodic value of currency. On each balance sheet date, review the bookvalue of the estimated liabilities. Where there is conclusive evidence that the book value does not reflect the current best estimate,the book value is adjusted to the current best estimate.
30. Revenue
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.
(1) General principles
Income is the total inflow of economic benefits formed in the daily activities of the Company, which will lead to theincrease 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 recognized when the customerobtains the control right of relevant goods. To obtain the control right of the relevant commodity means to be able to dominate theuse of the commodity and obtain almost all the economic benefits from it.
If there are two or more performance obligations in the contract, the Company will allocate the transaction price to eachsingle performance obligation according to the relative proportion of the separate selling price of the goods or services promisedby each single performance obligation on the start date of the contract, and measure the income according to the transaction priceallocated to each single performance obligation.
The transaction price refers to the amount of consideration that the Company is expected to be entitled to receive due to thetransfer of goods or services to customers, excluding the amount collected on behalf of a third party. When determining thecontract transaction price, if there is a variable consideration, the Company shall determine the best estimate of the variableconsideration according to the expected value or the most likely amount, and include it in the transaction price with the amount notexceeding the accumulated recognized income when the relevant uncertainty is eliminated, which is most likely not to have asignificant reversal. If there is a significant financing component in the contract, the Company will determine the transaction priceaccording to 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 during the contract period. Ifthe interval between the control right transfer and the customer's payment is less than one year, the Company will not consider thefinancing component Points.
If one of the following conditions is met, the performance obligation shall be performed within a certain period of time;otherwise, the performance obligation shall be performed at a certain point of time:
① When the customer performs the contract in the Company, he obtains and consumes the economic benefits brought bythe 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 Company has theright to collect money for the performance part that has been completed so far during the whole contract period.
For the performance obligations performed within a certain period of time, the Company shall recognize the revenueaccording to the performance progress within that period, except that the performance progress cannot be reasonably determined.The Company determines the performance schedule of providing services according to the input method. When the progress ofperformance cannot be reasonably determined, if the cost incurred by the Company is expected to be compensated, the revenueshall be recognized according to the amount of cost incurred until the progress of performance can be reasonably determined.
For the performance obligation performed at a certain time point, the Company recognizes the revenue at the time pointwhen the customer obtains the control right of relevant goods. In determining whether a customer has acquired control of goods orservices, the Company will consider the following signs:
① The Company has the right to receive payment for the goods or services, that is, the customer has the obligation to payfor the goods;
② The Company has transferred the legal ownership of the goods to the customer, that is, the customer has the legalownership of the goods;
③ The Company has transferred the goods in kind to the customer, that is, the customer has possessed the goods in kind;
④ The Company has transferred the main risks and rewards of the ownership of the goods to the customer, that is, thecustomer has obtained the main risks and rewards of the ownership of the goods;
⑤ The product has been accepted by the customer.
Sales return clause
For the sales with sales return clauses, when the customer obtains the control right of the relevant goods, the Company shallrecognize the revenue according to the amount of consideration it is entitled to obtain due to the transfer of the goods to thecustomer, and recognize the amount expected to be returned due to the sales return as the estimated liability; at the same time, the
Company shall deduct the estimated cost of recovering the goods according to the book value of the expected returned goods at thetime of transfer( The balance after deducting the value of the returned goods is recognized as an asset, that is, the cost of returnreceivable, 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 sales and re measures theabove assets and liabilities.Warranty obligationsAccording to the contract and legal provisions, the Company provides quality assurance for the goods sold and the projectsconstructed. For the guarantee quality assurance to ensure that the goods sold meet the established standards, the Companyconducts accounting treatment in accordance with the accounting standards for Business Enterprises No. 13 - contingencies. Forthe service quality assurance which provides a separate service in addition to guaranteeing that the goods sold meet the establishedstandards, the Company takes it as a single performance obligation, allocates part of the transaction price to the service qualityassurance according to the relative proportion of the separate selling price of the goods and service quality assurance, andrecognizes the revenue when the customer obtains the service control right. When evaluating whether the quality assuranceprovides a separate service in addition to assuring customers that the goods sold meet the established standards, the Companyconsiders whether the quality assurance is a statutory requirement, the quality assurance period, and the nature of the Company'scommitment to perform the task.
Customer consideration payableIf there is consideration payable to the customer in the contract, unless the consideration is to obtain other clearlydistinguishable goods or services from the customer, the Company will offset the transaction price with the consideration payable,and offset the current income at the later time of confirming the relevant income or paying (or promising to pay) the customer'sconsideration.Contractual rights not exercised by customersIf the Company advances sales of goods or services to customers, the amount shall be recognized as liabilities first, and thenconverted into income when relevant performance obligations are fulfilled. When the Company does not need to return theadvance payment and the customer may give up all or part of the contract rights, if the Company expects to have the right to obtainthe amount related to the contract rights given up by the customer, the above amount shall be recognized as income in proportionaccording to the mode of the customer exercising the contract rights; otherwise, the Company only has the very low possibility of
the customer requiring to perform the remaining performance obligations The relevant balance of the above liabilities is convertedinto income.Contract changeWhen the project contract between the Company and the customer is changed:
① If the contract change increases the clearly distinguishable construction service and contract price, and the new contractprice reflects the separate price of the new construction service, the Company will treat the contract change as a separate contractfor accounting;
② If the contract change does not belong to the above-mentioned situation (1), and there is a clear distinction between thetransferred construction service and the non transferred construction service on the date of contract change, the Company willregard it as the termination of the original contract, and at the same time, combine the non performance part of the originalcontract and the contract change part into a new contract for accounting treatment;
③ If the contract change does not belong to the above situation (1), and there is no clear distinction between the transferredconstruction services and the non transferred construction services on the date of contract change, the Company will take thecontract change part as an integral part of the original contract for accounting treatment, and the resulting impact on the recognizedincome will be adjusted to the current income on the date of contract change.
(2) Specific methods
The specific methods of revenue recognition of the Company are as follows:
① Commodity sales contract
The commodity sales contract between the company and the customer includes the performance obligation of transferringcurtain wall materials, screen door 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 of control of thegoods on the basis of comprehensive consideration of the following factors: the Ccompany has delivered the products to thecustomer according to the contract, the customer has accepted the goods, the payment for goods has been recovered or the receipthas been obtained, and the relevant economic benefits are likely to flow in, the main risks and rewards of the ownership of thegoods have been transferred, the legal ownership has been transferred;
The following conditions should be met for the recognition of export product revenue: the Company has declared theproduct according to the contract, obtained the bill of lading, collected the payment for goods or obtained the receipt certificate,and the relevant economic benefits are likely to flow in, the main risks and rewards of the ownership of goods have beentransferred, 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 metro platform screendoor operation maintenance, curtain wall maintenance and property services. As the Company's performance at the same time, thecustomers obtain and consume the economic benefits brought by the Company's performance, the Company takes it as theperformance obligation within a certain period of time and allocates it equally during the service provision period.
③ Engineering contract
The project contract between the Company and the customer includes the performance obligations of curtain wall projectand metro platform screen door project construction. As the customer can control the goods under construction in the process ofthe Company's performance, the Company takes them as the performance obligations within a certain period of time, andrecognizes the income according to the performance progress, except that the performance progress cannot be reasonablydetermined. The Company determines the performance schedule of providing construction services according to the input method.The performance schedule shall be determined according to the proportion of the actual contract cost to the estimated total contractcost.
④ Real estate sales contract
The income of the Company's real estate development business is recognized when the control of the property istransferred to the customer. Based on the terms of the sales contract and the legal provisions applicable to the contract, the controlof the property can be transferred within a certain period of time or at a certain point in time. Only if the goods produced by theCompany during the performance of the contract have irreplaceable uses, and the Company has the right to collect payment for thecumulative performance part that has been completed during the entire contract period, the performance obligation has beencompleted during the contract period. The progress is recognized as revenue within a period of time, and the progress of thecompleted performance obligations is determined in accordance with the ratio of the contract costs actually incurred to completethe performance obligations to the estimated total cost of the contract. Otherwise, the income is recognized when the customerobtains the physical ownership or legal ownership of the completed property and the Company has obtained the current right ofcollection and is likely to recover the consideration. When confirming the contract transaction price, if the financing component issignificant, the Company will adjust the contract commitment consideration according to the financing component of the contract.
(3) Differences in revenue recognition accounting policies caused by different business models of similar businessesThere is no difference in revenue recognition due to the adoption of different accounting policies for similar businesses.
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. None monetary capitalare 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 other manners long-term assets; or subsidies related to benefits. If the asset-related government subsidy is recognized as deferred gain, should berecorded in gain and loss in the service life. Government subsidy measured at the nominal amount is accounted into currentincome account. If the relevant assets are sold, transferred, scrapped or damaged before the end of their useful life, the unallocatedrelevant deferred income balance shall be transferred to the profit and loss of the current period of disposition of the assets.
Gain-related government subsidy should be accounted as follows:
The Company divides government subsidies into assets-related and earnings-related government subsidies. Gain-relatedgovernment subsidy should be accounted as follows:
Subsidy that will be used to compensate related future costs or losses should be recognized as deferred gain and recorded inthe 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 the current period oroffset related cost.
For government subsidies that include both asset-related and income-related parts, separate different parts for accountingtreatment; It is difficult to distinguish between the overall classification of government subsidies related to benefits.Government subsidy related to routine operations should be recorded in other gains or offset related cost. Governmentsubsidy 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 the interest-subsidy funds tothe lending bank, the loan amount actually received will be used as the entry value of the loan, and the borrowing cost will becalculated based on the loan principal and policy-based preferential interest rate.
If the government allocates the interest-bearing funds directly to the Group, discount interest will offset the borrowing costs.
④ Government subsidy refund
When a confirmed government subsidy needs to be returned, the book value of the asset is adjusted against the book valueof the relevant asset at initial recognition. If there is a related deferred income balance, the book balance of the related deferredincome is written off and the excess is credited to the current profit or loss; In other cases, it is directly included in the currentprofit 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 balance sheet dayand the tax base and the liabilities method to recognize the deferred income tax. 26. Deferred income tax assets and deferredincome tax liabilities
(1) Deferred income tax assets
For deductible temporary discrepancies, deductible losses and tax offsets that can be carried forward for future years, theimpact on income tax is calculated at the estimated income tax rate for the transfer-back period and the impact is recognized asdeferred income tax assets, provided that the Company is likely to obtain future taxable income for deductible temporarydiscrepancies, deductible losses and tax offsets.
At the same time, the impact on income tax of deductible temporary discrepancies resulting from the initial recognition ofassets or liabilities in transactions or matters with the following characteristics is inconclusive as deferred income tax assets:
A. The transaction is not a business combination;
B. the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;In the event of temporary discrepancy of deductible investment related to subsidiaries, joint ventures and joint ventures, andmeeting the following two conditions, the amount of impact (talent) on income tax shall be deemed as deferred income tax assets:
A. Temporary discrepancies are likely to be reversed in the foreseeable future;B. In the future, it is likely to obtain taxable income that can be used to offset the deductible temporary differences;On the balance sheet date, if there is conclusive evidence that sufficient taxable income is likely to be obtained in the futureto offset the deductible temporary differences, the deferred income tax assets that have not been recognized in the previous periodare recognized.
On the balance sheet day, the Company re-examines the book value of the deferred income tax assets. If it is unlikely tohave adequate taxable proceeds to reduce the benefits of the deferred income tax assets, less the deferred income tax assets' bookvalue. When there is adequate taxable proceeds, the lessened amount will be reversed.
(2) Deferred income tax assets
All provisional differences in taxable income of the Company shall be measured on the basis of the estimated income taxrate for the period of transfer-back and shall be recognized as deferred income tax liabilities, except that:
At the same time, the impact on income tax of deductible temporary discrepancies resulting the initial recognition of assetsor liabilities in transactions or matters with the following characteristics is inconclusive as deferred income tax Liabilities:
A. Initial recognition of goodwill;
B. Initial recognition of goodwill, or of assets or liabilities generated in transactions with the following features: thetransaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;
② For the taxable temporary differences related to the investment of subsidiaries and associated enterprises, the impact onincome tax is generally recognized as deferred income tax liabilities, except that the following two conditions are met at the sametime:
A. The Company is able to control the time of temporary discrepancy transfers;
B Temporary discrepancies are likely to be reversed in the foreseeable future;
(3) Deferred income tax assets
(1) Deferred income tax liabilities or assets associated with enterprise consolidation
Temporary difference of taxable tax or deductible temporary difference generated by enterprise merger under non-samecontrol. When deferred income tax liability or deferred income tax asset is recognized, related deferred income tax expense (orincome) 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 transactions or events directlyaccounted into the owners' equity, income tax is accounted as income tax expense into the current gain/loss account. The impact oftemporary differences on income tax is included in the transactions or events of owner's equity, including: other comprehensiveincome formed by changes in the fair value of other creditor's rights investment, retroactive adjustment method for changes inaccounting policies or retroactive restatement method for correction of previous (important) accounting errors, adjustment ofopening retained earnings, and mixed financial instruments containing both liability and equity components are included inowner's equity at initial recognition.
③ Compensation for losses and tax deductions
A. Compensable losses and tax deductions from the Company's own operations
Deductible losses refer to the losses calculated and determined in accordance with the provisions of the tax law that areallowed to be made up with the taxable income of subsequent years. The uncovered losses (deductible losses) and tax deductionsthat can be carried forward in accordance with the tax law are treated as deductible temporary differences. When it is expected thatsufficient taxable income is likely to be obtained in the future period when it is expected to be available to make up for losses ortax deductions, the corresponding deferred income tax assets are recognized within the limit of the taxable income that is likely tobe obtained, while reducing the current period Income tax expense in the income statement.
B. Compensable uncovered losses of the merged company due to business merger
In a business combination, if the Company obtains the deductible temporary difference of the purchased party and does notmeet the deferred income tax asset recognition conditions on the purchase date, it shall not be recognized. Within 12 months afterthe purchase date, if new or further information is obtained indicating that the relevant conditions on the purchase date alreadyexist, and the economic benefits brought about by the temporary difference are expected to be deducted on the purchase date,confirm the relevant delivery. Deferred income tax assets, while reducing goodwill, if the goodwill is not enough to offset, thedifference is recognized as the current profit and loss; except for the above circumstances, the deferred tax assets related to thebusiness combination are recognized and included in the current profit and loss.
④Temporary difference caused by merger offset
If there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet and thetaxable basis of the taxpayer due to the offset of the unrealized internal sales gain or loss, the deferred income tax asset or thedeferred income tax liability is confirmed in the consolidated balance sheet, and the income tax expense in the consolidated profitstatement is adjusted, with the exception of the deferred income tax related to the transaction or event directly included in theowner's equity and the merger of the enterprise.
⑤ Share payment settled by equity
If the tax law provides for allowable pre-tax deduction of expenses related to share payment, within the period for which thecost and expense are recognized in accordance with the accounting standards, the Company shall calculate the tax basis andtemporary discrepancy based on the estimated pre-tax deduction amount at the end of the accounting period and confirm therelevant deferred income tax if it meets the conditions for confirmation. Of these, the amount that can be deducted before tax in thefuture exceeds the cost related to share payment recognized in accordance with the accounting standards, and the excess incometax shall be directly included in the owner's equity.
33. Leasing
(1) Identification of lease
On the commencement date of the contract, the company evaluates whether the contract is a lease or includes a lease. If oneparty in the contract transfers the right to control the use of one or more identified assets within a certain period in exchange forconsideration, the contract is a lease or includes a lease. In order to determine whether the contract transfers the right to control theuse of the identified assets within a certain period, the company evaluates whether the customers in the contract have the right toobtain almost all the economic benefits arising from the use of the identified assets during the use period, and have the right todominate the 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 contract and conduct accountingtreatment for each separate lease. If the following conditions are met at the same time, the right to use the identified assetconstitutes a separate lease in the contract: ① the lessee can profit from using the asset alone or together with other easilyavailable resources; ② The asset is not highly dependent or 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 more than 12 months andexcluding the purchase option as a short-term lease; When a single leased asset is a brand-new asset, the lease with lower value is
recognized as a low value asset lease. If the Company sublets or expects to sublet the leased assets, the original lease is notrecognized 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 relevantasset cost or current profit and loss according to the straight-line method (or other systematic and reasonable methods) in eachperiod of the lease term.
In addition to the above short-term leases and low value asset leases with simplified treatment, the Company recognizes theright to use assets and lease liabilities for the lease on the beginning date of the lease term.
① Use right assets
The term "right to use assets" refers to the right of the lessee to use the leased assets during the lease term.
At the beginning of the lease term, the right of use assets are initially measured at cost. This cost includes:
? The initial measurement amount of lease liabilities;? 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;? Initial direct expenses incurred by the lessee;? The estimated cost incurred by the lessee for dismantling and removing the leased assets, restoring the site 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 according to the recognition standard and measurement method of estimated liabilities. If the above
costs are incurred for the production of inventories, they will be included in the cost of inventories.Depreciation of right of use assets is accrued by using the straight-line method. If it can be reasonably determined that theownership of the leased asset will be obtained at the expiration of the lease term, the depreciation rate shall be determinedaccording to the asset category of the right to use and the estimated net residual value rate within the expected remaining servicelife of the leased asset; If it is impossible to reasonably determine that the ownership of the leased asset will be obtained at theexpiration of the lease term, the depreciation rate shall be determined according to the asset category of the right of use within theshorter of the lease term and the remaining service life of the leased asset.
② Lease liabilities
The lease liabilities are initially measured Company shall according to the present value of the unpaid lease payments at thebeginning of the lease term. The lease payment includes the following five items:
? Fixed payment amount and substantial fixed payment amount. If there is lease incentive, the relevant amount of lease
incentive shall be deducted;
? Variable lease payments depending on index or ratio;? The exercise price of the purchase option, provided that the lessee reasonably determines that the option will beexercised;? The amount to be paid for exercising the option to terminate the lease, provided that the lease term reflects that the lessee
will exercise the option to terminate the lease;
? 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 as the discount rate. If theimplicit interest rate of the lease cannot be determined, the incremental borrowing interest rate of the company is used as thediscount rate. The difference between the lease payment amount and its present value is regarded as unrecognized financingexpenses, and the interest expenses are recognized according to the discount rate of the present value of the lease payment amountduring each period of the lease term and included in the current profit and loss. The amount of variable lease payments notincluded in the measurement 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 expected payable amount ofthe guaranteed residual value changes, the index or ratio used to determine the lease payment amount changes, the evaluationresults or actual exercise of the purchase option, renewal option or termination option changes, the Company remeasures the leaseliability according to the present value of the changed lease payment amount, And adjust the book value of the right to use assetsaccordingly.
(4) Accounting treatment method of the Company as lessor
On the lease commencement date, the Company classifies leases that have substantially transferred almost all the risks andrewards related to the ownership of the leased assets as financial leases, and all other leases are operating leases.
① Operating lease
During each period of the lease term, the Company recognizes the lease receipts as rental income according to the straight-line method (or other systematic and reasonable methods), and the initial direct expenses incurred are capitalized, amortized on thesame basis as the recognition of rental income, and included in the current profit and loss by stages. The variable lease paymentsobtained by the Company related to operating leases that are not included in the lease receipts are included in the current profitsand losses when actually incurred.
② Finance lease
On the lease beginning date, the Company recognizes the financial lease receivables according to the net amount of thelease investment (the sum of the unsecured residual value and the present value of the lease receipts not received on the lease
beginning date discounted according to the lease embedded interest rate), and terminates the recognition of the financial leaseassets. During each period of the lease term, the Company calculates and recognizes the interest income according to the interestrate embedded in the lease.The amount of variable lease payments obtained by the Company that are not included in the measurement of net leaseinvestment 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 lease change as aseparate lease for accounting: a. the lease change expands the lease scope by increasing the use right of one or more leased assets;B. The increased consideration is equivalent to the amount adjusted according to the conditions of the contract at the separate pricefor 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 changed leasepayment at the revised discount rate to re-measure the lease liability. When calculating the present value of the lease payment afterthe change, the implicit interest rate of the lease during the remaining lease period shall be used as the discount rate; If it isimpossible to determine the implicit interest rate of the lease for the remaining lease period, the incremental loan interest rate onthe effective date of the lease change shall 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 of the right to use
assets shall be reduced, and the relevant gains or losses of partial or complete termination of the lease shall be includedin the current profits and losses;
? For other lease changes, the book value of the right to use assets shall be adjusted accordingly.
The Company as leasor
If the operating lease is changed, the Company will treat it as a new lease for accounting from the effective date of thechange, and the amount of lease receipts received in advance or receivable related to the lease before the change is regarded as theamount of new lease receipts.
If the change of financial lease is not accounted for as a separate lease, the Company will deal with the changed lease underthe following circumstances: if the change of lease takes effect on the lease commencement date and the lease will be classified asan operating lease, the Company will account for it as a new lease from the effective date of lease change, and take the net leaseinvestment before the effective date of lease change as the book value of leased assets; If the lease change takes effect on the leasecommencement date, the lease will be classified as a financial lease, and the Company will conduct accounting treatment inaccordance with the 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 is a sale inaccordance with the provisions of 30. Income in Chapter X, V, Important accounting policies and accounting estimates.? The Company as seller (lessee)
If the asset transfer in the sale and leaseback transaction does not belong to sales, the Company will continue to recognize thetransferred assets, recognize a financial liability equal to the transfer income, and conduct accounting treatment for the financialliability in accordance with 9。 Financial instruments in Chapter X, V, Important accounting policies and accounting estimates. Ifthe asset transfer belongs to sales, the Company measures the right to use assets formed by sale and leaseback according to the partof the book value of the original assets related to the right to use obtained by leaseback, and only recognizes the relevant gains orlosses on the rights transferred to the lessor.? The Company as buyer (lessor)If the asset transfer in the sale and leaseback transaction does not belong to sales, the company does not recognize thetransferred asset, but recognizes a financial asset equal to the transfer income, and carries out accounting treatment on the financialasset in accordance with 9. Financial instruments in Chapter X, V. Important accounting policies and accounting estimates. If theasset transfer belongs to sales, the Company shall conduct accounting treatment for asset purchase and asset lease in accordancewith other applicable accounting standards for business enterprises.
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 parties familiar with thesituation 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 majormarket, the Company measures the fair value of the relevant assets or liabilities at the most favorable market prices. The Groupuses assumptions that market participants use to maximize their economic benefits when pricing the asset or liability.The main market refers to the market with the highest transaction volume and activity of the related assets or liabilities. Themost favorable market means the market that can sell the related assets at the highest amount or transfer the related liabilities at thelowest amount after considering the transaction cost and transportation cost.
For financial assets or liabilities in an active market, The Company determines their fair value based on quotations in theactive market. If there is no active market, the Company uses evaluation techniques to determine the fair value.
For the measurement of non-financial assets at fair value, the ability of market participants to use the assets for optimalpurposes to generate economic benefits, or the ability to sell the assets to other market participants that can be used for optimalpurposes to generate economic benefits.
① Valuation technology
The Company adopts valuation techniques that are applicable in the current period and are supported by sufficient data andother information. The valuation techniques used mainly include market method, income method and cost method. The Companyuses a method consistent with one or more of the valuation techniques to measure fair value. If multiple valuation techniques areused to measure fair value, the reasonableness of each valuation result shall be considered, and the fair value shall be selected asthe most representative of fair value under the current circumstances. The amount of value is regarded as fair value.
The The Company equipment are applicable in the current circumstances and have sufficient available data and otherinformation to support the use of the relevant observable input values prioritized. Unobservable input values are used only whenthe observable input value cannot be obtained or is not feasible. Observable input values are input values that can be obtained frommarket data. The Group uses assumptions that market participants use to maximize their economic benefits when pricing the assetor liability. Non-observable input values are input values that cannot be obtained from market data. The input value is obtainedbased on the best information available on assumptions used by market participants in pricing the relevant asset or liability.
②Fair value hierarchy
This company divides the input value used in fair value measurement into three levels, and first uses the first level inputvalue, then uses the second level input value, and finally uses the third level input value. First level: quotation of same assets orliabilities in an active market (unadjusted) The second level input value is a directly or indirectly observable input value of the
asset or liability in addition to the first level input value. The input value of the third level is the unobservable input value of therelated asset or liability.
(2) Accounting of hedging
(2.1) Classification of inventoriesThe Company's hedge is a cash flow hedge.Cash flow hedging refers to the hedging of cash flow risk. The change in cash flow is derived from specific risks associatedwith recognized assets or liabilities, expected transactions that are likely to occur, or with respect to the components of the above-mentioned project and will affect the profits and losses of the enterprise.(2.2) Hedging tools and hedged projectsHedging means a financial instrument designated by the Company for the purpose of hedging, whose fair value or cash flowvariation is expected to offset the fair value or cash flow variation of the hedged item, including:
① Financial liabilities measured at fair value with variations accounted into current income account Check-out options canonly be used as a hedging tool if the option is hedged, including those embedded in a hybrid contract. Derivatives embedded in ahybrid contract but not split cannot be used as separate hedging tools.
② Non-derivative financial assets or non-derivative financial liabilities that are measured at fair value and whose changesare included in the current profit and loss, but designated as fair value and whose changes are included in the current profit andloss, and their own credit risk changes caused by changes in fair value except for financial liabilities included in othercomprehensive income.
Own equity instruments are not financial assets or financial liabilities and cannot be used as hedging instruments.
A hedged item refers to an item that exposes the Company to the risk of changes in fair value or cash flow and is designatedas the hedged object and can be reliably measured. The Company designates the following individual projects, project portfolios ortheir components as hedged projects:
① Confirmed assets or liabilities.
② Confirmed commitments that have not yet been confirmed. Confirmed commitment refers to a legally binding agreementto 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 that have not yet beencommitted but are expected to occur.
④ Net investment in overseas operations.
The above-mentioned project components refer to the parts that are less than the overall fair value or cash flow changes ofthe project. The Company designates the following project components or their combinations as hedged items:
① The part of the change in fair value or cash flow (risk component) that is only caused by one or more specific risks in theoverall fair value or cash flow changes of the project. According to the assessment in a specific market environment, the riskcomponent should be able to be individually identified and reliably measured. The risk component also includes the part where thefair value or cash flow of the hedged item changes only above or below a specific price or other variables.
② One or more selected contractual cash flows.
③ The component of the nominal amount of the project, that is, the specific part of the whole amount or quantity of theproject, may be a certain proportion of the whole project, or may be a certain level of the whole project. If a certain level includesearly repayment rights and the fair value of the early repayment rights is affected by changes in the risk of the hedge, the levelshall not be designated as the hedged item of the fair value hedge, but in the measurement of the hedged item except when the fairvalue has included the influence of the prepayment right.
(2.3) Evaluation of hedging relationship
When the hedging relationship is initially specified, the Group officially specifies the related hedging relationships withofficial documents recording the hedging relationships, risk management targets and hedging strategies. This document sets outthe hedging tools, hedged items, the nature of hedged risks, and the Company's assessment of hedged effectiveness. Hedgingmeans a financial instrument designated by the Company for the purpose of hedging, whose fair value or cash flow variation isoffset the fair value or cash flow variation of the hedged item, including: Such hedges are continuously evaluated on and after theinitial specified date to meet the requirements for hedging validity.
If the hedging instrument has expired, been sold, the contract is terminated or exercised (but the extension or replacement aspart of the hedging strategy is not treated as expired or contract termination), or the risk management objective changes, resultingin hedging The relationship no longer meets the risk management objectives, or the economic relationship between the hedgeditem and the hedging instrument no longer exists, or the impact of credit risk begins to dominate in the value changes caused bythe economic relationship between the hedged item and the hedging instrument, or when the hedge no longer meets the otherconditions of the hedge accounting method, the Company terminates the use of hedge accounting.
If the hedging relationship no longer meets the requirements for hedging effectiveness due to the hedging ratio, but the riskmanagement objective of the designated hedging relationship has not changed, the Company shall rebalance the hedgingrelationship.
(2.4) Revenue the of revenue recognition and measurement
If the conditions for applying hedge accounting method are met, it shall be handled according to the following methods:
Cash flow hedging
The part of hedging tool gains or losses that is valid for hedging is recognized as other comprehensive income as a cashflow hedging reserve, and the part that is invalid for hedging (that is, other gains or losses after deducting other comprehensiveincome), are counted Into the current profit and loss. The amount of cash flow hedging reserve is determined according to thelower of the absolute amounts of the following two items: ①accumulated gains or losses of hedging instruments since the hedging.The amount in the effective arbitrage is recognized by the accumulative gains or losses from the starting of arbitrage andaccumulative changes to the current value of future forecast cash flows from the start of arbitrage.If the expected transaction of the hedged asset is subsequently recognized as a non-financial asset or non-financial liability, orif the expected transaction of the non-financial asset or non-financial liability forms a defined commitment to the applicable fairvalue hedge accounting, the amount of the cash flow hedge reserve originally recognized in the other consolidated income istransferred out to account for the initial recognized amount of the asset or liability. For the remaining cash flow hedges, during thesame period when the expected cash flow to be hedged affects the profit and loss, if the expected sales occur, the cash flow hedgereserve recognized 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 Company shall reducethe share capital by the total amount of the written-off shares, adjust the owner's equity by the difference between the price paid bythe purchased stocks (including transaction costs) and the total amount of the written-off shares, offset the capital reserve (sharecapital premium), surplus reserve and undistributed profits in turn; A portion of a capital reserve (share capital premium) that isless than the total face value and less than the total face value.
(3.2) The total expenditure of the repurchase shares of the Company, which is managed as an inventory share before theyare 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, the portion of the transferincome above the cost of the inventory unit; Lower than the inventory stock cost, the capital 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 reasonable forecast offuture events based on its historical experience and other factors. Significant accounting judgment and assumptions that may leadto major adjustment of the book value of assets and liabilities in the next accounting year are listed as follows:
Classification of financial assets
The major judgements involved in the classification of financial assets include the analysis of business model and contractcash flow characteristics.
The company determines the business mode of managing financial assets at the level of financial asset portfolio, taking intoaccount such factors as how to evaluate and report financial asset performance to key managers, the risks that affect financial assetperformance and how to manage it, and how to obtain remuneration for related business managers.
When the company assesses whether the contractual cash flow of financial assets is consistent with the basic borrowingarrangement, there are the following main judgments: whether the principal may change due to early repayment and other reasonsduring the duration of the period or the amount of change; whether the interest Including the time value of money, credit risk,other basic borrowing risks, and consideration of costs and profits. For example, does the amount paid in advance reflect only theunpaid principal and the interest based on the unpaid principal, as well as the reasonable compensation paid for early terminationof the contract.
Measurement of expected credit losses of accounts receivable
The Company calculates the expected credit loss of accounts receivable through the risk exposure of accounts receivabledefault and the expected credit loss rate, and determines the expected credit loss rate based on the default probability and thedefault loss rate. When determining the expected credit loss rate, the Company uses internal historical credit loss experience andother data, combined with current conditions and forward-looking information to adjust the historical data. When consideringforward-looking information, the indicators used by the Company include the risks of economic downturn, changes in the externalmarket environment, technological environment, and customer conditions. The Company regularly monitors and reviewsassumptions related to the calculation of expected credit losses.
Deferred income tax assetsIf there is adequate taxable profit to deduct the loss, the deferred income tax assets should be recognized by all the unusedtax loss. This requires the management to make a lot of judgment to forecast the time and amount of future taxable profit anddetermine 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 installation services isrecognized over a period of time. The recognition of the income and profit of such engineering installation services depends on theCompany's estimation of the contract results and performance progress. If the actual amount of total revenue and total cost ishigher or lower than the estimated value of the management, it will affect the amount of revenue and profit recognition of theCompany in the future.
Engineering contractThe management shall make relevant judgment to confirm the income and expenses of project contracting businessaccording to the performance progress. If losses are expected to occur in the project contract, such losses shall be recognized ascurrent expenses. The management of the Company estimates the possible losses according to the budget of the project contract.The Company determines the transaction price according to the terms of the contract and in combination with previous customarypractices, and considers the influence of variable consideration, major financing components in the contract and other factors.During the performance of the contract, the Company continuously reviews the estimated total contract revenue and the estimatedtotal contract cost. 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 the total 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 of investment real estateat least quarterly. This requires the management to reasonably estimate the fair value of the investment real estate with the help ofvaluation experts.
35. Major changes in accounting policies and estimates
1. Changes in important accounting policies
□ Applicable ? Inapplicable
(2) Changes in major accounting estimates
□ Applicable ? Inapplicable
(3) Implementation of new accounting standards adjustment for the first time starting from 2023, and implementation offinancial statement related items at the beginning of the year for the first time
□ Applicable ? Inapplicable
VI. Taxation
1. Major taxes and tax rates
| Tax | Tax basis | Tax rate |
| VAT | Taxable income | 1%, 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% |
| Fangda Jianke | 15% |
| Fangda Zhiyuan Technology | 15% |
| Fangda Jiangxi New Material | 15% |
| Chengdu Fangda Construction Technology Co., Ltd. (hereinafter Fangda Chengdu Technology) | 15% |
| Dongguan Fangda New Material Co., Ltd. (hereinafter Fangda Dongguan New Material) | 15% |
| Fangda Property | 25% |
| 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., Lt.d (hereinafter Kechuangyuan Software) | 25% |
| Fangda Zhiyuan Technology (Hong Kong) Co., Ltd, (Fangda Zhiyuan Hong Kong) | 16.50% |
| Fangda Zhiyuan Technology (Wuhan) Co., Ltd, (Fangda Wuhan Zhiyuan) | 25% |
| Fangda Zhiyuan Technology (Nanchang) Co., Ltd, (Fangda Nanchang Zhiyuan) | 25% |
| Fangda Zhiyuan Technology (Dongguan) Co., Ltd, (Fangda Dongguan Zhiyuan) | 25% |
| General Rail Technology Private Limited | 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 | 30% |
| Shanghai Fangda Zhijian Technology Co., Ltd. (hereinafter referred to as Fangda Shanghai Zhijian company) | 15% |
| Shenzhen Fangda Yunzhi Technology Co., Ltd. (hereinafter Fangda Yunzhi) | 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 Fangda Yunzhu Technology Co., Ltd. (hereinafter Fangda Yunzhu) | 15% |
| Shenzhen Yunzhu Testing Technology Co., Ltd. (Hereinafter Fangda Yunzhu Testing) | 25% |
| Jiangxi Fangda Intelligent Manufacturing Technology Co., Ltd. (hereinafter referred to as Fangda Intelligent Manufacturing Company) | 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 Zhiyuan 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 techenterprise jointly issued by Jiangxi Provincial Department of Science and Technology, Jiangxi Provincial Department of Finance,State Administration of Taxation and Jiangxi Provincial Bureau of Taxation. The certificate number is GR202136000174. Withinthree years 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 No.GR202051002193 jointly issued by the Department of Science and Technology of Sichuan Province, the Department of Finance ofSichuan Province, the State Administration of Taxation and the Sichuan Provincial Taxation Bureau. Within three years afterobtaining the qualification of high tech enterprise (2020 December-2023 December), the income tax will continue to be levied at15%.
(5) On December 22, 2022, the subsidiary Fangda Dongguan New Materials Co., Ltd. obtained the certificate of high techenterprise No.GR202244006622 jointly issued by Guangdong Provincial Department of science and technology, Guangdong
Provincial Department of Finance and Guangdong Provincial Taxation Bureau. Within three years (from 2022 to 2024) afterobtaining the qualification of high tech enterprise, the income tax will be charged at 15%.
(6) The subsidiary Kechuangyuan Software is an enterprise located in Qianhai Shenzhen Hong Kong Modern ServiceIndustry Cooperation Zone. Its main business meets the conditions of Preferential Catalogue of Enterprise Income Tax in QianhaiShenzhen Hong Kong Modern Service Industry Cooperation Zone (2021)(the Regulation shall be implemented from January 1,2021 to December 31, 2025), and the income tax is levied at 15%.
(7) On November 12, 2020, the subsidiary Fangda Shanghai Zhijian obtained the certificate of high tech enterpriseNo.GR202031001525 jointly issued by Shanghai Science and Technology Commission, Shanghai Finance Bureau and ShanghaiTaxation Bureau. Within three years (from 2020 November to 2023 November) after obtaining the qualification of high techenterprise, the income tax will continue to be charged at 15%.
(8) On December 11, 2020, the subsidiary Fangda Yunzhu Co., Ltd. obtained the certificate of high tech enterprise jointlyissued by Shenzhen Science and Technology Innovation Commission, Shenzhen Finance Bureau, State Administration of Taxationand Shenzhen Taxation Bureau. The certificate number is GR202044202438. Within three years after obtaining the qualificationof high tech enterprise (from 2020 December to 2023 December), the income tax will be levied at 15%.
(9) According to the Announcement of the Ministry of Finance and the State Administration of Taxation on FurtherImplementing Income Tax Preferential Policies for Small and Micro Enterprises (Announcement No. 13 of 2022) and theAnnouncement of the Ministry of Finance and the State Administration of Taxation on Income Tax Preferential Policies for Smalland Micro Enterprises and Individual Industrial and Commercial Households (Announcement No. 6 of 2023) issued by theMinistry of Finance and the State Administration of Taxation, some companies belong to small and micro profit enterprises in2023, Their income shall be subject to corporate income tax in accordance with the provisions of the aforementioned documents.VII. Notes to the consolidated financial statements
1. Monetary capital
In RMB
| Item | Closing balance | Opening balance |
| Inventory cash: | 5,350.98 | 149.81 |
| Bank deposits | 778,541,607.39 | 809,288,523.64 |
| Other monetary capital | 507,959,335.59 | 429,465,543.05 |
| Total | 1,286,506,293.96 | 1,238,754,216.50 |
| Including: total amount deposited in overseas | 40,703,365.79 | 49,596,440.24 |
| The total amount of money that has restrictions on use due to mortgage, pledge or freezing | 537,833,587.91 | 455,076,287.44 |
Notes:
(1) The restricted funds used in the ending balance of bank deposits are RMB36,219,081.10, mainlyconsisting of RMB20,435,919.19 in the special account for labor insurance and migrant worker wages, andRMB15,454,841.23 in the loan supervision account; The restricted funds used in the ending balance of othermonetary funds are RMB501,614,506.81, mainly including deposit for bills of exchange and guarantee letterissuance. In addition, there are no other funds in the monetary funds at the end of the period that haverestrictions 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 depositsare not used as cash and cash equivalents.
(3) At the end of the period, the Company's total amount deposited abroad was RMB40,703,365.79.
2. Derivative financial assets
In RMB
| Item | Closing balance | Opening balance |
| Forward foreign exchange contract | 77,586.17 | 789,205.34 |
| Total | 77,586.17 | 789,205.34 |
3. Notes receivable
(1) Classification of notes receivable
In RMB
| Item | Closing balance | Opening balance |
| Bank acceptance | 19,796,134.07 | 18,434,258.87 |
| Commercial acceptance | 33,404,202.85 | 111,994,295.62 |
| Total | 53,200,336.92 | 130,428,554.49 |
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 receivab | 53,788,028.76 | 100.00% | 587,691.84 | 1.09% | 53,200,336.92 | 132,708,717.05 | 100.00% | 2,280,162.56 | 1.72% | 130,428,554.49 |
| le with provision for bad debts by portfolio | ||||||||||
| Including: | ||||||||||
| Bank acceptance | 19,796,134.07 | 36.80% | 19,796,134.07 | 18,434,258.87 | 13.89% | 18,434,258.87 | ||||
| Commercial acceptance | 33,991,894.69 | 63.20% | 587,691.84 | 1.73% | 33,404,202.85 | 114,274,458.18 | 86.11% | 2,280,162.56 | 2.00% | 111,994,295.62 |
| Total | 53,788,028.76 | 100.00% | 587,691.84 | 1.09% | 53,200,336.92 | 132,708,717.05 | 100.00% | 2,280,162.56 | 1.72% | 130,428,554.49 |
Provision for bad debts by combination: trade acceptance
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Commercial acceptance | 33,991,894.69 | 587,691.84 | 1.73% |
Provision for bad debts by combination: bank acceptance
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Bank acceptance | 19,796,134.07 | 0.00 | 0.00% |
If the provision for bad debts of bills 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
(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 | 2,280,162.56 | -1,692,470.72 | 587,691.84 | |||
| Total | 2,280,162.56 | -1,692,470.72 | 587,691.84 | |||
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 | 19,496,134.07 | |
| Commercial acceptance | 8,309,096.47 | |
| Total | 27,805,230.54 |
(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 | 11,332,317.70 |
| Total | 11,332,317.70 |
4. 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 | 80,430,339.27 | 9.51% | 74,382,698.73 | 92.48% | 6,047,640.54 | 89,501,875.22 | 8.46% | 83,454,234.68 | 93.24% | 6,047,640.54 |
| Including: | ||||||||||
| Customer 1 | 54,873,223.21 | 6.49% | 54,873,223.21 | 100.00% | 54,873,223.21 | 5.19% | 54,873,223.21 | 100.00% | ||
| Customer 2 | 13,461,834.96 | 1.59% | 13,461,834.96 | 100.00% | 13,461,834.96 | 1.27% | 13,461,834.96 | 100.00% | ||
| Customer 3 | 4,998,860.10 | 0.59% | 2,499,430.06 | 50.00% | 2,499,430.04 | 4,998,860.10 | 0.47% | 2,499,430.06 | 50.00% | 2,499,430.04 |
| Customer 4 | 7,096,421.00 | 0.84% | 3,548,210.50 | 50.00% | 3,548,210.50 | 7,096,421.00 | 0.67% | 3,548,210.50 | 50.00% | 3,548,210.50 |
| Customer 5 | 9,071,535.95 | 0.86% | 9,071,535.95 | 100.00% | ||||||
| Account receivable for which bad debt provision is made by | 765,378,383.41 | 90.00% | 131,540,743.59 | 17.19% | 633,837,639.82 | 968,358,465.15 | 91.54% | 142,113,757.52 | 14.68% | 826,244,707.63 |
| group | ||||||||||
| Including: | ||||||||||
| 1. Portfolio 1: Engineering operations section | 547,227,703.34 | 64.70% | 121,260,383.44 | 22.16% | 425,967,319.90 | 714,451,919.44 | 67.54% | 128,787,757.87 | 18.03% | 585,664,161.57 |
| 2. Portfolio 2: Real estate business payments | 133,544,450.99 | 15.79% | 6,959,844.99 | 5.21% | 126,584,606.00 | 167,560,235.16 | 15.84% | 7,893,605.97 | 4.71% | 159,666,629.19 |
| 3. Combination 3: Other business models | 84,606,229.08 | 10.00% | 3,320,515.16 | 3.92% | 81,285,713.92 | 86,346,310.55 | 8.16% | 5,432,393.68 | 6.29% | 80,913,916.87 |
| Total | 845,808,722.68 | 100.00% | 205,923,442.32 | 24.35% | 639,885,280.36 | 1,057,860,340.37 | 100.00% | 225,567,992.20 | 21.32% | 832,292,348.17 |
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 | 13,461,834.96 | 13,461,834.96 | 100.00% | Customer credit status deteriorates and is hard to recover |
| 3. Customer 3 | 4,998,860.10 | 2,499,430.06 | 50.00% | Customer credit status deteriorates |
| 4. Customer 4 | 7,096,421.00 | 3,548,210.50 | 50.00% | Customer credit status deteriorates |
| Total | 80,430,339.27 | 74,382,698.73 | ||
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 | 246,808,063.70 | 4,837,438.05 | 1.96% |
| 1-2 years | 97,695,067.95 | 5,529,540.85 | 5.66% |
| 2-3 years | 60,634,127.27 | 7,736,914.64 | 12.76% |
| 3-4 years | 33,524,474.50 | 6,624,436.16 | 19.76% |
| 4-5 years | 21,171,562.60 | 9,137,646.42 | 43.16% |
| Over 5 years | 87,394,407.32 | 87,394,407.32 | 100.00% |
| Total | 547,227,703.34 | 121,260,383.44 | |
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 | 93,253,634.23 | 932,536.35 | 1.00% |
| 1-2 years | 82,491.13 | 4,124.55 | 5.00% |
| 2-3 years | 80,647.44 | 4,032.37 | 5.00% |
| 3-4 years | 22,273,070.00 | 3,340,960.50 | 15.00% |
| 4-5 years | |||
| Over 5 years | 17,854,608.19 | 2,678,191.22 | 15.00% |
| Total | 133,544,450.99 | 6,959,844.99 | |
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 | 57,933,653.13 | 422,912.67 | 0.73% |
| 1-2 years | 18,399,929.48 | 386,398.53 | 2.10% |
| 2-3 years | 3,371,027.41 | 283,840.51 | 8.42% |
| 3-4 years | 3,308,522.70 | 819,851.93 | 24.78% |
| 4-5 years | 1,371,649.28 | 1,186,064.44 | 86.47% |
| Over 5 years | 221,447.08 | 221,447.08 | 100.00% |
| Total | 84,606,229.08 | 3,320,515.16 | |
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 | Closing balance |
| Within 1 year (inclusive) | 397,995,351.06 |
| 1-2 years | 116,177,488.56 |
| 2-3 years | 64,518,448.43 |
| Over 3 years | 267,117,434.63 |
| 3-4 years | 59,106,067.20 |
| 4-5 years | 32,802,831.15 |
| Over 5 years | 175,208,536.28 |
| Total | 845,808,722.68 |
Accounts receivable with significant individual amounts over three years of age:
| 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 | 25,647,044.22 | 25,647,044.22 | Customer credit status deteriorates | Yes |
| Customer 3 | 17,374,148.42 | 17,374,148.42 | Customer credit status deteriorates | Yes |
| Customer 4 | 13,461,834.96 | 13,461,834.96 | Customer credit status deteriorates | Yes |
| Total | 111,356,250.81 | 111,356,250.81 |
(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 | 83,454,234.68 | 9,071,535.95 | 74,382,698.73 | |||
| 1. Portfolio 1: Engineering operations section | 128,787,757.87 | -7,181,743.93 | 345,630.50 | 121,260,383.44 | ||
| 2. Portfolio 2: Real estate business payments | 7,893,605.97 | -933,760.98 | 6,959,844.99 | |||
| 3. Combination 3: Other business models | 5,432,393.68 | -2,111,878.52 | 3,320,515.16 | |||
| Total | 225,567,992.20 | -10,227,383.43 | 9,071,535.95 | 345,630.50 | 205,923,442.32 | |
Including significant recovery or reversal:
In RMB
| Entity | Written-back or recovered amount | Method |
| Customer 1 | 9,071,535.95 | After applying for bankruptcy liquidation, the customer shall have priority to receive compensation and be recovered by bank transfer |
| Total | 9,071,535.95 |
After the Company verified that 100% of the bad debt reserves were withdrawn in the early stage, it was difficult for themanagement to recover the original accounts receivable in full. Subsequently, the company made unremitting efforts to obtain thepriority right of repayment of the project funds through litigation, application for bankruptcy liquidation of the customer, andfinally recovered the above funds through priority repayment after the bankruptcy liquidation of the customer 1.
(3) Written-off account receivable during the period
In RMB
| Item | Amount |
| Account receivable written off | 345,630.50 |
(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 | 6.49% | 54,873,223.21 |
| No.2 | 42,535,101.14 | 5.03% | 6,043,225.96 |
| No.3 | 31,500,000.00 | 3.72% | 2,214,033.38 |
| No.4 | 26,609,788.45 | 3.15% | 1,492,136.53 |
| No.5 | 26,002,530.93 | 3.07% | 25,667,164.77 |
| Total | 181,520,643.73 | 21.46% |
(5) Receivables derecognized due to transfer of financial assets
In RMB
| Customer | Way of transfer | De-recognized amount | Gain or loss related to the de-recognition |
| Customer 1 | Factoring | 15,744,556.14 | -524,992.11 |
| Customer 2 | Factoring | 15,516,080.12 | -326,570.39 |
| Customer 3 | Factoring | 12,217,700.00 | -425,127.73 |
| Customer 4 | Factoring | 6,514,269.60 | -242,897.38 |
| Customer 5 | Factoring | 3,604,432.50 | -122,127.97 |
| Customer 6 | Factoring | 8,518,028.24 | 116,089.38 |
| Customer 7 | Factoring | 4,838,904.94 | -193,501.09 |
| Customer 8 | Factoring | 7,631,987.06 | -241,849.95 |
| Customer 9 | Factoring | 2,000,000.00 | -55,333.33 |
| Customer 10 | Factoring | 6,000,000.00 | -74,375.00 |
| Customer 11 | Factoring | 3,318,734.36 | -121,175.29 |
| Customer 12 | Factoring | 4,096,559.14 | -133,820.93 |
| Customer 13 | Factoring | 524,197.43 | -16,445.82 |
| Total | 90,525,449.53 | -2,362,127.61 |
5. Receivable financing
In RMB
| Item | Closing balance | Opening balance |
| Notes receivable | 9,703,929.82 | 1,338,202.01 |
| Total | 9,703,929.82 | 1,338,202.01 |
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,please refer to the disclosure of other receivables to disclose the relevant information of the impairment provision:
□ Applicable ? Inapplicable
6. Prepayment
(1) Account ages of prepayments
In RMB
| Age | Closing balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Less than 1 year | 20,277,587.64 | 82.41% | 14,930,557.32 | 72.37% |
| 1-2 years | 1,046,199.43 | 4.25% | 2,913,056.11 | 14.12% |
| 2-3 years | 428,425.01 | 1.74% | 582,237.19 | 2.82% |
| Over 3 years | 2,853,915.34 | 11.60% | 2,205,799.97 | 10.69% |
| Total | 24,606,127.42 | 20,631,650.59 | ||
(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 RMB7,008,762.08,accounting for 28.48% of the total prepayments at the end of the period.
7. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Other receivables | 163,623,479.94 | 155,379,024.22 |
| Total | 163,623,479.94 | 155,379,024.22 |
(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 | 100,845,767.52 | 99,789,014.58 |
| Construction borrowing and advanced payment | 38,500,146.40 | 33,008,395.75 |
| Staff borrowing and petty cash | 2,347,718.13 | 1,439,503.90 |
| VAT refund receivable | 1,863,267.34 | 1,946,422.08 |
| Debt by Luo Huichi | 11,242,291.48 | |
| Others | 31,966,759.17 | 30,122,981.20 |
| Total | 175,523,658.56 | 177,548,608.99 |
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 | Expected credit loss for the entire duration (no | Expected credit loss for the entire duration (credit |
| months | credit impairment) | impairment has occurred) | ||
| Balance on January 1, 2023 | 2,063,971.54 | 117,684.26 | 19,987,928.97 | 22,169,584.77 |
| Balance on January 1, 2023 in the current period | ||||
| -- transferred to the second stage | ||||
| -- transferred to the third stage | ||||
| -- transferred back to second stage | ||||
| -- transferred back to first stage | ||||
| Provision | 264,051.64 | -8,960.72 | 754,598.59 | 1,009,689.51 |
| Transferred back in the current period | 292,877.00 | 292,877.00 | ||
| Written off in the current period | ||||
| Canceled in the current period | 10,992,291.48 | 10,992,291.48 | ||
| Other change | 5,811.34 | 261.48 | 6,072.82 | |
| Balance on June 30, 2023 | 2,333,834.52 | 108,723.54 | 9,457,620.56 | 11,900,178.62 |
Account age
In RMB
| Age | Closing balance |
| Within 1 year (inclusive) | 30,012,892.96 |
| 1-2 years | 7,102,785.94 |
| 2-3 years | 23,477,143.64 |
| Over 3 years | 114,930,836.02 |
| 3-4 years | 6,059,121.55 |
| 4-5 years | 82,166,283.63 |
| Over 5 years | 26,705,430.84 |
| Total | 175,523,658.56 |
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 | |||
| Separate bad debt provision | 15,026,957.59 | 292,877.00 | 10,992,291.48 | 3,741,789.11 | ||
| Provision for bad debts by combination | 7,142,627.18 | 1,009,689.51 | 6,072.82 | 8,158,389.51 | ||
| Total | 22,169,584.77 | 1,009,689.51 | 292,877.00 | 10,992,291.48 | 6,072.82 | 11,900,178.62 |
4) Other receivable written off in the current period
In RMB
| Item | Amount |
| Luo Huichi | 10,992,291.48 |
Including significant other receivable:
In RMB
| Entity | Nature | Amount | Reason | Writing-off procedure | Related transaction |
| Luo Huichi | Debt by Luo Huichi | 10,992,291.48 | Impossible enforcement of property, with minimal possibility of subsequent recovery | Approved by the senior management | No |
| Total | 10,992,291.48 |
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. | Deposit and prepaid expenses | 70,062,675.83 | 4-5 years | 43.33% | 1,133,333.87 |
| 6,000,000.00 | Less than 1 year | ||||
| Bangshen Electronics (Shenzhen) Co., Ltd. | Deposit | 20,000,000.00 | Over 5 years | 11.39% | 298,000.00 |
| Shenzhen Rijiasheng Trading Co., Ltd | Others | 18,708,945.57 | 2-3 years | 10.66% | 3,741,789.11 |
| Shenzhen Henggang Dakang Co., Ltd. | Deposit | 8,000,000.00 | 4-5 years | 4.56% | 119,200.00 |
| China Merchants Futures Brokerage Co., Ltd. | Deposit | 6,217,934.50 | Less than 1 year | 3.54% | 92,647.22 |
| Total | 128,989,555.90 | 73.49% | 5,384,970.20 |
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 | 964,545.88 | Less than 1 year | Full recovered in less than 1 year |
8. Inventories
Whether the Company needs to comply with disclosure requirements of the real estate industry.No
(1) Classification of inventories
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Provision for inventory depreciation or contract performance cost impairment provision | Book value | Remaining book value | Provision for inventory depreciation or contract performance cost impairment provision | Book value | |
| Raw materials | 102,216,693.48 | 102,216,693.48 | 124,041,162.65 | 124,041,162.65 | ||
| Product in process | 58,413,723.22 | 58,413,723.22 | 95,231,082.82 | 95,231,082.82 | ||
| Finished goods in stock | 11,448,102.53 | 11,448,102.53 | 8,937,351.29 | 8,937,351.29 | ||
| Contract performance costs | 89,656,600.87 | 89,656,600.87 | 88,165,638.94 | 88,165,638.94 | ||
| Goods delivered | 33,343,876.40 | 33,343,876.40 | 1,675,486.58 | 1,675,486.58 | ||
| Low price consumable | 325,030.91 | 325,030.91 | 193,880.28 | 193,880.28 | ||
| OEM materials | 14,738,285.32 | 14,738,285.32 | 22,479,288.26 | 22,479,288.26 | ||
| Development cost | 221,831,857.26 | 221,831,857.26 | 219,112,637.71 | 219,112,637.71 | ||
| Development products | 144,034,575.00 | 144,034,575.00 | 150,695,868.79 | 150,695,868.79 | ||
| Total | 676,008,744.99 | 676,008,744.99 | 710,532,397.32 | 710,532,397.32 | ||
(2) Balance at the end of the period includes capitalization of borrowing expenseAs of June 30, 2023, the capitalization amount of borrowing costs in the ending inventory balance is RMB5,626,053.35.
(3) Explanation of the current amortization amount of contract performance cost
The current amortization amount of contract performance costs is included in operating costs.
9. Contract assets
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
| Completed and unsettled project funds that fail to meet the collection conditions | 2,582,968,526.03 | 191,861,131.57 | 2,391,107,394.46 | 2,176,000,625.48 | 173,393,371.22 | 2,002,607,254.26 |
| Quality guarantee deposit that fails to meet the collection conditions | 119,839,601.21 | 16,134,937.67 | 103,704,663.54 | 133,413,895.62 | 19,336,873.48 | 114,077,022.14 |
| Sales funds with conditional collection right | 47,686,304.24 | 424,670.09 | 47,261,634.15 | 42,541,809.75 | 365,427.72 | 42,176,382.03 |
| Total | 2,750,494,431.48 | 208,420,739.33 | 2,542,073,692.15 | 2,351,956,330.85 | 193,095,672.42 | 2,158,860,658.43 |
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 | 388,500,140.20 | This is mainly due to the unsettled project funds with conditional collection rights arising from the revenue recognized in the project contract this year |
| Total | 388,500,140.20 | —— |
If the provision for impairment of contract assets is made in accordance with the general model of expected credit losses, pleaserefer to the disclosure of other receivables to disclose information about impairment:
□ 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 |
| Separate bad debt provision | ||||
| Provision for bad debts by combination | 15,325,066.91 | |||
| Total | 15,325,066.91 |
10. Non-current assets due in 1 year
In RMB
| Item | Closing balance | Opening balance |
| Certificate of deposit | 321,983,047.30 |
| Total | 321,983,047.30 |
11. Other current assets
In RMB
| Item | Closing balance | Opening balance |
| Reclassification of VAT debit balance and input to be certified | 205,783,723.96 | 174,264,248.29 |
| Overpayment and prepayment of income tax | 4,706,850.28 | 3,997,524.27 |
| Other prepaid taxes | 4,136,441.06 | 3,348,706.84 |
| Payment to be collected on behalf of suppliers | 3,003,841.89 | 12,015,367.57 |
| Agencies | 4,222,606.85 | 2,064,871.00 |
| Deferred discount expenses and others | 5,771,321.88 | 5,291,245.63 |
| Total | 227,624,785.92 | 200,981,963.60 |
12. 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 | |||||||||||
| Jiangxi Business Innovative Property Joint Stock Co., Ltd.&Shenzhen Ganshang Joint Investment Co., Ltd. | 54,969,042.14 | 294.42 | 54,969,336.56 | ||||||||
| Subtota | 54,969,042.14 | 294.42 | 54,969,336.56 | ||||||||
| l | |||||||||||
| Total | 54,969,042.14 | 294.42 | 54,969,336.56 |
13. Investment in other equity tools
In RMB
| Item | Closing balance | Opening balance |
| Unlisted equity instrument investment | 11,968,973.86 | |
| Total | 11,968,973.86 |
Sub-disclosure of non-tradable equity instrument investment in the current period
In RMB
| Project name | 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 | 28,562,575.67 | |||||
| Shenzhen Huihai Yirong Internet Service Co., Ltd. | 3,779,277.52 |
14. 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 | 7,515,217.28 | 7,507,434.68 |
| Total | 7,515,217.28 | 7,507,434.68 |
15. Investment real estates
(1) Investment real estate measured at costs
? Applicable □ Inapplicable
In RMB
| Item | Houses & buildings | Total |
| I. Book value | ||
| 1. Opening balance | 17,388,824.39 | 17,388,824.39 |
| 2. Increase in this period | ||
| 3. Decrease in this period | ||
| 4. Closing balance | 17,388,824.39 | 17,388,824.39 |
| II. Accumulative depreciation and amortization | ||
| 1. Opening balance | 7,702,419.40 | 7,702,419.40 |
| 2. Increase in this period | 224,656.39 | 224,656.39 |
| (1) Provision or amortization | 224,656.39 | 224,656.39 |
| 3. Decrease in this period | ||
| 4. Closing balance | 7,927,075.79 | 7,927,075.79 |
| 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 | 9,461,748.60 | 9,461,748.60 |
| 2. Opening book value | 9,686,404.99 | 9,686,404.99 |
(2) Investment real estate measured at fair value
? Applicable □ Inapplicable
In RMB
| Item | Houses & buildings | Total |
| I. Opening balance | 5,750,831,172.12 | 5,750,831,172.12 |
| II. Change in this period | 0.00 | 0.00 |
| Add: external purchase | ||
| Less: other transfer-out | 122,109.40 | 122,109.40 |
| Change in fair value | 122,109.40 | 122,109.40 |
| III. Closing balance | 5,750,831,172.12 | 5,750,831,172.12 |
16. Fixed assets
In RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 636,359,361.87 | 646,812,853.36 |
| Total | 636,359,361.87 | 646,812,853.36 |
(1) Fixed assets
In RMB
| Item | Houses & buildings | Mechanical equipment | Transportation facilities | Electronics and other devices | PV power plants | Total |
| I. Book value | ||||||
| 1. Opening balance | 607,215,899.93 | 130,812,618.16 | 20,276,104.91 | 51,941,275.99 | 129,596,434.84 | 939,842,333.83 |
| 2. Increase in | 1,341,577.70 | 2,245,168.14 | 252,718.76 | 553,624.55 | 4,393,089.15 |
| this period | ||||||
| (1) Purchase | 2,245,168.14 | 244,108.23 | 553,624.55 | 3,042,900.92 | ||
| (2) Transfer-in of construction in progress | 1,341,577.70 | 1,341,577.70 | ||||
| (3) Other increases | 8,610.53 | 8,610.53 | ||||
| 3. Decrease in this period | 785,123.03 | 312,615.00 | 207,052.91 | 1,304,790.94 | ||
| (1) Disposal or retirement | 785,123.03 | 312,615.00 | 207,052.91 | 1,304,790.94 | ||
| 4. Closing balance | 608,557,477.63 | 132,272,663.27 | 20,216,208.67 | 52,287,847.63 | 129,596,434.84 | 942,930,632.04 |
| II. Accumulative depreciation | 0.00 | 2,883.60 | 540,740.68 | 40,654,236.34 | 41,197,860.62 | |
| 1. Opening balance | 112,024,116.79 | 93,123,314.47 | 14,710,157.32 | 32,421,186.05 | 40,654,236.34 | 292,933,010.97 |
| 2. Increase in this period | 7,705,395.54 | 2,163,460.35 | 536,514.46 | 1,198,861.38 | 3,074,220.06 | 14,678,451.79 |
| (1) Provision | 7,705,395.54 | 2,163,460.35 | 530,207.91 | 1,198,820.16 | 3,074,220.06 | 14,672,104.02 |
| (2) Other increases | 6,306.56 | 41.22 | 6,347.77 | |||
| 3. Decrease in this period | 705,986.38 | 281,353.50 | 149,322.21 | 1,136,662.09 | ||
| (1) Disposal or retirement | 705,986.38 | 281,353.50 | 149,322.21 | 1,136,662.09 | ||
| 4. Closing balance | 119,729,512.33 | 94,580,788.44 | 14,965,318.28 | 33,470,725.22 | 43,728,456.40 | 306,474,800.67 |
| III. Impairment provision | ||||||
| 1. Opening balance | 79,843.20 | 16,626.30 | 96,469.50 | |||
| 2. Increase in this period | ||||||
| 3. Decrease in this period | ||||||
| 4. Closing balance | 79,843.20 | 16,626.30 | 96,469.50 | |||
| IV. Book value | ||||||
| 1. Closing book value | 488,827,965.30 | 37,612,031.63 | 5,250,890.39 | 18,800,496.11 | 85,867,978.44 | 636,359,361.87 |
| 2. Opening book value | 495,191,783.14 | 37,609,460.49 | 5,565,947.59 | 19,503,463.64 | 88,942,198.50 | 646,812,853.36 |
(2) Fixed assets without ownership certificate
In RMB
| Item | Book value | Reason |
| Yuehai Office Building C 502 | 109,384.41 | Historical reasons |
17. Construction in process
In RMB
| Item | Closing balance | Opening balance |
| Construction in process | 272,641.50 | |
| Total | 272,641.50 |
(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 | |
| Fangda (Ganzhou) Low Carbon Intelligent Manufacturing Headquarters Base | 272,641.50 | 272,641.50 | ||||
| Total | 272,641.50 | 272,641.50 | ||||
18. Use right assets
In RMB
| Item | Houses & buildings | Transportation facilities | Total |
| I. Book value | |||
| 1. Opening balance | 37,907,485.94 | 707,871.75 | 38,615,357.69 |
| 2. Increase in this period | 7,581,754.91 | 1,348,069.46 | 8,929,824.37 |
| 3. Decrease in this period | 5,582,322.29 | 707,871.75 | 6,290,194.04 |
| 4. Closing balance | 39,906,918.56 | 1,348,069.46 | 41,254,988.02 |
| II. Accumulative depreciation | |||
| 1. Opening balance | 18,558,917.17 | 606,747.12 | 19,165,664.29 |
| 2. Increase in this period | 7,043,989.57 | 326,658.11 | 7,370,647.68 |
| (1) Provision | 7,043,989.57 | 326,658.11 | 7,370,647.68 |
| 3. Decrease in this period | 4,145,509.01 | 707,871.75 | 4,853,380.76 |
| (1) Disposal | 4,145,509.01 | 707,871.75 | 4,853,380.76 |
| 4. Closing balance | 21,457,397.73 | 225,533.48 | 21,682,931.21 |
| 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 | 18,449,520.83 | 1,122,535.98 | 19,572,056.81 |
| 2. Opening book value | 19,348,568.77 | 101,124.63 | 19,449,693.40 |
Other note: The depreciation amount for the use rights assets from January to June 2023 is RMB7,370,647.68.
19. Intangible assets
(1) Intangible assets
In RMB
| Item | Land using right | Patent | Unpatented technologies | Total |
| I. Book value | ||||
| 1. Opening balance | 80,404,737.13 | 9,013,772.69 | 23,529,100.66 | 112,947,610.48 |
| 2. Increase in this period | 24,179,649.75 | 2,250.00 | 28,301.89 | 24,210,201.64 |
| (1) Purchase | 24,179,649.75 | 2,250.00 | 28,301.89 | 24,210,201.64 |
| 3. Decrease in this period | ||||
| 4. Closing balance | 104,584,386.88 | 9,016,022.69 | 23,557,402.55 | 137,157,812.12 |
| II. Accumulative amortization | ||||
| 1. Opening balance | 19,666,143.94 | 8,799,771.79 | 11,802,250.49 | 40,268,166.22 |
| 2. Increase in this period | 1,389,426.16 | 64,971.56 | 997,587.54 | 2,451,985.26 |
| (1) Provision | 1,389,426.16 | 64,971.56 | 997,587.54 | 2,451,985.26 |
| 3. Decrease in this period | ||||
| 4. Closing balance | 21,055,570.10 | 8,864,743.35 | 12,799,838.03 | 42,720,151.48 |
| 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 | 83,528,816.78 | 151,279.34 | 10,757,564.52 | 94,437,660.64 |
| 2. Opening book value | 60,738,593.19 | 214,000.90 | 11,726,850.17 | 72,679,444.26 |
20. Long-term amortizable expenses
In RMB
| Item | Opening balance | Increase in this period | Amortized amount in this period | Closing balance |
| Sporadic decoration and | 3,915,832.11 | 434,690.73 | 859,924.60 | 3,490,598.24 |
| renovation costs of Fangda City | ||||
| Sporadic decoration and renovation costs of Fangda Center | 1,069,259.56 | 182,780.58 | 886,478.98 | |
| Xuanfeng Chayuan village and Zhuyuan village land transfer compensation | 972,425.54 | 28,050.78 | 944,374.76 | |
| Reconstruction project of sample room | 115,713.78 | 57,856.80 | 57,856.98 | |
| Membership fee | 704,999.96 | 145,000.02 | 559,999.94 | |
| Factory wall painting and rolling shutter door engineering | 126,403.20 | 22,982.40 | 103,420.80 | |
| Plant ground reconstruction project | 232,431.71 | 43,581.00 | 188,850.71 | |
| High voltage network access fee of East China base | 487,104.91 | 153,822.66 | 333,282.25 | |
| Management consulting service fee | 113,569.36 | 32,448.36 | 81,121.00 | |
| Warehouse addition and renovation project | 90,825.75 | 30,275.22 | 60,550.53 | |
| Others | 1,916,095.13 | 95,284.04 | 550,344.58 | 1,461,034.59 |
| Total | 9,744,661.01 | 529,974.77 | 2,107,067.00 | 8,167,568.78 |
21. Differed income tax assets and differed income tax liabilities
(1) Non-deducted deferred income tax assets
In RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Assets impairment provision | 322,430,180.61 | 59,250,112.15 | 295,671,508.97 | 54,047,399.06 |
| Unrealized profit of internal transactions | 401,088,842.35 | 84,107,333.49 | 394,667,372.22 | 83,176,747.29 |
| Deductible loss | 173,556,570.33 | 34,939,379.79 | 160,102,622.27 | 32,419,194.27 |
| Credit impairment provision | 218,301,555.44 | 33,956,712.23 | 249,948,173.84 | 39,913,829.96 |
| Anticipated liabilities | 5,518,214.79 | 827,732.22 | 3,372,553.84 | 505,883.08 |
| Deferred earning | 3,511,556.86 | 543,157.44 | 3,610,875.25 | 558,241.49 |
| Change in fair value | 6,578,309.27 | 990,583.24 | 5,433,747.37 | 815,062.11 |
| Tax differences under new lease criteria | 386,406.38 | 43,400.05 | 1,316,989.65 | 195,214.63 |
| Accrued and unpaid land tax | 20,300,503.81 | 5,075,125.96 | 20,133,488.43 | 5,033,372.11 |
| Reserved expense | 30,496,974.99 | 4,542,330.07 | 22,640,219.20 | 3,396,032.88 |
| Total | 1,182,169,114.83 | 224,275,866.64 | 1,156,897,551.04 | 220,060,976.88 |
(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 | 4,186,741,285.94 | 1,046,677,562.89 | 4,188,015,507.12 | 1,046,924,956.27 |
| Acquire premium to form inventory | 1,535,605.48 | 383,901.37 | 1,535,605.47 | 383,901.37 |
| Estimated gross margin when Fangda City records income, but does not reach the taxable income level | 23,383,161.34 | 5,845,790.33 | 38,783,686.70 | 9,695,921.68 |
| Rental income | 30,472,339.02 | 7,618,084.76 | 32,671,966.71 | 8,167,991.68 |
| Total | 4,242,132,391.78 | 1,060,525,339.35 | 4,261,006,766.00 | 1,065,172,771.00 |
(3) Net deferred income tax assets or liabilities listed
In RMB
| Item | Deferred income tax assets and liabilities at the end of the period | Offset balance of deferred income tax assets or liabilities after offsetting | Deferred income tax assets and liabilities at the beginning of the period | Offset balance of deferred income tax assets or liabilities after offsetting |
| Deferred income tax assets | 224,275,866.64 | 220,060,976.88 | ||
| Deferred income tax liabilities | 1,060,525,339.35 | 1,065,172,771.00 |
(4) Details of unrecognized deferred income tax assets
In RMB
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 330,995.20 | 146,089.64 |
| Deductible loss | 18,653,471.92 | 16,177,447.74 |
| Total | 18,984,467.12 | 16,323,537.38 |
(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 |
| 2023 | 4,575,983.46 | 4,575,983.46 | |
| 2024 | 1,276,235.76 | 1,276,235.76 | |
| 2025 | 213,129.83 | 213,129.83 | |
| 2026 | 2,355,213.17 | 2,355,213.17 | |
| 2027 | 7,756,885.52 | 7,756,885.52 | |
| 2028 | 2,476,024.18 | ||
| Total | 18,653,471.92 | 16,177,447.74 |
22. Other non-current assets
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining | Impairment | Book value | Remaining | Impairment | Book value | |
| book value | provision | book value | provision | |||
| Contract assets | 97,421,283.71 | 5,282,135.78 | 92,139,147.93 | 105,183,978.15 | 5,709,693.38 | 99,474,284.77 |
| Prepaid house and equipment amount | 94,025,341.55 | 94,025,341.55 | 73,077,190.00 | 73,077,190.00 | ||
| Certificate of deposit | 316,929,580.18 | 316,929,580.18 | ||||
| Others | 2,004,000.00 | 2,004,000.00 | 2,005,361.70 | 2,005,361.70 | ||
| Total | 193,450,625.26 | 5,282,135.78 | 188,168,489.48 | 497,196,110.03 | 5,709,693.38 | 491,486,416.65 |
23. Short-term borrowings
(1) Classification of short-term borrowings
In RMB
| Item | Closing balance | Opening balance |
| Guarantee loan | 179,944,444.40 | 120,136,861.08 |
| Credit borrow | 300,050,833.33 | 300,247,500.00 |
| Bank acceptance bill financing loan | 773,500,000.00 | 797,889,951.95 |
| Other financing loans | 242,277,417.06 | 59,903,587.53 |
| Guarantee and pledge loan | 80,110,222.22 | 40,060,622.22 |
| Total | 1,575,882,917.01 | 1,318,238,522.78 |
24. Derivative financial liabilities
In RMB
| Item | Closing balance | Opening balance |
| Futures contracts | 1,439,675.00 | 293,400.00 |
| Total | 1,439,675.00 | 293,400.00 |
25. Notes payable
In RMB
| Type | Closing balance | Opening balance |
| Commercial acceptance | 15,736,648.36 | 44,531,921.12 |
| Bank acceptance | 746,053,195.97 | 690,358,287.44 |
| Total | 761,789,844.33 | 734,890,208.56 |
26. Account payable
(1) Account payable
In RMB
| Item | Closing balance | Opening balance |
| Account repayable and engineering repayable | 1,183,404,419.50 | 1,259,574,096.29 |
| Construction payable | 25,890,280.89 | 44,523,769.88 |
| Payable installation and implementation fees | 457,309,209.28 | 394,228,364.88 |
| Others | 21,024,755.43 | 19,710,144.73 |
| Total | 1,687,628,665.10 | 1,718,036,375.78 |
(2) Significant payables aging more than 1 year
In RMB
| Item | Closing balance | Reason |
| Supplier 1 | 26,934,513.76 | Not mature |
| Total | 26,934,513.76 |
27. Prepayment received
(1) Prepayment received
In RMB
| Item | Closing balance | Opening balance |
| Rental | 2,640,045.93 | 1,439,653.84 |
| Total | 2,640,045.93 | 1,439,653.84 |
28. Contract liabilities
In RMB
| Item | Closing balance | Opening balance |
| Project funds collected in advance | 107,103,236.39 | 194,354,649.37 |
| Material loan | 3,468,658.36 | 12,114,464.00 |
| Real estate sales payment | 586,105.50 | |
| Others | 484,363.39 | 938,452.68 |
| Total | 111,056,258.14 | 207,993,671.55 |
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 | -87,251,412.98 | Mainly due to the gradual performance of engineering contract and its conversion into income |
| Total | -87,251,412.98 | —— |
29. Employees' wage payable
(1) Employees' wage payable
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Short-term remuneration | 66,789,434.45 | 194,725,235.15 | 225,231,077.98 | 36,283,591.62 |
| 2. Retirement pension program-defined contribution plan | 314,429.46 | 10,879,267.13 | 10,911,206.94 | 282,489.65 |
| 3. Dismiss compensation | 47,000.00 | 909,479.06 | 883,246.06 | 73,233.00 |
| Total | 67,150,863.91 | 206,513,981.34 | 237,025,530.98 | 36,639,314.27 |
(2) Short-term remuneration
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Wage, bonus, allowance and subsidies | 64,995,965.84 | 179,466,479.40 | 209,463,601.45 | 34,998,843.79 |
| 2. Employee welfare | 475,904.12 | 5,132,401.54 | 5,522,948.92 | 85,356.74 |
| 3. Social insurance | 332,303.60 | 4,793,845.56 | 4,998,340.12 | 127,809.04 |
| Including: medical insurance | 279,363.18 | 3,892,157.44 | 4,065,915.45 | 105,605.17 |
| Labor injury insurance | 6,383.71 | 302,729.85 | 304,900.67 | 4,212.89 |
| Breeding insurance | 46,556.71 | 471,206.27 | 499,772.00 | 17,990.98 |
| Medical insurance | 127,752.00 | 127,752.00 | ||
| 4. Housing fund | 105,608.96 | 4,602,759.10 | 4,505,425.09 | 202,942.97 |
| 5. Labor union budget and staff education fund | 544,359.10 | 478,360.69 | 479,644.86 | 543,074.93 |
| 6. Short-term paid leave | 335,292.83 | 9,728.68 | 325,564.15 | |
| 7. Short-term profit share program | 251,388.86 | 251,388.86 | ||
| Total | 66,789,434.45 | 194,725,235.15 | 225,231,077.98 | 36,283,591.62 |
(3) Defined contribution plan
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Basic pension | 306,672.38 | 10,521,088.20 | 10,551,938.71 | 275,821.87 |
| 2. Unemployment insurance | 7,757.08 | 358,178.93 | 359,268.23 | 6,667.78 |
| Total | 314,429.46 | 10,879,267.13 | 10,911,206.94 | 282,489.65 |
30. Taxes payable
In RMB
| Item | Closing balance | Opening balance |
| VAT | 7,088,922.68 | 14,657,864.98 |
| Enterprise income tax | 18,340,655.14 | 28,092,096.58 |
| Personal income tax | 1,224,280.65 | 1,663,123.30 |
| City maintenance and construction tax | 1,346,649.54 | 1,651,960.05 |
| Land using tax | 495,167.14 | 256,490.15 |
| Property tax | 8,315,881.79 | 1,072,014.83 |
| Education surtax | 665,251.02 | 805,376.76 |
| Local education surtax | 304,777.82 | 397,447.79 |
| Land VAT | 21,453,843.28 | 36,201,588.58 |
| Others | 515,738.43 | 1,029,368.07 |
| Total | 59,751,167.49 | 85,827,331.09 |
31. Other payables
In RMB
| Item | Closing balance | Opening balance |
| Other payables | 109,992,243.02 | 113,425,377.70 |
| Total | 109,992,243.02 | 113,425,377.70 |
(1) Other payables
1) Other payables presented by nature
In RMB
| Item | Closing balance | Opening balance |
| Performance and quality deposit | 46,288,865.35 | 44,484,884.33 |
| Deposit | 26,948,685.34 | 19,901,002.35 |
| Reserved expense | 3,666,345.98 | 5,871,887.95 |
| Others | 33,088,346.35 | 43,167,603.07 |
| Total | 109,992,243.02 | 113,425,377.70 |
(2) Significant payables aging more than 1 year
In RMB
| Item | Closing balance | Reason |
| Shenzhen Yikang Real Estate Co. Ltd. | 26,044,709.60 | Payment paid as agreed in the contract |
| Total | 26,044,709.60 |
32. Non-current liabilities due within 1 year
In RMB
| Item | Closing balance | Opening balance |
| Long-term loans due within 1 year | 107,165,815.07 | 72,037,200.00 |
| Lease liabilities due within one year | 11,699,224.35 | 11,741,447.06 |
| Total | 118,865,039.42 | 83,778,647.06 |
33. Other current liabilities
In RMB
| Item | Closing balance | Opening balance |
| Unterminated notes receivable | 27,805,230.54 | 20,093,677.84 |
| Substituted money on VAT | 22,884,762.30 | 28,039,520.65 |
| Total | 50,689,992.84 | 48,133,198.49 |
34. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
| Item | Closing balance | Opening balance |
| Guaranteed and mortgage loans | 429,596,438.36 | 444,204,672.22 |
| Guarantee, mortgage and pledge loan | 870,569,376.71 | 891,332,527.78 |
| Less: Long-term loans due within 1 year | 107,165,815.07 | 72,037,200.00 |
| Total | 1,193,000,000.00 | 1,263,500,000.00 |
Notes to classification of long-term borrowings:
The pledge in the above-mentioned guarantee, mortgage and pledge loans is pledged by the 99% equity of the subsidiary FangdaReal Estate held by the Company, the 1% equity of the subsidiary Fangda Real Estate held by the subsidiary Hongjun InvestmentCompany and the rent receivable of the self-owned Dacheng rental property; The above guarantees and mortgage loans areguaranteed by the Company and its subsidiary Fangda Real Estate, and the subsidiary Fangda Property Company providesmortgage guarantees for part of the property of Fangda Property Company in Dacheng.Other notes, including interest rate range: the interest rate period of long-term loans is 3%-6%.
35. Lease liabilities
In RMB
| Item | Closing balance | Opening balance |
| Lease payments | 21,009,104.91 | 19,363,493.20 |
| Less: unrecognized financing expenses | 756,761.56 | 714,589.59 |
| Less: lease liabilities due within one year | 11,699,224.35 | 11,741,447.06 |
| Total | 8,553,119.00 | 6,907,456.55 |
36. Long-term payables
In RMB
| Item | Closing balance | Opening balance |
| Long-term payable | 204,640,219.18 | 197,640,219.18 |
| Total | 204,640,219.18 | 197,640,219.18 |
(1) Long term accounts payable listed by nature
In RMB
| Item | Closing balance | Opening balance |
| Disposal of equity repurchase | 204,640,219.18 | 197,640,219.18 |
37. Anticipated liabilities
In RMB
| Item | Closing balance | Opening balance | Reason |
| Product quality warranty | 5,263,801.13 | 3,108,521.87 | |
| Loss contract to be executed | 256,318.42 | 264,031.97 | |
| Total | 5,520,119.55 | 3,372,553.84 |
38. Deferred earning
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance | Reason |
| Government subsidy | 8,999,880.44 | 283,322.58 | 8,716,557.86 | See the following table | |
| Total | 8,999,880.44 | 283,322.58 | 8,716,557.86 |
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 | 20,940.89 | 9,452.16 | 11,488.73 | Assets-related | ||||
| Major investment project prize from Industry and Trade Development Division of Dongguan Finance Bureau | 1,452,381.50 | 28,571.40 | 1,423,810.10 | Assets-related | ||||
| Distributed PV power generation project subsidy sponsored by Dongguan Reform and Development Commission | 318,750.29 | 12,499.98 | 306,250.31 | Assets-related | ||||
| Subsidized land transfer | 166,101.95 | 1,862.82 | 164,239.13 | Assets-related | ||||
| Special subsidy for industrial transformation, upgrading and development | 686,666.61 | 40,000.02 | 646,666.59 | Assets-related | ||||
| Enterprise informationization subsidy project of Shenzhen Small and Medium Enterprise Service | 324,000.00 | 24,000.00 | 300,000.00 | Assets-related |
| Agency | ||||||||
| National Industry Revitalization and Technology Renovation Project fund | 5,070,254.90 | 153,864.30 | 4,916,390.60 | Assets-related | ||||
| Subsidy for new plant | 960,784.30 | 13,071.90 | 947,712.40 | Assets-related | ||||
| Total | 8,999,880.44 | 283,322.58 | 8,716,557.86 |
39. Capital share
In RMB
| Opening balance | Change (+,-) | Closing balance | |||||
| Issued new shares | Bonus shares | Transferred from reserves | Others | Subtotal | |||
| Total of capital shares | 1,073,874,227.00 | 1,073,874,227.00 | |||||
40. Capital reserve
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Capital premium (share capital premium) | 10,005,491.05 | 10,005,491.05 | ||
| Other capital reserves | 1,454,097.35 | 1,454,097.35 | ||
| Total | 11,459,588.40 | 11,459,588.40 |
41. Other miscellaneous income
In RMB
| Item | Opening balance | Amount occurred in the current period | Closing balance | |||||
| Amount before income tax | Less: amount written into other gains and transferred into gain/loss in previous terms | Less: amount written into other gains and transferred into gain/loss in previous terms | Less: Income tax expenses | After-tax amount attributed to the parent | After-tax amount attributed to minority shareholders | |||
| I. Other comprehensive income that will not be subsequently reclassified into profit | -16,224,478.87 | -11,968,973.86 | -2,992,243.47 | -8,976,730.39 | -25,201,209.26 | |||
| and loss | ||||||||
| Fair value change of investment in other equity tools | -16,224,478.87 | -11,968,973.86 | -2,992,243.46 | -8,976,730.39 | -25,201,209.26 | |||
| 2. Other misc. incomes that will be re-classified into gain and loss | 48,211,195.66 | -1,209,307.84 | 185,133.87 | -278,684.13 | -1,126,313.51 | 10,555.92 | 47,084,882.15 | |
| Cash flow hedge reserve | 448,562.20 | -1,672,760.30 | 185,133.87 | -278,684.13 | -1,579,210.04 | -1,130,647.84 | ||
| Translation difference of foreign exchange statement | -152,861.04 | 463,452.46 | 452,896.53 | 10,555.92 | 300,035.49 | |||
| Investment real estate measured at fair value | 47,915,494.50 | 47,915,494.50 | ||||||
| Other miscellaneous income | 31,986,716.79 | -13,178,281.70 | 185,133.87 | -3,270,927.60 | -10,103,043.90 | 10,555.92 | 21,883,672.89 |
42. Surplus reserves
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserves | 79,324,940.43 | 79,324,940.43 | ||
| Total | 79,324,940.43 | 79,324,940.43 |
43. Retained profit
In RMB
| Item | Current period | Last period |
| Adjustment on retained profit of previous period | 4,553,295,402.30 | 4,324,055,259.33 |
| Total of retained profit at beginning of year adjusted (+ for increase, - for decrease) | ||
| Retained profit adjusted at beginning of year | 4,553,295,402.30 | 4,324,055,259.33 |
| Plus: Net profit attributable to owners of the parent | 182,155,268.18 | 112,685,273.77 |
| Common share dividend payable | 53,693,711.35 | 53,693,711.35 |
| Closing retained profit | 4,681,756,959.13 | 4,383,046,821.75 |
44. Operational revenue and costs
In RMB
| Item | Amount occurred in the current period | Occurred in previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 1,994,095,251.72 | 1,613,648,910.68 | 1,523,656,283.61 | 1,238,697,976.76 |
| Other businesses | 84,751,625.60 | 10,581,557.95 | 89,407,031.69 | 20,817,865.84 |
| Total | 2,078,846,877.32 | 1,624,230,468.63 | 1,613,063,315.30 | 1,259,515,842.60 |
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 | 1,654,849,166.62 | 291,615,462.85 | 115,913,190.77 | 8,947,285.78 | 7,521,771.30 | 2,078,846,877.32 |
| Including: | ||||||
| Curtain wall system and new materials | 1,654,849,166.62 | 1,654,849,166.62 | ||||
| Subway screen door and service | 291,615,462.85 | 291,615,462.85 | ||||
| Real estate rental and sales and property services | 115,913,190.77 | 115,913,190.77 | ||||
| PV power generation products | 8,947,285.78 | 8,947,285.78 | ||||
| Others | 7,521,771.30 | 7,521,771.30 | ||||
| Total | 1,654,849,166.62 | 291,615,462.85 | 115,913,190.77 | 8,947,285.78 | 7,521,771.30 | 2,078,846,877.32 |
Information related to performance obligations:
For curtain wall materials, real estate and other commodity sales transactions, the Company completes the performance obligationswhen the customer obtains the control of the relevant commodities; for providing building curtain wall, Metro screen door design,production and installation and other service transactions, the Company confirms the completed performance obligationsaccording to the performance progress during the whole service period. The contract price of the Company is usually due withinone year, and there is no significant financing component.Information related to the transaction price allocated to the remaining performance obligations:
The amount of revenue corresponding to the performance obligations that have been signed, but not yet performed or not yetperformed at the end of the reporting period is RMB7,808,210,644.67, of which RMB2,330,231,497.17 is expected to berecognized in 2023 H2, and RMB3,451,005,032.62 is expected to be recognized in 2024, RMB2,026,974,114.88 is expected to berecognized in 2025 and beyond.
45. Taxes and surcharges
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| City maintenance and construction tax | 4,446,267.60 | 2,999,118.26 |
| Education surtax | 2,918,968.56 | 1,950,119.60 |
| Property tax | 9,523,215.93 | 6,877,755.11 |
| Land using tax | 888,300.59 | 661,851.40 |
| Vehicle usage tax | 10,290.00 | 14,640.00 |
| Stamp tax | 1,554,773.97 | 941,023.02 |
| Land VAT | 2,802,673.55 | 9,521,953.79 |
| Others | 359,251.36 | 237,493.38 |
| Total | 22,503,741.56 | 23,203,954.56 |
46. Sales expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 13,183,424.46 | 11,286,857.24 |
| Sales agency fee | 1,773,126.99 | 2,383,695.88 |
| Entertainment expense | 2,554,127.30 | 1,534,727.49 |
| Travel expense | 1,390,759.29 | 440,012.56 |
| Advertisement and promotion fee | 830,068.74 | 589,409.30 |
| Amortization of right of use assets and lease fees | 83,983.81 | 462,611.74 |
| Others | 8,328,066.20 | 6,598,791.57 |
| Total | 28,143,556.79 | 23,296,105.78 |
47. Management expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 51,557,093.96 | 51,258,947.78 |
| Agencies | 3,942,772.45 | 2,977,450.48 |
| Depreciation and amortization | 7,282,563.56 | 6,784,107.02 |
| Office expense | 5,141,931.61 | 4,110,000.28 |
| Entertainment expense | 2,551,085.91 | 2,079,903.87 |
| Amortization of right of use assets and lease fees | 1,904,893.13 | 2,678,867.12 |
| Lawsuit | 2,954,790.97 | 239,447.70 |
| Travel expense | 1,575,151.34 | 846,221.42 |
| Others | 2,680,658.53 | 3,218,305.90 |
| Total | 79,590,941.46 | 74,193,251.57 |
48. R&D cost
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 48,716,037.44 | 43,761,777.28 |
| Material costs | 29,157,592.26 | 22,539,028.06 |
| Agencies | 4,191,108.26 | 4,002,025.54 |
| Depreciation costs | 999,888.33 | 530,096.72 |
| Amortization of intangible assets | 497,817.82 | 495,249.97 |
| Others | 5,427,066.55 | 1,481,133.60 |
| Total | 88,989,510.66 | 72,809,311.17 |
49. Financial expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Interest expense | 48,188,161.19 | 50,244,714.46 |
| Less: interest capitalization | ||
| Less: discount government subsidies | 308,700.00 | 308,700.00 |
| Less: Interest income | 12,097,319.82 | 19,918,179.96 |
| Acceptant discount | 7,888,113.87 | 11,494,770.87 |
| Exchange gain/loss | -11,140,562.06 | -3,678,984.41 |
| Commission charges and others | 1,214,164.61 | 1,796,161.92 |
| Total | 33,743,857.79 | 39,629,782.88 |
50. Other gains
In RMB
| Source | Amount occurred in the current period | Occurred in previous period |
| Government subsidies related to deferred income (related to assets) | 283,322.58 | 283,322.58 |
| Government subsidies directly included in current profits and losses (related to income) | 7,695,968.32 | 5,945,520.73 |
| Other items related to daily activities and included in other income | 584,491.42 | 540,064.44 |
| Total | 8,563,782.32 | 6,768,907.75 |
51. Investment income
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Gains from long-term equity investment measured by equity | 294.42 | -32,974.15 |
| Financial assets derecognised as a result of amortized cost | -2,362,127.61 | -1,859,057.85 |
| Investment income from disposal of trading financial assets | 2,382,310.79 | |
| Interest income from debt investment during the holding period | 3,454,345.45 | |
| Others | 651,054.19 | |
| Total | -2,361,833.19 | 4,595,678.43 |
52. Income from fair value fluctuation
In RMB
| Source of income from fluctuation of fair value | Amount occurred in the current period | Occurred in previous period |
| Investment real estate measured at fair value | 122,109.40 | 1,068,328.60 |
| Other non-current financial assets | 7,782.60 | -20,657.41 |
| Transactional financial assets | 133,168.82 | |
| Total | 129,892.00 | 1,180,840.01 |
53. Credit impairment loss
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Bad debt loss of other receivables | -716,812.51 | -1,581,252.49 |
| Bad debt loss of accounts receivable and notes receivable | 20,991,390.10 | 26,597,550.83 |
| Total | 20,274,577.59 | 25,016,298.34 |
54. Assets impairment loss
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Contract asset impairment loss | -14,673,904.92 | -27,659,612.75 |
| Total | -14,673,904.92 | -27,659,612.75 |
55. Assets disposal gains
In RMB
| Source | Amount occurred in the current period | Occurred in previous period |
| Gain and loss from disposal of fixed assets ("-" for loss) | 50,072.23 | -815,581.50 |
| Gains or losses from the disposal of right-of-use assets | 323,279.85 | |
| Total | 373,352.08 | -815,581.50 |
56. 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 | 106,311.57 | 122,506.66 | 106,311.57 |
| Compensation received | 39,036.80 | 4,887.00 | 39,036.80 |
| Payable account not able to be paid | 115,354.80 | ||
| Others | 58,698.17 | 203,638.36 | 58,698.17 |
| Total | 204,046.54 | 446,386.82 | 204,046.54 |
57. 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 | 217,861.40 | 2,338,000.00 | 217,861.40 |
| Loss from retirement os damaged non-current assets | 23,473.88 | 159,921.17 | 23,473.88 |
| Penalty and overdue fine | 43,356.01 | 79,324.94 | 43,356.01 |
| Lawsuit indemnity | 53,158.01 | 53,158.01 | |
| Others | 232,013.29 | 755.20 | 232,013.29 |
| Total | 569,862.59 | 2,578,001.31 | 569,862.59 |
58. 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 | 33,781,299.25 | 24,417,052.77 |
| Deferred income tax expenses | -5,591,393.81 | -11,411,931.03 |
| Total | 28,189,905.44 | 13,005,121.74 |
(2) Adjustment process of accounting profit and income tax expense
In RMB
| Item | Amount occurred in the current period |
| Total profit | 213,584,850.26 |
| Income tax expenses calculated based on the legal (or applicable) tax rates | 53,396,212.56 |
| Impacts of different tax rates applicable for some subsidiaries | -18,251,152.56 |
| Impacts of income tax before adjustment | 4,357,682.86 |
| Impacts of non-deductible cost, expense and loss | 1,408,844.29 |
| Deductible temporary difference and deductible loss of unrecognized deferred income tax assets | 417,447.30 |
| Profit and loss of associates and joint ventures calculated using the equity method | -73.61 |
| Impact of tax rate change on the opening balance of deferred income tax | -200.45 |
| Taxation impact of R&D expense and (presented with “-”) | -13,138,854.97 |
| Income tax expenses | 28,189,905.44 |
59. Other miscellaneous income
See Note VII 41.
60. 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 | 4,863,151.74 | 1,798,697.05 |
| Subsidy income | 6,530,882.67 | 3,443,499.94 |
| Retrieving of bidding deposits | 20,253,140.27 | 28,957,397.39 |
| Other operating accounts | 11,800,747.12 | 67,415,733.82 |
| Total | 43,447,921.80 | 101,615,328.20 |
(2) Other cash paid related to operation
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Oocket expenses | 25,234,094.43 | 18,401,123.38 |
| Bidding deposit paid | 17,035,960.19 | 39,026,573.21 |
| Net draft deposit net paid | 199,180,751.42 | 181,744,397.40 |
| Other trades | 23,008,888.00 | 54,833,967.58 |
| Total | 264,459,694.04 | 294,006,061.57 |
(3) Other cash paid related to financing activities
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Bill discount financing deposit | 60,589,831.95 | 604,311,403.85 |
| Principal and interest of lease liabilities | 8,096,984.15 | 5,285,394.85 |
| Total | 68,686,816.10 | 609,596,798.70 |
61. 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 | 185,394,944.82 | 114,364,860.80 |
| Plus: Asset impairment provision | -5,600,672.67 | 2,643,314.41 |
| Fixed asset depreciation, gas and petrol depreciation, production goods depreciation | 14,896,760.41 | 15,224,319.96 |
| Depreciation of right to use assets | 7,370,647.68 | 6,615,143.02 |
| Amortization of intangible assets | 2,451,985.26 | 2,228,550.37 |
| Amortization of long-term amortizable expenses | 2,107,067.00 | 1,578,076.52 |
| Loss from disposal of fixed assets, intangible assets, and other long-term assets ("-" for gains) | -373,352.08 | 815,581.50 |
| Loss from fixed asset discard ("-" for gains) | 23,473.88 | 159,921.17 |
| Loss from fair value fluctuation ("-" for gains) | -129,892.00 | -1,180,840.01 |
| Financial expenses ("-" for gains) | 56,076,275.06 | 61,739,485.33 |
| Investment losses ("-" for gains) | -294.42 | -6,454,736.28 |
| Decrease of deferred income tax asset ("-" for increase) | -4,214,889.76 | -8,571,096.06 |
| Increase of deferred income tax asset ("-" for increase) | -4,647,431.65 | -3,012,044.14 |
| Decrease of inventory ("-" for increase) | 34,523,652.33 | 14,668,390.43 |
| Decrease of operational receivable items ("-" for increase) | -149,791,569.44 | -293,658,104.04 |
| Increase of operational receivable items ("-" for decrease) | -154,844,906.67 | -177,019,400.45 |
| Others | -20,555,508.88 | -36,722,215.57 |
| Cash flow generated by business operations, net | -37,313,711.13 | -306,580,793.04 |
| 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 | 748,672,706.05 | 593,918,013.39 |
| Less: Initial balance of cash | 783,677,929.06 | 892,251,071.59 |
| Add: Ending balance of cash equivalents | ||
| Less: Ending balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -35,005,223.01 | -298,333,058.20 |
(2) Composition of cash and cash equivalents
In RMB
| Item | Closing balance | Opening balance |
| I. Cash | 748,672,706.05 | 783,677,929.06 |
| Including: Cash in stock | 5,350.98 | 149.81 |
| Bank savings can be used at any time | 742,322,526.29 | 776,383,701.29 |
| Other monetary capital can be used at any time | 6,344,828.78 | 7,294,077.96 |
| 2. Cash equivalents | ||
| III. Balance of cash and cash equivalents at end of term | 748,672,706.05 | 783,677,929.06 |
62. Assets with restricted ownership or use rights
In RMB
| Item | Closing book value | Reason |
| Monetary capital | 537,833,587.91 | Various deposits |
| Notes receivable | 27,805,230.54 | Bills endorsed or discounted but not yet due |
| Fixed assets | 43,896,677.62 | Loan by pledge |
| Account receivable | 39,547,042.05 | Loan by pledge |
| Investment real estate | 3,293,733,474.51 | Loan by pledge |
| Non-current assets due in 1 year | 321,983,047.30 | Loan by pledge |
| Equity pledge | 200,000,000.00 | 100% stake in Fangda Property Development held by the Company |
| Total | 4,464,799,059.93 |
63. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
| Item | Closing foreign currency balance | Exchange rate | Closing RMB balance |
| Monetary capital | 54,038,995.75 | ||
| Including: USD | 4,889,797.02 | 7.225800 | 35,332,693.85 |
| Euro | 0.86 | 7.877100 | 6.77 |
| HK Dollar | 5,873,247.95 | 0.921980 | 5,415,021.91 |
| INR | 52,090,006.86 | 0.088025 | 4,585,222.85 |
| Vietnamese currency | 12,313,820.00 | 0.000307 | 3,774.78 |
| SGD | 438,636.43 | 5.344200 | 2,344,160.81 |
| AUD | 1,324,828.05 | 4.799200 | 6,358,114.78 |
| Account receivable | 25,680,970.40 | ||
| Including: USD | 2,318,655.02 | 7.225800 | 16,754,137.44 |
| INR | 7,058,471.00 | 0.088025 | 621,321.91 |
| AUD | 1,251,541.83 | 4.799200 | 6,006,399.55 |
| Vietnamese currency | 7,500,000,000.00 | 0.000307 | 2,299,111.50 |
| Contract assets | 189,210,828.74 | ||
| Including: USD | 17,057,897.01 | 7.225800 | 123,256,952.22 |
| HK Dollar | 20,511,073.82 | 0.921980 | 18,910,799.84 |
| INR | 97,365,653.65 | 0.088025 | 8,570,611.66 |
| AUD | 280,781.11 | 4.799200 | 1,347,524.70 |
| Euro | 4,713,021.33 | 7.877100 | 37,124,940.32 |
| Other receivables | 1,869,208.96 | ||
| Including: USD | 160,310.49 | 7.225800 | 1,158,371.54 |
| HK Dollar | 671,784.63 | 0.921980 | 619,372.00 |
| INR | 931,430.68 | 0.088025 | 81,989.19 |
| SGD | 1,773.18 | 5.344200 | 9,476.23 |
| Account payable | 14,941,711.05 | ||
| Including: USD | 1,223,641.16 | 7.225800 | 8,841,786.29 |
| INR | 22,669,594.77 | 0.088025 | 1,995,491.08 |
| HK Dollar | 4,451,760.00 | 0.921980 | 4,104,433.68 |
| Other payables | 152,810.55 | ||
| Including: USD | 3,323.20 | 7.225800 | 24,012.78 |
| HK Dollar | 124,855.10 | 0.921980 | 115,113.91 |
| Vietnamese currency | 44,638,518.52 | 0.000307 | 13,683.86 |
(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
64. Hedging
Hedging items and related tools, qualitative and quantitative information about hedging risks:
| Type | Hedged item | Hedging tools | Hedged risk |
| Cash flow hedging | Aluminum material purchase forward transaction | 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 |
65. Government subsidy
(1) Government subsidy profiles
In RMB
| Type | Amount | Item | Amount accounted into the current gain/loss |
| National Industry Revitalization and Technology Renovation Project fund | 4,916,390.60 | Deferred earning | 153,864.30 |
| Individual champion allocation from Shenzhen Municipal Bureau of Industry and Information Technology | 2,000,000.00 | Other gains | 2,000,000.00 |
| Value added tax immediate refund | 1,699,093.53 | Other gains | 1,699,093.53 |
| R&D subsidy | 1,326,100.00 | Other gains | 1,326,100.00 |
| Major investment project prize from Industry and Trade Development Division of Dongguan Finance Bureau | 1,423,810.10 | Deferred earning | 28,571.40 |
| Award for stable growth of the construction industry in 2022 | 1,000,000.00 | Other gains | 1,000,000.00 |
| Energy saving and environmental protection metal curtain wall production technology transformation project | 947,712.40 | Deferred earning | 13,071.90 |
| Special subsidy for industrial transformation, upgrading and development | 646,666.59 | Deferred earning | 40,000.02 |
| Hi-tech enterprise development subsidy and award | 500,000.00 | Other gains | 500,000.00 |
| Support for steady industrial growth in Shenzhen | 385,000.00 | Other gains | 385,000.00 |
| Discount subsidy | 308,700.00 | Financial expenses | 308,700.00 |
| Enterprise informationization subsidy project of Shenzhen Small and Medium Enterprise Service Agency | 300,000.00 | Deferred earning | 24,000.00 |
| Shenzhen SME Service Bureau subsidy for specialized, refined, and emerging companies | 200,000.00 | Other gains | 200,000.00 |
| Outstanding contribution award of Nanchang high tech zone | 200,000.00 | Other gains | 200,000.00 |
| Shenzhen Municipal Bureau of Industry and Information technology award project for specialized, refined, and new enterprises | 200,000.00 | Other gains | 200,000.00 |
| Others | 211,626.32 | Other gains/deferred gains | 209,589.75 |
| Total | 16,265,099.54 | 8,287,990.90 |
(2) Government subsidy refund
□ Applicable ? Inapplicable
66. Others
(1) The Company as leasee
In RMB
| Item | January-June 2023 |
| Short term lease expenses with simplified treatment included in current profit and loss | 23,422,339.52 |
| Lease expenses of low value assets with simplified treatment included in current profit and loss (except short-term lease) | 100,689.29 |
| Interest expense on lease liabilities | 465,093.28 |
| Total cash outflow related to leasing | 31,647,316.58 |
(2) The Company is the leasor
Operating leaseA. Rental income
In RMB
| Item | January-June 2023 |
| Rental income | 73,425,170.71 |
| Including: income related to variable lease payments not included in the measurement of lease receipts | 190,599.66 |
B. Undiscounted lease receipts to be received in each of the five consecutive fiscal years after the balance sheet date, andthe total undiscounted lease receipts to be received in the remaining years
In RMB
| Year | Amount |
| 2023 H2 | 78,862,199.38 |
| 2024 | 117,426,562.03 |
| 2025 | 97,198,392.07 |
| 2026 | 75,678,364.35 |
| 2027 | 46,399,602.29 |
| 2028 | 30,285,852.66 |
| Total undiscounted lease receipts to be received after 2028 | 93,380,127.88 |
| Including Within 1 year (inclusive) | 18,574,513.57 |
| 1-2 years | 12,835,912.30 |
| 2-3 years | 9,976,941.56 |
| Over 3 years | 51,992,760.45 |
VIII. Change to Consolidation Scope
1. 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:
There has been no change in the scope of consolidation in this period.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 | 98.66% | 1.34% | Incorporation |
| Fangda Zhiyuan Technology | Shenzhen | Shenzhen | Production, processing and installation of subway screen doors | 83.10% | Incorporation | |
| Fangda Jiangxi New Material | Nanchang | Nanchang | Prodution and sales of new-type materialsm composite materials and production of curtain walls | 75.00% | 25.00% | Incorporation |
| Fangda Property | Shenzhen | Shenzhen | Real estate development and operation | 99.00% | 1.00% | Incorporation |
| Fangda New Energy | Shenzhen | Shenzhen | Design and construction of PV power plants | 99.00% | 1.00% | Incorporation |
| 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 Zhiyuan 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 Yunzhi | Shenzhen | Shenzhen | Technology development and sales; Invest in industry; Operation management of science and technology park | 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 Technology | 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 | |
| General Metro Technology Co., Ltd | Singapore | Singapore | Production, processing and installation of subway screen doors | 83.10% | Incorporation | |
| Fangda Zhiyuan Technology Wuhan | Wuhan | Wuhan | Production, processing and installation of subway screen doors | 83.10% | Incorporation | |
| Fangda Zhiyuan Technology Nanchang | Nanchang | Nanchang | Production, processing and installation of subway screen doors | 83.10% | Incorporation | |
| Fangda Zhiyuan Technology Dongguan | Dongguan | Dongguan | Production, processing and installation of subway screen doors | 83.10% | Incorporation | |
| Fangda Intelligent Manufacturing | Ganzhou | Ganzhou | Prodution and sales of new-type materialsm composite materials | 99.00% | 1.00% | Incorporation |
(2) Major non wholly-owned subsidiaries
In RMB
and production of curtain wallsCompany
| 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% | -34,438.52 | 48,320,086.70 | |
| Fangda Zhiyuan Technology | 5.96% | 3,274,458.52 | 24,148,372.78 |
Note: In May 2021l the Company's subsidiaries Fangda Construction Technology Co., Ltd. and Jiangxi Fangda New Material Co.,Ltd. transfer 10.9375% of the equity of Fangda Zhiyuan 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.
(3) Financial highlights of major non wholly owned subsidiaries
In RMB
| Company | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total of assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total of assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Zhongrong Litai | 209,537,112.08 | 328,400.74 | 209,865,512.82 | 102,244,408.38 | 243,133.99 | 102,487,542.37 | 208,737,205.21 | 371,747.97 | 209,108,953.18 | 101,349,268.59 | 305,184.09 | 101,654,452.68 |
| Fangda Zhiyuan Technology | 806,580,699.09 | 152,604,545.70 | 959,185,244.79 | 537,099,105.97 | 16,912,098.83 | 554,011,204.80 | 770,739,460.72 | 135,423,070.69 | 906,162,531.41 | 540,848,850.07 | 15,118,392.71 | 555,967,242.78 |
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 | 55,045.86 | -76,530.05 | -76,530.05 | 101,149.87 | 82,951.18 | -54,116.91 | -54,116.91 | -8,017.93 |
| Fangda Zhiyuan Technology | 291,615,462.85 | 54,940,579.16 | 55,117,691.94 | -34,107,845.79 | 300,269,751.24 | 28,566,000.91 | 28,963,818.88 | -105,649,962.94 |
2. 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 | 54,969,336.56 | 54,969,042.14 |
| Total shareholding | ||
| Net profit | 294.42 | -32,974.15 |
| --Total of misc. incomes | 294.42 | -32,974.15 |
X. Risks of Financial Tools
The risks associated with the financial instruments of the Company arise from the various financial assets and liabilitiesrecognized by the Company in the course of its operations, including credit risks, liquidity risks and market risks.
The management objectives and policies of various risks related to financial instruments are governed by the management ofthe Company. The operating management is responsible for daily risk management through functional departments (for example,the Company's credit management department reviews the Company's credit sales on a case-by-case basis). The internal auditdepartment of the Company conducts daily supervision of the implementation of the Company's risk management policies andprocedures, and reports relevant findings to the Company's audit committee in a timely manner.
The overall goal of the Company's risk management is to formulate risk management policies that minimize the risksassociated with various financial instruments without excessively affecting the Company's competitiveness and resilience.Credit risk
Credit risk is caused by the failure of one party of a financial instrument in performing its obligations, causing the risk offinancial loss for the other party. The credit risk of the Company mainly comes from monetary capital, notes receivable, accountsreceivable, other receivables, receivables financing, contract assets, etc. The credit risk of these financial assets comes from thedefault of the counterparties, and the maximum risk exposure is equal to the book amount of these instruments.
The Company's money and funds are mainly deposited in the commercial banks and other financial institutions. TheCompany believes that these commercial banks have higher reputation and asset status and have lower credit risk.
For notes receivable, accounts receivable, other receivables, receivables financing and contract assets, the Company setsrelevant policies to control credit risk exposure. The Group set the credit line and term for debtors according to their financialstatus, external rating, and possibility of getting third-party guarantee, credit record and other factors. The Group regularlymonitors debtors' credit record. For those with poor credit record, the Group will send written payment reminders, shorten orcancel credit term to lower the general credit risk.
(1) Significant increases in credit risk
The credit risk of the financial instrument has not increased significantly since the initial confirmation. In determiningwhether the credit risk has increased significantly since the initial recognition, the Company considers reasonable and evidencedinformation, including forward-looking information, that can be obtained without unnecessary additional costs or effort. TheCompany determines the relative risk of default risk of the financial instrument by comparing the risk of default of the financialinstrument on the balance sheet date with the risk of default on the initial recognition date to assess the credit risk of the financialinstrument from initial recognition.
When one or more of the following quantitative and qualitative criteria are triggered, the Company believes that the creditrisk of financial instruments has increased significantly: the quantitative criteria are mainly the probability of default in theremaining life of the reporting date increased by more than a certain proportion compared with the initial recognition; the
qualitative criteria are the major adverse changes in the operation or financial situation of the major debtors, the early warning ofcustomer list, etc.
(2) Definition of assets where credit impairment has occurred
In order to determine whether or not credit impairment occurs, the standard adopted by our company is consistent with thecredit risk management target for related financial instruments, and quantitative and qualitative indicators are considered.Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor, such as payment ofinterest or default or overdue of principal; (B) The concession that the debtor would not make under any other circumstances foreconomic or contractual considerations relating to the financial difficulties of the debtor; The debtor is likely to be bankrupt orundertake other financial restructuring; The financial difficulties of the issuer or debtor lead to the disappearance of the activemarket for the financial asset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that acredit loss has occurred.
Credit impairment in financial assets may be caused by a combination of multiple events, not necessarily by events that canbe 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 the quantitative analysisand 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 risk exposure model.
Definition:
The probability of default refers to the possibility that the debtor will not be able to fulfill its obligation to pay in the next 12months or throughout the remaining period.
Breach Loss Rate means the extent of loss expected by the Company for breach risk exposure. Depending on the type ofcounterparty, the manner and priority of recourse, and the different collateral, the default loss rate is also different. The default lossrate is the percentage of the risk exposure loss at the time of the default, calculated on the basis of the next 12 months or the entirelifetime.
Exposure to default is the amount payable to the Company at the time of default in the next 12 months or throughout theremaining life. Prospective information credit risks significantly increased and expected credit losses were calculated. Through theanalysis of historical data, the Company has identified the key economic indexes that affect the credit risk of each business typeand 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 noguarantee that may cause the Group credit risks.
Among the Group's receivables, accounts receivable from top 5 customers account for 21.46% of the total accountsreceivable (beginning of the period: 26.41%); among other receivables, other receivables from top 5 customers account for 73.49%of the total other receivables (beginning of the period: 72.10%).Liquidity risk
Liquidity risk is the risk of capital shortage when the Group needs to pay cash or settled with other financial assets. TheCompany is responsible for the cash management of its subsidiaries, including short-term investments in cash surpluses and loans
to meet projected cash requirements. The Company's policy is to regularly monitor short and long-term liquidity requirements andcompliance with borrowing agreements to ensure adequate cash reserves and readily available securities.
As of June 30, 2023, the maturity of the Company's financial liabilities is as follows:
Amount: in RMB10,000
| Item | June 30, 2023 | |||
| Less than 1 year | Within 1-3 years | Over 3 years | Total | |
| Short-term loans | 157,588.29 | 157,588.29 | ||
| Derivative financial liabilities | 143.97 | 143.97 | ||
| Notes payable | 76,178.98 | 76,178.98 | ||
| Account payable | 166,492.35 | 2,010.72 | 259.8 | 168,762.87 |
| Employees' wage payable | 3,663.93 | 3,663.93 | ||
| Other payables | 6,960.25 | 967.87 | 3,071.10 | 10,999.22 |
| Non-current liabilities due in 1 year | 11,886.50 | 11,886.50 | ||
| Other current liabilities | 5,069.00 | 5,069.00 | ||
| Long-term loans | 43,500.00 | 75,800.00 | 119,300.00 | |
| Lease liabilities | 759.61 | 95.7 | 855.31 | |
| Long-term payable | 20,464.02 | 20,464.02 | ||
| Total liabilities | 427,983.27 | 67,702.22 | 79,226.60 | 574,912.09 |
(Continued)
| Item | December 31, 2022 | |||
| Less than 1 year | Within 1-3 years | Over 3 years | Total | |
Short-term loans
| Short-term loans | 131,823.85 | 131,823.85 | ||
| Derivative financial liabilities | 29.34 | 29.34 | ||
| Notes payable | 73,489.02 | 73,489.02 | ||
| Account payable | 168,254.83 | 3,119.05 | 429.76 | 171,803.64 |
| Employees' wage payable | 6,715.09 | 6,715.09 | ||
| Other payables | 7,228.45 | 1,099.12 | 3,014.97 | 11,342.54 |
| Non-current liabilities due in 1 year | 8,377.86 | 8,377.86 | ||
| Other current liabilities | 4,813.32 | 4,813.32 | ||
| Long-term loans | 63,146.28 | 63,203.72 | 126,350.00 | |
| Lease liabilities | 681.92 | 8.83 | 690.75 | |
| Long-term payable | 19,764.02 | 19,764.02 | ||
| Total liabilities | 400,731.76 | 87,810.39 | 66,657.28 | 555,199.43 |
Market risk
(1) Credit risks
The exchange rate risk of the Company mainly comes from the assets and liabilities of the Company and its subsidiaries inforeign currency not denominated in its functional currency. Except for the use of Hong Kong dollars, United States dollars,Australian dollars, Vietnamese dong, euro, Indian rupees or Singapore currencies by its subsidiaries established in and outside theHong Kong Special Administrative Region, other major businesses of the Company shall be denominated in Renminbi.As of June 30, 2023, the Company's foreign currency financial assets and liabilities at the end of the period are listed inChapter X, VII, item note 63 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 rate risk. TheCompany continuously monitors the scale of foreign currency transactions and foreign currency assets and liabilities to minimizeforeign exchange risks. To this end, the Company may avoid foreign exchange risks by signing forward foreign exchangecontracts or currency swap contracts.
(2) Exchange rate risk
The Group's interest rate risk mainly arises from long-term interest-bearing debts such as long-term bank loans. Financialliabilities with floating interest rate cause cash flow interest rate risk for the Group. Financial liabilities with fixed interest ratecause fair value interest rate risk for the Group. The Group decides the proportion between fixed interest rate and floating interestrate according to the market environment and regularly reviews and monitors the combination of fixed and floating interest rateinstruments.
The Group Finance Department of the Company continuously monitors the Group interest rate level. The rising interest ratewill increase the cost of the new interest-bearing debt and the interest expenditure on interest-bearing debt which has not yet beenpaid by the Company at the floating rate, and will have a significant adverse effect on the Company's financial performance.Management will make adjustments in time according to the latest market conditions.
As of June 30, 2023, when other risk variables remain unchanged, if the borrowing interest rate calculated by floating interestrate increases or decreases by 50 basis points, the net profit of the company in that year will decrease or increase byRMB5,994,400 (December 31, 2022: RMB6,125,600).
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 | 77,586.17 | 77,586.17 | ||
| 1. Financial assets measured at fair value with variations accounted into current income account | 77,586.17 | 77,586.17 | ||
| (1) Derivative financial assets | 77,586.17 | 77,586.17 | ||
| (2) Receivable financing | 9,703,929.82 | 9,703,929.82 | ||
| (3) Investment real estate | 5,750,831,172.12 | 5,750,831,172.12 | ||
| 1. Leased building | 5,750,831,172.12 | 5,750,831,172.12 | ||
| (4) Other non-current financial assets | 7,515,217.28 | 7,515,217.28 | ||
| Total assets measured at fair value continuously | 77,586.17 | 5,750,831,172.12 | 17,219,147.10 | 5,768,127,905.39 |
| (5) Transactional financial liabilities | 1,439,675.00 | 1,439,675.00 | ||
| 1. Derivative financial liabilities | 1,439,675.00 | 1,439,675.00 | ||
| Total assets measured at fair value continuously | 1,439,675.00 | 1,439,675.00 | ||
| 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 an active market;
3. Valuation technique and qualitative and quantitative information for key parameters of continuousand discontinuous second level fair value itemsFor investment real estate, the Company adopts valuation technology to determine its fair value. The valuation techniques adoptedare mainly the market comparison method and the income method, and the rent and resale model. The input value of valuationtechnology 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 continuousand discontinuous third level fair value itemsIf there is no active market, the Company uses evaluation techniques to determine the fair value. The valuation models are mainlycash flow discount model and market comparable company model. The input value of valuation technology mainly includes risk-free interest rate, benchmark interest rate, exchange rate, credit point difference, liquidity premium, lack of liquidity discount, etc.
5. Switch between different levels, switch reason and switching time policy
The Company takes the occurrence date of the events leading to the transition between levels as the time point to confirm thetransition between levels. In the period, there is no switch in the financial assets measured at fair value between the first andsecond 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, accounts receivable, otherreceivables, short-term borrowings, notes payable, employee compensation payable, accounts payables, 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% | 11.11% |
| Shengjiu Investment Ltd. | Hong Kong | Industrial investment | HKD1 million | 10.25% | 10.25% |
Particulars about the parent of the Company
① All of the investors of Shenzhen Banglin Technology Development Co., Ltd., the holding shareholder of the Company, arenatural persons. Among them, Chairman Xiong Jianming is holding 85％ shares, and Mr. Xiong Xi – son of Mr. Xiong Jianming,is holding 15% of the shares.
②Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. areparties action-in-concert with Xiong Jianming.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
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 Qijian Technology Co., Ltd. (Qijian Technology) | Common actual controller |
| Director, manager and secretary of the Board | Key management |
5. Related transactions
(1) Related transactions for purchase and sale of goods, provision and acceptance of servicesSales of goods and services
In RMB
| Affiliated party | Related transaction | Amount occurred in the current period | Occurred in previous period |
| Qijian Technology | Property service and sales of goods | 124,524.04 | 112,319.60 |
(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 | 434,285.70 | 434,285.70 |
(3) Related guarantees
The Company is the guarantor:
In RMB10,000
| Beneficiary party | Amount guaranteed | Start date | Due date | Completed or not |
| Fangda Jianke | 24,000.00 | March 9, 2022 | Three years after the expiration date of debt performance | Yes |
| Fangda New Material | 10,000.00 | April 20, 2022 | Three years after the expiration date of debt performance | Yes |
| Fangda Zhijian | 7,000.00 | June 1, 2022 | Three years after the expiration date of debt performance | Yes |
| Fangda Zhiyuan | 40,000.00 | July 4, 2022 | Three years after the expiration date of debt performance | Yes |
| Fangda Zhiyuan | 15,000.00 | March 9, 2022 | Three years after the expiration date of debt performance | Yes |
| Fangda Yunzhu | 600.00 | May 10, 2022 | Three years after the expiration date of debt performance | Yes |
| Total amount of guarantee fulfilled | 96,600.00 | |||
| Fangda Jianke | 86,000.00 | November 24, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 39,000.00 | December 9, 2022 | Three years after the expiration date of debt performance | No |
| Fangda New Material | 10,000.00 | April 18, 2023 | Three years after the expiration date of debt performance | No |
| Fangda Yunzhu | 1,000.00 | March 30, 2023 | Three years after the expiration date of debt performance | No |
| Fangda New Material | 8,500.00 | September 6, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 15,000.00 | May 23, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Zhijian | 7,000.00 | May 15, 2023 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 48,000.00 | December 15, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Zhiyuan | 18,000.00 | March 22, 2023 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 50,000.00 | September 20, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 30,000.00 | October 19, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 30,000.00 | September 20, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 4,000.00 | September 8, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 4,000.00 | May 15, 2023 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 20,000.00 | August 10, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 60,000.00 | January 21, 2023 | Three years after the expiration date of debt performance | No |
| Fangda Zhiyuan | 36,000.00 | June 20, 2023 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 24,000.00 | May 5, 2023 | Three years after the expiration date of debt performance | No |
| Fangda Zhiyuan | 15,000.00 | May 5, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Zhiyuan | 20,000.00 | October 19, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Zhiyuan | 15,000.00 | November 1, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Zhiyuan | 10,000.00 | May 23, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Yunzhu | 600.00 | May 11, 2023 | Three years after the expiration date of debt performance | No |
| Fangda Yunzhu | 800.00 | August 19, 2022 | Three years after the expiration date of debt performance | No |
| Fangda Jianke | 20,000.00 | March 31, 2023 | Three years after the expiration date of debt performance | No |
| Fangda Property | 135,000.00 | February 25, 2020 | Two years after the expiration date of debt performance | No |
| Fangda Property | 47,000.00 | December 16, 2020 | Three years after the expiration | No |
| date of debt performance | ||||
| Fangda Jianke and Zhiyuan Technology | 15,400.00 | December 18, 2019 | Two years after the expiration date of debt performance | No |
| Total amount of guarantee being performed | 769,300.00 |
Description of related party guarantee: The above-mentioned guarantees are all associated guarantees within interested entities ofthe Company.
(4) Remuneration of key management
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Directors, supervisors and senior management | 4,799,048.45 | 4,289,505.05 |
6. Receivable and payables due with related parties
(1) Receivable interest
In RMB
| Project name | Affiliated party | Closing balance | Opening balance | ||
| Remaining book value | Bad debt provision | Remaining book value | Bad debt provision | ||
| Account receivable | Qijian Technology | 4,708.76 | 47.09 | ||
| Other receivables | Shenyang Fangda | 42,877.00 | 42,877.00 | ||
| 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. | 76,062,675.83 | 1,133,333.87 | 70,062,675.83 | 1,043,933.87 |
(2) Receivable interest
In RMB
| Project name | Affiliated party | Closing balance of book value | Opening balance of book value |
| Other payables | Shenzhen Yikang Real Estate Co. Ltd. | 26,044,709.60 | 25,305,047.71 |
| 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 day
On 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 June 30, 2023, Fangda Real Estatehas paid a deposit of RMB 20,000,000.
(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 ofthe project company it holds and the entire development interest of the project to Party A. Party A shall pay Party B a total ofRMB600 million for the cooperation price. As of June 30, 2023, Fangda Property has paid Party B and the project companyRMB50 million of security deposit, RMB20 million of service fee, RMB61,937,200 of equity transfer and RMB79,062,800 ofother related payments.
In May 2021, the subsidiaries Fangda Jianke, Fangda Jiangxi New Material and CITIC Securities Investment Co., Ltd.,Shenzhen Hi Tech Investment Venture Capital Co., Ltd., Shenzhen Qianhai Pengchen Investment Partnership (limited partnership),Gongqingcheng Longrun Spring Investment Partnership (limited partnership), Shenzhen Jiayuan Capital Management Co., Ltdand Gongqingcheng Huasheng Botai Investment Partnership (limited partnership) (hereinafter referred to as the "Transferee")signed equity transfer agreements to transfer 10.9375% of the total equity of Fangda Zhiyuan Technology, with the transferamount of RMB 175 million. The agreement also stipulates that if Fangda Zhiyuan Technology fails to start and complete thequalified listing before May 31, 2025, the transferee has the right to require Fangda Jianke and Fangda Jiangxi New Material torepurchase or transfer all or part of the equity of Fangda Zhiyuan Technology held by the transferee.The Company has no other commitments that should be disclosed by June 30, 2023.
2. Contingencies
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 RMB13,939,863.27, and put forward the application for completed project costappraisal on November 22, 2019. As of the date of this report, the case is still under trial.
② In March 2022, Xiangheng Real Estate (Jinan) Co., Ltd. filed an arbitration with the Jinan Arbitration Commission,requesting Fangda Jianke to bear the deduction, maintenance, rectification and rework costs of RMB8,956,563.81 and lawyer'sfees of RMB350,000.00 caused by the quality problems of the supply and installation of aluminum alloy doors and windows,louvers and curtain walls of Jinan Kerry comprehensive development project (phase I and II); In April 2022, Fangda ConstructionTechnology Co., Ltd. filed an anti arbitration application, requiring Xiangheng Real Estate (Jinan) Co., Ltd. to pay a total ofRMB18,062,462.28 for the project funds and project expenses. As of the date of this report, the two cases are under joint trial.
③ In September 2022, Fangda Jianke Co., Ltd. filed a lawsuit to the People's Court of Longhua District, requiring LongguangEngineering Construction Co., Ltd. to pay the total principal and interest of the project funds of Longguang Jiuzuan Project Plot 05and Plot 09 to Fangda Construction Technology Co., Ltd., totaling RMB33,197,543.00. As of the date of this report, the case ofthe Jiuzhuan 05 plot project has been adjudicated in first instance, with Longguang Company being sentenced to pay theengineering fee of RMB7,709,679.55, the quality assurance deposit of RMB6,033,911.38, and corresponding interest to FangdaConstruction Technology Company. Longguang Company has the priority right to be compensated for the sale and auction price
of the curtain wall production and installation project of the project; Due to both parties filing appeals, it is currently in the secondinstance. The Jiuzhuan 09 plot project is still under first instance review.
④ In October 2022, Fangda Jianke Co., Ltd. filed a lawsuit to the People's Court of Danzhou City, Hainan Province,requesting Danzhou Dongtuo Tourism Development Co., Ltd. to pay to Fangda Jianke Co., Ltd. a total of RMB27,863,564.06 ofthe principal and interest of the project payment for the Hengda Huadao Project. As of the date of this report, the court has filed acase and the case is currently under trial.
⑤ In October 2022, Fangda Jianke Co., Ltd. filed an application for arbitration with the Guiyang Arbitration Commission,requiring Zhongtian Urban Investment Group Guiyang International Financial Center Co., Ltd. to pay Fangda Jianke Co., Ltd. atotal of RMB10,818,847.31 of the principal and interest of the curtain wall project of Building 7 and Building 9 in the first phaseof Guiyang International Financial Center Business District. As of the date of this report, the arbitration tribunal has filed a caseand held a hearing, waiting for an award.
⑥ In September 2022, Fangda Real Estate Co., Ltd. filed a lawsuit to the People's Court of Nanshan District, Shenzhen,requiring Shenzhen Hongtao Group Co., Ltd. to pay the total principal and interest of Fangda Real Estate Co., Ltd. to Fangda RealEstate Co., Ltd. for the purchase of building 3 # in Fangda City, amounting to RMB56,527,427.01, and Hongtao Company'scounterclaim party, Dada Real Estate Co., Ltd., requested to cancel the signed Supplementary Agreement on Real Estate Sales andpay the liquidated damages of RMB44,046,859.04 for overdue certificate processing. As of the disclosure date of this report, thecourt has issued a first instance judgment, ruling that Hongtao Company shall pay Fangda Real Estate Company the purchase priceof RMB40,127,678.19 and overdue payment interest (temporarily calculated as RMB8,418,135.54 until June 30, 2022). Thesubsequent interest shall be calculated based on RMB40,127,678.19 and continue to be calculated until the actual payment dateaccording to the loan market quotation interest rate standard published by the National Interbank Funding Center. Reject allcounterclaim requests from Hongtao Company. At present, both parties have filed an appeal and the case has entered the secondinstance process.
⑦ In September 2022, Fangda Real Estate filed a lawsuit with the People's Court of Nanshan District, Shenzhen City,requesting the court to order the cancellation of the Shenzhen Real Estate Sales Contract (Cash Sale) signed by Fangda Real Estateand Shenzhen Rijiasheng Trading Co., Ltd., and order Rijiasheng to pay the bank mortgage loan compensation ofRMB18,796,489.12 and interest of RMB3,800,495.61 to Fangda Real Estate, and the liquidated damages for contract cancellationof RMB3,428,313.10, occupation fee Please refund the overdue fee. In September 2022, Shenzhen Rijiasheng Trading Co., Ltd.filed a lawsuit to the People's Court of Nanshan District, Shenzhen, requesting Fangda Real Estate to perform the obligation ofhandling the certificate and bear the liquidated damages for overdue handling of the certificate. The provisional amount ofRMB3,669,046.43 is actually calculated until the certificate is completed. As of the date of this report, the court has issued firstinstance judgments, with Fangda Real Estate Company v. Japan Jiasheng Company ruling supporting the termination of thecontract and paying the bank mortgage loan repayment of RMB18,708,945.57 and interest of RMB3,790,999.98, as well as payinga breach of contract penalty of RMB1,714,156.55 and the occupancy and use fee of the house. The case of Rijia Sheng Company v.Da Real Estate Company was ruled to reject all litigation requests. At present, both parties have filed an appeal and the case hasentered the second instance process.
⑧ In July 2022, Wang Weihong filed a lawsuit on the ground that Fang Dajianke Company constituted a preservation errorin the (2015) YYYZFMCZ No. 01205 case, claiming that Fang Dajianke Company compensated for the loss of RMB2,325,779.17,and another lawsuit claimed that Fang Dajianke Company owed its project payment principal of RMB4.78 million and interest.The court of first instance in both cases has ruled against all of Wang Weihong's claims. As of the date of this report, the secondinstance court in the case of preservation error has revised the judgment that Fang Dajian Technology Company paid interest lossof RMB44,197.44 to Wang Weihong, which has been fulfilled. The second instance court of the first and second instance of theconstruction project dispute has ruled to remand the case for retrial, and currently has not received any information on the retrialcase.
⑨ Fangda Zhiyuan Technology Co., Ltd. and Shenzhen BYD Supply Chain Management Co., Ltd. (hereinafter referred to as"BYD") have a purchase and sales contract dispute, and BYD has defaulted on payment for goods. Fangda Zhiyuan TechnologyCo., Ltd. filed a lawsuit to the People's Court of Pingshan District on October 20, 2022, demanding payment of RMB5.4532million for raw materials and storage and management fees. The case was accepted by the court on February 13, 2023, and as ofthe date of this report, it has been settled through settlement.⑩ In April 2023, Fangda Jianke Company filed a lawsuit with the Guangzhou Intermediate People's Court, demanding thetermination of the construction contract signed with Guangzhou Kaidar Investment Co., Ltd. for the Kaidar Hub InternationalPlaza project, and requiring Guangzhou Kaidar Investment Co., Ltd. to pay the principal amount of the project payment ofRMB113,529,244.60 and interest to Fangda Jianke Company, and claiming the priority right to receive compensation for theconstruction project price. As of the date of this report, the court has filed a case and the case is currently under trial.? In June 2023, Fangda Jianke Company filed a lawsuit with the People's Court of Shapingba District, Chongqing,demanding that Chongqing Longhu Jingnan Real Estate Development Co., Ltd. pay Fangda Jianke Company the principal amountof RMB9,754,668.59 and overdue interest for the Chongqing Longhu Shapingba project, and claim the priority right to receivecompensation for the construction project price. As of the disclosure date of this report, the court has filed and accepted the case,and it is currently under trial.
(2) Contingent liabilities formed by providing of guarantee to other companies' debts and their influences on financialsituation
By June 30, 2023, the Company has provided loan guarantees for the following entities:
In RMB10,000
| Name of guaranteed entity | Guarantee | Amount | Term | Remarks |
| Fangda Property | Guarantee and mortgage guarantee | 87,000.00 | 2020.03.13-2030.03.12 | |
| Fangda Property | Guarantee | 42,850.00 | 2021.03.18-2031.03.18 | |
| Fangda Jianke | Guarantee and mortgage guarantee | 4,000.00 | 2022.09.08-2023.09.03 | |
| Fangda Jianke | Guarantee | 4,000.00 | 2023.02.27-2024.02.27 | |
| Fangda Jianke | Guarantee | 5,000.00 | 2023.03.17-2024.03.17 | |
| Fangda Jianke | Guarantee and mortgage guarantee | 4,000.00 | 2023.05.22-2024.05.16 | |
| Fangda Yunzhu | Guarantee | 980.00 | 2022.05.18-2024.05.17 | |
| Fangda Jianke | Guarantee | 5,000.00 | 2023.05.26-2024.05.25 | |
| Fangda Zhiyuan Technology | Guarantee | 3,000.00 | 2022.07.25-2023.07.25 | |
| Total | 155,830.00 |
Notes:: ① Providing debt guarantees to other units is all related guarantees between internal equity entities of the company.
② The Company's property business provides periodic mortgage guarantee for property purchasers. The term of the periodicguarantee lasts from the effectiveness of guarantee contracts to the completion of mortgage registration and transfer of housingownership certificates to banks. By June 30, 2023, the Company has provided periodic guarantee of RMB13,102,400.
(3) Other contingent liabilities and their influences
The Company has no other contingent events that should be disclosed by June 30, 2023.
3. Others
Status of non-revocation of company as at June 30, 2023：
| Currency | Guarantee balance (original currency) | Deposit (RMB) | Credit line used (RMB) |
| CNY | 775,140,903.15 | 823,387.12 | 774,317,516.03 |
| INR | 82,691,782.78 | 46,099.32 | 7,232,844.86 |
| HKD | 15,349,982.00 | 15,000,000.00 | |
| USD | 2,507,136.33 | 1,483,068.77 | 16,632,996.92 |
| SGD | 2,700,000.00 | 14,429,340.00 | |
| AUD | 2,388,000.00 | 11,460,489.60 | |
| EUR | 3,771,764.01 | 29,710,562.28 | |
| Total | 17,352,555.21 | 853,783,749.69 |
XIV. Post-balance-sheet events
1. Notes to other issues in post balance sheet period
The Company has no issues in post balance sheet period that need to be disclosed on August 25, 2023 (reportdate approved by the Board of Directors).
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 based on financialinformation required by routine internal management. The Group's management regularly review the operating results of thereporting segments to determine resource distribution and evaluate their performance.The reporting segments are:
(1) Curtain wall segment, production and sales of curtain wall materials, construction curtain wall design, production andinstallation;
(2) Rail transport segment: assembly and processing of metro screen doors;
(3) Real estate segment: development and operating of real estate on land of which land use right is legally obtained by theCompany; property management;
(4) New energy segment: photovoltaic power generation, photovoltaic power plant sales, photovoltaic equipment R & D,installation, and sales, and photovoltaic power plant engineering design and installation
(5) Others
The segment report information is disclosed based on the accounting policies and measurement standards used by thesegments when reporting to the management. The policies and standards should be consistent with those used in preparing thefinancial statement.
(2) Financial information
In RMB
| Item | Curtain wall | Rail transport | Real estate | New energy | Others | Offset between segments | Total |
| Turnover | 1,657,229,551.12 | 291,615,462.85 | 119,931,935.09 | 9,302,428.34 | 12,353,745.91 | 11,586,245.99 | 2,078,846,877.32 |
| Including: external transaction income | 1,654,849,166.62 | 291,615,462.85 | 115,913,190.77 | 8,947,285.78 | 7,521,771.30 | 2,078,846,877.32 | |
| Inter-segment transaction income | 2,380,384.50 | 0.00 | 4,018,744.32 | 355,142.56 | 4,831,974.61 | 11,586,245.99 | |
| Including: major business turnover | 1,643,016,529.06 | 291,538,344.20 | 52,962,063.40 | 9,302,428.34 | 2,724,113.27 | 1,994,095,251.72 | |
| Operating cost | 1,385,103,438.12 | 209,278,784.39 | 28,749,363.23 | 3,936,675.50 | 2,837,792.61 | 1,624,230,468.63 | |
| Including: major business cost | 1,378,141,699.70 | 209,278,784.39 | 25,085,173.65 | 3,936,675.50 | 2,793,422.55 | 1,613,648,910.68 | |
| Operation cost | 141,557,736.53 | 18,560,695.28 | 56,178,619.48 | 361,845.62 | 8,595,089.34 | -15,411,756.13 | 240,665,742.38 |
| Operating profit/(loss) | 130,484,288.83 | 63,775,983.18 | 35,330,704.82 | 5,003,907.22 | 3,758,656.60 | 24,402,874.34 | 213,950,666.31 |
| Total assets | 5,601,395,088.68 | 959,185,244.79 | 6,244,489,449.25 | 189,418,976.71 | 3,105,309,132.15 | 3,160,473,466.34 | 12,939,324,425.23 |
| Total liabilities | 3,458,793,622.07 | 554,011,204.80 | 3,477,503,320.01 | 70,343,151.34 | 821,262,631.09 | 1,384,583,411.82 | 6,997,330,517.49 |
(3) Others
Since 88.09% 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 | Proporti | Amount | Provisio | Amount | Proporti | Amount | Provisio | |||
| on | n rate | on | n rate | |||||||
| Including: | ||||||||||
| Account receivable for which bad debt provision is made by group | 538,064.33 | 100.00% | 53,870.45 | 10.01% | 484,193.88 | 680,529.54 | 100.00% | 32,584.96 | 4.79% | 647,944.58 |
| Including: | ||||||||||
| Portfolio 3. Others | 538,064.33 | 100.00% | 53,870.45 | 10.01% | 484,193.88 | 680,529.54 | 100.00% | 32,584.96 | 4.79% | 647,944.58 |
| Total | 538,064.33 | 100.00% | 53,870.45 | 10.01% | 484,193.88 | 680,529.54 | 100.00% | 32,584.96 | 4.79% | 647,944.58 |
Provision for bad debts by combination:
In RMB
| Name | Closing balance | ||
| Remaining book value | Bad debt provision | Provision rate | |
| Portfolio 3. Others | 538,064.33 | 53,870.45 | 10.01% |
| Total | 538,064.33 | 53,870.45 | |
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 | Closing balance |
| Within 1 year (inclusive) | 178,934.44 |
| 2-3 years | 222,666.00 |
| 3-4 years | 136,463.89 |
| Total | 538,064.33 |
(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 | 32,584.96 | 21,285.49 | 53,870.45 | |||
| Total | 32,584.96 | 21,285.49 | 53,870.45 |
(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 | 538,064.33 | 100.00% | 53,870.45 |
| Total | 538,064.33 | 100.00% |
2. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Other receivables | 1,073,141,303.92 | 1,046,500,428.02 |
| Total | 1,073,141,303.92 | 1,046,500,428.02 |
(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 | 80,000.00 | 150,699.54 |
| Debt by Luo Huichi | 11,242,291.48 | |
| Others | 64,732.30 | 396,561.98 |
| Accounts between related parties within the scope of consolidation | 1,072,998,703.01 | 1,046,003,558.83 |
| Total | 1,073,143,435.31 | 1,057,793,111.83 |
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 January 1, 2023 | 7,515.33 | 11,285,168.48 | 11,292,683.81 | |
| Balance on January 1, 2023 in the current period | ||||
| Provision | -5,383.94 | -5,383.94 | ||
| Transferred back in the current period | 292,877.00 | 292,877.00 | ||
| Canceled in the current period | 10,992,291.48 | 10,992,291.48 |
| Balance on June 30, 2023 | 2,131.39 | 2,131.39 |
Account age
In RMB
| Age | Closing balance |
| Within 1 year (inclusive) | 87,317,526.23 |
| 1-2 years | 273,452,880.00 |
| 2-3 years | 476,158,158.54 |
| Over 3 years | 236,214,870.54 |
| 3-4 years | 205,755,077.45 |
| 4-5 years | 0.00 |
| Over 5 years | 30,459,793.09 |
| Total | 1,073,143,435.31 |
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 | 11,292,683.81 | -5,383.94 | 292,877.00 | 10,992,291.48 | 2,131.39 | |
| Total | 11,292,683.81 | -5,383.94 | 292,877.00 | 10,992,291.48 | 2,131.39 | |
4) Other receivable written off in the current period
In RMB
| Item | Amount |
| Luo Huichi | 10,992,291.48 |
Including significant other receivable:
In RMB
| Entity | Nature | Amount | Reason | Writing-off procedure | Related transaction |
| Luo Huichi | Debt by Luo Huichi | 10,992,291.48 | Impossible enforcement of property, with minimal possibility of subsequent recovery | Approved by the senior management | No |
| Total | 10,992,291.48 |
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 | 74,529,980.00 | Less than 1 year | 79.18% | |
| 108,902,550.00 | 1-2 years | ||||
| 460,489,120.00 | 2-3 years | ||||
| 205,755,077.45 | 3-4 years | ||||
| Fangda Jiangxi Property Development | Affiliated party payment | 2,500,000.00 | Less than 1 year | 17.02% | |
| 164,550,000.00 | 1-2 years | ||||
| 15,589,038.54 | 2-3 years | ||||
| Shihui International | Affiliated party payment | 30,459,793.09 | Over 5 years | 2.84% | |
| Yunzhu Technology | Affiliated party payment | 10,035,928.48 | Less than 1 year | 0.94% | |
| Fangda Zhiyuan Technology | Affiliated party payment | 149,721.00 | Less than 1 year | 0.01% | |
| Total | 1,072,961,208.56 | 99.99% |
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 | 1,486,831,253.00 | 1,486,831,253.00 | 1,457,331,253.00 | 1,457,331,253.00 | ||
| Total | 1,486,831,253.00 | 1,486,831,253.00 | 1,457,331,253.00 | 1,457,331,253.00 | ||
(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 | 751,950,000.00 | 751,950,000.00 | |||||
| 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 | 235,323,000. | 235,323,000. | |||||
| Investment | 00 | 00 | |||||
| Fangda Intelligent Manufacturing | 500,000.00 | 29,500,000.00 | 30,000,000.00 | ||||
| Total | 1,457,331,253.00 | 29,500,000.00 | 1,486,831,253.00 |
4. Operational revenue and costs
In RMB
| Item | Amount occurred in the current period | Occurred in previous period | ||
| Income | Cost | Income | Cost | |
| Other businesses | 12,358,317.34 | 14,705,232.50 | 418,824.01 | |
| Total | 12,358,317.34 | 14,705,232.50 | 418,824.01 | |
Income information:
In RMB
| Contract classification | Segment 1 - other segments | Total |
| Type of product | ||
| Including: | ||
| Other businesses | 12,358,317.34 | 12,358,317.34 |
| Total | 12,358,317.34 | 12,358,317.34 |
Information related to performance obligations:
The operating income of the parent company comes from property rental income.
5. Investment income
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Investment gain of financial products | 431,992.15 | |
| Total | 431,992.15 |
XVII. Supplementary Materials
1. Detailed accidental gain/loss
? Applicable □ Inapplicable
In RMB
| Item | Amount | Notes |
| Non-current asset disposal gain/loss (including the write-off part for which assets impairment provision is made) | 373,352.08 | |
| 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. | 6,748,993.91 | |
| Gain/loss from change of fair value of transactional financial asset and | 7,782.60 |
| 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 | ||
| Write-back of impairment provision of receivables for which impairment test is performed individually | 4,750,256.42 | |
| Gain/loss from change of fair value of investment property measured at fair value in follow-up measurement | 122,109.40 | |
| Other non-business income and expenditures other than the above | -365,816.05 | |
| Less: Influenced amount of income tax | 1,835,470.87 | |
| Influenced amount of minority shareholders' equity | 130,276.06 | |
| Total | 9,670,931.43 | -- |
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 | Earning per share | |
| Basic earnings per share (yuan/share) | Diluted Earnings per share (yuan/share) | ||
| Net profit attributable to common shareholders of the Company | 3.14% | 0.17 | 0.17 |
| Net profit attributable to the common owners of the PLC after deducting of non-recurring gains/losses | 2.97% | 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 internationaland Chinese account standards
□ Applicable ? Inapplicable
(2) Differences in net profits and assets in financial statements disclosed according to the internationaland Chinese 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 adjustedNo