CHINA FANGDA GROUP CO., LTD.
2021 Financial Statements
August 2021
I. Auditor’s reportWhether the interim report is audited
□ Yes √ No
The financial statements for H1 2014 have not been audited.
II. Financial statementsUnit for statements in notes to financial statements: RMB yuan
1. Consolidated Balance Sheet
Prepared by: China Fangda Group Co., Ltd.
Wednesday, June 30, 2021
In RMB
Item | Wednesday, June 30, 2021 | Thursday, December 31, 2020 |
Current asset: | ||
Monetary capital | 1,246,131,160.65 | 1,463,974,162.44 |
Settlement provision | ||
Outgoing call loan | ||
Transactional financial assets | 132,493,708.09 | 14,382,896.04 |
Derivative financial assets | 5,096,490.27 | 6,974,448.22 |
Notes receivable | 117,929,830.31 | 207,165,063.97 |
Account receivable | 446,412,912.08 | 616,952,136.19 |
Receivable financing | 23,798,104.10 | 10,727,129.28 |
Prepayment | 24,126,119.19 | 24,105,635.39 |
Insurance receivable | ||
Reinsurance receivable | ||
Provisions of Reinsurance contracts receivable | ||
Other receivables | 168,599,288.27 | 162,282,396.88 |
Including: interest receivable | 1,601,660.58 | |
Dividend receivable | ||
Repurchasing of financial assets | ||
Inventory | 774,694,262.15 | 837,831,790.88 |
Contract assets | 1,662,933,014.05 | 1,433,599,583.48 |
Assets held for sales |
Non-current assets due in 1 year | 91,082,209.06 | 141,943,454.82 |
Other current assets | 235,259,911.57 | 233,223,084.51 |
Total current assets | 4,928,557,009.79 | 5,153,161,782.10 |
Non-current assets: | ||
Loan and advancement provided | ||
Debt investment | ||
Other debt investment | ||
Long-term receivables | ||
Long-term share equity investment | 55,449,484.30 | 55,902,377.95 |
Investment in other equity tools | 17,398,629.00 | 17,628,307.59 |
Other non-current financial assets | 5,198,015.90 | 5,025,186.16 |
Investment real estate | 5,646,194,098.44 | 5,634,648,416.52 |
Fixed assets | 566,440,865.19 | 483,217,323.75 |
Construction in process | 98,594,455.15 | 168,626,803.01 |
Productive biological assets | ||
Gas & petrol | ||
Use right assets | 25,764,982.77 | |
Intangible assets | 76,541,048.06 | 77,201,610.87 |
R&D expense | ||
Goodwill | ||
Long-term amortizable expenses | 7,008,249.85 | 4,581,487.32 |
Deferred income tax assets | 186,758,149.49 | 186,649,335.96 |
Other non-current assets | 107,305,323.12 | 104,817,688.85 |
Total of non-current assets | 6,792,653,301.27 | 6,738,298,537.98 |
Total of assets | 11,721,210,311.06 | 11,891,460,320.08 |
Current liabilities | ||
Short-term loans | 1,174,631,199.75 | 1,048,250,327.62 |
Loans from Central Bank | ||
Call loan received | ||
Transactional financial liabilities | ||
Derivative financial liabilities | 915,234.93 | |
Notes payable | 684,298,609.74 | 866,224,515.42 |
Account payable | 1,127,961,009.14 | 1,282,847,988.91 |
Prepayment received | 3,726,440.79 | 1,544,655.62 |
Contract liabilities | 166,915,485.03 | 265,487,113.12 |
Selling of repurchased financial assets | ||
Deposit received and held for others | ||
Entrusted trading of securities | ||
Entrusted selling of securities | ||
Employees' wage payable | 26,879,789.78 | 60,894,196.78 |
Taxes payable | 36,203,828.98 | 360,325,524.42 |
Other payables | 158,525,255.26 | 153,635,067.86 |
Including: interest payable | ||
Dividend payable | 6,000,000.00 | |
Fees and commissions payable | ||
Reinsurance fee payable | ||
Liabilities held for sales | ||
Non-current liabilities due in 1 year | 119,496,617.91 | 103,359,833.57 |
Other current liabilities | 36,713,615.23 | 107,688,425.69 |
Total current liabilities | 3,535,351,851.61 | 4,251,172,883.94 |
Non-current liabilities: | ||
Insurance contract provision | ||
Long-term loans | 1,484,161,462.35 | 1,099,411,462.35 |
Bond payable | ||
Including: preferred stock | ||
Perpetual bond | ||
Lease liabilities | 24,619,179.70 | |
Long-term payable | ||
Long-term employees' wage payable | ||
Anticipated liabilities | 30,000,528.43 | 33,425,500.13 |
Deferred earning | 8,843,181.51 | 9,168,492.17 |
Deferred income tax liabilities | 1,039,785,167.05 | 1,038,084,099.97 |
Other non-current liabilities | ||
Total of non-current liabilities | 2,587,409,519.04 | 2,180,089,554.62 |
Total liabilities | 6,122,761,370.65 | 6,431,262,438.56 |
Owner's equity: | ||
Share capital | 1,073,874,227.00 | 1,088,278,951.00 |
Other equity tools | ||
Including: preferred stock | ||
Perpetual bond | ||
Capital reserves | 122,211,372.31 | 20,459,588.40 |
Less: Shares in stock | 42,748,530.12 | |
Other miscellaneous income | 2,076,706.89 | 2,078,167.63 |
Special reserves | ||
Surplus reserve | 106,783,436.96 | |
Common risk provisions | ||
Retained profit | 4,304,908,130.31 | 4,217,527,242.56 |
Total of owner's equity belong to the parent company | 5,503,070,436.51 | 5,392,378,856.43 |
Minor shareholders' equity | 95,378,503.90 | 67,819,025.09 |
Total of owners' equity | 5,598,448,940.41 | 5,460,197,881.52 |
Total of liabilities and owner's interest | 11,721,210,311.06 | 11,891,460,320.08 |
Legal representative: XiongJianming CFO: Lin Kebing Accounting Manager: Wu Bohua
2. Balance Sheet of the Parent Company
In RMB
Item | Wednesday, June 30, 2021 | Thursday, December 31, 2020 |
Current asset: | ||
Monetary capital | 104,169,224.51 | 204,828,995.78 |
Transactional financial assets | ||
Derivative financial assets | ||
Notes receivable | ||
Account receivable | 888,385.48 | 885,849.08 |
Receivable financing | ||
Prepayment | 291,635.93 | 1,323,361.34 |
Other receivables | 1,624,397,140.22 | 1,156,802,204.91 |
Including: interest receivable | ||
Dividend receivable | ||
Inventory |
Contract assets | ||
Assets held for sales | ||
Non-current assets due in 1 year | ||
Other current assets | 1,171,313.27 | 1,071,138.13 |
Total current assets | 1,730,917,699.41 | 1,364,911,549.24 |
Non-current assets: | ||
Debt investment | ||
Other debt investment | ||
Long-term receivables | ||
Long-term share equity investment | 1,196,831,253.00 | 1,196,831,253.00 |
Investment in other equity tools | 16,392,331.44 | 16,392,331.44 |
Other non-current financial assets | 30,000,001.00 | 30,000,001.00 |
Investment real estate | 330,957,456.00 | 334,498,436.00 |
Fixed assets | 69,799,553.04 | 65,157,481.98 |
Construction in process | ||
Productive biological assets | ||
Gas & petrol | ||
Use right assets | ||
Intangible assets | 1,366,852.92 | 1,521,975.72 |
R&D expense | ||
Goodwill | ||
Long-term amortizable expenses | 450,845.25 | 687,202.16 |
Deferred income tax assets | 28,784,112.10 | 26,592,617.26 |
Other non-current assets | ||
Total of non-current assets | 1,674,582,404.75 | 1,671,681,298.56 |
Total of assets | 3,405,500,104.16 | 3,036,592,847.80 |
Current liabilities | ||
Short-term loans | 490,203,611.11 | 491,503,263.89 |
Transactional financial liabilities | ||
Derivative financial liabilities | ||
Notes payable | ||
Account payable | 606,941.85 | 606,941.85 |
Prepayment received | 868,632.74 | 927,674.32 |
Contract liabilities |
Employees' wage payable | 1,256,126.64 | 3,440,073.04 |
Taxes payable | 826,759.56 | 2,993,196.12 |
Other payables | 374,408,006.97 | 28,068,648.70 |
Including: interest payable | ||
Dividend payable | ||
Liabilities held for sales | ||
Non-current liabilities due in 1 year | ||
Other current liabilities | ||
Total current liabilities | 868,170,078.87 | 527,539,797.92 |
Non-current liabilities: | ||
Long-term loans | ||
Bond payable | ||
Including: preferred stock | ||
Perpetual bond | ||
Lease liabilities | ||
Long-term payable | ||
Long-term employees' wage payable | ||
Anticipated liabilities | ||
Deferred earning | ||
Deferred income tax liabilities | 74,187,186.84 | 73,837,511.85 |
Other non-current liabilities | ||
Total of non-current liabilities | 74,187,186.84 | 73,837,511.85 |
Total liabilities | 942,357,265.71 | 601,377,309.77 |
Owner's equity: | ||
Share capital | 1,073,874,227.00 | 1,088,278,951.00 |
Other equity tools | ||
Including: preferred stock | ||
Perpetual bond | ||
Capital reserves | 360,835.52 | 360,835.52 |
Less: Shares in stock | 42,748,530.12 | |
Other miscellaneous income | 1,137,972.98 | -371,129.71 |
Special reserves | ||
Surplus reserve | 78,439,630.84 | 106,783,436.96 |
Retained profit | 1,309,330,172.11 | 1,282,911,974.38 |
Total of owners' equity | 2,463,142,838.45 | 2,435,215,538.03 |
Total of liabilities and owner's interest | 3,405,500,104.16 | 3,036,592,847.80 |
3. Consolidated Income Statement
In RMB
Item | H1 2021 | H1 2020 |
1. Total revenue | 1,568,778,834.98 | 1,256,258,223.01 |
Incl. Business income | 1,568,778,834.98 | 1,256,258,223.01 |
Interest income | ||
Insurance fee earned | ||
Fee and commission received | ||
2. Total business cost | 1,464,915,772.96 | 1,161,656,553.71 |
Incl. Business cost | 1,208,641,803.18 | 972,247,913.86 |
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 | 35,853,693.88 | 7,589,822.75 |
Sales expense | 25,434,914.81 | 21,243,542.31 |
Administrative expense | 69,502,453.93 | 63,196,975.88 |
R&D cost | 78,645,594.86 | 52,496,161.25 |
Financial expenses | 46,837,312.30 | 44,882,137.66 |
Including: interest cost | 43,637,100.05 | 43,164,977.83 |
Interest income | 6,976,161.44 | 6,956,602.08 |
Add: other gains | 6,607,058.06 | 6,214,112.77 |
Investment gains (“-” for loss) | -532,743.54 | -642,178.57 |
Incl. Investment gains from affiliates and joint ventures | -452,893.65 | -375,202.09 |
Financial assets derecognised as a result of amortized cost | -3,032,899.72 | -2,255,794.10 |
Exchange gains ("-" for loss) | ||
Net open hedge gains (“-” for loss) | ||
Gains from change of fair value (“-“ for loss) | 172,829.74 | 50,384.90 |
Credit impairment ("-" for loss) | 19,853,416.06 | 54,670,793.32 |
Investment impairment loss ("-" for loss) | 3,466,913.89 | 20,219,822.04 |
Investment gains ("-" for loss) | -2,027,304.03 | -1,981.72 |
3. Operational profit ("-" for loss) | 131,403,232.20 | 175,112,622.04 |
Plus: non-operational income | 1,201,106.46 | 280,621.27 |
Less: non-operational expenditure | 3,480,374.51 | 5,275,868.33 |
4. Gross profit ("-" for loss) | 129,123,964.15 | 170,117,374.98 |
Less: Income tax expenses | 13,936,493.66 | 22,259,131.92 |
5. Net profit ("-" for net loss) | 115,187,470.49 | 147,858,243.06 |
(1) By operating consistency | ||
1. Net profit from continuous operation ("-" for net loss) | 115,187,470.49 | 147,858,243.06 |
2. Net profit from discontinuous operation ("-" for net loss) | ||
(2) By ownership | ||
1. Net profit attributable to the owners of parent company | 111,488,701.33 | 147,784,781.12 |
2. Minor shareholders’ equity | 3,698,769.16 | 73,461.94 |
6. After-tax net amount of other misc. incomes | -24,854.15 | 940,933.00 |
After-tax net amount of other misc. incomes attributed to parent's owner | -1,460.74 | 940,933.00 |
(1) Other misc. incomes that cannot be re-classified into gain and loss | -229,678.59 | -520,143.59 |
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 | -229,678.59 | -520,143.59 |
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 | 228,217.85 | 1,461,076.59 |
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 | -785,690.88 | 1,625,577.36 |
6. Translation difference of foreign exchange statement | -495,193.96 | -164,500.77 |
7. Others | 1,509,102.69 | |
After-tax net of other misc. income attributed to minority shareholders | -23,393.41 | |
7. Total of misc. incomes | 115,162,616.34 | 148,799,176.06 |
Total of misc. incomes attributable to the owners of the parent company | 111,487,240.59 | 148,725,714.12 |
Total misc gains attributable to the minor shareholders | 3,675,375.75 | 73,461.94 |
8. Earnings per share: | ||
(1) Basic earnings per share | 0.10 | 0.13 |
(2) Diluted earnings per share | 0.10 | 0.13 |
Net profit contributed by entities merged under common control in the report period was RMB17,512.89, net profit realized byparties merged during the previous period is RMB1,049,885.06.Legal representative: XiongJianming CFO: Lin Kebing Accounting Manager: Wu Bohua
4. Income Statement of the Parent Company
In RMB
Item | H1 2021 | H1 2020 |
1. Turnover | 12,068,999.58 | 12,719,395.10 |
Less: Operation cost | 89,904.13 | 151,219.77 |
Taxes and surcharges | 664,469.85 | 677,865.78 |
Sales expense | ||
Administrative expense | 13,509,831.81 | 11,316,043.39 |
R&D cost | ||
Financial expenses | 7,575,722.85 | 14,753,727.62 |
Including: interest cost | 7,449,236.11 | 15,820,677.77 |
Interest income | 407,702.78 | 1,914,893.50 |
Add: other gains | 85,100.49 | 295,818.89 |
Investment gains (“-” for loss) | 33,976,138.71 | 338,561.17 |
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) | -3,239.44 | -2,277.86 |
Investment impairment loss ("-" for loss) | ||
Investment gains ("-" for loss) | -460.17 | |
2. Operational profit (“-” for loss) | 24,286,610.53 | -13,547,359.26 |
Plus: non-operational income | 32,837.61 | 51,867.26 |
Less: non-operational expenditure | 101,429.05 | 1,008.00 |
3. Gross profit ("-" for loss) | 24,218,019.09 | -13,496,500.00 |
Less: Income tax expenses | -2,200,178.64 | -3,313,543.54 |
4. Net profit (“-” for net loss) | 26,418,197.73 | -10,182,956.46 |
(1) Net profit from continuous operation ("-" for net loss) | 26,418,197.73 | -10,182,956.46 |
(2) Net profit from discontinuous |
operation ("-" for net loss) | ||
5. After-tax net amount of other misc. incomes | 1,509,102.69 | |
(1) Other misc. incomes that cannot be re-classified into gain and loss | ||
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 | ||
4. Fair value change of the Company's credit risk | ||
5. Others | ||
(2) Other misc. incomes that will be re-classified into gain and loss | 1,509,102.69 | |
1. Other comprehensive income that can be transferred to profit or loss under the equity method | ||
2. Fair value change of other debt investment | ||
3. Gains and losses from changes in fair value of available-for-sale financial assets | ||
4. Other credit investment credit impairment provisions | ||
5. Cash flow hedge reserve | ||
6. Translation difference of foreign exchange statement | ||
7. Others | 1,509,102.69 | |
6. Total of misc. incomes | 27,927,300.42 | -10,182,956.46 |
7. Earnings per share: | ||
(1) Basic earnings per share | ||
(2) Diluted earnings per share |
5. Consolidated Cash Flow Statement
In RMB
Item | H1 2021 | H1 2020 |
1. Net cash flow from business operations: | ||
Cash received from sales of products and providing of services | 1,573,340,053.10 | 1,154,804,074.94 |
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 | 16,480,293.15 | 3,703,306.32 |
Other cash received from business operation | 91,747,818.37 | 213,986,261.22 |
Sub-total of cash inflow from business operations | 1,681,568,164.62 | 1,372,493,642.48 |
Cash paid for purchasing products and services | 1,361,468,797.85 | 996,468,687.27 |
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 | 196,896,028.86 | 168,329,630.62 |
Taxes paid | 431,724,633.10 | 69,056,612.37 |
Other cash paid for business activities | 192,403,249.81 | 277,565,976.54 |
Sub-total of cash outflow from business operations | 2,182,492,709.62 | 1,511,420,906.80 |
Cash flow generated by business operations, net | -500,924,545.00 | -138,927,264.32 |
2. Cash flow generated by investment: | ||
Cash received from investment recovery | 2,224,594,891.08 | 2,516,455,357.62 |
Cash received as investment profit | 2,754,435.58 | 9,253,861.27 |
Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 332,717.49 | |
Net cash received from disposal of subsidiaries or other operational units | ||
Other investment-related cash received | 250.00 | |
Sub-total of cash inflow generated from investment | 2,227,682,044.15 | 2,525,709,468.89 |
Cash paid for construction of fixed assets, intangible assets and other long-term assets | 54,321,772.94 | 69,468,255.88 |
Cash paid as investment | 2,167,460,000.00 | 2,516,610,000.00 |
Net increase of loan against pledge | ||
Net cash paid for acquiring subsidiaries and other operational units | 125,388,100.00 | |
Other cash paid for investment | 1,323,355.15 | |
Subtotal of cash outflows | 2,348,493,228.09 | 2,586,078,255.88 |
Cash flow generated by investment activities, net | -120,811,183.94 | -60,368,786.99 |
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 | 1,220,000,000.00 | 2,304,697,876.18 |
Other cash received from financing activities | ||
Subtotal of cash inflow from financing activities | 1,220,000,000.00 | 2,304,697,876.18 |
Cash paid to repay debts | 445,249,952.00 | 1,813,978,153.39 |
Cash paid as dividend, profit, or interests | 64,069,929.56 | 128,588,570.23 |
Incl. Dividend and profit paid by subsidiaries to minority shareholders | 4,560,100.00 | |
Other cash paid for financing activities | 529,360,479.34 | 281,298,965.99 |
Subtotal of cash outflow from financing activities | 1,038,680,360.90 | 2,223,865,689.61 |
Net cash flow generated by financing activities | 181,319,639.10 | 80,832,186.57 |
4. Influence of exchange rate changes on cash and cash equivalents | -671,353.77 | 1,284,254.96 |
5. Net increase in cash and cash equivalents | -441,087,443.61 | -117,179,609.78 |
Plus: Balance of cash and cash equivalents at the beginning of term | 1,028,386,529.73 | 730,933,482.19 |
6. Balance of cash and cash equivalents at the end of the period | 587,299,086.12 | 613,753,872.41 |
6. Cash Flow Statement of the Parent Company
In RMB
Item | H1 2021 | H1 2020 |
1. Net cash flow from business operations: | ||
Cash received from sales of | 10,393,331.14 | 8,683,073.96 |
products and providing of services | ||
Tax refunded | 232,652.87 | |
Other cash received from business operation | 2,246,619,631.82 | 2,914,427,921.50 |
Sub-total of cash inflow from business operations | 2,257,012,962.96 | 2,923,343,648.33 |
Cash paid for purchasing products and services | 342,534.67 | 406,441.27 |
Cash paid to and for the staff | 10,905,880.26 | 9,739,820.05 |
Taxes paid | 3,555,895.62 | 793,263.98 |
Other cash paid for business activities | 2,367,856,652.84 | 2,553,029,078.24 |
Sub-total of cash outflow from business operations | 2,382,660,963.39 | 2,563,968,603.54 |
Cash flow generated by business operations, net | -125,648,000.43 | 359,375,044.79 |
2. Cash flow generated by investment: | ||
Cash received from investment recovery | 382,800,000.00 | 562,800,000.00 |
Cash received as investment profit | 33,976,138.71 | 338,561.17 |
Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | ||
Net cash received from disposal of subsidiaries or other operational units | ||
Other investment-related cash received | ||
Sub-total of cash inflow generated from investment | 416,776,138.71 | 563,138,561.17 |
Cash paid for construction of fixed assets, intangible assets and other long-term assets | 239,020.66 | 48,767.89 |
Cash paid as investment | 382,800,000.00 | 562,800,000.00 |
Net cash paid for acquiring subsidiaries and other operational units | ||
Other cash paid for investment | ||
Subtotal of cash outflows | 383,039,020.66 | 562,848,767.89 |
Cash flow generated by investment | 33,737,118.05 | 289,793.28 |
activities, net | ||
3. Cash flow generated by financing activities: | ||
Cash received from investment | ||
Cash received from borrowed loans | 300,000,000.00 | 500,000,000.00 |
Other cash received from financing activities | ||
Subtotal of cash inflow from financing activities | 300,000,000.00 | 500,000,000.00 |
Cash paid to repay debts | 300,000,000.00 | 810,000,000.00 |
Cash paid as dividend, profit, or interests | 8,748,888.89 | 71,233,278.75 |
Other cash paid for financing activities | 99,998,965.99 | |
Subtotal of cash outflow from financing activities | 308,748,888.89 | 981,232,244.74 |
Net cash flow generated by financing activities | -8,748,888.89 | -481,232,244.74 |
4. Influence of exchange rate changes on cash and cash equivalents | -78,890.92 | |
5. Net increase in cash and cash equivalents | -100,659,771.27 | -121,646,297.59 |
Plus: Balance of cash and cash equivalents at the beginning of term | 204,578,995.78 | 175,341,953.63 |
6. Balance of cash and cash equivalents at the end of the period | 103,919,224.51 | 53,695,656.04 |
7. Statement of Change in Owners’ Equity (Consolidated)
Amount of the Current Term
In RMB
Item | H1 2021 | ||||||||||||||
Owners' Equity Attributable to the Parent Company | Minor shareholders' equity | Total of owners' equity | |||||||||||||
Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserve | Common risk provisions | Retained profit | Others | Subtotal | |||||
Preferred share | Perpetual bond | Others |
1. Balance at the end of last year | 1,088,278,951.00 | 11,459,588.40 | 42,748,530.12 | 2,078,167.63 | 106,783,436.96 | 4,215,005,541.52 | 5,380,857,155.39 | 66,538,836.09 | 5,447,395,991.48 | ||||||
Plus: Changes in accounting policies | |||||||||||||||
Correction of previous errors | |||||||||||||||
Consolidation of entities under common control | 9,000,000.00 | 2,521,701.04 | 11,521,701.04 | 1,280,189.00 | 12,801,890.04 | ||||||||||
Others | |||||||||||||||
2. Balance at the beginning of current year | 1,088,278,951.00 | 20,459,588.40 | 42,748,530.12 | 2,078,167.63 | 106,783,436.96 | 4,217,527,242.56 | 5,392,378,856.43 | 67,819,025.09 | 5,460,197,881.52 | ||||||
3. Change amount in the current period (“-“ for decrease) | -14,404,724.00 | 101,751,783.91 | -42,748,530.12 | -1,460.74 | -106,783,436.96 | 87,380,887.75 | 110,691,580.08 | 27,559,478.81 | 138,251,058.89 | ||||||
(1) Total of misc. incomes | -1,460.74 | 111,488,701.33 | 111,487,240.59 | 3,675,375.75 | 115,162,616.34 | ||||||||||
(2) Investment or decreasing of capital by owners | -14,404,724.00 | -42,748,530.12 | -28,343,806.12 | ||||||||||||
1. Common shares invested by owners | -14,404,724.00 | -42,748,530.12 | -28,343,806.12 | ||||||||||||
2. Capital contributed by |
other equity instrument holders | |||||||||||||||
3. Amount of shares paid and accounted as owners' equity | |||||||||||||||
4. Others | |||||||||||||||
(3) Profit allotment | |||||||||||||||
1. Provision of surplus reserves | |||||||||||||||
2. Common risk provision | |||||||||||||||
3. Distribution to owners (or shareholders) | |||||||||||||||
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 | 101,751,783.91 | -78,439,630.84 | -24,107,813.58 | -795,660.51 | 23,884,103.06 | 23,088,442.55 | |||||||||
4. Balance at the end of this period | 1,073,874,227.00 | 122,211,372.31 | 2,076,706.89 | 4,304,908,130.31 | 5,503,070,436.51 | 95,378,503.90 | 5,598,448,940.41 |
Amount of the Previous Term
In RMB
Item | H1 2020 | ||||||||||||||
Owners' Equity Attributable to the Parent Company | Minor shareholders' equity | Total of owners' equity | |||||||||||||
Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserve | Common risk provisions | Retained profit | Others | Subtotal | |||||
Preferred share | Perpetual bond | Others | |||||||||||||
1. Balance at the end of last year | 1,123,384,189.00 | 1,454,191.59 | -475,409.25 | 159,805,930.34 | 3,898,626,177.99 | 5,182,795,079.67 | 48,410,009.60 | 5,231,205,089.27 | |||||||
Plus: Changes in accounting policies | |||||||||||||||
Correction of previous errors | |||||||||||||||
Consolidation of entities under common | 9,000,000.00 | 9,026,682.67 | 18,026,682.67 | 2,002,964.74 | 20,029,647.41 |
control | |||||||||||||||
Others | |||||||||||||||
2. Balance at the beginning of current year | 1,123,384,189.00 | 10,454,191.59 | -475,409.25 | 159,805,930.34 | 3,907,652,860.66 | 5,200,821,762.34 | 50,412,974.34 | 5,251,234,736.68 | |||||||
3. Change amount in the current period (“-“ for decrease) | -35,105,238.00 | 940,933.00 | -64,280,649.28 | 93,370,833.57 | -5,074,120.71 | 73,461.94 | -5,000,658.77 | ||||||||
(1) Total of misc. incomes | 940,933.00 | 147,784,781.12 | 148,725,714.12 | 73,461.94 | 148,799,176.06 | ||||||||||
(2) Investment or decreasing of capital by owners | -35,105,238.00 | -64,280,649.28 | -99,385,887.28 | -99,385,887.28 | |||||||||||
1. Common shares invested by owners | -35,105,238.00 | -64,280,649.28 | -99,385,887.28 | -99,385,887.28 | |||||||||||
2. Capital contributed by other equity instrument holders | |||||||||||||||
3. Amount of shares paid and accounted as owners' equity | |||||||||||||||
4. Others | |||||||||||||||
(3) Profit allotment | -54,413,947.55 | -54,413,947.55 | -54,413,947.55 | ||||||||||||
1. Provision of surplus reserves | |||||||||||||||
2. Common risk provision | |||||||||||||||
3. Distribution | -54,41 | -54,41 | -54,413 |
to owners (or shareholders) | 3,947.55 | 3,947.55 | ,947.55 | ||||||||||||
4. Others | |||||||||||||||
(4) Internal carry-over of owners' equity | |||||||||||||||
1. Capitalizing of capital reserves (or share capital) | |||||||||||||||
2. Capitalizing of surplus reserves (or share capital) | |||||||||||||||
3. Surplus reserves used to cover losses | |||||||||||||||
4. Retained gain transferred due to change in set benefit program | |||||||||||||||
5. Other miscellaneous income | |||||||||||||||
6. Others | |||||||||||||||
(5) Special reserves | |||||||||||||||
1. Provided this year | |||||||||||||||
2. Used this period | |||||||||||||||
(6) Others | |||||||||||||||
4. Balance at the end of this period | 1,088,278,951.00 | 10,454,191.59 | 465,523.75 | 95,525,281.06 | 4,001,023,694.23 | 5,195,747,641.63 | 50,486,436.28 | 5,246,234,077.91 |
8. Statement of Change in Owners’ Equity (Parent Company)
Amount of the Current Term
In RMB
Item | H1 2021 | |||||||||||
Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserve | Retained profit | Others | Total of owners' equity | |||
Preferred share | Perpetual bond | Others | ||||||||||
1. Balance at the end of last year | 1,088,278,951.00 | 360,835.52 | 42,748,530.12 | -371,129.71 | 106,783,436.96 | 1,282,911,974.38 | 2,435,215,538.03 | |||||
Plus: Changes in accounting policies | ||||||||||||
Correction of previous errors | ||||||||||||
Others | ||||||||||||
2. Balance at the beginning of current year | 1,088,278,951.00 | 360,835.52 | 42,748,530.12 | -371,129.71 | 106,783,436.96 | 1,282,911,974.38 | 2,435,215,538.03 | |||||
3. Change amount in the current period (“-“ for decrease) | -14,404,724.00 | -42,748,530.12 | 1,509,102.69 | -28,343,806.12 | 26,418,197.73 | 27,927,300.42 | ||||||
(1) Total of misc. incomes | 1,509,102.69 | 26,418,197.73 | 27,927,300.42 | |||||||||
(2) Investment or decreasing of capital by owners | -14,404,724.00 | -42,748,530.12 | -28,343,806.12 | 0.00 | ||||||||
1. Common shares invested by owners | -14,404,724.00 | -42,748,530.12 | -28,343,806.12 | 0.00 | ||||||||
2. Capital contributed by other equity instrument holders | 0.00 | |||||||||||
3. Amount of | 0.00 |
shares paid and accounted as owners' equity | ||||||||||||
4. Others | 0.00 | |||||||||||
(3) Profit allotment | 0.00 | |||||||||||
1. Provision of surplus reserves | 0.00 | |||||||||||
2. Distribution to owners (or shareholders) | 0.00 | 0.00 | ||||||||||
3. Others | 0.00 | |||||||||||
(4) Internal carry-over of owners' equity | 0.00 | |||||||||||
1. Capitalizing of capital reserves (or share capital) | 0.00 | |||||||||||
2. Capitalizing of surplus reserves (or share capital) | 0.00 | |||||||||||
3. Surplus reserves used to cover losses | 0.00 | |||||||||||
4. Retained gain transferred due to change in set benefit program | 0.00 | |||||||||||
5. Other miscellaneous income | 0.00 | |||||||||||
6. Others | 0.00 | |||||||||||
(5) Special reserves | 0.00 | |||||||||||
1. Provided this year | 0.00 | |||||||||||
2. Used this period | 0.00 |
(6) Others | 0.00 | |||||||||||
4. Balance at the end of this period | 1,073,874,227.00 | 360,835.52 | 1,137,972.98 | 78,439,630.84 | 1,309,330,172.11 | 2,463,142,838.45 |
Amount of the Previous Term
In RMB
Item | H1 2020 | |||||||||||
Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserve | Retained profit | Others | Total of owners' equity | |||
Preferred share | Perpetual bond | Others | ||||||||||
1. Balance at the end of last year | 1,123,384,189.00 | 360,835.52 | 1,287,629.38 | 159,805,930.34 | 1,236,002,518.79 | 2,520,841,103.03 | ||||||
Plus: Changes in accounting policies | 0.00 | |||||||||||
Correction of previous errors | 0.00 | |||||||||||
Others | 0.00 | |||||||||||
2. Balance at the beginning of current year | 1,123,384,189.00 | 360,835.52 | 0.00 | 1,287,629.38 | 159,805,930.34 | 1,236,002,518.79 | 2,520,841,103.03 | |||||
3. Change amount in the current period (“-“ for decrease) | -35,105,238.00 | -64,280,649.28 | -64,596,904.01 | -163,982,791.29 | ||||||||
(1) Total of misc. incomes | -10,182,956.46 | -10,182,956.46 | ||||||||||
(2) Investment or decreasing of capital by owners | -35,105,238.00 | -64,280,649.28 | -99,385,887.28 | |||||||||
1. Common shares invested by owners | -35,105,238.00 | -64,280,649.28 | -99,385,887.28 |
2. Capital contributed by other equity instrument holders | 0.00 | |||||||||||
3. Amount of shares paid and accounted as owners' equity | 0.00 | |||||||||||
4. Others | 0.00 | |||||||||||
(3) Profit allotment | -54,413,947.55 | -54,413,947.55 | ||||||||||
1. Provision of surplus reserves | 0.00 | |||||||||||
2. Distribution to owners (or shareholders) | -54,413,947.55 | -54,413,947.55 | ||||||||||
3. Others | 0.00 | |||||||||||
(4) Internal carry-over of owners' equity | 0.00 | |||||||||||
1. Capitalizing of capital reserves (or share capital) | 0.00 | |||||||||||
2. Capitalizing of surplus reserves (or share capital) | 0.00 | |||||||||||
3. Surplus reserves used to cover losses | 0.00 | |||||||||||
4. Retained gain transferred due to change in set benefit program | 0.00 | |||||||||||
5. Other miscellaneous income | 0.00 | |||||||||||
6. Others | 0.00 |
(5) Special reserves | 0.00 | |||||||||||
1. Provided this year | 0.00 | |||||||||||
2. Used this period | 0.00 | |||||||||||
(6) Others | 0.00 | |||||||||||
4. Balance at the end of this period | 1,088,278,951.00 | 360,835.52 | 1,287,629.38 | 95,525,281.06 | 1,171,405,614.78 | 2,356,858,311.74 |
III. General InformationChina Fangda Group Co., Ltd. (hereinafter referred to as "the Company") was approved in October 1995 by the General Officeof the Shenzhen Municipal People's Government with the letter of Shenfu Office (1995) No. 194, in the original "Shenzhen FangdaBuilding Materials Co., Ltd." on the basis of the establishment of the fundraising method. The unified social credit code is:
91440300192448589C; registered address: Fangda Technology Building, Keji South 12th Road, South District, High-techIndustrial Park, Nanshan District, Shenzhen. Mr. XiongJianming is the legal representative.
The Company issued foreign currency shares (B shares) and local currency shares (A shares) and listed in November 1995 andApril 1996 respectively in Shenzhen Stock Exchange. The Company received the Reply to the Non-public Share Issuance of FangdaChina Group Co., Ltd. (CSRC License [2016] No.825) to allow the Company to conduct non-public issuance of 32,184,931 A-sharesin June 2016. According to the 2016 Annual Profit Allocation Scheme, which was approved by the 2016 Annual Shareholders'Congress, the Company has a total share capital of 789, 094, 836 shares as the basis and a capital reserve fund of 5 shares per 10shares to all shareholders. The registered capital at the end of 2017 was RMB 1,183,642,254.00. The Company repurchased andcancelled 28,160,568.00 B shares in August 2018, 32,097,497.00 B shares in January 2019, 35,105,238.00 B shares in May 2020,14404724.00 B shares in July-September 2020 and cancelled in April 2021. The existing registered capital is RMB1,073,874,227.00yuan.The Company has established a corporate governance structure that comprises shareholders’ meeting, boardof directors and supervisory committee. Currently, the Company sets up the President Office, AdministrativeDepartment, HR Department, Enterprise Management Department, Financial Department, Audit and SupervisoryDepartment, Securities Department, Technology Innovation Department and IT Department and has establishedsubsidiaries including Fangda Decoration, FangdaChuangzhi, Fangda New Material, Fangda Property and Fangda NewEnergy.
The business nature and main business operations of the Company and subsidiaries (“the Group”) include (1) production andsales of curtain wall materials, design, production and installation of construction curtain walls; (2) assembly and production ofsubway screen doors; (3) development and operation of real estate projects on land, of which rights have been obtained lawfully; (4)R&D, installation and sales of PV devices, design and installation of PV power plants.
Date of financial statement approval: This financial statement is approved by the Board of Directors of the Company on August16, 2021.
The Company in the current period includes a total of 28 subsidiaries, of which 1 have been added this year and 2 have been reducedthis year. For details, please refer to "Note 6. Change of the scope of merger" and "Note 9. Rights and Interests in Other Subjects".
IV. Basis for the preparation of financial statements
1. Preparation basis
The Company prepares the financial statements based on continuous operation and according to actual transactionsand events, with figures confirmed and measured in compliance with the Accounting Standards for BusinessEnterprises and other specific account standards, application guide and interpretations. The Company has alsodisclosed related financial information according to the requirement of the Regulations of Information Disclosure No.15 – GeneralProvisions for Financial Statements (Revised in 2014) issued by the CSRC.
2. Continuous operation
The Company assessed the continuing operations capability of the Company for the 12 months from the end of the reporting period.No matters were found that would affect the Company's ability to continue as a going concern. It is reasonable for the Company toprepare financial statements based on continuing operations.V. Significant Account Policies and EstimatesSpecific accounting policy and estimate prompt:
The following major accounting policies and accounting estimates shall be formulated in accordance with theaccounting standards of the enterprise. Unmentioned operations are carried out in accordance with the relevantaccounting policies in the enterprise accounting standards.
1. Statement of compliance to the Enterprise Accounting Standard
These financial statements meet the requirements of the Accounting Standards for Business Enterprises and trulyand fully reflect the Company’s financial status, performance result, changes in shareholders’ equity and cashflows.
2. Fiscal Period
The Company's fiscal year starts on January 1 and ends on December 31 of the Gregorian calendar.
3. Operation period
Our normal business cycle is one year
4. Bookkeeping standard money
The Company's bookkeeping standard currency is Renminbi, and overseas subsidiaries are based on the currencyof the main economic environment in which they operate.
5. Accounting treatment of the entities under common and different control
(1) Consolidation of entities under common control
The assets and liabilities acquired by the Company in a business combination are measured at the book valueof the combined party in the consolidated financial statements of the ultimate controlling party on the dateof combination. Among them, if the accounting policy adopted by the merger party is different from that adoptedby the Company before the merger, the accounting policy is unified based on the principle of importance, thatis, the book value of the assets and liabilities of the merger party is adjusted according to the accountingpolicy of the Company. If there is a difference between the book value of the net assets acquired by the Companyin the business combination and the book value of the consideration paid, first adjust the balance of the capitalreserve (capital premium or equity premium), the balance of the capital reserve (capital premium or equity premium)If it is insufficient to offset, the surplus reserve and undistributed profits will be offset in sequence.
See Note V, 6 for the accounting treatment method of business combination under the same control through step-by-steptransaction.
(2) Consolidation of entities under different control
All identifiable assets and liabilities acquired by the Company during the merger shall be measured at itsfair value on the date of purchase. Among them, if the accounting policy adopted by the merger party is differentfrom that adopted by the Company before the merger, the accounting policy is unified based on the principle ofimportance, that is, the book value of the assets and liabilities of the merger party is adjusted according tothe accounting policy of the Company. The merger cost of the Company on the date of purchase is greater thanthe fair value of the assets and liabilities recognized by the purchaser in the merger, and is recognized asgoodwill. If the merger cost is less than the difference between the identifiable assets and the fair value ofthe liabilities obtained by the purchaser in the enterprise merger, the merger cost and the fair value of theidentifiable assets and the liabilities obtained by the purchaser in the enterprise merger are reviewed, andthe merger cost is still less than the fair value of the identifiable assets and liabilities obtained by thepurchaser after the review, the difference is considered as the profit and loss of the current period of themerger.
See Note V, 6 for the accounting treatment method of business combination under the same control through step-by-steptransaction.
(3) Treatment of related transaction fee in enterprise merger
Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal servicesoccurred relating to the merger of entities are accounted into current income account when occurred. Thetransaction fees of equity certificates or liability certificates issued by the purchaser for payment for theacquisition are accounted at the initial amount of the certificates.
6. Preparation of Consolidated Financial Statements
(1) Determination of consolidation scope
The consolidated scope of the consolidated financial statements is determined on a control basis and includesnot only subsidiaries determined on the basis of voting rights (or similar voting rights) themselves or inconjunction with other arrangements, but also structured subjects determined on the basis of one or morecontractual arrangements.
Control means the power possessed by the Company on invested entities to share variable returns byparticipating in related activities of the invested entities and to impact the amount of the returns by usingthe power. The subsidiary company is the subject controlled by the Company (including the enterprise, the divisiblepart of the invested unit and the structured subject controlled by the enterprise, etc.). The structured subject
is the subject which is not designed to determine the controlling party by taking the voting right or similarright as the decisive factor.
(2) Preparation of Consolidated Financial Statements
The Company prepares consolidated financial statements based on the financial statements of itself and itssubsidiaries and based on other relevant information.The Company compiles consolidated financial statements, regards the whole enterprise group as an accountingentity, reflects the overall financial status, operating results and cash flow of the enterprise group accordingto the confirmation, measurement and presentation requirements of the relevant enterprise accounting standards,and the unified accounting policy and accounting period.
① Merge the assets, liabilities, owner's rights and interests, income, expenses and cash flow of parentcompany and subsidiary company.
② Offset the long-term equity investment of the parent company to the subsidiary company and the shareof the parent company in the ownership rights of the subsidiary company.
③ Offset the influence of internal transaction between parent company, subsidiary company and subsidiarycompany. If an internal transaction indicates that the relevant asset has suffered an impairment loss, the partof the loss shall be confirmed in full.
④ adjust the special transaction from the angle of enterprise group.
(3) Processing of subsidiaries during the reporting period
① Increase of subsidiaries or business
A. Subsidiary or business increased by business combination under the same control
(a) When preparing the consolidated balance sheet, adjust the opening number of the consolidated balance sheet and adjust therelated items of the comparative statement. The same report entity as the consolidated balance sheet will exist from the time of thefinal control party.
(b) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the business combination fromthe beginning of the current period to the end of the reporting period are included in the consolidated cash flow statement, and therelated items of the comparative statement are adjusted, which is regarded as the combined report body since the final The controllerhas been there since the beginning of control.
(c) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the business combination fromthe beginning of the current period to the end of the reporting period are included in the consolidated cash flow statement, and therelated items of the comparative statement are adjusted, which is regarded as the combined report body since the final The controllerhas been there since the beginning of control.
B. Subsidiaries or businesses added by business combinations not under the same control
(a) When preparing the consolidated balance sheet, the opening number of the consolidated balance sheet is not adjusted.
(b) When preparing the consolidated profit statement, the income, expense and profit of the subsidiary company and thebusiness Purchase date and Closing balance shall be included in the consolidated profit statement.
(c) When the consolidated cash flow statement is prepared, the cash flow from the purchase date of the subsidiary to the end ofthe reporting period is included in the consolidated cash flow statement.
② Disposal of subsidiaries or business
(A) When preparing the consolidated balance sheet, the opening number of the consolidated balance sheet is not adjusted.
B. When preparing the consolidated profit statement, the income, expense and profit of the subsidiary company and thebusiness opening and disposal date shall be included in the consolidated profit statement.
C. When the consolidated cash flow statement is prepared, the cash flow from the Beginning of the period of the subsidiary tothe end of the reporting period is included in the consolidated cash flow statement.
(4) Special considerations in consolidation offsets
① The long-term equity investment held by a subsidiary company shall be regarded as the inventory shares of the Company asa subtraction of the owner's rights and interests, which shall be listed under the item of "subtraction: Stock shares" under the item ofowner's rights and interests in the consolidated balance sheet.
The long-term equity investments held by the subsidiaries are offset by the shares of the shareholders ofthe 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 consolidatedbalance sheet and the taxable basis of the taxpayer due to the offset of the unrealized internal sales gain orloss, the deferred income tax asset or the deferred income tax liability is confirmed in the consolidated balancesheet, and the income tax expense in the consolidated profit statement is adjusted, with the exception of thedeferred income tax related to the transaction or event directly included in the owner's equity and the mergerof the enterprise.
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 shallbe offset between the "net profit attributable to the owners of the parent company" and the "minority shareholders' gains and losses"in accordance with the Company's distribution ratio to the seller's subsidiary .
⑤ If the current loss shared by the minority shareholders of the subsidiary exceeds the share of the minorityshareholders in the owner ’s equity of the subsidiary at the beginning of the period, the balance should stillbe offset against the minority shareholders ’equity.
(5) Accounting treatment of special transactions
① Purchase minority shareholders' equity
The Company purchases the shares of the subsidiaries owned by the minority shareholders of the subsidiaries.In the individual financial statements, the investment costs of the newly acquired long-term investments of theminority shares shall be measured at the fair value of the price paid. In the consolidated financial statements,the difference between the newly acquired long-term equity investment due to the purchase of minority equityand the share of net assets that should be continuously calculated by the subsidiary since the purchase dateor the merger date should be adjusted according to the new shareholding ratio. The product (capital premium orequity premium), if the capital reserve is insufficient to offset, the surplus reserve and undistributed profitsare offset in turn.
② Step-by-step acquisition of control of the subsidiary through multiple transactions
A. Enterprise merger under common control through multiple transactions
On the date of the merger, the Company determines the initial investment cost of the long-term equityinvestment in the individual financial statements based on the share of the subsidiary ’s net assets that shouldbe enjoyed after the merger in the final controller ’s consolidated financial statements; the initial investmentcost and the The difference between the book value of the long-term equity investment before the merger plusthe book value of the consideration paid for new shares acquired on the merger date, the capital reserve (capitalpremium or equity premium) is adjusted, and the capital reserve (capital premium or equity premium) is insufficientto offset Reduced, in turn offset the surplus reserve and undistributed profits.
In consolidated financial statements, assets and liabilities obtained by the merging party from the merged party should be
measured at the book value in the final controlling party’s consolidated financial statements other than the adjustment made due todifferences in accounting policies; adjust the capital surplus (share premium) according to the difference between the initialinvestment cost and the book value of the held investment before merger plus the book value of the consideration paid on the mergerdate. Where the capital surplus falls short, the retained income should be adjusted.If the merging party holds the equity investment before acquiring the control of the merged party and isaccounted for according to the equity method, the date of acquiring the original equity and the merging partyand the merged party are in the same party's final control from the later date to the merger date The relevantgains and losses, other comprehensive income and other changes in owner's equity have been confirmed betweenthem, and the retained earnings at the beginning of the comparative statement period should be offset separately.B. Enterprise merger not under common control through multiple transactionsOn the merger day, in individual financial statements, the initial investment cost of the long-term equityinvestment on the merger day is based on the book value of the long-term equity investment previously held plusthe sum of the additional investment costs on the merger day.
In the consolidated financial statements, the equity of the purchaser held prior to the date of purchaseis revalued according to the fair value of the equity at the date of purchase, and the difference between thefair value and its book value is credited to the current investment income; If the shares held by the purchaserprior to the date of purchase involve other consolidated gains under the equity law accounting, the otherconsolidated gains related thereto shall be converted to the current gains on the date of purchase, with theexception of the other consolidated gains arising from the remeasurement of the net assets or net liabilitiesof the merged party. The Company disclosed in the notes the fair value of the equity of the purchased party heldbefore the purchase date and the amount of related gains or losses remeasured according to the fair value.
(3) The Company disposes of long-term equity investment in subsidiaries without losing control
The parent company partially disposes of the long-term equity investment in the subsidiary company withoutlosing control. In the consolidated financial statements, the disposal price corresponds to the disposal of thelong-term equity investment. The difference between the shares is adjusted for the capital reserve (capitalpremium or equity premium). If the capital reserve is insufficient to offset, the retained earnings are adjusted.
④ The Company disposes of long-term equity investment in subsidiaries and loses 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 remeasure the remaining equity according to its fair value at the date of loss of control when compilingthe consolidated financial statement. The sum of the consideration obtained from the disposal of equity and thefair value of the remaining equity minus the difference between the share of the original subsidiary 's net assetsthat should be continuously calculated from the purchase date or the merger date, calculated as the loss of controlThe investment income of the current period.
Other comprehensive income and other owner's equity changes related to the equity investment of the atomiccompany are transferred to the current profit and loss when the control is lost, except for other comprehensiveincome arising from the remeasurement of the net benefits or net assets of the defined benefit plan by theinvestee. .
B. Multi-transaction step-by-step disposition
In consolidated financial statements, you should first determine whether a step-by-step transaction is a "blanket transaction".
If the step-by-step transaction does not belong to a "package deal", in the individual financial statements, for each transactionbefore the loss of control of the subsidiary, the book value of the long-term equity investment corresponding to each disposal ofequity is carried forward, the price received and the disposal The difference between the book value of the long-term equityinvestment is included in the current investment income; in the consolidated financial statements, it should be handled in accordance
with the relevant provisions of "the parent company disposes of the long-term equity investment in the subsidiary without losingcontrol."If a step-by-step transaction belongs to a "blanket transaction", the transaction shall be treated as a transaction that disposes ofthe subsidiary and loses control; In individual financial statements, the difference between each disposal price before the loss ofcontrol and the book value of the long-term equity investment corresponding to the equity being disposed of is first recognized asother consolidated gains and then converted to the current loss of control at the time of the loss of control; In the consolidatedfinancial statements, for each transaction prior to the loss of control, the difference between the disposition of the price and thedisposition of the investment corresponding to the share in the net assets of the subsidiary shall be recognized as other consolidatedgains and shall, at the time of the loss of control, be transferred to the loss of control for the current period.Where the terms, conditions, and economic impact of each transaction meet one or more of the following conditions, usuallymultiple transactions are treated as a "package deal":
(a) These transactions were concluded at the same time or in consideration of mutual influence.(b) These transactions can only achieve the business result as a whole;(c) The effectiveness of one transaction depends the occurance of at least another transaction;(d) A single transaction is not economic and is economic when considered together with other transactions.
(5) Proportion of minority shareholders in factor companies who increase capital and dilute ownership ofparent companiesProportion of Others ( minority shareholders in factor companies who increase capital , dilute Subsidiariesof parent companies. In the consolidated financial statements, the share of the parent company in the net bookassets of the former subsidiary of the capital increase is calculated according to the share ratio of the parentcompany before the capital increase, the difference between the share and the net book assets of the lattersubsidiary after the capital increase is calculated according to the share ratio of the parent company, the capitalreserve (capital premium or capital premium), the capital reserve (capital premium or capital premium) is notoffset, and the retained income is adjusted.
7. Recognition of cash and cash equivalents
Cash refers to cash in stock and deposits that can be used for payment at any time. Cash equivalents refer toinvestments with a short holding period (generally referring to expiry within three months from the date ofpurchase), strong liquidity, easy to convert to a known amount of cash, and little risk of value change.
8.Foreign exchange business and foreign exchange statement translation
(1) Methods for determining conversion rates in foreign currency transactions
When the Company's foreign currency transactions are initially confirmed, they will be converted into thebookkeeping standard currency at the spot exchange rate on the transaction date.
(2) Methods of conversion of foreign currency currencycurrency items on balance sheet days
At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balancesheet date. The exchange differences caused by the difference in exchange rates on the balance sheet date andinitial recognizing date or previous balance sheet date are included in the current profits and losses.Non-monetary items accounted in foreign currency and on historical costs are exchanged with the spot exchangerate on the transaction date. Non-monetary items accounted in foreign currency and on fair value are exchangedwith the spot exchange rate on the determination date of the fair value. The exchange difference between theaccounting standard-currency amount and the original accounting standard-currency amount are included in the
current profits and losses.
(3) Foreign currency statement conversion method
Prior to the conversion of the financial statements of an enterprise's overseas operations, the accountingperiod and policy of the overseas operations should be adjusted to conform to the accounting period and policyof the enterprise. The financial statements of the corresponding currency (other than the functional currency)should be prepared according to the adjusted accounting policy and the accounting period. The financial statementsof the overseas operations should be converted according to the following methods:
① The assets and liabilities items in the balance sheet are translated at the spot exchange rate on the balance sheet date. Exceptfor the "undistributed profits" items, the owner's equity items are translated at the spot exchange rate when they occur.
② The income and expense items in the profit statement are converted at the spot exchange rate on thetransaction date or the approximate exchange rate of the spot exchange rate.
③ The foreign currency cash flow and the foreign subsidiary's cash flow are converted using the immediateexchange rate or the approximate exchange rate at the date of the cash flow. The impact of exchange rate changeson cash should be used as an adjustment item and presented separately in the cash flow statement.
④ During the preparation of the consolidated financial statements, the resulting foreign currency 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 currencystatements related to the overseas operations that are listed in the shareholders' equity items in the balancesheet is transferred to the profit or loss for the current period, either in whole or in proportion to the disposalof the foreign operations.
9. Financial instrument
Financial instrument refers to a company’s financial assets and contracts that form other units of financialliabilities or equity instruments.
(1) Recognition and de-recognition of financial instrument
The Company recognizes a financial asset or liability when it becomes one party in the financial instrumentcontract.
Financial asset is derecognized when:
① The contractual right to receive the cash flows of the financial assets is terminated;
② The financial asset is transferred and meets the following derecognition condition.
If the current obligation of a financial liability (or part of it) has been discharged, the Companyderecognises the financial liability (or part of the financial liability). When the Company (borrower) and lenderenter into an agreement to replace the original financial liabilities by undertaking new financial liabilitiesand the contract terms for the new financial liabilities are essentially different from those for the originalone, the original financial liabilities will be derecognized and new financial liabilities will be recognized.Where the Company makes substantial amendments to the contract terms of the original financial liability (orpart thereof), it shall terminate the original financial liability and confirm a new financial liability inaccordance with the amended terms.
Financial asset transactions in regular ways are recognized and de-recognized on the transaction date. Theconventional sale of financial assets means the delivery of financial assets in accordance with the contractualterms and conditions, at the time set out in the regulations or market practices. Transaction date refers tothe date when the Company promises to buy or sell financial assets.
(2) Classification and subsequent measurement of financial assets
At initial recognition, the Company classifies financial assets into the following three categories basedon the business model of managing financial assets and the contractual cash flow characteristics of financialassets: financial assets measured at amortized cost are measured at fair value and their changes are includedin other financial assets with current profit and loss and financial assets measured at fair value through profitor loss. Unless the Company changes the business model for managing financial assets, in this case, all affectedfinancial assets are reclassified on the first day of the first reporting period after the business model changes,otherwise the financial assets may not be initially confirmed.
Financial assets are measured at the fair value at the initial recognition. For financial assets measuredat fair value with variations accounted into current income account, related transaction expenses are accountedinto the current income. For other financial assets, the related transaction expenses are accounted into theinitial recognized amounts. Bills receivable and accounts receivable arising from the sale of commodities orthe provision of labor services that do not contain or do not consider significant financing components, theCompany performs initial measurement according to the transaction price defined by the income standard.
The subsequent measurement of financial assets depends on their classification:
① Financial assets measured at amortized cost
Financial assets that meet the following conditions at the same time are classified as financial assetsmeasured at amortized cost: The Company ’s business model for managing this financial asset is to collectcontractual cash flows as its goal; the contract terms of the financial asset stipulate that Cash flow is onlythe payment of principal and interest based on the outstanding principal amount. For such financial assets, theactual interest rate method is used for subsequent measurement according to the amortized cost. The gains orlosses arising from the termination of recognition, amortization or impairment based on the actual interest ratemethod are included in the current profit and loss.
② Financial assets measured at fair value and whose changes are included in other comprehensive income
Financial assets that meet the following conditions at the same time are classified as financial assetsmeasured at fair value and their changes are included in other comprehensive income: The Company's business modelfor managing this financial asset is to both target the collection of contractual cash flows and the sale offinancial assets. Objective; The contractual terms of the financial asset stipulate that the cash flow generatedon a specific date is only for the payment of principal and interest based on the outstanding principal amount.For such financial assets, fair value is used for subsequent measurement. Except for impairment losses or gainsand exchange gains and losses recognized as current gains and losses, changes in the fair value of such financialassets are recognized as other comprehensive income. Until the financial asset is derecognized, its accumulatedgains or losses are transferred to current gains and losses. However, the relevant interest income of the financialasset calculated by the actual interest rate method is included in the current profit and loss.
The Company irrevocably chooses to designate a portion of non-tradable equity instrument investment as afinancial asset measured at fair value and whose variation is included in other consolidated income. Only therelevant dividend income is included in the current profit and loss, and the variation of fair value is recognizedas other consolidated income.
③ Financial assets measured at fair value with variations accounted into current income account
The above financial assets measured at amortized cost and other financial assets measured at fair valueand whose changes are included in other comprehensive income are classified as financial assets measured at fairvalue and whose changes are included in the current profit and loss. For such financial assets, fair value isused for subsequent measurement, and all changes in fair value are included in current profit and loss.
(3) Classification and measurement of financial liabilities
The Company classifies financial liabilities into financial liabilities measured at fair value and their
changes included in the current profit and loss, loan commitments and financial guarantee contract liabilitiesfor loans below market interest rates, and financial liabilities measured at amortized cost.
The subsequent measurement of financial liabilities depends on their classification:
① Financial liabilities measured at fair value with variations accounted into current income accountSuch financial liabilities include transactional financial liabilities (including derivatives that arefinancial liabilities) and financial liabilities designated as at fair value through profit or loss. After theinitial recognition, the financial liabilities are subsequently measured at fair value. Except for the hedgeaccounting, the gains or losses (including interest expenses) are recognized in profit or loss. However, forthe financial liabilities designated as fair value and whose variations are included in the profits and lossesof the current period, the variable amount of the fair value of the financial liability due to the variationof credit risk of the financial liability shall be included in the other consolidated income. When the financialliability is terminated, the cumulative gains and losses previously included in the other consolidated incomeshall be transferred out of the other consolidated income and shall be included in the retained income.
② Loan commitments and financial security contractual liabilities
A loan commitment is a promise that the Company provides to customers to issue loans to customers withestablished contract terms within the commitment period. Loan commitments are provided for impairment lossesbased on the expected credit loss model.A financial guarantee contract refers to a contract that requires the Company to pay a specific amount ofcompensation to the contract holder who suffered a loss when a specific debtor is unable to repay the debt inaccordance with the original or modified debt instrument terms. Financial guarantee contract liabilities aresubsequently measured based on the higher of the loss reserve amount determined in accordance with the principleof impairment of financial instruments and the initial recognition amount after deducting the accumulatedamortization amount determined in accordance with the revenue recognition principle.
③ Financial liabilities measured at amortized cost
After initial recognition, other financial liabilities are measured at amortized cost using the effectiveinterest method.
Except in special circumstances, financial liabilities and equity instruments are distinguished accordingto the following principles:
① If the Company cannot unconditionally avoid delivering cash or other financial assets to fulfill acontractual obligation, the contractual obligation meets the definition of financial liability. While somefinancial instruments do not explicitly contain terms and conditions for the delivery of cash or other financialassets, they may indirectly form contractual obligations through other terms and conditions.
If a financial instrument is required to be settled with or can be settled with the Company's own equityinstruments, the Company's own equity instrument used to settle the instrument needs to be considered as asubstitute for cash or other financial assets or for the holder of the instrument to enjoy the remaining equityin the assets after all liabilities are deducted. If it is the former, the instrument is the financial liabilitiesof the issuer; if it is the latter, the instrument is the equity instrument of the issuer. In some cases, a financialinstrument contract provides that the Company shall or may use its own instrument of interest, in which the amountof a contractual right or obligation is equal to the amount of the instrument of its own interest which may beacquired or delivered multiplied by its fair value at the time of settlement, whether the amount of the contractualright or obligation is fixed or is based entirely or in part on a variation of a variable other than the marketprice of the instrument of its own interest, such as the rate of interest, the price of a commodity or the priceof a financial instrument, the contract is classified as a financial liability.
(4) Derivative financial instruments and embedded derivatives
Derivative financial instruments are initially measured at the fair value of the day when the derivativetransaction contract is signed, and are subsequently measured at their fair values. Derivative financialinstruments with a positive fair value are recognized as asset, and instruments with a negative fair value arerecognized as liabilities.The gains and losses arising from the change in fair value of derivatives are directly included in the profitsand losses of the current period, except that the part of the cash flow that is valid in the hedge is includedin the other consolidated income and transferred out when the hedged item affects the gain and loss of the currentperiod.For a hybrid instrument containing an embedded derivative instrument, if the principal contract is afinancial asset, the hybrid instrument as a whole applies the relevant provisions of the financial assetclassification. If the main contract is not a financial asset, and the hybrid instrument is not measured at fairvalue and its changes are included in the current profit and loss for accounting, the embedded derivative doesnot have a close relationship with the main contract in terms of economic characteristics and risks, and it isIf the instruments with the same conditions and exist separately meet the definition of derivative instruments,the embedded derivative instruments are separated from the mixed instruments and treated as separate derivativefinancial instruments. If the fair value of the embedded derivative on the acquisition date or the subsequentbalance sheet date cannot be measured separately, the hybrid instrument as a whole is designated as a financialasset or financial liability measured at fair value and whose changes are included in the current profit or loss.
(5) Impairment of financial instruments
The Company shall confirm the preparation for loss on the basis of expected credit loss for financial assetsmeasured at amortization costs, creditor's rights investments measured at fair value, contractual assets, leasingreceivables, loan commitments and financial guarantee contracts, etc.
① Measurement of expected credit losses of accounts receivable
The expected credit loss refers to the weighted average of the credit losses of financial instruments thatare weighted by the risk of default. Credit loss refers to the difference between all contractual cash flowsreceivable from the contract and all cash flows expected to be received by the Company at the original actualinterest rate, that is, the present value of all cash shortages. Among them, the financial assets which havebeen purchased or born by the Company shall be discounted according to the actual rate of credit adjustment ofthe financial assets.
The expected lifetime credit loss is the expected credit loss due to all possible default events duringthe entire expected life of the financial instrument.
Expected credit losses in the next 12 months are expected to result from possible defaults in 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 atdifferent stages. Where the credit risk has not increased significantly since the initial confirmation of the financial instrument, itis 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 risk has increased significantly since the initial confirmation but the credit impairment has not occurred, thefinancial instrument is in the second stage. Where a credit impairment has occurred since the initial confirmation of the financialinstrument, it shall be in the third stage, and the Company shall prepare for measuring the expected credit loss of the whole survivalperiod of the instrument.
For financial instruments with low credit risk on the balance sheet date, the Company assumes that the credit risk has notincreased significantly since the initial recognition, and measures the loss provision based on the expected credit losses in the next 12months.
For financial instruments that are in the first and second stages and with lower credit risk, the Companycalculates interest income based on their book balances and actual interest rates without deduction for impairmentprovision. For financial instruments in the third stage, interest income is calculated based on the amortizedcost and the actual interest rate after the book balance minus the provision for impairment.
Regarding bills receivable, accounts receivable and financing receivables, regardless of whether there isa significant financing component, the Company measures the loss provision based on the expected credit lossesthroughout the duration.
A Accounts receivable/contract assets
Where there is objective evidence of impairment, as well as other receivable instruments, receivables, otherreceivables, receivables financing and long-term receivables applicable to individual assessments, separateimpairment tests are performed to confirm expected credit losses and prepare individual impairment. For notesreceivable, accounts receivable, other receivables, financing of receivables, long-term receivables, andcontract assets for which there is no objective evidence of impairment, or when individual financial assets cannotbe 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 riskcharacteristics, and calculates expected credit losses on the basis of the combination. The basis for determiningthe combination is as follows:
The basis for determining the combination of notes receivable is as follows:
Notes Receivable Combination1 Commercial Acceptance Bill
Notes Receivable Combination1 Commercial Acceptance Bill
For Notes receivable divided into portfolios, the Company refers to historical credit loss experience,combined with current conditions and predictions of future economic conditions, and calculates through defaultrisk exposure and expected credit loss rate within the next 12 months or the entire duration Expected creditlosses.
The basis for determining the combination of accounts receivable is as follows:
Accounts receivable combination 1 Accounts receivable business
Accounts receivable combination 2 Real estate receivable business
Accounts receivable combination 3 Others receivable business
Other receivable portfolio 4 Receivables from related parties within the scope of consolidation
For the accounts receivable divided into a combination, the Company refers to the historical credit lossexperience, combined with the current situation and the forecast of the future economic situation, compiles theaccount receivable age and the whole expected credit loss rate table, and calculates the expected credit loss.
The basis for determining the combination of other receivables is as follows:
Other receivable portfolio 1 Interest receivable
Portfolio of other receivables 2 Dividends receivable
Other combinations of receivables 3 Deposit and margin receivable
Other receivable portfolio 4 Receivable advances
Combination of other receivables 5 Value-added tax receivable is increased and refunded
Other receivable portfolio 6 Receivables from related parties within the scope of consolidation
Other receivables portfolio 7 Other receivables
For other receivables divided into portfolios, the Company refers to historical credit loss experience, combined with currentconditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss ratewithin the next 12 months or the entire duration Expected credit losses.
The basis for determining the combination of receivables financing is as follows:
Receivables financing portfolio 1 bank acceptance billFor Notes receivable divided into portfolios, the Company refers to historical credit loss experience,combined with current conditions and predictions of future economic conditions, and calculates through defaultrisk exposure and expected credit loss rate within the next 12 months or the entire duration Expected creditlosses.
The basis for determining the portfolio of contract assets is as follows:
Contract assets portfolio 1 conditional collection right of salesContract assets portfolio 2 Completed and unsettled project not meeting collection conditionsContract assets portfolio 3 Quality guarantee deposit not meeting collection conditionsFor contract assets divided into portfolios, the Company refers to historical credit loss experience,combined with current conditions and predictions of future economic conditions, and calculates through defaultrisk exposure and expected credit loss rate within the next 12 months or the entire duration Expected creditlosses.Other debt investmentFor other receivables divided into portfolios, the Company refers to historical credit loss experience, combined with currentconditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss ratewithin the next 12 months or the entire duration Expected credit losses.
② Lower credit risk
If the risk of default on financial instruments is low, the borrower’s ability to meet its contractualcash flow obligations in the short term is strong, and even if the economic situation and operating environmentare adversely changed over a long period of time, it may not necessarily reduce the receivables' performanceof their contractual cash. The ability of the flow obligation, the financial instrument is considered to havea lower credit risk.
③ Significant increase in credit risk
The Company compares the default probability of the financial instrument during the expected lifetimedetermined by the balance sheet date with the default probability of the expected lifetime during the initialconfirmation to determine the relative probability of the default probability of the financial instrument duringthe expected lifetime Changes to assess whether the credit risk of financial instruments has increasedsignificantly since initial recognition.
In determining whether the credit risk has increased significantly since the initial recognition, the Companyconsiders reasonable and evidenced information, including forward-looking information, that can be obtainedwithout unnecessary additional costs or effort. The information considered by the Company includes:
A. Significant changes in internal price indicators resulting from changes in credit risk;
B. Adverse changes in business, financial or economic conditions that are expected to cause significant changes in the debtor’sability to perform its debt service obligations;
C. Whether the actual or expected operating results of the debtor have changed significantly; whether the regulatory, economicor technical environment of the debtor has undergone significant adverse changes;
D. Whether there is a significant change in the value of the collateral used as debt collateral or the guarantee provided by a thirdparty or the quality of credit enhancement. These changes are expected to reduce the debtor’s economic motivation 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 repayment accordingto the contractual deadline;
F. Anticipated changes to the loan contract, including whether the expected violation of the contract may result in theexemption or revision of contract obligations, granting interest-free periods, rising interest rates, requiring additional collateral or
guarantees, 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 increasedsignificantly on the basis of a single financial instrument or combination of financial instruments. Whenconducting an assessment based on a combination of financial instruments, the Company can classify financialinstruments based on common credit risk characteristics, such as overdue information and credit risk ratings.
If the overdue period exceeds 30 days, the Company has determined that the credit risk of financial instruments has increasedsignificantly. Unless the Company does not have to pay excessive costs or efforts to obtain reasonable and warranted information, itproves that although it has exceeded the time limit of 30 days agreed upon in the Contract, credit risks have not increasedsignificantly since the initial confirmation.
④ Financial assets with credit impairment
The Company assesses on the balance sheet date whether financial assets measured at amortized cost and creditinvestments measured at fair value and whose changes are included in other comprehensive income have undergonecredit impairment. When one or more events that adversely affect the expected future cash flows of a financialasset occur, the financial asset becomes a financial asset that has suffered a credit impairment. Evidence thatcredit impairment has occurred in financial assets includes the following observable information:
Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor,such as payment of interest or default or overdue of principal; (B) The concession that the debtor would notmake under any other circumstances for economic or contractual considerations relating to the financialdifficulties of the debtor; The debtor is likely to be bankrupt or undertake other financial restructuring; Thefinancial difficulties of the issuer or debtor lead to the disappearance of the active market for the financialasset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that a creditloss has occurred.
⑤ Presentation of expected credit loss measurement
In order to reflect the changes in the credit risk of financial instruments since the initial recognition,the Company re-measures the expected credit losses on each balance sheet date, and the increase or reversal ofthe loss provision resulting therefrom is included as an impairment loss or gain. Current profit and loss. Forfinancial assets measured at amortized cost, the loss allowance offsets the book value of the financial assetlisted on the balance sheet; for debt investments measured at fair value and whose changes are included in othercomprehensive income, the Company Recognition of its loss provisions in gains does not offset the book valueof the financial asset.
⑥ Canceled
If it is no longer reasonably expected that the contract cash flow of the financial assets will be fullyor partially recovered, the book balance of the financial assets will be directly reduced. Such write-offconstitute the derecognition of related financial assets. This usually occurs when the Company determines thatthe debtor has no assets or sources of income that generate sufficient cash flow to cover the amount that willbe written down.
If the financial assets that have been written down are recovered in the future, the reversal of the impairmentloss is included in the profit or loss of the current period.
(6) Transfer of financial assets
The transfer of financial assets refers to the following two situations:
A. Transfer the contractual right to receive cash flow of financial assets to another party;
B. Transfers the financial assets to the other party in whole or in part, but reserves the contractual right to collect the cash flow
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 have neither transferred nor retained almost all the risks and rewards in the ownership of financial assets,but have given up control of the financial assets, terminate the confirmation The financial asset.
In determining whether control over the transferred financial asset has been waived, the actual capacityof the transferor to sell the financial asset is determined. If the transferor is able to sell the transferredfinancial assets wholly to a third party that does not have a relationship with them, and has no additionalconditions to limit the sale, it indicates ds has waived control over the financial assets.
The Company pays attention to the essence of financial asset transfer when judging whether financial assettransfer meets the condition of financial asset termination.
If the overall transfer of financial assets meets the conditions for termination of confirmation, thedifference between the following two amounts is included in the current profit and loss:
A. Continuing identification of transferred Book value;
B. The sum of the amount received as a result of the transfer and the amount accrued as a result of the change in the fair valueof the transfer in respect of the termination recognized portion of the amount previously charged directly to the other consolidatedproceeds (the financial assets involved in the transfer are those classified in accordance with Article 18 of Enterprise AccountingStandard No. 22 - Financial Instruments Recognition and Measurement as measured by the fair value and whose change is charged tothe other consolidated proceeds).
If the partial transfer of financial assets meets the conditions for derecognition, the book value of theentire transferred financial assets will be included in the derecognized part and the unterminated part (in thiscase, the retained service assets are regarded as part of the continued recognition of financial assets) Betweenthem, they are apportioned according to their respective relative fair values on the transfer date, and thedifference between the following two amounts is included in the current profit and loss:
A. Termination of the book value of the recognized portion on the date of derecognition;
B. The sum of the amount received as a result of the transfer and the amount accrued as a result of the change in the fair valueof the transfer in respect of the termination recognized portion of the amount previously charged to the other consolidated proceeds(the financial assets involved in the transfer are those classified in accordance with Article 18 of Enterprise Accounting Standard No.22 - Financial Instruments Recognition and Measurement as measured by the fair value and whose change is charged to the otherconsolidated proceeds).
② Continue to be involved in the transferred financial assets
If neither transfer nor retain almost all the risks and rewards of the ownership of financial assets, andhave not given up control of the financial assets, the relevant financial assets should be confirmed accordingto the extent of their continued involvement in the transferred financial assets, and the relevant liabilitiesshould be recognized accordingly.
The extent to which the transferred financial assets continue to be involved refers to the extent to whichthe enterprise undertakes the risk or compensation of the value change of the transferred financial assets.
(III) Continuing identification of transferred financial assets
Where almost all risks and remuneration in relation to ownership of the transferred financial assets areretained, the whole of the transferred financial assets shall continue to be recognized and the considerationreceived shall be recognized as a financial liability.
The financial asset and the recognized related financial liabilities shall not offset each other. In thesubsequent accounting period, the enterprise shall continue to recognize the income (or gain) generated by thefinancial asset and the costs (or losses) incurred by the financial liability.
(7) Deduction of financial assets and liabilities
Financial assets and financial liabilities should be listed separately in the balance sheet, and cannotbe offset against each other. However, if the following conditions are met, the net amount offset by each otheris listed in the balance sheet:
The Company has a statutory right to offset the confirmed amount, and such legal right is currentlyenforceable;
The Company plans to settle the net assets or realize the financial assets and liquidate the financialliabilities at the same time.
The transferring party shall not offset the transferred financial assets and related liabilities if it doesnot meet the conditions for terminating the recognition.
(8) Recognition of fair value of Finance instruments
See Note V 34 (1) for the recognition of fair value of financial assets and liabilities).
10. Notes receivable
See Chapter V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.
11. Account receivable
See Chapter V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
12. Receivable financing
See Chapter V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.
13. Other receivables
Methods for Determining Expected Credit Loss of Other Receivables and Accounting Processing MethodsSee Chapter V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.
14. Inventories
(1) Classification of inventories
Inventory refers to the finished products or commodities held by the Company for sale in daily activities,the products in process of production, the materials and materials consumed in the process of production orproviding labor services, including entrusted processing materials, raw materials, products in process, materialsin transit, stored goods, low value consumables, development costs, development products and contract performancecosts, etc.
(2) Valuation method for issuing inventory
Inventories are measured at cost when procured. Raw materials, products in process and commodity stocksin transit are measured by the weighted average method.
The real estate business inventory mainly includes inventory materials, products under development,completed development products, and development products intended to be sold but temporarily rented out. Inventoryis measured at the actual costs when the fixed assets are obtained The actual costs of development products includeland transfer payment, infrastructure and facility costs, installation engineering costs, borrows beforecompletion of the development and other costs during the development process. The special maintenance fundscollected in the first period are included in the development overheads. The actual costs of the developmentproduct is priced using the separate pricing method.
(3) Inventory system
The Company inventory adopts the perpetual inventory system, counting at least once a year, the inventoryprofit and loss amount is included in the current year's profit and loss.
(4) Recognition of inventory realizable value and providing of impairment provision
On the balance sheet date, inventories are accounted depending on which is lower between the cost and thenet realizable value. If the cost is higher than the net realizable value, the impairment provision will be made.
The realizable net value of inventory should be recognized based on solid evidence with the purpose of theinventory and after-balance-sheet-date events taken into consideration.
(1) In the course of normal production and operation, the net realizable value of finished goods, commoditiesand materials directly used for sale shall be determined by the estimated price of the inventory minus the estimatedcost of sale and related taxes. The inventory held for the execution of a sales contract or a labor contractshall be measured on the basis of the contract price as its net realizable value; If the quantity held is greaterthan the quantity ordered under the sales contract, the net realizable value of the excess inventory is measuredon the basis of the general sales price. For materials used for sale, the market price shall be used as themeasurement basis for the net realizable value.
②In the normal production and operation process, the inventory of materials that need to be processed isdetermined by the amount of the estimated selling price of the finished product minus the estimated cost to beincurred at the time of completion, estimated sales expenses and related taxes Realize the net value. If thenet realizable value of the finished product produced by it is higher than the cost, the material is measuredat cost; If the decrease in the price of the material indicates that the net realizable value of the finishedproduct is lower than the cost, the material is measured as the net realizable value and the inventory is preparedfor a decrease based on its difference.
③ Depreciation preparation of inventory is generally based on a single inventory item; For a large numberof inventories with a lower unit price, they are accrued by inventory type.
④ If the factors affecting the previous write-down of inventory value have disappeared on the balance sheetdate, the amount of the write-down will be restored and transferred back within the amount of inventorydepreciation reserve that has been accrued, and the amount returned will be included in the current profit andloss.
(5) Methods of amortization of swing materials
① Low-value consumables are amortized on on-off amortization basis at using.
② Packages are amortized on on-off amortization basis at using.
15. Contract assets
As of 1 January 2020
The Company presents contract assets or liabilities in the balance sheet according to the relationshipbetween performance obligation and customer payment. The consideration for which the Company is entitled to
receive (subject to factors other than the passage of time) for the transfer of goods or the provision of servicesto customers is listed as contract assets. The Company's obligation to transfer goods or provide services tocustomers for consideration received or receivable from customers is listed as contractual liabilities.
For the determination method and accounting treatment method of the Company's expected credit loss of contract assets, see 9.Financial instruments in Chapter XII, V. Important accounting policies and accounting estimates.
Contract assets and contract liabilities are listed separately in the balance sheet. Contract assets and contractliabilities under the same contract are listed in net amount. If the net amount is the debit balance, it shall be listed in "contract assets"or "other non current assets" according to its liquidity; if the net amount is the credit balance, it shall be listed in "contract liabilities"or "other non-current liabilities" according to its liquidity. Contract assets and contract liabilities under differentcontracts cannot offset each other.
16. Contract costs
As of 1 January 2020
Contract cost is divided into contract performance cost and contract acquisition cost.
The cost incurred by the Company in performing the contract shall be recognized as an asset when the followingconditions are met simultaneously:
① The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturingexpenses (or similar expenses), clearly borne by the customer, and other costs incurred only due to the contract;
② This cost increases the Company's future resources for fulfilling its performance obligations.
③ The cost is expected to be recovered.
If the incremental cost incurred by the Company to obtain the contract is expected to be recovered, it shallbe recognized as an asset as the contract acquisition cost.
The assets related to the contract cost shall be amortised on the same basis as the income from goods orservices related to the assets; however, if the amortization period of the contract acquisition cost is lessthan one year, the Company shall include it in the current profit and loss when it occurs.
If the book value of the assets related to the contract cost is higher than the difference between thefollowing two items, the Company will make provision for impairment for the excess part and recognize it as theloss of asset impairment, and further consider whether the estimated liabilities related to the loss contractshould be made:
① The residual consideration expected to be obtained due to the transfer of goods or services related tothe asset;
② The estimated cost to be incurred for the transfer of the relevant goods or services.
If the above provision for impairment of assets is subsequently reversed, the book value of the asset afterreversal shall not exceed the book value of the asset on the reversal date without provision for impairment.
The contract performance cost recognized as an asset with an amortization period of no more than one year or one normalbusiness cycle at the time of initial recognition shall be listed in the "inventory" item, and the amortization period of no more thanone year or one normal business cycle at the time of initial recognition shall be listed in the "other non current assets" item.The contract acquisition cost recognized as an asset shall be listed in the item of "other current assets" when the amortization perioddoes not exceed one year or one normal business cycle at the time of initial recognition, and listed in the item of "other non currentassets" when the amortization period exceeds one year or one normal business cycle at the time of initial recognition.
17. Long-term share equity investment
The Group's long-term equity investment includes control on invested entities and significant impacts onequity investment. Invested entities on which the Group has significant impacts are associates of the Group.
(1) Basis for recognition of common control and major influence on invested entities
Common control refers to the common control of an arrangement in accordance with the relevant agreement,and the relevant activities of the arrangement must be agreed upon by the participants who share control. Indetermining whether there is common control, the first step is to determine whether all or a group of participantscollectively control the arrangement, which is considered collective control by all or a group of participantsif all or a group of participants must act together to determine the activities associated with the arrangement.Secondly, it is judged whether the decision on related activities of the arrangement must be agreed by theparticipants who collectively control the arrangement. If there is a combination of two or more parties thatcan collectively control an arrangement, it does not constitute joint control. When judging whether there isjoint control, the protective rights enjoyed are not considered.
Major influence refers to the power to participate in decision-making of financial and operation policiesof a company, but cannot control or jointly control the making of the policies. When considering whether theCompany can impose significant impacts on the invested entity, impacts of conversion of shares with voting rightsheld directly or indirectly by the investor and voting rights that can be executed in this period held by theinvestor and other party into shares of the invested entity should be considered.
If the Company directly or through subsidiaries holds more than 20% (inclusive) but less than 50% of 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) Initial investment cost determination
Long-term equity investments formed by merger of enterprises shall be determined in accordance with thefollowing provisions:
A. In the case of an enterprise merger under the same control, where the merging party makes a valuation of the merger bypayment of cash, transfer of non-cash assets or undertaking liabilities, the share of the book value of the owner's interest in the finalcontrolling party's consolidated financial statements as the initial investment cost of the long-term equity investment at the date of themerger. The difference between the initial investment cost of long-term equity investment and the cash paid, thetransferred non-cash assets and the book value of the debt assumed shall be adjusted to the capital reserve;if the capital reserve is insufficient 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 betweenthe initial investment cost of long-term equity investment and the total face value of the issued shares. Ifthe capital reserve is insufficient to offset or reduce, the retained income shall be adjusted;
For merger of entities under different control, the merger cost is the fair value of the asset paid, liability undertaken, and equitysecurities issued for exchanging of control power over the entities at the day of acquisition. Agency expenses and otheradministrative expenses such as auditing, legal consulting, or appraisal services occurred relating to the mergerof entities are accounted into current income account when occurred.
Long-term equity investments formed by merger of enterprises shall be determined in accordance with thefollowing provisions:
For long-term equity investment obtained by cash, the actually paid consideration is the initial investment cost. Initial
investment costs include expenses, taxes and other necessary expenditures directly related to the acquisitionof long-term equity investments;B. Long-term equity investments acquired from the issuance of interest securities are the initial investment costs based on thefair value of the issue interest securities;C. For long-term equity investments obtained through non-monetary asset exchanges, if the exchange has commercialsubstance and the fair value of the exchanged assets or exchanged assets can be reliably measured, the fair value of the exchangedassets and relevant taxes shall be used as the initial Investment cost, the difference between the fair value and book value of theswapped-out asset is included in the current profit and loss; if the non-monetary asset exchange does not meet the above twoconditions at the same time, the book value of the swapped-out asset and relevant taxes will be used as the initial investment cost.D. Long-term equity investments acquired through debt restructuring determine their recorded value at the fair value of 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 controlthe invested entity; and uses the equity method to measure long-term share equity investment in which the Companyhas substantial influence on the invested entity.
① Cost
For the long-term equity investment measured on the cost basis, except for the announced cash dividend orprofit included in the practical cost or price when the investment was made, the cash dividends or profitdistributed by the invested entity are recognized as investment gains in the current gain/loss account.
Equity
Gains from long-term equity investment measured by equity
When the equity method is used to measure long-term equity investment, the investment cost will not beadjusted if the investment cost of the long-term equity investment is larger than the share of fair value ofthe recognizable assets of the invested entity. When it is smaller than the share of fair value of the recognizableassets of the invested entity, the book value will be adjusted and the difference is included in the currentgains of the investment.
When the equity method is used, the current investment gain is the share of the net gain realized in thecurrent year that can be shared or borne, recognized as investment gain and other misc. income. The book valueof the long-term equity investment is adjusted accordingly. The book value of the long-term equity investmentshould be accordingly decreased based on the share of profit or cash dividend announced by the invested entity;according to other changes in the owner’s equity except for net profit and loss, other misc income and profitdistribution of the invested entity, adjust the book value of the long-term equity investment and record it inthe capital surplus (other capital surplus). When the share of the net gains that can be enjoyed is recognized,it is recognized after the net profit of the invested entity is adjusted based on the fair value of the recognizeableassets of the invested entity according to the Company's accounting policies and accounting period. Where theaccounting policy and accounting period adopted by the Invested unit are inconsistent with the Company, thefinancial statements of the Invested unit shall be adjusted in accordance with the accounting policy and accountingperiod of the Company, and the investment income and other consolidated income shall be recognized. Internaltransaction gain not realized between the Company and affiliates is measured according to the shareholdingproportion and the investment gains is recoginzied after deduction. The unrealized internal transaction lossbetween the Company and the invested entity is the impairment loss of transferred assets and should not be writtenoff.
Where substantial influence on invested entities is imposed or joint control is implemented due to increase
in investment, the sum of the fair value of the original equity and increased investment on the conversion dateis the initial investment cost under the equity method. If the equity investment originally held is classifiedas other equity instrument investment, the difference between the fair value and the book value, as well as theaccumulated gains or losses originally included in other comprehensive income, shall be transferred out of othercomprehensive income and included in retained income in the current period when the equity method is adopted.Where joint control or substantial influence on invested entities is lost due to disposal of part ofinvestment, the remaining equity after the disposal should be treated according to the Enterprise AccountingStandard No.22 – Recognition and Measurement of Financial Instruments from the date of losing the joint controlor substantial influence. The difference between the fair value and book value should be accounted the profitand loss of the current period. For other misc. incomes of original share equity investment determined usingthe equity method, when the equity method is no longer used, it should be treated based on the same basis ofthe treatment of related assets or liability of the invested entities; the other owners' interests related tothe original share equity investment should be transferred to gain/loss of the current period.
(4) Equity investment held for sale
For the remaining equity investments not classified as assets held for sale, the equity method is adoptedfor accounting treatment.
Equity investments classified as held for sale to associates that are no longer eligible to hold classifiedassets for sale are retrospectively adjusted using the equity method starting from the date that they areclassified as held for sale. The classification is adjusted to hold the financial statements for the period tobe sold.
(5) Impairment examination and providing of impairment provision
See Note V. 24 for the assets impairment provision method for investment in subsidiaries and joint ventures.
XVIII. Investment real estates
(1) Classification of investment real estate
Investment real estates are held for rent or capital appreciation, or both. These include, inter alia:
① Leased land using right
(2) the right to use the land that is transferred after holding and preparing for the increment.
③ Leased building
(2) Measurement of investment real estate
For investment real estates with an active real estate transaction market and the Company can obtain marketprice and other information of same or similar real estates to reasonably estimate the investment real estates’fair value, the Company will use the fair value mode to measure the investment real estates subsequently.Variations in fair value are accounted into the current gain/loss account.
The fair value of investment real estates is determined with reference to the current market prices of sameor similar real estates in active markets; when no such price is available, with reference to the recent transactionprices and consideration of factors including transaction background, date and district to reasonably estimatethe fair value; or based on the estimated lease gains and present value of related cash flows.
For investment real estate under construction (including investment real estate under construction for thefirst time), if the fair value cannot be reliably determined but the expected fair value of the real estate aftercompletion is continuously and reliably obtained, the investment real estate under construction is measured bycost. When the fair value can be measured reliably or after completion (the earlier one), it is measured at fair
value. For an investment real estate whose fair value is proven unable to be obtained continuously and reliablyby objective evidence, the real estate will be measured at cost basis until it is disposed and no residual valueremains as assumed.
If the cost model is adopted to measure the investment real estate, the depreciation or amortization shall be calculated accordingto the straight line method after deducting the accumulated impairment and net residual value of the investment real estate cost. Forthe method of depreciation of the accrued assets, see Note V 24.
The types of investment real estate, estimated economic useful life and estimated net residual value rateare determined as follows:
Type | Service year (year) | Residual rate % | Annual depreciation rate % |
Houses & buildings | 35-50 | 10 | 1.80-2.57 |
19. Fixed assets
(1) Recognition conditions
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing services, lease or foroperation & management, and have more than one accounting year of service life. Fixed assets are recognized at the actual cost ofacquisition when the following conditions are met: (1) The economic benefits associated with the fixed assets are likely to flow intothe enterprise. ② The cost of the fixed assets can be measured reliably. Overhaul cost generated by regular examination on fixedassets is recognized as fixed assets costs when there is evidence proving that it meets fix assets recognition conditions. If not, it willbe accounted into the current gain/loss account.
(2) Depreciation method
Type | Depreciation method | Service year | Residual rate | Annual depreciation rate % |
Houses & buildings | Average age | 35-50 | 10% | 1.8%-2.57% |
Mechanical equipment | Average age | 10 | 10% | 9% |
Transportation facilities | Average age | 5 | 10% | 18% |
Electronics and other devices | Average age | 5 | 10% | 18% |
PV power plants | Average age | 20 | 5% | 4.75% |
(3) Recognition and pricing of financing leased fixed assets
See Chapter V, Important Accounting Policies and Accounting Estimates 33. Lease.XX. Construction in process
(1) Construction in progress is accounted for by project classification.
(2) Standard and timing for transferring construction in process into fixed assets
The full expenditure incurred on the construction-in-progress project as a fixed asset is recorded as the valueof the asset before the asset is constructed to the intended usable state. This includes construction costs,the original cost of equipment, other necessary expenditures incurred in order to enable the construction worksto reach the intended usable status and the borrowing costs incurred for the specific borrowing of the projectand the general borrowing expenses incurred before the assets reach the intended usable status. Constructionin process will be transferred to fixed assets when it reaches the preset service condition. The fixed assetsthat have reached the intended usable state but have not been completed shall be transferred to the fixed assetsaccording to the estimated value according to the estimated value according to the estimated value accordingto the project budget, cost or actual project cost, etc. The depreciation of the fixed assets shall be accruedaccording to the Company's fixed assets depreciation policy. The original estimated value shall be adjustedaccording to the actual cost after the completion.
XXI. Borrowing expenses
(1) Recognition principles for capitalization of borrowing expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or production of assetsatisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset.
(1) Asset expenditure has occurred;
② The borrowing expense has already occurred;
③ Purchasing or production activity, which is necessary for the asset to reach the useful status, has alreadystarted.
Other interest on loans, discounts or premiums and exchange differences are included in the income and lossincurred in the current period.
If the construction or production of assets satisfying the capitalizing conditions is suspended abnormally for over 3 months,capitalizing of borrowing expenses shall be suspended. During the normal suspension period, borrowing expenses will be capitalizedcontinuously.
When the asset satisfying the capitalizing conditions has reached its usable or sellable status, capitalizingof borrowing expenses 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 ofunused borrowings or investment gains from temporary investment is capitalized; the capitalization amount forgeneral borrowing is determined based on the capitalization rate which is the exceeding part of the accumulativeassets expense over weighted average of the assets expense of the special borrowing/used general borrowing.If the assets that are constructed or produced under the condition of capitalization occupy the general borrowing,the interest amount to be capitalized in the general borrowing shall be calculated and determined by multiplyingthe capital rate of the general borrowing by the weighted average of the asset expenditure of the accumulatedassets whose expenditure exceeds that of the specialized borrowing. The capitalization ratio is the weightedaverage interest rate of general borrowings.
22. Use right assets
See Chapter V, Important Accounting Policies and Accounting Estimates 33. Lease.
23. Intangible assets
(1) Pricing method, service life and depreciation test
(1) Pricing of intangible assets
Recorded at the actual cost of acquisition.Amortization of intangible assets
① Useful life of intangible assets with limited useful life
Item | Estimated useful life | Basis |
Land using right | Term | Use right assets |
Trademarks and patents | 10 years | Reference to determine the lifetime of a company for which it can bring economic benefits |
Proprietary technology | 10 years | Reference to determine the lifetime of a company for which it can bring economic benefits |
Software | 5, 10 years | Reference to determine the lifetime of a company for which it can bring economic benefits |
At the end of each year, the Company will reexamine the useful life and amortization basis of intangibleassets with limited useful life. Upon review, the service life and amortization methods of intangible assetsat the end of the period are not different from those previously estimated.
(2) Intangible assets which cannot be foreseeable to bring economic benefits to enterprises shall be regardedas intangible assets whose useful life is uncertain. For intangible assets with uncertain service life, the Companyreviews the service life of intangible assets with uncertain service life at the end of each year. If it is stilluncertain after rechecking, it shall conduct an impairment test on the balance sheet date.
③ Amortization of intangible assets
For intangible assets with limited service life, the Company shall determine their service life at the timeof acquisition, and shall use the straight line method system to reasonably amortize their service life, andthe amortization amount shall be included in the profit and loss of the current period according to the beneficialitems. The specific amortization amount is the amount after the cost is deducted from the estimated residualvalue. For fixed assets for which depreciation provision is made, the depreciation rate will be determined afterthe accumulative depreciation provision amount is deducted. The residual value of an intangible asset with limiteduseful life is treated as zero, except where a third party undertakes to purchase the intangible asset at theend of its useful life or to obtain expected residual value information based on the active market, which islikely to exist at the end of its useful life.Intangible assets with uncertain service life will not be amortized. At the end of each year, the useful lifeof intangible assets with uncertain useful life is reviewed, and if there is evidence that the useful life ofintangible assets is limited, the useful life is estimated and the system is reasonably amortized within theexpected useful life.
(2) Accounting policies for internal R&D expenses
Specific standard for distinguish between research and development stage
① The Company takes the information and related preparatory activities for further development activitiesas the research stage, and the intangible assets expenditure in the research stage is included in the current
profit and loss period.
② The development activities carried out after the Company has completed the research stage as thedevelopment stage.Specific conditions for capitalization of expenditures in the development phaseExpenditures in the development phase can be recognized as intangible assets only when the followingconditions are met:
A. It is technically feasible to complete the intangible asset so that it can be used or sold;
B. Have the intention to complete the intangible asset and use or sell it;
C. The way intangible assets generate economic benefits, including the ability to prove that the products produced by theintangible assets exist in the market or the intangible assets themselves exist in the market, and the intangible assets will be usedinternally, which can prove their usefulness;
D. Have sufficient technical, financial and other resource support to complete the development of the intangible asset, and havethe ability to use or sell the intangible asset;E. The expenditure attributable to the development stage of the intangible asset can be reliably measured.
24. Assets impairment
The Group uses the cost mode to continue measuring the assets impairment to investment real estate, fixedassets construction in progress, intangible assets and goodwill (except for the inventories, investment realestate measured by the fair value mode, deferred income tax assets and financial assets). The method is determinedas follows:
The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such signexists, the Company estimates the recoverable amount and conducts the impairment test. Impairment test isconducted annually for goodwill generated by mergers and intangible assets that have not reached the usefulcondition no matter whether the impairment sign exists.
The recoverable amount is determined by the higher of the net of fair value minus disposal expense and thepresent value of the predicted future cash flow. The Company estimates the recoverable amount on the individualasset item basis; whether it is hard to estimate the recoverable amount on the individual asset item basis,determine the recoverable amount based on the asset group that the assets belong to. The assets group is determinedby whether the main cash flow generated by the Group is independent from those generated by other assets or assetsgroups.
When the recoverable amount of the assets or assets group is lower than its book value, the Company writesdown the book value to the recoverable amount, the write-down amount is accounted into the current income accountand the assets impairment provision is made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized through reasonablemeasures since the purchase day to related asset groups; those cannot be amortized to related assets groups areamortized to related combination of asset groups. The related asset groups or combination of asset groups referto those that can benefit from the synergistic effect of mergers and must not exceed to the reporting rangedetermined by the Company.
When the impairment test is conducted, if there is sign of impairment to the asset group or combinationof asset groups related to goodwill, first perform impair test for asset group or combination of asset groupswithout goodwill and calculate the recoverable amount and recognize the related impairment loss. Then conductimpairment test on those with goodwill, compare the book value with recoverable amount. If the recoverable amountis lower than the book value, recognize the impairment loss of the goodwill.
Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.
25. Long-term amortizable expenses
The long-term outstanding expenses shall be accounted for all expenses incurred by the Company but whichshall be borne by the current and future periods for more than one year, and the long-term outstanding expensesshall be amortized averagely within the benefit period.
26. Contract liabilities
See 15. Contract assets in Chapter V. Important Accounting Policies and Accounting Estimates for details.
27. Staff remuneration
(1) Accounting of operational leasing
① Basic salary of employees (salary, bonus, allowance, subsidy)
In the accounting period for which the staff and workers provide services, the Company shall confirm theactual short-term remuneration as liabilities and shall account for the current income and loss, except as requiredor permitted by other accounting standards.
② Employee welfare
The employee benefits incurred by the Company shall be included in the current profit and loss or relatedasset costs according to the actual amount incurred. Where the employee's benefit is non-monetary, it shall bemeasured on the basis of fair value.
③ Social insurance premiums and housing accumulation funds such as health insurance premiums, work injurypremiums, birth insurance premiums, trade union funds and staff and education funds
The Company pays the medical insurance premiums, work injury insurance premiums, birth insurance premiums,etc. social insurance premiums and housing accumulation funds for the staff and workers, as well as the unionfunds and the staff and workers education funds according to the regulations, in the accounting period for whichthe staff and workers provide services, the corresponding salary amount of the staff and workers, and confirmsthe corresponding liabilities, which are included in the current profit and loss or related asset costs.
④ Short-term paid leave
The Company accumulates the salary of the employees who are absent from work with pay when the employeesprovide service, thus increasing their future right of absence with pay. The Company confirms the salary of theemployee related to the absence of non-cumulative salary during the actual absence accounting period.
⑤ Short-term profit share program
If the profit-sharing plan meets the following conditions at the same time, the Company shall confirm thesalary payable to the staff and workers:
A. The legal or presumptive obligation of the enterprise to pay the remuneration of its employees as a result of past matters;B. The amount of employee compensation obligations due to the profit sharing plan can be reliably estimated.
(2) Accounting of post-employment welfare
The Group's post-employment benefit plan is defined contribution plan. Defined contribution plans include basicendowment insurance, unemployment insurance, etc. During the accounting period when employees provide services
for them, the Company shall recognize the deposit amount calculated according to the defined deposit plan asliabilities and include it in the current profits and losses or related asset costs.
(3) Accounting of dismiss welfare
If the Company provides termination benefits to employees, the employee compensation liabilities arisingfrom the termination benefits shall be recognized at the earliest of the following two and shall be includedin the current profit and loss:
① An enterprise may not unilaterally withdraw the resignation benefits provided for by the dismissal planor reduction proposal;
② When the enterprise recognizes the costs or expenses related to the reorganization involving the payment ofresignation benefits.
(4) Accounting of other long-term staff welfare
28. Lease liabilities
See Chapter V, Important Accounting Policies and Accounting Estimates 33. Lease.
29. Anticipated liabilities
(1) Confirmation of projected liabilities
When responsibilities occurred in connection to contingent issues, and all of the following conditions aresatisfied, they are recognized as expectable liability in the balance sheet:
① This responsibility is a current responsibility undertaken by the Company;
② Execution of this responsibility may cause financial benefit outflow from the Company;
③ Amount of the liability can be reliably measured.
(2) Methods of measurement of projected liabilities
Expected liabilities are initially measured at the best estimation on the expenses to exercise the currentresponsibility, and with considerations to the relative risks, uncertainty, and periodic value of currency. Oneach balance sheet date, review the book value of the estimated liabilities. Where there is conclusive evidencethat the book value does not reflect the current best estimate, the book value is adjusted to the current bestestimate.
30. Revenue
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
As of 1 January 2020
(1) General principles
Income is the total inflow of economic benefits formed in the daily activities of the Company, which willlead to the increase of shareholders' equity and has nothing to do with the capital invested by shareholders.
The Company has fulfilled the performance obligation in the contract, that is, the revenue is recognized
when the customer obtains the control right of relevant goods. To obtain the control right of the relevant commoditymeans to be able to dominate the use of the commodity and obtain almost all the economic benefits from it.
If there are two or more performance obligations in the contract, the Company will allocate the transactionprice to each single performance obligation according to the relative proportion of the separate selling priceof the goods or services promised by each single performance obligation on the start date of the contract, andmeasure the income according to the transaction price allocated to each single performance obligation.The transaction price refers to the amount of consideration that the Company is expected to be entitledto receive due to the transfer of goods or services to customers, excluding the amount collected on behalf ofa third party. When determining the contract transaction price, if there is a variable consideration, the Companyshall determine the best estimate of the variable consideration according to the expected value or the most likelyamount, and include it in the transaction price with the amount not exceeding the accumulated recognized incomewhen the relevant uncertainty is eliminated, which is most likely not to have a significant reversal. If thereis a significant financing component in the contract, the Company will determine the transaction price accordingto the amount payable in cash when the customer obtains the control right of the commodity. The difference betweenthe transaction price and the contract consideration will be amortised by the effective interest method duringthe contract period. If the interval between the control right transfer and the customer's payment is less thanone year, the Company will not consider the financing component Points.If one of the following conditions is met, the performance obligation shall be performed within a certainperiod of time; otherwise, the performance obligation shall be performed at a certain point of time:
① When the customer performs the contract in the Company, he obtains and consumes the economic benefitsbrought by the Company's performance;
② Customers can control the goods under construction during the performance of the contract;
③ The goods produced by the Company in the process of performance have irreplaceable uses, and the Companyhas the right to collect money for the performance part that has been completed so far during the whole contractperiod.
For the performance obligations performed within a certain period of time, the Company shall recognize therevenue according to the performance progress within that period, except that the performance progress cannotbe reasonably determined. The Company determines the performance schedule of providing services according tothe input method. When the progress of performance cannot be reasonably determined, if the cost incurred by theCompany is expected to be compensated, the revenue shall be recognized according to the amount of cost incurreduntil the progress of performance can be reasonably determined.
For the performance obligation performed at a certain time point, the Company recognizes the revenue atthe time point when the customer obtains the control right of relevant goods. In determining whether a customerhas acquired control of goods or services, the Company will consider the following signs:
① The Company has the right to receive payment for the goods or services, that is, the customer has theobligation to pay for the goods;
② The Company has transferred the legal ownership of the goods to the customer, that is, the customer hasthe legal ownership of the goods;
③ The Company has transferred the goods in kind to the customer, that is, the customer has possessed thegoods in kind;
④ The Company has transferred the main risks and rewards of the ownership of the goods to the customer,that is, the customer has obtained the main risks and rewards of the ownership of the goods;
⑤ The product has been accepted by the customer.
Sales return clause
For the sales with sales return clauses, when the customer obtains the control right of the relevant goods,the Company shall recognize the revenue according to the amount of consideration it is entitled to obtain dueto the transfer of the goods to the customer, and recognize the amount expected to be returned due to the salesreturn as the estimated liability; at the same time, the Company shall deduct the estimated cost of recoveringthe goods according to the book value of the expected returned goods at the time of transfer( The balance afterdeducting the value of the returned goods is recognized as an asset, that is, the cost of return receivable,which is carried forward by deducting the net cost of the above assets according to the book value of the transferredgoods at the time of transfer. On each balance sheet date, the Company re estimates the return of future salesand re measures the above assets and liabilities.Warranty obligationsAccording to the contract and legal provisions, the Company provides quality assurance for the goods soldand the projects constructed. For the guarantee quality assurance to ensure that the goods sold meet the established standards,the Company conducts accounting treatment in accordance with the accounting standards for Business Enterprises No. 13 -contingencies. For the service quality assurance which provides a separate service in addition to guaranteeing thatthe goods sold meet the established standards, the Company takes it as a single performance obligation, allocatespart of the transaction price to the service quality assurance according to the relative proportion of the separateselling price of the goods and service quality assurance, and recognizes the revenue when the customer obtainsthe service control right. When evaluating whether the quality assurance provides a separate service in additionto assuring customers that the goods sold meet the established standards, the Company considers whether the qualityassurance is a statutory requirement, the quality assurance period, and the nature of the Company's commitmentto perform the task.Customer consideration payableIf there is consideration payable to the customer in the contract, unless the consideration is to obtainother clearly distinguishable goods or services from the customer, the Company will offset the transaction pricewith the consideration payable, and offset the current income at the later time of confirming the relevant incomeor paying (or promising to pay) the customer's consideration.
Contractual rights not exercised by customers
If the Company advances sales of goods or services to customers, the amount shall be recognized as liabilitiesfirst, and then converted into income when relevant performance obligations are fulfilled. When the Company doesnot need to return the advance payment and the customer may give up all or part of the contract rights, if theCompany expects to have the right to obtain the amount related to the contract rights given up by the customer,the above amount shall be recognized as income in proportion according to the mode of the customer exercisingthe contract rights; otherwise, the Company only has the very low possibility of the customer requiring to performthe remaining performance obligations The relevant balance of the above liabilities is converted into income.
Contract change
When the construction contract between the Company and the customer is changed:
① If the contract change increases the clearly distinguishable construction service and contract price,and the new contract price reflects the separate price of the new construction service, the Company will treatthe contract change as a separate contract for accounting;
② If the contract change does not belong to the above-mentioned situation (1), and there is a cleardistinction between the transferred construction service and the non transferred construction service on thedate of contract change, the Company will regard it as the termination of the original contract, and at the sametime, combine the non performance part of the original contract and the contract change part into a new contractfor accounting treatment;
③ If the contract change does not belong to the above situation (1), and there is no clear distinction betweenthe transferred construction services and the non transferred construction services on the date of contract change,the Company will take the contract change part as an integral part of the original contract for accounting treatment,and the resulting impact on the recognized income will be adjusted to the current income on the date of contractchange.
(2) Specific methods
The specific methods of revenue recognition of the Company are as follows:
① Commodity sales contract
The sales contract between the Company and customers includes the performance obligation of transferringcurtain wall materials, electric energy, etc., which belongs to the performance obligation at a certain timepoint.Revenue from domestic sales of products is recognized at the time when the customer obtains the right ofcontrol of the goods on the basis of comprehensive consideration of the following factors: the Ccompany hasdelivered the products to the customer according to the contract, the customer has accepted the goods, the paymentfor goods has been recovered or the receipt has been obtained, and the relevant economic benefits are likelyto flow in, the main risks and rewards of the ownership of the goods have been transferred, the legal ownershiphas been transferred;
Based on the comprehensive consideration of the following factors, the revenue of export products isrecognized at the time when the customer obtains the control of the goods: the Company has declared the productsaccording to the contract, obtained the bill of lading, collected the payment for goods or obtained the receiptcertificate, and the relevant economic benefits are likely to flow in, the main risks and rewards of the ownershipof the goods have been transferred, and the legal ownership of the goods has been transferred Move.
② Service contract
The service contract between the Company and its customers includes the performance obligations of metroplatform screen door operation and maintenance and property services. As the Company's performance at the sametime, the customers obtain and consume the economic benefits brought by the Company's performance, the Companytakes it as the performance obligation within a certain period of time and allocates it equally during the serviceprovision period.
③ Engineering contract
The project contract between the Company and the customer includes the performance obligations of curtainwall project and metro platform screen door project construction. As the customer can control the goods underconstruction in the process of the Company's performance, the Company takes them as the performance obligationswithin a certain period of time, and recognizes the income according to the performance progress, except thatthe performance progress cannot be reasonably determined. The Company determines the performance schedule ofproviding services according to the input method. The performance schedule shall be determined according to theproportion of the actual contract cost to the estimated total contract cost. On the balance sheet date, the Companyre estimates the progress of completed or completed services to reflect the changes in performance.
④ Real estate sales contract
The income of the Company's real estate development business is recognized when the control of the propertyis transferred to the customer. Based on the terms of the sales contract and the legal provisions applicableto the contract, the control of the property can be transferred within a certain period of time or at a certainpoint in time. Only if the goods produced by the Company during the performance of the contract have irreplaceableuses, and the Company has the right to collect payment for the cumulative performance part that has been completedduring the entire contract period, the performance obligation has been completed during the contract period.
The progress is recognized as revenue within a period of time, and the progress of the completed performanceobligations is determined in accordance with the ratio of the contract costs actually incurred to complete theperformance obligations to the estimated total cost of the contract. Otherwise, the income is recognized whenthe customer obtains the physical ownership or legal ownership of the completed property and the Company hasobtained the current right of collection and is likely to recover the consideration. When confirming the contracttransaction price, if the financing component is significant, the Company will adjust the contract commitmentconsideration according to the financing component of the contract.
31. Government subsidy
(1) Recognition of government subsidies
Government subsidies are recognized when the following conditions are met:
① Requirements attached to government subsidies;
② The Company can receive government subsidies.
(2) Recognition of government subsidies
When a government subsidy is monetary capital, it is measured at the received or receivable amount. Nonemonetary capital are measured at fair value; if no reliable fair value available, recognized at RMB1.
(3) Recognition of government subsidies
① Assets-related
Government subsidies related to assets are obtained by the Company to purchase, build or formulate in othermanners long-term assets; or subsidies related to benefits. If the asset-related government subsidy is recognizedas deferred gain, should be recorded in gain and loss in the service life. Government subsidy measured at thenominal amount is accounted into current income account. If the relevant assets are sold, transferred, scrappedor damaged before the end of their useful life, the unallocated relevant deferred income balance shall betransferred to the profit and loss of the current period of disposition of the assets.
Gain-related government subsidy should be accounted as follows:
The Company divides government subsidies into assets-related and earnings-related government subsidies.Gain-related government subsidy should be accounted as follows:
Subsidy that will be used to compensate related future costs or losses should be recognized as deferredgain and recorded in the gain and loss of the current report and offset related cost;
Subsidy that is used to compensate existing cost or loss should be recorded in the gain and loss of thecurrent period or offset related cost.
For government subsidies that include both asset-related and income-related parts, separate different partsfor accounting treatment; It is difficult to distinguish between the overall classification of governmentsubsidies related to benefits.
Government subsidy related to routine operations should be recorded in other gains or offset related cost.Government subsidy not related to routine operations should be recorded in non-operating income or expense.
③ Policy preferential loan discount
The policy-based preferential loan obtained has interest subsidy. If the government allocates theinterest-subsidy funds to the lending bank, the loan amount actually received will be used as the entry valueof the loan, and the borrowing cost will be calculated based on the loan principal and policy-based preferentialinterest rate.
If the government allocates the interest-bearing funds directly to the Group, discount interest will offsetthe borrowing costs.
④ Government subsidy refund
When a confirmed government subsidy needs to be returned, the book value of the asset is adjusted against thebook value of the relevant asset at initial recognition. If there is a related deferred income balance, the bookbalance of the related deferred income is written off and the excess is credited to the current profit or loss;In other cases, it is directly included in the current profit and loss.
32. Differed income tax assets and differed income tax liabilities
The Company uses the temporary difference between the book value of the assets and liabilities on the balancesheet day and the tax base and the liabilities method to recognize the deferred income tax. 26. Deferred incometax assets and deferred income tax liabilities
(1) Deferred income tax assets
For deductible temporary discrepancies, deductible losses and tax offsets that can be carried forward forfuture years, the impact on income tax is calculated at the estimated income tax rate for the transfer-back periodand the impact is recognized as deferred income tax assets, provided that the Company is likely to obtain futuretaxable income for deductible temporary discrepancies, deductible losses and tax offsets.
At the same time, the impact on income tax of deductible temporary discrepancies resulting from the initialrecognition of assets or liabilities in transactions or matters with the following characteristics is inconclusiveas deferred income tax assets:
A. The transaction is not a business combination;
B. the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;
In the event of temporary discrepancy of deductible investment related to subsidiaries, joint ventures andjoint ventures, and meeting the following two conditions, the amount of impact (talent) on income tax shall bedeemed 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 beobtained in the future to offset the deductible temporary differences, the deferred income tax assets that havenot been recognized in the previous period are recognized.
On the balance sheet day, the Company re-examines the book value of the deferred income tax assets. If itis unlikely to have adequate taxable proceeds to reduce the benefits of the deferred income tax assets, lessthe deferred income tax assets’ book value. When there is adequate taxable proceeds, the lessened amount willbe reversed.
(2) Deferred income tax assets
All provisional differences in taxable income of the Company shall be measured on the basis of the estimatedincome tax rate for the period of transfer-back and shall be recognized as deferred income tax liabilities, exceptthat:
At the same time, the impact on income tax of deductible temporary discrepancies resulting the initialrecognition of assets or liabilities in transactions or matters with the following characteristics is inconclusiveas deferred income tax Liabilities:
A. Initial recognition of goodwill;
B. Initial recognition of goodwill, or of assets or liabilities generated in transactions with the following features: the transactionis not a merger and the transaction does not affect the accounting profit or taxable proceeds;
② In the event of temporary discrepancy of deductible investment related to subsidiaries, Joint venture
joint ventures, and meeting the two conditions, the amount of impact (talent) on income tax shall be deemed asdeferred income tax assets:
A. The Company is able to control the time of temporary discrepancy transfers;B Temporary discrepancies are likely to be reversed in the foreseeable future;
(3) Deferred income tax assets
(1) Deferred income tax liabilities or assets associated with enterprise consolidationTemporary difference of taxable tax or deductible temporary difference generated by enterprise merger undernon-same control. When deferred income tax liability or deferred income tax asset is recognized, related deferredincome tax expense (or income) is usually adjusted as recognized goodwill in enterprise merger.
② Amount of shares paid and accounted as owners' equity
Except for the adjustment goodwill generated by mergers or deferred income tax related to transactions orevents directly accounted into the owners’ equity, income tax is accounted as income tax expense into the currentgain/loss account. The effects of temporary discrepancy on income tax include the following: Other integratedbenefits such as fair value change of financial assets available for sale, retroactive adjustment of accountingpolicy changes or retroactive restatement of accounting error correction discrepancy to adjust the initialretained income, and mixed financial instruments including liabilities and equity.
③ Compensation for losses and tax deductions
A. Compensable losses and tax deductions from the Company's own operations
Deductible losses refer to the losses calculated and determined in accordance with the provisions of thetax law that are allowed to be made up with the taxable income of subsequent years. The uncovered losses (deductiblelosses) and tax deductions that can be carried forward in accordance with the tax law are treated as deductibletemporary differences. When it is expected that sufficient taxable income is likely to be obtained in the futureperiod when it is expected to be available to make up for losses or tax deductions, the corresponding deferredincome tax assets are recognized within the limit of the taxable income that is likely to be obtained, whilereducing the current period Income tax expense in the income statement.
B. Compensable uncovered losses of the merged company due to business merger
In a business combination, if the Company obtains the deductible temporary difference of the purchased partyand does not meet the deferred income tax asset recognition conditions on the purchase date, it shall not berecognized. Within 12 months after the purchase date, if new or further information is obtained indicating that the relevantconditions on the purchase date already exist, and the economic benefits brought about by the temporary difference are expected tobe deducted on the purchase date, confirm the relevant delivery. Deferred income tax assets, while reducing goodwill, if the goodwillis not enough to offset, the difference is recognized as the current profit and loss; except for the above circumstances, the deferred taxassets related to the business 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 consolidatedbalance sheet and the taxable basis of the taxpayer due to the offset of the unrealized internal sales gain orloss, the deferred income tax asset or the deferred income tax liability is confirmed in the consolidated balancesheet, and the income tax expense in the consolidated profit statement is adjusted, with the exception of thedeferred income tax related to the transaction or event directly included in the owner's equity and the mergerof the enterprise.
⑤ Share payment settled by equity
If the tax law provides for allowable pre-tax deduction of expenses related to share payment, within the periodfor which the cost and expense are recognized in accordance with the accounting standards, the Company shallcalculate the tax basis and temporary discrepancy based on the estimated pre-tax deduction amount at the end
of the accounting period and confirm the relevant deferred income tax if it meets the conditions for confirmation.Of these, the amount that can be deducted before tax in the future exceeds the cost related to share paymentrecognized in accordance with the accounting standards, and the excess income tax shall be directly includedin the owner's equity.
33. Leasing
(1) The Company as leasee
The Company recognizes the right to use assets and lease liabilities for the lease on the beginning date of thelease term. The right of use assets are initially measured at cost, including the initial measurement amount of lease liabilities, thelease payment paid on or before the beginning of the lease term (deducting the amount related to the enjoyed lease incentives), theinitial direct expenses incurred, and the costs incurred for dismantling and removing the leased assets, the estimated cost of restoringthe site where the leased asset is located or restoring the leased asset to the state agreed in the lease terms.The Company depreciates the right of use assets using the straight-line method. If it can be reasonablydetermined that the ownership of the leased asset is obtained at the expiration of the lease term, the Companyshall accrue depreciation within the remaining service life of the leased asset. Otherwise, the leased assetis depreciated within the shorter of the lease term and the remaining service life of the leased asset. Theimpairment provision for right of use assets shall be accrued according to the accounting policies described in note V. 24.
The lease liabilities are initially measured according to the present value of the unpaid lease paymentsat the beginning of the lease term, and the discount rate is the interest rate embedded in the lease. If theembedded interest rate of the lease cannot be determined, the incremental loan interest rate of the Company shallbe used as the discount rate.The Company calculates the interest expense of the lease liability in each period of the lease term accordingto the fixed periodic interest rate and records it into the current profit and loss or relevant asset cost. Theamount of variable lease payments not included in the measurement of lease liabilities shall be included in thecurrent profits and losses or relevant asset costs when actually incurred.After the beginning date of the lease term, in case of the following circumstances, the Company shall remeasure the lease liabilities according to the present value of the lease payment after the change:
-Changes in the expected payable amount according to the guarantee residual value;
-Changes in the index or ratio used to determine the amount of lease payments;
-The Company's appraisal results of purchase option, renewal option or termination option have changed, or the actual exerciseof renewal option or termination option is inconsistent with the original appraisal results.
When the lease liabilities are remeasured, the Company adjusts the book value of the right to use assetsaccordingly. If the book value of the right of use asset has been reduced to zero, but the lease liability stillneeds to be further reduced, the Company shall record the remaining amount into the current profit and loss.
The Company has chosen not to recognize the right to use assets and lease liabilities for short-term leases (leases with a leaseterm of no more than 12 months) and low-value asset leases, and the relevant lease payments are included in the current profit andloss or relevant asset costs according to the straight-line method in each period of the lease term.
(2) The Company is the leasor
On the lease commencement date, the Company divides the lease into financial lease and operating lease. Thecompany does not have financial leasing.
When the Company is the operating lessor, the rent received shall be recognized as income within the lease
term by the straight line method. Where the lessor provides a lease-free period, the total rent shall be apportionedwithin the whole lease-free period without deducting the lease-free period according to the straight line methodor other reasonable method, and the rent-free period shall be recognized as well as the corresponding liabilities.If the charterer undertakes certain expenses, the Company shall distribute the rent income balance deducted fromthe total rent income during the lease term.Initial direct expenses are recorded to current income account. Larger amounts shall be capitalized andincluded in current profits and losses in installments on the same basis as the confirmed rental income duringthe entire operating lease period. In the event of an agreement or rent, the current profit and loss shall beincluded in the actual occurrence.
34. Other significant accounting policies and estimates
(1) Measurement of Fair Value
Fair value refers to the amount of asset exchange or liabilities settlement by both transaction partiesfamiliar with the situation in a fair deal on a voluntary basis.The Company measures the fair value of related assets or liabilities at the prices in the main market. Ifthere is no major market, the Company measures the fair value of the relevant assets or liabilities at the mostfavorable market prices. The Group uses assumptions that market participants use to maximize their economicbenefits when pricing the asset or liability.
The main market refers to the market with the highest transaction volume and activity of the related assetsor liabilities. The most favorable market means the market that can sell the related assets at the highest amountor transfer the related liabilities at the lowest amount after considering the transaction cost and transportationcost.
For financial assets or liabilities in an active market, The Company determines their fair value based onquotations in the active market. If there is no active market, the Company uses evaluation techniques to determinethe fair value.
For the measurement of non-financial assets at fair value, the ability of market participants to use theassets for optimal purposes to generate economic benefits, or the ability to sell the assets to other marketparticipants that can be used for optimal purposes to generate economic benefits.
① Valuation technology
The Company adopts valuation techniques that are applicable in the current period and are supported bysufficient data and other information. The valuation techniques used mainly include market method, income methodand cost method. The Company uses a method consistent with one or more of the valuation techniques to measurefair value. If multiple valuation techniques are used to measure fair value, the reasonableness of each valuationresult shall be considered, and the fair value shall be selected as the most representative of fair value underthe current circumstances. The amount of value is regarded as fair value.
The The Company equipment are applicable in the current circumstances and have sufficient available dataand other information to support the use of the relevant observable input values prioritized. Unobservable inputvalues are used only when the observable input value cannot be obtained or is not feasible. Observable inputvalues are input values that can be obtained from market data. The Group uses assumptions that market participantsuse to maximize their economic benefits when pricing the asset or liability. Non-observable input values areinput values that cannot be obtained from market data. The input value is obtained based on the best informationavailable on assumptions used by market participants in pricing the relevant asset or liability.
②Fair value hierarchy
This company divides the input value used in fair value measurement into three levels, and first uses thefirst level input value, then uses the second level input value, and finally uses the third level input value.First level: quotation of same assets or liabilities in an active market (unadjusted) The second level inputvalue is a directly or indirectly observable input value of the asset or liability in addition to the first levelinput value. The input value of the third level is the unobservable input value of the related asset or liability.
(2) Hedge accounting
(2.1) Classification of inventories
The Company's hedge is a cash flow hedge.
Cash flow hedging refers to the hedging of cash flow risk. The change in cash flow is derived from specificrisks associated with recognized assets or liabilities, expected transactions that are likely to occur, or withrespect to the components of the above-mentioned project and will affect the profits and losses of the enterprise.
(2.2) Hedging tools and hedged projects
Hedging means a financial instrument designated by the Company for the purpose of hedging, whose fair valueor cash flow variation is expected to offset the fair value or cash flow variation of the hedged item, including:
① Financial liabilities measured at fair value with variations accounted into current income accountCheck-out options can only be used as a hedging tool if the option is hedged, including those embedded in a hybridcontract. Derivatives embedded in a hybrid contract but not split cannot be used as separate hedging tools.
② Non-derivative financial assets or non-derivative financial liabilities that are measured at fair valueand whose changes are included in the current profit and loss, but designated as fair value and whose changesare included in the current profit and loss, and their own credit risk changes caused by changes in fair valueexcept for financial liabilities included in other comprehensive income.
Own equity instruments are not financial assets or financial liabilities and cannot be used as hedginginstruments.
A hedged item refers to an item that exposes the Company to the risk of changes in fair value or cash flowand is designated as the hedged object and can be reliably measured. The Company designates the followingindividual projects, project portfolios or their components as hedged projects:
① Confirmed assets or liabilities.
② Confirmed commitments that have not yet been confirmed. Confirmed commitment refers to a legally bindingagreement to exchange a specific amount of resources at an agreed price on a specific date or period in the future.
③ Expected transactions that are likely to occur. Anticipated transactions refer to transactions that havenot yet been committed but are expected to occur.
④ Net investment in overseas operations.
The above-mentioned project components refer to the parts that are less than the overall fair value or cashflow changes of the project. The Company designates the following project components or their combinations ashedged items:
① The part of the change in fair value or cash flow (risk component) that is only caused by one or morespecific risks in the overall fair value or cash flow changes of the project. According to the assessment ina specific market environment, the risk component should be able to be individually identified and reliablymeasured. The risk component also includes the part where the fair value or cash flow of the hedged item changesonly above or below a specific price or other variables.
② One or more selected contractual cash flows.
③ The component of the nominal amount of the project, that is, the specific part of the whole amount orquantity of the project, may be a certain proportion of the whole project, or may be a certain level of the whole
project. If a certain level includes early repayment rights and the fair value of the early repayment rightsis affected by changes in the risk of the hedge, the level shall not be designated as the hedged item of thefair value hedge, but in the measurement of the hedged item except when the fair value has included the influenceof the prepayment right.
(2.3) Evaluation of hedging relationshipWhen the hedging relationship is initially specified, the Group officially specifies the related hedgingrelationships with official documents recording the hedging relationships, risk management targets and hedgingstrategies. This document sets out the hedging tools, hedged items, the nature of hedged risks, and the Company'sassessment of hedged effectiveness. Hedging means a financial instrument designated by the Company for the purposeof hedging, whose fair value or cash flow variation is offset the fair value or cash flow variation of the hedgeditem, including: Such hedges are continuously evaluated on and after the initial specified date to meet therequirements for hedging validity.If the hedging instrument has expired, been sold, the contract is terminated or exercised (but the extensionor replacement as part of the hedging strategy is not treated as expired or contract termination), or the riskmanagement objective changes, resulting in hedging The relationship no longer meets the risk management objectives,or the economic relationship between the hedged item and the hedging instrument no longer exists, or the impactof credit risk begins to dominate in the value changes caused by the economic relationship between the hedgeditem and the hedging instrument, or when the hedge no longer meets the other conditions of the hedge accountingmethod, the Company terminates the use of hedge accounting.If the hedging relationship no longer meets the requirements for hedging effectiveness due to the hedgingratio, but the risk management objective of the designated hedging relationship has not changed, the Companyshall rebalance the hedging relationship.(2.4) Validation and measurementIf the strict conditions of the hedging accounting method are satisfied, the following methods shall beapplied:
Cash flow hedgingThe part of hedging tool gains or losses that is valid for hedging is recognized as other comprehensiveincome as a cash flow hedging reserve, and the part that is invalid for hedging (that is, other gains or lossesafter deducting other comprehensive income), are counted Into the current profit and loss. The amount of cashflow hedging reserve is determined according to the lower of the absolute amounts of the following two items:
①accumulated gains or losses of hedging instruments since the hedging. The amount in the effective arbitrageis recognized by the accumulative gains or losses from the starting of arbitrage and accumulative changes tothe current value of future forecast cash flows from the start of arbitrage.
If the expected transaction of the hedged asset is subsequently recognized as a non-financial asset ornon-financial liability, or if the expected transaction of the non-financial asset or non-financial liabilityforms a defined commitment to the applicable fair value hedge accounting, the amount of the cash flow hedge reserveoriginally recognized in the other consolidated income is transferred out to account for the initial recognizedamount of the asset or liability. For the remaining cash flow hedges, during the same period when the expectedcash flow to be hedged affects the profit and loss, if the expected sales occur, the cash flow hedge reserverecognized in other comprehensive income is transferred out and included in the current profit and loss.
(3) Repurchase of the Company’s shares
(3.1) In the event of a reduction in the Company's share capital as approved by legal procedure, the Company shall reduce theshare capital by the total amount of the written-off shares, adjust the owner's equity by the difference between the price paid by thepurchased stocks (including transaction costs) and the total amount of the written-off shares, offset the capital reserve (share capital
premium), surplus reserve and undistributed profits in turn; A portion of a capital reserve (share capital premium) that is less than thetotal face value and less than the total face value.(3.2) The total expenditure of the repurchase shares of the Company, which is managed as an inventory share before they arecancelled or transferred, is converted to the cost of the inventory shares.(3.3) Increase in the capital reserve (capital premium) at the time of transfer of an inventory unit, the portion of the transferincome above the cost of the inventory unit; Lower than the inventory stock cost, the capital reserve (share capital premium), surplusreserve, undistributed profits in turn.
(4) Significant accounting judgment and estimate
The Group continuously reviews significant accounting judgment and estimate adopted for the reasonableforecast of future events based on its historical experience and other factors. Significant accounting judgmentand assumptions that may lead to major adjustment of the book value of assets and liabilities in the next accountingyear are listed as follows:
Classification of financial assets
The major judgements involved in the classification of financial assets include the analysis of businessmodel and contract cash flow characteristics.
The Group determines the business mode of managing financial assets at the level of financial asset portfolio,taking into account such factors as how to evaluate and report financial asset performance to key managers, therisks that affect financial asset performance and how to manage it, and how to obtain remuneration for relatedbusiness managers.
When the Group assesses whether the contractual cash flow of financial assets is consistent with the basicborrowing arrangement, there are the following main judgments: whether the principal may change due to earlyrepayment and other reasons during the duration of the period or the amount of change; whether the interestIncluding the time value of money, credit risk, other basic borrowing risks, and consideration of costs and profits.For example, does the amount paid in advance reflect only the unpaid principal and the interest based on theunpaid principal, as well as the reasonable compensation paid for early termination of the contract.
Measurement of expected credit losses of accounts receivable
The Group calculates the expected credit loss of accounts receivable through the risk exposure of accountsreceivable default and the expected credit loss rate, and determines the expected credit loss rate based on thedefault probability and the default loss rate. When determining the expected credit loss rate, the Company usesinternal historical credit loss experience and other data, combined with current conditions and forward-lookinginformation to adjust the historical data. When considering forward-looking information, the indicators usedby the Company include the risks of economic downturn, changes in the external market environment, technologicalenvironment, and customer conditions. The Company regularly monitors and reviews assumptions related to thecalculation of expected credit losses.
Deferred income tax assets
If there is adequate taxable profit to deduct the loss, the deferred income tax assets should be recognizedby all the unused tax loss. This requires the management to make a lot of judgment to forecast the time and amountof future taxable profit and determine the amount of the deferred tax assets based on the taxation strategy.
Revenue recognition (after January 1, 2020)
The Group's revenue from providing curtain wall construction and metro platform screen door installationservices is recognized over a period of time. The recognition of the income and profit of such engineeringinstallation services depends on the Company's estimation of the contract results and performance progress. Ifthe actual amount of total revenue and total cost is higher or lower than the estimated value of the management,it will affect the amount of revenue and profit recognition of the Group in the future.
Estimate of fair valueThe Group uses fair value to measure investment real estate and needs to estimate the fair value of investmentreal estate at least quarterly. This requires the management to reasonably estimate the fair value of theinvestment real estate with the help of valuation experts.Development costFor property that has been handed over with income recognized, but whose public facilities have not beenconstructed or not been completed, the management will estimate the development cost for the part that has notbeen started according to the budget to reflect the operation result of the property sales.
35. Major changes in accounting policies and estimates
(1) Changes in accounting policies
√ Applicable □ Inapplicable
Account policy changes and reasons | Approval procedure | Remarks |
In December 2018, the Ministry of Finance revised and issued the accounting standards for Business Enterprises No. 21 - leasing (CK [2018] No. 35) (hereinafter referred to as the "new leasing standards"), which requires enterprises listed at home and abroad and enterprises listed abroad and preparing financial statements using international financial reporting standards or accounting standards for enterprises to take effect as of January 1, 2019; Other enterprises implementing the accounting standards for business enterprises shall be implemented as of January 1, 2021. According to the above unified requirements, the Company needs to make corresponding changes to the original accounting policies. | Inapplicable | Disclosure source: Announcement on Changes in Accounting Policies on March 23, 2021 (http://www.cninfo.com.cn/) on http://www.cninfo.com.cn/ |
According to the requirements of the new lease standard, the Company will recognize all leased assets (except short-termleases and low-value asset leases that choose simplified processing) to recognize right-of-use assets and lease liabilities from January1, 2021, and recognize depreciation and interest expenses respectively.In the standard convergence policy, simplified treatment is selected, that is, the lease liabilities are equal to the present value ofthe remaining lease payment, and the right-of-use asset is equal to the amount of the lease liabilities and necessary adjustments aremade. Using this method will not affect the Company's retained earnings at the beginning of 2021.Due to the implementation of the new lease standards, the consolidated statements of the Company adjusted the use rightassets of RMB7,208,915.40 yuan, lease liabilities of RMB5,102,002.19 yuan and non-current liabilities due within one year ofRMB2,106,913.21 yuan on January 1, 2021.At the same time, due to the implementation of the new lease standard, there is no impact on the financial statements of theparent company of the Company.
(2) Changes in major accounting estimates
□ Applicable √ Inapplicable
(3) The first implementation of the new financial instruments guidelines, new lease standards, adjustmentsthe first implementation of the financial statements at the beginning of the year 2021ApplicableWhether to adjust the balance sheet accounts at the beginning of the year
√ Yes □ No
Consolidated Balance Sheet
In RMB
Item | Thursday, December 31, 2020 | Friday, January 1, 2021 | Adjustment |
Current asset: | |||
Monetary capital | 1,463,974,162.44 | 1,463,974,162.44 | |
Settlement provision | 0.00 | ||
Outgoing call loan | 0.00 | ||
Transactional financial assets | 14,382,896.04 | 14,382,896.04 | |
Derivative financial assets | 6,974,448.22 | 6,974,448.22 | |
Notes receivable | 207,165,063.97 | 207,165,063.97 | |
Account receivable | 616,952,136.19 | 616,952,136.19 | |
Receivable financing | 10,727,129.28 | 10,727,129.28 | |
Prepayment | 24,105,635.39 | 24,105,635.39 | |
Insurance receivable | 0.00 | ||
Reinsurance receivable | 0.00 | ||
Provisions of Reinsurance contracts receivable | 0.00 | ||
Other receivables | 162,282,396.88 | 162,282,396.88 | |
Including: interest receivable | 0.00 | ||
Dividend receivable | 0.00 | ||
Repurchasing of financial assets | 0.00 | ||
Inventory | 837,831,790.88 | 837,831,790.88 |
Contract assets | 1,433,599,583.48 | 1,433,599,583.48 | |
Assets held for sales | 0.00 | ||
Non-current assets due in 1 year | 141,943,454.82 | 141,943,454.82 | |
Other current assets | 233,223,084.51 | 233,223,084.51 | |
Total current assets | 5,153,161,782.10 | 5,153,161,782.10 | |
Non-current assets: | |||
Loan and advancement provided | |||
Debt investment | |||
Other debt investment | |||
Long-term receivables | |||
Long-term share equity investment | 55,902,377.95 | 55,902,377.95 | |
Investment in other equity tools | 17,628,307.59 | 17,628,307.59 | |
Other non-current financial assets | 5,025,186.16 | 5,025,186.16 | |
Investment real estate | 5,634,648,416.52 | 5,634,648,416.52 | |
Fixed assets | 483,217,323.75 | 483,217,323.75 | |
Construction in process | 168,626,803.01 | 168,626,803.01 | |
Productive biological assets | 0.00 | ||
Gas & petrol | 0.00 | ||
Use right assets | 7,208,915.40 | 7,208,915.40 | |
Intangible assets | 77,201,610.87 | 77,201,610.87 | |
R&D expense | 0.00 | ||
Goodwill | 0.00 | ||
Long-term amortizable expenses | 4,581,487.32 | 4,581,487.32 | |
Deferred income tax assets | 186,649,335.96 | 186,649,335.96 | |
Other non-current assets | 104,817,688.85 | 104,817,688.85 | |
Total of non-current assets | 6,738,298,537.98 | 6,745,507,453.38 | 7,208,915.40 |
Total of assets | 11,891,460,320.08 | 11,898,669,235.48 | 7,208,915.40 |
Current liabilities |
Short-term loans | 1,048,250,327.62 | 1,048,250,327.62 | |
Loans from Central Bank | 0.00 | ||
Call loan received | 0.00 | ||
Transactional financial liabilities | |||
Derivative financial liabilities | 915,234.93 | 915,234.93 | |
Notes payable | 866,224,515.42 | 866,224,515.42 | |
Account payable | 1,282,847,988.91 | 1,282,847,988.91 | |
Prepayment received | 1,544,655.62 | 1,544,655.62 | |
Contract liabilities | 265,487,113.12 | 265,487,113.12 | |
Selling of repurchased financial assets | 0.00 | ||
Deposit received and held for others | 0.00 | ||
Entrusted trading of securities | 0.00 | ||
Entrusted selling of securities | 0.00 | ||
Employees' wage payable | 60,894,196.78 | 60,894,196.78 | |
Taxes payable | 360,325,524.42 | 360,325,524.42 | |
Other payables | 153,635,067.86 | 153,635,067.86 | |
Including: interest payable | |||
Dividend payable | 6,000,000.00 | 6,000,000.00 | |
Fees and commissions payable | 0.00 | ||
Reinsurance fee payable | 0.00 | ||
Liabilities held for sales | |||
Non-current liabilities due in 1 year | 103,359,833.57 | 105,466,746.78 | 2,106,913.21 |
Other current liabilities | 107,688,425.69 | 107,688,425.69 | 0.00 |
Total current liabilities | 4,251,172,883.94 | 4,253,279,797.15 | 2,106,913.21 |
Non-current liabilities: |
Insurance contract provision | |||
Long-term loans | 1,099,411,462.35 | 1,099,411,462.35 | |
Bond payable | |||
Including: preferred stock | 0.00 | ||
Perpetual bond | 0.00 | ||
Lease liabilities | 5,102,002.19 | 5,102,002.19 | |
Long-term payable | |||
Long-term employees' wage payable | |||
Anticipated liabilities | 33,425,500.13 | 33,425,500.13 | |
Deferred earning | 9,168,492.17 | 9,168,492.17 | |
Deferred income tax liabilities | 1,038,084,099.97 | 1,038,084,099.97 | |
Other non-current liabilities | |||
Total of non-current liabilities | 2,180,089,554.62 | 2,185,191,556.81 | 5,102,002.19 |
Total liabilities | 6,431,262,438.56 | 6,438,471,353.96 | 7,208,915.40 |
Owner's equity: | |||
Share capital | 1,088,278,951.00 | 1,088,278,951.00 | |
Other equity tools | |||
Including: preferred stock | 0.00 | ||
Perpetual bond | 0.00 | ||
Capital reserves | 20,459,588.40 | 20,459,588.40 | |
Less: Shares in stock | 42,748,530.12 | 42,748,530.12 | |
Other miscellaneous income | 2,078,167.63 | 2,078,167.63 | |
Special reserves | |||
Surplus reserve | 106,783,436.96 | 106,783,436.96 | |
Common risk provisions | 0.00 | ||
Retained profit | 4,217,527,242.56 | 4,217,527,242.56 |
Total of owner's equity belong to the parent company | 5,392,378,856.43 | 5,392,378,856.43 | |
Minor shareholders' equity | 67,819,025.09 | 67,819,025.09 | |
Total of owners' equity | 5,460,197,881.52 | 5,460,197,881.52 | |
Total of liabilities and owner's interest | 11,891,460,320.08 | 11,898,669,235.48 | 7,208,915.40 |
About the adjustment
According to the requirements of the new lease standard, the Company will recognize all leased assets (except short-termleases and low-value asset leases that choose simplified processing) to recognize right-of-use assets and lease liabilities from January1, 2021, and recognize depreciation and interest expenses respectively.In the standard convergence policy, simplified treatment is selected, that is, the lease liabilities areequal to the present value of the remaining lease payment, and the right-of-use asset is equal to the amountof the lease liabilities and necessary adjustments are made. Using this method will not affect the Company's retainedearnings at the beginning of 2021.
Balance Sheet of the Parent Company
In RMB
Item | Thursday, December 31, 2020 | Friday, January 1, 2021 | Adjustment |
Current asset: | |||
Monetary capital | 204,828,995.78 | 204,828,995.78 | |
Transactional financial assets | |||
Derivative financial assets | |||
Notes receivable | |||
Account receivable | 885,849.08 | 885,849.08 | |
Receivable financing | |||
Prepayment | 1,323,361.34 | 1,323,361.34 | |
Other receivables | 1,156,802,204.91 | 1,156,802,204.91 | |
Including: interest receivable | |||
Dividend receivable | |||
Inventory | |||
Contract assets | |||
Assets held for sales | |||
Non-current assets due |
in 1 year | |||
Other current assets | 1,071,138.13 | 1,071,138.13 | |
Total current assets | 1,364,911,549.24 | 1,364,911,549.24 | |
Non-current assets: | |||
Debt investment | |||
Other debt investment | |||
Long-term receivables | |||
Long-term share equity investment | 1,196,831,253.00 | 1,196,831,253.00 | |
Investment in other equity tools | 16,392,331.44 | 16,392,331.44 | |
Other non-current financial assets | 30,000,001.00 | 30,000,001.00 | |
Investment real estate | 334,498,436.00 | 334,498,436.00 | |
Fixed assets | 65,157,481.98 | 65,157,481.98 | |
Construction in process | |||
Productive biological assets | |||
Gas & petrol | |||
Use right assets | |||
Intangible assets | 1,521,975.72 | 1,521,975.72 | |
R&D expense | |||
Goodwill | |||
Long-term amortizable expenses | 687,202.16 | 687,202.16 | |
Deferred income tax assets | 26,592,617.26 | 26,592,617.26 | |
Other non-current assets | |||
Total of non-current assets | 1,671,681,298.56 | 1,671,681,298.56 | |
Total of assets | 3,036,592,847.80 | 3,036,592,847.80 | |
Current liabilities | |||
Short-term loans | 491,503,263.89 | 491,503,263.89 | |
Transactional financial liabilities | |||
Derivative financial liabilities |
Notes payable | |||
Account payable | 606,941.85 | 606,941.85 | |
Prepayment received | 927,674.32 | 927,674.32 | |
Contract liabilities | |||
Employees' wage payable | 3,440,073.04 | 3,440,073.04 | |
Taxes payable | 2,993,196.12 | 2,993,196.12 | |
Other payables | 28,068,648.70 | 28,068,648.70 | |
Including: interest payable | |||
Dividend payable | |||
Liabilities held for sales | |||
Non-current liabilities due in 1 year | |||
Other current liabilities | |||
Total current liabilities | 527,539,797.92 | 527,539,797.92 | |
Non-current liabilities: | |||
Long-term loans | |||
Bond payable | |||
Including: preferred stock | |||
Perpetual bond | |||
Lease liabilities | |||
Long-term payable | |||
Long-term employees' wage payable | |||
Anticipated liabilities | |||
Deferred earning | |||
Deferred income tax liabilities | 73,837,511.85 | 73,837,511.85 | |
Other non-current liabilities | |||
Total of non-current liabilities | 73,837,511.85 | 73,837,511.85 |
Total liabilities | 601,377,309.77 | 601,377,309.77 | |
Owner's equity: | |||
Share capital | 1,088,278,951.00 | 1,088,278,951.00 | |
Other equity tools | |||
Including: preferred stock | |||
Perpetual bond | |||
Capital reserves | 360,835.52 | 360,835.52 | |
Less: Shares in stock | 42,748,530.12 | 42,748,530.12 | |
Other miscellaneous income | -371,129.71 | -371,129.71 | |
Special reserves | |||
Surplus reserve | 106,783,436.96 | 106,783,436.96 | |
Retained profit | 1,282,911,974.38 | 1,282,911,974.38 | |
Total of owners' equity | 2,435,215,538.03 | 2,435,215,538.03 | |
Total of liabilities and owner's interest | 3,036,592,847.80 | 3,036,592,847.80 |
About the adjustmentThe parent company of the Company has no leases other than short-term leases and leases of low-value assets. Therefore, theimplementation of the new lease standards has no impact on the balance sheet of the parent company at the beginning of 2021.
(4) Description of the 2021 first implementation of the new lease standard retrospective adjustment of theprevious period comparison data
□ Applicable √ Inapplicable
VI. Taxation
1. Major taxes and tax rates
Tax | Tax basis | Tax rate |
VAT | Taxable income | 3%, 5%, 6%, 9%, 13% |
City maintenance and construction tax | Taxable turnover | 1%, 5%, 7% |
Enterprise income tax | Taxable income | See the following table |
Education surtax | Taxable turnover | 3% |
Local education surtax | Taxable turnover | 2% |
Tax rates applicable for different tax payers
Tax payer | Income tax rate |
The Company | 25% |
Shenzhen FangdaJianke Co., Ltd. (hereinafter FangdaJianke) | 15% |
FangdaZhichuang Technology Co., Ltd, (FangdaZhichuang) | 15% |
Fangda New Material (Jiangxi) Co., Ltd. (hereinafter Fangda New Material) | 15% |
Dongguan Fangda New Material Co., Ltd. (hereinafter Dongguan New Material) | 15% |
Chengdu Fangda Construction Technology Co., Ltd. (hereinafter Chengdu Fangda) | 15% |
Shenzhen Fangda Property Development Co., Ltd. (hereinafter Fangda Property Development) | 25% |
Shenzhen Fangda New Energy Co., Ltd. (hereinafter Fangda New Energy) | 25% |
Shenzhen Fangda Property Development Co., Ltd. (hereinafter Fangda Property Development) | 25% |
Jiangxi Fangda Property Development Co., Ltd. (hereinafter Fangda Property Development) | 25% |
PingxiangFangdaLuxin New Energy Co., Ltd. (hereinafter Luxin New Energy) | 25% |
Nanchang Xinjian Fangda New Energy Co., Ltd. (hereinafter Xinjian New Energy) | 25% |
Dongguan Fangda New Energy Co., Ltd. (hereinafter Dongguan New Energy) | 25% |
Shenzhen QIanhaiKechuangyuan Software Co., Lt.d (hereinafter Kechuangyuan Software) | 15% |
FangdaZhichuang Technology (Hong Kong) Co., Ltd, (Zhichuang Hong Kong) | 16.50% |
Shihui International Holding Co., Ltd. (hereinafter Shihui International) | 16.50% |
Shenzhen Hongjun Investment Co., Ltd. | 25% |
Fangda Australia Pty Ltd (hereinafter Jianke Australia) | 30% |
Shanghai FangdaZhijian Technology Co., Ltd. (hereinafter referred to as Shanghai Zhijian company) | 15% |
Shenzhen Fangda Cloud Rail Technology Co., Ltd. (hereinafter Fangda Cloud Rail) | 25% |
Shanghai FangdaJianzhi Technology Co., Ltd. (hereinafter Shanghai Jianzhi) | 25% |
Shenzhen ZhongrongLitai Investment Co. Ltd. (ZhongrongLitai) | 25% |
Chengdu Fangda Curtain Wall Technology Co., Ltd. (hereinafter Chengdu Curtain Wall) | 25% |
Fangda Southeast Asia Co., Ltd. | 20% |
Shenzhen Xunfu Investment Co., Ltd. (hereinafter referred to as Xunfu Investment) | 25% |
Shenzhen Lifu Investment Co., Ltd. (hereinafter referred to as Lifu Investment) | 25% |
Shenzhen Fangda Investment Partnership (Limited Partnership) (hereinafter referred to as Fangda Partnership) | 25% |
FangdaJianke (Hong Kong) Co., Ltd. (hereinafter Jianke Hong Kong) | 16.50% |
Shenzhen Yunzhu Industrial Co., Ltd. (Hereinafter Yunzhu) | 15% |
2. Tax preference
(1) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation,Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureau, FangdaJianke was entitled toenjoy a tax preference of enterprise income tax of 15% for three years (2018-2020) since the qualifications were awarded on October16, 2018.
(2) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation,Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureau, FangdaZhichuang was entitledto enjoy a tax preference of enterprise income tax of 15% for three years (2018-2020) since the qualifications were awarded onOctober 16, 2018.
(3) According to the Certification of High-tech Enterprise issued by Jiangxi Ministry of Science and Technology, JiangxiMinistry of Finance, Jiangxi National Tax Bureau, and Jiangxi Local Tax Bureau, Fangda New Material was entitled to enjoy a taxpreference of enterprise income tax of 15% for three years (2018-2020) since the qualifications were awarded on August 13, 2018.
(3) On December 14, 2017, the subsidiary Chengdu Fangda obtained the “High-tech Enterprise Certificate” jointly issued bySichuan Science and Technology Department, Sichuan Provincial Department of Finance, and Sichuan Provincial Taxation Bureau,within three years after obtaining the qualification of high-tech enterprises (2020 to 2022), the income tax is levied at 15%.
(5) On March 2, 2016, according to the document issued by Luxi National Tax Bureau, the PV power generation projectundertaken by Subsidiary PingxiangFangdaLuxin New Energy Co., Ltd, became the infrastructure project supported by the centralgovernment. the Company enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016, theCompany entered the exemption period.
(6) On June 2, 2016, according to the document issued by Nanchang Xinjian District National Tax Bureau, the PV powergeneration project undertaken by Subsidiary Nanchang Xinjian Fangda New Energy Co., Ltd, became the infrastructure projectsupported by the central government. the Company enjoys a three-year enterprise income tax relief and 50% reduction for anotherthree years. In 2016, the Company entered the exemption period.
(7) According to the Official Reply of the State Council on Supporting the Development and Opening-up of the QianhaiShenzhen-Hong Kong Modern Service Industry Cooperation Zone in Shenzhen (Guo Han [2012] No. 58) and Notice of the Ministry
of Finance and the State Administration of Taxation on the Preferential Policies and Preferential Catalogue of Enterprise Income Taxin the Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone in the Pingtan ComprehensiveExperimental Zone of Fujian, Hengqin New District, Guangdong (CaiShui [2014] No. 26), the subsidiary Kechuangyuan SoftwareCompany is a software and integrated circuit design enterprise, which belongs to the "encouraged industrial enterprise" in the aboveprovisions, the enterprise income tax shall be levied at a reduced tax rate of 15%.
(8) On December 2, 2019, the subsidiary Dongguan Fangda New Materials Co., Ltd. obtained the “High-tech EnterpriseCertificate” jointly issued by Guangdong Science and Technology Department, Guangdong Provincial Department of Finance, andGuangdong Provincial Taxation Bureau. The income tax shall be levied at 15% within three years after the qualification of thehigh-tech enterprise is recognized (2019 to 2021).
(9) On November 12, 2020, the subsidiary Shanghai Zhijian obtained the certificate of high tech enterprise jointly issued byShanghai Science and Technology Commission, Shanghai Finance Bureau and Shanghai Taxation Bureau. Within three years (from2020 to 2022) after obtaining the qualification of high tech enterprise, the income tax will continue to be charged at 15%.
(10) On December 11, 2020, the subsidiary Yunzhu obtained the certificate of high tech enterprise jointly issued by ShenzhenScience and Technology Innovation Commission, Shenzhen Finance Commission and Shenzhen State Administration of taxation.The certificate number is GR202044202438. Within three years after obtaining the qualification of high tech enterprise (2020-2022),the income tax will be levied at 15%.VII. Notes to the consolidated financial statements
1. Monetary capital
In RMB
Item | Closing balance | Opening balance |
Inventory cash: | 9,176.73 | 482.09 |
Bank deposits | 919,530,095.12 | 1,124,691,042.58 |
Other monetary capital | 326,591,888.80 | 339,282,637.77 |
Total | 1,246,131,160.65 | 1,463,974,162.44 |
Including: total amount deposited in overseas | 43,416,674.79 | 45,275,606.68 |
The total amount of money that has restrictions on use due to mortgage, pledge or freezing | 658,832,074.53 | 435,587,632.71 |
Other note
(1) Among the bank deposits, RMB364,794,086.20 yuan is restricted, including RMB300 million yuan of time deposits,RMB35,956,145.59 yuan of deposits restricted by corporate litigation matters, RMB25,207,868.34 yuan of deposits in real estatedevelopment supervision accounts, RMB3,086,104.96 yuan of deposits in special labor insurance accounts and migrant workers'wages accounts, and RMB543,967.31 yuan of deposits in other guarantee accounts; Among other monetary funds, the use ofrestricted funds is RMB294,037,988.33 yuan, mainly including bill deposit, phased guarantee deposit, guarantee deposit for issuingletter of guarantee, etc. In addition, there are no other funds in the monetary funds at the end of the period thathave restrictions on use and potential recovery risks due to mortgages, pledges or freezing.
(2) In the preparation of the cash flow statement, the above-mentioned deposits and other restricted deposits are not used as cash andcash equivalents.
2. Transactional financial assets
In RMB
Item | Closing balance | Opening balance |
Financial assets measured at fair value with variations accounted into current income account | 132,493,708.09 | 14,382,896.04 |
Including: Investment of financial products | 132,493,708.09 | 14,382,896.04 |
Total | 132,493,708.09 | 14,382,896.04 |
3. Derivative financial assets
In RMB
Item | Closing balance | Opening balance |
Futures hedging contract | 4,478,375.00 | 6,330,475.00 |
Forward foreign exchange contract | 618,115.27 | 643,973.22 |
Total | 5,096,490.27 | 6,974,448.22 |
4. Notes receivable
(1) Classification of notes receivable
In RMB
Item | Closing balance | Opening balance |
Bank acceptance | 10,854,396.27 | 21,081,547.58 |
Commercial acceptance | 107,075,434.04 | 186,083,516.39 |
Total | 117,929,830.31 | 207,165,063.97 |
In RMB
Type | Closing balance | Opening balance | ||||||||
Remaining book value | Bad debt provision | Book value | Remaining book value | Bad debt provision | Book value | |||||
Amount | Proportion | Amount | Provision rate | Amount | Proportion | Amount | Provision rate | |||
Including: | ||||||||||
Notes receivable with | 117,929, | 100.00% | 117,929,8 | 207,165,0 | 100.00% | 207,165,0 |
provision for bad debts by portfolio | 830.31 | 30.31 | 63.97 | 63.97 | ||||||
Including: | ||||||||||
Bank acceptance | 10,854,396.27 | 9.20% | 10,854,396.27 | 21,081,547.58 | 10.18% | 21,081,547.58 | ||||
Commercial acceptance | 107,075,434.04 | 90.80% | 107,075,434.04 | 186,083,516.39 | 89.82% | 186,083,516.39 | ||||
Total | 117,929,830.31 | 100.00% | 117,929,830.31 | 207,165,063.97 | 100.00% | 207,165,063.97 |
If the provision for bad debts of bills receivable is made in accordance with the general model of expected credit losses, please referto the disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Inapplicable
(2) The Group has no endorsed or discounted immature receivable notes at the end of the period.
In RMB
Item | De-recognized amount | Not de-recognized amount |
Bank acceptance | 1,824,969.42 | 9,473,266.27 |
Commercial acceptance | 16,889,399.01 | |
Total | 1,824,969.42 | 26,362,665.28 |
(3) 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 | 32,500,000.00 |
Total | 32,500,000.00 |
5. Account receivable
(1) Account receivable disclosed by categories
In RMB
Type | Closing balance | Opening balance | ||||||||
Remaining book value | Bad debt provision | Book value | Remaining book value | Bad debt provision | Book value | |||||
Amount | Proportion | Amount | Provision rate | Amount | Proportion | Amount | Provision rate |
Account receivable for which bad debt provision is made by group | 90,074,440.13 | 14.69% | 90,074,440.13 | 100.00% | 99,969,069.48 | 12.42% | 99,969,069.48 | 100.00% | ||
Including: | ||||||||||
1. Customer 1 | 54,873,223.21 | 8.95% | 54,873,223.21 | 100.00% | 54,873,223.21 | 6.82% | 54,873,223.21 | 100.00% | ||
2. Customer 2 | 21,739,381.96 | 3.54% | 21,739,381.96 | 100.00% | 21,739,381.96 | 2.70% | 21,739,381.96 | 100.00% | ||
3. Customer 3 | 13,461,834.96 | 2.20% | 13,461,834.96 | 100.00% | 13,461,834.96 | 1.67% | 13,461,834.96 | 100.00% | ||
4. Customer 4 | 7,270,000.00 | 0.90% | 7,270,000.00 | 100.00% | ||||||
5. Customer 5 | 2,624,629.35 | 0.33% | 2,624,629.35 | 100.00% | ||||||
Account receivable for which bad debt provision is made by group | 523,151,364.89 | 85.31% | 76,738,452.81 | 14.67% | 446,412,912.08 | 705,506,680.47 | 87.59% | 88,554,544.28 | 12.55% | 616,952,136.19 |
Including: | ||||||||||
1. Portfolio 1: Engineering operations section | 318,210,909.20 | 51.89% | 66,810,754.82 | 21.00% | 251,400,154.38 | 514,227,513.84 | 63.84% | 78,043,856.98 | 15.18% | 436,183,656.86 |
2. Portfolio 2: Real estate business payments | 115,113,350.31 | 18.77% | 6,381,238.33 | 5.54% | 108,732,111.98 | 110,059,782.48 | 13.66% | 7,310,980.25 | 6.64% | 102,748,802.23 |
3. Portfolio 3: Other business models | 89,827,105.38 | 14.65% | 3,546,459.66 | 3.95% | 86,280,645.72 | 81,219,384.15 | 10.08% | 3,199,707.05 | 3.94% | 78,019,677.10 |
Total | 613,225,805.02 | 100.00% | 166,812,892.94 | 27.20% | 446,412,912.08 | 805,475,749.95 | 100.00% | 188,523,613.76 | 23.41% | 616,952,136.19 |
Separate bad debt provision:
In RMB
Name | Closing balance | |||
Remaining book value | Bad debt provision | Provision rate | Reason | |
Customer 1 | 54,873,223.21 | 54,873,223.21 | 100.00% | Customer credit status deteriorates and is hard to recover |
Customer 2 | 21,739,381.96 | 21,739,381.96 | 100.00% | Customer credit status deteriorates and is hard |
to recover | ||||
Customer 3 | 13,461,834.96 | 13,461,834.96 | 100.00% | Customer credit status deteriorates and is hard to recover |
Total | 90,074,440.13 | 90,074,440.13 | -- | -- |
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 | 154,496,568.47 | 3,028,413.77 | 1.96% |
1-2 years | 44,607,842.82 | 2,524,852.40 | 5.66% |
2-3 years | 33,976,090.42 | 4,335,323.23 | 12.76% |
3-4 years | 14,681,954.21 | 2,901,154.15 | 19.76% |
4-5 years | 28,901,199.88 | 12,473,757.87 | 43.16% |
Over 5 years | 41,547,253.40 | 41,547,253.40 | 100.00% |
Total | 318,210,909.20 | 66,810,754.82 | -- |
Bad 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 | 58,678,054.75 | 586,780.54 | 1.00% |
1-2 years | 4,435,295.56 | 221,764.78 | 5.00% |
2-3 years | 22,273,070.00 | 1,113,653.50 | 5.00% |
4-5 years | 29,726,930.00 | 4,459,039.51 | 15.00% |
Total | 115,113,350.31 | 6,381,238.33 | -- |
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 | 46,022,790.55 | 375,283.28 | 0.73% |
1-2 years | 19,993,830.52 | 408,742.29 | 2.10% |
2-3 years | 19,759,890.58 | 1,628,051.85 | 8.42% |
3-4 years | 3,845,643.61 | 954,088.96 | 24.78% |
4-5 years | 182,238.29 | 157,581.45 | 86.47% |
Over 5 years | 22,711.83 | 22,711.83 | 100.00% |
Total | 89,827,105.38 | 3,546,459.66 | -- |
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) | 259,197,413.77 |
1-2 years | 69,196,361.13 |
2-3 years | 79,310,331.56 |
Over 3 years | 205,521,698.56 |
3-4 years | 29,977,612.72 |
4-5 years | 68,364,402.40 |
Over 5 years | 107,179,683.44 |
Total | 613,225,805.02 |
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
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 | 53,862,071.05 | 53,862,071.05 | Customer credit status deteriorates | Yes |
Customer 2 | 19,289,861.33 | 19,289,861.33 | Customer credit status deteriorates | Yes |
Customer 3 | 13,461,834.96 | 13,461,834.96 | Customer credit status deteriorates | Yes |
Customer 4 | 17,374,148.42 | 17,295,727.82 | Customer credit status deteriorates | Yes |
Total | 103,987,915.76 | 103,909,495.16 |
(2) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
Type | Opening balance | Change in the period | Closing balance | |||
Provision | Written-back or recovered | Canceled | Others | |||
Separate bad debt provision | 99,969,069.48 | 7,270,000.00 | 2,624,629.35 | 90,074,440.13 |
Provision for bad debts by combination | 88,554,544.28 | -11,443,432.01 | 372,659.46 | 76,738,452.81 | ||
Total | 188,523,613.76 | -11,443,432.01 | 7,270,000.00 | 2,997,288.81 | 0.00 | 166,812,892.94 |
Including significant recovery or reversal:
In RMB
Entity | Written-back or recovered amount | Method |
Zhejiang Jiayue Industrial Co., Ltd. | 7,270,000.00 | Settlement recovery |
Total | 7,270,000.00 | -- |
(3) Written-off account receivable during the period
In RMB
Item | Amount |
Engineering receivables | 2,997,288.81 |
(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 |
Customer 1 | 56,823,678.84 | 9.27% | 5,690,277.99 |
Customer 2 | 54,873,223.21 | 8.95% | 54,873,223.21 |
Customer 3 | 31,500,000.00 | 5.14% | 617,400.00 |
Customer 4 | 30,142,992.93 | 4.92% | 1,049,162.02 |
Customer 5 | 22,633,721.50 | 3.69% | 1,994,412.39 |
Total | 195,973,616.48 | 31.97% |
(5) Receivables derecognized due to transfer of financial assets
Customer | Way of transfer | De-recognized amount | Gain or loss related to the de-recognition |
Customer 1 | Factoring | 6,012,240.28 | -238,802.84 |
Customer 2 | Factoring | 7,625,631.21 | -285,712.87 |
Customer 3 | Factoring | 11,897,246.28 | -496,531.57 |
Customer 4 | Factoring | 5,328,588.41 | -319,815.81 |
Customer 5 | Factoring | 9,897,439.00 | -791,795.12 |
Customer 6 | Factoring | 1,608,410.51 | -66,671.30 |
Customer 7 | Factoring | 10,000,000.00 | -178,597.08 |
Customer 8 | Factoring | 3,200,196.11 | -159,527.93 |
Customer 9 | Factoring | 5,093,647.78 | -201,600.83 |
Customer 10 | Factoring | 3,242,714.47 | -126,141.59 |
Customer 11 | Factoring | 9,390,000.00 | -167,702.78 |
Total | 73,296,114.05 | -3,032,899.72 |
6. Receivable financing
In RMB
Item | Closing balance | Opening balance |
Notes receivable | 23,798,104.10 | 10,727,129.28 |
Total | 23,798,104.10 | 10,727,129.28 |
Increase or decrease in the current period of receivables financing and changes in fair value
□ Applicable √ Inapplicable
If the provision for financing impairment of receivables is accrued in accordance with the general expected credit loss model, pleaserefer to the disclosure of other receivables to disclose the relevant information of the impairment provision:
□ Applicable √ Inapplicable
7. Prepayment
(1) Account age of prepayments
In RMB
Age | Closing balance | Opening balance | ||
Amount | Proportion | Amount | Proportion | |
Less than 1 year | 18,729,843.52 | 77.63% | 18,880,088.01 | 78.32% |
1-2 years | 1,887,107.72 | 7.82% | 3,080,312.85 | 12.78% |
2-3 years | 1,707,116.28 | 7.08% | 1,156,139.70 | 4.80% |
Over 3 years | 1,802,051.67 | 7.47% | 989,094.83 | 4.10% |
Total | 24,126,119.19 | -- | 24,105,635.39 | -- |
(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 RMB8,689,564.47, accounting for 36.02% of the totalprepayments at the end of the period.
8. Other receivables
In RMB
Item | Closing balance | Opening balance |
Interest receivable | 1,601,660.58 | 0.00 |
Dividend receivable | 0.00 | |
Other receivables | 166,997,627.69 | 162,282,396.88 |
Total | 168,599,288.27 | 162,282,396.88 |
(1) Receivable interest
1) Receivable interest
In RMB
Item | Closing balance | Opening balance |
Time deposit | 1,601,660.58 | |
Total | 1,601,660.58 | 0.00 |
2) Method of bad debt provision
□ Applicable √ Inapplicable
(2) Other receivables
1) Other receivables are disclosed by nature
In RMB
By nature | Closing balance of book value | Opening balance of book value |
Deposit | 105,115,483.57 | 103,782,569.80 |
Construction borrowing and advanced payment | 53,675,374.44 | 34,052,644.05 |
Staff borrowing and petty cash | 2,685,748.34 | 1,717,094.83 |
Receivable refund of VAT | 422,914.58 | 548,129.42 |
Debt by Luo Huichi | 12,992,291.48 | 12,992,291.48 |
Others | 15,170,689.10 | 12,502,878.08 |
Total | 190,062,501.51 | 165,595,607.66 |
2) Method of bad debt provision
In RMB
Bad debt provision | First stage | Second stage | Third stage | Total |
Expected credit losses in the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
Balance on Friday, January 1, 2021 | 2,253,521.41 | 572,176.59 | 21,456,358.87 | 24,282,056.87 |
Balance on Friday, January 1, 2021 in the current period | —— | —— | —— | —— |
Provision | 203,817.68 | 13,494.90 | -1,357,296.63 | -1,139,984.05 |
Canceled in the current period | 77,199.00 | 77,199.00 | ||
Balance on Wednesday, June 30, 2021 | 2,457,339.09 | 585,671.49 | 20,021,863.24 | 23,064,873.82 |
Changes in book balances with significant changes in the current period
□ Applicable √ Inapplicable
Account age
In RMB
Age | Closing balance |
Within 1 year (inclusive) | 54,856,468.07 |
1-2 years | 11,670,871.98 |
2-3 years | 81,146,799.81 |
Over 3 years | 42,388,361.65 |
3-4 years | 21,134,527.37 |
4-5 years | 1,365,756.20 |
Over 5 years | 19,888,078.08 |
Total | 190,062,501.51 |
3) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
Type | Opening balance | Change in the period | Closing balance | |||
Provision | Written-back or recovered | Canceled | Others | |||
Other receivables and bad debt provision | 24,282,056.87 | -1,139,984.05 | 77,199.00 | 23,064,873.82 |
Total | 24,282,056.87 | -1,139,984.05 | 77,199.00 | 23,064,873.82 |
4) Other receivable written off in the current period
In RMB
Item | Amount |
Other receivable written off | 77,199.00 |
5) Balance of top 5 other receivables at the end of the period
In RMB
Entity | By nature | Closing balance | Age | Percentage (%) | Balance of bad debt provision at the end of the period |
Shenzhen Yikang Real Estate Co. Ltd. | Deposit and advancement | 70,000,000.00 | 2-3 years | 36.83% | 1,043,000.00 |
Bangshen Electronics (Shenzhen) Co., Ltd. | Deposit | 20,000,000.00 | 3-4 years | 10.52% | 298,000.00 |
Shenzhen Rijiasheng Trading Co., Ltd | Advancement | 18,808,945.57 | Less than 1 year | 9.90% | 564,268.37 |
Luo Huichi | Debt by Luo Huichi | 12,992,291.48 | Over 5 years | 6.84% | 12,992,291.48 |
Shenzhen HenggangDakang Co., Ltd. | Deposit | 8,044,000.00 | 2-3 years | 4.23% | 119,855.60 |
Total | -- | 129,845,237.05 | -- | 68.32% | 15,017,415.45 |
9. Inventories
Whether the Company needs to comply with disclosure requirements of the real estate industry.Yes
(1) Classification of inventories
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.3 – Listed Companies Engaged in Property Development.Classified by nature:
In RMB
Item | Closing balance | Opening balance |
Remaining book value | Provision for inventory depreciation or contract performance cost impairment provision | Book value | Remaining book value | Provision for inventory depreciation or contract performance cost impairment provision | Book value | |
Development cost | 210,828,927.04 | 210,828,927.04 | 458,032,158.63 | 458,032,158.63 | ||
Development products | 312,870,562.69 | 312,870,562.69 | 99,012,986.31 | 99,012,986.31 | ||
Contract performance costs | 92,016,666.73 | 464,651.43 | 91,552,015.30 | 140,403,466.43 | 464,651.43 | 139,938,815.00 |
Raw materials | 83,466,750.73 | 55,182.86 | 83,411,567.87 | 61,682,744.96 | 55,182.86 | 61,627,562.10 |
Product in process | 55,364,191.11 | 55,364,191.11 | 66,570,800.79 | 66,570,800.79 | ||
Finished goods in stock | 11,358,399.61 | 11,358,399.61 | 7,784,598.06 | 7,784,598.06 | ||
Low price consumable | 166,748.73 | 166,748.73 | 123,705.51 | 123,705.51 | ||
OEM materials | 5,418,418.28 | 5,418,418.28 | 3,562,856.58 | 3,562,856.58 | ||
Materials in transit | 3,723,431.52 | 3,723,431.52 | 1,178,307.90 | 1,178,307.90 | ||
Total | 775,214,096.44 | 519,834.29 | 774,694,262.15 | 838,351,625.17 | 519,834.29 | 837,831,790.88 |
Development cost and capitalization rate of its interest are disclosed as follows:
In RMB
Item | Starting time | Estimated finish time | Estimated total investment | Opening balance | Transferred to development product in this period | Other decrease in this period | Increase (development cost) in this period | Closing balance | Accumulative capitalized interest | Including: capitalized interest for the current period | Capital source |
Nanchang Fangda Center | Tuesday, May 1, 2018 | Tuesday, April 27, 2021 | 670,000,000.00 | 250,191,619.08 | 223,823,880.71 | 26,367,738.37 | Bank loan and self-owned fund | ||||
Dakang Village Project in Shenzhen | 1 December 2023 | 31 December 2029 | 3,600,000,000.00 | 197,352,043.69 | 683,524.39 | 198,035,568.08 |
FangdaBangshen Industry Park | 1 December 2022 | 31 December 2024 | 870,000,000.00 | 10,488,495.86 | 2,304,863.10 | 12,793,358.96 | |||||
Total | -- | -- | 5,140,000,000.00 | 458,032,158.63 | 223,823,880.71 | 26,367,738.37 | 2,988,387.49 | 210,828,927.04 | -- |
Disclose the main project information of "Development Products" according to the following format:
In RMB
Item | Completion time | Opening balance | Increase | Decrease | Closing balance | Accumulative capitalized interest | Including: capitalized interest for the current period |
Phase I of Fangda Town | Thursday, December 29, 2016 | 99,012,986.31 | 10,093,492.33 | 88,919,493.98 | 3,433,223.79 | ||
Nanchang Fangda Center | Tuesday, April 27, 2021 | 223,823,880.71 | 223,823,880.71 | 9,813,470.29 | 1,537,383.71 | ||
Total | -- | 99,012,986.31 | 223,823,880.71 | 10,093,492.33 | 312,743,374.69 | 13,246,694.08 | 1,537,383.71 |
(2) Provision for inventory depreciation and contract performance cost impairment provision
The inventory depreciation provision is disclosed as follows:
Classified by nature:
In RMB
Item | Opening balance | Increase in this period | Decrease in this period | Closing balance | Remarks | ||
Provision | Others | Recover or write-off | Others | ||||
Contract performance costs | 464,651.43 | 464,651.43 | |||||
Raw materials | 55,182.86 | 55,182.86 | |||||
Total | 519,834.29 | 519,834.29 | -- |
(3) Capitalization rate of interest in the closing inventory balance
As at June 30, 2021, the amount of the capitalization of borrowing costs in the balance of the end-of-period inventory wasRMB13,246,694.08.
(4) Restriction of inventory
Restricted inventory is disclosed by project
In RMB
Item | Opening balance | Closing balance | Reason |
Nanchang Fangda Center | 103,973,925.13 | 87,429,489.76 | Credit Mortgage, Mortgage Loan |
Total | 103,973,925.13 | 87,429,489.76 | -- |
10. Contract assets
In RMB
Item | Closing balance | Opening balance | ||||
Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
Sales funds with conditional collection right | 42,793,840.93 | 1,215,396.98 | 41,578,443.95 | 27,639,344.20 | 351,544.65 | 27,287,799.55 |
Completed but unsettled assets | 1,762,114,432.79 | 141,438,318.05 | 1,620,676,114.74 | 1,540,146,004.75 | 146,024,200.75 | 1,394,121,804.00 |
Unexpired warranty deposit | 692,613.72 | 14,158.36 | 678,455.36 | 12,536,462.04 | 346,482.11 | 12,189,979.93 |
Total | 1,805,600,887.44 | 142,667,873.39 | 1,662,933,014.05 | 1,580,321,810.99 | 146,722,227.51 | 1,433,599,583.48 |
The amount and reasons for major changes in the book value of contract assets during the current period:
In RMB
Item | Change | Reason |
Sales funds with conditional collection right | 14,290,644.40 | It is mainly due to the sales payment with conditional collection right arising from the recognized product sales revenue in the current period |
Completed but unsettled assets | 226,554,310.74 | It is mainly caused by the unsettled assets with conditional collection right generated from the revenue recognized in the project contract this period |
Total | 240,844,955.14 | —— |
If the provision for bad debts of contract assets is made in accordance with the general model of expected credit losses, please refer tothe disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Inapplicable
Provision made for bad debts of contract assets in this period
In RMB
Item | Provision | Transferred back in the current period | Written off in the current period | Reason |
Sales funds with conditional collection right | 863,852.33 | |||
Completed but unsettled assets | 2,744,117.30 | 7,330,000.00 | The reversal of 7.33 million yuan in the current period is due to the reconciliation and recovery in the current period after the individual full provision for impairment in the previous period. | |
Unexpired warranty deposit | -332,323.75 | |||
Total | 3,275,645.88 | 7,330,000.00 | -- |
11. Non-current assets due in 1 year
In RMB
Item | Closing balance | Opening balance |
Contract assets due within one year | 107,518,641.70 | 159,410,690.57 |
Less: provision for impairment | 16,436,432.64 | 17,467,235.75 |
Total | 91,082,209.06 | 141,943,454.82 |
12. Other current assets
In RMB
Item | Closing balance | Opening balance |
Tax to be input | 122,632,551.19 | 136,812,357.07 |
Prepaid income tax | 86,196,746.29 | 88,741,787.42 |
Other prepaid taxes | 20,253,761.57 | 2,373,031.15 |
Deferred discount expense | 6,170,627.16 | 2,644,267.12 |
Contract acquisition cost | 2,156,027.17 | |
Others | 6,225.36 | 495,614.58 |
Total | 235,259,911.57 | 233,223,084.51 |
13. Long-term share equity investment
In RMB
Invested entity | Opening book value | Change (+,-) | Closing book value | Balance of impairment provision at the end of the period | |||||||
Increased investment | Decreased investment | Investment gain and loss recognized using the equity method | Other miscellaneous income adjustment | Other equity change | Cash dividend or profit announced | Impairment provision | Others | ||||
1. Joint venture | |||||||||||
2. Associate | |||||||||||
Shenzhen Ganshang Joint Investment Co., Ltd. | 2,364,798.65 | 404.53 | 2,365,203.18 | ||||||||
Jiangxi Business Innovative Property Joint Stock Co., Ltd. | 53,537,579.30 | -453,298.18 | 53,084,281.12 | ||||||||
Subtotal | 55,902,377.95 | -452,893.65 | 55,449,484.30 | ||||||||
Total | 55,902,377.95 | -452,893.65 | 55,449,484.30 |
14. Investment in other equity tools
In RMB
Item | Closing balance | Opening balance |
Unlisted equity instrument investment | 17,398,629.00 | 17,628,307.59 |
Total | 17,398,629.00 | 17,628,307.59 |
Sub-disclosure of non-tradable equity instrument investment in the current period
In RMB
Item | Dividend recognized in the period | Total gain | Total loss | Amount of other comprehensive income | Reason for measurement at fair value with | Reason for transfer of other miscellaneous |
transferred to retained earnings | variations accounted into current income account | into income | ||||
Shenyang Fangda | 12,170,244.23 | |||||
Shenzhen HuihaiYirong Internet Service Co., Ltd. | 2,772,979.96 |
15. Other non-current financial assets
In RMB
Item | Closing balance | Opening balance |
Financial assets measured at fair value with variations accounted into current income account | 5,198,015.90 | 5,025,186.16 |
Total | 5,198,015.90 | 5,025,186.16 |
16. Investment real estates
(1) Investment real estate measured at costs
√ Applicable □ Inapplicable
In RMB
Item | Houses & buildings | Total |
I. Book value | ||
1. Opening balance | 10,410,691.87 | 10,410,691.87 |
2. Increase in this period | 6,978,132.52 | 6,978,132.52 |
(1) Transfer-in from inventory\fixed assets\construction in progress | 6,978,132.52 | 6,978,132.52 |
3. Decrease in this period | 0.00 | 0.00 |
4. Closing balance | 17,388,824.39 | 17,388,824.39 |
II. Accumulative depreciation and amortization | ||
1. Opening balance | 4,053,723.75 | 4,053,723.75 |
2. Increase in this period | 2,974,583.59 | 2,974,583.59 |
(1) Provision or amortization | 209,680.87 | 209,680.87 |
(2) Other transfer-in | 2,764,902.72 | 2,764,902.72 |
3. Decrease in this period | ||
4. Closing balance | 7,028,307.34 | 7,028,307.34 |
III. Impairment provision | ||
1. Opening balance | ||
2. Increase in this period | ||
3. Decrease in this period | ||
4. Closing balance | ||
IV. Book value | ||
1. Closing book value | 10,360,517.05 | 10,360,517.05 |
2. Opening book value | 6,356,968.12 | 6,356,968.12 |
(2) Investment real estate measured at fair value
√ Applicable □ Inapplicable
In RMB
Item | Houses & buildings | Total |
I. Opening balance | 5,628,291,448.40 | 5,628,291,448.40 |
II. Change in this period | 7,542,132.99 | 7,542,132.99 |
Add: external purchase | 11,083,112.99 | 11,083,112.99 |
Transfer-in from inventory\fixed assets\construction in progress | 8,987,340.00 | 8,987,340.00 |
Less: other transfer-out | 12,528,320.00 | 12,528,320.00 |
III. Closing balance | 5,635,833,581.39 | 5,635,833,581.39 |
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.3 – Listed Companies Engaged in Property Development.Disclosure of investment real estate measured at fair value by projects
In RMB
Item | Location | Completion time | Building area | Rental income in the report period | Opening fair value | Closing fair value | Change in fair value | Reason for the change and report |
Commercial podium of Fangda Town | Shenzhen | 11 October 2017 | 22,565.42 | 16,719,174.95 | 1,340,385,948.00 | 1,340,385,948.00 | ||
Building 1# of Fangda Town | Shenzhen | 29 December 2018 | 72,517.71 | 34,936,181.89 | 3,646,971,680.07 | 3,646,971,680.07 |
Fangda Building | Shenzhen | 28 December 2002 | 17,604.12 | 7,361,567.20 | 334,498,436.00 | 330,957,456.00 | -1.06% | |
Nanchang Fangda Center | Nanchang | Tuesday, April 27, 2021 | 32,354.44 | 302,854,554.33 | 313,937,667.32 | 3.66% | ||
Total | —— | —— | 145,041.69 | 59,016,924.04 | 5,624,710,618.40 | 5,632,252,751.39 | 0.13% | —— |
Whether the Company has investment real estate in the current construction period
□ Yes √ No
Whether there is new investment real estate measured at fair value in the report period
□ Yes √ No
(3) Investment real estate without ownership certificate
In RMB
Item | Book value | Reason |
Nanchang Fangda Center | 313,937,667.32 | Conditions for applying for property right are not met |
17. Fixed assets
In RMB
Item | Closing balance | Opening balance |
Fixed assets | 566,440,865.19 | 481,326,212.63 |
Disposal of fixed assets | 1,891,111.12 | |
Total | 566,440,865.19 | 483,217,323.75 |
(1) Fixed assets
In RMB
Item | Houses & buildings | Mechanical equipment | Transportation facilities | Electronics and other devices | PV power plants | Total |
I. Original book value: | ||||||
1. Opening balance | 415,725,429.92 | 121,496,328.96 | 21,516,442.64 | 46,349,557.98 | 129,596,434.84 | 734,684,194.34 |
2. Increase in this period | 106,511,868.90 | 1,639,089.37 | 275,730.08 | 814,682.92 | 109,241,371.27 |
(1) Purchase | 12,224,293.06 | 1,639,089.37 | 275,730.08 | 814,682.92 | 14,953,795.43 | |
(2) Transfer-in of construction in progress | 81,759,255.84 | 81,759,255.84 | ||||
(3) Increase due to enterprise merger | ||||||
(4) Other increases | 12,528,320.00 | 12,528,320.00 | ||||
3. Decrease in this period | 14,818,152.52 | 3,269,796.62 | 439,458.08 | 405,887.75 | 18,933,294.97 | |
(1) Disposal or retirement | 3,269,706.62 | 439,458.08 | 386,783.23 | 4,095,947.93 | ||
(2) Other decrease | 14,818,152.52 | 90.00 | 19,104.52 | 14,837,347.04 | ||
4. Closing balance | 511,745,585.15 | 119,865,621.71 | 21,352,714.64 | 46,758,353.15 | 129,596,434.84 | 829,318,709.49 |
II. Accumulative depreciation | ||||||
1. Opening balance | 89,797,346.50 | 89,670,126.47 | 16,097,483.98 | 29,337,279.16 | 28,357,356.10 | 253,259,592.21 |
2. Increase in this period | 5,960,601.60 | 2,111,534.26 | 356,399.79 | 982,359.12 | 3,074,220.06 | 12,485,114.83 |
(1) Provision | 5,960,601.60 | 2,111,534.26 | 356,399.79 | 982,359.12 | 3,074,220.06 | 12,485,114.83 |
3. Decrease in this period | 3,629,719.64 | 2,780,502.19 | 389,373.35 | 490,175.91 | 7,289,771.09 | |
(1) Disposal or retirement | 2,780,502.19 | 389,373.35 | 346,138.26 | 3,516,013.80 | ||
(2) Other decrease | 3,629,719.64 | 144,037.65 | 3,773,757.29 | |||
4. Closing balance | 92,128,228.46 | 89,001,158.54 | 16,064,510.42 | 29,829,462.37 | 31,431,576.16 | 258,454,935.95 |
III. Impairment provision | ||||||
1. Opening balance | 41,621.81 | 56,767.69 | 98,389.50 |
2. Increase in this period | ||||||
3. Decrease in this period | 1,920.00 | 1,920.00 | ||||
(1) Disposal or retirement | 1,920.00 | 1,920.00 | ||||
4. Closing balance | 39,701.81 | 56,767.69 | 96,469.50 | |||
IV. Book value | ||||||
1. Closing book value | 419,617,356.69 | 30,824,761.36 | 5,288,204.22 | 16,872,123.09 | 98,164,858.68 | 570,767,304.04 |
2. Opening book value | 325,928,083.42 | 31,784,580.68 | 5,418,958.66 | 16,955,511.13 | 101,239,078.74 | 481,326,212.63 |
(2) Fixed assets without ownership certificate
In RMB
Item | Book value | Reason |
Houses in Urumuqi for offsetting debt | 490,848.03 | Historical reasons |
Yuehai Office Building C 502 | 121,526.97 | Historical reasons |
Construction of Chengdu FangdaXinjin Base | 25,624,991.38 | In the process of applying for property right certificate |
(3) Disposal of fixed assets
In RMB
Item | Closing balance | Opening balance |
Jiangxi new material South Korea composite aluminum plate production line | 1,891,111.12 | |
Total | 1,891,111.12 |
18. Construction in process
In RMB
Item | Closing balance | Opening balance |
Construction in process | 98,594,455.15 | 168,626,803.01 |
Total | 98,594,455.15 | 168,626,803.01 |
(1) Construction in progress
In RMB
Item | Closing balance | Opening balance | ||||
Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
Construction and decoration of self-use part of Building 1 of Fangda Town | 78,213,965.55 | 78,213,965.55 | ||||
Fangda Group East China Construction Base Project | 98,195,599.66 | 98,195,599.66 | 90,101,031.20 | 90,101,031.20 | ||
Design of intelligent gluing robot | 23,242.53 | 23,242.53 | 23,242.53 | 23,242.53 | ||
Standard production line | 288,563.73 | 288,563.73 | 288,563.73 | 288,563.73 | ||
Environmental protection equipment of Xinjin base | 87,049.23 | 87,049.23 | ||||
Total | 98,594,455.15 | 98,594,455.15 | 168,626,803.01 | 168,626,803.01 |
(2) Changes in major construction in process in this period
In RMB
Item | Budget | Opening balance | Increase in this period | Amount transfer-in to fixed assets in this period | Other decrease in this period | Closing balance | Proportion of accumulative engineering investment in the budget | Project progress | Accumulative capitalized interest | Including: capitalized interest for the current period | Interest capitalization rate | Capital source |
Construction and decoratio | 82,840,000.00 | 78,213,965.55 | 3,545,290.29 | 81,759,255.84 | 98.70% | Completed | 3,253,136.04 | Self-owned fund |
n of self-use part of Building 1 of Fangda Town | ||||||||||||
Fangda Group East China Construction Base Project | 105,060,000.00 | 90,101,031.20 | 8,094,568.46 | 98,195,599.66 | 93.47% | In construction | 3,703,581.41 | 1,067,732.34 | 5.46% | Loans from financial institutions+ self-owned fund | ||
Total | 187,900,000.00 | 168,314,996.75 | 11,639,858.75 | 81,759,255.84 | 98,195,599.66 | -- | -- | 6,956,717.45 | 1,067,732.34 | -- |
19. Use right assets
In RMB
Item | Houses & buildings | Transportation facilities | Total |
1. Opening balance | 5,889,664.28 | 1,319,251.12 | 7,208,915.40 |
2. Increase in this period | 20,997,165.18 | 20,997,165.18 | |
4. Closing balance | 26,886,829.46 | 1,319,251.12 | 26,886,829.46 |
2. Increase in this period | 2,136,566.18 | 304,531.63 | 2,441,097.81 |
(1) Provision | 2,136,566.18 | 304,531.63 | 2,441,097.81 |
4. Closing balance | 2,136,566.18 | 304,531.63 | 2,441,097.81 |
1. Closing book value | 24,750,263.28 | 1,014,719.49 | 25,764,982.77 |
2. Opening book value | 5,889,664.28 | 1,319,251.12 | 7,208,915.40 |
20. Intangible assets
(1) Intangible assets
In RMB
Item | Land using right | Patent | Unpatented technologies | Software | Total |
I. Book value | |||||
1. Opening | 80,404,737.13 | 8,982,747.17 | 19,357,024.16 | 108,744,508.46 |
balance | |||||
2. Increase in this period | 1,450,061.46 | 1,450,061.46 | |||
(1) Purchase | 1,450,061.46 | 1,450,061.46 | |||
3. Decrease in this period | |||||
4. Closing balance | 80,404,737.13 | 8,982,747.17 | 20,807,085.62 | 110,194,569.92 | |
II. Accumulative amortization | |||||
1. Opening balance | 15,075,529.76 | 8,472,024.78 | 7,995,343.05 | 31,542,897.59 | |
2. Increase in this period | 1,147,670.62 | 103,185.07 | 859,768.58 | 2,110,624.27 | |
(1) Provision | 1,147,670.62 | 103,185.07 | 859,768.58 | 2,110,624.27 | |
3. Decrease in this period | |||||
4. Closing balance | 16,223,200.38 | 8,575,209.85 | 8,855,111.63 | 33,653,521.86 | |
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 | 64,181,536.75 | 407,537.32 | 11,951,973.99 | 76,541,048.06 | |
2. Opening book value | 65,329,207.37 | 510,722.39 | 11,361,681.11 | 77,201,610.87 |
(2) Failure to obtain the land use right certificates
At the end of the period, the Company had no land use right without the property right certificate.
21. Long-term amortizable expenses
In RMB
Item | Opening balance | Increase in this period | Amortized amount in this period | Other decrease | Closing balance |
Decoration cost of headquarters of Fangda Town building No.1 | 2,925,988.72 | 166,589.69 | 2,759,399.03 | ||
XuanfengChayuan village and Zhuyuan village land transfer compensation | 1,084,628.66 | 28,050.78 | 1,056,577.88 | ||
Waterproofing works for employee dormitories | 631,470.05 | 79,291.98 | 552,178.07 | ||
Warehouse addition and renovation project | 572,782.87 | 120,489.30 | 452,293.57 | ||
Plant ground reconstruction project | 406,755.71 | 64,727.88 | 43,581.00 | 427,902.59 | |
Property insurance premium | 360,772.95 | 79,923.61 | 116,279.12 | 324,417.44 | |
Membership fees | 413,749.88 | 15,000.00 | 117,500.04 | 311,249.84 | |
Rectification works of rainwater and sewage diversion pipeline | 328,751.71 | 21,916.80 | 306,834.91 | ||
Others | 1,111,327.20 | 108,306.80 | 402,237.48 | 817,396.52 | |
Total | 4,581,487.32 | 3,522,698.72 | 1,095,936.19 | 7,008,249.85 |
22. Differed income tax assets and differed income tax liabilities
(1) Non-deducted deferred income tax assets
In RMB
Item | Closing balance | Opening balance | ||
Deductible temporary | Deferred income tax | Deductible temporary | Deferred income tax |
difference | assets | difference | assets | |
Assets impairment provision | 245,456,559.19 | 46,067,705.01 | 263,315,510.54 | 38,465,248.35 |
Unrealized profit of internal transactions | 135,859,744.95 | 33,964,936.24 | 135,859,744.95 | 33,964,936.24 |
Deductible loss | 98,962,421.46 | 36,608,601.11 | 122,522,156.58 | 29,105,371.97 |
Credit impairment provision | 209,492,239.65 | 33,697,512.85 | 212,717,683.70 | 44,512,473.69 |
Unrealizable gross profit | 118,170,953.89 | 28,937,296.23 | 130,105,754.96 | 31,898,500.96 |
Anticipated liabilities | 30,000,528.43 | 7,068,448.87 | 33,425,500.13 | 7,715,527.38 |
Deferred earning | 2,155,083.48 | 318,970.24 | 2,314,029.86 | 342,765.63 |
Change in fair value | 631,192.72 | 94,678.94 | 1,520,569.70 | 228,085.49 |
Others | 1,679,786.49 | 416,426.25 | ||
Total | 840,728,723.77 | 186,758,149.49 | 903,460,736.91 | 186,649,335.96 |
(2) Non-deducted deferred income tax liabilities
In RMB
Item | Closing balance | Opening balance | ||
Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
Change in fair value | 4,126,613,255.88 | 1,031,205,476.48 | 4,126,893,826.17 | 1,031,090,409.04 |
Estimated gross profit at the time when the recognized income of the real estate project fails to meet the tax obligation | 4,152,000.00 | 1,038,000.00 | ||
Acquire premium to form inventory | 1,535,605.48 | 383,901.37 | 1,535,605.47 | 383,901.37 |
Rental income | 28,631,156.82 | 7,157,789.20 | 26,439,158.17 | 6,609,789.56 |
Total | 4,160,932,018.18 | 1,039,785,167.05 | 4,154,868,589.81 | 1,038,084,099.97 |
(3) Net deferred income tax assets or liabilities listed
In RMB
Item | Deferred income tax assets and liabilities at the end of the period | Offset balance of deferred income tax assets or liabilities after offsetting | Deferred income tax assets and liabilities at the beginning of the period | Offset balance of deferred income tax assets or liabilities after offsetting |
Deferred income tax assets | 186,758,149.49 | 186,649,335.96 | ||
Deferred income tax liabilities | 1,039,785,167.05 | 1,038,084,099.97 |
(4) Details of unrecognized deferred income tax assets
In RMB
Item | Closing balance | Opening balance |
Deductible temporary difference | 56,487.23 | 130,889.01 |
Deductible loss | 6,884,305.40 | 7,336,111.24 |
Total | 6,940,792.63 | 7,467,000.25 |
(5) Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RMB
Year | Closing amount | Opening amount | Remarks |
2022 | 1,270,623.72 | 1,270,623.72 | |
2023 | 4,575,983.46 | 4,575,983.46 | |
2024 | 789,748.15 | 1,276,235.76 | |
2025 | 117,456.13 | 213,268.30 | |
2026 | 130,493.94 | ||
Total | 6,884,305.40 | 7,336,111.24 | -- |
23. Other non-current assets
In RMB
Item | Closing balance | Opening balance | ||||
Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
Contract assets | 98,819,964.74 | 8,072,414.04 | 90,747,550.70 | 81,494,380.56 | 6,412,571.95 | 75,081,808.61 |
Prepaid house and equipment amount | 16,557,772.42 | 16,557,772.42 | 29,735,880.24 | 29,735,880.24 | ||
Total | 115,377,737.16 | 8,072,414.04 | 107,305,323.12 | 111,230,260.80 | 6,412,571.95 | 104,817,688.85 |
24. Short-term borrowings
(1) Classification of short-term borrowings
In RMB
Item | Closing balance | Opening balance |
Loan by pledge | 30,045,466.66 | |
Guarantee loan | 10,012,083.34 | 200,013,291.68 |
Credit borrow | 490,203,611.11 | 346,029,354.19 |
Discount loans such as bills of exchange | 674,415,505.30 | 472,162,215.09 |
Total | 1,174,631,199.75 | 1,048,250,327.62 |
25. Derivative financial liabilities
In RMB
Item | Closing balance | Opening balance |
Forward foreign exchange contract | 915,234.93 | |
Total | 915,234.93 |
26. Notes payable
In RMB
Type | Closing balance | Opening balance |
Commercial acceptance | 144,096,887.36 | 651,222,454.25 |
Bank acceptance | 540,201,722.38 | 215,002,061.17 |
Total | 684,298,609.74 | 866,224,515.42 |
The total amount of bills payable due and unpaid at the end of the period was RMB7,128,013.05 yuan, which was caused by theother party's failure to prompt for payment.
27. Account payable
(1) Account payable
In RMB
Item | Closing balance | Opening balance |
Account repayable and engineering repayable | 807,191,590.64 | 884,174,693.50 |
Construction payable | 22,116,236.64 | 98,783,841.73 |
Payable installation and implementation fees | 294,400,555.72 | 295,439,323.67 |
Others | 4,252,626.14 | 4,450,130.01 |
Total | 1,127,961,009.14 | 1,282,847,988.91 |
(2) Significant payables aging more than 1 year
In RMB
Item | Closing balance | Reason |
Supplier 1 | 76,327,378.14 | Not mature |
Supplier 2 | 19,433,026.36 | Not mature |
Supplier 3 | 18,646,902.62 | Not mature |
Total | 114,407,307.12 | -- |
28. Prepayment received
(1) Prepayment received
In RMB
Item | Closing balance | Opening balance |
Rent and others | 3,726,440.79 | 1,544,655.62 |
Total | 3,726,440.79 | 1,544,655.62 |
29. Contract liabilities
In RMB
Item | Closing balance | Opening balance |
Project funds collected in advance | 136,552,610.74 | 195,922,455.76 |
Real estate sales payment | 27,779,823.59 | 62,466,576.69 |
Payment for materials, etc | 2,583,050.70 | 7,098,080.67 |
Total | 166,915,485.03 | 265,487,113.12 |
The amount and reason for the significant change in the book value during the reporting period
In RMB
Item | Change | Reason |
Project funds collected in advance | -59,369,845.02 | This is mainly due to the decrease in advance receipts due to the revenue recognized in the current period of the project contract |
Real estate sales payment | -34,686,753.10 | This is mainly due to the decrease in advance receipts due to the |
recognition of income from house delivery and occupation of Nanchang Fangda Center project in this period | ||
Total | -94,056,598.12 | —— |
30. Employees’ wage payable
(1) Employees’ wage payable
In RMB
Item | Opening balance | Increase | Decrease | Closing balance |
1. Short-term remuneration | 60,855,743.99 | 153,476,290.98 | 187,488,204.44 | 26,843,830.53 |
2. Retirement pension program-defined contribution plan | 38,452.79 | 7,056,167.15 | 7,058,660.69 | 35,959.25 |
3. Dismiss compensation | 321,692.29 | 321,692.29 | ||
Total | 60,894,196.78 | 160,854,150.42 | 194,868,557.42 | 26,879,789.78 |
(2) Short-term remuneration
In RMB
Item | Opening balance | Increase | Decrease | Closing balance |
1. Wage, bonus, allowance and subsidies | 60,093,523.10 | 140,157,327.87 | 174,220,078.01 | 26,030,772.96 |
2. Employee welfare | 6,007,801.18 | 5,993,145.73 | 14,655.45 | |
3. Social insurance | 150.39 | 2,931,793.61 | 2,931,944.00 | |
Including: medical insurance | 2,531,013.15 | 2,531,013.15 | ||
Labor injury insurance | 150.39 | 104,357.72 | 104,508.11 | |
Breeding insurance | 296,422.74 | 296,422.74 | ||
4. Housing fund | 41,608.00 | 3,840,165.69 | 3,837,787.69 | 43,986.00 |
5. Labor union budget and staff education fund | 564,651.81 | 508,442.72 | 505,249.01 | 567,845.52 |
6. Short-term paid leave | 155,810.69 | 30,759.91 | 186,570.60 | |
Total | 60,855,743.99 | 153,476,290.98 | 187,488,204.44 | 26,843,830.53 |
(3) Defined contribution plan
In RMB
Item | Opening balance | Increase | Decrease | Closing balance |
1. Basic pension | 38,302.40 | 6,837,610.97 | 6,839,954.12 | 35,959.25 |
2. Unemployment insurance | 150.39 | 218,556.18 | 218,706.57 | |
Total | 38,452.79 | 7,056,167.15 | 7,058,660.69 | 35,959.25 |
31. Taxes payable
In RMB
Item | Closing balance | Opening balance |
VAT | 2,522,107.96 | 4,241,613.97 |
Enterprise income tax | 26,820,215.06 | 14,495,521.72 |
Personal income tax | 1,033,200.45 | 1,118,590.56 |
City maintenance and construction tax | 624,407.20 | 814,163.97 |
Land using tax | 279,217.10 | 242,187.59 |
Property tax | 1,170,989.82 | 317,791.55 |
Education surtax | 350,180.76 | 432,267.04 |
Local education surtax | 95,625.85 | 169,248.62 |
Land VAT | 3,277,497.08 | 337,655,257.61 |
Others | 30,387.70 | 838,881.79 |
Total | 36,203,828.98 | 360,325,524.42 |
32. Other payables
In RMB
Item | Closing balance | Opening balance |
Dividend payable | 6,000,000.00 | |
Other payables | 158,525,255.26 | 147,635,067.86 |
Total | 158,525,255.26 | 153,635,067.86 |
(1) Dividend payable
In RMB
Item | Closing balance | Opening balance |
Common share dividend | 6,000,000.00 |
Total | 6,000,000.00 |
(2) Other payables
1) Other payables presented by nature
In RMB
Item | Closing balance | Opening balance |
Performance and quality deposit | 51,614,323.81 | 37,137,147.11 |
Deposit | 20,500,389.65 | 17,623,656.22 |
Reserved expense | 9,799,122.02 | 10,861,930.30 |
Others | 76,611,419.78 | 82,012,334.23 |
Total | 158,525,255.26 | 147,635,067.86 |
(2) Significant payables aging more than 1 year
In RMB
Item | Closing balance | Reason |
Shenzhen Yikang Real Estate Co. Ltd. | 25,062,852.92 | Affiliated party payment |
Total | 25,062,852.92 | -- |
33. Non-current liabilities due within 1 year
In RMB
Item | Closing balance | Opening balance |
Long-term loans due within 1 year | 118,173,496.59 | 103,359,833.57 |
Lease liabilities due within one year | 1,323,121.32 | 2,106,913.21 |
Total | 119,496,617.91 | 105,466,746.78 |
34. Other current liabilities
In RMB
Item | Closing balance | Opening balance |
Unterminated notes receivable | 19,329,820.88 | 82,447,039.97 |
Substituted money on VAT | 17,383,794.35 | 25,241,385.72 |
Total | 36,713,615.23 | 107,688,425.69 |
35. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
Item | Closing balance | Opening balance |
Loan by pledge | 115,661,462.35 | 231,295,035.65 |
Guarantee, mortgage and pledge loan | 1,368,500,000.00 | 868,116,426.70 |
Total | 1,484,161,462.35 | 1,099,411,462.35 |
Notes to classification of long-term borrowings:
The pledge in the above guarantee, mortgage and pledge loan is based on the 100% equity of Fangda Real Estate Co., Ltd., asubsidiary of the Company, and lease and the rent receivable pledge of Fangda Town rental property.Other note, including interest rate range:
The interest rate period of long-term loan is 3%-7%.
36. Lease liabilities
In RMB
Item | Closing balance | Opening balance |
House lease | 24,199,811.38 | 4,421,707.15 |
Other leases | 419,368.32 | 680,295.04 |
Total | 24,619,179.70 | 5,102,002.19 |
37. Anticipated liabilities
In RMB
Item | Closing balance | Opening balance | Reason |
Pending lawsuit | 25,683,696.08 | 27,017,023.60 | Penalty for delay in handling certificate of title |
Product quality warranty | 4,316,832.35 | 6,408,476.53 | Product quality warranty |
Total | 30,000,528.43 | 33,425,500.13 | -- |
Note: including related significant assumptions and estimates for anticipated liabilitiesFor details of the matters involved in the litigation of liquidated damages, see description of ③ of XIII. Commitments andcontingencies 2. Contingencies (1).
38. Deferred earning
In RMB
Item | Opening balance | Increase | Decrease | Closing balance | Reason |
Government subsidy | 9,168,492.17 | 325,310.66 | 8,843,181.51 | See the following table | |
Total | 9,168,492.17 | 325,310.66 | 8,843,181.51 | -- |
Items involving government subsidies:
In RMB
Liabilities | Opening balance | Amount of new subsidy | Amount included in non-operating revenue | Other misc. gains recorded in this period | Costs offset in the period | Other change | Closing balance | Related to assets/earning |
Railway transport screen door controlling system and information transmission technology | 58,749.53 | 9,452.16 | 49,297.37 | Assets-related | ||||
Major investment project prize from Industry and Trade Development Division of Dongguan Finance Bureau | 1,566,667.10 | 28,571.40 | 1,538,095.70 | Assets-related | ||||
Distributed PV power generation project subsidy sponsored by Dongguan Reform and Development Commission | 368,750.21 | 12,499.98 | 356,250.23 | Assets-related | ||||
Subsidized land transfer | 173,553.23 | 1,862.82 | 171,690.41 | Assets-related | ||||
Special subsidy for industrial | 800,000.00 | 800,000.00 | Assets-related |
transformation, upgrading and development | ||||||||
Enterprise informationization subsidy project of Shenzhen Small and Medium Enterprise Service Agency | 420,000.00 | 24,000.00 | 396,000.00 | Assets-related | ||||
National Industry Revitalization and Technology Renovation Project fund | 5,685,712.10 | 153,864.30 | 5,531,847.80 | Assets-related | ||||
Shenzhen Science and Technology Innovation Committee Technology Innovation Subsidy | 95,060.00 | 95,060.00 | 0.00 | Earning-related | ||||
Total | 9,168,492.17 | 325,310.66 | 8,843,181.51 |
39. Capital share
In RMB
Opening balance | Change (+,-) | Closing balance | |||||
Issued new shares | Bonus shares | Transferred from reserves | Others | Subtotal | |||
Total of capital shares | 1,088,278,951.00 | -14,404,724.00 | -14,404,724.00 | 1,073,874,227.00 |
Others:
① The decrease in share capital was due to the cancellation of B shares repurchased by the Company during the reporting period.
② As of June 30, 2021, there are 2,302,093 shares with limited sales conditions in the closing balance, all of which are held by
senior executives.
40. Capital reserve
In RMB
Item | Opening balance | Increase | Decrease | Closing balance |
Capital premium (share capital premium) | 19,005,491.05 | 123,294,737.60 | 21,542,953.69 | 123,294,737.60 |
Other capital reserves | 1,454,097.35 | 1,454,097.35 | ||
Total | 20,459,588.40 | 123,294,737.60 | 21,542,953.69 | 122,211,372.31 |
Other note, including explanation about the reason of the change:
The increase of RMB123,294,737.60 yuan in capital reserve in the current period is due to the premium transfer of part of the equityof Zhichuang Technology, a holding subsidiary of the Company; The capital reserve decreased by RMB21,542,953.69 yuan in thecurrent period due to the Company's acquisition of 100% equity of Yunzhu.
41. Shares in stock
In RMB
Item | Opening balance | Increase | Decrease | Closing balance |
Shares in stock | 42,748,530.12 | 42,748,530.12 | ||
Total | 42,748,530.12 | 42,748,530.12 |
Other note, including explanation about the reason of the change:
At the second meeting of the ninth board of directors held on June 23, 2020, the Company considered and approved the proposal torepurchase part of the Company's domestic listed foreign shares (B shares) in 2020. From July 23, 2020 to September 22, 2020,14,404,724 shares were repurchased through centralized competitive bidding, the highest price was HK $3.47/share and the lowestprice was HK $3.16/share. The actual payment was HK $48,359,819.24 (including transaction costs), which was included in treasuryshares of RMB 42,748,530.12. On April 23, 2021, the Company completed the cancellation of the repurchase of 14,404,724 B shares,reduced the share capital of 14,404,724 shares and offset the surplus reserve of RMB28,343,806.12.
42. 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 | Less: Income tax expenses | After-tax amount attributed to the parent | After-tax amount attributed to minority shareholders |
in previous terms | ||||||||
1. Other misc. incomes that cannot be re-classified into gain and loss | -11,670,984.54 | -229,678.59 | -229,678.59 | -11,900,663.13 | ||||
Fair value change of investment in other equity tools | -11,670,984.54 | -229,678.59 | -229,678.59 | -11,900,663.13 | ||||
2. Other misc. incomes that will be re-classified into gain and loss | 13,749,152.17 | 1,207,423.43 | 643,973.21 | 358,625.78 | 228,217.85 | -23,393.41 | 13,977,370.02 | |
Cash flow hedge reserve | 5,150,331.29 | -318,749.80 | 643,973.21 | -144,408.45 | -785,690.88 | -32,623.68 | 4,364,640.41 | |
Translation difference of foreign exchange statement | -157,732.58 | -485,963.69 | -495,193.96 | 9,230.27 | -652,926.54 | |||
Investment real estate measured at fair value | 8,756,553.46 | 2,012,136.92 | 503,034.23 | 1,509,102.69 | 10,265,656.15 | |||
Other miscellaneous income | 2,078,167.63 | 977,744.84 | 643,973.21 | 358,625.78 | -1,460.74 | -23,393.41 | 2,076,706.89 |
43. Surplus reserves
In RMB
Item | Opening balance | Increase | Decrease | Closing balance |
Statutory surplus reserves | 106,783,436.96 | 106,783,436.96 | ||
Total | 106,783,436.96 | 106,783,436.96 |
Note, including explanation about the reason of the change:
If the cost of treasury shares written off in the current period is higher than the corresponding capital stock cost, the surplus reserve ofRMB28,343,806.12 yuan is offset at the time of write off; The acquisition of 100% equity of Yunzhu in the current period offset thesurplus reserve of RMB78,439,630.84 yuan.
44. Retained profit
In RMB
Item | Current period | Last period |
Adjustment on retained profit of previous period | 4,215,005,541.52 | 3,898,626,177.99 |
Total of retained profit at beginning of year adjusted (+ for increase, - for decrease) | 2,521,701.04 | 9,026,682.67 |
Retained profit adjusted at beginning of year | 4,217,527,242.56 | 3,907,652,860.66 |
Plus: Net profit attributable to owners of the parent | 111,488,701.33 | 147,784,781.12 |
Common share dividend payable | 54,413,947.55 | |
Adjustment to consolidation of entities under common control | 24,107,813.58 | |
Closing retained profit | 4,304,908,130.31 | 4,001,023,694.23 |
Details of retained profit adjusted at beginning of the period
1) Retrospective adjustment due to adopting of the Enterprise Accounting Standard and related regulations, included the retainedprofit by RMB0.
2) Variation of accounting policies, influenced the retained profit by RMB0.00.
3) Correction of material accounting errors, influenced the retained profit by RMB0.00.
4) Change of consolidation range caused by merger of entities under common control, influenced the retained profit by RMB0.
5) Other adjustment influenced the retained profit by RMB0.
45. Operational revenue and costs
In RMB
Item | Amount occurred in the current period | Occurred in previous period | ||
Income | Cost | Income | Cost | |
Main business | 1,500,250,618.47 | 1,201,118,172.57 | 1,203,907,359.56 | 966,357,682.01 |
Other businesses | 68,528,216.51 | 7,523,630.61 | 52,350,863.45 | 5,890,231.85 |
Total | 1,568,778,834.98 | 1,208,641,803.18 | 1,256,258,223.01 | 972,247,913.86 |
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 | 1,097,171,007.07 | 267,687,038.55 | 188,235,871.36 | 8,323,350.81 | 7,361,567.20 | 1,568,778,834.98 |
Including: | ||||||
Curtain wall system and materials | 1,097,171,007.07 | 1,097,171,007.07 | ||||
Subway screen door and service | 267,687,038.55 | 267,687,038.55 | ||||
Real estate sales | 188,235,871.36 | 188,235,871.36 | ||||
PV power generation products | 8,323,350.81 | 8,323,350.81 | ||||
Others | 7,361,567.20 | 7,361,567.20 |
Total | 1,097,171,007.07 | 267,687,038.55 | 188,235,871.36 | 8,323,350.81 | 7,361,567.20 | 1,568,778,834.98 |
Information related to performance obligations:
The two businesses of the Company's curtain wall system and materials, subway screen doors and services are mainlythe contracts corresponding to the engineering projects. Usually, a contract constitutes a single performanceobligation and is a performance obligation performed within a certain period of time. The Company recognizesrevenue according to the performance progress.The sales of photovoltaic power generation products and real estate belong to contracts corresponding to commoditysales. Usually, a contract constitutes a single performance obligation and is a performance obligation at a certainpoint in time. Revenue is recognized when the customer obtains control of the relevant product.
Information related to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the amount of revenue corresponding to the performance obligations that have been signed buthave not been performed or completed is RMB5,996,487,536.97 yuan, of which RMB2,009,854,086.60 yuan is expected to berecognized in the second half of 2021, RMB2,926,253,777.06 yuan is expected to be recognized in 2022, and RMB1,060,379,673.31yuan is expected to be recognized in 2023 and later years.Other noteThe Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.3 – Listed Companies Engaged in Property Development.Top-5 projects in terms of income received and recognized in the reporting period:
In RMB
No. | Item | Balanace |
1 | Fangda Town | 35,672,181.90 |
2 | Nanchang Fangda Center | 63,168,965.12 |
46. Taxes and surcharges
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
City maintenance and construction tax | 3,078,129.75 | 2,421,623.93 |
Education surtax | 1,915,966.95 | 1,711,891.44 |
Property tax | 2,864,691.90 | 2,227,891.98 |
Land using tax | 751,644.13 | 684,461.08 |
Vehicle usage tax | 51,320.40 | 9,780.00 |
Stamp tax | 1,249,671.01 | 475,666.06 |
Land VAT | 25,705,049.49 | |
Others | 237,220.25 | 58,508.26 |
Total | 35,853,693.88 | 7,589,822.75 |
47. Sales expense
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Labor costs | 10,473,510.26 | 10,938,678.79 |
Sales agency fee | 7,400,124.58 | 1,726,247.64 |
Entertainment expense | 2,041,529.62 | 888,653.78 |
Travel expense | 793,223.58 | 503,408.24 |
Advertisement and promotion fee | 716,856.99 | 934,902.84 |
Rental | 1,297,595.54 | 1,125,898.88 |
Office costs | 398,521.93 | 262,176.26 |
Material consumption | 367,137.80 | 490,460.47 |
Others | 1,946,414.51 | 4,373,115.41 |
Total | 25,434,914.81 | 21,243,542.31 |
48. Management expense
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Labor costs | 42,525,730.63 | 39,047,937.75 |
Maintenance costs | 3,088,854.95 | 2,003,855.95 |
Agencies | 4,747,575.30 | 5,871,925.65 |
Depreciation and amortization | 4,238,728.47 | 4,118,354.72 |
Office expense | 3,742,123.03 | 4,388,983.49 |
Entertainment expense | 2,159,401.56 | 1,549,406.05 |
Rental | 1,171,537.38 | 1,166,665.68 |
Lawsuit | 2,650,332.80 | 274,438.54 |
Travel expense | 870,897.82 | 675,099.35 |
Property management fee | 728,524.88 | 414,235.37 |
Water and electricity | 385,129.66 | 104,054.76 |
Material consumption | 719,301.89 | 161,161.21 |
Others | 2,474,315.56 | 3,420,857.36 |
Total | 69,502,453.93 | 63,196,975.88 |
49. R&D cost
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Labor costs | 47,607,487.83 | 29,168,628.85 |
Material costs | 23,898,889.12 | 17,682,878.47 |
Agencies | 3,027,319.72 | 2,526,263.58 |
Rental | 992,048.08 | 1,105,564.58 |
Depreciation costs | 788,799.38 | 737,427.60 |
Amortization of intangible assets | 507,608.85 | 578,107.24 |
Travel expense | 176,681.32 | 34,950.20 |
Others | 1,646,760.56 | 662,340.73 |
Total | 78,645,594.86 | 52,496,161.25 |
50. Financial expense
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Interest expense | 46,707,567.90 | 46,974,588.65 |
Less: interest capitalization | 3,070,467.85 | 3,809,610.82 |
Less: discount government subsidies | ||
Less: Interest income | 6,976,161.44 | 6,956,602.08 |
Acceptant discount | 5,472,503.74 | 6,049,511.72 |
Exchange gain/loss | 1,703,136.52 | -311,399.26 |
Commission charges and others | 3,000,733.43 | 2,935,649.45 |
Total | 46,837,312.30 | 44,882,137.66 |
51. Other gains
In RMB
Source | Amount occurred in the current period | Occurred in previous period |
Government subsidies related to deferred income (related to assets) | 206,250.66 | 158,379.99 |
Government subsidies related to deferred income (related to income) | 95,060.00 | 34,980.00 |
Government subsidies directly included in current profits and losses (related to income) | 5,791,459.18 | 2,893,461.97 |
Other items related to daily activities and included in other income | 514,288.22 | 3,127,290.81 |
Total | 6,607,058.06 | 6,214,112.77 |
52. Investment income
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Gains from long-term equity investment measured by equity | -452,893.65 | -375,202.09 |
Investment income from disposal of trading financial assets and derivative financial assets | 2,953,049.83 | 2,297,898.75 |
Financial assets derecognised as a result of amortized cost | -3,032,899.72 | -2,255,794.10 |
Others | -309,081.13 | |
Total | -532,743.54 | -642,178.57 |
53. Income from fair value fluctuation
In RMB
Source of income from fluctuation of fair value | Amount occurred in the current period | Occurred in previous period |
Transactional financial assets | 41,277.62 | |
Other non-current financial assets | 172,829.74 | 9,107.28 |
Total | 172,829.74 | 50,384.90 |
54. Credit impairment loss
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Bad debt loss of other receivables | 1,139,984.05 | -712,877.78 |
Bad debt loss of account receivable | 18,713,432.01 | 55,383,671.10 |
Total | 19,853,416.06 | 54,670,793.32 |
55. Assets impairment loss
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Contract asset impairment loss | 3,466,913.89 | 20,219,822.04 |
Total | 3,466,913.89 | 20,219,822.04 |
56. 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) | -2,027,304.03 | -1,981.72 |
57. 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 | 195,216.06 | 172,413.23 | 195,216.06 |
Payable account not able to be paid | 539,817.35 | 539,817.35 | |
Compensation received | 36,000.00 | 4,740.00 | 36,000.00 |
Others | 430,073.05 | 103,468.04 | 430,073.05 |
Total | 1,201,106.46 | 280,621.27 | 1,201,106.46 |
58. Non-business expenses
In RMB
Item | Amount occurred in the current period | Occurred in previous period | Amount accounted into the current accidental gain/loss |
Donation | 3,127,302.00 | 5,113,500.00 | 3,127,302.00 |
Loss from retirement os damaged non-current assets | 101,810.29 | 123,770.81 | 101,810.29 |
Penalty and overdue fine | 54,643.82 | 3,731.07 | 54,643.82 |
Others | 196,618.40 | 34,866.45 | 196,618.40 |
Total | 3,480,374.51 | 5,275,868.33 | 3,480,374.51 |
59. 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 | 9,913,372.73 | 16,599,518.26 |
Deferred income tax expenses | 4,023,120.93 | 5,659,613.66 |
Total | 13,936,493.66 | 22,259,131.92 |
(2) Adjustment process of accounting profit and income tax expense
In RMB
Item | Amount occurred in the current period |
Total profit | 129,123,964.15 |
Income tax expenses calculated based on the legal (or applicable) tax rates | 32,280,991.04 |
Impacts of different tax rates applicable for some subsidiaries | -10,512,008.61 |
Impacts of income tax before adjustment | 33,438.03 |
Impacts of non-deductible cost, expense and loss | 1,291,544.82 |
Impacts of using deductible loss of unrecognized deferred income tax assets | -2,863.58 |
Deductible temporary difference and deductible loss of unrecognized deferred income tax assets | 130,493.94 |
Profit and loss of associates and joint ventures calculated using the equity method | 113,223.41 |
Taxation impact of R&D expense and (presented with “-”) | -9,398,325.39 |
Income tax expenses | 13,936,493.66 |
60. Other miscellaneous income
See Note VII 42.
61. 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 | 3,844,284.17 | 3,910,905.13 |
Subsidy income | 2,962,771.94 | 2,675,134.41 |
Retrieving of bidding deposits | 29,885,356.39 | 194,526,618.44 |
Other operating accounts | 55,055,405.87 | 12,873,603.24 |
Total | 91,747,818.37 | 213,986,261.22 |
(2) Other cash paid related to operation
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Management and R&D expenses | 14,947,949.40 | 16,820,091.22 |
Sales expense | 6,908,552.06 | 2,200,543.16 |
Bidding deposit paid | 15,899,280.00 | 50,058,802.62 |
Net draft deposit net paid | 144,928,637.13 | 129,561,924.62 |
Lawsuit freezing funds | 61,699,121.88 | |
Other trades | 9,718,831.22 | 17,225,493.04 |
Total | 192,403,249.81 | 277,565,976.54 |
(3) Other cash received related to investment activities
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Other investment-related cash received | 250.00 | |
Total | 250.00 |
(4) Other cash paid related to investment activities
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Other cash paid for investment | 1,323,355.15 | |
Total | 1,323,355.15 |
(5) Other cash paid related to financing activities
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Bill of exchange discounted loan margin | 228,210,000.00 | 181,300,000.00 |
B share repurchase expenses | 99,998,965.99 | |
Loan pledged by certificate of deposit | 300,000,000.00 | |
Repayment of principal and interest of lease liabilities | 1,150,479.34 | |
Total | 529,360,479.34 | 281,298,965.99 |
62. 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 | 115,187,470.49 | 147,858,243.06 |
Plus: Asset impairment provision | -23,320,329.95 | -74,890,615.36 |
Fixed asset depreciation, gas and petrol depreciation, production goods depreciation | 12,694,795.70 | 11,802,786.53 |
Depreciation of right to use assets | 2,441,097.81 | |
Amortization of intangible assets | 2,110,624.27 | 2,117,631.57 |
Amortization of long-term amortizable expenses | 1,095,936.19 | 609,394.73 |
Loss from disposal of fixed assets, intangible assets, and other long-term assets (“-“ for gains) | 2,027,304.03 | 1,981.72 |
Loss from fixed asset discard (“-“ for gains) | 101,810.29 | 123,770.81 |
Loss from fair value fluctuation (“-“ for gains) | -172,829.74 | -50,384.90 |
Financial expenses (“-“ for gains) | 50,128,451.89 | 49,214,489.55 |
Investment losses (“-“ for gains) | -2,500,156.18 | -1,613,615.53 |
Decrease of deferred income tax asset (“-“ for increase) | -108,813.53 | 10,311,829.50 |
Increase of deferred income tax asset (“-“ for increase) | 1,701,067.08 | -4,365,349.25 |
Decrease of inventory (“-“ for increase) | 63,137,528.73 | -46,192,352.00 |
Decrease of operational receivable items (“-“ for increase) | 25,896,769.11 | -141,439,156.06 |
Increase of operational receivable items (“-“ for decrease) | -851,232,377.90 | -55,880,612.56 |
Others | 99,887,106.71 | -36,535,306.13 |
Cash flow generated by business | -500,924,545.00 | -138,927,264.32 |
operations, net | ||
2. Major investment and financing activities with no cash involved: | -- | -- |
Debt transferred to assets | ||
Convertible corporate bonds due within one year | ||
Fixed assets under finance leases | ||
3. Net change in cash and cash equivalents: | -- | -- |
Balance of cash at period end | 587,299,086.12 | 613,753,872.41 |
Less: Initial balance of cash | 1,028,386,529.73 | 730,933,482.19 |
Add: Ending balance of cash equivalents | ||
Less: Ending balance of cash equivalents | ||
Net increase in cash and cash equivalents | -441,087,443.61 | -117,179,609.78 |
(2) Net cash paid to subsidiaries acquired in the current period
In RMB
Amount | |
Cash or cash equivalents paid by the business combination in the current period | 125,388,100.00 |
Including: Net cash paid for acquiring subsidiaries | 125,388,100.00 |
(3) Composition of cash and cash equivalents
In RMB
Item | Closing balance | Opening balance |
I. Cash | 587,299,086.12 | 1,028,386,529.73 |
Including: Cash in stock | 9,176.73 | 482.09 |
Bank savings can be used at any time | 554,736,008.92 | 1,013,118,829.42 |
Other monetary capital can be used at any time | 32,553,900.47 | 15,267,218.22 |
III. Balance of cash and cash equivalents at end of term | 587,299,086.12 | 1,028,386,529.73 |
Including: restricted cash and cash equivalent used by parent company or | 658,832,074.53 | 435,587,632.71 |
63. Assets with restricted ownership or use rights
In RMB
subsidiaries in the GroupItem
Item | Closing book value | Reason |
Monetary capital | 658,832,074.53 | Margin, pledge and judicial frozen deposit, etc |
Inventory | 87,429,489.76 | Credit Mortgage, Mortgage Loan |
Fixed assets | 113,877,697.76 | Credit Mortgage, Mortgage Loan |
Intangible assets | 18,869,282.56 | Loan by pledge |
Account receivable | 42,595,672.31 | Loan by pledge |
Investment real estate | 4,161,289,402.27 | Loan by pledge |
100% stake in Fangda Property Development held by the Company | 200,000,000.00 | Loan by pledge |
Total | 5,282,893,619.19 | -- |
64. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
Item | Closing foreign currency balance | Exchange rate | Closing RMB balance |
Monetary capital | -- | -- | 75,185,722.28 |
Including: USD | 4,628,223.20 | 6.460100 | 29,898,784.69 |
Euro | 0.83 | 7.686200 | 6.38 |
HK Dollar | 34,961,409.39 | 0.832080 | 29,090,689.53 |
INR | 17,058,783.99 | 0.086946 | 1,483,193.03 |
Vietnamese currency | 302,393,210.00 | 0.000281 | 84,851.33 |
SGD | 2,000.30 | 4.811898 | 9,625.24 |
AUD | 3,012,399.90 | 4.852799 | 14,618,572.08 |
Account receivable | -- | -- | 11,671,200.48 |
Including: USD | 697,734.93 | 6.460100 | 4,507,437.42 |
AUD | 1,476,212.52 | 4.852799 | 7,163,763.06 |
Contract assets | 20,705,194.94 | ||
Including: USD | 2,728,310.81 | 6.460100 | 17,625,160.66 |
INR | 35,424,680.60 | 0.086946 | 3,080,034.27 |
Contract liabilities | 42,853,498.22 | ||
Including: USD | 2,581,815.62 | 6.460100 | 16,678,787.09 |
HK Dollar | 31,456,964.64 | 0.832080 | 26,174,711.14 |
Other receivables | 1,445,917.29 | ||
Including: USD | 174,206.31 | 6.460100 | 1,125,390.18 |
HK Dollar | 63,000.00 | 0.832080 | 52,421.04 |
INR | 2,519,593.00 | 0.086946 | 219,068.53 |
AUD | 10,105.00 | 4.852799 | 49,037.54 |
Account payable | 4,574,128.13 | ||
Including: USD | 708,058.41 | 6.460100 | 4,574,128.13 |
Other payables | 390,244.49 | ||
Including: USD | 57,548.51 | 6.460100 | 371,769.13 |
HK Dollar | 100.00 | 0.832080 | 83.21 |
Vietnamese currency | 65,545,950.00 | 0.000281 | 18,392.15 |
(2) The note of overseas operating entities should include the main operation places, book keepingcurrencies and selection basis. Where the book keeping currency is changed, the reason should also beexplained.
□ Applicable √ Inapplicable
65. Hedging
Hedging items and related tools, qualitative and quantitative information about hedging risks:
Type | Hedged item | Hedging tools | Hedged risk |
Cash flow hedging | Forward transaction of aluminum sheet purchase; | Aluminum futures contract; | The price of raw materials has risen, leading to an increase in expected transaction procurement costs; |
Forward foreign exchange transaction | Forward foreign exchange contract | The depreciation of foreign currency leads to the decrease of actual collection |
66. Government subsidy
(1) Government subsidy profiles
In RMB
Type | Amount | Item | Amount accounted into the current gain/loss |
Enterprise informationization subsidy project of Shenzhen Small and Medium Enterprise Service Agency | 4,200,000.00 | Deferred earning | 24,000.00 |
VAT rebated into revenue | 2,975,710.51 | Other gains | 2,975,710.51 |
R&D subsidy from Shenzhen Science and Technology Innovation Commission | 1,023,500.00 | Other gains | 1,023,500.00 |
2020 industrial added value award project | 664,600.00 | Other gains | 664,600.00 |
Support for steady industrial growth in Shenzhen | 637,000.00 | Other gains | 637,000.00 |
VAT plus deduction | 251,399.27 | Other gains | 251,399.27 |
National Industry Revitalization and Technology Renovation Project fund | 153,864.30 | Deferred earning | 153,864.30 |
Technology research and development award of Finance Bureau of Management Committee of Nanchang High-tech Development Zone | 123,700.00 | Other gains | 123,700.00 |
Others | 812,033.51 | Other gains/deferred gains | 753,283.98 |
Total | 10,841,807.59 | 6,607,058.06 |
(2) Government subsidy refund
□ Applicable √ Inapplicable
VIII. Change to Consolidation Scope
1. Consolidation of entities under common control
(1) Merger of companies under the common control during the report period
In RMB
Consolidated party | Proportion of equity obtained in business consolidation | Basis for judgment of merger of companies under the common control | Consolidation date | Determination basis of consolidation date | Income of the consolidated party from the beginning of the current period to the consolidation date | Net profit of the consolidated party from the beginning of the current period to the consolidation date | Income of the consolidated party during the consolidation period | Net profit of the consolidated party during the consolidation period |
Shenzhen Yunzhu Industrial Co., Ltd. | 100.00% | The ultimate controlling party of the Company and Yunzhu before and after the consolidation is Mr. XiongJianming | Thursday, April 8, 2021 | Obtaining the actual control right of the acquired party | 3,390,588.25 | 17,512.89 | 4,650,158.59 | 1,049,885.06 |
(2) Consolidation costs
In RMB
Combination costs | |
--Cash | 125,388,100.00 |
(3) Book value of assets and liabilities of the consolidated party on the consolidation date
In RMB
Item | Consolidation date | End of last period |
Assets: | 15,175,632.19 | 24,603,069.69 |
Monetary capital | 2,128,872.25 | 4,134,142.34 |
Receivables | 995,631.44 | 757,006.79 |
Inventory | 1,276,334.40 | |
Fixed assets | 52,890.36 | 55,650.37 |
Intangible assets | 7,934.87 | 8,785.04 |
Transactional financial assets | 3,155,680.40 | 10,331,880.99 |
Contract assets | 5,748,854.44 | 8,559,360.21 |
Prepayment | 333,438.89 | 259,671.72 |
Others | 1,475,995.14 | 496,572.23 |
Liabilities: | 2,356,229.26 | 11,801,179.65 |
Borrowing | 37,186.48 | 0.00 |
Payable | 2,319,042.78 | 11,801,179.65 |
Net assets | 12,819,402.93 | 12,801,890.04 |
Less: minor shareholders’ equity | 0.00 | 1,280,189.00 |
Acquired net assets | 12,819,402.93 | 11,521,701.04 |
Contingent liabilities of the consolidated party assumed in the business consolidation:
NoneOthers:
None
2. Disposal of subsidiaries
Single disposal of a subsidiary that may lead to loss of control
□ Yes √ No
Disposal of a subsidiary in multiple steps that lead to loss of control in the report period
□ Yes √ No
3. 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:
NoneIX. Equity in Other Entities
1. Interests in subsidiaries
(1) Group Composition
Company | Place of business | Registered address | Business | Shareholding percentage | Obtaining method | |
Direct | Indirect | |||||
FangdaJianke | Shenzhen | Shenzhen | Designing, | 98.39% | 1.61% | Incorporation |
manufacturing, and installation of curtain walls | ||||||
FangdaZhichuang | Shenzhen | Shenzhen | Production, processing and installation of subway screen doors | 83.10% | Incorporation | |
Fangda New Material | Nanchang | Nanchang | Prodution and sales of new-type materialsm composite materials and production of curtain walls | 75.00% | 25.00% | Incorporation |
Fangda Property | Shenzhen | Shenzhen | Real estate development and operation | 99.00% | 1.00% | Incorporation |
Fangda New Energy | Shenzhen | Shenzhen | Design and construction of PV power plants | 99.00% | 1.00% | Incorporation |
Chengdu Fangda | Chengdu | Chengdu | Trusted processing of building curtain wall materials | 100.00% | Incorporation | |
Shihui International | Virgin Islands | Virgin Islands | Investment | 100.00% | Incorporation | |
Dongguan New Material | Dongguan | Dongguan | Installation and sales of building curtain walls | 100.00% | Incorporation | |
Fangda Property Management | Shenzhen | Shenzhen | Property management | 100.00% | Incorporation | |
Jiangxi Property Development | Nanchang | Nanchang | Real estate development and operation | 100.00% | Incorporation | |
Luxin New Energy | Pingxiang | Pingxiang | Design and construction of PV power plants | 100.00% | Incorporation | |
Xinjian New Energy | Nanchang | Nanchang | Design and construction of PV power plants | 100.00% | Incorporation |
Dongguan New Energy | Dongguan | Dongguan | Design and construction of PV power plants | 100.00% | Incorporation | |
Kechuangyuan Software | Shenzhen | Shenzhen | Software development | 83.10% | Incorporation | |
FangdaZhichuang Science and Technology (Hong Kong) Co., Ltd. | Hong Kong | Hong Kong | Metro screen door | 83.10% | Incorporation | |
Hongjun Investment Company | Shenzhen | Shenzhen | Investment | 98.00% | 2.00% | Incorporation |
Fangda Australia Co., Ltd. | Australia | Australia | Designing, manufacturing, and installation of curtain walls | 100.00% | Incorporation | |
Fangda Cloud Rail | Shenzhen | Shenzhen | Design, development and sales of cloud rail transport equipment | 100.00% | Incorporation | |
Chengda Curtain Wall Company | Chengdu | Chengdu | Building decoration and other construction industry | 100.00% | Incorporation | |
Fangda Southeast Asia | Vietnam | Vietnam | Designing, manufacturing, and installation of curtain walls | 100.00% | Incorporation | |
Shanghai Zhijian | Shanghai | Shanghai | Intelligent technology, new energy, automated technology | 30.00% | 70.00% | Incorporation |
Shanghai Jianzhi | Shanghai | Shanghai | Construction technology, intelligent technology, automation technology, | 100.00% | Incorporation |
design, production and installation of building curtain walls | ||||||
ZhongrongLitai | Shenzhen | Shenzhen | Business service | 55.00% | Purchase | |
Fangda Investment Partnership (Limited Partnership) | Shenzhen | Shenzhen | Project investment and investment consultancy | 99.00% | 0.52% | Incorporation |
Lifu Investment | Shenzhen | Shenzhen | Project investment and investment consultancy | 52.00% | Incorporation | |
Xunfu Investment | Shenzhen | Shenzhen | Project investment and investment consultancy | 100.00% | Incorporation | |
Jianke Hong Kong | Hong Kong | Hong Kong | Design, sale and installation of building curtain wall | 100.00% | Incorporation | |
Yunzhu | Shenzhen | Shenzhen | Inspection, technical service and consultation of building safety and building energy saving system | 100.00% | Purchase |
Note to the difference between shareholdings in subsidiaries and percentage of votes:
NoneBasis for holding half or less votes but controlling invested entities, and holding half or more votes but not controlling investedentities:
NoneBasis for control of structural entities incorporated in the consolidation scope:
NoneBasis for recognizing a company as an agent or consigner:
NoneOthers:
None
(2) Major non wholly-owned subsidiaries
In RMB
Company | Shareholding of minority shareholders | Profit and loss attributed to minority shareholders | Dividend to be distributed to minority shareholders | Interest balance of minority shareholders in the end of the period |
ZhongrongLitai | 45.00% | 5,020.74 | 48,407,976.32 | |
FangdaZhichuang | 16.90% | 3,689,439.35 | 3,989,716.00 | 46,308,033.52 |
Note to the difference between shareholdings of minority shareholders in subsidiaries and percentage of votes:
NoneOthers:
None
(3) Financial highlights of major non wholly owned subsidiaries
In RMB
Company | Closing balance | Opening balance | ||||||||||
Current asset | Non-current assets | Total of assets | Current liabilities | Non-current liabilities | Total liabilities | Current asset | Non-current assets | Total of assets | Current liabilities | Non-current liabilities | Total liabilities | |
ZhongrongLitai | 206,568,978.96 | 186,691.75 | 206,755,670.71 | 99,011,785.19 | 170,604.81 | 99,182,390.00 | 205,837,361.25 | 30,024.88 | 205,867,386.13 | 98,305,262.61 | 98,305,262.61 | |
FangdaZhichuang | 545,615,396.10 | 82,132,291.49 | 627,747,687.59 | 345,785,202.83 | 7,950,452.10 | 353,735,654.93 | 757,453,607.34 | 62,283,669.54 | 819,737,276.88 | 519,869,993.38 | 6,562,286.06 | 526,432,279.44 |
In RMB
Company | Amount occurred in the current period | Occurred in previous period | ||||||
Turnover | Net profit | Total of misc. incomes | Business operation cash flows | Turnover | Net profit | Total of misc. incomes | Business operation cash flows | |
ZhongrongLitai | 201,032.08 | 11,157.19 | 11,157.19 | 16,306.16 | 229,334.85 | -70,059.04 | -70,059.04 | -11,053.19 |
FangdaZhichuang | 267,687,038.55 | 48,286,952.27 | 47,707,035.22 | -122,774,779.41 |
2. Change in the ownership share of the subsidiary and control of the transaction of the subsidiary
(1) Description of changes in owner's equity shares of subsidiaries
In order to strengthen the strategic layout of the Company's rail transit PSD system industry and further optimize the equity structureof the holding subsidiary Zhichuang Technology, according to the Company's strategic plan, the Company transferred 10.9375% of
the equity of Zhichuang Technology, with a transfer amount of RMB175 million yuan. The above equity transfer related procedureshave been completed in the reporting period. For details of the disclosure of relevant matters, please refer to the Announcement onTransfer of Partial Equity of Holding Subsidiaries released on cninfo.com on May 17, 2021.
(2) Impact of transaction on minority shareholders' equity and owner's equity attributable to parentcompany
In RMB
Item | Amount |
Purchase cost/disposal consideration | |
--Cash | 175,000,000.00 |
Total purchase cost/disposal consideration | 175,000,000.00 |
Less: share of net assets of subsidiaries calculated according to the proportion of equity acquired / disposed | 29,154,008.06 |
Difference | 145,845,991.94 |
Including: adjustment of capital reserve | 145,845,991.94 |
Other noteNone
3. Interests in joint ventures or associates
(1) Financial summary of insignificant joint ventures and associates
In RMB
Closing balance/amount occurred in this period | Opening balance/amount occurred in previous period | |
Associate: | -- | -- |
Total book value of investment | 55,449,484.30 | 55,902,377.95 |
Total shareholding | -- | -- |
Net profit | -452,893.65 | -375,202.09 |
--Total of misc. incomes | -452,893.65 | -375,202.09 |
Other noteNoneX. Risks of Financial Tools
The risks associated with the financial instruments of the Company arise from the various financial assetsand liabilities recognized by the Company in the course of its operations, including credit risks, liquidityrisks and market risks.The management objectives and policies of various risks related to financial instruments are governed by
the management of the Company. The operating management is responsible for daily risk management throughfunctional departments (for example, the Company's credit management department reviews the Company's creditsales on a case-by-case basis). The internal audit department of the Company conducts daily supervision of theimplementation of the Company's risk management policies and procedures, and reports relevant findings to theCompany's audit committee in a timely manner.
The overall goal of the Company's risk management is to formulate risk management policies that minimizethe risks associated with various financial instruments without excessively affecting the Company'scompetitiveness and resilience.
1. Credit risk
Credit risk is caused by the failure of one party of a financial instrument in performing its obligations,causing the risk of financial loss for the other party. The credit risk of the Company mainly comes from monetarycapital, notes receivable, accounts receivable, other receivables, receivables financing, contract assets, etc.The credit risk of these financial assets comes from the default of the counterparties, and the maximum riskexposure is equal to the book amount of these instruments.
The Company's money and funds are mainly deposited in the commercial banks and other financial institutions.The Company believes that these commercial banks have higher reputation and asset status and have lower creditrisk.
For notes receivable, accounts receivable, other receivables, receivables financing and contract assets,the Company sets relevant policies to control credit risk exposure. The Group set the credit line and term fordebtors according to their financial status, external rating, and possibility of getting third-party guarantee,credit record and other factors. The Group regularly monitors debtors’ credit record. For those with poor creditrecord, the Group will send written payment reminders, shorten or cancel credit term to lower the general creditrisk.
(1) Significant increases in credit risk
The credit risk of the financial instrument has not increased significantly since the initial confirmation.In determining whether the credit risk has increased significantly since the initial recognition, the Companyconsiders reasonable and evidenced information, including forward-looking information, that can be obtainedwithout unnecessary additional costs or effort. The Company determines the relative risk of default risk of thefinancial instrument by comparing the risk of default of the financial instrument on the balance sheet date withthe risk of default on the initial recognition date to assess the credit risk of the financial instrument frominitial recognition.
When one or more of the following quantitative and qualitative criteria are triggered, the Company believesthat the credit risk of financial instruments has increased significantly: the quantitative criteria are mainlythe probability of default in the remaining life of the reporting date increased by more than a certain proportioncompared with the initial recognition; the qualitative criteria are the major adverse changes in the operationor financial situation of the major debtors, the early warning of customer list, etc.
(2) Definition of assets where credit impairment has occurred
In order to determine whether or not credit impairment occurs, the standard adopted by our company 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 of interest or default or overdue of principal; (B) The concession that the debtor would notmake under any other circumstances for economic or contractual considerations relating to the financialdifficulties of the debtor; The debtor is likely to be bankrupt or undertake other financial restructuring; Thefinancial difficulties of the issuer or debtor lead to the disappearance of the active market for the financialasset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that a creditloss has occurred.Credit impairment in financial assets may be caused by a combination of multiple events, not necessarilyby events that can be identified separately.
(3) Expected credit loss measurement
Depending on whether there is a significant increase in credit risk and whether a credit impairment has occurred, the Companyprepares different assets for a 12-month or full expected credit loss. The key parameters of expected credit loss measurementinclude 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 fulfil its obligation to pay in the next 12months or throughout the remaining period.
Breach Loss Rate means the extent of loss expected by the Company for breach risk exposure. Depending onthe type of counterparty, the manner and priority of recourse, and the different collateral, the default lossrate is also different. The default loss rate is the percentage of the risk exposure loss at the time of the default, calculated on thebasis of the next 12 months or the entire lifetime.
Exposure to default is the amount payable to the Company at the time of default in the next 12 months or throughout theremaining life. Prospective information credit risks significantly increased and expected credit losses werecalculated. Through the analysis of historical data, the Company has identified the key economic indexes thataffect the credit risk of each business type and the expected credit loss.
The largest credit risk facing the Group is the book value of each financial asset on the balance sheet.The Group makes no guarantee that may cause the Group credit risks.
Among the Group’s receivables, accounts receivable from top 5 customers account for 31.97% of the total accounts receivable(beginning of the period: 28.36%); among other receivables, other receivables from top 5 customers account for 68.32% of the totalother receivables (beginning of the period: 69.65%).
2. Liquidity risk
Liquidity risk is the risk of capital shortage when the Group needs to pay cash or settled with other financialassets. The Company is responsible for the cash management of its subsidiaries, including short-term investmentsin cash surpluses and loans to meet projected cash requirements. The Company's policy is to regularly monitorshort and long-term liquidity requirements and compliance with borrowing agreements to ensure adequate cashreserves and readily available securities.As of June 30, 2021, the maturity of the Company's financial liabilities is as follows:
Contract amount: RMB
Item | June 30, 2021 |
Less than 1 year | Within 1-3 years | Over 3 years | Total | |
Short-term loans | 117,463.12 | 117,463.12 |
Notes payable | 68,429.86 | 68,429.86 | ||
Account payable | 108,683.62 | 2,983.24 | 1,129.24 | 112,796.10 |
Employees' wage payable | 2,687.98 | 2,687.98 |
Other payables | 10,024.62 | 1,592.44 | 4,235.47 | 15,852.53 |
Non-current liabilities due in 1 year | 11,949.66 | 11,949.66 | ||
Other current liabilities | 3,671.36 | 3,671.36 | ||
Long-term loans | 29,116.15 | 119,300.00 | 148,416.15 |
Total liabilities | 322,910.22 | 33,691.83 | 124,664.71 | 481,266.76 |
(Continued)Contract amount: RMB
December 31, 2020 | ||||
Item | Less than 1 year | Within 1-3 years | Over 3 years | Total |
Short-term loans | 104,825.03 | 104,825.03 | ||
Notes payable | 86,622.45 | 86,622.45 |
Account payable | 124,909.38 | 3,271.34 | 104.08 | 128,284.80 |
Employees' wage payable | 6,089.42 | 6,089.42 | ||
Other payables | 9,741.88 | 3,965.54 | 1,656.09 | 15,363.51 |
Non-current liabilities due in 1 year | 10,335.98 | 10,335.98 |
Other current liabilities | 10,768.84 | 10,768.84 | ||
Long-term loans | 24,941.15 | 85,000.00 | 109,941.15 | |
Total liabilities | 353,292.98 | 32,178.03 | 86,760.17 | 472,231.18 |
3. Market risks and measures
(1) Credit risks
The exchange rate risk of the Company mainly comes from the assets and liabilities of the Company and itssubsidiaries in foreign currency not denominated in its functional currency. Except for the use of Hong Kongdollars, United States dollars, Australian dollars, Vietnamese dong, euro, Indian rupees or Singapore currenciesby its subsidiaries established in and outside the Hong Kong Special Administrative Region, other major businesses
of the Company shall be denominated in Renminbi.
As of June 30, 2021, the Company's ending foreign currency financial assets and foreign currency financial liabilities are listedin Note 7, 66 foreign currency monetary item description.
The Company pays close attention to the impact of exchange rate changes on the Company's exchange raterisk. The Company continuously monitors the scale of foreign currency transactions and foreign currency assetsand liabilities to minimize foreign exchange risks. To this end, the Company may avoid foreign exchange risksby signing forward foreign exchange contracts or currency swap contracts.
(2) Interest risk
The Group's interest rate risk mainly arises from long-term interest-bearing debts such as long-term bankloans. Financial liabilities with floating interest rate cause cash flow interest rate risk for the Group.Financial liabilities with fixed interest rate cause fair value interest rate risk for the Group. The Group decidesthe proportion between fixed interest rate and floating interest rate according to the market environment andregularly reviews and monitors the combination of fixed and floating interest rate instruments.
The Group Finance Department of the Company continuously monitors the Group interest rate level. The risinginterest rate will increase the cost of the new interest-bearing debt and the interest expenditure oninterest-bearing debt which has not yet been paid by the Company at the floating rate, and will have a significantadverse effect on the Company's financial performance. Management will make adjustments in time according tothe latest market conditions.
As of June 30, 2021, the current floating rate loan is RMB 2.077 billion. If the loan interest rate calculated by floating rateincreases or decreases by 50 basis points, the net profit of the Company will decrease or increase by RMB 7.7888 million (December31, 2020: RMB 7.3875 million) while other risk variables remain unchanged.
XI. Fair Value
1. Closing fair value of assets and liabilities measured at fair value
In RMB
Item | Closing fair value | |||
First level fair value | Second level fair value | Third level fair value | Total | |
1. Continuous fair value measurement | -- | -- | -- | -- |
Derivative financial assets | 5,096,490.27 | 5,096,490.27 | ||
Investment in other equity tools | 17,398,629.00 | 17,398,629.00 | ||
Leased building | 5,635,833,581.39 | 5,635,833,581.39 | ||
Financial assets measured at fair value with changes included in current profits and losses -- investment in | 132,493,708.09 | 132,493,708.09 |
financial products | ||||
Receivable financing | 23,798,104.10 | 23,798,104.10 | ||
Other non-current financial assets | 5,198,015.90 | 5,198,015.90 | ||
Total assets measured at fair value continuously | 5,096,490.27 | 5,635,833,581.39 | 178,888,457.09 | 5,819,818,528.75 |
2. Discontinuous fair value measurement | -- | -- | -- | -- |
2. Recognition basis of market value of continuous and discontinuous items measured at first level fairvalue
The Group determines the fair value using quotation in an active market for financial instruments traded in anactive market;
3. Valuation technique and qualitative and quantitative information for key parameters of continuous anddiscontinuous second level fair value itemsFor investment real estate, the Company adopts valuation technology to determine its fair value. The valuationtechniques adopted are mainly the market comparison method and the income method, and the rent and resale model.The input value of valuation technology mainly includes comparable market unit price, market rent, vacancy rate,growth rate, rate of return, etc.
4. Valuation technique and qualitative and quantitative information for key parameters of continuous anddiscontinuous third level fair value itemsIf there is no active market, the Company uses evaluation techniques to determine the fair value. The valuationmodels are mainly cash flow discount model and market comparable company model. The input value of valuationtechnology mainly includes risk-free interest rate, benchmark interest rate, exchange rate, credit pointdifference, liquidity premium, lack of liquidity discount, etc.
5. Switch between different levels, switch reason and switching time policy
The Company takes the occurrence date of the events leading to the transition between levels as the time pointto confirm the transition between levels. In the period, there is no switch in the financial assets measuredat fair value between the first and second level or transfer in or out of the third level.
6. Fair value of financial assets and liabilities not measured at fair value
Financial assets and liabilities measured at amortized cost include: monetary capital, bills receivable, accountsreceivable, other receivables, short-term borrowings, notes payable, employee compensation payable, accountspayables, other payables, and long-term payables.
XII. Related Parties and Transactions
1. Parent of the Company
Parent | Registered address | Business | Registered capital | Share of the parent co. in the Company | Voting power of the parent company |
Shenzhen Banglin Technologies Development Co., Ltd. | Shenzhen | Industrial investment | RMB30 million | 11.11% | 11.11% |
Shengjiu Investment Ltd. | Hong Kong | Industrial investment | HKD10,000 | 9.89% | 9.89% |
Particulars about the parent of the Company
①All of the investors of Shenzhen Banglin Technology Development Co., Ltd., the holding shareholder of the Company, arenatural persons. Among them, Chairman XiongJianming is holding 85% shares, and Mr. Xiong Xi – son of Mr. XiongJianming, isholding 15% of the shares.
② Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd.are acting in concert.
The final controller of the Company is XiongJianming.
2. Subsidiaries of the Company
For details of subsidiaries of the enterprise, please refer to Note IX, rights and interests in other entities.
3. Joint ventures and associates
See Note for details of significant joint ventures and associates of the Company.Information about other joint ventures or associates with related transactions in this period or with balance generated by relatedtransactions in previous period:
Joint venture or associate | Relationship with the Company |
Shenzhen Ganshang Joint Investment Co., Ltd. (Shenzhen Ganshang) | Associate |
4. Other associates
Other related parties | Relationship with the Company |
Jiangxi Business Innovative Property Joint Stock (Jiangxi Business Inovation) | Associate |
Shenzhen Qijian Technology Co., Ltd. (Qijian Technology) | Common actual controller |
Shenzhen Mingjiu Investment Co., Ltd | Common actual controller |
Shenzhen Fangda Property Development Co., Ltd. (hereinafter Fangda Property Development) | Controlled subsidiaries |
Shenyang Fangda Semi-conductor Lighting Co., Ltd. (hereinafter Shenyang Fangda) | Subsidiary in liquidation |
Shenzhen Woke Semi-conductor Lighting Co., Ltd. (hereinafter Shenzhen Woke) | Subsidiary in liquidation |
Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) | Affiliated relationship with Shenzhen Banglin Technology Development Co., Ltd. |
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 | 59,376.04 | 25,261.82 |
(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 | 482,580.65 | 207,366.00 |
(3) Related guarantees
The Company is the guarantor:
In RMB10,000
Beneficiary party | Amount guaranteed | Start date | Due date | Completed or not |
FangdaZhijian | 8,000.00 | Wednesday, July 31, 2019 | Wednesday, July 10, 2024 | No |
Jiangxi Property Development | 20,000.00 | Wednesday, June 19, 2019 | Friday, June 23, 2023 | No |
FangdaJianke | 50,000.00 | Tuesday, July 14, 2020 | Thursday, July 8, 2021 | No |
FangdaJianke | 25,000.00 | Tuesday, September 22, 2020 | Tuesday, September 21, 2021 | No |
FangdaJianke | 15,000.00 | Friday, April 10, 2020 | Friday, March 18, 2022 | No |
FangdaJianke | 30,000.00 | Friday, June 12, 2020 | Wednesday, April 14, 2021 | Yes |
FangdaZhichuang | 10,000.00 | Friday, April 10, 2020 | Friday, March 18, 2022 | No |
FangdaZhichuang | 3,000.00 | Monday, June 29, 2020 | Wednesday, June 23, 2021 | Yes |
FangdaJianke | 60,000.00 | Wednesday, March 17, 2021 | Thursday, February 17, 2022 | No |
FangdaJianke | 40,000.00 | Thursday, September 3, 2020 | Thursday, August 19, 2021 | No |
FangdaZhichuang | 40,000.00 | Tuesday, July 28, 2020 | Wednesday, June 30, 2021 | Yes |
FangdaZhichuang | 10,000.00 | Thursday, September 3, 2020 | Thursday, August 19, 2021 | No |
FangdaZhichuang | 20,000.00 | Monday, March 29, 2021 | Thursday, February 17, 2022 | No |
Fangda New Material | 6,500.00 | Tuesday, July 14, 2020 | Tuesday, July 13, 2021 | No |
Fangda New Material | 8,000.00 | Saturday, May 23, 2020 | Saturday, May 22, 2021 | Yes |
Fangda Property | 135,000.00 | Tuesday, February 25, 2020 | Sunday, February 24, 2030 | No |
Kechuangyuan | 1,000.00 | Sunday, August 23, 2020 | Saturday, February 13, 2021 | Yes |
FangdaJianke and FangdaZhichuang | 14,000.00 | Wednesday, December 18, 2019 | For details, please refer to the following description of related party guarantee (2) | No |
FangdaJianke | 20,000.00 | Friday, March 6, 2020 | Friday, March 5, 2021 | Yes |
Note to related guarantees
1. The above-mentioned guarantees are all associated guarantees within interested entities of the Group.
2. HSBC has a total credit of RMB 90 million to the Company, FangdaJianke and FangdaZhichuang and has not yet agreed on thecredit expiration date. HSBC regularly evaluates the credit status. The restriction on the use of the credit is as follows:
The Company can use non-financial bank guarantees of up to 90 million yuan to grant credit;FangdaJianke has non-committed combined revolving credits of not more than RMB90 million including revolving loans of up toRMB90 million, non-financial bank guarantees of up to RMB90 million and bank acceptances of up to RMB90 million.FangdaJianke has non-committed combined revolving credits of not more than RMB140 million including revolving loans of up toRMB50 million, non-financial bank guarantees of up to RMB140 million and bank acceptances of up to RMB140 million.
(4) Remuneration of key management
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Directors, supervisors and senior management | 4,157,864.33 | 3,921,960.54 |
(5) Other related transactions
The subsidiaries FangdaJianke and Hongjun Investment acquired 100% equity of Yunzhu in cash. Yunzhu is a companycontrolled by Mr. XiongJianming, the actual controller of the Company. The total transaction amount is RMB 125,388,100. Allrelevant transaction procedures have been completed during the reporting period. FangdaJianke and Hongjun Investment hold 99%and 1% shares of Yunzhu respectively.
6. Receivable and payables due with related parties
(1) Receivable interest
In RMB
Item | Affiliated party | Closing balance | Opening balance | ||
Remaining book value | Bad debt provision | Remaining book value | Bad debt provision | ||
Account receivable | Qijian Technology | 3,789.89 | 37.90 | 44,268.81 | 442.69 |
Other receivables | Shenyang Fangda | 42,877.00 | 42,877.00 | 42,877.00 | 42,877.00 |
Other receivables | Shenzhen Woke | 867,442.94 | 867,442.94 | 867,442.94 | 867,442.94 |
Other receivables | Ganshang Joint Investment | 3,791,089.25 | 56,487.23 | 3,791,089.25 | 56,487.23 |
Other receivables | Shenzhen Yikang Real Estate Co. Ltd. | 70,062,675.83 | 1,043,933.87 | 70,000,000.00 | 1,043,000.00 |
(2) Receivable interest
In RMB
Item | Affiliated party | Closing balance of book value | Opening balance of book value |
Other payables | Shenzhen Yikang Real Estate Co. Ltd. | 25,062,852.92 | 24,912,830.32 |
Other payables | Qijian Technology | 400.00 | 400.00 |
Other payables | Ganshang Joint Investment | 3,355.36 | 3,355.36 |
XIII. Contingent events
1. Major commitments
Major commitments that exist on the balance sheet dayOn November 6, 2017, Fangda Real Estate Co., Ltd., a subsidiary of the Company, and Bangshen Electronics (Shenzhen) Co.,Ltd. signed the “Joint Development Agreement on FangdaBangshen 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, 2021, Fangda Real EstateCo., Ltd. had paid a security deposit of RMB 20 million.
(2) In July 2018 ,the Company's subsidiary Fangda Real Estate Co. Ltd. (Party A) signed a contract with Shenzhen YikangReal Estate Co. Ltd. (Party B1) and Shenzhen QianhaiZhongzhengDingfeng No. 6 Investment Enterprise (Limited Partnership)(Party B2), "Shenzhen HenggangDakang Village Project Cooperation Agreement". Party B agrees to transfer the entire equity of theproject company it holds and the entire development interest of the project to Party A. Party A shall pay Party B a total of RMB600million for the cooperation price. As of June 30, 2021, Fangda Real Estate has paid RMB 50 million yuan of deposit and RMB
61.9372 million yuan of equity transfer to Party B; Pay the service fee, deposit, preliminary willingness collection fee and the downpayment of the old chicken farm on behalf of the project company, totaling about RMB90 million yuan.
As of June 30, 2021, the Group did not have other commitments that should be disclosed.
2. Contingencies
(1) Significant contingencies on the balance sheet date
(1) Contingent liabilities formed by material lawsuit or arbitration, and their influences on the financial position
① In November 2018,FangdaJianke a subsidiary of the Group sued Fujian Huapu Real Estate Development Co. Ltd. for apayment of RMB 13810243.67 and its overdue interest of RMB 373,380.16 totaling RMB 14,183,623.83 to the Taijiang DistrictPeople's Court of Fuzhou City. The case has not been decided. On 10 May 2019, the court ruled against the prosecution; On 16 May2019, Fang Da Jianke filed an appeal; On 26 August 2019, the court of second instance ordered the court of first instance to revokethe first instance decision; On 8 October 2019, it was sent back to the court of first instance, case number: (2019) Min 0103 Republicof China 4282. In April 2020, Huapu Company filed a counterclaim application to the court, requesting FangdaJianke Company topay a total of RMB12,746,000.00 for the construction period and quality. The first instance has not yet been decided. Fujian HuapuReal Estate Development Co., Ltd. has been applied for bankruptcy liquidation by other creditors, and FangdaJiankehas declared its creditor's rights to the manager. As of the date of this report, the case is still under trial.
② On June 19, 2019, LangfangAomeiJiye Real Estate Development Co., Ltd. filed a lawsuit against FangdaJianke 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; FangdaJianke filed a counterclaim onSeptember 11, 2019, demanding payment of RMB13,920,000.70, and put forward the application for completed project costappraisal on November 22, 2019. As of the date of this report, the case is still in the process of first instance.
③ As of December 31, 2021, due to the expiration of the implementation rules of the "Shenzhen Municipal People'sGovernment on the Administration of the Transfer of Industrial Buildings (Trial)" and the "Notice of the Municipal Planning andLand Resources Commission on Matters Related to the Management of Industrial Building Transfers" and other reasons, some
owners of Fangda Town failed to handle the real estate ownership certificate as scheduled and could not handle the certificate untilthe implementation of the new policy in February 2020. Both parties had disputes over the failure to handle the certificate. As a resultof the above-mentioned litigation, the owners proposed property preservation, and the monetary fund of RMB35,956,145.59 ofFangda Real Estate was frozen. As of June 30, 2021, Fangda Real Estate has accrued estimated liabilities of RMB25,683,696.08 yuanaccording to the most likely litigation results.
(2) Pending major lawsuits
On September 6, 2017, Chenghua District People's Court of Chengdu Municipality sentenced Sichuan ChutaHengyuanIndustrial Co., Ltd. to pay construction money to FangdaJianke within 10 days from the date of the verdict 川0108民初1828号RMB10,242,182.99. As of the date of this report, FangdaJianke has applied for execution and has not received therelevant payment.On September 10, 2018, the People's Court of Lixia District of Jinan City sentenced Shandong Zhonghong Real Estate Co. Ltd.to the Company for payment of RMB5960429.45 within 10 days from the date of the effective date of the (2018) Lu 0102 Minchu5367 civil judgment. Shandong Zhonghong Real Estate Co., Ltd. has been applied for bankruptcy liquidation and itsassets have been successfully auctioned. Fangda Construction Technology Co., Ltd. has declared its creditor'srights and enjoys the priority to be paid for the project price. The manager is formulating the distributiondetails. As of the date of this report, no relevant payment has been received.On November 15, 2019, the Chengdu Chenghua District People’s Court ruled (2019) Chuan 0108 Min Chu No. 428 thatSichuan ChuantaHengyuan Industrial Co., Ltd. shall pay interest to the Company within ten days from the effective date of thejudgment (subject to RMB6,013, 841.233 as the base, from May 29, 2015 to the day when the payment is paid; with RMB841,876.3235 as the base, from May 28, 2015 to the day when the payment is paid. Based on RMB841, 876.3235, from May 28, 2016 to theday when the payment is paid). The Company enjoys the priority of compensation for the discounted or auctioned price of BuildingC of the Chuan Tower supporting project (Film and Television Cultural Square) project within the scope of RMB 7,697,593.88. As ofthe date of this report, FangdaJianke has applied for execution and has not received the relevant payment.
(3) Contingent liabilities formed by providing of guarantee to other companies’ debts and their influences on financialsituationAs of June 30, 2021, the Company provided guarantees for the following unit loans:
Name of guaranteed entity | Guarantee | Amount (RMB10,000) | Term |
FangdaZhijian | Guarantee and mortgage guarantee | 123.78 | 2019/7/31 to 2024/7/10 |
FangdaZhijian | Guarantee and mortgage guarantee | 586.24 | 2019/8/27 to 2024/7/10 |
FangdaZhijian | Guarantee and mortgage guarantee | 211.98 | 2019/9/27 to 2024/7/10 |
FangdaZhijian | Guarantee and mortgage guarantee | 892.92 | 2019/11/18 to 2024/7/10 |
FangdaZhijian | Guarantee and mortgage guarantee | 837.41 | 2019/12/20 to 2024/7/10 |
FangdaZhijian | Guarantee and mortgage guarantee | 843.58 | 2020/01/15 to 2024/07/10 |
Fangda Property | Guarantee, pledge and | 625.00 | 2019/9/12 to 2023/7/22 |
mortgage guarantee | |||
Fangda Property | Guarantee, pledge and mortgage guarantee | 3,000.00 | 2019/9/26 to 2023/7/22 |
Fangda Property | Guarantee, pledge and mortgage guarantee | 2,000.00 | 2019/9/29 to 2023/7/22 |
Fangda Property | Guarantee, pledge and mortgage guarantee | 5,000.00 | 2019/10/31 to 2023/7/22 |
Fangda Property | Guarantee, pledge and mortgage guarantee | 4,021.70 | 020/03/9 to 2023/07/22 |
Fangda Property | Guarantee, pledge and mortgage guarantee | 96,195.65 | 2020/03/13 to 2030/03/12 |
Fangda Property | Guarantee and mortgage guarantee | 46,960.97 | 2021/03/18 to 2031/03/18 |
Kechuangyuan | Guarantee | 1,001.21 | 2020/08/23 to 2021/02/13 |
Total | 162,300.44 |
Note 1: Contingent liabilities caused by guarantees provided for other entities are all related guarantees between interested entities inthe Group.Notes 2: The Group’s property business provides periodic mortgage guarantee for property purchasers. As of June 30, 2021, theCompany assumed the above-mentioned phased guarantee amount of RMB157,862,600.
(2) Significant contingent events that do not need to be disclosed should be explainedAs of June 30, 2021, the Company has no other important contingencies to be disclosed.
3. Others
As of June 30, 2021:
Currency | Guarantee balance (original currency) | Deposit (RMB) | Credit line used (RMB) |
RMB (CNY) | 719,509,537.4 | 2,791,133.69 | 716,718,403.71 |
Indian rupee (INR) | 87,299,635.00 | - | 7,590,354.06 |
HK $(HKD) | 15,349,982.00 | - | 12,772,413.02 |
United States dollars (USD) | 9,102,345.5 | 1,259,418.27 | 57,542,643.89 |
Euro (EUR) | 150,000.00 | - | 1,152,930.00 |
Total | 4,050,551.96 | 795,776,744.69 |
XIV. Post-balance-sheet events
1. Profit distribution
In RMB
Profit or dividend to be distributed | 0.00 |
Profit or dividend approved to be distributed | 0.00 |
2. Notes to other issues in post balance sheet period
The Company has no other issues in post balance sheet period that need to be disclosed on Monday, August16, 2021 (report date approved by the Board of Directors).XV. Other material events
1. Suspension of operations
There is no net profit from discontinued operations in the current period.
2. Segment information
(1) Recognition basis and accounting policy for segment report
The Group divides its businesses into five reporting segments. The reporting segments are determined basedon financial information required by routine internal management. The Group’s management regularly review theoperating results of the reporting segments to determine resource distribution and evaluate their performance.
The reporting segments are:
(1) Curtain wall segment, production and sales of curtain wall materials, construction curtain wall design,production and installation;
(2) Rail transport segment: assembly and processing of metro screen doors;
(3) Real estate segment: development and operating of real estate on land of which land use right is legallyobtained by the Company; property management;
(4) New energy segment: photovoltaic power generation, photovoltaic power plant sales, photovoltaicequipment R & D, installation, and sales, and photovoltaic power plant engineering design and installation
(5) Others
The segment report information is disclosed based on the accounting policies and measurement standardsused by the segments when reporting to the management. The policies and standards should be consistent with thoseused in preparing the financial statement.
(2) Financial information
In RMB
Item | Curtain wall | Rail transport | Real estate | New energy | Others | Offset between segments | Total |
Turnover | 1,099,031,952.98 | 267,687,038.55 | 192,144,565.45 | 8,712,992.49 | 12,068,999.58 | 10,866,714.07 | 1,568,778,834.98 |
Including: external transaction income | 1,097,171,007.07 | 267,687,038.55 | 188,235,871.36 | 8,323,350.81 | 7,361,567.19 | 1,568,778,834.98 | |
Inter-segment transaction income | 1,860,945.92 | 3,908,694.09 | 389,641.68 | 4,707,432.38 | 10,866,714.07 | 0.00 | |
Including: major business turnover | 1,086,846,566.38 | 267,675,591.44 | 139,197,248.64 | 8,712,992.49 | 2,181,780.48 | 1,500,250,618.47 | |
Operating cost | 940,911,538.40 | 190,007,785.06 | 76,033,488.56 | 3,849,674.63 | 89,904.13 | 2,250,587.60 | 1,208,641,803.18 |
Including: major business cost | 935,765,330.92 | 190,007,785.06 | 74,370,131.39 | 3,849,674.63 | 2,874,749.43 | 1,201,118,172.57 | |
Operation cost | -35,998,064.18 | -19,651,831.82 | 78,165,036.90 | 811,034.05 | -36,141,450.10 | -241,549,074.75 | 228,733,799.60 |
Operating profit/(loss) | 194,118,478.76 | 97,331,085.31 | 37,946,039.99 | 4,052,283.81 | 48,120,545.55 | 250,165,201.22 | 131,403,232.20 |
Total assets | 4,720,277,495.83 | 627,747,687.59 | 6,658,684,740.30 | 548,563,316.08 | 3,424,589,311.92 | 4,258,652,240.66 | 11,721,210,311.06 |
Total liabilities | 3,192,837,798.84 | 353,735,654.93 | 4,087,612,847.85 | 447,618,025.92 | 1,046,618,617.02 | 3,005,661,573.91 | 6,122,761,370.65 |
(3) Others
Since more than 90% of the Group’s revenue comes from Chinese customer and 90% of the Group’s assets are in China, no detailedregional information is needed.
XVI. Notes to Financial Statements of the Parent
1. Account receivable
(1) Account receivable disclosed by categories
In RMB
Type | Closing balance | Opening balance | ||||||||
Remaining book value | Bad debt provision | Book value | Remaining book value | Bad debt provision | Book value | |||||
Amount | Proportion | Amount | Provision rate | Amount | Proportion | Amount | Provision rate | |||
Including: | ||||||||||
Account receivable for which bad debt provision is made by group | 897,991.34 | 100.00% | 9,605.86 | 1.07% | 888,385.48 | 892,363.43 | 100.00% | 6,514.35 | 0.73% | 885,849.08 |
Including: | ||||||||||
Combination 3: Other business models | 897,991.34 | 100.00% | 9,605.86 | 1.07% | 888,385.48 | 892,363.43 | 100.00% | 6,514.35 | 0.73% | 885,849.08 |
Total | 897,991.34 | 100.00% | 9,605.86 | 1.07% | 888,385.48 | 892,363.43 | 100.00% | 6,514.35 | 0.73% | 885,849.08 |
Provision for bad debts by combination:
In RMB
Name | Closing balance | ||
Remaining book value | Bad debt provision | Provision rate | |
Combination 3: Other business models | 897,991.34 | 9,605.86 | 1.07% |
Total | 897,991.34 | 9,605.86 | -- |
Provision for bad debts by combination:
In RMB
Name | Closing balance | ||
Remaining book value | Bad debt provision | Provision rate | |
Less than 1 year | 675,325.34 | 4,929.87 | 0.73% |
1-2 years | 222,666.00 | 4,675.99 | 2.10% |
Total | 897,991.34 | 9,605.86 | -- |
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Inapplicable
Account age
In RMB
Age | Closing balance |
Within 1 year (inclusive) | 675,325.34 |
1-2 years | 222,666.00 |
Total | 897,991.34 |
(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 | |||
Combination 3: Other business models | 6,514.35 | 3,091.51 | 9,605.86 | |||
Total | 6,514.35 | 3,091.51 | 9,605.86 |
(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 | 856,402.31 | 95.37% | 9,302.26 |
Total | 856,402.31 | 95.37% |
2. Other receivables
In RMB
Item | Closing balance | Opening balance |
Other receivables | 1,624,397,140.22 | 1,156,802,204.91 |
Total | 1,624,397,140.22 | 1,156,802,204.91 |
(1) Other receivables
1) Other receivables are disclosed by nature
In RMB
By nature | Closing balance of book value | Opening balance of book value |
Deposit | 150,699.54 | 150,699.54 |
Debt by Luo Huichi | 12,992,291.48 | 12,992,291.48 |
Others | 985,404.46 | 975,476.54 |
Accounts between related parties within the scope of consolidation | 1,624,173,104.78 | 1,156,587,949.46 |
Total | 1,638,301,500.26 | 1,170,706,417.02 |
2) Method of bad debt provision
In RMB
Bad debt provision | First stage | Second stage | Third stage | Total |
Expected credit losses in the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
Balance on Friday, January 1, 2021 | 3,240.69 | 13,900,971.42 | 13,904,212.11 | |
Balance on Friday, January 1, 2021 in the current period | —— | —— | —— | —— |
Provision | 147.93 | 147.93 | ||
Balance on Wednesday, June 30, 2021 | 3,388.62 | 13,900,971.42 | 13,904,360.04 |
Changes in book balances with significant changes in the current period
□ Applicable √ Inapplicable
Account age
In RMB
Age | Closing balance |
Within 1 year (inclusive) | 1,624,329,829.30 |
Over 3 years | 13,971,670.96 |
4-5 years | 42,877.00 |
Over 5 years | 13,928,793.96 |
Total | 1,638,301,500.26 |
3) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
Type | Opening balance | Change in the period | Closing balance | |||
Provision | Written-back or recovered | Canceled | Others | |||
Other receivables and bad debt provision | 13,904,212.11 | 147.93 | 13,904,360.04 | |||
Total | 13,904,212.11 | 147.93 | 13,904,360.04 |
4) Balance of top 5 other receivables at the end of the period
In RMB
Entity | By nature | Closing balance | Age | Percentage (%) | Balance of bad debt provision at the end of the period |
Fangda Property | Associate accounts | 868,875,749.45 | Less than 1 year | 53.04% | 0.00 |
FangdaJianke | Associate accounts | 469,824,736.51 | Less than 1 year | 28.68% | 0.00 |
Fangda New Energy | Associate accounts | 155,776,232.69 | Less than 1 year | 9.51% | 0.00 |
Fangda Property | Associate accounts | 92,589,038.54 | Less than 1 year | 5.65% | 0.00 |
Shihui International | Associate accounts | 30,459,793.09 | Less than 1 year | 1.86% | 0.00 |
Total | -- | 1,617,525,550.28 | -- | 98.73% | 0.00 |
3. Long-term share equity investment
In RMB
Item | Closing balance | Opening balance | ||||
Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
Investment in subsidiaries | 1,196,831,253.00 | 1,196,831,253.00 | 1,196,831,253.00 | 1,196,831,253.00 | ||
Total | 1,196,831,253.00 | 1,196,831,253.00 | 1,196,831,253.00 | 1,196,831,253.00 |
(1) Investment in subsidiaries
In RMB
Invested entity | Opening book | Change (+,-) | Closing book | Balance of |
value | Increased investment | Decreased investment | Impairment provision | Others | value | impairment provision at the end of the period | |
FangdaJianke | 491,950,000.00 | 491,950,000.00 | |||||
Fangda 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 | |||||
Hongjun Investment Company | 98,000,000.00 | 98,000,000.00 | |||||
Fangda Investment Partnership | 235,323,000.00 | 235,323,000.00 | |||||
Total | 1,196,831,253.00 | 1,196,831,253.00 |
4. Operational revenue and costs
In RMB
Item | Amount occurred in the current period | Occurred in previous period | ||
Income | Cost | Income | Cost | |
Other businesses | 12,068,999.58 | 89,904.13 | 12,719,395.10 | 151,219.77 |
Total | 12,068,999.58 | 89,904.13 | 12,719,395.10 | 151,219.77 |
Information related to performance obligations:
Information related to performance obligations:
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 32,364,717.13 yuan, of which 11,865,658.82 yuan is expected to be recognized in2021, and 16,403,912.49 yuan is expected to be recognized in 2022, 4,095,145.82 yuan is expected to be recognized in 2023 andbeyond.
5. Investment income
In RMB
Item | Amount occurred in the current period | Occurred in previous period |
Gains from long-term equity investment measured by costs | 33,660,000.00 | |
Investment gain of financial products | 316,138.71 | 338,561.17 |
Total | 33,976,138.71 | 338,561.17 |
XVII. Supplementary Materials
1. Detailed accidental gain/loss
√ Applicable □ Inapplicable
In RMB
Item | Amount | Notes |
Gain/loss of non-current assets | -2,027,304.03 | |
Subsidies accounted into the current income account (except the government subsidy closely related to the enterprise’s business and based on unified national standard quota) | 3,563,846.25 | |
Net gain between the beginning and merger day of subsidiaries generated by merger of companies under common control | 17,512.89 | |
Gain/loss from change of fair value of transactional financial asset and liabilities, and investment gains from disposal of transactional and derivative financial assets and liabilities and sellable financial assets, other than valid period value instruments related to the Company’s common businesses | 3,102,080.16 | |
Write-back of impairment provision of receivables and contract assets for which impairment test is performed individually | 14,600,000.00 | |
Other non-business income and expenditures other than the above | -2,279,268.05 | |
Less: Influenced amount of income tax | 2,384,080.04 | |
Influenced amount of minority | 199,880.80 |
shareholders’ equity | ||
Total | 14,392,906.38 | -- |
Explanation statement should be made for accidental gain/loss items defined and accidental gain/loss items defined as regulargain/loss items according to the Explanation Announcement of Information Disclosure No. 1 - Non-recurring gain/loss mentioned.
□ Applicable √ Inapplicable
2. Net income on asset ratio and earning per share
Profit of the report period | Weighted average net income/asset ratio | Earning per share | |
Basic earnings per share (yuan/share) | Diluted Earnings per share (yuan/share) | ||
Net profit attributable to common shareholders of the Company | 2.05% | 0.10 | 0.10 |
Net profit attributable to the common owners of the PLC after deducting of non-recurring gains/losses | 1.79% | 0.09 | 0.09 |
3. Differences in accounting data under domestic and foreign accounting standards
(1) Differences in net profits and assets in financial statements disclosed according to the international andChinese account standards
□ Applicable √ Inapplicable
(2) Differences in net profits and assets in financial statements disclosed according to the international andChinese account standards
□ Applicable √ Inapplicable
(3) Differences in financial data using domestic and foreign accounting standards, the overseas institutionname should be specified if the difference in data audited by an overseas auditor is adjustedNone