Zhejiang Dahua Technology Co., Ltd.
2020 Semi-annual Report
August 2020
Section I Important Notes, Contents and Definitions
The Board of Directors, Board of Supervisors, Directors, Supervisors and SeniorManagement of the Company hereby guarantee that the information presented in this reportshall be authentic, accurate and complete and free of any false records, misleading statementsor material omissions, and they will bear joint and several liabilities for such information.Fu Liquan, the Company's legal representative, Xu Qiaofen, person in charge ofaccounting, and Zhu Zhuling, person in charge of accounting institution (Accounting Officer)hereby declare and warrant that the financial statements in the semi-annual report areauthentic, accurate and complete.
All directors attended the meeting of the Board of Directors for deliberation of this annualreport.
During the reporting period, there was no significant change in the risks faced by theCompany. The Company has been trying to identify all kinds of risks and actively takecountermeasures to avoid and reduce the risks:
1. Risk of technology upgrading: the video surveillance industry is a typicaltechnology-intensive industry, which is changing extremely fast. If the Company is unable tokeep up with development trends in the industry's technology, to pay full attention to customers'diversified individual needs, and to be followed by sufficient R&D investments, it will still facethe risk of losing market competitiveness due to discontinuous innovation.
2. Risk of business model change: with the development of network communications,cloud computing, big data, AI and other technologies, and the upgrade of the application ofsmart phones, the business model in the IoT era may have an impact on the development oftraditional industry. If an enterprise fails to timely grasp opportunities brought about by businessmodel transformation, it will be exposed to the risk of losing its market share.
3. Risk of product safety: the Company attaches great importance to and continuouslystrengthens resource investment to ensure safe and reliable operations of the security system
so as to respond to the product security risks on the Internet. However, hackers’ attacks,computer viruses, physical security vulnerabilities, natural disasters, accidents, powerinterruptions, telecommunications failures, terrorism, and warfare events may still occur fromtime to time, resulting in security vulnerabilities, system failures, or service interruptions.
4. Risk of Intellectual property: the promotion of the company's globalization andself-owned brand strategy will likely bring about intellectual property risks and patentinfringement, which may cause fluctuation in business relations and public opinions, increasinglawsuits and rising costs.
5. Risk of foreign exchange: the Company's export sales are mainly settled in UnitedStates Dollars ("USD"), and overseas transactions are still increasing. Therefore, fluctuations inthe foreign exchange rate may affect the profitability of the Company.
6. Risk of decrease of local fiscal paying capacity: At present, some local fiscal debts arerelatively high. If local paying capacity is reduced, a series of risks may occur: industry demandgrowth may slow down, project duration may be extended, companies may need longer time towithdraw its capital, and customers may delay their payment.
7. Risk of internationalized operation: the Company's products and solutions are providedto over 100 overseas countries and regions. The operation of international business may besubject to national or regional trade protection. What's more, the global spread of COVID-19has produced uncertainties in overseas economic environment, which may bring negativeimpacts on the Company's local business development.
8. Risk of supply chain security: In terms of supply security, the Company hascomprehensively reviewed various potential supply risks through dedicated projects, andstrengthened its capacity for continuous and safe supply of key materials by researching anddeveloping backup plans and diversifying supply sources, in order to ensure the security of thesupply chain.
The Company proposed not to distribute cash dividends, not send bonus shares, and notconvert the capital reserve into share capital in the first half of the year.
Contents
Section I Important Notes, Contents and Definitions ...... 2
Section II Company Profile and Key Financial Indicators ...... 11
Section III Corporate Business Overview ...... 14
Section IV Discussion and Analysis on Business Circumstance ...... 15
Section V Significant Events ...... 29
Section VI Changes in Shares and Information about Shareholders ...... 53
Section VII Information of Preferred Shares ...... 60
Section VIII Convertible Corporate Bonds ...... 61
Section IX Directors, Supervisors, and Senior Managers ...... 62
Section X Matters on Corporate Bonds ...... 66
Section XI Financial Reports ...... 67
Section XII Documents Available for Reference ...... 218
Definitions
| Item | Refers To | Definitions |
| Reporting Period | Refers To | January 1, 2020 to June 30, 2020 |
| Dahua, company, the company | Refers To | Zhejiang Dahua Technology Co., Ltd. |
| Dahua System Engineering, System Engineering Company | Refers To | Zhejiang Dahua System Engineering Co., Ltd. |
| Dahua Vision Technology | Refers To | Zhejiang Dahua Vision Technology Co., Ltd. |
| Dahua Security Network, Operation Company | Refers To | Zhejiang Dahua Security Network Operation Service Co., Ltd. |
| Dahua Ju'an | Refers To | Zhejiang Dahua Ju'an Technology Co., Ltd. |
| Guangxi Dahua Information | Refers To | Guangxi Dahua Information Technology Co., Ltd. |
| Dahua Security | Refers To | Zhejiang Dahua Security Service Co., Ltd. |
| Guangxi Security | Refers To | Guangxi Dahua Security Service Co., Ltd. |
| Huatu Microchip | Refers To | Zhejiang Huatu Microchip Technology Co., Ltd. |
| Xiaohua Technology, Hangzhou Xiaohua | Refers To | Hangzhou Xiaohua Technology CO., LTD. |
| Dahua Zhilian | Refers To | Zhejiang Dahua Zhilian Co., Ltd. |
| Tecomore Technology | Refers To | Hangzhou Tecomore Technology Co., Ltd. |
| Dahua Investment, Dahua Investment Management | Refers To | Zhejiang Dahua Investment Management Co., Ltd. |
| Guangxi Zhicheng, Dahua Zhicheng | Refers To | Guangxi Dahua Zhicheng Co., Ltd. |
| Hangzhou Huacheng, Huacheng Network | Refers To | Hangzhou Huacheng Network Technology Co., Ltd. |
| Xinjiang Information | Refers To | Xinjiang Dahua Zhixin Information Technology Co., Ltd. |
| HuaRay Technology | Refers To | Zhejiang HuaRay Technology Co., Ltd. |
| Fuyang Hua'ao | Refers To | Hangzhou Fuyang Hua'ao Technology Co., Ltd. |
| Huafei Intelligent | Refers To | Zhejiang Huafei Intelligent Technology CO., LTD. |
| Huachuang Vision | Refers To | Zhejiang Huachuang Vision Technology Co., Ltd. |
| Guizhou Huayi | Refers To | Guizhou Huayi Shixin Technology Co., Ltd. |
| Xinjiang Dahua Information | Refers To | Xinjiang Dahua Information Technology Co., Ltd. |
| Xinjiang Intelligence | Refers To | Xinjiang Dahua Intelligence Technology Co., Ltd. |
| Xinjiang Zhihe | Refers To | Xinjiang Dahua Zhihe Information Technology Co., Ltd. |
| Guangxi Huacheng | Refers To | Guangxi Huacheng Technology Co., Ltd. |
| Meitan Dahua Technology | Refers To | Guizhou Meitan Dahua Information Technology Co., Ltd. |
| Inner Mongolia Zhimeng | Refers To | Inner Mongolia Dahua Zhimeng Information Technology Co., Ltd. |
| Xinjiang Zhitian | Refers To | Xinjiang Dahua Zhitian Information Technology Co., Ltd. |
| Xinjiang Xinzhi | Refers To | Xinjiang Dahua Xinzhi Information Technology Co., Ltd. |
| Xinjiang Huayue | Refers To | Xinjiang Dahua Huayue Information Technology Co., Ltd. |
| Dahua Intelligence (IoT) Industrial Park | Refers To | Dahua Intelligent (IoT) Industrial Park Construction Project |
| Leapmotor Technology | Refers To | Zhejiang Leapmotor Technology Co., Ltd. |
| Leapmotor | Refers To | Leapmotor Automobile Co., Ltd. |
| Tianjin Dahua Information, Tianjin Dahua | Refers To | Tianjin Dahua Information Technology Co., Ltd. |
| Hunan Dahua Zhilong, Dahua Zhilong | Refers To | Hunan Dahua Zhilong Information Technology Co., Ltd. |
| Huaxiao Technology | Refers To | Zhejiang Huaxiao Technology Co., Ltd. |
| Vision Technology | Refers To | Zhejiang Fengshi Technology Co., Ltd. |
| Xi'an Dahua Zhilian, Xi'an Dahua | Refers To | Xi'an Dahua Zhilian Technology Co., Ltd. |
| Wuxi Ruipin | Refers To | Wuxi Dahua Ruipin Technology Co., Ltd. |
| Dahua Robot | Refers To | Zhejiang Dahua Robot Technology Co., Ltd. |
| Beijing Huayue | Refers To | Beijing Huayue Shangcheng Information Technology Service Co., Ltd. |
| Shanghai Huashang | Refers To | Shanghai Huashang Chengyue Information Technology Service Co., Ltd. |
| Dahua Jinzhi | Refers To | Zhejiang Dahua Jinzhi Technology Co., Ltd. |
| Dahua Guangxun | Refers To | Sichuan Dahua Guangxun Photoelectric Technology Co., Ltd. |
| Huajuan Technology | Refers To | Hangzhou Huajuan Technology Co., Ltd. |
| Dahua Hong Kong, Dahua (HK) Limited | Refers To | Dahua Technology (HK) Limited |
| Zhoushan Operation | Refers To | Zhejiang Zhoushan Digital Development Operation Co., Ltd |
| Yunnan Zhili | Refers To | Yunnan Zhili Technology Co., Ltd |
| Guangxi Dahua Technology | Refers To | Guangxi Dahua Technology Co., Ltd. |
| Dahua Storage | Refers To | Zhejiang Dahua Storage Technology Co., Ltd. |
| Dahua Automobile | Refers To | Zhejiang Dahua Automobile Technology Co., Ltd. |
| Chengdu Zhilian | Refers To | Chengdu Dahua Zhilian Information Technology Co., Ltd. |
| Dahua Zhian | Refers To | Chengdu Dahua Zhian Information Technology Service Co., Ltd. |
| Chengdu Zhishu | Refers To | Chengdu Dahua Zhishu Information Technology Service Co., Ltd. |
| Chengdu Zhichuang | Refers To | Chengdu Zhichuang Yunshu Technology Co., Ltd. |
| Chengdu Smart | Refers To | Chengdu Huishan Smart Network Technology Co., Ltd. |
| Huakong Software | Refers To | Zhejiang Huakong Software Co., Ltd. |
| Xinsheng Electronic | Refers To | Zhejiang Xinsheng Electronic Technology Co., Ltd. |
| Huacheng Software | Refers To | Hangzhou Huacheng Software Technology Co., Ltd. |
| Guizhou Dahua | Refers To | Guizhou Dahua Information Technology Co., Ltd. |
| Dahua USA | Refers To | Dahua Technology USA Inc. |
| Dahua Europe | Refers To | Dahua Europe B.V. |
| Dahua Middle East | Refers To | Dahua Technology Middle East FZE |
| Dahua Mexico | Refers To | Dahua Technology Mexico S.A. DE C.V |
| Dahua Chile | Refers To | Dahua Technology Chile SpA |
| Dahua Malaysia | Refers To | Dahua Security Malaysia SDN. BHD. |
| Dahua Korea | Refers To | Dahua Technology Korea Company Limited |
| Dahua Indonesia | Refers To | PT. Dahua Vision Technology Indonesia |
| Dahua Colombia | Refers To | Dahua Technology Colombia S.A.S |
| Dahua Australia | Refers To | Dahua Technology Australia PTY LTD |
| Dahua Singapore | Refers To | Dahua Technology Singapore Pte. Ltd. |
| Dahua South Africa | Refers To | Dahua Technology South Africa Proprietary Limited |
| Dahua Peru | Refers To | Dahua Technology Perú S.A.C |
| Dahua Russia | Refers To | Dahua Technology Rus Limited Liability Company |
| Dahua Brazil | Refers To | DAHUA TECHNOLOGY BRASIL COM?RCIO E SERVI?OS EM SEGURAN?A ELETR?NICA LTDA |
| Dahua Canada | Refers To | Dahua Technology Canada INC. |
| Dahua Panama | Refers To | Dahua Technology Panama S.A. |
| Dahua Hungary | Refers To | Dahua Technology Hungary Kft |
| Dahua Poland | Refers To | Dahua Technology Poland Sp. z o.o. |
| Dahua Tunisia | Refers To | Dahua Technology Tunisia |
| Dahua Kenya | Refers To | Dahua Technology Kenya Limited |
| Dahua UK | Refers To | Dahua Technology UK Limited |
| Dahua Bulgaria | Refers To | Dahua Technology Bulgaria EOOD |
| Dahua Germany | Refers To | Dahua Technology GmbH |
| Dahua Serbia | Refers To | Dahua Technology SRB d.o.o. |
| Dahua India | Refers To | Dahua Technology India Private Limited |
| Dahua Turkey | Refers To | Dahua Guvenlik Teknolojileri Sanayi ve Ticaret A.S. |
| Dahua Czech | Refers To | Dahua Technology Czech s.r.o. |
| Dahua Argentina | Refers To | Dahua Argentina S.A. |
| Dahua Spain | Refers To | Dahua Iberia, S.L. |
| Dahua Kazakhstan | Refers To | Dahua Technology Kazakhstan LLP |
| Dahua Denmark | Refers To | Dahua Technology Denmark Aps. |
| Dahua France | Refers To | Dahua Technology France |
| Dahua Lorex (US) Corporation | Refers To | Lorex Corporation |
| Dahua Technology Holdings | Refers To | Dahua Technology Holdings Limited |
| Dahua New Zealand | Refers To | Dahua Technology New Zealand Limited |
| Dahua Netherlands | Refers To | Dahua Technology Netherlands B.V. |
| Dahua Morocco | Refers To | Dahua Technology Morocco SARL |
| Dahua Romania | Refers To | Dahua Technology S.R.L |
| Dahua Uzbekistan | Refers To | DAHUA VISION LLC |
| Dahua Technology Italy | Refers To | Dahua Technology Italy S.R.L. |
| Dahua Lorex (Canada) Corporation | Refers To | Lorex Technology Inc. |
| Dahua Bulgaria | Refers To | Dahua Technology Bulgaria EOOD |
| Dahua Sri Lanka | Refers To | Dahua Technology China (Pvt) LTD |
| Dahua Pakistan | Refers To | Dahua Technology Pakistan (private) Limited |
| Dahua Thailand | Refers To | Dahua Technology(Thailand) Co.,LTD. |
| Dahua Nigeria | Refers To | Dahua Technology Nigeria Representative Ltd |
| Dahua Israel | Refers To | Dahua Technology Israel Ltd. |
Section II Company Profile and Key Financial Indicators
1. Company Profile
| Stock Abbreviation | DAHUA | Stock Code | 002236 |
| Stock Exchange | Shenzhen Stock Exchange | ||
| Company Name in Chinese | 浙江大华技术股份有限公司 | ||
| Abbreviation of Chinese Name | DAHUA | ||
| Company Name in Foreign Language (If any) | ZHEJIANG DAHUA TECHNOLOGY CO., LTD. | ||
| Legal Representative | Fu Liquan | ||
II. Contact Person and Contact Information
| Secretary of the Board | Representative of Securities Affairs | |
| Name | Wu Jian | Lou Qiongyu |
| Contact Address | No. 1199 Binan Road, Binjiang District, Hangzhou City, Zhejiang Province | No. 1199 Binan Road, Binjiang District, Hangzhou City, Zhejiang Province |
| Tel. | 0571-28939522 | 0571-28939522 |
| Fax | 0571-28051737 | 0571-28051737 |
| zqsw@dahuatech.com | zqsw@dahuatech.com |
III. Other Matters
1. Company Contact Information
The Company's registered address, office address, postal codes, website, and/or e-mail address have changed during thereporting period
□ Applicable √ Not applicable
The Company's registered address, office address and postal codes, website, and e-mail address remained unchangedduring the reporting period. Please refer to the 2019 Annual Report for details.
2. Information Disclosure and Storage Location
The information disclosure and storage location have changed during the reporting period
□ Applicable √ Not applicable
The name of the newspaper selected by the Company for information disclosure, the website designated by the China
Securities Regulatory Commission for publishing semi-annual reports, and the storage location of the Company'ssemi-annual reports has not changed during the reporting period. For details, please refer to the 2019 annual report.
IV. Key Accounting Data and Financial IndicatorsWhether the Company needs performed retroactive adjustment or restatement of accounting data in prior years or not
□ Yes √ No
| The Current Reporting Period | The Same Period of Last Year | Increase/Decrease of the Current Reporting Period Compared with the Same Period of the Previous Year | |
| Operating income (RMB) | 9,838,328,853.62 | 10,806,566,370.89 | -8.96% |
| Net profit attributable to shareholders of the listed Company (RMB) | 1,368,974,364.44 | 1,238,880,948.74 | 10.50% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) | 1,290,258,785.10 | 1,138,651,748.03 | 13.31% |
| Net cash flow generated by operational activities (RMB) | -106,927,963.95 | -870,467,092.88 | 87.72% |
| Basic Earnings per Share (RMB/Share) | 0.47 | 0.42 | 11.90% |
| Diluted Earnings per Share (RMB/Share) | 0.47 | 0.42 | 11.90% |
| Weighted Average ROE | 8.35% | 9.40% | -1.05% |
| At the End of the Current Reporting Period | At the End of the Previous Year | Increase/Decrease at the End of the Current Reporting Period Compared with the End of the Previous Year | |
| Total assets (RMB) | 29,550,280,033.16 | 29,564,650,212.93 | -0.05% |
| Net assets attributable to shareholders of the listed company (RMB) | 16,994,161,396.52 | 15,643,007,027.91 | 8.64% |
V. Differences in Accounting Data under Domestic and Foreign AccountingStandards
(1) Differences of net profits and net assets in the financial reports disclosed according to theinternational accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
During the reporting period of the company, there is no difference between the net profits and net assets in the financialreports disclosed according to international accounting standards and Chinese accounting standards.
(2) Differences between the net profits and net assets in the financial reports disclosedaccording to the overseas accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
During the reporting period of the company, there is no difference between the net profits and net assets in the financialreports disclosed according to overseas accounting standards and Chinese accounting standards.VI. Non-recurring Profit and Loss Items and Their Amounts
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount | Note |
| Profits or losses from disposal of non-current assets (including the write-off for the accrued impairment of assets) | 5,844,316.80 | |
| The government subsidies included in the current profits and losses (excluding the government subsidies closely related to regular businesses of the Company and issued in the quota or quantity based on the national standards) | 85,572,330.79 | |
| Profits and losses resulting from the changes in fair value for holding trading financial assets, derivative financial assets and trading financial liabilities, derivative financial liabilities and investment income from disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities, and other obligatory right investment, excluding the effective hedging businesses related to the regular business operation of the Company | 22,700,204.34 | |
| Reversal of the receivables and contract assets depreciation reserves for separate impairment test | 1,920,625.00 | |
| Non-Operating Revenue and expenses other than the above | -6,359,772.83 | |
| Other gains and losses items that fit the definition of non-recurring gains and losses | 210,491.25 | |
| Less: Impact of income tax | 15,263,612.09 | |
| Impact of minority equity (after tax) | 15,909,003.92 | |
| Total | 78,715,579.34 | -- |
For items defined as non-recurring gains and losses according to the No. 1 Explanatory Announcement on InformationDisclosure for Companies Offering Their Securities to Public - Non-recurring Gains and Losses, or non-recurring gainsand losses items listed in the said document defined as recurring ones, please specify the reasons.
□ Applicable √ Not applicable
In the reporting period, the Company did not define any non-recurring gains and losses items defined and listed in the No.1 Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to Public - Non-recurringGains and Losses, as recurring gains and losses items.
Section III Corporate Business Overview
I. The Principal Business of the Company during the Reporting PeriodDuring the reporting period, there were no major changes in the Company's principal business. For details, please refer tothe 2019 Annual Report.II. Material Changes to Major Assets
1. Major changes in main assets
| Major Assets | Explanation of Material Changes |
| Equity assets | No major changes. |
| Fixed Assets | No major changes. |
| Intangible Assets | No major changes. |
| Projects under Construction | 62.53% higher than that at the beginning of the year, mainly due to the increase of investment in the Phase II construction of the smart manufacturing base in Hangzhou and the smart IoT solutions R&D and industrialization project. |
| Trading Financial Assets | RMB 902 million increased compared with that at the beginning of the year, mainly due to the purchase of structured deposits of RMB 900 million in this period. |
| Receivables Financing | 38.25% lower than that at the beginning of this year, mainly caused by the decrease of settlement of notes receivable in the current reporting period. |
| Non-current Assets Due within 1 Year | 37.64% higher than that at the beginning of the year, mainly due to increase of long-term receivables due within one year. |
2. Major overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
During the reporting period, there was no major change in the Company's core competitiveness. For details, please referto the 2019 Annual Report.
Section IV Discussion and Analysis on Business Circumstance
I. OverviewIn the first half of 2020, the global outbreak of the novel coronavirus and the further escalation of Sino-US tradefriction have inflicted impacts of varying degrees on economic activities. Facing these unfavorable factors in the externalenvironment, the Company has worked hard together to proactively promote the marketing of strategic products, keyproducts and software products, optimize product structure, implement strategic sinking, strengthen refined managementof business processes, enhance operation quality, with an aim to achieve a sustainable and steady development of theCompany's business. Meanwhile, to combat COVID-19, the Company has utilized its long-term technologicalaccumulation to quickly respond to market needs and provide customers with scientific solutions for pandemic preventionand control and humanitarian assistance within its capacity. These efforts have provided strong guarantee for globalpandemic prevention and control and resumption of work and production, improved the Company's image and sense ofsocial responsibility, and enhanced mutual trust with customers.During the reporting period, the Company has realized RMB 9.838 billion of operating revenue, 8.96% lower on ayear-on-year basis, and RMB 1.369 billion net profits attributable to shareholders of listed company, a year-on-yearincrease of 10.50%.
Main business strategies of the Company include:
1. Continuously increase targeted R&D investments, improve technology innovation ability and core technicalstrengthThe Company continued to increases its investment in AI, cloud computing and big data, 5G, computer vision, andother future-oriented core technologies. The Company continued to strengthen software capabilities, gain insights intoindustry and technology development trends, and cooperate with ecological partners to develop more customerdemand-oriented products and solutions.
2. Deepen its understanding of customer business, focus on the management of strategic opportunities, and enhancesystematic marketing capabilities
The Company enhanced its penetration into industry segmentation and customers’ businesses, and improved itsability to incubate and implement businesses from market insights. The Company constantly advanced the managementof strategic opportunities, rapidly researched and delivered targeted products and solutions, realized business value forcustomers, and contributed to the success of customers. As to the applications in cross-industry scenarios, the Companyprovided comprehensive solutions through ecological cooperation.
3. Promote the construction of a global marketing system and strengthen global delivery and service capabilities
In the domestic market, the Company continued to promote the construction of marketing channel systems, refineoperating channels, and improve project operation capabilities; in overseas markets, the Company overcame adverseeffects of the pandemic and adopted various methods, such as online and localized marketing, to advance channelexpansion and sinking and improve overseas market coverage and brand awareness. The Company continuouslystrengthened its end-to-end supply chain forecasting ability and inventory management capability, improved cost-effectivesupply capabilities in global markets, and enhanced its compliance operating system, in order to support the steadybusiness development.
4. Continue to promote systematic management changes and improve organizational capabilities and operationalefficiency
The Company continued to promote refined management, insist on the development path with high quality and stable
growth, deepen business transformation and management optimization aimed at creating value for customers, andsmooth the LTC, IPD, ITR, ISC, ISD processes, to realize the efficient operation of the end-to-end process system.II. Main Business AnalysisOverviewSee "I. Overview" in "Discussion and Analysis on Business Circumstance".Year-on-year changes in major financial data
Unit: RMB
| The Current Reporting Period | The Same Period of Last Year | Year-on-year Increase or Decrease | Reasons for Changes | |
| Operating Income | 9,838,328,853.62 | 10,806,566,370.89 | -8.96% | No Significant Change |
| Operating Cost | 5,099,250,150.57 | 6,443,429,151.03 | -20.86% | No Significant Change |
| Sales Expenses | 1,805,227,134.27 | 1,539,714,255.33 | 17.24% | No Significant Change |
| Administration Expenses | 355,781,491.22 | 346,919,167.36 | 2.55% | No Significant Change |
| Financial Expenses | -24,567,529.26 | 11,045,548.40 | -322.42% | Mainly due to the decrease in interest expenses in the current period |
| Income Tax Expense | 169,559,416.73 | 163,173,365.97 | 3.91% | No Significant Change |
| R&D Investment | 1,314,612,940.95 | 1,245,261,201.77 | 5.57% | No Significant Change |
| Net Cash Flow Generated by Operating Activities | -106,927,963.95 | -870,467,092.88 | 87.72% | Mainly due to the increase in sales payment collection in the current period |
| Net Cash Flow Generated by Investment Activities | -1,247,540,391.99 | -282,555,064.78 | -341.52% | Mainly due to the purchase of structured deposits in the current period |
| Net Cash Flow Generated by Financing Activities | 1,401,333,857.62 | 988,389,356.92 | 41.78% | Mainly due to the decrease in debt repayment in the current period |
| Net Additions to Balance of Equivalents | 46,435,465.25 | -157,333,633.07 | 129.51% | Mainly due to the increase in sales payment collection and the decrease in debt repayment in the current period |
The Company's profit composition or source has changed significantly during the reporting period
□ Applicable √ Not applicable
There was no major change in the Company's profit composition or source during the reporting period.Operating income composition
Unit: RMB
| The Current Reporting Period | The Same Period of Last Year | Year-on-year Increase or Decrease | |||
| Amount | Proportion in Operating Revenue | Amount | Proportion in Operating Revenue | ||
| Total Revenue | 9,838,328,853.62 | 100% | 10,806,566,370.89 | 100% | -8.96% |
| By Industry | |||||
| Security industry | 9,838,328,853.62 | 100.00% | 10,806,566,370.89 | 100.00% | -8.96% |
| By Product | |||||
| Solutions | 5,200,876,438.66 | 52.86% | 5,626,141,239.99 | 52.06% | -7.56% |
| Product | 4,069,496,985.96 | 41.37% | 4,537,889,480.14 | 41.99% | -10.32% |
| Others | 567,955,429.00 | 5.77% | 642,535,650.76 | 5.95% | -11.61% |
| By Region | |||||
| Domestic | 5,789,716,423.38 | 58.85% | 7,087,773,045.42 | 65.59% | -18.31% |
| Overseas | 4,048,612,430.24 | 41.15% | 3,718,793,325.47 | 34.41% | 8.87% |
Industry, product, or region accounting for more than 10% of the Company's operating revenue or profit
√ Applicable □ Not applicable
Unit: RMB
| Operating income | Operating Cost | Gross Margin | Increase or Decrease of Operating Income Compared with the Same Period of Last Year | Increase or Decrease of Operating Cost over the Same Period of Last year | Increase or Decrease of Gross Profit Compared with the Same Period of Last year | |
| By Industry | ||||||
| Security Industry | 9,838,328,853.62 | 5,099,250,150.57 | 48.17% | -8.96% | -20.86% | 7.80% |
| By Product | ||||||
| Solutions | 5,200,876,438.66 | 2,706,121,225.19 | 47.97% | -7.56% | -13.94% | 3.86% |
| Product | 4,069,496,985.96 | 1,874,094,337.42 | 53.95% | -10.32% | -30.94% | 13.75% |
| By Region | ||||||
| Domestic | 5,789,716,423.38 | 3,354,083,609.38 | 42.07% | -18.31% | -24.32% | 4.60% |
| Overseas | 4,048,612,430.24 | 1,745,166,541.19 | 56.89% | 8.87% | -13.23% | 10.97% |
Where the statistical caliber of main business data was adjusted in the reporting period, the main business data of latestperiod were adjusted according to the period-end caliber
□ Applicable √ Not applicable
Reasons for over 30% changes in related data on year-on-year basis
√ Applicable □ Not applicable
| Increase or Decrease of Operating Income Compared with the Same Period of Last Year | Increase or Decrease of Operating Cost over the Same Period of Last year | Reasons for Changes | |
| Product | -10.32% | -30.94% | Mainly due to the decrease in operating income compared with the same period last year, and the increase in the proportion of high-margin products compared with the same period last year |
III. Non-main Business Analysis
□ Applicable √ Not applicable
IV. Analysis of Assets and Liabilities
1. Significant changes in assets composition
Unit: RMB
| At the End of the Current Reporting Period | Balance at the End of the Previous Year | Proportion increase and decrease | Statement on Significant Changes | |||
| Amount | Proportion To Total Assets | Amount | Proportion To Total Assets | |||
| Cash and Bank Balances | 3,130,271,241.04 | 10.59% | 3,084,428,970.43 | 10.43% | 0.16% | No Significant Change |
| Accounts Receivable | 11,916,984,059.27 | 40.33% | 13,241,196,380.65 | 44.79% | -4.46% | Mainly due to the increase in sales payment collection |
| Inventory | 4,491,116,344.16 | 15.20% | 3,839,810,704.33 | 12.99% | 2.21% | Mainly due to the increase of stock |
| Investment Property | 334,097,817.92 | 1.13% | 336,181,589.99 | 1.14% | -0.01% | No Significant Change |
| Long-term Equity Investment | 499,277,297.72 | 1.69% | 490,731,236.85 | 1.66% | 0.03% | No Significant Change |
| Fixed Assets | 1,510,795,215.4 | 5.11% | 1,522,463,368.8 | 5.15% | -0.04% | No Significant Change |
| 7 | 3 | |||||
| Projects under Construction | 708,252,710.11 | 2.40% | 435,757,406.90 | 1.47% | 0.93% | It's mainly caused by the increase of investment in the Phase II construction of Hangzhou smart manufacturing base and the R&D and industrialization of the smart IoT solutions |
| Short-term Loan | 1,540,344,169.29 | 5.21% | 400,323,888.90 | 1.35% | 3.86% | Mainly due to the increase in demand for short-term capital turnover |
| Long-term Loan | 528,500,000.00 | 1.79% | 153,500,000.00 | 0.52% | 1.27% | Mainly due to the increase in bank loans |
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
| Item | At the beginning of the reporting period | Changes in fair value gains and losses in the current period | Cumulative fair value changes in equity | Impairment loss of the reporting period | Purchase amount of the reporting period | Sales amount of the reporting period | Other variations | At the end of the reporting period |
| Financial Assets | ||||||||
| Derivative Financial Assets | 2,431,780.82 | 1,819,459,912.88 | 919,459,912.88 | 902,431,780.82 | ||||
| Financial Assets Subtotal | 2,431,780.82 | 1,819,459,912.88 | 919,459,912.88 | 902,431,780.82 | ||||
| Other Non-current Financial Assets | 67,213,489.43 | 14,577,362.35 | 108,147,000.00 | 189,937,851.78 | ||||
| Receivables Financing | 1,086,017,357.90 | -415,349,993.99 | 670,667,363.91 | |||||
| Total | 1,153,230,847.33 | 17,009,143.17 | 1,927,606,912.88 | 919,459,912.88 | -415,349,993.99 | 1,763,036,996.51 | ||
| Financial liabilities | ||||||||
Are there any significant changes in the measurement attributes of the company's main assets during the reportingperiod?
□ Yes √ No
3. Restrictions on asset rights as of the end of the reporting period
As of June 30, 2020, restricted assets are as follows:
| Item | End Balance (RMB) | Cause of Restrictions |
| Cash and Bank Balances | 345,896,141.39 | Deposit for Documentary Loan, Guarantee Deposit |
| Receivables Financing | 608,093,569.33 | Pledges used to issue bank acceptance bills |
| Long-term Receivables | 216,551,165.91 | Pledges used for bank loans |
| Non-current Assets Due within 1 Year | 29,381,785.35 | Pledges used for bank loans |
| Trading Financial Assets | 100,000,000.00 | Pledges used to issue domestic LoCs |
| Total | 1,299,922,661.98 |
V. Investment analysis
1. Overview
√ Applicable □ Not applicable
| Investment In The Reporting Period (RMB) | Investment Over The Corresponding Period Of Last Year | Rate Of Change |
| 447,786,608.55 | 168,115,641.06 | 166.36% |
2. Significant equity investments acquired during the reporting period
□ Applicable √ Not applicable
3. Major non-equity investments underway during the reporting period
√ Applicable □ Not applicable
Unit: RMB
| Item Name | Investment Mode | The Investment In The Fixed Assets Or Not | Involved industry in investment projects | Amount Invested In The Current Reporting Period | Cumulative Actual Investment As Of The End Of Reporting | Capital Source | Progress of Project | Anticipated Income | Cumulative Income As Of The End Of The Reporting | Reasons For Unreached Planned Progress And Anticipated | Disclosing Date (If Any) | Disclosing Index (If Any) |
| Period | Period | Revenue | ||||||||||
| Phase I Technical Transformation and Phase II Construction Project of Hangzhou Smart Manufacturing Base | Self-construction | Yes | Video surveillance industry | 126,452,692.93 | 383,636,322.40 | Self-raised funds | 22.72% | N/A | August 17, 2019 | Juchao Information Website http://cninfo.com.cn/ | ||
| Construction Project of Xi'an R & D Center | Self-construction | Yes | Video surveillance industry | 28,318,944.40 | 118,137,498.43 | Self-raised funds | 10.10% | N/A | August 17, 2019 | Juchao Information Website http://cninfo.com.cn/ | ||
| Project of Smart IoT Solution R & D and Industrialization | Self-construction | Yes | Video surveillance industry | 240,229,439.69 | 435,248,614.70 | Self-raised funds | 26.80% | N/A | August 17, 2019 | Juchao Information Website http://cninfo.com.cn/ | ||
| Total | -- | -- | -- | 395,001,077.02 | 937,022,435.53 | -- | -- | -- | -- | -- |
4. Financial assets at fair value
√ Applicable □ Not applicable
Unit: RMB
| Asset Class | Initial Investment Cost | Changes in fair value gains and losses in the | Cumulative fair value changes in equity | Amount purchased during the reporting | Amount sold during the reporting | Cumulative investme | Amount at the end of the period | Capital Source |
| current period | period | period | nt income | |||||
| Financial Derivatives | 900,000,000.00 | 2,431,780.82 | 1,819,459,912.88 | 919,459,912.88 | -1,616,153.94 | 902,431,780.82 | Equity Fund | |
| Other Non-current Financial Assets | 67,213,489.43 | 14,577,362.35 | 108,147,000.00 | 189,937,851.78 | Equity Fund | |||
| Receivables Financing | 1,086,017,357.90 | 670,667,363.91 | Equity Fund | |||||
| Total | 2,053,230,847.33 | 17,009,143.17 | 1,927,606,912.88 | 919,459,912.88 | -1,616,153.94 | 1,763,036,996.51 | -- |
5. Financial Asset Investment
(1) Securities investment
□ Applicable √ Not applicable
No securities investment during the reporting period.
(2) Derivatives investment
√ Applicable □ Not applicable
Unit: ten thousand RMB
| Name of derivatives investment operator | Relation with related party | Related-party transaction or not | Types of derivatives investment | Initial amount of derivatives investment | Starting date | Termination date | Investment amount at the beginning of the period | Amount purchased during the reporting period | Amount sold during the reporting period | Provision for impairment accrued (if any) | Investment amount at the end of the period | Proportion of the period-end investment amount to the company’s net assets at the end of the reporting period | Actual profit and loss amount during the reporting period |
| Agricult | Not | No | Structur | 10,000. | May | Decem | 10,000. | 10,000. | 0.59% |
| ural Bank of China | related | ed deposits | 00 | 20, 2020 | ber 29, 2020 | 00 | 00 | ||||||
| China Construction Bank | Not related | No | Structured deposits | 80,000.00 | June 5, 2020 | September 3, 2020 | 80,000.00 | 80,000.00 | 4.71% | ||||
| Bank | Not related | No | Foreign exchange contract | February 28, 2020 | June 30, 2020 | 91,945.99 | 91,945.99 | -161.62 | |||||
| Total | 90,000.00 | -- | -- | 181,945.99 | 91,945.99 | 90,000.00 | 5.30% | -161.62 | |||||
| Sources of funds for derivatives investment | Equity Fund | ||||||||||||
| Litigation involved (if applicable) | N/A | ||||||||||||
| Disclosure date of the announcement of the board of directors for the approval of derivatives investment (if any) | April 3, 2020 | ||||||||||||
| Disclosure date of the announcement of the general meeting of shareholders for the approval of derivatives investment (if any) | May 13, 2020 | ||||||||||||
| Risk analysis and control measures for derivatives positions during the reporting period (including but not limited to the market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | For detailed information on structured deposits risk analysis and control measures, please refer to the "Announcement on the Use of Self-owned Funds to Purchase Bank Wealth Management Products" (Announcement No. 2020-025) disclosed on April 3, 2020 by the Company, and the "Announcement on Carrying out Foreign Exchange Hedging Transactions" (Announcement No. 2020-022) disclosed on April 3, 2020. | ||||||||||||
| Changes in market prices or product fair value of invested derivatives during the reporting period, the analysis of the fair value of derivatives should disclose the specific methods used and related assumptions and parameters | Undue structured deposits signed by the Company and banks during the reporting period, the gains and losses from changes in fair value shall be determined by linking the interest rate with foreign exchange options; the trading financial assets or liabilities shall be determined according to the differences between the quotation of forward foreign exchange settlement & sales contract and the forward foreign exchange price. | ||||||||||||
| Explanation for significant | N/A | ||||||||||||
| changes in the company’s derivatives accounting policies and specific accounting principles during the reporting period compared with the previous reporting period | |
| Special opinions from independent directors about the Company's derivatives investment and risk control | N/A |
6. Use of raised funds
□ Applicable √ Not applicable
No use of funds in the reporting period of the Company
7. Major projects invested with non-raised funds
□ Applicable √ Not applicable
During the reporting period, the company had no major projects invested with non-raised funds.
VI. Major Assets and Equity Sales
1. Major assets sales
□ Applicable √ Not applicable
No major assets sales in the reporting period of the Company
2. Major equity sales
□ Applicable √ Not applicable
VII. Analysis of Major Subsidiaries and Investees
√ Applicable □ Not applicable
Major subsidiaries and joint-stock companies with a net profit impact of over 10%.
Unit: RMB
| Company Name | Company Type | Main businesses | Registered Capital | Total Assets | Net Assets | Operating income | Operating Profit | Net Profit |
| Zhejiang Dahua System | Subsidiary Compa | The development, production, installation and | 500,000,000.00 | 4,515,270,687.50 | 1,272,570,053.77 | 544,876,923.38 | -29,229,774.81 | -16,970,904.88 |
| Engineering Co., Ltd. | ny | sales of electronic and communication products; the design, construction and installation of computer system integration and automated control engineering | ||||||
| Zhejiang Dahua Vision Technology Co., Ltd. | Subsidiary Company | The development, sales, and technical services related to computer software, as well as the design, development, production and sales of security equipment, electronic products and communications products | 646,810,000.00 | 17,804,434,277.55 | 1,546,139,662.47 | 8,190,745,327.33 | 314,570,695.88 | 236,045,368.81 |
| Zhejiang Dahua Zhilian Co., Ltd. | Subsidiary Company | Production and sales of electronic products and auxiliary equipment; technological development, technical consultation and services, achievement transference of computer software, electronic products, communications products, and digital security | 1,110,000,000.00 | 4,370,702,038.44 | 947,262,905.41 | 1,855,734,942.27 | -26,503,796.27 | -19,889,347.58 |
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
products;self-owned houselease; cateringservice; import andexport of goods.
Company Name
| Company Name | Method of acquisition and disposal of subsidiaries during the reporting period | Impact on overall production management and performance |
| Guizhou Dahua Intelligence Technology Co., Ltd. | Cancellation | No significant impact on overall production, operation and performance |
| Zhejiang Dahua Storage Technology Co., Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| Zhejiang Dahua Automobile Technology Co., Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| Chengdu Dahua Zhilian Information Technology Co., Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| Chengdu Dahua Zhian Information Technology Service Co., Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| Chengdu Dahua Zhishu Information Technology Service Co., Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| Chengdu Zhichuang Yunshu Technology Co., Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| Chengdu Huishan Smart Network Technology Co., Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| Zhejiang Huakong Software Co., Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| Zhejiang Xinsheng Electronic Technology Co., Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| Hangzhou Huacheng Software Technology Co., Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| Guizhou Dahua Information Technology Co., Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| Dahua Technology Nigeria Representative Ltd | Established with investment | No significant impact on overall production, operation and performance |
| Dahua Technology Israel Ltd. | Established with investment | No significant impact on overall production, operation and performance |
| South-North United Information Technology | Equity transfer | No significant impact on overall |
| Co., Ltd. | production, operation and performance |
VIII. The structured entity controlled by the Company
□ Applicable √ Not applicable
IX. Estimation of Business Performance from January to September 2020Warning and explanation of the forecast that the cumulative net profit from the beginning of the year to the end of the nextreporting period may be negative or a significant change compared with the same period of the previous year
□ Applicable √ Not applicable
X. Risks Faced by the Company and CountermeasuresDuring the reporting period, there was no significant change in the risks faced by the Company. The Company hasbeen trying to identify all kinds of risks and actively take countermeasures to avoid and reduce the risks:
1. Risk of technology upgrading: the video surveillance industry is a typical technology-intensive industry, which ischanging extremely fast. If the Company is unable to keep up with development trends in the industry's technology, to payfull attention to customers' diversified individual needs, and to be followed by sufficient R&D investments, it will still facethe risk of losing market competitiveness due to discontinuous innovation. By increasing R & D investment, the Companycontinued to strengthen research on core technologies, such as AI, video cloud, computer vision, and reserved products,technology, management and talent resources for a broader market in the future, so as to achieve sustainable and steadydevelopment of business.
2. Risk of business model change: with the development of network communications, cloud computing, big data, AIand other technologies, and the upgrade of the application of smart phones, the business model in the IoT era may havean impact on the development of traditional industry. If an enterprise fails to timely grasp opportunities brought about bybusiness model transformation, it will be exposed to the risk of losing its market share. The Company continues to focuson and study the major changes in global economy, industry and technology, analyze the industry development logic, andpredict the evolution of global security industry and IoT industry, the continuous integration of video, informationcommunication and digital technologies, diversification and uncertainty of customer demands. While consolidating theadvantageous market, The Company actively explores and pilots new businesses and new commercial mode, and carryout business and technical layout.
3. Risk of product safety: the Company attaches great importance to and continuously strengthens resourceinvestment to ensure safe and reliable operations of the security system so as to respond to the product security risks onthe Internet. However, hackers’ attacks, computer viruses, physical security vulnerabilities, natural disasters, accidents,power interruptions, telecommunications failures, terrorism, and warfare events may still occur from time to time, resultingin security vulnerabilities, system failures, or service interruptions. The Company has founded a cyber security committee,and set up a professional security team to develop company-level product safety plan, ensuring product safety in wholeprocess from requirements to design, coding, and testing process. At the same time, the Company actively carries outtechnical exchanges and cooperation with mainstream safety enterprises, safety evaluation agencies and correspondingindustry associations to provide customers with safe products and solutions.
4. Risk of Intellectual property: the promotion of the company's globalization and self-owned brand strategy will likelybring about intellectual property risks and patent infringement, which may cause fluctuation in business relations andpublic opinions, increasing lawsuits and rising costs. The Company attaches great importance to technological innovation
and has established protection and management mechanism for intangible assets such as innovation achievements,self-owned brands, trade secrets, and constantly gathers advantageous IP assets; With IP compliance risk control system,the Company continues to strengthen its ability to understand and grasp the IP laws and regulations, administrative andjudicial environment of the region where the company's business is located in.
5. Risk of foreign exchange: the Company's export sales are mainly settled in United States Dollars ("USD"), andoverseas transactions are still increasing. Therefore, fluctuations in the foreign exchange rate may affect the profitability ofthe Company. As US dollar is the settlement currency, the Company hedges and avoids the risk of exchange rates bycentralized management of exchange capitals, purchase and payment hedging and other methods.
6. Risk of decrease of local fiscal paying capacity: At present, some local fiscal debts are relatively high. If localpaying capacity is reduced, a series of risks may occur: industry demand growth may slow down, project duration may beextended, companies may need longer time to withdraw its capital, and customers may delay their payment. TheCompany continued to improve the internal control system and optimize project review methods, select local projectscarefully and assess project risks systematically, prudently assess the market logic and cash flow balance logic, controlrisks reasonably, make plans to deal with cash flow shortage, project delay and other risks, and reduce the risk of delayedpayment.
7. Risk of internationalized operation: the Company's products and solutions are provided to over 100 overseascountries and regions. The operation of international business may be subject to national or regional trade protection.What's more, the global spread of COVID-19 has produced uncertainties in overseas economic environment, which maybring negative impacts on the Company's local business development. The Company proactively prepared for andresponded to international business risks, established an overseas compliance and risk control system, continuouslystrengthened its understanding of and adaptability to the laws and regulations as well as the political and economicenvironment of the regions of business operation, and formulated differentiated business strategies based on "one country,one policy" in accordance with the changes in politics and economy of different regions, in order to reduce operationalrisks.
8. Risk of supply chain security: In terms of supply security, the Company has comprehensively reviewed variouspotential supply risks through dedicated projects, and strengthened its capacity for continuous and safe supply of keymaterials by researching and developing backup plans and diversifying supply sources, in order to ensure the security ofthe supply chain.
Section V Significant EventsI. Annual General Meeting and the Extraordinary General Meeting of Shareholders inthe Reporting Period
1. The shareholders' meetings for this reporting period
| Conference Session | Conference Type | Percentage of Investors Involved | Date of Conference | Date of Disclosure | Disclosure Index |
| First Extraordinary General Meeting of Shareholders in 2020 | Extraordinary General Meeting of Shareholders | 41.69% | January 16, 2020 | January 17, 2020 | Juchao Information Website http://www.cninfo.com.cn/ |
| 2019 Annual General Meeting of Shareholders | Annual General Meeting | 51.25% | May 12, 2020 | May 13, 2020 | Juchao Information Website http://www.cninfo.com.cn/ |
| 2nd Extraordinary General Meeting of Shareholders in 2020 | Extraordinary General Meeting of Shareholders | 54.39% | July 24, 2020 | July 25, 2020 | Juchao Information Website http://www.cninfo.com.cn/ |
2. Convening of the Extraordinary General Meeting of Shareholders upon request of thepreferred stockholders whose voting rights are restored
□ Applicable √ Not applicable
II. Profit Distribution and Capital Reserve Converted to Share Capital in theReporting Period
□ Applicable √ Not applicable
The Company proposed not to distribute cash dividends, not send bonus shares, and not convert the capital reserve intoshare capital in the first half of the year.III. Commitments Made by the Company's Actual Controller, Shareholders, RelatedParties, Purchasers and the Company that Have Been Fulfilled during the ReportingPeriod and Those Have Not by the End of the Reporting Period
√ Applicable □ Not applicable
| Commitments | Party making commitments | Commitment Type | Content | Time | Term | Performance |
| Commitments made during initial public offerings or refinancing | Fu Liquan, Zhu Jiangming, Chen Ailing, Wu Jun | Commitment on restricted shares | The number of shares transferred each year during his/her term of service shall not exceed 25 percent of the total number of shares he/she holds in the Company; he/she shall not transfer his/her shares in the Company within half a year after he/she leaves the Company; within the next twelve months, the number of shares sold through the stock exchange listing transactions shall not exceed 50% of the total shares he/she holds. | July 15, 2007 | Long-term | As of the disclosure date of this announcement, the aforementioned commitments are still in strict execution. |
| Other commitments to minority shareholders of the Company | Fu Liquan, Chen Ailing | Commitment on horizontal competition | (1) He/she will not directly engage in operational activities that constitute horizontal competition with the stock company's business; (2) for companies he/she held or indirectly held, he/she will fulfill the obligations under this commitment through agencies and personnel (including but not limited to directors and managers); (3) if the stock company further expands its range of products and business scope, he/she and the company held by him/her will not compete with the expanded range of products or businesses of the stock company. | June 30, 2007 | Long-term | As of the disclosure date of this announcement, the aforementioned commitments are still in strict execution. |
| Whether the commitment is fulfilled on time | Yes | |||||
IV. Appointment and Dismissal of Accounting FirmsWhether the semi-annual financial report has been audited
□ Yes √ No
The semi-annual report of the Company has not been audited yet.
V. Explanations of the Board of Directors and the Board of Supervisors for the"Non-standard Audit Report" of this Reporting Period made by the Accounting Firm
□ Applicable √ Not applicable
VI. Explanations of the Board of Directors for the “Non-Standard Audit Report” of thePrevious Year
□ Applicable √ Not applicable
VII. Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such case as bankruptcy and reorganization related event during the reporting period.VIII. Litigation MattersMajor lawsuits and arbitrations
□ Applicable √ Not applicable
There is no major lawsuit or arbitration during this reporting period.Other litigation matters
□ Applicable √ Not applicable
IX. Questions from Media
□ Applicable √ Not applicable
During the reporting period, the company had no questions raised by the general media.X. Penalties and Rectification
□ Applicable √ Not applicable
No such case as penalty and rectification during the reporting period.XI. Integrity of the Company, its Controlling Shareholder and Actual Controller
□ Applicable √ Not applicable
XII. Implementation of the Company's Equity Incentive Plan, Employee StockOwnership Plan or Other Employee Incentive Measures
√ Applicable □ Not applicable
1. On May 16, 2017, the Company's 2016 Annual General Meeting of Shareholders deliberated and approved theZhejiang Dahua Technology Co., Ltd. Phase III Employee Stock Ownership Plan (Draft) and its summary, and decided toimplement the Phase III Employee Stock Ownership Plan. On June 1, 2017, the Company's third employee stock
ownership plan completed the stock purchase through the "DAHUA No. 3 Directional Asset Management Plan of CaitongSecurities Asset Management", with an average purchase price of 16.83 yuan per share and total purchase amount of47,000,000 shares.
On November 12, 2018, the Company's 18th meeting of the 6th Board of Directors deliberated and approved"Suggestive Proposal on Extension of the Impending Expiration of the Company's Third Employee Stock Ownership PlanDuration". The Board of Directors agreed to extend the Company's third employee stock ownership plan for one yearaccording to the voting results of the shareholders' meeting. That is, the duration was extended for one additional year onthe basis of the original termination date, until May 15, 2020.
As of January 21, 2020, the Company's shares held by CAITONG Securities in accordance with Dahua No. 3directional asset management plan have all been sold out, and the third phase of ESOP has been implemented andterminated.
2. On January 16, 2020, the 1st Extraordinary General Meeting of Shareholders in 2020 deliberated and approvedthe "Proposal on Buy-back and Cancellation of Some Granted but Not Unlocked Restricted Stocks" and agreed to buyback and cancel 437,100 granted but not unlocked restricted shares held by 16 incentive targets who have left theCompany (of which, 427,100 shares were first granted, with the repurchase price of RMB 8.17 per share; reserved grantof 10,000 shares with a repurchase price of RMB 8.75 per share), and reduce the registered capital accordingly. Theabove buy-back and cancellation procedures were completed on April 27, 2020.
3. On April 2, 2020, the company’s 33rd meeting of the 6th Board of Directors and the 19th meeting of the 6th boardof supervisors reviewed and approved the "Proposal on the First Grant of Satisfying Unlocking Conditions for the FirstUnlocking Period of 2018 Restricted Stock Incentive Plan". The board of directors agreed to unlock 36,931,560 restrictedshares held by 2901 incentive targets that meet the unlocking conditions. The matter was completed on April 16, 2020.
4. On May 12, 2020, the Company's 2019 annual general meeting of shareholders deliberated and approved the"Proposal on Buy-back and Cancellation of Some Granted but not Unlocked Restricted Stocks" and agreed to buy backand cancel 1,810,600 authorized but not unlocked restricted shares held by 36 incentive targets who have left theCompany (of which, 1,787,600 shares were first granted, with the repurchase price of RMB 8.17 per share; reserved grantof 23,000 shares at a repurchase price of RMB 8.75 per share). The repurchase is still in process.
5. On May 12, 2020, the Company's 2019 annual general meeting of shareholders reviewed and approved "2020Restricted Stocks Incentive Plan of Zhejiang Dahua Technology Co., Ltd (Draft)" and its summary, and authorized theBoard of Directors to handle relevant matters.
6. On June 4, 2020, the 35th meeting of the 6th board of directors reviewed and approved the "Proposal on GrantingRestricted Stocks to Incentive Targets" and "Proposal on Adjusting the Grant Price of 2020 Restricted Stocks IncentivePlans". As during the period from the announcement date of the "2020 Restricted Stocks Incentive Plan of ZhejiangDahua Technology Co., Ltd (Draft)" to when the incentive targets complete the registration of restricted shares, theCompany has implemented the 2019 equity distribution, the grant price of restricted shares was adjusted from RMB 7.60per share to RMB 7.467. Meanwhile, the Board of Directors confirmed the granting conditions and concluded that theconditions had been satisfied and decided to grant restricted shares to the incentive targets. The granting date was June 4,2020.
7. On June 29, 2020, the Company disclosed the "Announcement on Completion of Registration of 2020 RestrictedShare Incentive Plan". The plan granted 13,391,480 shares to 10 incentive targets, which were listed on the ShenzhenStock Exchange on June 24, 2020.
8. On August 12, 2020, the Company’s 3rd Extraordinary General Meeting of Shareholders in 2020 reviewed andapproved the "Proposal on Buy-back and Cancellation of Some Granted but not Unlocked Restricted Stocks". Themeeting agreed to buy back and cancel 4,822,680 restricted shares that have been granted but not unlocked held by 183incentive targets who are no longer eligible (of which, 4,337,880 shares are first granted with a repurchase price of RMB
8.17 per share; reserved grant of 484,800 shares with a repurchase price of RMB 8.75 per share). The repurchase is stillin process.XIII. Significant Related-party Transactions
1. Related transactions relevant to daily operations
□ Applicable √ Not applicable
No such case as significant related-party transactions connected with daily operations.
2. Related transactions in acquisition or sale of assets or equities
□ Applicable √ Not applicable
No such case as related-party transactions arising from the acquisition or sale of major assets or equity.
3. Significant related-party transactions arising from joint investments on external parties
√ Applicable □ Not applicable
For details, see "5. Other Significant Related-party Transactions" in this section.
4. Related-party Credit and Debt
√ Applicable □ Not applicable
Whether there are non-operating credit and debt with related parties
√ Yes □ No
Debts payable to related parties:
| Related parties | Relation with related party | Causes | Open Balance (RMB 10,000) | New amount in the current period (RMB 10,000) | Amount returned in this period (RMB 10,000) | Interest rate | Current interest (RMB 10,000) | End Balance (RMB 10,000) |
| Zhoushan Weixin Equity Investment Partnership (Limited Partnership) | Enterprise over which the actual controller has significant influence | Equity transfer intention payment | 640.00 | 640.00 | ||||
| Zhoushan Zhixin Equity Investment Partnership (Limited | Enterprise controlled by the senior manager of the | Equity transfer intention payment | 660.00 | 660.00 |
| Partnership) | Company | |||||||
| Ningbo Hualing Investment Management Partnership (Limited Partnership) | Enterprise controlled by the actual controller | Equity transfer intention payment | 1,100.00 | 1,100.00 | ||||
| Influence of related-party debts on the Company's operating results and financial position | No significant influence | |||||||
5. Other major related transactions
√ Applicable □ Not applicable
1. On February 3, 2020, the 30th session of the 6th Board of Directors' meeting reviewed and approved the"Proposal on Joint Investment with Related Party i.e. Related-party Transactions". The meeting agreed that the Companyand its related parties, Ningbo Huagu Enterprise Management Partnership (Limited Partnership) and Ningbo HualingInvestment Management Partnership (Limited Partnership), jointly invested RMB 50 million to establish Zhejiang DahuaStorage Technology Co., Ltd. Among them, Dahua invested RMB 25.5 million with its own funds, accounting for 51% ofthe registered capital. In February 2020, the company was established.
2. On February 24, 2020, the 31st session of the 6th Board of Directors' meeting reviewed and approved the"Proposal on Joint Investment with Related Parties to Establish a Holding Subsidiary i.e. Related-party Transactions". Themeeting agreed that the Company and its related parties, Zhejiang Leapmotor Technology Co., Ltd, Ningbo HualingInvestment Management Partnership (Limited Partnership), and Ningbo Huaqi Enterprise Management Partnership(Limited Partnership), jointly invested RMB 150 million to establish Zhejiang Dahua Automotive Technology Co., Ltd.Among them, Dahua invested RMB 76.5 million with its own funds, accounting for 51% of the registered capital. In March2020, the company was established.
3. On July 8, 2020, the 36th meeting of the 6th Board of Directors deliberated and approved the "Proposal onAccepting Subsidiary's Equity i.e. Related-party Transactions" according to which the Company accepted 49% of theequity of Zhejiang Dahua Robot Technology Co., Ltd. held by the related party Zhejiang Huashi Investment ManagementCo., Ltd. The amount involved in this related-party transaction was RMB 7,004,918. The changes of industrial andcommercial registrations for the above matter were completed in August 2020.
4. On July 24, 2020, the Company's 2nd Extraordinary General Meeting of Shareholders of 2020 considered andpassed the "Proposal on Entering into Wholly-owned Subsidiary Equity Transfer Agreement, i.e. Related-partyTransactions", and agreed that the Company would transfer 100% equity of its subsidiary Zhejiang Huatu MicrochipTechnology Co., Ltd. to Hangzhou Gancheng Equity Investment Partnership (Limited Partnership), Shaoxing GanshengEquity Investment Partnership (Limited Partnership), Zhejiang Free Trade Zone Fenghang Investment Partnership(Limited Partnership), Yuyao Yangming Zhixing Investment Center (Limited Partnership), Ganzhou Daewoo CapitalManagement Partnership (Limited Partnership), Chen Heyu, Ningbo Hualing Investment Management Partnership(Limited Partnership), Zhoushan Zhixin Equity Investment Partnership (Limited Partnership), and Zhoushan Weixin EquityInvestment Partnership (Limited Partnership). The transfer price is RMB 1,200 million. The changes of industrial andcommercial registrations for the above matter were completed in August 2020.
Website for disclosing the interim report on significant related-party transactions
| Announcement name | Disclosure date | Website for the disclosure |
| Announcement on Joint Investment with Related Party i.e. Related-party Transactions | February 4, 2020 | http://www.cninfo.com.cn |
| Announcement on Joint Investment with Related Parties to Establish a Holding Subsidiary i.e. Related-party Transactions | February 25, 2020 | http://www.cninfo.com.cn |
| Announcement on Entering into Wholly-owned Subsidiary Equity Transfer Framework Agreement, i.e. Related-party Transactions", Announcement on Accepting Subsidiary's Equity i.e. Related-party Transactions | July 9, 2020 | http://www.cninfo.com.cn |
| Announcement of Resolutions at the 2nd Extraordinary General Meeting of Shareholders in 2020 | July 25, 2020 | http://www.cninfo.com.cn |
XIV. Non-operational Capital Occupation over Listed Companies by ControllingShareholders and Their Related Parties
□ Applicable √ Not applicable
During the reporting period, there is no non-operational capital occupation over listed companies by controllingshareholders and their related parties.XV. Significant Contracts and Performance
1. Matters on trusteeship, contracting, and leasehold
(1) Matters on trusteeship
□ Applicable √ Not applicable
No such case as custody during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
No such case as contracting during the reporting period.
(3) Leasing
√ Applicable □ Not applicable
Explanations on leasesDuring the reporting period, some of the Company's own real estate properties were used for rental, and the leased realestate property was used for office, warehouse and production workshops. There were no other major real estate leasing.Cases that brought the profit and loss accounted for more than 10% of the Company's total profit during the reporting
period
□ Applicable √ Not applicable
No such leases that brought the profit and loss accounted for more than 10% of the Company's total profit during thereporting period.
2. Significant guarantees
√ Applicable □ Not applicable
(1) Guarantees
Unit: ten thousand RMB
| External guarantees from the Company and its subsidiaries (excluding guarantees to the subsidiaries) | ||||||||
| Guaranteed party | Announcement date of disclosure of the guarantee cap | Guarantee amount | Actual occurrence date | Actual guarantee amount | Type of guarantee | Term of guarantee | Due or not | Guarantee for related parties or not |
| Total amount of guarantees approved during the reporting period (A1) | Total amount of guarantees actually occurred during the reporting period (A2) | |||||||
| Total amount of guarantees approved by the end of the reporting period (A3) | Total balance of guarantees at the end of the reporting period (A4) | |||||||
| Company's guarantees to subsidiaries | ||||||||
| Guaranteed party | Announcement date of disclosure of the guarantee cap | Guarantee amount | Actual occurrence date | Actual guarantee amount | Type of guarantee | Term of guarantee | Due or not | Guarantee for related parties or not |
| Zhejiang Dahua Vision Technology Co., Ltd. | November 05, 2019 | 900,000.00 | June 6, 2016 | 29,000.00 | Joint liability guarantee | June 6, 2016 -January 15, 2020 | Yes | Yes |
| April 13, 2018 | 24,000.00 | Joint liability guarantee | April 13, 2018 -April 12, 2020 | Yes | Yes | |||
| January 3, 2019 | 20,000.00 | Joint | Three years | Yes | Yes | |||
| liability guarantee | after the maturity of the debts in the master contract | ||||
| January 17, 2019 | 30,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | Yes | Yes |
| March 21, 2019 | 20,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | Yes | Yes |
| April 18, 2019 | 20,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | Yes | Yes |
| May 13, 2019 | 23,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | Yes | Yes |
| September 26, 2019 | 14,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | Yes | Yes |
| August 30, 2019 | 38,000.00 | Joint liability guarantee | Two years after the maturity of the debts in the master contract | Yes | Yes |
| August 10, 2017 | 60,000.00 | Joint | Two years | No | Yes |
| liability guarantee | after the maturity of the debts in the master contract | ||||
| October 13, 2017 | 22,000.00 | Joint liability guarantee | Two years after the maturity of the debts in the master contract | No | Yes |
| March 27, 2018 | 50,000.00 | Joint liability guarantee | March 20, 2018 -March 19, 2021 | No | Yes |
| September 21, 2018 | 28,318.00 (40 million USD) | Joint liability guarantee | Two years after the maturity of the debts in the master contract | No | Yes |
| May 10, 2019 | 65,000.00 | Joint liability guarantee | Two years after the maturity of the debts in the master contract | No | Yes |
| June 26, 2019 | 18,000.00 | Joint liability guarantee | June 26, 2019 -June 26, 2022 | No | Yes |
| July 22, 2019 | 44,000.00 | Joint liability guarantee | Two years after the maturity of the debts in the master contract | No | Yes |
| September 20, 2019 | 5,000.00 | Joint liability guarantee | Three years since the date on which the debt period of master contract | No | Yes |
| expires or the date on which the secured claim is determined, whichever is later | |||||
| September 29, 2019 | 20,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | No | Yes |
| October 22, 2019 | 10,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | No | Yes |
| December 10, 2019 | 50,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | No | Yes |
| January 15, 2020 | 30,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | No | Yes |
| February 17, 2020 | 25,000.00 | Joint liability guarantee | Two years after the maturity of the debts in the master contract | No | Yes |
| February 25, 2020 | 30,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master | No | Yes |
| contract | ||||||||
| April 7, 2020 | 53,000.00 | Joint liability guarantee | April 7, 2020 -March 31, 2024 | No | Yes | |||
| April 13, 2020 | 24,000.00 | Joint liability guarantee | Two years after the maturity of the debts in the master contract | No | Yes | |||
| Zhejiang Dahua Zhilian Co., Ltd. | November 05, 2019 | 600,000.00 | April 9, 2019 | 10,000.00 | Joint liability guarantee | One years upon expiration of debt period of master contract | Yes | Yes |
| May 13, 2019 | 6,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | Yes | Yes | |||
| December 12, 2019 | 20,000.00 | Joint liability guarantee | One years upon expiration of debt period of master contract | Yes | Yes | |||
| June 6, 2016 | 20,000.00 | Joint liability guarantee | June 6, 2016 -June 30, 2020 | Yes | Yes | |||
| September 1, 2018 | 50,000.00 | Joint liability guarantee | September 1, 2018 -September 1, 2020 | No | Yes | |||
| October 12, 2018 | 30,000.00 | Joint liability guarantee | October 12, 2018 -October 12, 2021 | No | Yes | |||
| August 30, 2019 | 10,000.00 | Joint liability | Two years after the | No | Yes |
| guarantee | maturity of the debts in the master contract | |||||||
| November 1, 2019 | 40,000.00 | Joint liability guarantee | One years upon expiration of debt period of master contract | No | Yes | |||
| February 25, 2020 | 6,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | No | Yes | |||
| April 9, 2020 | 10,000.00 | Joint liability guarantee | One years upon expiration of debt period of master contract | No | Yes | |||
| May 1, 2020 | 42,477.00 (60 million USD) | Joint liability guarantee | One years upon expiration of debt period of master contract | No | Yes | |||
| Zhejiang Dahua System Engineering Co., Ltd. | November 05, 2019 | 50,000.00 | June 6, 2016 | 10,000.00 | Joint liability guarantee | June 6, 2016 -March 30, 2020 | Yes | Yes |
| May 13, 2019 | 4,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | Yes | Yes | |||
| May 10, 2019 | 10,000.00 | Joint liability guarantee | Two years after the maturity of the debts in the master | No | Yes |
| contract | ||||||||
| August 30, 2019 | 1,000.00 | Joint liability guarantee | Two years after the maturity of the debts in the master contract | No | Yes | |||
| November 7, 2019 | 6,000.00 | Joint liability guarantee | Two years after the maturity of the debts in the master contract | No | Yes | |||
| February 25, 2020 | 4,000.00 | Joint liability guarantee | Three years after the maturity of the debts in the master contract | No | Yes | |||
| Dahua Technology (HK) Limited | November 05, 2019 | 205,000.00 | December 15, 2017 | 35,397.50 (50 million US dollars) | Joint liability guarantee | December 15, 2017-December 15, 2020 | No | Yes |
| December 25, 2019 | 4,955.65 (7 million USD) | Joint liability guarantee | Two years after the maturity of the debts in the master contract | No | Yes | |||
| DAHUA TECHNOLOGY MEXICO S.A. DE C.V | November 05, 2019 | 20,000.00 | March 26, 2019 | 1,841.48 (59,973,100 MXN) | Joint liability guarantee | March 26, 2019-March 26, 2020 | Yes | Yes |
| April 9, 2019 | 5,524.43 (179,919,400 MXN) | Joint liability guarantee | April 9, 2019-April 9, 2020 | Yes | Yes | |||
| Hangzhou Huacheng Network Technology Co., Ltd. | November 05, 2019 | 5,000.00 | August 30, 2019 | 5,000.00 | Joint liability guarantee | Two years after the maturity of the debts in the master contract | No | Yes |
| Guangxi Dahua Information Technology Co., Ltd. | November 05, 2019 | 10,000.00 | No such case during the reporting period | |||||
| Zhejiang Dahua Jinzhi Technology Co., Ltd. | November 05, 2019 | 100,000.00 | No such case during the reporting period | |||||
| Xi'an Dahua Zhilian Technology Co., Ltd. | November 05, 2019 | 100,000.00 | No such case during the reporting period | |||||
| Zhejiang Huafei Intelligent Technology CO., LTD. | November 05, 2019 | 5,000.00 | No such case during the reporting period | |||||
| Zhejiang Huachuang Vision Technology Co., Ltd. | November 05, 2019 | 5,000.00 | No such case during the reporting period | |||||
| Zhejiang HuaRay Technology Co., Ltd. | November 05, 2019 | 5,000.00 | No such case during the reporting period | |||||
| Zhejiang Dahua Security Network Operation Service Co., Ltd. | November 05, 2019 | 5,000.00 | No such case during the reporting period | |||||
| Hangzhou Xiaohua Technology CO., LTD. | November 05, 2019 | 5,000.00 | No such case during the reporting period | |||||
| Zhejiang Dahua Security Service Co., | November 05, 2019 | 5,000.00 | No such case during the reporting period |
| Ltd. | |||
| Hangzhou Tecomore Technology Co., Ltd. | November 05, 2019 | 5,000.00 | No such case during the reporting period |
| Wuxi Dahua Ruipin Technology Co., Ltd. | November 05, 2019 | 5,000.00 | No such case during the reporting period |
| Zhejiang Huaxiao Technology Co., Ltd. | November 05, 2019 | 5,000.00 | No such case during the reporting period |
| Zhejiang Dahua Investment Management Co., Ltd. | November 05, 2019 | 5,000.00 | No such case during the reporting period |
| Zhejiang Dahua Robot Technology Co., Ltd. | November 05, 2019 | 5,000.00 | No such case during the reporting period |
| DAHUA EUROPE B.V. | November 05, 2019 | 14,000.00 | No such case during the reporting period |
| Dahua Technology USA Inc. | November 05, 2019 | 3,500.00 | No such case during the reporting period |
| Dahua Technology Singapore Pte.Ltd. | November 05, 2019 | 500.00 | No such case during the reporting period |
| Dahua Technology UK Limited | November 05, 2019 | 2,000.00 | No such case during the reporting period |
| Dahua Technology Poland sp.zo.o. | November 05, 2019 | 1,600.00 | No such case during the reporting period |
| Dahua Technology Hungary Kft | November 05, 2019 | 1,600.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY INDIA PRIVATE LIMITED | November 05, 2019 | 3,500.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY BRASIL COMERCIO SERV EM SEGURANCA ELETRONICA LTDA | November 05, 2019 | 1,000.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY MIDDLE EAST FZE | November 05, 2019 | 350.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY PER? S.A.C | November 05, 2019 | 1,000.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY RUS LIMITED | November 05, 2019 | 3,000.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY AUSTRALIA PTY LTD | November 05, 2019 | 500.00 | No such case during the reporting period |
| Dahua Technology South Africa Proprietary Limited | November 05, 2019 | 500.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY CANADA INC. | November 05, 2019 | 800.00 | No such case during the reporting period |
| DAHUA | November | 1,100.00 | No such case during the reporting period |
| GUVENLIK TEKNOLOJILERI SANAYI VE TICARET ANONIM SIRKETI | 05, 2019 | ||
| Dahua Technology SRB d.o.o. | November 05, 2019 | 300.00 | No such case during the reporting period |
| Dahua Technology Bulgaria EOOD | November 05, 2019 | 100.00 | No such case during the reporting period |
| DAHUA IBERIA, S.L.(U.) | November 05, 2019 | 200.00 | No such case during the reporting period |
| DAHUA SECURITY MALAYSIA SDN. BHD. | November 05, 2019 | 200.00 | No such case during the reporting period |
| Dahua Technology Kazakhstan LLP | November 05, 2019 | 200.00 | No such case during the reporting period |
| PT DAHUA VISION TECHNOLOGY INDONESIA | November 05, 2019 | 300.00 | No such case during the reporting period |
| Dahua Technology Korea Company Limited | November 05, 2019 | 100.00 | No such case during the reporting period |
| Dahua Technology S.R.L. | November 05, 2019 | 200.00 | No such case during the reporting period |
| Dahua technology France SAS | November 05, 2019 | 200.00 | No such case during the reporting period |
| Dahua vision | November | 200.00 | No such case during the reporting period |
| LLc | 05, 2019 | ||
| Dahua Technology New Zealand Limited | November 05, 2019 | 200.00 | No such case during the reporting period |
| Dahua Technology GmbH | November 05, 2019 | 300.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY COLOMBIA S.A.S. | November 05, 2019 | 100.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY PANAMA S.A. | November 05, 2019 | 100.00 | No such case during the reporting period |
| Dahua Technology Chile SpA | November 05, 2019 | 100.00 | No such case during the reporting period |
| Dahua technology tunisia limited liability company | November 05, 2019 | 200.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY KENYA LIMITED | November 05, 2019 | 100.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY CHINA(PVT) LTD | November 05, 2019 | 200.00 | No such case during the reporting period |
| DAHUA TECHNOLOGY PAKISTAN (PRIVATE) LIMITED | November 05, 2019 | 200.00 | No such case during the reporting period |
| DAHUA | November | 100.00 | No such case during the reporting period |
| TECHNOLOGY MOROCCO SARL | 05, 2019 | ||||
| DAHUA ARGENTINA S.A. | November 05, 2019 | 200.00 | No such case during the reporting period | ||
| Dahua Technology Czech s.r.o. | November 05, 2019 | 200.00 | No such case during the reporting period | ||
| Dahua Technology Denmark ApS | November 05, 2019 | 200.00 | No such case during the reporting period | ||
| Dahua Technology Netherlands B.V. | November 05, 2019 | 300.00 | No such case during the reporting period | ||
| DAHUA TECHNOLOGY (THAILAND) CO., LTD | November 05, 2019 | 100.00 | No such case during the reporting period | ||
| DAHUA TECHNOLOGY ITALY S.R.L. | November 05, 2019 | 600.00 | No such case during the reporting period | ||
| LOREX TECHNOLOGY INC | November 05, 2019 | 1,500.00 | No such case during the reporting period | ||
| LOREX CORPORATION | November 05, 2019 | 1,500.00 | No such case during the reporting period | ||
| Total amount of guarantees to subsidiaries approved during the reporting period (B1) | Total amount of guarantees to subsidiaries actually occurred during the reporting period (B2) | 224,477.00 | |||
| Total amount of guarantees to subsidiaries approved by the end of the reporting period (B3) | 2,088,150.00 | Total balance of guarantees actually paid to subsidiaries at the end of the reporting period (B4) | 789,148.15 | ||
| Subsidiaries' guarantees to subsidiaries | |||||||||
| Guaranteed party | Announcement date of disclosure of the guarantee cap | Guarantee amount | Actual occurrence date | Actual guarantee amount | Type of guarantee | Term of guarantee | Due or not | Guarantee for related parties or not | |
| Total amount of guarantees to subsidiaries approved during the reporting period (C1) | Total amount of guarantees to subsidiaries actually occurred during the reporting period (C2) | ||||||||
| Total amount of guarantees to subsidiaries approved at the end of the reporting period (C3) | Total of actual guarantee balance for subsidiaries at the end of the reporting period (C4) | ||||||||
| Total amount of company guarantees (namely sum of the previous three major items) | |||||||||
| Total amount of guarantees approved during the reporting period (A1+B1+C1) | Total amount of guarantees actually occurred during the reporting period (A2+B2+C2) | 224,477.00 | |||||||
| Total amount of guarantees approved by the end of the reporting period (A3+B3+C3) | 2,088,150.00 | Total balance of guarantees actually paid at the end of the reporting period (A4+B4+C4) | 789,148.15 | ||||||
| Total amount of actual guarantees (A4+B4+C4) as a percentage of the Company's net assets | 46.44% | ||||||||
| Including: | |||||||||
| Balance of guarantees to the shareholders, actual controllers and their related parties (D) | |||||||||
| Balance of debt guarantees directly or indirectly offered to guaranteed objects with asset-liability ratio exceeding 70% (E) | 789,148.15 | ||||||||
| Amount of the guarantees with the total volume exceeding 50% of the net assets (F) | |||||||||
| Total amount of the above three guarantees (D+E+F) | 789,148.15 | ||||||||
| Notes on unexpired guarantees with guarantee responsibilities occurred or possible joint liabilities within the reporting period (if any) | |||||||||
| Notes on providing external guarantees in violation of specified procedures (if any) |
(2) Illegal external guarantees
□ Applicable √ Not applicable
No illegal external guarantees during the reporting period.
3. Entrusted Financing
√ Applicable □ Not applicable
Unit: ten thousand RMB
| Specific type | Funding source | Entrusted amount | Unexpired balance | Overdue outstanding amount |
| Structured deposits | Equity Fund | 90,000.00 | 90,000.00 | |
| Total | 90,000.00 | 90,000.00 | ||
Note: 1. Undue balance refers to the total undue balance of this type of entrusted financing at the end of the reportingperiod.Details of entrusted financing with significant single amount
√ Applicable □ Not applicable
Unit: ten thousand RMB
| Name of trustee institution (or trustee) | Type of trustee institution (or trustee) | Product type | Amount | Capital Source | Starting date | Termination date | Investment direction | Remuneration determination method | Reference annualized rate of return | Expected benefits (if any) | Actual profit and loss amount during the reporting period | Actual recovery of profits and losses during the reporting period | Provision for impairment accrued (if any) | Whether it has undergone legal procedures | Whether there will be entrusted financing plan | Summary of matters and related query index (if any) |
| Agricultural Bank of | Bank | Structured deposits | 10,000.00 | Equity Fund | May 20, 2020 | December 29, 2020 | - | As agreed by the | 3.60% | Undue | Yes | Yes | The "Announcement on the Use of Self-owned |
| China | contract | Funds to Purchase Bank Wealth Management Products" (Announcement No.: 2020-025) published on www.cninfo.com.cn on April 3, 2020 | ||||||||||||||
| China Construction Bank | Bank | Structured deposits | 80,000.00 | Equity Fund | June 5, 2020 | September 3, 2020 | - | As agreed by the contract | 3.70% | Undue | Yes | Yes | ||||
| Total | 90,000.00 | -- | -- | -- | -- | -- | - | - | -- | -- | -- | -- | ||||
Cases of entrusted financing expected to be unable to recover the principal or cases that may result in impairment
□ Applicable √ Not applicable
4. Other Significant Contracts
□ Applicable √ Not applicable
No such case as other significant contract during the reporting period.XVI. Social Responsibilities
1. Major environmental issues
Whether the listed company and its subsidiaries belong to the key pollutant discharging units announced by theenvironmental protection departmentNo
2. Social responsibility fulfillment regarding targeted poverty alleviationDuring the first half of the year, there was no targeted poverty alleviation activity or follow-up targeted povertyalleviation plan in the Company.XVII. Explanations for Other Significant Matters
√ Applicable □ Not applicable
1. On April 25, 2019, the Company’s 21st meeting of the 6th board of directors reviewed and approved the “Proposalon the Scheme for the Repurchase of Shares”. The Company plans to buy back some shares with the funds raised byitself through centralized competitive bidding. The total amount of funds for the repurchase shall not be lower than 200million yuan (inclusive) and higher than 400 million yuan (inclusive). The price of the repurchase shall not exceed 25.37yuan per share (inclusive). Calculated according to the purchase price and the upper limit for the repurchase, it’sestimated to buy back 15,766,653 shares. The repurchased shares will make up 0.53% of the current total share capital ofthe Company. The specific amount of repurchased shares and the proportion in the total share capital of the Company
shall be subject to the actually repurchased number of shares and the actual proportion when the period of repurchaseexpires. The period for the implementation of repurchase shall be 12 months from the day the board of directors reviewsand approves the repurchase scheme.As of April 24, 2020, the Company bought back 13,391,480 shares with its share repurchases special securitiesaccount through centralized competitive bidding, accounting for 0.45% of the Company's current total share capital. Thehighest transaction price was RMB 17.88 per share and the lowest was RMB 12.90 per share. The total amount oftransactions was RMB 203,499,400.44 (excluding transaction fees). This share repurchase plan has been completed.
2. On February 24, 2020, the 31st session of the 6th Board of Directors' meeting reviewed and approved the"Proposal on Investment in Establishing a Joint Venture Company", and agreed that The Company and Tianjin RongyuEnterprise Management Partnership (Limited Partnership), Tianjin Qushi Management Consulting Partnership (LimitedPartnership), and Huzhou Xubo Smart City Technology Partnership (Limited Partnership) enter into a "Joint VentureAgreement" to jointly invest in the establishment of Zhongruixin Digital Technology Co., Ltd.. with a registered capital ofRMB 800 million, and the Company's shareholding accounted for 20%. In March 2020, this new company was establishedand the name approved by the Bureau of Industry and Commerce was 中睿信数字技术有限公司 (Zhongruixin DigitalTechnology Co., Ltd).
3. On June 5, 2019, the Company’s 1st Extraordinary General Meeting of Shareholders in 2019 reviewed andapproved the “Proposal on the Public Offering of Convertible Corporate Bonds” and other relevant matters.
On June 4, 2020, the 35th meeting of the 6th Board of Directors and the 21st meeting of the 6th Board of Supervisorsreviewed and approved the "Proposal on Terminating the Public Offering of Convertible Corporate Bonds" and agreed theCompany to terminate the public offering of convertible corporate bonds.
For details of other major matters of the Company during the above reporting period, please refer to relevantannouncements disclosed by the Company on the "Securities Times" and www.cninfo.com.cn:
| Announcement No. | Announcement Title | Date of Disclosure |
| 2019-025 | Announcement on the Scheme for the Repurchase of Shares | April 26, 2019 |
| 2020-036 | Announcement on the Implementation Results of Share Repurchase i.e. Share Changes | April 25, 2020 |
| 2020-011 | Announcement on Investment in Establishing a Joint Venture Company | February 25, 2020 |
| 2019-030 | Proposal on the Public Offering of Convertible Corporate Bonds | May 18, 2019 |
| 2020-057 | Announcement on Terminating the Public Offering of Convertible Corporate Bonds | June 5, 2020 |
XVIII. Significant Matters of the Company's Subsidiaries
□ Applicable √ Not applicable
Section VI Changes in Shares and Information about
ShareholdersI. Changes in Shares
1. Changes in shares
Unit: share
| Before the change | Increase or decrease in the change (+, -) | After the change | |||||||
| Number | Percentage | Shares newly issued | Bonus shares | Shares converted from capital reserves | Others | Subtotal | Number | Percentage | |
| I. Shares with limited sales condition | 1,194,350,711 | 39.71% | -48,011,643 | -48,011,643 | 1,146,339,068 | 38.17% | |||
| 3. Other domestic shares | 1,194,295,711 | 39.71% | -47,981,843 | -47,981,843 | 1,146,313,868 | 38.17% | |||
| Shares held by domestic natural persons | 1,194,295,711 | 39.71% | -47,981,843 | -47,981,843 | 1,146,313,868 | 38.17% | |||
| 4. Foreign shares | 55,000 | 0.00% | -29,800 | -29,800 | 25,200 | 0.00% | |||
| Shares held by foreign natural persons | 55,000 | 0.00% | -29,800 | -29,800 | 25,200 | 0.00% | |||
| II. Shares without restrictions | 1,813,640,519 | 60.29% | 43,296,543 | 43,296,543 | 1,856,937,062 | 61.83% | |||
| 1. RMB ordinary shares | 1,813,640,519 | 60.29% | 43,296,543 | 43,296,543 | 1,856,937,062 | 61.83% | |||
| III. Total | 3,007,991,230 | 100.00% | -4,715,100 | -4,715,100 | 3,003,276,130 | 100.00% | |||
Reasons for changes in shares
√ Applicable □ Not applicable
1. In 2020, the Company bought back and canceled the granted but not unlocked restricted shares held by theincentive targets who have left the Company.
2. In April 2020, the Company granted the first satisfaction of unlocking conditions for the first unlocking period of2018 restricted share incentive plan.
3. On June 24, 2020, the 13,391,480 restricted shares of 2020 granted by the company to 10 incentive targets werelisted on the Shenzhen Stock Exchange. These shares were from the Company's repurchase in secondary marketsthrough centralized bidding transactions.Approval for changes in shares
√ Applicable □ Not applicable
1. On January 16, 2020, the 1st Extraordinary General Meeting of Shareholders in 2020 deliberated and approvedthe "Proposal on Buy-back and Cancellation of Some Granted but Not Unlocked Restricted Stocks" and agreed to buyback and cancel 437,100 granted but not unlocked restricted shares held by 16 incentive targets who have left theCompany (of which, 427,100 shares were first granted, with the repurchase price of RMB 8.17 per share; reserved grantof 10,000 shares with a repurchase price of RMB 8.75 per share), and reduce the registered capital accordingly.
2. On April 2, 2020, the 33rd meeting of the 6th board of directors of the Company reviewed and approved the"Proposal on the First Grant of Satisfying Unlocking Conditions for the First Unlocking Period of 2018 Restricted StockIncentive Plan". The board of directors agreed to unlock 36,931,560 restricted shares held by 2901 incentive targets thatmeet the unlocking conditions.
3. On May 12, 2020, the Company's 2019 annual general meeting of shareholders reviewed and approved "2020Restricted Stocks Incentive Plan of Zhejiang Dahua Technology Co., Ltd (Draft)" and its summary, and authorized theBoard of Directors to handle relevant matters.
4. On June 4, 2020, the 35th meeting of the 6th Board of Directors of the Company reviewed and approved the"Proposal on Granting Restricted Stocks to Incentive Targets" and "Proposal on Adjusting the Grant Price of 2020Restricted Stock Incentive Plans". As during the period from the announcement date of the "2020 Restricted StockIncentive Plan of Zhejiang Dahua Technology Co., Ltd (Draft)" to when the incentive targets complete the registration ofrestricted shares, the Company has implemented the 2019 equity distribution, the grant price of restricted shares wasadjusted from RMB 7.60 per share to RMB 7.467. Meanwhile, the Board of Directors confirmed the granting conditionsand concluded that the conditions had been satisfied and decided to grant restricted shares to the incentive targets. Thegranting date was June 4, 2020.
5. On June 29, 2020, the Company disclosed the "Announcement on Completion of Registration of 2020 RestrictedStock Incentive Plan". The plan granted 10 incentive targets 13,391,480 shares, which were listed on the Shenzhen StockExchange on June 24, 2020.Transfer for changes in shares
√ Applicable □ Not applicable
1. According to the 33rd meeting of the 6th Board of Directors of the Company, the Company completed the first grantof first phase unlocking of 2018 restricted stocks. The unlocking date is April 16, 2020, i.e. the listing day.
2. According to the resolution of the 1st Extraordinary General Meeting of Shareholders in 2020, the Company boughtback and canceled 437,100 restricted shares which were granted to 16 incentive targets who have left the Company butnot unlocked, and the procedure was completed on April 27, 2020.
3. On June 24, 2020, the shares granted under 2020 restricted stocks incentive plan were listed on Shenzhen StockExchange.The progress on share repurchase
√ Applicable □ Not applicable
On April 25, 2019, the Company’s 21st meeting of the 6th board of directors reviewed and approved the “Proposal onthe Scheme for the Repurchase of Shares”. The Company plans to buy back some shares with the self-raised fundsthrough centralized competitive bidding. The total funds for the repurchase shall be not lower than RMB 200 million(inclusive) and not higher than RMB 400 million (inclusive). The price of the repurchase shall not exceed 25.37 yuan per
share (inclusive). Calculated according to the purchase price and the upper limit for the repurchase, it’s estimated to buyback 15,766,653 shares. The repurchased shares will make up 0.53% of the current total share capital of the Company.The specific amount of repurchased shares and the proportion in the total share capital of the Company shall be subject tothe actually repurchased number of shares and the actual proportion when the period of repurchase expires. The periodfor the implementation of repurchase shall be 12 months from the day the board of directors reviews and approves therepurchase scheme.As of April 24, 2020, the Company bought back 13,391,480 shares with its share repurchase special securitiesaccount through centralized competitive bidding, accounting for 0.45% of the Company's current total share capital. Thehighest transaction price was RMB 17.88 per share and the lowest was RMB 12.90 per share. The total amount oftransactions was RMB 203,499,400.44 (excluding transaction fees). This share repurchase plan has been completed.The progress on reduction of re-purchase shares by means of centralized bidding
□ Applicable √ Not applicable
Effects of changes in shares on the basic earnings per share ("EPS"), diluted EPS, net assets per share, attributable tocommon shareholders of the Company, and other financial indexes over the last year and last period
□ Applicable √ Not applicable
Other contents that the Company considers necessary or are required by the securities regulatory authorities to disclose
□ Applicable √ Not applicable
2. Changes in restricted stocks
√ Applicable □ Not applicable
Unit: share
| Name of Shareholder | Number Of Shares With Limited Sales Condition At The Beginning Of The Period | Number of unlocked shares with limited sales condition in current period | Number of increased shares with limited sales condition in current period | Number of shares with limited sales condition at the end of the period | Reasons for limited sales | Date of unlocking |
| Fu Liquan | 834,736,410 | 23,175,000 | 0 | 811,561,410 | According to the relevant provisions of executives shares management | According to the relevant provisions of executives shares management |
| Zhu Jiangming | 139,846,117 | 0 | 0 | 139,846,117 | According to the relevant provisions of executives shares management | According to the relevant provisions of executives shares management |
| Chen Ailing | 53,447,110 | 0 | 0 | 53,447,110 | According to the relevant provisions of executives shares management | According to the relevant provisions of executives shares management |
| Wu Jun | 51,938,164 | 0 | 0 | 51,938,164 | According to the relevant | According to relevant |
| provisions of executives shares management | provisions of executives shares management and unlocking of restricted shares | |||||
| Zhang Xingming | 1,261,060 | 0 | 2,361,480 | 3,622,540 | Per relevant management regulations of equity incentives and senior managers' shares | According to relevant provisions of equity incentives and executives shares management, and unlocking of restricted shares |
| Zhao Yuning | 740,000 | 0 | 1,775,000 | 2,515,000 | Per relevant management regulations of equity incentives and senior managers' shares | According to relevant provisions of equity incentives and executives shares management, and unlocking of restricted shares |
| Ying Yong | 1,251,937 | 0 | 1,020,000 | 2,271,937 | Per relevant management regulations of equity incentives and senior managers' shares | According to relevant provisions of equity incentives and executives shares management, and unlocking of restricted shares |
| Wu Jian | 1,147,001 | 0 | 1,020,000 | 2,167,001 | Per relevant management regulations of equity incentives and senior managers' shares | According to relevant provisions of equity incentives and executives shares management, and unlocking of restricted shares |
| Zhu Jiantang | 670,000 | 0 | 1,267,669 | 1,937,669 | Per relevant management regulations of equity incentives and senior managers' shares | According to relevant provisions of equity incentives and executives shares management, and unlocking of restricted shares |
| Other senior executives and incentive targets | 107,497,912 | 32,885,792 | 0 | 74,612,120 | According to relevant provisions of equity incentives and executives shares management, and restricted shares to be bought back and canceled, and unlocking of restricted shares | According to relevant provisions of equity incentives and executives shares management, and restricted shares to be bought back and canceled, and unlocking of restricted shares |
| Li Ke | 1,815,000 | 0 | 605,000 | 2,420,000 | According to relevant management regulations of equity incentives and left senior managers' shares | According to relevant provisions of former executives shares management, and restricted shares to be bought back and canceled |
| Total | 1,194,350,711 | 56,060,792 | 8,049,149 | 1,146,339,068 | -- | -- |
II. Issuance and listing of securities
□ Applicable √ Not applicable
III. Number of Shareholders and Shareholdings
Unit: share
| Total Number Of Common Shareholders At The End Of The Reporting Period | 142,107 | Total Number of Preferred Shareholders (If Any) (Refer to Note 8) Whose Voting Rights have been Recovered at the End of the Reporting Period | 0 | |||||||
| Shareholding of shareholders with more than 5% common shares or top ten common shareholders | ||||||||||
| Name of Shareholder | Nature Of Shareholder | Shareholding Percentage | Number of common shares held at the end of the reporting period | Changes in the reporting period | Number of common shares held with limited sales conditions | Number of common shares held without limited sales conditions | Pledges or freezings | |||
| State Of Shares | Number | |||||||||
| Fu Liquan | Domestic Natural Person | 34.09% | 1,023,868,980 | -58212900 | 811,561,410 | 212,307,570 | Pledge | 197,992,000 | ||
| Zhu Jiangming | Domestic Natural Person | 5.35% | 160,577,490 | -25884000 | 139,846,117 | 20,731,373 | Pledge | 50,754,000 | ||
| Hong Kong Securities Clearing Co. Ltd. | Overseas Legal Person | 5.20% | 156,235,924 | -1009701 | 0 | 156,235,924 | ||||
| Shanghai Gaoyi Asset Management Partnership (Limited Partnership) - Gaoyi | Others | 2.83% | 85,000,085 | 85000085 | 0 | 85,000,085 | ||||
| Linshan No. 1 Yuanwang Fund | |||||||||
| Chen Ailing | Domestic Natural Person | 2.37% | 71,262,813 | 0 | 53,447,110 | 17,815,703 | Pledge | 21,100,000 | |
| Wu Jun | Domestic Natural Person | 2.31% | 69,250,886 | 0 | 51,938,164 | 17,312,722 | |||
| China Galaxy Securities Co., Ltd. | State-owned Legal Person | 2.08% | 62,450,100 | 62445400 | 0 | 62,450,100 | |||
| China Securities Finance Co., Ltd. | Domestic Non-state-owned Legal Person | 1.32% | 39,611,241 | 0 | 0 | 39,611,241 | |||
| Central Huijin Asset Management Co., Ltd. | State-owned Legal Person | 1.05% | 31,448,750 | 0 | 0 | 31,448,750 | |||
| Shanghai Greenwoods Asset Management Co., Ltd. - Greenwoods Global Fund | Others | 1.03% | 30,811,881 | 1833495 | 0 | 30,811,881 | |||
| Description of the association relationship or concerted action of above-mentioned shareholders | Mr. Fu Liquan And Ms. Chen Ailing Are Husband And Wife. The Company Is Unaware Of Whether Other Shareholders Have Associated Relationship Or Are Persons Acting In Concert. | ||||||||
| Shareholding of top ten common shareholders without limited sales condition | |||||||||
| Name of Shareholder | Number of common shares held without limited sales condition at the end of the reporting period | Type of shares | |||||||
| Type of shares | Number | ||||||||
| Fu Liquan | 212,307,570 | RMB common stock | 212,307,570 | ||||||
| Hong Kong Securities Clearing Co. Ltd. | 156,235,924 | RMB common stock | 156,235,924 | ||||||
| Shanghai Gaoyi Asset Management Partnership (Limited Partnership) - Gaoyi Linshan No. 1 Yuanwang Fund | 85,000,085 | RMB common stock | 85,000,085 | ||||||
| China Galaxy Securities Co., Ltd. | 62,450,100 | RMB common stock | 62,450,100 | ||||||
| China Securities Finance Co., Ltd. | 39,611,241 | RMB common stock | 39,611,241 |
| Central Huijin Asset Management Co., Ltd. | 31,448,750 | RMB common stock | 31,448,750 |
| Shanghai Greenwoods Asset Management Co., Ltd. - Greenwoods Global Fund | 30,811,881 | RMB common stock | 30,811,881 |
| Zhu Jiangming | 20,731,373 | RMB common stock | 20,731,373 |
| Haitong Securities Co., Ltd. | 18,001,334 | Domestically listed foreign shares | 18,001,334 |
| Chen Ailing | 17,815,703 | RMB common stock | 17,815,703 |
| Explanation for associated relationship or acting in concert among top ten common shareholders without limited sales conditions, and between top ten common shareholders without limited sales conditions and top ten common shareholders | Mr. Fu Liquan And Ms. Chen Ailing Are Husband And Wife. The Company Is Unaware Of Whether Other Shareholders Have Associated Relationship Or Are Persons Acting In Concert. | ||
Whether the Company's top ten common shareholders or top ten common shareholders without limited shares agree onany repurchase transaction in the reporting period
□ Yes √ No
None of the Company's top ten common shareholders or top ten common shareholders without limited shares agreed onrepurchase in the reporting period.
IV. Changes of the Controlling Shareholders or Actual Controller
Change of the controlling shareholders in the reporting period
□ Applicable √ Not applicable
No change has happened to the controlling shareholder in the reporting period of the CompanyChange of the actual controller in the reporting period
□ Applicable √ Not applicable
No change has happened to the actual controller in the reporting period
Section VII Information of Preferred Shares
□ Applicable √ Not applicable
There are no preferred shares in the reporting period.
Section VIII Convertible Corporate Bonds
□ Applicable √ Not applicable
There are no convertible corporate bonds in the reporting period.
Section IX Directors, Supervisors, and Senior Managers
I. Shareholding Changes of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
| Name | Post | Position status | Number of shares held at the beginning of the period (share) | Number of shares increased in the period (share) | Number of shares decreased in the period (share) | Number of shares held at the end of the period | Number of restricted shares granted at the beginning of the period (shares) | Number of restricted shares granted during the period (shares) | Number of restricted shares granted at the end of the period (shares) |
| Fu Liquan | Chairman, President | Incumbent | 1,082,081,880 | 0 | 58,212,900 | 1,023,868,980 | 0 | 0 | 0 |
| Wu Jun | Vice Chairman | Incumbent | 69,250,886 | 0 | 0 | 69,250,886 | 260,000 | 0 | 156,000 |
| Zhang Xingming | Director, CEO | Incumbent | 1,681,413 | 2,361,480 | 0 | 4,042,893 | 740,000 | 2,361,480 | 2,805,480 |
| Zhu Jiangming | Director | Incumbent | 186,461,490 | 0 | 25,884,000 | 160,577,490 | 0 | 0 | |
| Chen Ailing | Director | Incumbent | 71,262,813 | 0 | 0 | 71,262,813 | 0 | 0 | |
| Yang Huayong | Independent Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | |
| Liu Hanlin | Independent Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | |
| Zhang Yuli | Independent Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | |
| Song Maoyuan | Supervisor | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | |
| Zheng Jieping | Supervisor | Incumbent | 124,500 | 0 | 8,300 | 116,200 | 110,000 | 0 | 66,000 |
| Zuo Pengfei | Supervisor | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | |
| Chen Yuqing | Vice President | Incumbent | 1,835,951 | 0 | 0 | 1,835,951 | 260,000 | 0 | 156,000 |
| Jiang Xiaolai | Vice President | Incumbent | 530,000 | 1,560,000 | 0 | 2,090,000 | 530,000 | 1,560,000 | 2,004,400 |
| Li Zhijie | Vice President | Incumbent | 670,000 | 1,020,000 | 0 | 1,690,000 | 670,000 | 1,020,000 | 1,422,000 |
| Wu Jian | Secretary of the Board, Vice President | Incumbent | 1,529,335 | 1,020,000 | 0 | 2,549,335 | 530,000 | 1,020,000 | 1,338,000 |
| Wu Yunlong | Vice President | Incumbent | 762,280 | 0 | 0 | 762,280 | 260,000 | 0 | 156,000 |
| Xu Qiaofen | CFO, Vice President | Incumbent | 530,000 | 1,020,000 | 0 | 1,550,000 | 530,000 | 1,020,000 | 1,338,000 |
| Xu Zhicheng | Vice President | Incumbent | 530,000 | 1,020,000 | 0 | 1,550,000 | 530,000 | 1,020,000 | 1,338,000 |
| Ying Yong | Vice President | Incumbent | 1,669,250 | 1,020,000 | 0 | 2,689,250 | 670,000 | 1,020,000 | 1,422,000 |
| Zhu Jiantang | Vice President | Incumbent | 730,225 | 1,390,000 | 0 | 2,120,225 | 670,000 | 1,390,000 | 1,792,000 |
| Zhao Yuning | Vice President | Incumbent | 740,000 | 1,960,000 | 0 | 2,700,000 | 740,000 | 1,960,000 | 2,404,000 |
| He Chao | Independent Director | Resigned | 0 | 0 | 0 | 0 | 0 | 0 | |
| Wang Zexia | Independent Director | Resigned | 0 | 0 | 0 | 0 | 0 | 0 | |
| Huang Siying | Independent Director | Resigned | 0 | 0 | 0 | 0 | 0 | 0 | |
| Song Ke | Supervisor | Resigned | 0 | 0 | 0 | 0 | 0 | 0 | |
| Yan Gang | Vice President | Resigned | 606,349 | 0 | 0 | 606,349 | 330,000 | 0 | 198,000 |
| Wei Meizhong | CFO, Vice President | Resigned | 1,510,000 | 0 | 0 | 1,510,000 | 260,000 | 0 | 156,000 |
| Zhang | Vice President | Resig | 927,500 | 0 | 0 | 927,500 | 740,000 | 0 | 483,500 |
| Wei | ned | ||||||||
| Li Ke | Director, President | Resigned | 2,420,000 | 0 | 0 | 2,420,000 | 800,000 | 0 | 800,000 |
| Total | -- | -- | 1,425,853,872 | 12,371,480 | 84,105,200 | 1,354,120,152 | 8,630,000 | 12,371,480 | 18,035,380 |
II. Changes of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
| Name | Title | Type | Date | Causes |
| Fu Liquan | Chairman, President | Elected | August 12, 2020 | the election at expiration of office terms of Board of Directors |
| Wu Jun | Vice Chairman | Elected | August 12, 2020 | the election at expiration of office terms of Board of Directors |
| Zhang Xingming | Executive President | Appointment and dismissal | February 27, 2020 | Appointed as Executive President and Resigned as Vice President |
| Appointment | August 12, 2020 | Appointed by the 7th Board of Directors | ||
| Director | Elected | August 12, 2020 | the election at expiration of office terms of Board of Directors | |
| Zhu Jiangming | Director | Elected | August 12, 2020 | the election at expiration of office terms of Board of Directors |
| Chen Ailing | Director | Elected | August 12, 2020 | the election at expiration of office terms of Board of Directors |
| Yang Huayong | Independent Director | Elected | August 12, 2020 | the election at expiration of office terms of Board of Directors |
| Liu Hanlin | Independent Director | Elected | August 12, 2020 | the election at expiration of office terms of Board of Directors |
| Zhang Yuli | Independent Director | Elected | August 12, 2020 | the election at expiration of office terms of Board of Directors |
| Song Maoyuan | Supervisor | Elected | August 12, 2020 | the election at expiration of office terms of Board of Supervisors |
| Zheng Jieping | Supervisor | Elected | August 12, 2020 | the election at expiration of office terms of Board of Supervisors |
| Zuo Pengfei | Supervisor | Elected | August 12, 2020 | the election at expiration of office terms of Board of Supervisors |
| Chen Yuqing | Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors |
| Jiang Xiaolai | Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors |
| Li Zhijie | Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors |
| Wu Jian | Secretary of the Board, Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors |
| Wu Yunlong | Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors |
| Xu Qiaofen | Vice President | Appointment | February 27, 2020 | Appointed As Vice President |
| CFO | Appointment | April 27, 2020 | Appointed as Chief Financial Officer | |
| CFO, Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors | |
| Xu Zhicheng | Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors |
| Ying Yong | Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors |
| Zhu Jiantang | Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors |
| Zhao Yuning | Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors |
| Jiang Xiaolai | Vice President | Appointment | February 27, 2020 | Appointed As Vice President |
| Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors | |
| Li Zhijie | Vice President | Appointment | February 27, 2020 | Appointed As Vice President |
| Vice President | Appointment | August 12, 2020 | Appointed by the 7th Board of Directors | |
| He Chao | Independent Director | Resigned after the expiration of term of office | August 12, 2020 | Resigned after the expiration of term of office |
| Wang Zexia | Independent Director | Resigned after the expiration of term of office | August 12, 2020 | Resigned after the expiration of term of office |
| Huang Siying | Independent Director | Resigned after the expiration of term of office | August 12, 2020 | Resigned after the expiration of term of office |
| Song Ke | Supervisor | Resigned after the expiration of term of office | August 12, 2020 | Resigned after the expiration of term of office |
| Li Ke | Director, President | Resigned | February 27, 2020 | Left the Company Voluntarily |
| Yan Gang | Vice President | Dismissal | April 27, 2020 | Resigned voluntarily as vice president but still in office in the Company |
| Wei Meizhong | CFO, Vice President | Dismissal | April 27, 2020 | Left the Company Voluntarily |
| Zhang Wei | Vice President | Dismissal | April 27, 2020 | Left the Company Voluntarily |
Section X Matters on Corporate BondsWhether the Company has corporate bonds which have been publicly issued and listed on the stock exchange and areundue or not fully honored by the approved published date of the semi-annual reportNo
Section XI Financial ReportsI. Audit ReportsWhether the semi-annual report has been audited.
□ Yes √ No
The semi-annual report of the Company has not been audited yet.II. Financial StatementsUnits of financial reports in the notes: yuan
1. Consolidated Balance Sheet
Prepared by: Zhejiang Dahua Technology Co., Ltd.
June 30, 2020
Unit: RMB
| Item | June 30, 2020 | December 31, 2019 |
| Current Assets: | ||
| Cash and Bank Balances | 3,130,271,241.04 | 3,084,428,970.43 |
| Deposit Reservation for Balance | ||
| Loans to Banks and Other Financial Institutions | ||
| Trading Financial Assets | 902,431,780.82 | |
| Derivative Financial Assets | ||
| Notes receivable | ||
| Accounts receivable | 11,916,984,059.27 | 13,241,196,380.65 |
| Receivables Financing | 670,667,363.91 | 1,086,017,357.90 |
| Prepayments | 118,410,346.36 | 128,182,099.47 |
| Premium Receivable | ||
| Reinsurance Accounts Receivable | ||
| Reinsurance Contract Reserves Receivable | ||
| Other Receivables | 326,474,815.43 | 408,776,610.17 |
| Including: interest receivable | ||
| Dividends Receivable | ||
| Buying Back the Sale of Financial Assets | ||
| Inventory | 4,491,116,344.16 | 3,839,810,704.33 |
| Contract Assets | 56,834,587.73 | |
| Holding for-sale assets | ||
| Non-current Assets Due within 1 Year | 868,113,666.02 | 630,717,329.58 |
| Other Current Assets | 417,461,368.28 | 556,311,770.08 |
| Subtotal of Current Assets | 22,898,765,573.02 | 22,975,441,222.61 |
| Non-current Assets: | ||
| Granting of loans and advances | ||
| Investment in Creditor's Rights | ||
| Investment in Other Creditor's Rights | ||
| Long-term Receivables | 2,262,478,707.29 | 2,568,442,030.19 |
| Long-term Equity Investment | 499,277,297.72 | 490,731,236.85 |
| Investment in Other Equity Instruments | ||
| Other Non-current Financial Assets | 189,937,851.78 | 67,213,489.43 |
| Investment Property | 334,097,817.92 | 336,181,589.99 |
| Fixed Assets | 1,510,795,215.47 | 1,522,463,368.83 |
| Projects under Construction | 708,252,710.11 | 435,757,406.90 |
| Productive Biological Assets | ||
| Oil and gas assets | ||
| Right-of-use Assets | ||
| Intangible Assets | 412,722,605.77 | 411,758,785.31 |
| Development Expenditure | ||
| Goodwill | 42,685,490.30 | 42,685,490.30 |
| Long-term Prepaid Expenses | 50,722,916.18 | 37,311,198.19 |
| Deferred Income Tax Assets | 634,361,732.39 | 668,058,558.83 |
| Other Non-current Assets | 6,182,115.21 | 8,605,835.50 |
| Subtotal of Non-current Assets | 6,651,514,460.14 | 6,589,208,990.32 |
| Total Assets | 29,550,280,033.16 | 29,564,650,212.93 |
| Current Liabilities: | ||
| Short-term loan | 1,540,344,169.29 | 400,323,888.90 |
| Borrowings from the Central Bank | ||
| Borrowings from Banks and Other Financial Institutions | ||
| Transactional financial liabilities | ||
| Derivative Financial Liabilities |
| Notes Payable | 2,158,234,712.01 | 3,807,292,795.07 |
| Accounts Payable | 3,854,639,329.00 | 4,290,253,501.81 |
| Received Prepayments | 375,521,795.82 | |
| Contract liabilities | 548,034,908.61 | |
| Financial Assets Sold for Repurchase | ||
| Deposit Taking and Interbank Deposit | ||
| Receiving from Vicariously Traded Securities | ||
| Receiving from Vicariously Sold Securities | ||
| Payroll payable | 978,146,424.59 | 1,582,368,359.30 |
| Tax Payable | 534,038,767.85 | 813,357,471.37 |
| Other Payables | 1,045,327,489.78 | 1,163,915,713.24 |
| Including: interest payable | ||
| Dividends Payable | 14,288,249.35 | 9,454,479.13 |
| Service Charge and Commission Payable | ||
| Reinsurance Accounts Payable | ||
| Holding for-sale liabilities | ||
| Non-current Liabilities Due within 1 Year | 26,381,963.91 | 26,993,755.57 |
| Other Current Liabilities | 96,409,504.55 | 71,233,107.93 |
| Subtotal of Current Liabilities | 10,781,557,269.59 | 12,531,260,389.01 |
| Non-current Liabilities: | ||
| Insurance Contract Reserves | ||
| Long-term loan | 528,500,000.00 | 153,500,000.00 |
| Bonds Payable | ||
| Including: Preferred Stocks | ||
| Perpetual Bonds | ||
| Lease Liabilities | ||
| Long-term Payables | ||
| Long-term payroll payable | ||
| Expected Liabilities | 318,154,671.10 | 303,670,887.50 |
| Deferred Income | 87,838,590.09 | 117,210,761.34 |
| Deferred Income Tax Liabilities | 52,503,211.19 | 50,565,095.68 |
| Other Non-current Liabilities | 394,149,821.16 | 432,275,367.74 |
| Subtotal of Non-current Liabilities | 1,381,146,293.54 | 1,057,222,112.26 |
| Total Liabilities | 12,162,703,563.13 | 13,588,482,501.27 |
| Shareholders' Equity: | ||
| Share Capital | 3,001,465,530.00 | 3,003,713,230.00 |
| Other Equity Instruments | ||
| Including: Preferred Stocks | ||
| Perpetual Bonds | ||
| Capital Reserves | 1,834,183,770.35 | 1,882,855,119.53 |
| Less: Treasury Share | 629,131,574.61 | 1,057,584,258.31 |
| Other Comprehensive Incomes | 14,147,021.66 | 12,308,276.23 |
| Special Reserves | ||
| Surplus Reserves | 1,553,691,005.92 | 1,553,691,005.92 |
| General Risk Reserves | ||
| Undistributed Profits | 11,219,805,643.20 | 10,248,023,654.54 |
| Total Shareholders' Equity Attributable to the Parent Company | 16,994,161,396.52 | 15,643,007,027.91 |
| Minority Shareholders' Equity | 393,415,073.51 | 333,160,683.75 |
| Total Shareholders' Equity | 17,387,576,470.03 | 15,976,167,711.66 |
| Total Liabilities and Shareholders' Equity | 29,550,280,033.16 | 29,564,650,212.93 |
Legal representative: Fu Liquan Person in charge of accounting: Xu Qiaofen Person in charge of the accounting institution: Zhu Zhuling
2. Balance Sheet of the Parent Company
Unit: RMB
| Item | June 30, 2020 | December 31, 2019 |
| Current Assets: | ||
| Cash and Bank Balances | 482,787,245.80 | 890,598,735.62 |
| Trading Financial Assets | 802,027,397.26 | |
| Derivative Financial Assets | ||
| Notes receivable | ||
| Accounts receivable | 5,743,320,432.22 | 8,450,364,515.05 |
| Receivables Financing | 216,863,939.83 | 841,427,888.19 |
| Prepayments | 31,996,818.19 | 30,501,431.44 |
| Other Receivables | 9,573,681,872.01 | 5,138,830,912.64 |
| Including: interest receivable | ||
| Dividends Receivable | ||
| Inventory | 157,074,903.08 | 124,904,729.01 |
| Contract Assets | ||
| Holding for-sale assets | ||
| Non-current Assets Due within 1 Year | 54,206,272.29 | 53,952,526.19 |
| Other Current Assets | 192,864.70 | 21,919,487.88 |
| Subtotal of Current Assets | 17,062,151,745.38 | 15,552,500,226.02 |
| Non-current Assets: | ||
| Investment in Creditor's Rights | ||
| Investment in Other Creditor's Rights | ||
| Long-term Receivables | 128,685,529.71 | 137,284,594.67 |
| Long-term Equity Investment | 3,695,090,178.38 | 3,523,259,061.78 |
| Investment in Other Equity Instruments | ||
| Other Non-current Financial Assets | 185,703,750.03 | 62,979,387.68 |
| Investment Property | 177,260,428.90 | 187,756,594.11 |
| Fixed Assets | 563,916,932.57 | 536,909,246.66 |
| Projects under Construction | 318,286,472.02 | 203,836,998.96 |
| Productive Biological Assets | ||
| Oil and gas assets | ||
| Right-of-use Assets | ||
| Intangible Assets | 162,160,978.21 | 168,215,377.39 |
| Development Expenditure | ||
| Goodwill | ||
| Long-term Prepaid Expenses | 23,779,058.89 | 26,687,122.32 |
| Deferred Income Tax Assets | 104,244,152.63 | 131,503,372.44 |
| Other Non-current Assets | 3,571,654.77 | 1,964,757.00 |
| Subtotal of Non-current Assets | 5,362,699,136.11 | 4,980,396,513.01 |
| Total Assets | 22,424,850,881.49 | 20,532,896,739.03 |
| Current Liabilities: | ||
| Short-term loan | 1,293,986,500.00 | 400,323,888.90 |
| Transactional financial liabilities | ||
| Derivative Financial Liabilities | ||
| Notes Payable | 504,836,599.69 | 302,168,249.70 |
| Accounts Payable | 749,417,763.56 | 948,348,622.52 |
| Received Prepayments | 181,462,746.37 | |
| Contract liabilities | 69,361,206.15 |
| Payroll payable | 681,094,314.36 | 1,078,396,381.39 |
| Tax Payable | 271,554,671.05 | 460,577,509.52 |
| Other Payables | 1,338,029,254.84 | 1,363,740,346.75 |
| Including: interest payable | ||
| Dividends Payable | 14,288,249.35 | 9,454,479.13 |
| Holding for-sale liabilities | ||
| Non-current Liabilities Due within 1 Year | 265,000.00 | |
| Other Current Liabilities | 5,290,905.01 | 5,892,364.82 |
| Subtotal of Current Liabilities | 4,913,836,214.66 | 4,740,910,109.97 |
| Non-current Liabilities: | ||
| Long-term loan | 400,000,000.00 | |
| Bonds Payable | ||
| Including: Preferred Stocks | ||
| Perpetual Bonds | ||
| Lease Liabilities | ||
| Long-term Payables | ||
| Long-term payroll payable | ||
| Expected Liabilities | 9,441,652.33 | 9,735,157.34 |
| Deferred Income | ||
| Deferred Income Tax Liabilities | 2,982,370.12 | 1,297,719.64 |
| Other Non-current Liabilities | 13,422,253.24 | 16,155,036.85 |
| Subtotal of Non-current Liabilities | 425,846,275.69 | 27,187,913.83 |
| Total Liabilities | 5,339,682,490.35 | 4,768,098,023.80 |
| Shareholders' Equity: | ||
| Share Capital | 3,001,465,530.00 | 3,003,713,230.00 |
| Other Equity Instruments | ||
| Including: Preferred Stocks | ||
| Perpetual Bonds | ||
| Capital Reserves | 1,818,239,212.32 | 1,867,489,901.04 |
| Less: Treasury Share | 629,131,574.61 | 1,057,584,258.31 |
| Other Comprehensive Incomes | ||
| Special Reserves | ||
| Surplus Reserves | 1,553,691,005.92 | 1,553,691,005.92 |
| Undistributed Profits | 11,340,904,217.51 | 10,397,488,836.58 |
| Total Shareholders' Equity | 17,085,168,391.14 | 15,764,798,715.23 |
| Total Liabilities and Shareholders' Equity | 22,424,850,881.49 | 20,532,896,739.03 |
3. Consolidated Income Statement
Unit: RMB
| Item | Semi-annual 2020 | Semi-annual 2019 |
| I. Total Operating Revenue | 9,838,328,853.62 | 10,806,566,370.89 |
| Including: Operating Revenue | 9,838,328,853.62 | 10,806,566,370.89 |
| Interest Income | ||
| Earned Premiums | ||
| Service Charge and Commission Income | ||
| II. Total Operating Cost | 8,605,447,370.85 | 9,650,560,173.11 |
| Including: Operating Cost | 5,099,250,150.57 | 6,443,429,151.03 |
| Interest Expenditures | ||
| Service Charge and Commission Expenses | ||
| Surrender Value | ||
| Net Claims Paid | ||
| The Net Amount Withdrawn for Insurance Liability Reserves | ||
| Policyholder Dividend Expense | ||
| Reinsurance Cost | ||
| Taxes and Surcharges | 55,143,183.10 | 64,190,849.22 |
| Sales Expenses | 1,805,227,134.27 | 1,539,714,255.33 |
| Administration expenses | 355,781,491.22 | 346,919,167.36 |
| Research and development expense | 1,314,612,940.95 | 1,245,261,201.77 |
| Financial Expenses | -24,567,529.26 | 11,045,548.40 |
| Including: interest expenses | 36,633,828.03 | 76,337,321.42 |
| Interest Income | 82,236,920.48 | 81,150,189.81 |
| Add: Other income | 458,546,321.24 | 426,921,517.08 |
| Investment Income (Mark "-" for Loss) | -32,178,746.19 | -5,691,002.29 |
| Including: Investment Income from Affiliates and Joint Ventures | -44,335,467.10 | -548,623.93 |
| Profits from recognition Termination of Financial Assets at Amortized Cost | ||
| Exchange Gains (Mark "-" for Losses) |
| Profit of Net Exposure Hedging (Mark "-" for Loss) | ||
| Incomes from changes in fair value (losses marked with "-") | 17,009,143.17 | 45,449,188.16 |
| Credit Impairment Losses (Mark "-" for Loss) | -87,762,680.91 | -163,681,506.49 |
| Asset Impairment Losses (Mark "-" for Loss) | -42,303,107.35 | -98,774,186.62 |
| Asset Disposal Income (Mark "-" for Loss) | 10,307.31 | 448,615.83 |
| III. Operating Profit (Mark "-" for Loss) | 1,546,202,720.04 | 1,360,678,823.45 |
| Add: Non-operating Revenues | 6,124,434.50 | 8,513,835.06 |
| Less: Non-operating Expenses | 12,034,840.16 | 1,357,098.55 |
| IV. Total Profit (Mark "-" for Total Loss) | 1,540,292,314.38 | 1,367,835,559.96 |
| Less: Income Tax Expense | 169,559,416.73 | 163,173,365.97 |
| V. Net Profit (Mark "-" for Net Loss) | 1,370,732,897.65 | 1,204,662,193.99 |
| i. Classified by operation continuity | ||
| 1. Net Profit as a Going Concern (Mark "-" for Net Loss) | 1,370,732,897.65 | 1,204,662,193.99 |
| 2. Net Profit of Discontinued Operation (Mark "-" for Net Loss) | ||
| ii. Classified by the attribution of ownership | ||
| 1. Net Profit Attributable to the Parent Company's Owner | 1,368,974,364.44 | 1,238,880,948.74 |
| 2. Minority Shareholders' Profit and Loss | 1,758,533.21 | -34,218,754.75 |
| VI. Net Amount of Other Comprehensive Incomes after Tax | 1,838,733.32 | -718,205.48 |
| Net Amount of Other Comprehensive Incomes after Tax Attributable to the Parent Company's Owner | 1,838,745.43 | -718,255.60 |
| (1) Other comprehensive income that cannot be reclassified as P/L | ||
| 1. Re-measure the variation of the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to P/L under the equity method | ||
| 3. Changes in the fair value of investment in other equity instruments | ||
| 4. Changes in the fair value of the credit risk of the enterprise | ||
| 5. Others |
| (2) Other comprehensive income that will be reclassified as P/L | 1,838,745.43 | -718,255.60 |
| 1. Other comprehensive income that can be transferred to P/L under the equity method | ||
| 2. Changes in the fair value of investment in other creditor's rights | ||
| 3. Financial assets reclassified into other comprehensive income | ||
| 4. Provisions for the credit impairment of other creditors' investment | ||
| 5. Reserves for cash flow hedges | ||
| 6. Difference from translating foreign currency financial statements | 1,838,745.43 | -718,255.60 |
| 7. Others | ||
| Net Amount of Other Comprehensive Incomes After Tax Attributable to Minority Shareholders | -12.11 | 50.12 |
| VII. Total Comprehensive Income | 1,372,571,630.97 | 1,203,943,988.51 |
| Total Comprehensive Income Attributable to the Parent Company's Owner | 1,370,813,109.87 | 1,238,162,693.14 |
| Total Comprehensive Income Attributable to Minority Shareholders | 1,758,521.10 | -34,218,704.63 |
| VIII. Earnings per Share: | ||
| (I) Basic Earnings per Share | 0.47 | 0.42 |
| (II) Diluted Earnings per Share | 0.47 | 0.42 |
Legal representative: Fu Liquan Person in charge of accounting: Xu Qiaofen Person in charge of the accounting institution: Zhu Zhuling
4. Income Statement of the Parent Company
Unit: RMB
| Item | Semi-annual 2020 | Semi-annual 2019 |
| I. Operating Revenue | 3,624,985,329.95 | 3,281,203,959.86 |
| Less: Operating Cost | 464,299,570.21 | 369,348,403.98 |
| Taxes and Surcharges | 37,785,882.54 | 43,805,303.56 |
| Sales Expenses | 763,855,586.98 | 774,697,601.25 |
| Administration expenses | 209,844,615.20 | 194,508,500.94 |
| Research and development expense | 1,047,270,644.13 | 1,047,272,163.00 |
| Financial Expenses | 5,634,218.96 | 32,399,789.08 |
| Including: interest expenses | 32,511,309.24 | 51,929,211.84 |
| Interest Income | 29,029,575.89 | 21,971,107.71 |
| Add: Other income | 384,657,520.57 | 388,225,543.16 |
| Investment Income (Mark "-" for Loss) | -37,634,661.64 | 9,740,090.32 |
| Including: Investment Income from Affiliates and Joint Ventures | -45,152,368.00 | -7,096.54 |
| Profits from Derecognition of Financial Assets at Amortized Cost (Mark "-" for Loss) | ||
| Profit of Net Exposure Hedging (Mark "-" for Loss) | ||
| Incomes from changes in fair value (losses marked with "-") | 16,604,759.61 | |
| Credit Impairment Losses (Mark "-" for Loss) | -5,673,952.18 | -10,600,820.35 |
| Asset Impairment Losses (Mark "-" for Loss) | -4,696,447.86 | |
| Asset Disposal Income (Mark "-" for Loss) | 10,000.01 | 230,024.34 |
| II. Operating Profit (Mark "-" for Loss) | 1,449,562,030.44 | 1,206,767,035.52 |
| Add: Non-operating Revenues | 2,972,951.40 | 2,476,092.90 |
| Less: Non-operating Expenses | 6,055,686.02 | 700,678.88 |
| III. Total Profit (Mark "-" for Total Loss) | 1,446,479,295.82 | 1,208,542,449.54 |
| Less: Income Tax Expense | 105,871,539.11 | 81,947,097.24 |
| IV. Net Profit (Mark "-" for Net Loss) | 1,340,607,756.71 | 1,126,595,352.30 |
| (I) Net Profit as a Going Concern (Mark "-" for Net Loss) | 1,340,607,756.71 | 1,126,595,352.30 |
| (II) Net Profit of Discontinued Operation (Mark "-" for Net Loss) | ||
| V. Net Amount of Other Comprehensive Incomes After Tax | ||
| (1) Other comprehensive income that cannot be reclassified as P/L | ||
| 1. Re-measure the variation of the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to P/L under the equity method | ||
| 3. Changes in the fair value of investment in other equity instruments | ||
| 4. Changes in the fair value of the credit risk of the enterprise |
| 5. Others | ||
| (2) Other comprehensive income that will be reclassified as P/L | ||
| 1. Other comprehensive income that can be transferred to P/L under the equity method | ||
| 2. Changes in the fair value of investment in other creditor's rights | ||
| 3. Financial assets reclassified into other comprehensive income | ||
| 4. Provisions for the credit impairment of other creditors' investment | ||
| 5. Reserves for cash flow hedges | ||
| 6. Difference from translating foreign currency financial statements | ||
| 7. Others | ||
| VI. Total Comprehensive Income | 1,340,607,756.71 | 1,126,595,352.30 |
| VII. Earnings per Share: | ||
| (I) Basic Earnings per Share | 0.46 | 0.39 |
| (II) Diluted Earnings per Share | 0.46 | 0.39 |
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | Semi-annual 2020 | Semi-annual 2019 |
| I. Cash Flow Generated by Operational Activities: | ||
| Cash from Sales of Merchandise and Provision of Services | 12,453,860,700.45 | 10,826,094,759.86 |
| Net Increase in Customer's Bank Deposits and Interbank Deposits | ||
| Net Increase in Borrowings from the Central Bank | ||
| Net Increase in Borrowings from Other Financial Institutions | ||
| Cash Arising from Receiving Premiums for the Original Insurance Contract | ||
| Net Amount Arising from Reinsurance Business | ||
| Net Increase in Deposits and Investments from Policyholders |
| Cash Arising from Interests, Service Charges and Commissions | ||
| Net Increase in Borrowings from Banks and Other Financial Institutions | ||
| Net Increase in Repurchase Business Funds | ||
| Net Amount of Cash Received from the Vicariously Traded Securities | ||
| Tax Refund | 1,193,492,111.32 | 824,424,362.86 |
| Other Received Cashes Related to Operational Activities | 139,593,191.08 | 182,265,336.17 |
| Subtotal of cash inflow from operational activities | 13,786,946,002.85 | 11,832,784,458.89 |
| Cash Paid for Merchandise and Services | 8,806,532,224.04 | 8,183,055,955.85 |
| Net Increase in Loans and Advances to Customers | ||
| Net Increase in Deposits with Central Bank and Other Financial Institutions | ||
| Cash Paid for Original Insurance Contract Claims | ||
| Net increase of funds lent | ||
| Cash Paid for Interests, Service Charges and Commissions | ||
| Cash Paid for Policy Dividends | ||
| Cash Paid to and for Employees | 3,126,225,617.57 | 2,506,637,462.82 |
| Cash Paid for Taxes and Surcharges | 1,114,316,698.90 | 851,257,957.46 |
| Other Paid Cashes Related to Operational Activities | 846,799,426.29 | 1,162,300,175.64 |
| Subtotal of cash outflow from operational activities | 13,893,873,966.80 | 12,703,251,551.77 |
| Net cash flow generated by operating activities | -106,927,963.95 | -870,467,092.88 |
| II. Cash Flow from Investment Activities: | ||
| Cash Arising from Disposal of Investments | 212,000,000.00 | |
| Cash Arising from Investment Incomes | 7,031,342.00 | 9,387,186.86 |
| Net Cash Arising from Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets | 851,832.61 | 4,361,781.86 |
| Net Cash Arising from Disposal of Subsidiaries and Other Business Units | ||
| Other Received Cashes Related to Investment Activities | 135,010,923.00 | 4,052,392.39 |
| Subtotal of cash inflow from investment activities | 354,894,097.61 | 17,801,361.11 |
| Cash Paid for Purchase and Construction of Fixed | 250,327,215.67 | 260,697,897.67 |
| Assets, Intangible Assets and Other Long-term Assets | ||
| Cash Paid for Investments | 1,272,547,000.00 | 13,200,000.00 |
| Net Increase in Pledge Loans | ||
| Net Cash Paid for Acquisition of Subsidiaries and Other Business Units | ||
| Other Paid Cashes Related to Investment Activities | 79,560,273.93 | 26,458,528.22 |
| Subtotal of cash outflow from investment activities | 1,602,434,489.60 | 300,356,425.89 |
| Net amount of cash flow generated by investment activities | -1,247,540,391.99 | -282,555,064.78 |
| III. Cash Flow from Financing Activities: | ||
| Cash Arising from Absorbing Investments | 59,440,000.00 | 43,114,250.00 |
| Including: Cash Arising from Subsidiaries Absorbing Investments by Minority Shareholders | 59,440,000.00 | 43,114,250.00 |
| Cash Arising from Borrowings | 3,324,530,906.01 | 3,995,334,621.50 |
| Other Received Cashes Related to Financing Activities | 867,776,937.16 | 805,382,000.00 |
| Subtotal of cash inflow from financing activities | 4,251,747,843.17 | 4,843,830,871.50 |
| Cash Paid for Debts Repayment | 1,663,711,726.38 | 2,690,153,276.12 |
| Cash Paid for Distribution of Dividends and Profits or Payment of Interests | 418,919,503.17 | 348,633,662.77 |
| Including: Dividends and Profits Paid to Minority Shareholders by Subsidiaries | ||
| Other Paid Cashes Related to Financing Activities | 767,782,756.00 | 816,654,575.69 |
| Subtotal of cash outflow from financing activities | 2,850,413,985.55 | 3,855,441,514.58 |
| Net cash flow generated by financing activities | 1,401,333,857.62 | 988,389,356.92 |
| IV. Impact of Fluctuation in Exchange Rate on Cash and Cash Equivalents | -430,036.43 | 7,299,167.67 |
| V. Net Increase in Cash and Cash Equivalents | 46,435,465.25 | -157,333,633.07 |
| Add: Cash and Cash Equivalents at the Commencement of the Period | 2,734,185,976.41 | 3,702,283,803.54 |
| VI. Cash and Cash Equivalents at the End of the Period | 2,780,621,441.66 | 3,544,950,170.47 |
6. Cash Flow Statement of the Parent Company
Unit: RMB
| Item | Semi-annual 2020 | Semi-annual 2019 |
| I. Cash Flow Generated by Operational Activities: |
| Cash from Sales of Merchandise and Provision of Services | 7,212,656,097.72 | 1,594,454,492.04 |
| Tax Refund | 395,396,831.40 | 327,192,023.88 |
| Other Received Cashes Related to Operational Activities | 68,383,248.19 | 98,858,726.98 |
| Subtotal of cash inflow from operational activities | 7,676,436,177.31 | 2,020,505,242.90 |
| Cash Paid for Merchandise and Services | 507,090,103.14 | 391,253,745.70 |
| Cash Paid to and for Employees | 1,905,848,316.86 | 1,597,070,311.21 |
| Cash Paid for Taxes and Surcharges | 670,752,521.48 | 534,095,073.85 |
| Other Paid Cashes Related to Operational Activities | 452,566,064.54 | 550,587,545.42 |
| Subtotal of cash outflow from operational activities | 3,536,257,006.02 | 3,073,006,676.18 |
| Net cash flow generated by operating activities | 4,140,179,171.29 | -1,052,501,433.28 |
| II. Cash Flow from Investment Activities: | ||
| Cash Arising from Disposal of Investments | 199,900,000.00 | |
| Cash Arising from Investment Incomes | 7,031,342.00 | 9,387,186.86 |
| Net Cash Arising from Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets | 7,862,105.25 | 12,303,962.73 |
| Net Cash Arising from Disposal of Subsidiaries and Other Business Units | ||
| Other Received Cashes Related to Investment Activities | 63,493,496.46 | 9,227,698.52 |
| Subtotal of cash inflow from investment activities | 278,286,943.71 | 30,918,848.11 |
| Cash Paid for Purchase and Construction of Fixed Assets, Intangible Assets and Other Long-term Assets | 137,011,698.40 | 102,347,243.84 |
| Cash Paid for Investments | 1,309,807,000.00 | 111,885,750.00 |
| Net Cash Paid for Acquisition of Subsidiaries and Other Business Units | ||
| Other Paid Cashes Related to Investment Activities | ||
| Subtotal of cash outflow from investment activities | 1,446,818,698.40 | 214,232,993.84 |
| Net amount of cash flow generated by investment activities | -1,168,531,754.69 | -183,314,145.73 |
| III. Cash Flow from Financing Activities: | ||
| Cash Arising from Absorbing Investments | ||
| Cash Arising from Borrowings | 1,889,800,000.00 | 1,963,462,853.53 |
| Other Received Cashes Related to Financing Activities | 1,487,145,393.24 | 2,541,785,779.17 |
| Subtotal of cash inflow from financing activities | 3,376,945,393.24 | 4,505,248,632.70 |
| Cash Paid for Debts Repayment | 599,800,000.00 | 1,066,444,497.42 |
| Cash Paid for Distribution of Dividends and Profits or Payment of Interests | 410,133,298.68 | 329,177,945.46 |
| Other Paid Cashes Related to Financing Activities | 5,735,303,661.46 | 2,258,109,917.86 |
| Subtotal of cash outflow from financing activities | 6,745,236,960.14 | 3,653,732,360.74 |
| Net cash flow generated by financing activities | -3,368,291,566.90 | 851,516,271.96 |
| IV. Impact of Fluctuation in Exchange Rate on Cash and Cash Equivalents | -73,606.83 | -251,558.05 |
| V. Net Increase in Cash and Cash Equivalents | -396,717,757.13 | -384,550,865.10 |
| Add: Cash and Cash Equivalents at the Commencement of the Period | 860,741,299.14 | 603,430,209.42 |
| VI. Cash and Cash Equivalents at the End of the Period | 464,023,542.01 | 218,879,344.32 |
7. Consolidated Statement of Changes in Owners' Equity
Amount of this period
Unit: RMB
| Item | Semi-annual 2020 | ||||||||||||||
| Shareholders' Equity Attributable to the Parent Company's Owner | Minority Shareholders' Equity | Total Shareholders' Equity | |||||||||||||
| Share Capital | Other Equity Instruments | Capital Reserves | Less: Treasury Share | Other Comprehensive Incomes | Special Reserves | Surplus Reserves | General Risk Reserves | Undistributed Profits | Others | Subtotal | |||||
| Preferred Stocks | Perpetual Bonds | Others | |||||||||||||
| I. Balance at the End of Last Year | 3,003,713,230.00 | 1,882,855,119.53 | 1,057,584,258.31 | 12,308,276.23 | 1,553,691,005.92 | 10,248,023,654.54 | 15,643,007,027.91 | 333,160,683.75 | 15,976,167,711.66 | ||||||
| Add: Changes in Accounting Policies | |||||||||||||||
| Correction of Errors in the Previous | |||||||||||||||
| Period | |||||||||||||||
| Consolidated under the Same Control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the Start of This Year | 3,003,713,230.00 | 1,882,855,119.53 | 1,057,584,258.31 | 12,308,276.23 | 1,553,691,005.92 | 10,248,023,654.54 | 15,643,007,027.91 | 333,160,683.75 | 15,976,167,711.66 | ||||||
| III. Increases or Decreases in This Period (Mark "-" for Decreases) | -2,247,700.00 | -48,671,349.18 | -428,452,683.70 | 1,838,745.43 | 971,781,988.66 | 1,351,154,368.61 | 60,254,389.76 | 1,411,408,758.37 | |||||||
| (I) Total Comprehensive Income | 1,838,745.43 | 1,368,974,364.44 | 1,370,813,109.87 | 1,758,521.10 | 1,372,571,630.97 | ||||||||||
| (II) Shareholders' Contribution and Reduction in Capital | -2,247,700.00 | -49,972,123.11 | -428,452,683.70 | 376,232,860.59 | 59,440,000.00 | 435,672,860.59 | |||||||||
| 1． Common stock invested by the owner | -2,247,700.00 | -119,640,368.28 | -428,452,683.70 | 306,564,615.42 | 59,440,000.00 | 366,004,615.42 | |||||||||
| 2． Capital Invested by Holders of Other Equity Instruments | |||||||||||||||
| 3． Amount of Share-based Payments Recorded into Shareholders' Equity | 69,668,245.17 | 69,668,245.17 | 69,668,245.17 | ||||||||||||
| 4． Others | |||||||||||||||
| (III) Profit Distribution | -397,192,37 | -397,192,37 | -397,192,37 |
| 5.78 | 5.78 | 5.78 | |||||||||||||
| 1． Appropriation of Surplus Reserves | |||||||||||||||
| 2． Appropriation of General Risk Reserves | |||||||||||||||
| 3． Distribution to Owners (or Shareholders) | -397,192,375.78 | -397,192,375.78 | -397,192,375.78 | ||||||||||||
| 4． Others | |||||||||||||||
| (IV) Internal Carry-forward of Shareholders' Equity | |||||||||||||||
| 1． Capital Reserves Transferred into Capital (or Share Capital) | |||||||||||||||
| 2． Surplus Reserves Transferred into Capital (or Share Capital) | |||||||||||||||
| 3． Surplus Reserves Covering Losses | |||||||||||||||
| 4． Carry-forward retained earnings of the variation of the defined benefit plan | |||||||||||||||
| 5． Other Carry-forward Retained Earnings of the |
| Comprehensive Income | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special Reserves | |||||||||||||||
| 1． Withdrawal in this period | |||||||||||||||
| 2． Used in This Period | |||||||||||||||
| (VI) Others | 1,300,773.93 | 1,300,773.93 | -944,131.34 | 356,642.59 | |||||||||||
| IV. Balance at the End of This Period | 3,001,465,530.00 | 1,834,183,770.35 | 629,131,574.61 | 14,147,021.66 | 1,553,691,005.92 | 11,219,805,643.20 | 16,994,161,396.52 | 393,415,073.51 | 17,387,576,470.03 |
Amount of Previous Period
Unit: RMB
| Item | Semi-annual 2019 | ||||||||||||||
| Shareholders' Equity Attributable to the Parent Company's Owner | Minority Shareholders' Equity | Total Shareholders' Equity | |||||||||||||
| Share Capital | Other Equity Instruments | Capital Reserves | Less: Treasury Share | Other Comprehensive Incomes | Special Reserves | Surplus Reserves | General Risk Reserves | Undistributed Profits | Others | Subtotal | |||||
| Preferred Stocks | Perpetual Bonds | Others | |||||||||||||
| I. Balance at the End of Last Year | 2,997,621,930.00 | 1,501,180,862.83 | 807,733,586.00 | 10,337,164.41 | 1,246,369,430.91 | 7,670,983,116.33 | 12,618,758,918.48 | 284,506,754.95 | 12,903,265,673.43 | ||||||
| Add: Changes in Accounting Policies | |||||||||||||||
| Correction of Errors in the Previous Period | |||||||||||||||
| Consolidated under the Same Control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the Start of This Year | 2,997,621,930.00 | 1,501,180,862.83 | 807,733,586.00 | 10,337,164.41 | 1,246,369,430.91 | 7,670,983,116.33 | 12,618,758,918.48 | 284,506,754.95 | 12,903,265,673.43 | ||||||
| III. Increases or Decreases in This Period (Mark "-" for Decreases) | -44,200.00 | 71,017,514.99 | 70,490,360.13 | -718,255.60 | 939,119,278.75 | 938,883,978.01 | 11,352,704.76 | 950,236,682.77 | |||||||
| (I) Total Comprehensive Income | -718,255.60 | 1,238,880,948.74 | 1,238,162,693.14 | -34,218,704.63 | 1,203,943,988.51 | ||||||||||
| (II) Shareholders' Contribution and Reduction in Capital | -44,200.00 | 103,583,714.04 | 80,372,644.44 | 23,166,869.60 | 43,114,250.00 | 66,281,119.60 | |||||||||
| 1． Common stock invested by the owner | -44,200.00 | -326,617.25 | 80,372,644.44 | -80,743,461.69 | 43,114,250.00 | -37,629,211.69 | |||||||||
| 2． Capital Invested by Holders of Other Equity Instruments | |||||||||||||||
| 3． Amount of Share-based Payments Recorded into Shareholders' Equity | 103,910,331.29 | 103,910,331.29 | 103,910,331.29 | ||||||||||||
| 4． Others | |||||||||||||||
| (III) Profit Distribution | -9,882,284.31 | -299,761,669.99 | -289,879,385.68 | -289,879,385.68 |
| 1． Appropriation of Surplus Reserves | |||||||||||||||
| 2． Appropriation of General Risk Reserves | |||||||||||||||
| 3． Distribution to Owners (or Shareholders) | -299,761,669.99 | -299,761,669.99 | -299,761,669.99 | ||||||||||||
| 4． Others | -9,882,284.31 | 9,882,284.31 | 9,882,284.31 | ||||||||||||
| (IV) Internal Carry-forward of Shareholders' Equity | |||||||||||||||
| 1． Capital Reserves Transferred into Capital (or Share Capital) | |||||||||||||||
| 2． Surplus Reserves Transferred into Capital (or Share Capital) | |||||||||||||||
| 3． Surplus Reserves Covering Losses | |||||||||||||||
| 4． Carry-forward retained earnings of the variation of the defined benefit plan |
| 5． Other Carry-forward Retained Earnings of the Comprehensive Income | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special Reserves | |||||||||||||||
| 1． Withdrawal in this period | |||||||||||||||
| 2． Used in This Period | |||||||||||||||
| (VI) Others | -32,566,199.05 | -32,566,199.05 | 2,457,159.39 | -30,109,039.66 | |||||||||||
| IV. Balance at the End of This Period | 2,997,577,730.00 | 1,572,198,377.82 | 878,223,946.13 | 9,618,908.81 | 1,246,369,430.91 | 8,610,102,395.08 | 13,557,642,896.49 | 295,859,459.71 | 13,853,502,356.20 |
8. Statement of Changes in Owners' Equity of the Parent Company
Amount of this period
Unit: RMB
| Item | Semi-annual 2020 | |||||||||||
| Share Capital | Other Equity Instruments | Capital Reserves | Less: Treasury Share | Other Comprehensive Incomes | Special Reserves | Surplus Reserves | Undistributed Profits | Others | Total Shareholders' Equity | |||
| Preferred Stocks | Perpetual Bonds | Others | ||||||||||
| I. Balance at the End of Last Year | 3,003,713,230.00 | 1,867,489,901.04 | 1,057,584,258.31 | 1,553,691,005.92 | 10,397,488,836.58 | 15,764,798,715.23 | ||||||
| Add: Changes in Accounting Policies | ||||||||||||
| Correction of Errors in the Previous Period | ||||||||||||
| Others | ||||||||||||
| II. Balance at the Start of This Year | 3,003,713,230.00 | 1,867,489,901.04 | 1,057,584,258.31 | 1,553,691,005.92 | 10,397,488,836.58 | 15,764,798,715.23 | ||||||
| III. Increases or Decreases in This Period (Mark "-" for Decreases) | -2,247,700.00 | -49,250,688.72 | -428,452,683.70 | 943,415,380.93 | 1,320,369,675.91 | |||||||
| (I) Total Comprehensive Income | 1,340,607,756.71 | 1,340,607,756.71 | ||||||||||
| (II) Shareholders' Contribution and Reduction in Capital | -2,247,700.00 | -49,250,688.72 | -428,452,683.70 | 376,954,294.98 | ||||||||
| 1． Common stock invested by the owner | -2,247,700.00 | -119,640,368.28 | -428,452,683.70 | 306,564,615.42 | ||||||||
| 2． Capital Invested by Holders of Other Equity Instruments | ||||||||||||
| 3． Amount of Share-based Payments Recorded into Shareholders' Equity | 70,389,679.56 | 70,389,679.56 | ||||||||||
| 4． Others | ||||||||||||
| (III) Profit Distribution | -397,192,375.78 | -397,192,375.78 |
| 1． Appropriation of Surplus Reserves | ||||||||||||
| 2． Distribution to Owners (or Shareholders) | -397,192,375.78 | -397,192,375.78 | ||||||||||
| 3． Others | ||||||||||||
| (IV) Internal Carry-forward of Shareholders' Equity | ||||||||||||
| 1． Capital Reserves Transferred into Capital (or Share Capital) | ||||||||||||
| 2． Surplus Reserves Transferred into Capital (or Share Capital) | ||||||||||||
| 3． Surplus Reserves Covering Losses | ||||||||||||
| 4． Carry-forward retained earnings of the variation of the defined benefit plan | ||||||||||||
| 5． Other Carry-forward Retained Earnings of the Comprehensive Income | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special Reserves |
| 1． Withdrawal in this period | ||||||||||||
| 2． Used in This Period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Balance at the End of This Period | 3,001,465,530.00 | 1,818,239,212.32 | 629,131,574.61 | 1,553,691,005.92 | 11,340,904,217.51 | 17,085,168,391.14 |
Amount of Previous Period
Unit: RMB
| Item | Semi-annual 2019 | |||||||||||
| Share Capital | Other Equity Instruments | Capital Reserves | Less: Treasury Share | Other Comprehensive Incomes | Special Reserves | Surplus Reserves | Undistributed Profits | Others | Total Shareholders' Equity | |||
| Preferred Stocks | Perpetual Bonds | Others | ||||||||||
| I. Balance at the End of Last Year | 2,997,621,930.00 | 1,497,801,068.88 | 807,733,586.00 | 1,246,369,430.91 | 7,930,928,526.31 | 12,864,987,370.10 | ||||||
| Add: Changes in Accounting Policies | ||||||||||||
| Correction of Errors in the Previous Period | ||||||||||||
| Others | ||||||||||||
| II. Balance at the Start of This Year | 2,997,621,930.00 | 1,497,801,068.88 | 807,733,586.00 | 1,246,369,430.91 | 7,930,928,526.31 | 12,864,987,370.10 | ||||||
| III. Increases or Decreases in This Period (Mark "-" for Decreases) | -44,200.00 | 68,460,768.79 | 70,490,360.13 | 826,833,682.31 | 824,759,890.97 | |||||||
| (I) Total | 1,126,59 | 1,126,595, | ||||||||||
| Comprehensive Income | 5,352.30 | 352.30 | ||||||||||
| (II) Shareholders' Contribution and Reduction in Capital | -44,200.00 | 101,026,967.84 | 80,372,644.44 | 20,610,123.40 | ||||||||
| 1． Common stock invested by the owner | -44,200.00 | -326,617.25 | 80,372,644.44 | -80,743,461.69 | ||||||||
| 2． Capital Invested by Holders of Other Equity Instruments | ||||||||||||
| 3． Amount of Share-based Payments Recorded into Shareholders' Equity | 101,353,585.09 | 101,353,585.09 | ||||||||||
| 4． Others | ||||||||||||
| (III) Profit Distribution | -9,882,284.31 | -299,761,669.99 | -289,879,385.68 | |||||||||
| 1． Appropriation of Surplus Reserves | ||||||||||||
| 2． Distribution to Owners (or Shareholders) | -299,761,669.99 | -299,761,669.99 | ||||||||||
| 3． Others | -9,882,284.31 | 9,882,284.31 | ||||||||||
| (IV) Internal Carry-forward of Shareholders' Equity | ||||||||||||
| 1． Capital Reserves Transferred |
| into Capital (or Share Capital) | ||||||||||||
| 2． Surplus Reserves Transferred into Capital (or Share Capital) | ||||||||||||
| 3． Surplus Reserves Covering Losses | ||||||||||||
| 4． Carry-forward retained earnings of the variation of the defined benefit plan | ||||||||||||
| 5． Other Carry-forward Retained Earnings of the Comprehensive Income | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special Reserves | ||||||||||||
| 1． Withdrawal in this period | ||||||||||||
| 2． Used in This Period | ||||||||||||
| (VI) Others | -32,566,199.05 | -32,566,199.05 | ||||||||||
| IV. Balance at the End of This Period | 2,997,577,730.00 | 1,566,261,837.67 | 878,223,946.13 | 1,246,369,430.91 | 8,757,762,208.62 | 13,689,747,261.07 |
III. Basic Information about the Company
Zhejiang Dahua Technology Co., Ltd. (hereinafter referred to as "Company" or "the Company") was incorporated underthe official approval document No. 18 [2002] Zhejiang Enterprise Listing by Zhejiang Provincial People's Government
Work Leading Group for Enterprise Listing in June 2002, and on the basis of overall change of the previous HangzhouDahua Information Technology Co., Ltd. It was an incorporated company initiated and established jointly by five naturalpersons, Fu Liquan, Chen Ailing, Zhu Jiangming, Liu Yunzhen and Chen Jianfeng as initiators.On April 22, 2008, the Company issued 16.8 million shares of common stock in RMB to the general public for the first timeunder the approval document No. 573 [2008] Securities Regulatory Issuance, issued by China Securities RegulatoryCommission ("CSRC"). It was listed on Shenzhen Stock Exchange on May 20, 2008 with a registered capital of RMB 66.8million and the change registration filed with Administration for Industry and Commerce was completed on May 23, 2008.The Company's unified social credit code is 91330000727215176K. The Company falls within the security videosurveillance industry.As of June 30, 2020, the Company has issued a total of 3,001,465,530 shares of capital, with a registered capital of RMB3,001,465,530. The registered address is No.1187, Binan Road, Binjiang District, Hangzhou, and the headquartersaddress is No.1199, Binan Road, Binjiang District, Hangzhou.The Company's main operational activities include: the development, services & sales of computer software; the design,development, production, installation & sales of electronic products and communication products; the development,system integration & sales of network products; the design & installation of electronic engineering products; informationtechnology consulting services; import & export businesses, etc. The actual controllers of the Company are Fu Liquan andChen Ailing.This financial statement has been approved by Board of Directors on August 20, 2020.IV. Basis for Preparing the Financial Statement
1. Basis for the preparation
The Company prepares the financial statement, as a going concern, based on transactions and matters that have actuallyoccurred, in accordance with Accounting Standards for Business Enterprises - Basic Standards issued by the Ministry ofFinance and all specific accounting standards, application guidelines for accounting standards for business enterprises,explanations on the accounting standards for business enterprises and other related regulations (hereinafter referred toas "Accounting Standards for Business Enterprises" collectively), and the disclosure provisions in the Preparation Rulesfor Information Disclosures by Companies Offering Securities to the Public No. 15 - General Provisions on FinancialReports issued by CSRC.
2. Going concern
The Company has the capability to continue as a going concern for at least 12 months as of the end of current reportingperiod, without any significant item affecting the capability for continuing as a going concern.V. Significant Accounting Polices and Accounting EstimatesNotes to specific accounting policies and accounting estimates:
The following disclosures cover the specific accounting policies and accounting estimates formulated by the Companyaccording to the characteristics of its production and operation.
1. Statement on compliance with Accounting Standards for Business EnterprisesThis financial statement complies with the requirements in the Accounting Standards for Business Enterprises
promulgated by the Ministry of Finance, and serves as a true and complete reflection of the financial positions of themerged companies and the parent company at the end of the reporting period and their operating results and cash flowsduring the reporting period.
2. Accounting period
The accounting period of the Company is from 1 January to 31 December of each calendar year.
3. Operating cycle
The Company's operating cycle is 12 months.
4. Functional currency
For the domestic operating entities of the Company and its overseas operating entity Dahua Technology (HK) Limited, thereporting currency is Renminbi ("RMB"). The remaining offshore operating entities use the local currency as the reportingcurrency.
5. The accounting treatment of business combinations involving enterprises under commoncontrol and business combinations not involving enterprises under common control
Business combination under common control: The assets and liabilities acquired by the merging party in businesscombination shall be measured at the book value of the assets, liabilities of the merged party (including goodwill incurredin the acquisition of the merged party by ultimate controlling party) in the consolidated financial statements of the ultimatecontrolling party on the date of combination. The difference between the book value of the net assets obtained and thebook value of the consideration paid for the combination (or total nominal value of the issued shares) is adjusted to capitalpremium in capital reserve. Adjustments shall be made to retained earnings in the event that the share premiums in thecapital reserves are not sufficient for write-down.Business combinations involving entities not under common control: The assets paid and liabilities incurred or committedas a consideration of business combination by the merging party were measured at fair value on the date of acquisitionand the difference between the fair value and its book value shall be charged to the profit or loss for the period. Where thecost of combination is higher than the fair value of the identifiable net assets acquired from the merging party in businesscombination, such difference shall be recognized as goodwill; where the cost of combination is less than the fair value ofthe identifiable net assets acquired from the merging party in business combination, such difference shall be charged tothe profit or loss for the period.The fees which are directly related to the business combination shall be recognized as the profit or loss in the period whenthe costs are incurred; the transaction expenses of issuing equity securities or debt securities for business merger shall beinitially capitalized for equity securities or debt securities.
6. Preparation method of consolidated financial statements
(1) Scope of Consolidation
The scope of consolidation of the consolidated financial statements is based on controlling interests and includes theCompany and all the subsidiaries.
(2) Procedures of Consolidation
The consolidated financial statements are prepared by the Company based on the financial statements of the Companyand its subsidiaries and in accordance with the other relevant information. In preparation of the Company's consolidatedfinancial statements, the Company will treat the enterprise group as a single accounting entity. The Group's overallfinancial position, operating results and cash flow are reflected based on the relevant accounting standards, measurementand presentation requirements and in accordance with the unified accounting policy.The subsidiaries that are within the scope of the consolidation shall have the same accounting policies and the accountingperiods with those of the Company. In preparing the consolidated financial statements, where the accounting policies andthe accounting periods are inconsistent between the Company and subsidiaries, the financial statements of subsidiariesare adjusted in accordance with the accounting policies and accounting period of the Company. For subsidiaries acquiredfrom a business combination involving entities not under common control, the individual financial statements of thesubsidiaries are adjusted based on the fair value of the identifiable net assets on the date of acquisition. For subsidiariesacquired from a business combination involving entities under common control, the individual financial statements of thesubsidiaries are adjusted based on the book value of the assets, liabilities of the acquiree (including goodwill incurred inthe acquisition of the acquiree by ultimate controlling party) in the financial statements of the ultimate controlling party.The owner's equity, the net profit or loss and the comprehensive income attributable to minority shareholders of asubsidiary of the current period are presented separately under the owners' equity in the consolidated balance sheet, thenet profit and the total comprehensive income in the consolidated income statement respectively. Where lossesattributable to the minority shareholders of a subsidiary of the current period exceed the minority shareholders' interestentitled in the shareholders' equity of the subsidiary at the beginning of the period, the excess is allocated against theminority shareholders interest.
① Addition of Subsidiaries or Business
For acquisition of subsidiaries or business due to business combination involving entities under common control duringthe reporting period, the opening balance of the consolidated balance sheet shall be adjusted; the revenue, expense andprofit of such subsidiaries or business from the beginning to the end of the reporting period when the merger occurs areincluded in the consolidated income statement; the cash flows of such subsidiaries or business from the beginning to theend of the reporting period when the merger occurs are included in the consolidated cash flow statement, and thecomparative figures of the financial statements should be adjusted simultaneously as if the consolidated reporting entityhas been in existence since the beginning of the control by the ultimate controlling party.An investor that may impose control over the investee under joint control due to additional investment shall be deemed aparty participating in the combination, and shall be adjusted at current status when the ultimate controlling party beginsthe control. The equity investment held before gaining the control of the combined party is recognized as relevant profit orloss, other comprehensive income and changes in other net assets at the later of the date of acquisition of the originalequity and the date when the combining and the combined parties are under joint control, and shall be written down to theopening balance retained earnings or current profit or loss in the comparative reporting period.For acquisition of subsidiaries due to business combination involving entities not under common control during thereporting period, the opening balance of consolidated balance sheet needs not be adjusted; the revenue, expense andprofit of such subsidiaries or business from the date of acquisition to the end of the reporting period are included in theconsolidated income statement; the cash flows of such subsidiaries or business from the date of acquisition to the end ofthe reporting period are included in the consolidated cash flow statement.In connection with imposing control over the investee not under joint control due to additional investment and otherreasons, the equity of acquiree held before acquisition date shall be remeasured by the Company at the fair value of suchequity on the acquisition date and the difference between fair value and book value shall be recognized as investmentincome in current period. If the acquiree's equity held before the acquiring date contains other comprehensive income andthe other changes of owner's equity except for net profits and losses, other comprehensive income and profit distributions
under the equity method, the related other comprehensive income and changes in other owner's equity shall betransferred to investment gains or losses on the date of acquisition, excluding the other comprehensive income derivedfrom changes of net liabilities or net assets due to re-measurement on defined benefit plan by the investee.
② Disposal of Subsidiaries or Business
a. General TreatmentFor disposal of subsidiaries or business during the reporting period, the revenue, expense and profit of such subsidiariesor business from the beginning of the period to the date of disposal are included in the consolidated income statement; thecash flows of such subsidiaries or business from the beginning of the period to the date of disposal are included in theconsolidated cash flow statement.When losing control of the investee due to partial disposal of the equity investment, or any other reasons, the remainingequity investment is remeasured at fair value at the date in which control is lost. The sum of consideration received fromdisposal of equity investment and the fair value of the remaining equity investment, net of the difference between the sumof the Company's previous share of the subsidiary's net assets recorded from the acquisition date or combination dateand the sum of goodwill, is recognized in investment income in the period in which control is lost. Other comprehensiveincome or net profit and loss related to the previous equity investment in the subsidiary, changes in equity except the othercomprehensive income and profit distribution, are transferred to investment income of the current period when losingcontrol, except the other comprehensive income as a result of the changes arising from the remeasurement of the netassets and net liabilities of the investee's defined benefit plan.In the event of losing control due to a decrease in the proportion of shares held by the Company as the capital increase insubsidiaries by other investors, the accounting treatment shall be conducted in accordance with the above principles.b. Disposal of Subsidiary Achieved by StagesWhen disposal of equity investments of subsidiaries through multiple transactions until the control is lost, generallytransactions in stages are treatment as a package deal in accounting if the transaction terms, conditions, and economicimpact of disposal of the subsidiary's equity interests comply with one or more of the following:
ⅰ. These transactions are achieved at the same time or the mutual effects on each other are considered;ⅱ. A complete set of commercial results can be achieved with reference to the series of transactions as a whole;ⅲ. Achieving a transaction depends on at least achieving of one of the other transaction;ⅳ. One transaction recognized separately is not economical, but it is economical when considered together with othertransactions.When losing control of a subsidiary in disposal of equity investments through multiple transactions is recognized as apackage deals, these transactions shall be in accounting treated as loss control of a subsidiary in disposal of equityinterests achieved. However, the differences between price on each disposal and disposal of investment on thesubsidiary's net assets shall be recognized in other comprehensive income in the consolidated financial statements, andincluded in profit or loss for the period when the control is lost.If all transactions in disposal of equity investments of subsidiaries until losing control are not a package deals, accountingtreatment for partial disposal of equity investments of subsidiary without losing control shall be applied before control islost. When the control is lost, general accounting treatment for disposal of a subsidiary shall be used.
③ Acquisition of Minority Interest of Subsidiaries
The Company shall adjust the share premium in the capital reserve of the consolidated balance sheet with respect toany difference between the long-term equity investment arising from the purchase of minority interest and the net assetsattributing to the parent company continuously calculated on the basis of the newly increased share proportion as of theacquisition date (or date of combination) or, adjust the retained earnings if the share premium in the capital reserve isinsufficient for write-down.
④ Disposal of Some Equity Investment in Subsidiaries without Losing Control
The difference between disposal consideration of long-term equity investment in subsidiaries partially disposed withoutlosing control and the share of net assets calculated from the date of acquisition or combination date shall be adjusted toshare premium in the capital reserve in the consolidated balance sheet. Adjustments shall be made to retained earnings inthe event that the share premiums in the capital reserves are not sufficient for write-down.
7. Recognition criteria of cash and cash equivalents
In preparing the cash flow statement, the cash on hand and deposits that are available for payment at any time of theCompany are recognized as cash. The short-term (due within 3 months of the date of purchase) and highly liquidinvestments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of valuechange are recognized as cash equivalents.
8. Conversion of transactions and financial statements denominated in foreign currencies
(1) Foreign currency transactions
Foreign currency transactions shall be translated into RMB at the spot exchange rate on the day when the transactionsoccurred.Balance sheet date foreign currency monetary items shall be translated using the spot exchange rate at the balance sheetdate. The resulting exchange differences are recognized in profit or loss for the current period, except for thosedifferences related to the principal and interest on a specific-purpose borrowing denominated in foreign currency foracquisitions, construction or production of the qualified assets, which should be capitalized as cost of the assets.
2. Translation of foreign currency financial statements
All assets and liabilities items in balance sheet are translated based on spot exchange rate on the balance sheet date;owners' equity items other than "undistributed profit" are translated at a spot exchange rate when accrued. Revenue andexpense items in the income statement are translated at a spot exchange rate at the transaction occurrence date.
9. Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
(1) Classification of the financial instruments
According to the Company's business model for management of the financial assets and the contractual cash flowfeatures of the financial assets, the financial assets, when initially recognized, are classified as: financial assets atamortized cost, financial assets at fair value through other comprehensive income (debt instruments) and financial assetsat fair value through profit or loss.The business model is designed to collect the contractual cash flow which is only used to pay the principal and theinterests based on the outstanding principal amount, and classified as financial assets at amortized cost; the businessmodel is designed to both collect the contractual cash flow and sell the financial assets, and the contractual cash flow isonly used to pay the principal and the interests based on the outstanding principal amount, and classified as financialassets at fair value through other comprehensive income (debt instruments); in addition, other financial assets areclassified as financial assets at fair value through profit or loss.For non-trading investments in equity instruments, the Company will determine, at the time of initial recognition, whetherto designate them as financial assets at fair value through other comprehensive income (equity instruments). At the timeof initial recognition, the financial assets can be designated as financial assets at fair value through profit or loss in orderto eliminate or significantly reduce the accounting mismatch.
The financial liabilities, when initially recognized, are classified as: financial liabilities at fair value through profit or loss andfinancial liabilities at amortized cost.Financial liabilities which meet one of the following conditions will be, when initially measured, designated as financialliabilities at fair value through profit or loss:
① Such designation may eliminate or significantly reduce accounting mismatch.
② The portfolio of financial liabilities or the portfolio of financial assets and liabilities shall be subject to management andperformance evaluation on the basis of fair value according to the enterprise risk management or investment strategycontained in the formal written documentations, and an internal report shall be made to key management personnel onthis basis.
③ Such financial liabilities shall contain embedded derivatives which need a separate spin-off.Subject to the conditions above, the Company has no such designated financial liabilities.
(2) Recognition and measurement of financial instruments
① Financial assets at amortized cost
Financial assets at amortized cost include notes receivable, accounts receivable, other receivables, long-term receivablesand creditors investment, which shall be initially measured at fair value, and the relevant transaction expenses should beinitially capitalized; The accounts receivable that do not contain material financing compositions and those for which theCompany decides to not take into account the financing compositions of no more than one year shall be initially measuredat the contract transaction price.The interest calculated by effective interest method during the holding period is recorded into the current profit and loss.At the time of recovery or disposal, the difference between the price obtained and the book value shall be included in thecurrent profit or loss.
② Financial assets at fair value through other comprehensive income (debt instruments)Financial assets measured at fair value and its changes are included in other comprehensive income (debt instruments)include receivables financing and investments in other creditor's rights. They are initially measured at fair value, and therelevant transaction expenses should be initially capitalized. These financial assets are subsequently measured at fairvalue, and the change in fair value, other than the interest, the impairment loss or profit and the profit or loss on foreignexchange, shall be included in other comprehensive income.Upon derecognition, the cumulative profits or losses previously included in other comprehensive income shall be removedfrom other comprehensive income and included in the profit or loss for the period.
③ Financial assets at fair value through other comprehensive income (equity instruments)Financial assets at fair value through other comprehensive income (equity instruments) include investment in other equityinstruments. They are initially measured at fair value, and the transaction expenses shall be initially capitalized. Thesefinancial assets are subsequently measured at fair value, and the change in fair value shall be included in othercomprehensive income. The dividends obtained shall be included in the profit or loss for the period.Upon derecognition, the cumulative profits or losses previously included in other comprehensive income shall be removedfrom other comprehensive income and included in the carry-forward retained earnings.
④ Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include trading financial assets, derivative financial assets and othernon-current financial assets. They are initially measured at fair value, and the transaction expenses related to them areincluded in the profit or loss for the period. These financial assets are subsequently measured at fair value, and thechange in fair value shall be included in the profit or loss for the period.
⑤ Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include trading financial liabilities and derivative financial liabilities.They are initially measured at fair value, and the transaction expenses related to them are included in the profit or loss forthe period. These financial liabilities are subsequently measured at fair value, and the change in fair value shall beincluded in the profit or loss for the period.Upon derecognition, the difference between their book value and the consideration paid is included in the profit or loss forthe period.
⑥ Financial liabilities at amortized cost
Financial liabilities at amortized cost include short-term loans, notes payable, accounts payable, other payables, long-termloans, bonds payable, and long-term payables. They are initially measured at fair value, and the transaction expensesshall be initially capitalized.The interest calculated by effective interest method during the holding period is recorded into the current profit and loss.Upon derecognition the difference between the consideration paid and the book value of these financial liabilities isincluded in the current profit or loss.
(3) Recognition basis and measurement of transfer of financial assets
A financial asset recognition shall be terminated while the Company has transferred nearly all the risks and rewardsrelated to the ownership of the financial asset to the transferee, and it shall not be terminated if the Company has retainednearly all the risks and rewards related to the ownerships of the financial asset.The substance-over-form principle shall be adopted while making judgment on whether the transfer of financial assetssatisfies the above conditions for termination of recognition.The transfer of financial assets can be classified into entire transfer and partial transfer. If the transfer of an entire financialasset satisfies the conditions for termination of recognition, the difference between the two amounts below shall berecorded into profit or loss for the period:
① The book value of the financial asset transferred;
② The sum of consideration received as a result of the transfer, and the accumulative amount of the changes in fair valuepreviously recorded into the owners' equities (related to the situations where the financial assets transferred aremeasured at fair value through other comprehensive income (debt instruments), or financial assets available for sale).If the partial transfer of financial assets satisfies the conditions for termination of recognition, the overall book value of thetransferred financial asset shall be apportioned according to their respective relative fair value between the recognitionterminated part and the remaining part, and the difference between the two amounts below shall be recorded into profit orloss for the current period:
① The book value of derecognized portion;
② The sum of consideration of the derecognized portion, and the accumulated amount, corresponding to de-recognizedportion, of changes in fair value previously recorded into owners' equity (related to the situations where the financialassets transferred are measured at fair value through other comprehensive income (debt instruments), or financial assetsavailable for sale).Financial assets will still be recognized if they fail to satisfy the conditions for termination of recognition, with theconsideration received recognized as a financial liability.
(4) Recognition conditions for termination of financial liabilities
When the current obligation under a financial liability is completely or partially discharged, the recognition of the whole orrelevant portion of the liability is terminated; an agreement is entered between the Company and a creditor to replace theoriginal financial liabilities with new financial liabilities with substantially different terms, terminate the recognition of theoriginal financial liabilities as well as recognize the new financial liabilities.
If all or part of the contract terms of the original financial liabilities are substantially amended, the recognition of the originalfinancial liabilities will be terminated in full or in part, and the financial liabilities whose terms have been amended shall berecognized as a new financial liability.When recognition of financial liabilities is terminated in full or in part, the difference between the book value of the financialliabilities terminated and the consideration paid (including transferred non-cash assets or new financial liability) isrecognized in profit or loss for the current period.Where the Company repurchases part of its financial liabilities, the book value of such financial liabilities will be allocatedaccording to the relative fair value between the continued recognized part and terminated part on the repurchase date.The difference between the book value of the financial liabilities terminated and the consideration paid (includingtransferred non-cash assets or new financial liability) is recognized in profit or loss for the current period.
(5) Method of determining the fair values of financial assets and liabilities
The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the activemarket. The fair value of a financial instrument that is not traded in an active market is determined by using a valuationtechnique. The Company uses the valuation technique when it is applicable under current conditions and there areenough available data and other information to support and the technique should maximize the use of relevant observable.It chooses the inputs which are consistent with the asset or liability's characteristics considered by market participants inthe transaction of the relevant asset or liability and makes the maximum use of relevant observable inputs. Unobservableinputs are used under the circumstance that the relevant observable inputs cannot be obtained or not feasible.
(6) Test method and accounting treatment for impairment of financial assets
The Company estimates the expected credit loss on the financial assets at amortized cost and the financial assets at fairvalue through other comprehensive income (debt instruments), either alone or in combination, by taking into account allthe reasonable and well-founded information, including forward-looking information. Measurement of expected credit lossdepends on whether there is a significant increase in credit risk of financial assets since the initial recognition.If the credit risk of this financial instrument has been significantly increased upon initial recognition, the Companymeasures its loss provision in accordance with the amount equivalent to the expected credit loss of the financialinstrument throughout the duration; if the credit risk of this financial instrument is not significantly increased upon initialrecognition, the Company will measure the loss provision of this financial instrument by the amount of its expected creditloss in the 12 months to come. The increased or reversed amount of the loss provision resulting therefrom is included inthe current profit or loss as the impairment loss or profit.If the financial instrument becomes overdue for more than 30 days, the Company believes that the credit risk of thisfinancial instrument has been significantly increased, unless there are concrete evidences that the credit risk of thisfinancial instrument has not been significantly increased upon initial recognition.If the financial instrument carries low credit risk at the balance sheet date, the Company believes that the credit risk of thisfinancial instrument is not significantly increased upon initial recognition.If there are objective evidences showing that a certain financial asset has been subject to credit impairment, the Companywill accrue impairment provision for this financial asset on the individual asset basis.The Company will always measure the loss provision for the accounts receivable, whether they contain material financingcompositions or not, by the amount of the expected credit loss throughout the duration.a. Accounts receivable which are individually significant but subject to separate bad debt provisionJudgment bases or amount standard for significant single amount: top 5 account receivablesb. Accounts receivable for which provision of bad debts made by portfolio of credit risk characteristics
| Portfolio Name | Basis to Determine the Portfolio |
| Portfolio 1: Related Parties Portfolio | Receivables of related parties within the scope of the portfolio have similar credit risk characteristics |
| Portfolio 2: Aging Analysis Portfolio | Except for Portfolio 1, the receivables for which provision for impairment has been made separately and other receivables, the receivables of the same aging have similar credit risk characteristics |
c. The receivables with insignificant single amount and separate provision for bad debtsReason for making bad debt provision individually: Long aging, with objective evidence of impairmentThe Company will always measure the loss provision for the rents receivable and the long-term receivables formed in theCompany’s sale of goods or rendering of services by the amount of the expected credit loss throughout the duration.
10. Notes Receivable
Refer to this Section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 9. FinancialInstruments
11. Accounts Receivable
Refer to this Section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 9. FinancialInstruments
12. Receivables Financing
Refer to this Section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 9. FinancialInstruments
13. Other Receivables
Determination method and accounting treatment for the expected credit loss of other receivablesRefer to this Section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 9. FinancialInstruments
14. Inventories
(1) Category of inventory
Inventories are classified as raw materials, turnover materials, commodity stocks, products in progress and materialscommissioned for processing.
(2) Determination of cost
Cost of inventories is determined using the weighted average method.
(3) Basis for the determination of net realizable value and different type of inventories
Net realizable value of held-for-sale commodity stocks, such as finished goods, goods-in-stock, and held-for-sale rawmaterials, during the normal course of production and operation, shall be determined by their estimated sales less therelated selling expenses and taxes; the net realizable value of material inventories, which need to be processed, duringthe normal course of production and operation, shall be determined by the amount after deducting the estimated cost of
completion, estimated selling expenses and relevant taxes from the estimated selling price of finished goods; the netrealizable value of inventories held for execution of sales contracts or labor contracts shall be calculated on the ground ofthe contracted price. If an enterprise holds more inventories than the quantity stipulated in the sales contract, the netrealizable value of the exceeding part shall be calculated on the ground of general selling price.Decline in value of inventories is made on an item-by item basis at the end of the period. For large quantity and low valueitems of inventories, provision may be made based on categories of inventories; for items of inventories relating to aproduct line that is produced and marketed in the same geographical area and with the same or similar end uses orpurposes, which cannot be practicable evaluated separately from other items in that product line, provision for decline invalue of inventories may be determined on an aggregate basis.Unless the evidence clearly shows that abnormality in market price exists as of the balance sheet date, the net realizablevalue of inventories is determined based on the market price as of the balance sheet date.The net realizable value of inventories at the end of current period is determined based on the market price of the balancesheet date.
(4) Inventory system
The perpetual inventory system is adopted.
(5) Amortization of low-value consumables and packaging materials
① Low-value consumables are amortized with the one-off amortization method;
② Packaging materials are amortized with the one-off amortization method.
15. Contract Assets
Confirmation methods and standards of contract assets:
Contract assets refer to the right to collect consideration after the Company has transferred goods or services tocustomers, and this right depends on other factors excluding time. The Company's unconditional (that is, only dependingon the lapse of time) right to collect consideration from customers shall be separately listed as receivables.The recognition and accounting method of the expected credit loss of contract assets: please refer to this sectionFinancial Report - (V) Important Accounting Policies and Accounting Estimates - 9. Financial Instruments.
16. Assets Held for Sale
A non-current asset or disposed group is classified by the Company as holding for sale if it meets the following criteria atthe same time:
(1) Immediate sale could be made under the current circumstances in accordance with the convention of selling such kindof assets or disposal groups in similar transactions;
(2) Selling is extremely likely to occur, i.e. the Company has made a resolution on a selling plan and obtained confirmedpurchase commitments, and the selling is predicted to be completed within 1 year. If required by relevant provisions thatselling shall only be made after approved by the relevant competent authority or supervision department of the Company,such approval should have been obtained.
17. Long-term Equity Investment
(1) Joint control or significant influence criterion
Joint control is the contractually agreed sharing of control of an arrangement, and exists only when requiring the
unanimous consent of the parties sharing control before making decisions about the relevant activities of the arrangement.The Company together with the other joint venture parties can jointly control over the investee and are entitled to the rightof the net assets of the investee, as the investee is joint venture of the Company.Significant influence refers to the power to participate in making decisions on the financial and operating policies of anenterprise, but not the power to control, or jointly control, the formulation of such policies with other parties. Where theCompany can exercise significant influence over the investee, the investee is an associate of the Company.
(2) Determination of initial investment cost
① Long-term equity investments from business combination
For business combinations involving entities under common control: where the Company pays cash, transfers non-cashassets, bears debts or issues equity securities as consideration of combinations, the initial investment cost of long-termequity investments are the share with reference to the book value of the shareholders' equity of the combined party in theconsolidated financial statements of the ultimate controlling party on the date of combinations. In connection withimposing control over the investee under joint control as a result of additional investment and other reasons, on thecombination date, the initial cost of long-term equity investments shall be determined based on share of book values in theconsolidated financial statement of the ultimate controlling party by net assets of the combined party after the combination.The difference between initial investment cost and the carrying value of long term equity investment before combinationand the sum of carrying value of newly paid consideration for additional shares acquired on the date of combination is toadjust share premium. If the balance of share premium is insufficient, any excess is adjusted to retained earnings.Business combinations involving entities not under common control: the cost of the combination ascertained on the dateof acquisition shall be taken as the initial investment cost of the long-term equity investments. In connection with imposingcontrol over the investee not under joint control as a result of additional investment and other reasons, the initialinvestment cost when changing to the cost method shall be the sum of the book value of the equity investment originallyheld and the newly increased initial investment cost.
② Long-term equity investments acquired by other means
The initial cost of a long-term equity investment obtained by cash payment shall be the purchase costs actually paid.The initial cost of investment of a long-term equity investment obtained by means of issuance of equity securities shall bethe fair value of the equity securities issued.When the non-monetary assets transaction is commercial in nature and the fair value of the assets received orsurrendered can be reliably measured, measurement shall be carried out on the basis of the fair value. If the fair value ofthe assets received and surrendered can be reliably measured, the initial cost of a long-term equity investment receivedshall be determined on the basis of the fair value of the assets surrendered and the related taxes payable, unless thereare concrete evidences that the fair value of the assets received is more reliable. If the non-monetary assets transaction isnot commercial in nature and the fair value of the assets received and surrendered cannot be reliably measured, the initialcost of a long-term equity investment received shall be the book value of the assets surrendered and the relevant taxespayable.The entry value of a long-term equity investment through debt restructuring shall be determined on the basis of the fairvalue of the creditor's rights abandoned, the tax directly attributable to this asset and other costs, and the differencebetween the fair value and book value of the creditor's rights abandoned shall be included in the profit or loss for theperiod.
(3) Subsequent measurement and recognition of profit or loss
① Long-term equity investment accounted by cost method
Long-term equity investment in subsidiaries of the Company is calculated by cost method, except for the actualconsideration paid for the acquisition of investment or the declared but not yet distributed cash dividends or profits whichare included in the consideration, investment gains are recognized as the Company' shares of the cash dividends or
profits declared by the investee.
② Long-term equity investment accounted by equity method
Long-term equity investments of associates and jointly controlled entities are calculated using equity method. Where theinitial investment cost of a long-term equity investment exceeds the investor's interest in the fair value of the investee'sidentifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost; where the initialinvestment cost is less than the investor's interest in the fair value of the investee's identifiable net assets at theacquisition date, the difference shall be charged to profit or loss for the current period.The Company recognizes the investment income and other comprehensive income according to the shares of net profit orloss and other comprehensive income realized by the investee which it shall be entitled or shared respectively, andsimultaneously makes adjustment to the book value of long-term equity investments; The book value of long-term equityinvestment shall be reduced by attributable share of the profit or cash dividends for distribution declared by the investee.In relation to other changes of owner's equity except for net profits and losses, other comprehensive income and profitdistributions of the investee, the book value of long-term equity investments shall be adjusted and included in owner'sequity.When determining the amount of proportion of net profit or loss in the investee which it entitles, fair value of eachidentifiable assets of the investee at the time when the investment is obtained shall be used as basis, and according to theaccounting policies and accounting period of the Company, adjustment shall be made to the net profit of the investee.During the period of holding investments, when preparing consolidated financial statements by the investee, theaccounting shall be based on the amounts attributable to the investee in the net profit, other comprehensive income andother changes of the owner's equity in the consolidated financial statements.The unrealized profit or loss resulting from transactions between the Company and its associates or joint venture shall beeliminated in portion to the investor's equity interest of investee, based on which investment income or loss shall berecognized. Any losses resulting from transactions, which are attributable to impairment of assets, shall be fullyrecognized. Where the transactions involving investment or sales of assets between the Company and the associatedenterprises or joint ventures and that the assets constitute a business, account treatment shall be conducted inaccordance with the relevant policies disclosed in "The accounting treatment of business combinations involvingenterprises under common control and business combinations involving enterprises under common control" and "Methodof preparation of consolidated financial statements".In recognition of share of losses in the investee, the Company treats it in the following order: Firstly, the Company will writeoff the book value of long-term equity investments. Secondly, in the event the aforesaid book value is insufficient for offset,the investment losses shall continue to be confirmed with the limit of the book value of long-term equity which substantiallyconstitutes the net investment in the investee, to offset the book value of long-term receivable. Finally, after the abovetreatment, for the additional obligations which shall be still assumed by entities according to investment contract oragreement, the estimated liabilities shall be recognized based on the obligations which are expected to assume andincluded in the investment loss for the current period.
③ Disposal of long-term equity investments
For disposal of long-term equity investment, the difference between the book value and the consideration actuallyreceived shall be included in the current profit or loss.For the long-term equity investment under the equity method, when disposing of such investment, part of amounts thatshall be originally included in other comprehensive income shall be accounted for in proportion by using the same basisas the investee used for direct disposal of relevant assets or liabilities. The owner's equity which is recognized due toother changes of owner's equity except for net profits and losses, other comprehensive income and profit distributionsshall be transferred in proportion into the current profit or loss, excluding the other comprehensive income derived fromchanges of net liabilities or net assets due to re-measurement on defined benefit plan by the investee.
When losing the controls or material influence over the investee due to partially disposal of equity investment and otherreasons, the remaining equities shall be accounted for in accordance with the standards on recognition and measurementof financial instruments, and the difference between the fair value and the book value at the date of losing control ormaterial influence shall be included in current profit or loss. For other comprehensive income recognized in the originalequity investment due to the equity method is adopted, it shall be treated using the same accounting basis as the investeeused for direct disposal of relevant assets or liabilities when ceasing to use the equity method. All owner's equities whichare recognized due to other changes of owner's equity except for net profits and losses, other comprehensive income andprofit distributions shall be transferred into the current profit or loss when ceasing to use the equity method.When losing the controls over the investee due to partially disposal of equity investment and other reasons, the remainingequities after disposal shall be accounted for under equity method in preparation of individual financial statementsprovided that common control or material influence over the investee can be imposed, and shall be adjusted as if suchremaining equities has been accounted for under the equity method since they are obtained. Where the remainingequities after disposal cannot impose common control or material influence over the investee, it shall be accounted foraccording to relevant provisions of the standards on recognition and measurement of financial instruments, and thedifference between fair value and the book value on the date of losing control shall be included in the current profit or loss.The disposed equity interest was acquired in a business combination as resulted from such as making additionalinvestment, the remaining equity interest after disposal will be accounted for using cost method or equity method whenpreparing the separate financial statements. Other comprehensive income and other owners' equity recognized when theequity interests held on the acquisition date is accounted for using equity method and shall be transferred proportionally;For the remaining equity interest after disposal accounted for using the recognition and measurement standard of financialinstruments, other comprehensive income and other owners' equity shall be fully transferred.
18. Investment Properties
Measurement Mode of Investment PropertyMeasured by cost methodDepreciation or amortization methodsInvestment property refers to the real estate held to generate rental income or capital appreciation, or both, includingleased land use rights, land use rights held for transfer after appreciation, and leased buildings (including buildings thatare leased after completion of self-construction or development activities and buildings in construction or developmentthat are used for rental in the future).The Company adopts the cost mode to measure the existing investment property. Investment property measured at cost -buildings held for leasing shall adopt the same depreciation policy for fixed assets of the company, land use rights held forleasing shall adopt the same amortization policy for the intangible assets.
19. Fixed Assets
(1) Conditions for recognition of fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others,or for administrative purposes; and have a service life of more than one accounting year. A Fixed asset is recognizedwhen all the following conditions are met: ① the economic benefits associated with it will probably flow into the enterprise;
② its cost can be reliably measured.
(2) Methods for depreciation
| Category | Depreciation method | Useful lives of depreciation | Residual Ratio | Annual depreciation rate |
| Housing and building | Straight-line method | 20 | 5% | 4.75% |
| Machinery and equipment | Straight-line method | 5-10 | 5% | 19.00%-9.50% |
| Means of transport | Straight-line method | 4-8 | 5% | 23.75%-11.88% |
| Electronic and other equipment | Straight-line method | 3-5 | 5% | 31.67%-19.00% |
Fixed assets are depreciated by categories using the straight-line method, and the annual depreciation rates aredetermined by categories based upon their estimated useful lives and their estimated residual values. Where the parts ofa fixed asset have different useful lives or cause economic benefits for the enterprise in different ways, differentdepreciation rates or depreciation methods shall apply, and each part is depreciated separately.For fixed assets leased under finance lease, if it can be reasonably determined that the ownership of the leased asset canbe acquired upon the expiry of the lease term, depreciation policies in line with the fixed assets will be adopted fordepreciation during the remaining service life of the leased asset. If it cannot be reasonably determined that the ownershipof the leased asset can be acquired upon the expiry of the lease term, depreciation policies in line with the fixed assets willbe adopted for depreciation during the shorter of the lease term and the remaining service life of the leased asset.
(3) Recognition bases and measurement methods of fixed assets under finance leaseWhere any one of the following conditions is stipulated in the lease agreement signed by and between the Company andthe lessee, the leased assets can be recognized as the assets acquired under finance leases: ① The ownership of theleased assets, upon the expiry of lease term, belongs to the Company; ② The Company has the option to purchase theleased assets at a price far lower than the fair value of the assets when the option is exercised; ③ The lease termaccounts for the majority of the service life of the leased assets; ④ There is no significant difference between the presentvalue of minimum lease payment on the commencement date of lease term and the fair value of the assets. On thecommencement of the lease, the leased asset shall be recorded at an amount equal to the lower of the fair value of theleased asset and the present value of the minimum lease payments, and the minimum lease payments shall be recordedas the carrying amount of long-term payables. The difference between the recorded amount of the leased asset and theminimum lease payments shall be accounted for as unrecognized finance charge.
20. Construction in Process
Criteria and time point for construction in progress being transferred to the fixed asset Construction in progress ismeasured at all the expenditures incurred to bring the fixed assets ready for their intended use. If the construction inprogress of fixed assets constructed are ready for their intended use but the final account of completed project has notbeen issued, it should be transferred to fixed assets at an estimated cost according to the construction budget,construction price or actual cost, and depreciation should be provided according to deprecation policy for fixed assetsfrom the date when the assets are ready for their intended use. When the final account of completed project is issued, theestimated cost will be adjusted according to the actual cost, while the original depreciation charge will not be adjusted.
21. Borrowing Costs
(1) Criteria for recognition of capitalized borrowing costs
Borrowing costs refers to the borrowing interests, amortization of discounts or premiums, ancillary costs and exchangedifferences arising from foreign currency borrowings, etc.For borrowing costs incurred by the Company that are directly attributable to the acquisition, construction or production ofassets qualified for capitalization, the costs will be capitalized and included in the costs of the related assets. Otherborrowing costs shall be recognized as expense in the period in which they are incurred and included in profit or loss forthe current period.Assets qualified for capitalization are assets (fixed assets, investment property, inventories, etc.) that necessarily take asubstantial period of time for acquisition, construction or production to get ready for their intended use or sale.Capitalization of borrowing costs begins when the following three conditions are fully satisfied:
① Asset expenditures have been incurred, which include the expenditures incurred in the form of cash paid, transferringnon-cash assets or undertaking interest-bearing debt for acquisition, construction or production of the assets qualified forcapitalization);
② Borrowing costs have been incurred;
③ The acquisition, construction or production necessary to make the assets ready for use or sale have begun.
(2) Capitalization period of borrowing costs
The capitalization period shall refer to the period between the commencement and the cessation of capitalization ofborrowing costs, excluding the period in which capitalization of borrowing costs is temporarily suspended.Capitalization of borrowing costs shall be suspended during periods in which the qualifying asset under acquisition andconstruction or production ready for the intended use or sale.If part of an asset being acquired, constructed or produced has been completed respectively and put into use individually,capitalization of borrowing costs should be suspended.If different parts of the assets acquired, constructed or produced are completed separately, but such asset will not beready for the intended use or sale until all parts have been completed, then the borrowing costs will be capitalized until thecompletion of all parts of the said asset.
(3) Suspension of capitalization period
Capitalization of borrowing costs shall be suspended during periods in which the acquisition, construction or production ofa qualifying asset is interrupted abnormally, when the interruption is for a continuous period of more than 3 months; if theinterruption is a necessary step for making the qualifying asset under acquisition and construction or production ready forthe intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during suchperiod shall be recognized as profits and losses of the current period. When the acquisition and construction or productionof the asset resumes, the capitalization of borrowing costs commences.
(4) Calculation of capitalization rate and amount of borrowing costs
Specific borrowings for the acquisition, construction or production of assets qualified for capitalization, borrowing costs ofthe specific borrowings actually incurred in the current period minus the interest income earned on the unused borrowingloans as a deposit in the bank or as investment income earned from temporary investment will be used to determine theamount of borrowing costs for capitalization.General borrowings for the acquisition, construction or production of assets qualified for capitalization, theto-be-capitalized amount of interests on the general borrowing shall be calculated and determined by multiplying theweighted average asset disbursement of the part of the accumulative asset disbursements minus the specificallyborrowed loans by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated anddetermined according to the weighted average interest rate of the general borrowing.
22. Intangible Assets
(1) Valuation method, service life, impairment test
A. Valuation Method of Intangible Assets
① The company shall make an initial measurement by cost upon obtaining the intangible assetsThe costs of an externally purchased intangible asset include the purchase price, relevant taxes and expenses paid, andother expenditures directly attributable to putting the asset into condition for its intended use. If the payment for anintangible asset is delayed beyond the normal credit conditions and it is of financing nature in effect, the cost of theintangible assets shall be ascertained based on the present value of the purchase price.The amount of intangible assets acquired from debt restructuring should be recorded at the fair value of such intangibleassets, and the difference between the book value of the restructured debt and the fair value of the intangible assetsacquired from debt restructuring should be included in the profit or loss for the current period.If the non-monetary assets transaction is commercial in nature and the fair value of the assets received or surrenderedcan be reliably measured, the intangible assets received in the non-monetary assets transaction, shall be measured onthe basis of the fair value of the assets surrendered, unless there are concrete evidence that the fair value of the assetsreceived is more reliable; For non-monetary assets transaction which does not meet the above conditions, the cost ofintangible assets received shall be the book value of the assets surrendered and the relevant taxes and expenses payable,and the profit or loss will not be recognized.
② Subsequent measurement
The service life of intangible assets shall be analyzed and judged upon acquisition.As for intangible assets with a finite service life, they are amortized using the straight-line method over the term in whicheconomic benefits are brought to the firm; If the term in which economic benefits are brought to the firm by an intangibleasset cannot be estimated, the intangible asset shall be taken as an intangible asset with indefinite service life, and shallnot be amortized.B. Estimation of Service Life of the Intangible Assets with Limited Service Life:
| Item | Estimated useful lives | Basis |
| Land use rights | 50 years | Land use certificate |
| Non-patented technology | 5-10 years | Expected benefited period |
| Softwares | 2-5 years | Expected benefited period |
| Trademark rights | 6 years | Expected benefited period |
| Software copyright | 10 years | Expected benefited period |
For an intangible asset with a finite service life, review on its service life and amortization method is performed at the endof each end.Upon review, service life and amortization method for the intangible assets are the same with the previous estimate at theend of this period.C. The basis for the judgment of intangible assets with uncertain service life and the procedure for reviewing their servicelifeAs at the balance sheet date, the Company has no intangible assets with uncertain service life.
(2) Accounting policy for internal R&D expenditure
A. Specific criteria for division of research and development phasesThe expenses for internal research and development projects of the Company are divided into expenses in the researchphase and expenses in the development phase.Research phase: Scheduled innovative investigations and research activities to obtain and understand scientific ortechnological knowledge.Development phase: Apply the research outcomes or other knowledge to a plan or design prior to a commercialproduction or use in order to produce new or essentially-improved materials, devices, products, etc.B. Specific condition for capitalizing expenditure during the development phaseThe expenses in the development phase for internal R&D are recognized as intangible assets if the following conditionsare fulfilled:
①It is technically feasible to make such intangible asset ready for use or sale by completing it;
②There is intention to complete the intangible asset for use or sale;
③ The means by which the intangible asset generates economic benefits, includes the evidence showing that there is amarket for the products made with such intangible asset or that there is a market for the intangible asset itself. For theintangible asset being used internally, the evidence to prove its usefulness is required;
④There is sufficient support in terms of technology, financial resources and other resources to complete the developmentof the intangible asset, and there is capability to use or sell the intangible asset;
⑤The expenses attributable to the development stage of the intangible asset can be measured reliably.If the expenses in the development phase does not meet the above conditions, it shall be included in the profits andlosses for the current period at the time of occurrence. Expenses in the research phase are recorded into the profits andlosses for the current period when they occur.
23. Impairment of long-term assets
Long-term assets, such as long-term equity investment, investment properties, fixed assets, construction in progress,intangible assets that measured at cost are tested for impairment if there is any indication that an asset may be impairedat the balance sheet date. If the result of the impairment test indicates that the recoverable amount of the asset is lessthan its book value, a provision for impairment and an impairment loss are recognized for the amount by which the asset'sbook value exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs tosell and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment isdetermined and recognized on the individual asset basis. If it is not possible to estimate the recoverable amount of anindividual asset, the recoverable amount of a group of assets to which the asset belongs to is determined. A group ofassets is the smallest group of assets that is able to generate cash inflows independently.Impairment test to goodwill and the intangible assets whose using life is not certain shall be carried out at least at the endof each year.When the Company carry out impairment test to goodwill, the Company shall, as of the purchasing day, allocate on areasonable basis the book value of the goodwill formed by merger of enterprises to the relevant asset groups, or if there isa difficulty in allocation, to allocate it to the sets of asset groups. When the book value of goodwill is allocated to therelated asset group or sets of asset group, the allocation shall be made based on the proportion of the fair value of eachasset groups or sets of asset groups to the total fair value of the relevant assets groups or sets of asset group. If there isdifficulty for the fair value to be reliably measured, the allocation shall be made based on the proportion of the book valueof each asset groups or sets of asset groups to the total book value of the relevant assets groups or sets of asset groups.
For the purpose of impairment test on the relevant asset groups or the sets of asset groups containing goodwill, if anyevidence shows that the impairment of asset groups or sets of asset groups related to goodwill is possible, an impairmenttest will be made first on the asset groups or sets of asset groups not containing goodwill, thus calculating the recoverableamount and comparing it with the relevant book value so as to recognize the corresponding impairment loss. Then animpairment test will be made on the asset groups or sets of asset groups containing goodwill, and compare the book valueof these asset groups or sets of asset groups (including the book value of the goodwill allocated thereto) with therecoverable amount. Where the recoverable amount of the relevant assets or sets of the asset groups is lower than thebook value thereof, it shall recognize the impairment loss of the goodwill.Once the above asset impairment loss is recognized, it will not be reversed in the subsequent accounting periods.
24. Long-term prepaid expenses
Long-term prepaid expenses are expenses which have occurred but will benefit over 1 year and shall be amortized overthe current period and subsequent periods. The long-term prepaid expenses of the Company include expenditures paidfor improvement of fixed assets under operating lease.
(1) Amortization method
Long-term prepaid expenses are amortized evenly over the estimated benefit period
(2) Amortization period
Expenditures paid for improvement of fixed assets under operating lease, amortized evenly over the lease term orremaining service life of the asset, whichever is shorter.
25. Contract liabilities
Contract liabilities refer to the Company's obligation to transfer goods or services to customers for the considerationreceived or receivable from the customers. Contract assets and contract liabilities under the same contract are presentedin net amount.
26. Employee remuneration
(1) Accountant arrangement method of short-term remuneration
During the accounting period when the staff provides service, the Company will recognize the short-term remunerationactually incurred as liabilities, and the liabilities would be charged into current profits and loss or costs of assets.The Company will pay social insurance and housing funds, and will make provision of trade union funds and staffeducation costs in accordance with the requirements. During the accounting period when the staff provides service, theCompany will determine the relevant amount of employee benefits in accordance with the required provision basis andprovision ratios.Non-currency employee benefits will be accounted for in accordance with their fair value if they can be measured reliably.
(2) Accountant arrangement method of retirement benefit plan
①Defined contribution plan
The Company will pay basic pension insurance and unemployment insurance in accordance with the relevant provisionsof the local government for the staff. During the accounting period when the staff provides service, the Company willcalculate the amount payable in accordance with the local stipulated basis and proportions which will be recognized as
liabilities, and the liabilities would be charged into current profits and loss or costs of assets.In addition to the basic pension insurance, the Company has also established an enterprise annuity payment system(supplementary pension insurance)/enterprise annuity plan based on the relevant policies of the national enterpriseannuity system. The Company conducts payment/payment of annuity plan to local social insurance institutions accordingto certain proportion of employees' wages and corresponding expenditures are included in profit or loss for the period orrelevant asset costs.
②Defined benefit plan
The welfare responsibilities generated from defined benefit plan based on the formula determined by projected unit creditmethod would be vested to the service period of the staff and charged into current profits and loss or costs of assets.
(3) Accountant arrangement method of termination benefits
The Company will pay termination benefits when the group can no longer withdraw the offer of termination plan or layoffproposal or when the Group recognizes costs for restructuring which involving the payment of termination benefits(whichever the earliest). The remuneration incurred by the termination benefits will be recognized as liabilities whichwould be charged into current profits and loss.
27. Estimated liabilities
Where the Company is involved in litigations, guarantees provided to debts, loss-making contracts, restructuring andafter-sale maintenance cost, and if such matters are likely to require future assets delivery or the provision of laborservices, the amount of which can be reliably measured, such items shall be recognized as estimated liabilities.
(1) Recognition criteria for estimated liabilities
The Company shall recognize the obligations related to contingencies involving litigations, guarantees provided to debts,loss-making contracts, and restructuring as estimated liabilities, when all of the following conditions are satisfied:
①The obligation is the current obligation of the Company;
②Performance of this obligation is likely to result in the outflow of economic benefits from the Company;
③The amount of the obligation can be measured reliably.
(2) Method of measuring the various estimated liabilities
Estimated liabilities shall be initially measured at the best estimate of the expenditure required to settle the related presentobligation.Factors pertaining to a contingency such as risk, uncertainties, and time value of money shall be taken into account as awhole in reaching the best estimate. Where the effect of the time value of money is material, the best estimate shall bedetermined by discounting the related future cash outflow.The best estimate will be dealt with separately in the following circumstances:
The expenses required have a successive range (or band), in which the possibilities of occurrence of each result are thesame, and the best estimate should be determined as the middle value for the range, i.e. the average of the upper andlower limit.The expenses required does not have a successive range (or band), or although there is a successive range (or band),the possibilities of occurrence of each result are different, if the contingency is related to individual item, the best estimateshould be determined as the most likely amount; where the contingency is related to a number of items, the best estimateshould be calculated and determined according to the possible results and the relevant possibilities.Where some or all of the expenditure required to settle an estimated liability is expected to be reimbursed by a third party,the reimbursement is separately recognized as an asset when it is virtually certain that the reimbursement will be received.
The amount recognized for the reimbursement is limited to the book value of the estimated liability.28 Share-based payment
The Company's share-based payment refers to a transaction in which an enterprise determines the liabilities on the basisof equity instruments granting or bearing for the acquisition of service from its employees or other parties. The Company'sshare-based payment is equity-settled.Equity-settled share-based payment and equity instrument:
As to an equity-settled share-based payment in return for services of employees, calculation will be based on the fairvalue of the equity instrument granted to the employees. If the Company make the share-based payment by restrictedshares, employees will subscribe the share but those shares shall not be listed on the market or transferred before it fulfillthe unlocking condition and unlocked. If the unlocking conditions stipulated in the equity incentive scheme cannot befulfilled eventually, the Company will repurchase those shares based on the predetermined price. Upon obtaining thepayment for subscribing restricted shares made by the employees, the Company will recognized the share capital andcapital reserve (share capital premium) according to the payment it received, while fully recognize a liability for itsrepurchasing obligation as well as its treasury shares. On each balance sheet date within the vesting period, the Companywill make the best estimation of the number of vested equity instruments based on the subsequent information such asthe updated changes in the number of executives and the achievement of performance standard. Based on the aboveresults, the services received in the current period will be included in the relevant cost or expense based on the fair valueon the date of grant, and the capital reserve will be increased accordingly. The recognized cost or expense and owners'interest will not be adjusted after the vesting date. However, equity instruments vested immediately after the date of grantwill be included in the relevant cost or expense based on its fair value on the date of grant, and the capital reserve will beincreased accordingly.For the share-based payments that are not vested eventually, no cost or expense will be recognized, except the vestingcondition is market condition or non-exercisable condition. Under such circumstances, no matter whether the marketcondition or non-exercisable condition can be fulfilled, the share-based payment will be deemed as vested as long as allthe non-market conditions in the vesting condition are fulfilled.If the terms of the equity-settled share-based payment are amended, the Company shall recognize the services receivedat least based on the situation before the amendment was made. In addition, any amendment resulting in the increase ofthe fair value of the equity instrument granted or changes that are beneficial to the staff on the amendment date, will berecognized as an increase in the service received.If the equity-settled share-based payment is canceled, it will be accounted for as accelerated exercise on the cancellationdate and the unrecognized amount will be recognized immediately. Employees and other parties are able to satisfy thenon-vesting conditions. If the conditions are not fulfilled during the vesting period, the equity settled share-based paymentwill be deemed as canceled. However, if new equity instruments are vested and they are verified at the vesting date ofnew equity instrument as alternatives vested to cancel equity instruments, the treatment on the new equity instrument is inconformity with the modified treatment on disposal of equity instrument.
29. Revenue
Accounting policies for revenue recognition and measurementFor the contract containing two or more performance obligations, the Company shall allocate the transaction price to eachindividual performance obligation in accordance with the relative proportion of the stand-alone selling price of the goods orservices committed in accordance with individual performance obligation on the date of the contract. However, if there is
conclusive evidence showing that the contract discount or variable consideration is only related to one or more (but not all)performance obligations in the contract, the Company shall allocate the contract discount or variable consideration to therelevant one or more performance obligations. Stand-alone selling price refers to the price at which the Company sellsgoods or services separately to customers. For the stand-alone selling price that cannot be directly observed, theCompany shall comprehensively consider all the relevant information that can be reasonably obtained, and maximum theuse of observable inputs to estimate the stand-alone selling price.Where there is a variable consideration in the contract, the Company shall determine the best estimate of the variableconsideration based on the expected value or the most likely amount. The transaction price with the variableconsideration shall not exceed the amount at which the accumulated confirmed revenue will most likely not undergo asignificant reversal when the relevant uncertainty is eliminated. On each balance sheet date, the Company shallre-estimate the amount of variable consideration that should be included in the transaction price.For the customer with non-cash consideration payment, the Company shall determine the transaction price based on thefair value of the non-cash consideration. Where the fair value of non-cash consideration that cannot be reasonablyestimated, the Company shall indirectly determine the transaction price by referring to the stand-alone selling price of thegoods or services promised to transfer to the customer.Where there is the consideration payable to the customer in the contract, the Company will offset the considerationpayable against the transaction price, and offsets the current income at the time of confirming the relevant revenue orpaying (or promise to pay) the customer consideration, whichever is later, unless the consideration is to obtain otherclearly distinguishable goods or services from the customer.Where there is a significant financing component in the contract, the Company shall determine the transaction price basedon the amount payable in cash when the customer assumes control of the goods or services. The difference between thetransaction price and the contract consideration shall be amortized by the effective interest method during the contractperiod. Where the Company, on the commencement date, expects that the interval between the customer's acquisition ofcontrol of the goods or services and the customer's payment will not exceed one year, the significant financingcomponents in the contract shall be considered.For the sales with sales return clauses, when the customer obtains control of the relevant goods, the Company shallrecognize the revenue based on the amount of consideration that is expected to be charged due to the transfer of thegoods to the customer (that is, the amount expected to be refunded due to a sales return is not included), and recognizethe liabilities according to the expected amount to be refunded due to sales returns; At the same time, recognize an assetaccording to the expected book value of the returned goods at the time of transfer, the balance after deducting theestimated cost of recovering the goods (including the value impairment of the returned goods). Deduct the net carry-overcost of the aforementioned asset cost according to the book value of the transferred commodity at the time of transfer.For the sales with quality assurance clauses, if the quality assurance provides a separate service in addition to ensuringthat the goods or services sold meet the established standards, the quality assurance constitutes an individualperformance obligation. Otherwise, the Company will conduct accounting for quality assurance responsibilities inaccordance with the "Accounting Standards for Business Enterprises No. 13 - Contingencies".The Company judges whether its identity is the main responsible person or an agent when the transaction is conductedbased on whether it has control over the product or service before the transfer of the product or service to the customer.Where the Company is able to control the goods or services before transferring them to the customer, the Company shallbe the principal person in charge, and the income shall be confirmed based on the total consideration received orreceivable; otherwise, the Company is the agent and the income is recognized based on the commission or handling feesexpected to collect. The amount is determined based on the net amount of the total consideration received or receivableminus the price payable to other related parties, or the established commission amount or ratio.
30. Government subsidies
(1) Type
Government grants are monetary assets and non-monetary assets acquired by the Company from the government free ofcharge. Government grants are classified into government grants related to assets and government grants related torevenue.Government grants related to assets refer to government grants acquired by the Company for the purpose of purchasingor constructing or otherwise forming long-term assets. Government grants related to revenue refer to the governmentgrants other than those related to assets.
(2) Confirmation of time point
Government grants related to assets will be measured at the actual amount of money received at the time of receipt. Theassets (bank deposits) and deferred income shall be period by period included in the profits and losses of the currentperiod in a reasonable and systematic manner from the time the assets are available for use (those related to theCompany's daily activities shall be included in other income; those unrelated to the Company's daily activities shall berecognized as non-operating income). When the relevant assets are disposed of (sold, transferred, scrapped, etc.) at orbefore the end of their service life, the balance of the deferred income that has not yet been apportioned will betransferred to the current-period income from the disposal of the assets on an one-time manner, and will not be deferred.For government grants related to revenue, they will be recognized as profit and loss of the current period according to theamount receivable for government grants obtained under fixed quota standards, otherwise, they will be recognized asprofit and loss of the current period when it is actually received.
(3) Accounting treatment
Government grants related to assets shall write off the book value of relevant assets or be recognized as deferred income.When recognized as deferred income, the government grant related to assets will be period by period credited to theprofits and losses of the current period in a reasonable and systematic manner within the service life of relevant assets(those related to the Company's daily activities shall be recognized as other income; those unrelated to the Company'sdaily activities shall be recognized as non-operating income).The revenue-related government grants shall be recognized as deferred income if they are used to compensate relevantexpenses or losses in subsequent periods, and they shall be included in profit and loss of the current period (those relatedto Company's routine activities shall be included in other income; those unrelated to the Company's routine activities shallbe included in non-operating income) or used to offset relevant expenses or losses during the recognition of relatedexpenses or losses; the grants used to compensate related expenses or losses incurred shall be included in profit andloss of the current period (those related to Company's routine activities shall be included in other income; those unrelatedto the Company's routine activities shall be included in non-operating income) or used to offset relevant expenses orlosses.
31. Deferred income tax assets/deferred income tax liabilities
Deferred income tax assets are recognized to the extent that it is probable that future taxable profits will be availableagainst which deductible temporary differences can be utilized. For deductible losses and tax credits that can be reversedin the future period, deferred income tax assets shall be recognized to the extent that it is probable that taxable profit willbe available in the future to offset the deductible losses and tax credits.Save as the exceptions, deferred income tax liabilities shall be recognized for the taxable temporary difference.The exceptions for not recognition of deferred income tax assets and liabilities include: the initial recognition of thegoodwill; other transactions or matters other than business combinations in which neither profit nor taxable income (ordeductible loss) will be affected when transactions occur.
After granted the legal rights of net settlement and with the intention to use net settlement or obtain assets and repay debtat the same time, the net amount after offsetting its current income tax assets and current income tax liabilities shall berecorded.When the Company was granted the legal rights of net settlement of current income tax assets and current income taxliabilities, and deferred income tax assets and deferred income tax liabilities are related to income tax to be paid by thesame entity liable to pay tax to the same tax collection and management authority or related to different entities liable topay tax, but the relevant entity liable to pay tax is intended to apply net settlement of current income tax assets andliabilities or, at the same time, obtain assets, repay debt whenever every deferred income tax assets and liabilities withimportance would be reversed in the future, the Company records the net amount after offsetting its current income taxassets and current income tax liabilities.
32. Lease
(1) Accounting of operating lease
① The lease fee paid by the Company for rented assets shall be apportioned on a straight-line basis over the lease termwithout deducting the rent-free periods and included in the current expenses. Initial direct costs that are attributable to anoperating lease incurred by the Company are charged to current profit and loss.When the lesser bears the lease related expenses which should be undertaken by the Company, the Company shalldeduct this part of expense from the rent and amortize the net amount over the lease term.
②Leasing charges received by the Company for the assets leased out shall be amortized on a straight-line basis over thelease term without deducting the rent-free periods, and recognized as leasing income. The initial direct fee related to theleasing transactions paid by the Company shall be charged to current expenses; if the mount is significant, it shall becapitalized and charged to current income evenly on the same basis as the leasing income is recognized over the leaseterm.When the Company bears the lease related expenses which should be undertaken by the lessee, the Company shalldeduct this part of expense from the rent income, and amortize the net amount over the lease term.
(2) Accounting of finance lease
①The company shall take the lower of the two, namely the fair value of leased asset and the present value of theminimum lease payment, as the book value of the leased asset, and take the minimum lease payment as the book valueof long-term payables on the commencement date of lease, the difference shall be taken as unconfirmed financingexpense. The Company, by means of the effective interest method, amortizes the unacknowledged financial chargesduring the lease term of the assets and includes them into financing expenses. Initial direct cost incurred by the Companywill be included in the assets acquired under finance leases.
②Assets acquired under finance rents: At the commencement date of the lessee, the finance lease receivables and thedifference between the non-guarantee remaining sum and the present value shall be accounted as the unrecognizedfinance income and recognized as the rental income over the period of the lease when the rent is received. Initial directcosts shall be included in the initial accounting of the lease payment receivables and deduct by the revenue recognizedover the lease term.
33. Other significant accounting policies and accounting estimates
(1) Termination of operation
Termination of business is a separately distinguishable constituent part that satisfies one of the following conditions andthat has been disposed of or classified by the Company as held for sale:
①This constituent part represents an independent primary business or a separate principal operating area;
②This constituent part is part of an associated plan to dispose of an independent primary business or a separate principaloperating area;
③This constituent part is a subsidiary acquired for resale.
(2) Repurchase of the Company's shares
The Company's shares repurchased by the Company for reducing the registered capital or rewarding employees shall betreated as the treasury shares based on the actual amount paid, and shall be checked and registered at the same time. Ifthe repurchased shares are canceled, the difference between the actual amount paid for the repurchase and the total parvalue of shares calculated by the par value of the canceled shares and the number of canceled shares will write off thecapital reserve. If the capital reserve is insufficient, the retained income will be written off; if the repurchased shares areawarded to the employees of the Company, it shall be categorized as equity-settled share-based payment. When theCompany receives the payment made by employees who exercise their rights to purchase such shares, the amount shallbe used to write off the cost of treasury shares delivered to employees and the capital reserve in the waiting period andmeanwhile, the capital reserve (stock premium) shall be adjusted according to the difference.
34. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable □ Not applicable
| Content and Reasons for Change in Accounting Policies | Approval process | Notes |
| From January 1, 2020, implement the "Notice on Revision and Issuance of the "Accounting Standards for Business Enterprises No. 14 - Revenue" issued by the Ministry of Finance in July 2017 (Cai Kuai (2017) No. 22) | Approved by the Board of Directors | See other notes |
Other notes:
According to the "Accounting Standards for Business Enterprises No. 14 - Revenue" revised by the Ministry of Finance,the current revenue and construction contract standards are incorporated into an unified revenue recognition model; thetransfer of control rights, to replace risk return shifting, is used as the criterion for determining the timing of revenuerecognition; The individual performance obligations contained in the contract are recognized as revenues when they areperformed; Clearer guidance shall be provided for the accounting of contracts involving multiple transaction arrangements;Clear regulations are provided for the revenue recognition and measurement of some specific transactions (or events).This accounting policy is a change based on the latest accounting standards revised and promulgated by the Ministry ofFinance, and will not have a significant impact on the Company's financial status and operating results.
(2) Changes in significant accounting estimates
□ Applicable √ Not applicable
(3) Related items in the financial statements at the beginning of the year after implementation ofnew revenue standard and adjustment of new lease standard in 2020.
ApplicableWhether to adjust the balance sheet accounts at the beginning of the year
√ Yes □ No
Consolidated Balance Sheet
Unit: RMB
| Item | December 31, 2019 | January 1, 2020 | Adjusted amount |
| Current Assets: | |||
| Cash and Bank Balances | 3,084,428,970.43 | 3,084,428,970.43 | |
| Deposit Reservation for Balance | |||
| Loans to Banks and Other Financial Institutions | |||
| Trading Financial Assets | |||
| Derivative Financial Assets | |||
| Notes receivable | |||
| Accounts receivable | 13,241,196,380.65 | 13,240,269,418.22 | -926,962.43 |
| Receivables Financing | 1,086,017,357.90 | 1,086,017,357.90 | |
| Prepayments | 128,182,099.47 | 143,212,500.49 | 15,030,401.02 |
| Premium Receivable | |||
| Reinsurance Accounts Receivable | |||
| Reinsurance Contract Reserves Receivable | |||
| Other Receivables | 408,776,610.17 | 408,776,610.17 | |
| Including: interest receivable | |||
| Dividends Receivable | |||
| Buying Back the Sale of Financial Assets | |||
| Inventory | 3,839,810,704.33 | 3,839,810,704.33 | |
| Contract Assets | 926,962.43 | 926,962.43 | |
| Holding for-sale assets | |||
| Non-current Assets Due within 1 Year | 630,717,329.58 | 630,717,329.58 | |
| Other Current Assets | 556,311,770.08 | 569,164,987.09 | 12,853,217.01 |
| Subtotal of Current Assets | 22,975,441,222.61 | 23,003,324,840.64 | 27,883,618.03 |
| Non-current Assets: |
| Granting of loans and advances | |||
| Investment in Creditor's Rights | |||
| Investment in Other Creditor's Rights | |||
| Long-term Receivables | 2,568,442,030.19 | 2,568,442,030.19 | |
| Long-term Equity Investment | 490,731,236.85 | 490,731,236.85 | |
| Investment in Other Equity Instruments | |||
| Other Non-current Financial Assets | 67,213,489.43 | 67,213,489.43 | |
| Investment Property | 336,181,589.99 | 336,181,589.99 | |
| Fixed Assets | 1,522,463,368.83 | 1,522,463,368.83 | |
| Projects under Construction | 435,757,406.90 | 435,757,406.90 | |
| Productive Biological Assets | |||
| Oil and gas assets | |||
| Right-of-use Assets | |||
| Intangible Assets | 411,758,785.31 | 411,758,785.31 | |
| Development Expenditure | |||
| Goodwill | 42,685,490.30 | 42,685,490.30 | |
| Long-term Prepaid Expenses | 37,311,198.19 | 37,311,198.19 | |
| Deferred Income Tax Assets | 668,058,558.83 | 668,058,558.83 | |
| Other Non-current Assets | 8,605,835.50 | 8,605,835.50 | |
| Subtotal of Non-current Assets | 6,589,208,990.32 | 6,589,208,990.32 | |
| Total Assets | 29,564,650,212.93 | 29,592,533,830.96 | 27,883,618.03 |
| Current Liabilities: | |||
| Short-term loan | 400,323,888.90 | 400,323,888.90 | |
| Borrowings from the Central Bank | |||
| Borrowings from Banks and Other Financial Institutions | |||
| Transactional financial liabilities | |||
| Derivative Financial Liabilities | |||
| Notes Payable | 3,807,292,795.07 | 3,807,292,795.07 | |
| Accounts Payable | 4,290,253,501.81 | 4,290,253,501.81 | |
| Received Prepayments | 375,521,795.82 | -375,521,795.82 | |
| Contract liabilities | 334,045,746.26 | 334,045,746.26 | |
| Financial Assets Sold for Repurchase | |||
| Deposit Taking and Interbank Deposit |
| Receiving from Vicariously Traded Securities | |||
| Receiving from Vicariously Sold Securities | |||
| Payroll payable | 1,582,368,359.30 | 1,582,368,359.30 | |
| Tax Payable | 813,357,471.37 | 869,863,921.95 | 56,506,450.58 |
| Other Payables | 1,163,915,713.24 | 1,163,915,713.24 | |
| Including: interest payable | |||
| Dividends Payable | 9,454,479.13 | 9,454,479.13 | |
| Service Charge and Commission Payable | |||
| Reinsurance Accounts Payable | |||
| Holding for-sale liabilities | |||
| Non-current Liabilities Due within 1 Year | 26,993,755.57 | 26,993,755.57 | |
| Other Current Liabilities | 71,233,107.93 | 71,233,107.93 | |
| Subtotal of Current Liabilities | 12,531,260,389.01 | 12,546,290,790.03 | 15,030,401.02 |
| Non-current Liabilities: | |||
| Insurance Contract Reserves | |||
| Long-term loan | 153,500,000.00 | 153,500,000.00 | |
| Bonds Payable | |||
| Including: Preferred Stocks | |||
| Perpetual Bonds | |||
| Lease Liabilities | |||
| Long-term Payables | |||
| Long-term payroll payable | |||
| Expected Liabilities | 303,670,887.50 | 316,524,104.51 | 12,853,217.01 |
| Deferred Income | 117,210,761.34 | 117,210,761.34 | |
| Deferred Income Tax Liabilities | 50,565,095.68 | 50,565,095.68 | |
| Other Non-current Liabilities | 432,275,367.74 | 432,275,367.74 | |
| Subtotal of Non-current Liabilities | 1,057,222,112.26 | 1,070,075,329.27 | 12,853,217.01 |
| Total Liabilities | 13,588,482,501.27 | 13,616,366,119.30 | 27,883,618.03 |
| Shareholders' Equity: | |||
| Share Capital | 3,003,713,230.00 | 3,003,713,230.00 | |
| Other Equity Instruments |
| Including: Preferred Stocks | |||
| Perpetual Bonds | |||
| Capital Reserves | 1,882,855,119.53 | 1,882,855,119.53 | |
| Less: Treasury Share | 1,057,584,258.31 | 1,057,584,258.31 | |
| Other Comprehensive Incomes | 12,308,276.23 | 12,308,276.23 | |
| Special Reserves | |||
| Surplus Reserves | 1,553,691,005.92 | 1,553,691,005.92 | |
| General Risk Reserves | |||
| Undistributed Profits | 10,248,023,654.54 | 10,248,023,654.54 | |
| Total Shareholders' Equity Attributable to the Parent Company | 15,643,007,027.91 | 15,643,007,027.91 | |
| Minority Shareholders' Equity | 333,160,683.75 | 333,160,683.75 | |
| Total Shareholders' Equity | 15,976,167,711.66 | 15,976,167,711.66 | |
| Total Liabilities and Shareholders' Equity | 29,564,650,212.93 | 29,592,533,830.96 | 27,883,618.03 |
Adjustment explanationBalance Sheet of the Parent Company
Unit: RMB
| Item | December 31, 2019 | January 1, 2020 | Adjusted amount |
| Current Assets: | |||
| Cash and Bank Balances | 890,598,735.62 | 890,598,735.62 | |
| Trading Financial Assets | |||
| Derivative Financial Assets | |||
| Notes receivable | |||
| Accounts receivable | 8,450,364,515.05 | 8,450,364,515.05 | |
| Receivables Financing | 841,427,888.19 | 841,427,888.19 | |
| Prepayments | 30,501,431.44 | 30,501,431.44 | |
| Other Receivables | 5,138,830,912.64 | 5,138,830,912.64 | |
| Including: interest receivable | |||
| Dividends Receivable | |||
| Inventory | 124,904,729.01 | 124,904,729.01 | |
| Contract Assets | |||
| Holding for-sale assets | |||
| Non-current Assets Due within 1 Year | 53,952,526.19 | 53,952,526.19 | |
| Other Current Assets | 21,919,487.88 | 21,919,487.88 | |
| Subtotal of Current Assets | 15,552,500,226.02 | 15,552,500,226.02 |
| Non-current Assets: | |||
| Investment in Creditor's Rights | |||
| Investment in Other Creditor's Rights | |||
| Long-term Receivables | 137,284,594.67 | 137,284,594.67 | |
| Long-term Equity Investment | 3,523,259,061.78 | 3,523,259,061.78 | |
| Investment in Other Equity Instruments | |||
| Other Non-current Financial Assets | 62,979,387.68 | 62,979,387.68 | |
| Investment Property | 187,756,594.11 | 187,756,594.11 | |
| Fixed Assets | 536,909,246.66 | 536,909,246.66 | |
| Projects under Construction | 203,836,998.96 | 203,836,998.96 | |
| Productive Biological Assets | |||
| Oil and gas assets | |||
| Right-of-use Assets | |||
| Intangible Assets | 168,215,377.39 | 168,215,377.39 | |
| Development Expenditure | |||
| Goodwill | |||
| Long-term Prepaid Expenses | 26,687,122.32 | 26,687,122.32 | |
| Deferred Income Tax Assets | 131,503,372.44 | 131,503,372.44 | |
| Other Non-current Assets | 1,964,757.00 | 1,964,757.00 | |
| Subtotal of Non-current Assets | 4,980,396,513.01 | 4,980,396,513.01 | |
| Total Assets | 20,532,896,739.03 | 20,532,896,739.03 | |
| Current Liabilities: | |||
| Short-term loan | 400,323,888.90 | 400,323,888.90 | |
| Transactional financial liabilities | |||
| Derivative Financial Liabilities | |||
| Notes Payable | 302,168,249.70 | 302,168,249.70 | |
| Accounts Payable | 948,348,622.52 | 948,348,622.52 | |
| Received Prepayments | 181,462,746.37 | -181,462,746.37 | |
| Contract liabilities | 160,586,501.21 | 160,586,501.21 | |
| Payroll payable | 1,078,396,381.39 | 1,078,396,381.39 | |
| Tax Payable | 460,577,509.52 | 481,453,754.68 | 20,876,245.16 |
| Other Payables | 1,363,740,346.75 | 1,363,740,346.75 | |
| Including: interest payable |
| Dividends Payable | 9,454,479.13 | 9,454,479.13 | |
| Holding for-sale liabilities | |||
| Non-current Liabilities Due within 1 Year | |||
| Other Current Liabilities | 5,892,364.82 | 5,892,364.82 | |
| Subtotal of Current Liabilities | 4,740,910,109.97 | 4,740,910,109.97 | |
| Non-current Liabilities: | |||
| Long-term loan | |||
| Bonds Payable | |||
| Including: Preferred Stocks | |||
| Perpetual Bonds | |||
| Lease Liabilities | |||
| Long-term Payables | |||
| Long-term payroll payable | |||
| Expected Liabilities | 9,735,157.34 | 9,735,157.34 | |
| Deferred Income | |||
| Deferred Income Tax Liabilities | 1,297,719.64 | 1,297,719.64 | |
| Other Non-current Liabilities | 16,155,036.85 | 16,155,036.85 | |
| Subtotal of Non-current Liabilities | 27,187,913.83 | 27,187,913.83 | |
| Total Liabilities | 4,768,098,023.80 | 4,768,098,023.80 | |
| Shareholders' Equity: | |||
| Share Capital | 3,003,713,230.00 | 3,003,713,230.00 | |
| Other Equity Instruments | |||
| Including: Preferred Stocks | |||
| Perpetual Bonds | |||
| Capital Reserves | 1,867,489,901.04 | 1,867,489,901.04 | |
| Less: Treasury Share | 1,057,584,258.31 | 1,057,584,258.31 | |
| Other Comprehensive Incomes | |||
| Special Reserves | |||
| Surplus Reserves | 1,553,691,005.92 | 1,553,691,005.92 | |
| Undistributed Profits | 10,397,488,836.58 | 10,397,488,836.58 | |
| Total Shareholders' Equity | 15,764,798,715.23 | 15,764,798,715.23 | |
| Total Liabilities and Shareholders' Equity | 20,532,896,739.03 | 20,532,896,739.03 |
(4) Explanation of early compared data after first implementation of new revenue standard andretroactive adjustment of new lease standard in 2020
□ Applicable √ Not applicable
Ⅵ. Taxes
1. Major categories of taxes and tax rates
| Tax Type | Taxation basis | Tax rate |
| VAT | According to the provisions of the tax law, the sales tax shall be calculated on the basis of the income by selling goods and taxable services. After deducting the input tax that is allowed to be deducted from the sales tax in the current period, the difference shall be the value added tax | 17%, 16%, 13%, 11%, 10%, 9%, 6%, simple collection rate of 5%, and simple collection rate of 3% |
| Urban Maintenance and Construction Tax | Calculated based on the deduction-free amount and actual paid turnover tax | 7%, 5% |
| Enterprise Income Tax | Calculated based on the taxable income | 12.5%、15%、16.5%、20%、25% |
| Education Surcharges | Calculated based on the deduction-free amount and actual paid turnover tax | 3% |
| Local Education Surcharges | Calculated based on the deduction-free amount and actual paid turnover tax | 2% |
If there are multiple taxpayers with different enterprise income tax rates, specify the situation
| Name of taxpayer | Income tax rate |
| Zhejiang Dahua Technology Co., Ltd. | 15% |
| Zhejiang Dahua System Engineering Co., Ltd. | 15% |
| Zhejiang Dahua Security Network Operation Service Co., Ltd. | 15% |
| Zhejiang Huatu Microchip Technology Co., Ltd. | 15% |
| Hangzhou Tecomore Technology Co., Ltd. | 15% |
| Zhejiang HuaRay Technology Co., Ltd. | 15% |
| Hangzhou Huacheng Network Technology Co., Ltd. | 15% |
| Xinjiang Dahua Zhixin Information Technology Co., Ltd. | 15% |
| Xinjiang Dahua Zhihe Information Technology Co., Ltd. | 15% |
| Xinjiang Dahua Zhitian Information Technology Co., Ltd. | 15% |
| Xinjiang Dahua Huayue Information Technology Co., Ltd. | 15% |
| Xinjiang Dahua Xinzhi Information Technology Co., Ltd. | 15% |
| Inner Mongolia Dahua Zhimeng Information Technology Co., Ltd. | 15% |
| Guangxi Dahua Zhicheng Co., Ltd. | 15% |
| Zhejiang Dahua Ju'an Technology Co., Ltd. | 20% |
| Hangzhou Fuyang Hua'ao Technology Co., Ltd. | 20% |
| Guizhou Huayi Shixin Technology Co., Ltd. | 20% |
| Zhejiang Fengshi Technology Co., Ltd. | 20% |
| Zhejiang Huaxiao Technology Co., Ltd. | 20% |
| Zhejiang Dahua Robot Technology Co., Ltd. | 20% |
| Sichuan Dahua Guangxun Photoelectric Technology Co., Ltd. | 20% |
| Zhejiang Zhoushan Digital Development Operation Co., Ltd | 20% |
| Guangxi Dahua Technology Co., Ltd. | 20% |
| Hangzhou Huajuan Technology Co., Ltd. | 20% |
| Beijing Huayue Shangcheng Information Technology Service Co., Ltd. | 20% |
| Shanghai Huashang Chengyue Information Technology Service Co., Ltd. | 20% |
| Hangzhou Huacheng Software Technology Co., Ltd. | 20% |
| Zhejiang Dahua Storage Technology Co., Ltd. | 20% |
| Zhejiang Huakong Software Co., Ltd. | 20% |
| Zhejiang Huachuang Vision Technology Co., Ltd. | 12.50% |
| Dahua Technology (HK) Limited | 16.50% |
| Other domestic companies | 25% |
| Other overseas companies | Applicable to local tax rate |
2. Preferential tax rate
(1) According to CaiShui [2011] No.100 jointly issued by the Ministry of Finance and State Administration of Taxation, forthe sales revenue of software products, the actual tax burden of more than 3% is subject to the policy of immediate refundright after collection after being reviewed and approved by the competent tax authorities; the policy of "tax exemption,offset, and refund" is valid for the value-added tax (VAT) on our export goods, with the tax refund rate of 16% and 13%.According to No.39 document of 2019 by the Ministry of Finance, State Administration of Taxation, and the GeneralAdministration of Customs, the tax rates for VAT taxable sales or imported goods by the taxpayer was adjusted from 16%,10%, and 6% to 13%, 9%, and 6% respectively from April 1, 2019.
(2) According to the "Reply on the Filing of the First Batch of High-tech Enterprises in Zhejiang Province in 2017" (Guo KeHuo Zi [2017] No. 201) issued by the Office for the Administration of the Certification of National High-tech Enterprises on
December 15, 2017, the Company was certified as a high-tech enterprise, with a validity period of 3 years from 2017 to2019. Currently, it's still under the application for reexamination of the qualification of high and new technology enterprises.Pursuant to the “Announcement of State Administration of Taxation on Issues Concerning Implementation of PreferentialIncome Tax Policies for High-tech Enterprises”, the corporate income tax may be temporarily prepaid at the rate of 15%before re-application within the year of expiration of high-tech qualification. Therefore, the Company's current corporateincome tax is reduced and paid at the rate of 15%.
(3) According to the "Reply on the Filing of the First Batch of High-tech Enterprises in Zhejiang Province in 2019" (Guo KeHuo Zi [2020] No.32) issued by the Office for the Administration of the Certification of National High-tech Enterprises onJanuary 20, 2020, our subsidiary Zhejiang Dahua System Engineering Co., Ltd. was certified as a high-tech enterprise,valid for 3 years. The corporate income tax for this year was reduced at a rate of 15%.
(4) According to the "Reply on the Filing of the First Batch of High-tech Enterprises in Zhejiang Province in 2017" (Guo KeHuo Zi [2017] No. 201) issued by the Office for the Administration of the Certification of National High-tech Enterprises onDecember 15, 2017, our subsidiary Zhejiang Dahua Security Network Operations Services Co., Ltd. was certified as ahigh-tech enterprise with the validation for 3 years (2017-2019). Currently, it's still under the application for reexaminationof the qualification of high and new technology enterprises. Pursuant to the “Announcement of State Administration ofTaxation on Issues Concerning Implementation of Preferential Income Tax Policies for High-tech Enterprises”, thecorporate income tax may be temporarily prepaid at the rate of 15% before re-application within the year of expiration ofhigh-tech qualification. Therefore, the Company's current corporate income tax is reduced and paid at the rate of 15%.
(5) According to the "Notice on Publicizing Zhejiang Province's List of Proposed High-tech Enterprises in 2018" issued bythe Office for the Administration of the Certification of National High-tech Enterprises on November 30, 2018, oursubsidiary Zhejiang Huatu Microchip Technology Co., Ltd. was certified as a high-tech enterprise with the validation for 3years. The corporate income tax for this year was reduced at a rate of 15%.
(6) According to the "Notice on Publicizing Zhejiang Province's List of Proposed High-tech Enterprises in 2018" issued bythe Office for the Administration of the Certification of National High-tech Enterprises on November 30, 2018, oursubsidiary Hangzhou Teconmore Technology Co., Ltd. was certified as a high-tech enterprise with the validation for 3years. The corporate income tax for this year was reduced at a rate of 15%.
(7) According to the "Notice on Publicizing Zhejiang Province's List of Proposed High-tech Enterprises in 2018" issued bythe Office for the Administration of the Certification of National High-tech Enterprises on November 30, 2018, oursubsidiary Zhejiang HuaRay Technology Co., Ltd. was certified as a high-tech enterprise with the validation for 3 years.The corporate income tax for this year was reduced at a rate of 15%.
(8) According to the "Notice on Publicizing Zhejiang Province's List of Proposed High-tech Enterprises in 2018" issued bythe Office for the Administration of the Certification of National High-tech Enterprises on November 30, 2018, oursubsidiary Zhejiang Huachuang Vision Technology Co., Ltd. was preliminarily certified as a high-tech enterprise with thevalidity period of 3 years. The corporate income tax for this year was calculated and paid at a rate of 15%.
(9) According to the "Reply on the Filing of the First Batch of High-tech Enterprises in Zhejiang Province in 2019" (Guo KeHuo Zi [2020] No.32) issued by the Office for the Administration of the Certification of National High-tech Enterprises onJanuary 20, 2020, our subsidiary Hangzhou Huacheng Network Technology Co., Ltd. was certified as a high-techenterprise, with a validity period of 3 years. The corporate income tax for this year was calculated and paid at the tax rateof 15%.
(10) According to The Notice on Implementation of Inclusive Tax Reduction and Exemption Policies for Small andMicro-Enterprises (CaiShui [2019] No.13), the following subsidiaries should pay the enterprise income tax at a rate of 20%of their taxable income: Zhejiang Dahua Ju'an Technology Co., Ltd., Hangzhou Fuyang Hua'ao Technology Co., Ltd.,Guizhou Huayi Shixin Technology Co., Ltd., Zhejiang Fengshi Technology Co., Ltd., Zhejiang Huaxiao Technology Co.,Ltd., Zhejiang Dahua Robot Technology Co., Ltd., Sichuan Dahua Guangxun Photoelectric Technology Co., Ltd., Zhejiang
Zhoushan Digital Development Operation Co., Ltd, Guangxi Dahua Technology Co. Ltd., Hangzhou Huajuan TechnologyCo., Ltd., Beijing Huayue Shangcheng Information Technology Co., Ltd., Shanghai Huashang Chengye InformationTechnology Co., Ltd., Hangzhou Huacheng Network Technology Co., Ltd., Zhejiang Dahua Storage Technology Co., Ltd.,and Zhejiang Huakong Software Co., Ltd.
(11) According to the document CaiShui [2011] No.58 issued by the Ministry of Finance, the State Administration ofTaxation, and the General Administration of Customs, the following subsidiaries may enjoy preferential tax policies forDevelopment of the West Regions Program from 2011 to 2020: Xinjiang Dahua Zhixin Information Technology Co., Ltd.,Xinjiang Dahua Zhihe Information Technology Co., Ltd., Xinjiang Dahua Zhitian Information Technology Co., Ltd., XinjiangDahua Huayue Information Technology Co., Ltd., Xinjiang Dahua Xinzhi Information Technology Co., Ltd., Inner MongoliaDahua Zhimeng Information Technology Co., Ltd. Therefore, the corporate income tax for this year was reduced and paidat the rate of 15%.
(12) According to the Announcement on the 2019 Evaluation of the Eighth Batch of Software Enterprises and SoftwareProducts issued by the Zhejiang Software Industry Association (September 10, 2019), our subsidiary ZhejiangHuachuang Vision Technology Co., Ltd. has been recognized as a software enterprise and obtained a software enterprisecertificate (Certificate No. Zhe RQ-2019-0217). According to the Notice on Corporate Income Tax Policy for FurtherEncouraging the Development of Software Industry and Integrated Circuit Industry" (CaiShui [2012] No.27), thepreferential period starts from the profitable year of software enterprises (2017). The enterprises are exempt fromcorporate income tax from the first year to the second year. From the third to fifth years, the corporate income tax isreduced by half from the statutory tax rate of 25%. The corporate income tax rate for our subsidiary Zhejiang HuachuangVision Technology Co., Ltd. was reduced by half in 2020.Ⅶ. Notes to the Items in the Consolidated Financial Statement
1. Cash and bank balances
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Cash on Hand | 25,886.50 | 117,289.25 |
| Bank Balance | 2,748,146,637.43 | 2,590,777,015.41 |
| Other Cash and Bank Balances | 382,098,717.11 | 493,534,665.77 |
| Total | 3,130,271,241.04 | 3,084,428,970.43 |
| Including: Total Amount Deposited in Overseas Banks | 1,063,661,549.17 | 875,156,010.72 |
| The total amount restricted for use due to mortgage, pledge or freeze | 345,896,141.39 | 346,461,821.88 |
The amount restricted in use due to mortgage, pledge or freeze are as follows:
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Documentary Credit Deposit | 247,782,500.00 | 244,167,000.00 |
| Bid/performance bond | 98,113,641.39 | 102,294,821.88 |
| Total | 345,896,141.39 | 346,461,821.88 |
2. Trading financial assets
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Financial assets at fair value through profit or loss in this period | 902,431,780.82 | |
| Of which: Derivative Financial Assets | 902,431,780.82 | |
| Total | 902,431,780.82 |
Other notes:
The amount of trading financial assets pledged by the company at the end of the period was 100,000,000.00 yuan, seeNote 60 for details.
3. Accounts receivable
(1) Categorical disclosure of accounts receivable
Unit: RMB
| Category | Balance at the End of the Period | Balance at the Start of the Period | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage | Amount | Accrued proportion | Amount | Percentage | Amount | Accrued proportion | |||
| Accounts receivables with the bad debt provision accrued based on single item | 63,011,465.15 | 0.47% | 63,011,465.15 | 100.00% | 64,978,308.37 | 0.44% | 64,978,308.37 | 100.00% | ||
| Including: | ||||||||||
| Accounts receivable with insignificant single amount but accrued for separate provision of bad debt | 63,011,465.15 | 0.47% | 63,011,465.15 | 100.00% | 64,978,308.37 | 0.44% | 64,978,308.37 | 100.00% | ||
| Accounts receivables with the bad debt provision accrued based on combinations | 13,403,301,352.34 | 99.53% | 1,486,317,293.07 | 11.09% | 11,916,984,059.27 | 14,644,273,870.19 | 99.56% | 1,404,004,451.97 | 9.59% | 13,240,269,418.22 |
| Including: | ||||||||||
| Portfolio 2: Aging Analysis Portfolio | 13,403,301,352.34 | 99.53% | 1,486,317,293.07 | 11.09% | 11,916,984,059.27 | 14,644,273,870.19 | 99.56% | 1,404,004,451.97 | 9.59% | 13,240,269,418.22 |
| Total | 13,466,312,817.49 | 100.00% | 1,549,328,758.22 | 11,916,984,059.27 | 14,709,252,178.56 | 100.00% | 1,468,982,760.34 | 13,240,269,418.22 |
Bad debt provision based on single item
Unit: RMB
| Name | Balance at the End of the Period | |||
| Book balance | Bad debt provision | Accrued proportion | Reason for making bad debt provision | |
| Customer 1 | 51,616,761.62 | 51,616,761.62 | 100.00% | Expected to be unable to recover |
| Customer 2 | 11,394,703.53 | 11,394,703.53 | 100.00% | Expected to be unable to recover |
| Total | 63,011,465.15 | 63,011,465.15 | -- | -- |
Bad debt provision based on combinations
Unit: RMB
| Name | Balance at the End of the Period | ||
| Book balance | Bad debt provision | Accrued proportion | |
| Within 1 year (including 1 year) | 9,732,341,242.42 | 486,617,062.12 | 5.00% |
| 1 to 2 years | 2,218,293,540.52 | 221,829,354.05 | 10.00% |
| 2 to 3 years | 655,394,461.95 | 196,618,338.58 | 30.00% |
| 3 to 4 years | 277,095,011.09 | 138,547,505.55 | 50.00% |
| 4 to 5 years | 387,360,317.99 | 309,888,254.40 | 80.00% |
| 5 years or above | 132,816,778.37 | 132,816,778.37 | 100.00% |
| Total | 13,403,301,352.34 | 1,486,317,293.07 | -- |
Please refer to the disclosing methods of other receivables for the information disclosure of bad debts provisions, if thebad debt provisions of accounts receivable are made according to the general model of expected credit losses:
□ Applicable √ Not applicable
Disclosure by age
Unit: RMB
| Aging | Balance at the End of the Period |
| Within 1 year (including 1 year) | 9,732,341,242.42 |
| 1 to 2 years | 2,218,293,540.52 |
| 2 to 3 years | 666,789,165.48 |
| 3 years or above | 848,888,869.07 |
| 3 to 4 years | 328,711,772.71 |
| 4 to 5 years | 387,360,317.99 |
| 5 years or above | 132,816,778.37 |
| Total | 13,466,312,817.49 |
(2) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
| Category | Balance at the Start of the Period | Amount of Changes in the Current Period | Balance at the End of the Period | |||
| Accrued | Recovered or Reversed | Written Off | Others | |||
| Bad debt provision | 1,468,982,760.34 | 82,365,867.05 | 1,920,625.00 | -99,244.17 | 1,549,328,758.22 | |
| Total | 1,468,982,760.34 | 82,365,867.05 | 1,920,625.00 | -99,244.17 | 1,549,328,758.22 | |
(3) Accounts receivable of the top five balances at the end of the period collected by the arrearsAccording to the balance collected by the debtor at the end of the period, the total amount of the top five accountsreceivable is RMB 1,281,315,750.11, accounting for 9.51% of the total balance at the end of the period of accountsreceivable. The balance at the end of the period for bad debt provision accrued was RMB 244,712,379.18 accordingly.
(4) Accounts receivable derecognized due to the transfer of financial assetsThere are no accounts receivable derecognized due to the transfer of financial assets in this period.
(5) The amount of assets and liabilities generated due to transferred receivables that theCompany still keeps recourse or retains part of corresponding rights or interests
There are no assets or liabilities generated due to transferred receivables that the Company still keeps recourse or retainspart of corresponding rights or interests.
4. Receivables financing
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Notes receivable | 670,667,363.91 | 1,086,017,357.90 |
| Total | 670,667,363.91 | 1,086,017,357.90 |
The increase and decrease of accounts receivable financing in the current period and the changes in the fair value.
√ Applicable □ Not applicable
The closing balances are all bank acceptance bills with short remaining maturity and whose book values are close to fairvalues.Please refer to the disclosing methods of other receivables for the information disclosure of depreciation provisions, if thedepreciation provisions of accounts receivable financing are made according to the general model of expected creditlosses:
□ Applicable √ Not applicable
Other notes:
(1) Notes receivable pledged by the Company at the end of the period
Unit: RMB
| Item | Pledged amount by the end of period |
| Bank Acceptance Notes | 608,093,569.33 |
| Total | 608,093,569.33 |
(2) Notes receivable that the Company has endorsed or discounted at the end of the period and that have not yetexpired on the balance sheet date
Unit: RMB
| Item | Derecognised amount at the end of period | Not derecognised amount at the end of period |
| Bank Acceptance Notes | 484,012,688.06 | |
| Total | 484,012,688.06 |
5. Advance payment
(1) Aging analysis of prepayments is as follows
Unit: RMB
| Aging | Balance at the End of the Period | Balance at the Start of the Period | ||
| Amount | Percentage | Amount | Percentage | |
| Within 1 year | 108,453,563.29 | 91.59% | 139,527,812.79 | 97.43% |
| 1 to 2 years | 7,698,609.47 | 6.50% | 1,674,410.31 | 1.17% |
| 2 to 3 years | 1,135,823.08 | 0.96% | 762,597.42 | 0.53% |
| 3 years or above | 1,122,350.52 | 0.95% | 1,247,679.97 | 0.87% |
| Total | 118,410,346.36 | -- | 143,212,500.49 | -- |
(2) Advance payment of the top five closing balances by prepayment parties
According to the advance payment objects, the total amount of the top five at the end of period is RMB 32,609,671.58,accounting for 27.54% of the total closing balance of the advance payment.
6. Other receivables
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Other Receivables | 326,474,815.43 | 408,776,610.17 |
| Total | 326,474,815.43 | 408,776,610.17 |
(1) Other receivables
1) Other receivables categorized by the nature of the funds
Unit: RMB
| Nature of the funds | Closing balance | Opening balance |
| Deposits | 166,251,332.97 | 186,488,490.93 |
| Prepaid or advance expense | 87,702,819.28 | 105,487,796.31 |
| Export refunds | 40,988,648.13 | |
| Employee home loan | 110,265,165.46 | 130,509,023.60 |
| Others | 22,831,054.15 | 6,367,769.53 |
| Total | 387,050,371.86 | 469,841,728.50 |
2) Bad debt provision
Unit: RMB
| Bad debt provision | Phase One | Phase Two | Phase Three | Total |
| Expected credit losses in the next 12 months | Expected credit losses for the entire extension (without credit impairment) | Expected credit losses for the entire extension (with credit impairment) | ||
| Balance on January 1, 2020 | 44,187,736.10 | 15,678,284.02 | 1,199,098.21 | 61,065,118.33 |
| Balance of the current period on January 1, | —— | —— | —— | —— |
| 2020 | ||||
| --Transfer to phase two | -5,894,374.55 | 5,894,374.55 | ||
| --Transfer to phase three | -49,468.73 | -13,403.03 | 62,871.76 | |
| Provisions of this period | 3,260,909.12 | 1,476,569.46 | 10,299.32 | 4,747,777.90 |
| Reversal of the current period | 372,845.64 | 372,845.64 | ||
| Other variations | -4,179,747.03 | -684,747.13 | -4,864,494.16 | |
| Balance on June 30, 2020 | 37,325,054.91 | 22,351,077.87 | 899,423.65 | 60,575,556.43 |
Book balance changes with significant changes in loss provision in the current period
□ Applicable √ Not applicable
Disclosure by age
Unit: RMB
| Aging | Balance at the End of the Period |
| Within 1 year (including 1 year) | 224,404,880.67 |
| 1 to 2 years | 62,155,737.52 |
| 2 to 3 years | 55,525,585.27 |
| 3 years or above | 44,964,168.40 |
| 3 to 4 years | 34,533,546.35 |
| 4 to 5 years | 6,076,294.81 |
| 5 years or above | 4,354,327.24 |
| Total | 387,050,371.86 |
3) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
| Category | Balance at the Start of the Period | Amount of Changes in the Current Period | Balance at the End of the Period | |||
| Accrued | Recovered or Reversed | Written Off | Others | |||
| Portfolio 2: Aging Analysis Portfolio | 61,065,118.33 | 4,747,777.90 | 372,845.64 | -4,864,494.16 | 60,575,556.43 | |
| Total | 61,065,118.33 | 4,747,777.90 | 372,845.64 | -4,864,494.16 | 60,575,556.43 | |
4) Accounts receivable actually written off in this period
There's no actual written-off accounts receivable in this period.
5) Other receivables of the top five closing balances collected by debtors
Unit: RMB
| Name of Unit | Nature of the funds | Balance at the End of the Period | Aging | As a percentage of total other receivables at the end of the period | Bad debt provision at the end of the period |
| Company 1 | Deposits | 24,410,000.00 | RMB 24,400,000.00 within 1 year, RMB 10,000.00 for 1 to 2 years | 6.31% | 1,221,000.00 |
| Company 2 | Prepaid or advance expense | 15,349,084.51 | Within 1 year | 3.97% | 767,454.23 |
| Company 3 | Deposits | 12,000,000.00 | 3 to 4 years | 3.10% | 6,000,000.00 |
| Company 4 | Prepaid or advance expense | 8,870,200.04 | RMB 134,183.84 within 1 year, RMB 93,396.00 for 1 to 2 years, RMB 8,642,620.20 for 2 to 3 years | 2.29% | 2,608,834.85 |
| Company 5 | Deposits | 7,912,207.01 | RMB 2,000,000.00 within 1 year, RMB 5,912,207.01 for 1 to 2 years | 2.04% | 691,220.70 |
| Total | -- | 68,541,491.56 | -- | 17.71% | 11,288,509.78 |
6) Accounts receivable not related to government subsidies
There are no other accounts receivable related to government subsidies.
7) Other accounts receivable derecognised due to transfer of financial assets
There are no other accounts receivable derecognized due to the transfer of financial assets.
8) Assets and liabilities generated due to other transferred receivables that the Company stillkeeps recourse or retains part of corresponding rights or interestsThere are no assets and liabilities generated due to other transferred receivables that the Company still keeps recourse orretains part of corresponding rights or interests.
7. Inventory
(1) Categories of inventories
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period | ||||
| Book balance | Provision for inventory write down or contract performance cost impairment | Book value | Book balance | Provision for inventory write down or contract performance cost impairment | Book value | |
| Raw materials | 1,562,567,062.45 | 14,739,209.10 | 1,547,827,853.35 | 1,322,280,135.63 | 9,174,244.38 | 1,313,105,891.25 |
| Work-in-progress | 1,191,134,997.24 | 25,244,199.15 | 1,165,890,798.09 | 907,039,528.28 | 11,835,784.37 | 895,203,743.91 |
| Finished goods | 1,662,117,074.88 | 65,211,111.60 | 1,596,905,963.28 | 1,549,317,679.30 | 59,728,540.61 | 1,489,589,138.69 |
| Outsourced work-in-progress | 180,491,729.44 | 180,491,729.44 | 141,911,930.48 | 141,911,930.48 | ||
| Total | 4,596,310,864.01 | 105,194,519.85 | 4,491,116,344.16 | 3,920,549,273.69 | 80,738,569.36 | 3,839,810,704.33 |
(2) Provision for inventory write down and for contract performance cost impairment
Unit: RMB
| Item | Balance at the Start of the Period | Increased in the current period | Decreased in the current period | Balance at the End of the Period | ||
| Accrued | Others | Reversals or write-offs | Others | |||
| Raw materials | 9,174,244.38 | 11,424,739.53 | 5,859,774.81 | 14,739,209.10 | ||
| Work-in-progress | 11,835,784.37 | 16,391,701.49 | 2,983,286.71 | 25,244,199.15 | ||
| Finished goods | 59,728,540.61 | 14,486,666.33 | 9,576,053.79 | -571,958.45 | 65,211,111.60 | |
| Total | 80,738,569.36 | 42,303,107.35 | 18,419,115.31 | -571,958.45 | 105,194,519.85 | |
8. Contract assets
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period | ||||
| Book balance | Provision for | Book value | Book balance | Provision for | Book value | |
| decline in value | decline in value | |||||
| Completed but unsettled assets formed under construction contracts | 1,017,240.04 | 90,277.61 | 926,962.43 | 1,017,240.04 | 90,277.61 | 926,962.43 |
| Operation and maintenance service | 58,850,131.90 | 2,942,506.60 | 55,907,625.30 | |||
| Total | 59,867,371.94 | 3,032,784.21 | 56,834,587.73 | 1,017,240.04 | 90,277.61 | 926,962.43 |
Please refer to the disclosing methods of other receivables for the information disclosure of bad debts provisions, if thebad debt provisions of contract assets are made according to the general model of expected credit losses:
□ Applicable √ Not applicable
Provision for impairment accrued for contract assets of this period
Unit: RMB
| Item | Provisions of this period | Reversal of the current period | Write-offs of this period | Causes |
| Operation and maintenance service | 2,942,506.60 | |||
| Total | 2,942,506.60 | -- |
9. Non-current assets due within 1 year
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Long-term accounts receivables due within 1 year | 868,113,666.02 | 630,717,329.58 |
| Total | 868,113,666.02 | 630,717,329.58 |
Other notes:
The amount of long-term receivables due within 1 year pledged by the Company at the end of the period is RMB29,381,785.35. See Note 60 for details.
10. Other current assets
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Receivable return cost | 16,598,569.57 | 12,853,217.01 |
| Not deducted input tax | 386,743,022.27 | 538,283,444.00 |
| Prepaid enterprise income tax | 14,119,776.44 | 18,028,326.08 |
| Total | 417,461,368.28 | 569,164,987.09 |
11. Long-term receivables
(1) Long-term receivables
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period | Range of discount rate | ||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | ||
| Installment Payment for Selling Products | 2,262,478,707.29 | 2,262,478,707.29 | 2,568,442,030.19 | 2,568,442,030.19 | |||
| Including: Unrealized Financing Income | 355,899,512.25 | 355,899,512.25 | 413,390,725.32 | 413,390,725.32 | 3.03%-7.62% | ||
| Total | 2,262,478,707.29 | 2,262,478,707.29 | 2,568,442,030.19 | 2,568,442,030.19 | -- | ||
Book balance changes with significant changes in loss provision in the current period
□ Applicable √ Not applicable
(2) Long-term receivables derecognised due to transfer of financial assets
There are no long-term receivables derecognised due to transfer of financial assets.
(3) Assets/liabilities generated due to transferred long-term receivables that the Company stillkeeps recourse or retains part of corresponding rights or interestsThere are no assets/liabilities generated due to transferred long-term receivables that the Company still keeps recourse orretains part of corresponding rights or interests.Other notesThe amount of long-term receivables pledged by the Company at the end of the period is RMB 216,551,165.91. See Note60 for details.
12. Long-term equity investment
Unit: RMB
| The invested entity | Balance at the Start of the Period (book | Decrease/Increase in the current period | Balance at the End of the Period (book | Closing balance of provision for decline | |||||||
| Investments increased | Investment decreased | Investment profit and loss recognized under | Adjustment on other comprehensive | Other changes in equity | Cash dividends or profit declared to | Provision for impairment accrued | Others | ||||
| value) | the equity method | income | distribute | value) | in value | ||||||
| Ⅰ. Joint ventures | |||||||||||
| Ⅱ. Affiliates | |||||||||||
| Zhejiang Leapmotor Technology Co., Ltd. | 123,065,033.65 | -42,984,111.81 | 80,080,921.84 | ||||||||
| Hangzhou Juhuanyan Information Technology Co., Ltd. | 811,197.09 | 500,000.00 | 37,312.48 | 1,348,509.57 | |||||||
| Wenzhou Dahua Security Services Co., Ltd. | 806,173.85 | -42,462.85 | 763,711.00 | ||||||||
| Taizhou Dahua Security Services Co., Ltd. | 364,239.13 | 36,716.50 | 400,955.63 | ||||||||
| Ningbo Dahua Anbang Security Services Co., Ltd. | 1,102,372.36 | 62,590.26 | 1,164,962.62 | ||||||||
| Lishui Dahua Intelligent Technology Co., | 5,549.81 | 62,929.88 | 68,479.69 | ||||||||
| Ltd. | |||||||||||
| Zhoushan Dahua Technology Co., Ltd. | 692,565.83 | 15,277.10 | 707,842.93 | ||||||||
| Shaoxing Dahua Security Services Co., Ltd. | 570,258.76 | -66,384.57 | 503,874.19 | ||||||||
| Zhejiang Dahua Zhian Internet of Things Technology Co., Ltd. | 3,954,685.12 | 12,277.02 | 3,966,962.14 | ||||||||
| Shenzhen Conwin Security Electronics CO., Ltd. | 11,426,036.40 | 11,313,591.67 | -112,444.73 | ||||||||
| China Standard Intelligent Security Technology Co., Ltd. | 10,567,309.66 | -364,953.51 | 10,202,356.15 | ||||||||
| Intelbras S.A. | 337,365,815.19 | 1,213,355.80 | -63,899.99 | 338,515,271.00 | |||||||
| Ruicity Digital Technology Co., Ltd. | 64,000,000.00 | -2,446,549.04 | 61,553,450.96 | ||||||||
| Subtotal | 490,731, | 64,500,0 | 11,313,5 | -44,576, | -63,899. | 499,277, |
| 236.85 | 00.00 | 91.67 | 447.47 | 99 | 297.72 | ||||||
| Total | 490,731,236.85 | 64,500,000.00 | 11,313,591.67 | -44,576,447.47 | -63,899.99 | 499,277,297.72 |
13. Other non-current financial assets
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Financial assets at fair value through profit or loss in this period | 189,937,851.78 | 67,213,489.43 |
| Among which: Investment in equity instrument | 189,937,851.78 | 67,213,489.43 |
| Total | 189,937,851.78 | 67,213,489.43 |
14. Investment property
(1) Investment properties measured by cost method
√ Applicable □ Not applicable
Unit: RMB
| Item | Buildings and constructions | Land use rights | Projects under Construction | Total |
| Ⅰ. Original book value | ||||
| 1. Opening Balance | 366,256,418.69 | 9,422,118.33 | 375,678,537.02 | |
| 2. Increased in the Current Period | 7,728,000.16 | 421,414.92 | 8,149,415.08 | |
| (1) Purchase | ||||
| (2) Transfer of fixed assets\intangible assets | 7,728,000.16 | 421,414.92 | 8,149,415.08 | |
| (3) Acquisition | ||||
| 3. Decreased in the Current Period | ||||
| (1) Disposal | ||||
| (2) Other Transfer-out | ||||
| 4. Closing Balance | 373,984,418.85 | 9,843,533.25 | 383,827,952.10 | |
| Ⅱ. Accumulated Depreciation and |
| Amortization | ||||
| 1. Opening Balance | 38,163,932.99 | 1,333,014.04 | 39,496,947.03 | |
| 2. Increased in the Current Period | 10,589,046.25 | -355,859.10 | 10,233,187.15 | |
| (1) Accrual or Amortization | 8,801,979.46 | 96,045.72 | 8,898,025.18 | |
| (2) Transfer of fixed assets\intangible assets | 1,787,066.79 | -451,904.82 | 1,335,161.97 | |
| 3. Decreased in the Current Period | ||||
| (1) Disposal | ||||
| (2) Other Transfer-out | ||||
| 4. Closing Balance | 48,752,979.24 | 977,154.94 | 49,730,134.18 | |
| Ⅲ. Provision for Impairment | ||||
| 1. Opening Balance | ||||
| 2. Increased in the Current Period | ||||
| (1) Accrual | ||||
| 3. Decreased in the Current Period | ||||
| (1) Disposal | ||||
| (2) Other Transfer-out | ||||
| 4. Closing Balance | ||||
| Ⅳ. Book value | ||||
| 1. Closing Balance on Book Value | 325,231,439.61 | 8,866,378.31 | 334,097,817.92 | |
| 2. Opening Balance on Book Value | 328,092,485.70 | 8,089,104.29 | 336,181,589.99 |
(2) Investment properties measured at fair value
□ Applicable √ Not applicable
(3) Investment properties with certificates of title not granted
N/A
15. Fixed assets
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Fixed Assets | 1,510,795,215.47 | 1,522,463,368.83 |
| Total | 1,510,795,215.47 | 1,522,463,368.83 |
(1) Fixed assets
Unit: RMB
| Item | Housing and building | Machinery and equipment | Means of transport | Electronic and other equipment | Total |
| Ⅰ. Original book value: | |||||
| 1. Opening Balance | 1,229,211,545.48 | 293,050,750.13 | 35,697,923.61 | 789,678,550.06 | 2,347,638,769.28 |
| 2. Increased in the Current Period | 2,286,532.67 | 2,696,041.81 | 1,866,572.25 | 114,344,989.65 | 121,194,136.38 |
| (1) Purchase | 2,696,041.81 | 1,866,572.25 | 114,344,989.65 | 118,907,603.71 | |
| (2) Transferred From Construction in Progress | 2,286,532.67 | 2,286,532.67 | |||
| (3) Acquisition | |||||
| 3. Decreased in the Current Period | 7,728,000.16 | 140,656.86 | 152,295.68 | 15,606,751.35 | 23,627,704.05 |
| (1) Disposal or Scrapping | 140,656.86 | 152,295.68 | 14,758,981.00 | 15,051,933.54 | |
| (2) Transfer to investment real estate | 7,728,000.16 | 7,728,000.16 | |||
| (3) Disposal of subsidiaries | 847,770.35 | 847,770.35 | |||
| 4. Currency Translation | 57,763.50 | 35,497.71 | -138,763.10 | -2,290,515.82 | -2,336,017.71 |
| Difference | |||||
| 5. Closing Balance | 1,223,827,841.49 | 295,641,632.79 | 37,273,437.08 | 886,126,272.54 | 2,442,869,183.90 |
| II. Accumulated depreciation | |||||
| 1. Opening Balance | 223,283,902.05 | 71,753,769.77 | 28,598,213.53 | 501,539,515.10 | 825,175,400.45 |
| 2. Increased in the Current Period | 26,584,629.85 | 12,924,805.90 | 1,391,120.17 | 81,439,003.80 | 122,339,559.72 |
| (1) Accrual | 26,584,629.85 | 12,924,805.90 | 1,391,120.17 | 81,439,003.80 | 122,339,559.72 |
| 3. Decreased in the Current Period | 1,787,066.79 | 92,448.06 | 144,680.89 | 12,633,663.74 | 14,657,859.48 |
| (1) Disposal or Scrapping | 92,448.06 | 144,680.89 | 11,972,823.37 | 12,209,952.32 | |
| (2) Transfer to investment real estate | 1,787,066.79 | 1,787,066.79 | |||
| (3) Disposal of subsidiaries | 660,840.37 | 660,840.37 | |||
| 4. Currency Translation Difference | 7,798.07 | 29,843.22 | -87,511.46 | -733,262.09 | -783,132.26 |
| 5. Closing Balance | 248,089,263.18 | 84,615,970.83 | 29,757,141.35 | 569,611,593.07 | 932,073,968.43 |
| Ⅲ. Provision for Impairment | |||||
| 1. Opening Balance | |||||
| 2. Increased in the Current Period | |||||
| (1) Accrual | |||||
| 3. Decreased in the Current Period | |||||
| (1) Disposal or Scrapping | |||||
| 4. Closing Balance | |||||
| Ⅳ. Book value | |||||
| 1. Closing Balance on Book | 975,738,578.31 | 211,025,661.96 | 7,516,295.73 | 316,514,679.47 | 1,510,795,215.47 |
| Value | |||||
| 2. Opening Balance on Book Value | 1,005,927,643.43 | 221,296,980.36 | 7,099,710.08 | 288,139,034.96 | 1,522,463,368.83 |
(2) Fixed assets with certificates of title not granted
N/A
16. Construction in progress
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Projects under Construction | 708,252,710.11 | 435,757,406.90 |
| Total | 708,252,710.11 | 435,757,406.90 |
(1) Details of construction in progress
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period | ||||
| Book balance | Provision for decline in value | Book value | Book balance | Provision for decline in value | Book value | |
| Phase I, Urban Intelligent Information Industry Construction Project | 33,087,597.41 | 33,087,597.41 | 25,497,962.29 | 25,497,962.29 | ||
| The phase II construction project of the smart manufacturing base in Hangzhou | 209,276,362.03 | 209,276,362.03 | 122,432,129.02 | 122,432,129.02 | ||
| Construction Project of Xi'an R & D Center | 83,507,868.43 | 83,507,868.43 | 55,188,924.03 | 55,188,924.03 | ||
| The construction project of the marketing center in Xi'an | 33,751,027.72 | 33,751,027.72 | 25,256,304.13 | 25,256,304.13 | ||
| Project of Smart IoT Solution R & D and Industrialization | 313,423,723.52 | 313,423,723.52 | 195,019,175.01 | 195,019,175.01 | ||
| Others | 35,206,131.00 | 35,206,131.00 | 12,362,912.42 | 12,362,912.42 | ||
| Total | 708,252,710.11 | 708,252,710.11 | 435,757,406.90 | 435,757,406.90 |
(2) Changes in significant construction in progress
Unit: RMB
| Item Name | Budget | Balance at the Start of the Period | Increased in the current period | Transfer amounts in this period | Other amounts decreased in current period | Balance at the End of the Period | Project accumulative investment as a percentage of the budget | Project Progress | Accumulated capitalized interest amount | Including: capitalized interest amount in the current period | Capitalization rate of the interest in the current period | Capital Source |
| Project of Smart IoT Solution R & D and Industrialization | 911,964,400.00 | 195,019,175.01 | 118,404,548.51 | 313,423,723.52 | 34.37% | 34.37% | Equity Fund | |||||
| The phase II construction project of the smart manufacturing base in Hangzhou | 827,063,700.00 | 122,432,129.02 | 86,844,233.01 | 209,276,362.03 | 25.30% | 25.30% | Equity Fund | |||||
| Construction Project | 733,621,400.00 | 55,188,924.03 | 28,318,944.40 | 83,507,868.43 | 11.38% | 11.38% | Equity Fund |
| of Xi'an R & D Center | ||||||||||||
| The construction project of the marketing center in Xi'an | 300,000,000.00 | 25,256,304.13 | 8,494,723.59 | 33,751,027.72 | 11.25% | 11.25% | Equity Fund | |||||
| Phase I, Urban Intelligent Information Industry Construction Project | 39,333,858.52 | 25,497,962.29 | 7,589,635.12 | 33,087,597.41 | 84.12% | 84.12% | Equity Fund | |||||
| Total | 2,811,983,358.52 | 423,394,494.48 | 249,652,084.63 | 673,046,579.11 | -- | -- | -- |
17. Intangible assets
(1) Details of intangible assets
Unit: RMB
| Item | Land use rights | Patent right | Non-patented technology | Softwares | Trademark rights | Software copyright | Total |
| Ⅰ. Original book value | |||||||
| 1. Opening Balance | 359,239,987.62 | 62,876,510.59 | 131,131,771.38 | 2,699,144.00 | 6,381,122.62 | 562,328,536.21 | |
| 2. Increased in the Current Period | 15,131,620.75 | 11,482,140.39 | 26,613,761.14 | ||||
| (1) Purchase | 15,131,620.75 | 1,985,424.65 | 17,117,045.40 |
| (2) Internal research and development | |||||||
| (3) Acquisition | |||||||
| (4) Transfer of construction in progress | 9,496,715.74 | 9,496,715.74 | |||||
| 3. Decreased in the Current Period | 421,414.92 | 1,549,817.59 | 1,971,232.51 | ||||
| (1) Disposal | 728,663.74 | 728,663.74 | |||||
| (2) Transfer to investment real estate | 421,414.92 | 421,414.92 | |||||
| (3) Disposal of subsidiaries | 821,153.85 | 821,153.85 | |||||
| 4. Currency Translation Difference | 7,275.00 | 400,513.85 | 6,984.00 | 414,772.85 | |||
| 5. Closing Balance | 373,957,468.45 | 62,876,510.59 | 141,464,608.03 | 2,706,128.00 | 6,381,122.62 | 587,385,837.69 | |
| Ⅱ. Accumulated amortization | |||||||
| 1. Opening Balance | 21,260,557.80 | 41,287,081.04 | 79,542,869.86 | 2,574,344.03 | 5,904,898.17 | 150,569,750.90 | |
| 2. Increased in the Current Period | 4,027,290.44 | 3,073,730.22 | 17,270,049.18 | 62,399.97 | 238,112.29 | 24,671,582.10 | |
| (1) Accrual | 4,027,290.44 | 3,073,730.22 | 17,270,049.18 | 62,399.97 | 238,112.29 | 24,671,582.10 | |
| 3. Decreased in the Current Period | -451,904.82 | 1,129,288.24 | 677,383.42 | ||||
| (1) Disposal | 728,134.45 | 728,134.45 | |||||
| (2) Transfer to investment | -451,904.82 | -451,904.82 |
| real estate | |||||||
| (3) Disposal of subsidiaries | 401,153.79 | 401,153.79 | |||||
| 4. Currency Translation Difference | 92,298.34 | 6,984.00 | 99,282.34 | ||||
| 5. Closing Balance | 25,739,753.06 | 44,360,811.26 | 95,775,929.14 | 2,643,728.00 | 6,143,010.46 | 174,663,231.92 | |
| Ⅲ. Provision for Impairment | |||||||
| 1. Opening Balance | |||||||
| 2. Increased in the Current Period | |||||||
| (1) Accrual | |||||||
| 3. Decreased in the Current Period | |||||||
| (1) Disposal | |||||||
| 4. Closing Balance | |||||||
| Ⅳ. Book value | |||||||
| 1. Closing Balance on Book Value | 348,217,715.39 | 18,515,699.33 | 45,688,678.89 | 62,400.00 | 238,112.16 | 412,722,605.77 | |
| 2. Opening Balance on Book Value | 337,979,429.82 | 21,589,429.55 | 51,588,901.52 | 124,799.97 | 476,224.45 | 411,758,785.31 |
(2) Land use right without property ownership certificate
Unit: RMB
| Item | Book value | Reasons for certificates of title not |
| granted | ||
| Liuzhou office land | 14,997,569.95 | In the process of obtaining the real estate certificates |
18. Goodwill
(1) Original book value of goodwill
Unit: RMB
| The invested entity or matters which formed goodwill | Balance at the Start of the Period | Increased in the current period | Decreased in the current period | Balance at the End of the Period | ||
| Generated from business combination | Disposal | |||||
| South-North United Information Technology Co., Ltd. | 71,083,281.09 | 71,083,281.09 | ||||
| DahuaTechnology Italy S.R.L. | 6,615,294.18 | 6,615,294.18 | ||||
| LorexTechnology Inc. | 36,070,196.12 | 36,070,196.12 | ||||
| Total | 113,768,771.39 | 71,083,281.09 | 42,685,490.30 | |||
(2) Provision of impairment in goodwill
Unit: RMB
| The invested entity or matters which formed goodwill | Balance at the Start of the Period | Increased in the current period | Decreased in the current period | Balance at the End of the Period | ||
| Accrued | Disposal | |||||
| South-North United Information Technology Co., Ltd. | 71,083,281.09 | 71,083,281.09 | ||||
| Total | 71,083,281.09 | 71,083,281.09 | ||||
Information about the asset group or asset group combination where the goodwill is located
| The invested entity or matters which formed goodwill | Amount of goodwill | Information about the asset group or asset group combination where it is located |
| Dahua Technology Italy S.R.L. | 6,615,294.18 | The asset group relating to the goodwill generated from acquisition of |
| the Dahua Technology Italy S.R.L., that is, the long-term asset group, including fixed assets and intangible assets, formed for Dahua Technology Italy S.R.L. on June 30, 2020. | ||
| Lorex Technology Inc. | 36,070,196.12 | The asset group relating to the goodwill generated from acquisition of Lorex Technology Inc., that is, the long-term asset group, including fixed assets and intangible assets, formed for Lorex Technology Inc. on June 30, 2020. |
Explain the goodwill impairment test process, key parameters (e.g. growth rate at forecast period, growth rate atsteady period, profit rate, discount rate, forecast period, etc. when the present value of future cash flow isestimated) and the confirmation method of goodwill impairment loss:
The recoverable amount is determined according to the present value of the expected future cash flow of the relevantasset group. Its future cash flow is determined based on the 5-year financial budget approved by management from 2020to 2024, with a discount rate of 15% to 18%. Cash flows over 5 years are calculated on the basis of zero growth rate. Thegrowth rate is determined based on the growth forecast of the relevant industry and does not exceed the long-termaverage growth rate of the industry. Future cash flow estimates are based on management’s estimated sales amount, costof sales, and operating expenses during the forecast period based on past performance and expectations of marketdevelopment.Result of goodwill impairment testAfter assessing the recoverable amount of goodwill, the Company did not find that the recoverable amount of goodwill ofthe underlying asset group was lower than its book value, nor that there was any indication of impairment, therefore theCompany concluded that there was no need to accrue an impairment loss.During the period, the Company transferred its entire 51% equity in North-South United Information Technology Co., Ltd.after which the company was no longer included in the scope of consolidation, and the goodwill previously formed fromthe acquisition of North-South United Information Technology Co., Ltd. under non-homogeneous control was no longerrecognized.
19. Long-term deferred expenses
Unit: RMB
| Item | Balance at the Start of the Period | Increased in the current period | Prepaid Expenses in This Period | Other Amounts Decreased | Balance at the End of the Period |
| Housing rent | 654,902.81 | 53,106.75 | 601,796.06 | ||
| Improvement expenditure of fixed assets leased by operating lease | 36,656,295.38 | 8,849,689.36 | 10,245,765.81 | 370,654.78 | 34,889,564.15 |
| Others | 17,385,627.80 | 2,154,071.83 | 15,231,555.97 | ||
| Total | 37,311,198.19 | 26,235,317.16 | 12,452,944.39 | 370,654.78 | 50,722,916.18 |
20. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets not written off
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period | ||
| Deductible temporary difference | Deferred Income Tax Assets | Deductible temporary difference | Deferred Income Tax Assets | |
| Provision for Impairment of Assets | 75,042,053.44 | 17,122,398.04 | 1,372,773,968.68 | 280,528,766.00 |
| Unrealized Profit from Internal Transactions | 546,606,346.69 | 102,435,745.09 | 547,077,611.01 | 104,177,416.44 |
| Deductible Losses | 421,383,456.45 | 89,540,580.48 | 112,428,262.35 | 22,790,464.62 |
| Provision for Credit Loss | 1,370,948,276.69 | 264,116,414.57 | ||
| Expected Liabilities | 273,494,254.24 | 41,605,440.33 | 294,259,856.02 | 48,245,412.84 |
| Payroll payable | 210,843,754.32 | 34,942,955.08 | 186,486,020.88 | 30,804,008.79 |
| Equity incentive expense | 381,041,112.07 | 59,125,494.02 | 645,397,447.32 | 100,199,757.74 |
| Costs from Tax Increase Due to Absence of Invoice | 126,126,096.80 | 25,023,838.03 | 332,596,395.85 | 79,563,686.57 |
| Changes in fair value of financial instruments | 0.00 | 0.00 | 4,652,255.96 | 697,838.39 |
| Others | 1,795,359.86 | 448,866.75 | 4,204,829.75 | 1,051,207.44 |
| Total | 3,407,280,710.56 | 634,361,732.39 | 3,499,876,647.82 | 668,058,558.83 |
(2) Deferred income tax liabilities not written off
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period | ||
| Taxable temporary difference | Deferred Income Tax Liabilities | Taxable temporary difference | Deferred Income Tax Liabilities | |
| The gross profit of sales by installments | 290,441,168.98 | 50,609,239.75 | 274,935,901.68 | 50,565,095.68 |
| Changes in fair value of financial instruments | 12,356,861.89 | 1,893,971.44 | ||
| Total | 302,798,030.87 | 52,503,211.19 | 274,935,901.68 | 50,565,095.68 |
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Offset
Unit: RMB
| Item | Amount of Deferred Income Tax Assets Offset against Liabilities at the End of the Period | Balance of Deferred Income Tax Assets or Liabilities after Offset at the End of the Period | Amount of Deferred Income Tax Assets Offset against Liabilities at the Start of the Period | Balance of Deferred Income Tax Assets or Liabilities after Offset at the Start of the Period |
| Deferred Income Tax Assets | 634,361,732.39 | 668,058,558.83 | ||
| Deferred Income Tax Liabilities | 52,503,211.19 | 50,565,095.68 |
(4) Deferred income tax assets or liabilities listed by net amount after offset
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Deductible temporary difference | 341,100,125.87 | 288,540,182.92 |
| Deductible Losses | 566,087,882.20 | 426,612,969.56 |
| Total | 907,188,008.07 | 715,153,152.48 |
(5) Details of unrecognized deferred income tax assets
Unit: RMB
| Year | Amount at the end of the period | Opening balance | Notes |
| 2020 | 11,057,227.29 | 11,057,227.29 | Losses in 2015 and due in 2020 |
| 2021 | 31,829,325.69 | 39,382,442.56 | Losses in 2016 and due in 2021 |
| 2022 | 46,869,736.69 | 48,794,703.23 | Losses in 2017 and due in 2022 |
| 2023 | 86,746,791.78 | 87,817,547.48 | Losses in 2018 and due in 2023 |
| 2024 | 231,564,150.96 | 239,561,049.00 | Losses in 2019 and due in 2024 |
| 2025 | 158,020,649.79 | Losses in 2020 and due in 2025 | |
| Total | 566,087,882.20 | 426,612,969.56 | -- |
21. Other non-current assets
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Prepayments for purchase of engineering equipments | 6,182,115.21 | 8,605,835.50 |
| Total | 6,182,115.21 | 8,605,835.50 |
22. Short-term loans
(1) Categories of short-term loan
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Pledged loans | 166,357,669.29 | |
| Fiduciary loans | 1,370,000,000.00 | 400,000,000.00 |
| Interest payable for short-term loan | 3,986,500.00 | 323,888.90 |
| Total | 1,540,344,169.29 | 400,323,888.90 |
23. Notes payable
Unit: RMB
| Types | Balance at the End of the Period | Balance at the Start of the Period |
| Commercial acceptance bill | 1,268,899,541.24 | 1,875,977,697.88 |
| Bank acceptance bill | 889,335,170.77 | 1,931,315,097.19 |
| Total | 2,158,234,712.01 | 3,807,292,795.07 |
24. Accounts payable
(1) Details of accounts payable
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Payment for purchase of materials | 3,704,566,380.68 | 4,140,093,134.61 |
| Payment for engineering equipments | 150,072,948.32 | 150,160,367.20 |
| Total | 3,854,639,329.00 | 4,290,253,501.81 |
(2) Important accounts payable aged over 1 year
There is no significant accounts payable aged over 1 year.
25. Contract liabilities
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Payments for sales of goods | 212,902,049.29 | 185,485,784.16 |
| Pre-payments from construction projects | 315,721,286.36 | 148,559,962.10 |
| Member points | 19,411,572.96 | |
| Total | 548,034,908.61 | 334,045,746.26 |
26. Payroll payable
(1) Details of payroll payable
Unit: RMB
| Item | Balance at the Start of the Period | Increased in the current period | Decreased in the current period | Balance at the End of the Period |
| Ⅰ. Short-term remuneration | 1,575,736,595.62 | 2,448,411,579.29 | 3,053,485,345.97 | 970,662,828.94 |
| Ⅱ. Dimission benefits - defined contribution plan | 6,631,763.68 | 61,301,659.97 | 60,490,351.56 | 7,443,072.09 |
| Ⅲ. Dismissal welfare | 17,458,349.16 | 17,417,825.60 | 40,523.56 | |
| Total | 1,582,368,359.30 | 2,527,171,588.42 | 3,131,393,523.13 | 978,146,424.59 |
(2) List of short-term remuneration
Unit: RMB
| Item | Balance at the Start of the Period | Increased in the current period | Decreased in the current period | Balance at the End of the Period |
| 1. Wages or salaries, bonuses, allowances and subsidies | 1,361,769,616.52 | 2,184,355,401.29 | 2,838,302,719.09 | 707,822,298.72 |
| 2. Staff welfare | 42,879,845.98 | 42,879,845.98 | ||
| 3. Social insurance contributions | 5,896,704.91 | 50,603,764.47 | 49,827,669.45 | 6,672,799.93 |
| Including: medical insurance | 5,098,015.12 | 47,004,531.06 | 47,288,267.81 | 4,814,278.37 |
| Work injury | 352,016.99 | 1,315,539.16 | 1,245,195.56 | 422,360.59 |
| insurance premium | ||||
| Maternity insurance premium | 446,672.80 | 2,283,694.25 | 1,294,206.08 | 1,436,160.97 |
| 4. Housing funds | 289,644.14 | 112,097,763.18 | 112,329,729.41 | 57,677.91 |
| 5. Labor union and education funds | 207,780,630.05 | 58,474,804.37 | 10,145,382.04 | 256,110,052.38 |
| Total | 1,575,736,595.62 | 2,448,411,579.29 | 3,053,485,345.97 | 970,662,828.94 |
(3) Defined contribution plan (Note)
Unit: RMB
| Item | Balance at the Start of the Period | Increased in the current period | Decreased in the current period | Balance at the End of the Period |
| 1. Basic pension insurance | 6,028,969.84 | 58,801,223.38 | 57,928,191.00 | 6,902,002.22 |
| 2. Unemployment insurance | 602,793.84 | 2,500,436.59 | 2,562,160.56 | 541,069.87 |
| Total | 6,631,763.68 | 61,301,659.97 | 60,490,351.56 | 7,443,072.09 |
27. Taxes and dues payable
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| VAT | 242,656,048.73 | 378,432,028.44 |
| Enterprise Income Tax | 253,833,866.92 | 419,841,639.86 |
| Individual income tax | 13,977,438.40 | 18,196,436.48 |
| Urban Maintenance and Construction Tax | 6,294,021.36 | 20,932,919.75 |
| House property tax | 224,337.86 | 10,840,683.16 |
| Education surcharges (including local education surcharges) | 4,495,338.22 | 14,952,034.15 |
| Stamp duty | 1,046,519.98 | 2,048,405.64 |
| Land usage tax | 315,265.61 | |
| Disabled security fund | 7,170,681.70 | 1,020,725.47 |
| Sales tax | 3,920,998.14 | 3,356,926.93 |
| Others | 104,250.93 | 242,122.07 |
| Total | 534,038,767.85 | 869,863,921.95 |
28. Other payables
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Dividends Payable | 14,288,249.35 | 9,454,479.13 |
| Other Payables | 1,031,039,240.43 | 1,154,461,234.11 |
| Total | 1,045,327,489.78 | 1,163,915,713.24 |
(1) Dividends payable
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Equity Incentive Restricted Stock Dividend | 14,288,249.35 | 9,454,479.13 |
| Total | 14,288,249.35 | 9,454,479.13 |
(2) Other payables
1) Other payables listed by nature of funds
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Deposits | 129,491,183.72 | 51,615,269.84 |
| Temporarily borrowed and advance payments | 229,731,718.43 | 202,871,784.05 |
| Special fund for talent incentive | 10,966,002.00 | 58,413.00 |
| Restricted share repurchase obligations | 629,131,574.61 | 854,084,857.87 |
| Others | 31,718,761.67 | 45,830,909.35 |
| Total | 1,031,039,240.43 | 1,154,461,234.11 |
2) Significant other payables aged over 1 year
There are no significant other payables aged over 1 year
29. Non-current liabilities due within 1 year
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Long-term debt due within one year | 25,500,000.00 | 25,500,000.00 |
| Interest payable due within 1 year | 881,963.91 | 1,493,755.57 |
| Total | 26,381,963.91 | 26,993,755.57 |
30. Other current liabilities
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| To-be-transferred sales taxes in installments | 96,409,504.55 | 71,233,107.93 |
| Total | 96,409,504.55 | 71,233,107.93 |
31. Long-term loans
(1) Categories of long-term loans
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Pledged loans | 128,500,000.00 | 153,500,000.00 |
| Fiduciary loans | 400,000,000.00 | |
| Total | 528,500,000.00 | 153,500,000.00 |
32. Estimated liabilities
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period | Causes |
| Expected after-sales maintenance cost | 293,967,773.40 | 300,715,511.10 | After-sales maintenance |
| Expected return amount after the period | 24,171,783.44 | 15,552,498.78 | Expected sales return |
| Others | 15,114.26 | 256,094.63 | Loss-making contract |
| Total | 318,154,671.10 | 316,524,104.51 | -- |
33. Deferred income
Unit: RMB
| Item | Balance at the Start of the Period | Increased in the current period | Decreased in the current period | Balance at the End of the Period | Causes |
| Government subsidies | 91,257,373.89 | 3,418,783.80 | 87,838,590.09 | Received government subsidies related to assets | |
| Member points | 25,953,387.45 | 25,953,387.45 | Sales of merchandise | ||
| Total | 117,210,761.34 | 29,372,171.25 | 87,838,590.09 | -- |
Projects related to government subsidies:
Unit: RMB
| Liabilities | Balance at the Start of the Period | The amount of new subsidies in this period | Amount recorded as non-operating revenue in this period | The Amount Recorded as Other Income in This Period | The Amount Written off Costs in This Period | Other variations | Balance at the End of the Period | Related to assets/related to income |
| Special award for industrial park projects | 55,520,909.92 | 1,586,311.74 | 53,934,598.18 | Related to assets | ||||
| Phase I investment financial incentive fund for security video surveillance product production base project | 27,455,000.00 | 27,455,000.00 | Related to assets | |||||
| Funding for manufacturing enterprise technological transformation projects | 8,281,463.97 | 1,832,472.06 | 6,448,991.91 | Related to assets | ||||
| Total | 91,257,373.89 | 3,418,783.80 | 87,838,590.09 |
Other notes:
(1) According to the FuJingGuan [2017] No.35 document and the FuCaiQi [2017] No.506 document issued by EconomicDevelopment Zone Management Committee and the Finance Bureau of Fuyang District, Hangzhou, the Companyreceived the special subsidies for the Fuyang Dahua Intelligent (IoT) Industrial Park in 2015 and 2017, respectively, RMB
31.66 million each time, totaling RMB 63.32 million. As the government grant related to assets, it is recognized as deferredincome and will be recognized as other income in installments based on the estimated service life of the asset (20 years).
(2) According to the FuJingGuan [2019] No.18 document and the FuCaiQi [2019] No.286 document issued by FuyangEconomic Development Zone Management Committee and the Finance Bureau of Fuyang District, Hangzhou, in 2019,the Company received a financial incentive fund of RMB 27.455 million for the phase I investment of the production baseof security video surveillance products, which was recognized as deferred income as a government subsidy related toassets.
(3) According to the FuJingXinCai [2019] No.49 document and the FuCaiQi [2019] No.804 document issued by Economicand Information Bureau of Fuyang District, Hangzhou and the Finance Bureau of Fuyang District, Hangzhou, In 2019, theCompany received a total of RMB 9.1977 million in 2019 from the first batch of funds for technical renovation projects ofmunicipal manufacturing enterprises as government subsidies related to assets, which were recognized as deferredincome, and recognized as other income in installments based on the estimated service life of the assets (15–111months).
34. Other non-current liabilities
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| To-be-transferred sales taxes in installments | 284,149,821.16 | 322,275,367.74 |
| Other loans | 110,000,000.00 | 110,000,000.00 |
| Total | 394,149,821.16 | 432,275,367.74 |
Other notes:
The Company and CDB Development Fund reached a cooperation intention to increase the capital of the Company'ssubsidiary Dahua Zhilian Co., Ltd. The capital increase agreement stipulates that CDB Development Fund will not sendsenior management personnel such as directors and supervisors to Dahua Zhilian; the Company shall pay an annualinvestment profit of 1.2% to CDB Development Fund through dividends and repurchase premium. The Company shallredeem the equity of CDB Development Fund in Dahua Zhilian from 2022 to 2024 as other non-current liabilities.
35. Share capital
Unit: RMB
| Balance at the Start of the Period | Increased or decreased amount in this period (+/-) | Balance at the End of the Period | |||||
| Shares newly issued | Bonus shares | Shares converted from capital reserves | Others | Subtotal | |||
| Total shares | 3,003,713,230.00 | -2,247,700.00 | -2,247,700.00 | 3,001,465,530.00 | |||
Other notes:
1. In accordance with the resolution of the 29th meeting of the 6th Board of Directors on December 30, 2019 and therevised Articles of Association of the Company, as well as and the resolution of the Company's 1st ExtraordinaryGeneral Meeting of Shareholders in 2020, the Company repurchased and canceled 437,100 shares of the grantedbut locked restricted stock held by the resigned equity incentive targets, reducing the registered capital of RMB437,100.00. The Company's registered capital was reduced to RMB 3,003,276,130.00. The above capital reductionhas been verified through Xin Kuai Shi Bao Zi [2020] No.ZF10124 Verification Report issued by BDO China Shu LunPan CPAs (special general partnership).
2. According to the resolution of the 33rd session of the 6th Board of Directors' meeting held by the Company on April 2,2020 and the revised company Articles of Association and the resolution of the Company's Annual Shareholders'Meeting in 2019, the Company repurchased and canceled 1,810,600 shares of the granted but locked restricted stockheld by the resigned equity incentive objects, reducing the registered capital by RMB 1,810,600.00. The Company'sregistered capital was reduced to RMB 3,001,465,530.00. The change registration of the above capital reductionmatters is still in process.
36. Capital reserves
Unit: RMB
| Item | Balance at the Start of the Period | Increased in the current period | Decreased in the current period | Balance at the End of the Period |
| Capital premium (capital share premium) | 1,351,253,597.73 | 164,023,202.10 | 119,640,368.28 | 1,395,636,431.55 |
| Other capital reserves | 531,601,521.80 | 86,184,488.08 | 179,238,671.08 | 438,547,338.80 |
| Total | 1,882,855,119.53 | 250,207,690.18 | 298,879,039.36 | 1,834,183,770.35 |
Other notes, including increases or decreases in this period and their reasons:
1. According to the 2020 Restricted Stock Incentive Plan of Zhejiang Dahua Technology Co. Ltd. (Draft) approved by theCompany at its Annual Shareholders' Meeting in 2019, 10 restricted stock incentive objects purchased 13,391,480shares of the Company's shares that were repurchased by the Company through centralized bidding, with arepurchase amount of RMB 203,499,400.44, and the actually received amount from the restricted stock incentiveobjects was RMB 99,994,181.16. The difference between the repurchase amount and the actual payment of RMB103,505,219.28 was used to offset the capital surplus (share premium).
2. The amount of employee service exchanged by the share-based payment for this period was RMB 86,184,488.08and due to repurchase and cancellation, the granted but locked restricted shares from equity incentive targetsreimbursed employee service remuneration of RMB 11,138,896.13. The impact amount of the income tax on the partthat the amount deductible before tax exceeded the share-based payment related cost which the accountingstandards allows to recognize, is RMB -5,377,346.78, increasing other capital reserves by RMB 86,184,488.08 intotal, and reducing other capital reserves by RMB 16,516,242.91.
3. In this period, the Company repurchased and canceled the granted but locked restricted shares from equity incentivetargets, amounting to 2,247,700 shares, reducing the capital shares by RMB 2,247,700.00, and reducing the capitalreserves (capital share premium) by RMB 16,135,149.00.
4. As the performance conditions of 2019 have qualified to unlock the first unlocking period set by the Incentive Plan,
the restricted shares held by the incentive objects for the first unlocking period were unlocked, except for those whohave departed. In other capital reserves, the amount of expenses recognized related to the unlocked restrictedshares during the period was RMB 135,908,140.80 , and the income tax impact of the amount deductible on a pre-taxbasis in excess of the portion of costs and expenses recognized under accounting standards related to share-basedpayments was RMB 26,814,287.37, totaling RMB 162,722,428.17 transferred to capital reserve (share premium).
5. The total increase in capital reserve (share premium) due to the purchase and disposal of minority interests insubsidiaries was RMB 1,300,773.93 in this period.
37. Treasury share
Unit: RMB
| Item | Balance at the Start of the Period | Increased in the current period | Decreased in the current period | Balance at the End of the Period |
| Restricted shares | 854,084,857.87 | 99,994,181.16 | 324,947,464.42 | 629,131,574.61 |
| Share repurchase | 203,499,400.44 | 203,499,400.44 | ||
| Total | 1,057,584,258.31 | 99,994,181.16 | 528,446,864.86 | 629,131,574.61 |
Other notes, including increases or decreases in this period and their reasons:
1. The Company repurchased restricted stocks from former employees in this period, and a total of 2,247,700 shares ofrestricted stocks were repurchased, which correspondingly reduced the share capital by RMB 2,247,700.00, andreduced the corresponding treasury shares amounting RMB 18,382,849.00.
2. As the Phase I of 2018 Restricted Stock Incentive Plan met the unlocking conditions, an aggregate of 36,931,560restricted shares were unlocked, with a corresponding reduction in treasury share and related liabilities of RMB298,037,635.57.
3. The cash dividends allocated to restricted stock holders reduced treasury shares and related liabilities by RMB8,989,262.52. Due to the departure of some employees, the cash dividends allocated to related former employeeswere recovered, and treasury shares and related liabilities were increased by RMB 462,282.67.
4. According to the 2020 Restricted Stock Incentive Plan of Zhejiang Dahua Technology Co. Ltd. (Draft) approved by the
Company at its Annual Shareholders' Meeting in 2019, 10 restricted stock incentive objects purchased 13,391,480shares repurchased by the Company through centralized bidding, correspondingly reducing the inventory shares byRMB 203,499,400.00. The grant price of this incentive plan was 7.467, with a corresponding recognition of anincrease in the repurchase obligation for treasury shares of RMB 99,994,181.16.
38. Other comprehensive incomes
Unit: RMB
| Item | Balance at the Start of the Period | This Period's Amount of Occurrence | Balance at the End of the Period | |||||
| Before tax balance in this period | Less: recorded into other comprehensive incomes | Less: Recorded into other comprehensive incomes | Less: Income Tax Exp | Attributable to the Company after tax | Attributable to the minority shareholders | |||
| in previous period and transferred to P/L in current period | in previous period and transferred to retained income in current period | ense | after tax | |||||
| II. Other comprehensive income that will be reclassified into P/L | 12,308,276.23 | 1,838,733.32 | 1,838,745.43 | -12.11 | 14,147,021.66 | |||
| Including: converted difference in foreign currency statements | 12,308,276.23 | 1,838,733.32 | 1,838,745.43 | -12.11 | 14,147,021.66 | |||
| Other comprehensive incomes in total | 12,308,276.23 | 1,838,733.32 | 1,838,745.43 | -12.11 | 14,147,021.66 |
39. Surplus reserve
Unit: RMB
| Item | Balance at the Start of the Period | Increased in the current period | Decreased in the current period | Balance at the End of the Period |
| Statutory surplus reserve | 1,553,691,005.92 | 1,553,691,005.92 | ||
| Total | 1,553,691,005.92 | 1,553,691,005.92 |
40. Undistributed profits
Unit: RMB
| Item | Current Period | Previous Period |
| Undistributed Profit before Adjustment at the End of Previous Period | 10,248,023,654.54 | 7,670,983,116.33 |
| Undistributed Profit after Adjustment at the Start of the Period | 10,248,023,654.54 | 7,670,983,116.33 |
| Add: net profit attributable to parent company's owner in current period | 1,368,974,364.44 | 1,238,880,948.74 |
| Less: ordinary share dividends payable | 397,654,658.45 | 299,761,669.99 |
| Add: Common stock dividends corresponding to repurchase and cancellation of restricted | 462,282.67 |
| stocks | ||
| Undistributed Profit at the End of the Period | 11,219,805,643.20 | 8,610,102,395.08 |
41. Operating income and operating costs
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence | ||
| Income | Cost | Income | Cost | |
| Main Business | 9,602,675,069.68 | 4,920,046,273.00 | 10,586,100,409.57 | 6,258,976,217.79 |
| Other businesses | 235,653,783.94 | 179,203,877.57 | 220,465,961.32 | 184,452,933.24 |
| Total | 9,838,328,853.62 | 5,099,250,150.57 | 10,806,566,370.89 | 6,443,429,151.03 |
42. Taxes and surcharges
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Urban Maintenance and Construction Tax | 23,318,746.92 | 33,452,748.45 |
| Education Surcharges | 16,649,481.08 | 23,819,218.33 |
| House property tax | 2,429,673.54 | 2,649,929.92 |
| Land usage tax | 939,532.57 | 323,227.12 |
| Vehicle and vessel use tax | 34,922.82 | |
| Stamp duty | 4,827,847.03 | 3,763,949.94 |
| Others | 6,942,979.14 | 181,775.46 |
| Total | 55,143,183.10 | 64,190,849.22 |
43. Cost of sales
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Labor cost | 883,747,948.12 | 765,103,249.42 |
| After-sales service expense | 188,026,183.46 | 140,370,118.61 |
| Transportation and vehicle expenses | 162,242,677.25 | 155,268,937.92 |
| Marketing expense | 125,951,940.36 | 111,187,209.88 |
| Taxation and insurance expense | 117,797,928.06 | 28,293,533.06 |
| Administrative expenses | 106,886,558.37 | 99,350,035.03 |
| Business entertainment | 68,957,545.58 | 70,914,579.08 |
| Traveling expense | 62,166,335.57 | 73,216,422.53 |
| Communication expense | 26,252,604.63 | 25,917,363.58 |
| Knowledge resource fee | 21,141,479.54 | 12,443,137.92 |
| Depreciation cost and asset amortization | 15,640,480.09 | 10,375,898.37 |
| Others | 26,415,453.24 | 47,273,769.93 |
| Total | 1,805,227,134.27 | 1,539,714,255.33 |
44. Administration expenses
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Labor cost | 258,180,429.50 | 224,951,022.47 |
| Depreciation cost and asset amortization | 36,171,195.90 | 34,319,636.29 |
| Administrative expenses | 26,698,756.21 | 41,428,195.75 |
| Knowledge resource fee | 17,269,047.77 | 14,562,057.39 |
| Consumables and service fees | 8,690,430.41 | 7,304,727.49 |
| Business entertainment | 3,527,325.45 | 5,786,555.52 |
| Transportation and vehicle expenses | 2,405,347.17 | 7,313,060.87 |
| Traveling expense | 1,599,133.76 | 3,615,217.28 |
| Others | 1,239,825.05 | 7,638,694.30 |
| Total | 355,781,491.22 | 346,919,167.36 |
45. R&D expenses
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Labor cost | 1,142,032,536.26 | 1,087,040,550.89 |
| Research consumables and service fees | 105,243,650.19 | 87,539,009.16 |
| Depreciation cost and asset amortization | 27,160,042.95 | 23,016,431.23 |
| Traveling expense | 17,825,255.20 | 21,821,910.39 |
| Administrative expenses | 13,410,737.82 | 10,606,482.20 |
| Communication expense | 6,041,044.08 | 8,105,366.86 |
| Others | 2,899,674.45 | 7,131,451.04 |
| Total | 1,314,612,940.95 | 1,245,261,201.77 |
46. Financial expenses
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Interest expense | 36,633,828.03 | 76,337,321.42 |
| Less: interest income | 82,236,920.48 | 81,150,189.81 |
| P/L on foreign exchange | 5,140,375.51 | 1,303,546.52 |
| Others | 15,895,187.68 | 14,554,870.27 |
| Total | -24,567,529.26 | 11,045,548.40 |
47. Other incomes
Unit: RMB
| Sources of other incomes | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Refund of VAT excess tax | 373,851,655.76 | 352,500,448.39 |
| Special subsidies | 84,531,537.83 | 74,387,384.26 |
| Value-added tax deduction | 163,127.65 | 33,684.43 |
| Total | 458,546,321.24 | 426,921,517.08 |
48. Investment income
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Long-term equity investment income measured by equity method | -44,335,467.10 | -548,623.93 |
| Investment income from disposal of long-term equity investment | 6,255,168.49 | 9,152,198.76 |
| Investment income from disposal of trading financial assets | -1,616,153.94 | -26,055,180.12 |
| After losing control, the remaining equity is re-measured at fair value | 1,013,416.14 | |
| Investment income of other non-current financial assets | 7,307,215.11 | 10,747,186.86 |
| during the holding period | ||
| Investment income from treasury bond reverse repurchase | 210,491.25 | |
| Total | -32,178,746.19 | -5,691,002.29 |
49. Income from changes in fair value
Unit: RMB
| Source of the income from changes in fair value | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Trading Financial Assets | 2,431,780.82 | 7,056,942.13 |
| Including: gains from changes at fair value of derivative financial instruments | 2,431,780.82 | 7,056,942.13 |
| Transactional financial liabilities | 38,392,246.03 | |
| Other Non-current Financial Assets | 14,577,362.35 | |
| Total | 17,009,143.17 | 45,449,188.16 |
50. Credit impairment loss
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Bad debt losses of other receivables | -4,374,932.26 | -7,517,011.67 |
| Loss on contract asset impairment | -2,942,506.60 | |
| Bad debt losses of accounts receivable | -80,445,242.05 | -156,164,494.82 |
| Total | -87,762,680.91 | -163,681,506.49 |
51. Asset impairment loss
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Ⅱ. Loss of inventory falling price and loss of contract performance cost impairment | -42,303,107.35 | -27,690,905.53 |
| XI. Goodwill impairment loss | -71,083,281.09 | |
| Total | -42,303,107.35 | -98,774,186.62 |
52. Asset disposal income
Unit: RMB
| Sources of the asset disposal income | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Income from disposal of fixed assets | 10,307.31 | 448,615.83 |
53. Non-operating revenue
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence | Amount recorded into non-recurring profit and loss in current period |
| Government subsidies | 877,665.31 | 5,018,245.00 | 877,665.31 |
| Gains and losses of non-current asset retirement | 398,527.61 | 245,869.56 | 398,527.61 |
| Others | 4,848,241.58 | 3,249,720.50 | 4,848,241.58 |
| Total | 6,124,434.50 | 8,513,835.06 | 6,124,434.50 |
Government subsidies recorded into current period P/L:
Unit: RMB
| Subsidy items | Distributing Entity | Distributing Reason | Types of Nature | Subsidies Influence Profit and Loss in the Current Year or not | Special Subsidy or not | This period's amount of occurrence | Previous period's amount of occurrence | Related to assets/related to income |
| Wuzhou City allocates special funds to actively support and cultivate eligible enterprises | Development and Reform Bureau of Changzhou District, Wuzhou City | Subsidy | Subsidies received due to engagement in specific industries and trades encouraged and supported by the State (obtained by national policies and regulations) | Yes | No | 50,000.00 | Related to income | |
| 2019 Top Ten Meritorious Enterprise (Excellent Entrepreneur) Award | Economic and Information Bureau of Fuyang District, | Reward | Subsidies received due to engagement in specific industries and trades encouraged and supported by the State (obtained by national | Yes | No | 300,000.00 | Related to income |
| Hangzhou | policies and regulations) | |||||||
| Employee retention subsidies during the pandemic | Governments of other countries overseas | Subsidy | A subsidy received for assuming the functions of the state for guaranteeing certain public utilities or supplying socially necessary products or price control | Yes | No | 511,665.31 | Related to income | |
| Baise City's contribution award for encouraging the economic development of headquarters | Baise Municipal Investment Promotion Bureau | Reward | Subsidies obtained due to local support policies such as investment promotion by local governments | Yes | No | 1,910,000.00 | Related to income | |
| 2016 (3rd batch) National Intellectual Property Demonstration Enterprise and Advantageous Enterprise | Finance Bureau of Binjiang District, Hangzhou | Subsidy | Subsidies obtained for research and development, technological update and transformation | Yes | No | 100,000.00 | Related to income | |
| Backbone enterprises in Hangzhou drive the development of the industrial chain | Finance Bureau of Binjiang District, Hangzhou | Subsidy | Subsidies received due to engagement in specific industries and trades encouraged and supported by the State (obtained by national policies and regulations) | Yes | No | 1,747,200.00 | Related to income | |
| 2018 Top Ten Merit Enterprise (Excellent Entrepreneur) Award | Economic and Information Bureau of Fuyang District, Hangzhou | Reward | Subsidies received due to engagement in specific industries and trades encouraged and supported by the State (obtained by national policies and regulations) | Yes | No | 200,000.00 | Related to income | |
| The 2nd batch of cross-border E-commerce support funds in 2018 | Finance Bureau of Binjiang District, Hangzhou | Subsidy | Subsidies received due to engagement in specific industries and trades encouraged and supported by the State | Yes | No | 150,000.00 | Related to income |
| (obtained by national policies and regulations) | ||||||||
| Employment and entrepreneurship subsidies | Hangzhou Employment Management Service Bureau | Subsidy | Subsidies received due to engagement in specific industries and trades encouraged and supported by the State (obtained by national policies and regulations) | Yes | No | 6,600.00 | Related to income | |
| Subsidy for the elimination of old vehicles in Hangzhou | Hangzhou Finance Bureau | Subsidy | Subsidies obtained due to local support policies such as investment promotion by local governments | Yes | No | 16,000.00 | 14,500.00 | Related to income |
| High-tech enterprise subsidies | Finance Bureau of Binjiang District, Hangzhou | Subsidy | Subsidies received due to engagement in specific industries and trades encouraged and supported by the State (obtained by national policies and regulations) | Yes | No | 800,000.00 | Related to income | |
| Other special subsidies | Finance Bureau of Binjiang District, Hangzhou | Subsidy | Subsidies received due to engagement in specific industries and trades encouraged and supported by the State (obtained by national policies and regulations) | Yes | No | 89,945.00 | Related to income | |
| Total | 877,665.31 | 5,018,245.00 |
54. Non-operating expenses
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence | Amount recorded into non-recurring profit and loss in current period |
| Donations | 9,139,267.32 | 42,664.36 | 9,139,267.32 |
| Gains and losses of non-current asset retirement | 819,686.61 | 356,248.11 | 819,686.61 |
| Including: Losses from disposal of fixed assets | 819,686.61 | 356,248.11 | 819,686.61 |
| Water conservancy fund | 7,139.14 | ||
| Others | 2,068,747.09 | 958,186.08 | 2,068,747.09 |
| Total | 12,034,840.16 | 1,357,098.55 | 12,027,701.02 |
55. Income tax expenses
(1) Income tax expenses table
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Current income tax expense | 140,980,035.67 | 175,953,366.51 |
| Deferred income tax expense | 28,579,381.06 | -12,780,000.54 |
| Total | 169,559,416.73 | 163,173,365.97 |
(2) Reconciliation of accounting profits and income tax expenses
Unit: RMB
| Item | This Period's Amount of Occurrence |
| Total Profit | 1,540,292,314.38 |
| Income tax expense calculated at statutory/applicable tax rate | 231,043,847.16 |
| Impact by applying different tax rates to subsidiaries | 24,153,934.18 |
| Impact of the non-deductible costs, expenses and losses | 8,239,763.49 |
| Impact of additional deduction of the research and development expenses | -149,798,564.53 |
| Others | 55,920,436.43 |
| Income tax expense | 169,559,416.73 |
56. Other comprehensive incomes
For details, please see Note 38 of this section, Other Comprehensive Income.
57. Items of cash flow statement
(1) Other cash receipts relating to operating activities
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of |
| Occurrence | ||
| Interest Income | 17,443,454.89 | 30,396,327.98 |
| Government subsidies | 78,834,593.67 | 105,134,372.52 |
| Tender and performance guarantee deposit | 28,166,941.19 | 43,658,924.94 |
| Others | 15,148,201.33 | 3,075,710.73 |
| Total | 139,593,191.08 | 182,265,336.17 |
(2) Other cash payments relating to operating activities
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Administrative expenses | 140,230,672.86 | 128,926,539.93 |
| Communication expense | 15,732,684.76 | 19,528,790.65 |
| Business entertainment | 71,195,825.63 | 79,513,825.83 |
| Traveling expense | 82,296,281.44 | 103,427,522.52 |
| Marketing expense | 77,354,370.79 | 65,465,197.54 |
| Transportation and vehicle expenses | 163,643,754.38 | 105,553,831.63 |
| Knowledge resource fee | 34,596,983.79 | 27,255,766.77 |
| Research and development consumption and external inspection fee | 20,323,161.02 | 22,909,208.47 |
| Taxation and insurance expense | 24,354,809.36 | 12,067,545.99 |
| Tender and performance guarantee deposit | 13,108,747.03 | 308,548,820.57 |
| Incomings and outgoings and advanced payments | 34,877,860.45 | 120,052,101.89 |
| Consumables and service fees | 152,728,533.48 | 157,130,890.63 |
| Others | 16,355,741.30 | 11,920,133.22 |
| Total | 846,799,426.29 | 1,162,300,175.64 |
(3) Other cash receipts relating to investing activities
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Cash received from investment in | 71,517,426.54 | 354,648.07 |
| financial derivatives | ||
| Receipt of loans from non-financial institutions | 3,493,496.46 | 3,697,744.32 |
| Receipt of earnest money for equity transfer | 60,000,000.00 | |
| Total | 135,010,923.00 | 4,052,392.39 |
(4) Other cash payments related to investing activities
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Cash paid for investment in financial derivatives | 72,348,580.48 | 26,458,528.22 |
| Disposal of the net cash from subsidiaries | 7,211,693.45 | |
| Total | 79,560,273.93 | 26,458,528.22 |
(5) Other cash receipts related to financing activities
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Security deposits recovered | 767,782,756.00 | 805,382,000.00 |
| Equity incentive subscription | 99,994,181.16 | |
| Total | 867,776,937.16 | 805,382,000.00 |
(6) Other cash payments related to financing activities
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Paid security deposits | 767,782,756.00 | 735,550,000.00 |
| Share repurchase expenses | 81,104,575.69 | |
| Total | 767,782,756.00 | 816,654,575.69 |
58. Supplementary information about the cash flow statement
(1) Supplementary information about the Cash Flow Statement
Unit: RMB
| Supplementary information | Amount of this period | Amount of Previous Period |
| 1． Reconciliation of net profit to cash flows from operational activities: | -- | -- |
| Net Profit | 1,370,732,897.65 | 1,204,662,193.99 |
| Add: provision for impairment of assets | 130,065,788.26 | 262,455,693.11 |
| Depreciation of fixed assets, oil and gas assets, productive biological assets | 131,141,539.18 | 117,068,423.66 |
| Amortization of Intangible Assets | 24,767,627.82 | 18,067,531.25 |
| Amortization of long-term prepaid expenses | 12,452,944.39 | 13,898,229.61 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (mark "-" for incomes) | -10,307.31 | -448,615.83 |
| Losses on scrapping of fixed assets (mark "-" for incomes) | 421,159.00 | 110,378.55 |
| Losses on fair value changes (mark "-" for incomes) | -17,009,143.17 | -45,449,188.16 |
| Financial expenses (mark "-" for incomes) | 15,327,107.25 | 79,518,151.71 |
| Losses on investment (mark "-" for incomes) | 32,178,746.19 | 5,691,002.29 |
| Decrease on deferred income tax assets (mark "-" for increases) | 1,505,192.29 | -17,043,861.48 |
| Increase on deferred income tax liabilities (mark "-" for decreases) | 1,938,115.51 | 4,084,960.87 |
| Decrease on inventories (mark "-" for increases) | -675,761,590.32 | -324,164,744.44 |
| Decrease on operational receivables (mark "-" for increases) | 1,756,139,392.57 | -1,132,688,857.07 |
| Increase on operational payables (mark "-" for decreases) | -2,965,863,025.21 | -1,146,875,248.26 |
| Others | 75,045,591.95 | 90,646,857.32 |
| Net cash flow generated by operating activities | -106,927,963.95 | -870,467,092.88 |
| 2． Major investing and financing activities not involving cash receipts and payment: | -- | -- |
| 3． Net changes in cash and cash equivalents: | -- | -- |
| Closing balance of cash | 2,780,621,441.66 | 3,540,965,671.43 |
| Less: opening balance of cash | 2,734,185,976.41 | 3,690,994,031.05 |
| Add: closing balance of cash equivalents | 3,984,499.04 | |
| Less: opening balance of cash equivalents | 11,289,772.49 | |
| Net additions to balance of equivalents | 46,435,465.25 | -157,333,633.07 |
(2) Net cash received from disposal of subsidiaries in this period
Unit: RMB
| Amount | |
| Cash or cash equivalents received from disposal of subsidiaries in this period | 5,100,000.00 |
| Including: | -- |
| South-North United Information Technology Co., Ltd. | 5,100,000.00 |
| Less: cash and cash equivalents held by the subsidiary on the day when it loses control | 12,311,693.45 |
| Including: | -- |
| South-North United Information Technology Co., Ltd. | 12,311,693.45 |
| Including: | -- |
| Net cash from disposal of subsidiaries | -7,211,693.45 |
(3) Composition of cash and cash equivalents
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Ⅰ. Cash | 2,780,621,441.66 | 2,734,185,976.41 |
| Including: cash on hand | 25,886.50 | 117,289.25 |
| Bank deposit for payment at any time | 2,744,392,979.44 | 2,586,995,843.27 |
| Other monetary capital for payment at any time | 36,202,575.72 | 147,072,843.89 |
| Ⅲ. Closing balance of cash and cash equivalents | 2,780,621,441.66 | 2,734,185,976.41 |
59. Notes to items in the statement of stockholders equity
60. Assets with restricted ownership or use rights
Unit: RMB
| Item | Book value at the end of the period | Cause of restrictions |
| Cash and Bank Balances | 345,896,141.39 | Deposit for Documentary Loan, Guarantee Deposit |
| Receivables Financing | 608,093,569.33 | Pledges used to issue bank acceptance bills |
| Long-term Receivables | 216,551,165.91 | Pledges used for bank loans |
| Non-current Assets Due within 1 Year | 29,381,785.35 | Pledges used for bank loans |
| Trading Financial Assets | 100,000,000.00 | Pledges used to issue domestic LoCs |
| Total | 1,299,922,661.98 | -- |
61. Monetary items in foreign currencies
(1) Monetary items in foreign currencies
Unit: RMB
| Item | Closing balance in foreign currencies | Exchange rate for conversion | Closing Balance Converted into RMB |
| Cash and Bank Balances | -- | -- | |
| Including: USD | 135,136,231.64 | 7.0795 | 956,696,951.90 |
| EUR | 23,053,265.44 | 7.9610 | 183,527,046.17 |
| HKD | 19,734,915.71 | 0.9134 | 18,026,661.41 |
| ZAR | 147,621,266.50 | 0.4101 | 60,545,183.54 |
| MXN | 161,604,708.47 | 0.3070 | 49,620,703.90 |
| GBP | 5,047,648.72 | 8.7144 | 43,987,230.01 |
| Total amount of other currencies | 172,432,042.89 |
| Accounts receivable | -- | -- | |
| Including: USD | 353,349,597.11 | 7.0795 | 2,501,538,472.77 |
| EUR | 47,986,878.02 | 7.9610 | 382,023,535.92 |
| HKD | 0.9134 | ||
| PLN | 43,602,266.67 | 1.7877 | 77,948,882.98 |
| AED | 34,975,877.93 | 1.9275 | 67,414,282.28 |
| MXN | 205,550,622.53 | 0.3070 | 63,114,290.88 |
| Total amount of other currencies | 184,169,769.95 | ||
| Long-term loan | -- | -- | |
| Including: USD | |||
| EUR | |||
| HKD | |||
| Short-term loan | -- | ||
| Including: USD | 9,373,214.11 | 7.0795 | 66,357,669.29 |
| Accounts Payable | |||
| Including: USD | 91,715,567.99 | 7.0795 | 649,300,363.59 |
| MXN | 28,295,728.52 | 0.3070 | 8,688,199.62 |
| EUR | 684,707.72 | 7.9610 | 5,450,958.16 |
| INR | 15,097,168.72 | 0.0938 | 1,415,540.77 |
| BRL | 780,864.03 | 1.3101 | 1,023,026.24 |
| GBP | 108,635.94 | 8.7144 | 946,697.04 |
| Total amount of other currencies | 2,022,749.36 |
(2) Notes on overseas business entities, including that for the important overseas businessentities, the overseas main premises, functional currency and selection basis shall be disclosed.If there are changes on its functional currency, the causes for the changes shall be disclosed aswell.
√ Applicable □ Not applicable
Since the overseas business entity of the Company, Dahua Technology (HK) Limited, does not have autonomy over itsbusiness activities, which are the extension of the business activities of the Company, constituting the business activitiesof the Company, RMB shall be used as its functional currency, and for the rest of the overseas entities, local currenciesshall be used as its functional currency.
62. Government subsidies
(1) Basic information about government subsidies
Unit: RMB
| Types | Amount | Items reported | Amount taken to current P&L |
| Refund of VAT excess tax | 373,851,655.76 | Other Incomes | 373,851,655.76 |
| Core Electronics, High-End General-Purpose Chips and Basic Software Products special fund | 19,708,200.00 | Other Incomes | 19,708,200.00 |
| Financial subsidy for science and technology R&D plan projects | 11,546,479.00 | Other Incomes | 11,546,479.00 |
| 2018 "Kunpeng Plan" Award | 8,000,000.00 | Other Incomes | 8,000,000.00 |
| Refunds of employment promotion social security | 7,629,087.00 | Other Incomes | 7,629,087.00 |
| Special funds for service development | 6,513,200.00 | Other Incomes | 6,513,200.00 |
| International software city construction project in 2019 | 5,000,000.00 | Other Incomes | 5,000,000.00 |
| Special subsidy for development of integrated circuit industry | 4,089,100.00 | Other Incomes | 4,089,100.00 |
| Patent subsidies | 3,258,818.00 | Other Incomes | 3,258,818.00 |
| Return of personal income tax commission | 3,190,927.48 | Other Incomes | 3,190,927.48 |
| Subsidies for incremental export of foreign trade | 2,787,600.00 | Other Incomes | 2,787,600.00 |
| Award to Individual Champion Demonstration Enterprise in Manufacturing Industry | 2,000,000.00 | Other Incomes | 2,000,000.00 |
| Other special subsidies | 1,090,100.00 | Other Incomes | 1,090,100.00 |
| Rent subsidy | 1,692,404.00 | Other Incomes | 1,692,404.00 |
| Intellectual property incentive fund | 1,053,000.00 | Other Incomes | 1,053,000.00 |
| Award to National high-tech enterprise | 700,000.00 | Other Incomes | 700,000.00 |
| Government subsidies during the pandemic | 614,510.30 | Other Incomes | 614,510.30 |
| National Technological Invention Award | 500,000.00 | Other Incomes | 500,000.00 |
| Hangzhou Service Trade Demonstration Enterprise and Demonstration Park | 500,000.00 | Other Incomes | 500,000.00 |
| Export credit insurance premium subsidies | 500,000.00 | Other Incomes | 500,000.00 |
| Incentive Fund for Quality Brand Standard | 300,000.00 | Other Incomes | 300,000.00 |
| Stable post subsidy | 277,936.69 | Other Incomes | 277,936.69 |
| Value-added tax deduction | 163,127.65 | Other Incomes | 163,127.65 |
| R&D subsidies for small and micro enterprises | 145,000.00 | Other Incomes | 145,000.00 |
| Subsidies for enterprise practical training | 16,391.56 | Other Incomes | 16,391.56 |
| Special award for industrial park projects | 55,520,909.92 | Deferred Income | 1,586,311.74 |
| Phase I investment financial incentive fund for security video surveillance product production base project | 27,455,000.00 | Deferred Income | |
| Funding for manufacturing enterprise technological transformation projects | 8,281,463.97 | Deferred Income | 1,832,472.06 |
| Subsidies for overseas employee retention during the pandemic | 511,665.31 | Non-operating Revenue | 511,665.31 |
| 2019 Top Ten Meritorious Enterprise (Excellent Entrepreneur) Award | 300,000.00 | Non-operating Revenue | 300,000.00 |
| Wuzhou City allocates special funds to actively support and cultivate eligible enterprises | 50,000.00 | Non-operating Revenue | 50,000.00 |
| Subsidy for the elimination of old vehicles in Hangzhou | 16,000.00 | Non-operating Revenue | 16,000.00 |
(2) Repayment of government subsidies
□ Applicable √ Not applicable
VIII. Changes in the Scope of Consolidation
1. Disposal of subsidiaries
Is there any situation where disposal of investment in subsidiaries in a single transaction causes loss of control
√ Yes □ No
Unit: RMB
| Name of Subsidiaries | Equity disposal price | Equity disposal ratio | Methods of equity disposal | Time-point of loss of control | Basis for determining the time-point of loss of control | At the level of consolidated financial statement corresponding to the disposal price and the disposal of investment, the | Percentage of remaining equity on the date of loss of control | Book value of remaining equity on the date of loss of control | Fair value of remaining equity on the date of loss of control | Gains or losses from re-measurement of remaining equity at fair value | The determination method and main assumptions of the fair value of remaining equity on the date of loss of control | The amount of other comprehensive incomes related to the equity investment of the original subsidiary transferred into |
| difference in the net asset share of the subsidiary shall be gained | investment profits and losses | |||||||||||
| South-North United Information Technology Co., Ltd. | 5,100,000.00 | 51.00% | Equity transfer | April 1, 2020 | Signed Equity Transfer Agreement and completed the delivery of property rights | 4,114,893.43 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 |
Is there any situation where disposal of investment in subsidiaries is achieved through multiple transactions in variousstages, causing loss of control in this period
□ Yes √ No
2. Changes in the scope of combination for other reasons
Explanations on the changes in the scope of consolidation caused by other reasons (for example, newly establishedsubsidiaries, subsidiaries clearing, etc.) and relevant information:
(1) In the period, the Company invested to establish 11 Chinese subsidiaries, namely, Zhejiang Dahua StorageTechnology Co. Ltd., Zhejiang Dahua Automobile Technology Co., Ltd., Chengdu Dahua Zhilian Information TechnologyCo., Ltd., Chengdu Dahua Zhi'an Information Technology Co., Ltd., Chengdu Dahua Zhishu Information Technology Co.,Ltd., Chengdu Zhichuang Clouds Technology Co., Ltd., Chengdu Huishan Intelligent Network Co., Ltd., Zhejiang HuakongSoftware Co., Ltd., Hangzhou Huacheng Software Co., Ltd., and Guizhou Dahua Information Technology Co., Ltd., and 2overseas subsidiaries, namely, Dahua Technology Israel Representative Ltd and Dahua Technology Israel Ltd, all of whichare incorporated into the scope of consolidation from the date of establishment.
(2) The subsidiary Guizhou Dahua Intelligent Technology Co., Ltd. was cancelled in the current period and will no longerbe included in the scope of consolidation since the date of cancellation.
IX. Equity in Other Entities
1. Equity in Subsidiaries
(1) Composition of the enterprise group
| Name of Subsidiaries | Main Place of Business | Registered Address | Business Nature | Shareholding Percentage | Acquisition Method | |
| Direct | Indirect | |||||
| Dahua System Engineering | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 100.00% | Establishment | |
| Dahua Vision Technology | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 100.00% | Establishment | |
| Dahua Security Network | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 51.00% | Establishment | |
| Dahua Ju'an | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 51.00% | Establishment | |
| Guangxi Dahua Information | Qingxiu District, Nanning | Qingxiu District, Nanning | Electronics and information | 100.00% | Establishment | |
| Dahua Security | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Service | 100.00% | Establishment | |
| Guangxi Security | Qingxiu District, Nanning | Qingxiu District, Nanning | Service | 100.00% | Establishment | |
| Huatu Microchip | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 100.00% | Establishment | |
| Hangzhou Xiaohua | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 45.00% (Note 1) | Establishment | |
| Dahua Zhilian | Fuyang District, Hangzhou | Fuyang District, Hangzhou | Electronics and information | 90.09% (Note 2) | Establishment | |
| Tecomore Technology | West Lake District, Hangzhou | West Lake District, Hangzhou | Electronics and information | 51.00% | Business combination not under common control | |
| Dahua investment management | Fuyang District, Hangzhou | Fuyang District, Hangzhou | Investment & investment management | 75.00% | Establishment | |
| Guangxi Zhicheng | Youjiang District, Baise | Youjiang District, Baise | Electronics and information | 65.00% | Establishment | |
| Hangzhou Huacheng | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 51.00% | Establishment | |
| Xinjiang Information | High-tech Zone, Shihezi | High-tech Zone, Shihezi | Electronics and information | 92.00% | Establishment | |
| HuaRay Technology | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 51.00% | Establishment | |
| Fuyang Hua'ao | Fuyang District, Hangzhou | Fuyang District, Hangzhou | Electronics and information | 51.00% | Establishment | |
| Huafei Intelligent | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 45.50% (Note 3) | Establishment | |
| Huachuang Vision | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 51.00% | Establishment | |
| Guizhou Huayi | Guanshanhu District, Guiyang | Guanshanhu District, Guiyang | Electronics and information | 45.00% (Note 4) | Establishment | |
| Xinjiang Dahua Information | Shihezi, Xinjiang | Shihezi, Xinjiang | Electronics and information | 100.00% | Establishment | |
| Xinjiang Intelligence | Changji, Changji Prefecture, Xinjiang | Changji, Changji Prefecture, Xinjiang | Electronics and information | 100.00% | Establishment | |
| Xinjiang Zhihe | Hetian County, Hetian, Xinjiang | Hetian County, Hetian, Xinjiang | Electronics and information | 97.00% | Establishment |
| Guangxi Huacheng | Wuzhou, Guangxi | Wuzhou, Guangxi | Electronics and information | 90.00% | Establishment | |
| Meitan Dahua Technology | Zunyi, Guizhou | Zunyi, Guizhou | Electronics and information | 100.00% | Establishment | |
| Inner Mongolia Zhimeng | New District, Bai County, Chahar Right Wing Back Banner | New District, Bai County, Chahar Right Wing Back Banner | Electronics and information | 95.00% | Establishment | |
| Xinjiang Zhitian | Hetian County, Hetian, Xinjiang | Hetian County, Hetian, Xinjiang | Electronics and information | 97.00% | Establishment | |
| Xinjiang Xinzhi | Shache County, Kashgar District, Xinjiang | Shache County, Kashgar District, Xinjiang | Electronics and information | 100.00% | Establishment | |
| Xinjiang Huayue | Kashgar, Xinjiang | Kashgar, Xinjiang | Electronics and information | 100.00% | Establishment | |
| Tianjin Dahua | Tianjin Binhai New Area | Tianjin Binhai New Area | Electronics and information | 65.00% | Establishment | |
| Dahua Zhilong | Shuangpai County, Yongzhou City | Shuangpai County, Yongzhou City | Electronics and information | 90.00% | Establishment | |
| Vision Technology | Fuyang District, Hangzhou City, Zhejiang Province | Fuyang District, Hangzhou City, Zhejiang Province | Electronics and information | 100.00% | Establishment | |
| Huaxiao Technology | Fuyang District, Hangzhou City, Zhejiang Province | Fuyang District, Hangzhou City, Zhejiang Province | Electronics and information | 51.00% | Establishment | |
| Xi'an Dahua | Xi'an City, Shaanxi Province | Xi'an City, Shaanxi Province | Electronics and information | 100.00% | Establishment | |
| Wuxi Ruipin | Wuxi City | Wuxi City | Electronics and information | 51.00% | Establishment |
| Dahua Robot | Xiaoshan District, Hangzhou City, Zhejiang Province | Xiaoshan District, Hangzhou City, Zhejiang Province | Electronics and information | 51.00% | Establishment | |
| Beijing Huayue | Xicheng District, Beijing | Xicheng District, Beijing | Electronics and information | 100.00% | Establishment | |
| Shanghai Huashang | Putuo District, Shanghai | Putuo District, Shanghai | Electronics and information | 100.00% | Establishment | |
| Dahua Jinzhi | Wucheng District, Jinhua City, Zhejiang Province | Wucheng District, Jinhua City, Zhejiang Province | Electronics and information | 100.00% | Establishment | |
| Dahua Guangxun | Chengdu High-tech Zone | Chengdu High-tech Zone | Electronics and information | 100.00% | Business combination not under common control | |
| Huajuan Technology | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 100.00% | Establishment | |
| Zhoushan Operation | Zhoushan City, Zhejiang Province | Zhoushan City, Zhejiang Province | Electronics and information | 59.00% | Establishment | |
| Yunnan Zhili | Lijiang City, Yunnan Province | Lijiang City, Yunnan Province | Electronics and information | 90.00% | Establishment | |
| Guangxi Dahua Technology | Liuzhou City, Guangxi Zhuang Autonomous Region | Liuzhou City, Guangxi Zhuang Autonomous Region | Electronics and information | 100.00% | Establishment | |
| Dahua Storage | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 51.00% | Establishment | |
| Dahua Automobile | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 51.00% | Establishment | |
| Chengdu Zhilian | Longquanyi District, Chengdu | Longquanyi District, Chengdu | Electronics and information | 100.00% | Establishment |
| Dahua Zhian | Longquanyi District, Chengdu | Longquanyi District, Chengdu | Electronics and information | 100.00% | Establishment | |
| Chengdu Zhishu | Longquanyi District, Chengdu | Longquanyi District, Chengdu | Electronics and information | 100.00% | Establishment | |
| Chengdu Zhichuang | Longquanyi District, Chengdu | Longquanyi District, Chengdu | Electronics and information | 100.00% | Establishment | |
| Chengdu Smart | Dayi County, Chengdu City | Dayi County, Chengdu City | Electronics and information | 90.00% | Establishment | |
| Huakong Software | Wucheng District, Jinhua City | Wucheng District, Jinhua City | Electronics and information | 100.00% | Establishment | |
| Xinsheng Electronic | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 100.00% | Establishment | |
| Huacheng Software | Binjiang District, Hangzhou | Binjiang District, Hangzhou | Electronics and information | 100.00% | Establishment | |
| Guizhou Dahua | Nanming District, Guiyang City | Nanming District, Guiyang City | Electronics and information | 100.00% | Establishment | |
| Dahua Hong Kong | Hong Kong | Hong Kong | Electronics and information | 100.00% | Establishment | |
| Dahua USA | USA | USA | Electronics and information | 100.00% | Establishment | |
| Dahua Europe | Netherlands | Netherlands | Electronics and information | 100.00% | Establishment | |
| Dahua Middle East | United Arab Emirates | United Arab Emirates | Electronics and information | 100.00% | Establishment | |
| Dahua Mexico | Mexico | Mexico | Electronics and information | 100.00% | Establishment | |
| Dahua Chile | Chile | Chile | Electronics and information | 100.00% | Establishment | |
| Dahua Colombia | Columbia | Columbia | Electronics and information | 100.00% | Establishment | |
| Dahua Australia | Australia | Australia | Electronics and information | 100.00% | Establishment |
| Dahua Singapore | Singapore | Singapore | Electronics and information | 100.00% | Establishment | |
| Dahua South Africa | South Africa | South Africa | Electronics and information | 100.00% | Establishment | |
| Dahua Peru | Peru | Peru | Electronics and information | 100.00% | Establishment | |
| Dahua Brazil | Brazil | Brazil | Electronics and information | 100.00% | Establishment | |
| Dahua Russia | Russia | Russia | Electronics and information | 100.00% | Establishment | |
| Dahua Canada | Canada | Canada | Electronics and information | 100.00% | Establishment | |
| Dahua Panama | Panama | Panama | Electronics and information | 100.00% | Establishment | |
| Dahua Hungary | Hungary | Hungary | Electronics and information | 100.00% | Establishment | |
| Dahua Poland | Poland | Poland | Electronics and information | 100.00% | Establishment | |
| Dahua Tunisia | Tunisia | Tunisia | Electronics and information | 100.00% | Establishment | |
| Dahua Kenya | Kenya | Kenya | Electronics and information | 100.00% | Establishment | |
| Dahua UK | UK | UK | Electronics and information | 100.00% | Establishment | |
| Dahua Bulgaria | Bulgaria | Bulgaria | Electronics and information | 100.00% | Establishment | |
| Dahua Serbia | Serbia | Serbia | Electronics and information | 100.00% | Establishment | |
| Dahua Germany | Germany | Germany | Electronics and information | 100.00% | Establishment | |
| Dahua Malaysia | Malaysia | Malaysia | Electronics and information | 100.00% | Establishment | |
| Dahua Korea | South Korea | South Korea | Electronics and information | 100.00% | Establishment | |
| Dahua Indonesia | Indonesia | Indonesia | Electronics and information | 100.00% | Establishment | |
| Dahua India | India | India | Electronics and information | 100.00% | Establishment |
| Dahua Turkey | Turkey | Turkey | Electronics and information | 100.00% | Establishment | |
| Dahua Czech | Czech Republic | Czech Republic | Electronics and information | 100.00% | Establishment | |
| Dahua Argentina | Argentina | Argentina | Electronics and information | 100.00% | Establishment | |
| Dahua Spain | Spain | Spain | Electronics and information | 100.00% | Establishment | |
| Dahua Kazakhstan | Kazakhstan | Kazakhstan | Electronics and information | 100.00% | Establishment | |
| Dahua Denmark | Denmark | Denmark | Electronics and information | 100.00% | Establishment | |
| Dahua France | France | France | Electronics and information | 100.00% | Establishment | |
| Dahua Lorex (US) Corporation | USA | USA | Electronics and information | 100.00% | Establishment | |
| Dahua Technology Holdings | Hong Kong | Hong Kong | Electronics and information | 100.00% | Establishment | |
| Dahua Morocco | Morocco | Morocco | Electronics and information | 100.00% | Establishment | |
| Dahua Technology Italy | Italy | Italy | Electronics and information | 100.00% | Business combination not under common control | |
| Dahua Uzbekistan | Uzbekistan | Uzbekistan | Electronics and information | 100.00% | Establishment | |
| Dahua Netherlands | Netherlands | Netherlands | Electronics and information | 100.00% | Establishment | |
| Dahua Sri Lanka | Sri Lanka | Sri Lanka | Electronics and information | 100.00% | Establishment | |
| Dahua Lorex (Canada) Corporation | Canada | Canada | Electronics and information | 100.00% | Business combination not under common control | |
| Dahua Pakistan | Pakistan | Pakistan | Electronics and information | 100.00% | Establishment |
| Dahua New Zealand | New Zealand | New Zealand | Electronics and information | 100.00% | Establishment | |
| Dahua Thailand | Thailand | Thailand | Electronics and information | 99.98% | Establishment | |
| Dahua Romania | Romania | Romania | Electronics and information | 100.00% | Establishment | |
| Dahua Nigeria | Nigeria | Nigeria | Electronics and information | 100.00% | Establishment | |
| Dahua Israel | Israel | Israel | Electronics and information | 100.00% | Establishment |
Explanations on the fact that the proportion of the shares held by a subsidiary differs from that of voting rights:
(1) The Company directly holds 45% equity in Hangzhou Xiaohua Technology Co., Ltd., and as agreed upon, ZhejiangHuashi Investment Management Co., Ltd. grants its voting rights of 12% to the Company. The Company effectively holds57% of the voting rights in Hangzhou Xiaohua Technology Co., Ltd., which constitutes working control so as to incorporateit into the scope of consolidation.
(2) Based on the industrial and commercial registration data, the CDB Development Fund holds equity in the Company.According to the cooperation agreement between the Company and CDB Development Fund, CDB Development Fundshall not appoint senior management personnel, such as directors and supervisors, to Dahua Zhilian; regarding itsinvestment, the Company shall pay an annual investment profit of 1.2% to CDB Development Fund through dividends,repurchase premiums, etc. In addition, the Company shall redeem the CDB Development Fund's equity in Dahua Zhilianperiod by period from 2022 to 2024, using its amount of investment as other non-current liabilities. The Companyeffectively holds 100% voting rights and equity in Dahua Zhilian.
(3) The Company directly holds 45.5% equity in Zhejiang Huafei Intelligence Technology Co., Ltd., and as agreed upon,Zhejiang Huashi Investment Management Co., Ltd. grants its voting rights of 16% to the Company. The Companyeffectively holds 61.50% of the voting rights in Zhejiang Huafei Intelligence Technology Co., Ltd., which constitutesworking control so as to incorporate it into the scope of consolidation.
(4) The Company directly holds 45% equity in Guizhou Huayi Vision Technology Co., Ltd., and as agreed upon, GuizhouYiyun Investment Management Co., Ltd. grants its voting rights of 6% to the Company. The Company effectively holds 51%of the voting rights in Guizhou Huayi Vision Technology Co., Ltd., which constitutes working control so as to incorporate itinto the scope of consolidation.
2. Equity in joint venture arrangements or affiliates
(1) Financial summary of non-essential joint ventures and affiliates
Unit: RMB
| Closing balance / accrual of current period | Opening balance / accrual of previous period | |
| Joint ventures: | -- | -- |
| The total count of the following items based on the shareholding ratios | -- | -- |
| Affiliates: | -- | -- |
| Total book value of investments | 499,277,297.72 | 490,731,236.85 |
| The total count of the following items based on the shareholding ratios | -- | -- |
| --Net profit | -44,335,467.10 | -548,623.93 |
| --Other comprehensive income | -63,899.99 | -32,566,199.05 |
| --Total comprehensive income | -44,399,367.09 | -33,114,822.98 |
X. Risks Relating to Financial InstrumentsIn the business operation, the Company is facing with various financial risks: credit risk, market risk and liquidity risk.The overall objective of the Company's risk management is to formulate risk management policies that can minimizerisks without affecting the Company's competitiveness and adaptability to changes too much.
(I) Credit riskThe credit risk refers to the risk of one party of a financial instrument suffering financial losses due to that the otherparty fails to perform its obligations.. The Company is mainly facing with the customer credit risk arising from sales onaccount. Before signing a new contract, the Company will assess the new customer's credit risk, including external creditrating and the credibility letter from a bank under some circumstances (if such information is available). The Company hasset a credit limit for sales on account for each customer. Such limit shall be the maximum amount with no additionalapproval needed.The Company ensures that the overall credit risk is within the controllable range through quarterly monitoring of creditratings of existing customers, and monthly review of aging analysis on accounts receivable. When monitoring customers'credit risk, the Company groups them according to their credit characteristics. Customers rated as "high risk" will beplaced on the restricted customer list. The Company can provide them with O/A in the future period only when additionalapproval is obtained. Otherwise they must make relevant payment in advance.For overseas customers, the Company mainly uses wire transfer as a payment method. According to the creditevaluation of each customer, the Company gives different credit lines and credit account periods, and agrees on thepayment method and account period in the commodity procurement contract between the two parties. After the sales ofproducts, the Company has a dedicated person responsible for tracking, reconciliation, and payment reminding. Inaddition, the Company introduced export credit insurance to ensure that the return risk from overseas customers is withincontrollable range.(II) Market risk
The market risk of financial instruments refers to the risk of fluctuation at fair value of financial instruments or futurecash flows with the change of market prices, including exchange rate risks and interest rate risks.
1. Interest rate risk
The interest rate risk refers to the risk in which the fair value or future cash flow of financial instruments changes dueto the change of market interest rate. The interest rate risk faced with by the Company is mainly from bank loans. TheCompany's assets and liabilities relating to interest rate are respectively bank deposits and short-term loans, whoseinterest rate risk is low.
2. Exchange rate risk
The exchange rate risk refers to the risk in which the fair value or future cash flow of financial instruments changesdue to the change of foreign exchange rate. The Company will try its best to match the revenues with the expenses inforeign currency, to lower the exchange rate risk. In addition, the Company may also sign forward foreign exchange
contracts or currency swap contracts to avoid exchange rate risks.The exchange rate risk faced with by the Company is mainly from financial assets and liabilities in USD. The amountsof assets and liabilities in foreign currencies and converted into RMB are listed as below:
| Item | Balance at the End of the Period | Balance at the Start of the Period | ||||
| USD | Other foreign currencies | Total | USD | Other foreign currencies | Total | |
| Accounts receivable | 2,501,538,472.77 | 774,670,762.01 | 3,276,209,234.78 | 3,344,560,887.12 | 869,863,405.15 | 4,214,424,292.27 |
| Accounts Payable | 649,300,363.59 | 19,547,171.19 | 668,847,534.78 | 1,037,081,038.74 | 26,243,892.41 | 1,063,324,931.15 |
| Total | 3,150,838,836.36 | 794,217,933.20 | 3,945,056,769.56 | 4,381,641,925.86 | 896,107,297.56 | 5,277,749,223.42 |
(III) Liquidity risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligation of settlement by cash orother financial assets. The Company's policy is to ensure that there is sufficient cash to repay the liabilities due. Theliquidity risk is under the concentrated control of the Company's Financial Department. Through monitoring the balance ofcash and securities cashable at any time and rolling forecasting the cash flow in the next 12 months, the FinancialDepartment ensures that the Company has sufficient funds to repay its debts under all reasonable predictions.The financial liabilities of the Company are listed as follows based on the undiscounted contractual cash flow:
| Item | Balance at the End of the Period | ||
| Within 1 year | 1 years or above | Total | |
| Short-term loan | 1,540,344,169.29 | 1,540,344,169.29 | |
| Notes Payable | 2,158,234,712.01 | 2,158,234,712.01 | |
| Accounts Payable | 3,854,639,329.00 | 3,854,639,329.00 | |
| Other Payables | 1,045,327,489.78 | 1,045,327,489.78 | |
| Non-current Liabilities Due within 1 Year | 26,381,963.91 | 26,381,963.91 | |
| Long-term loan | 528,500,000.00 | 528,500,000.00 |
| Total | 8,624,927,663.99 | 528,500,000.00 | 9,153,427,663.99 |
| Item | Balance at the Start of the Period | ||
| Within 1 year | 1 years or above | Total | |
| Short-term loan | 400,323,888.90 | 400,323,888.90 | |
| Notes Payable | 3,807,292,795.07 | 3,807,292,795.07 | |
| Accounts Payable | 4,290,253,501.81 | 4,290,253,501.81 | |
| Other Payables | 1,163,915,713.24 | 1,163,915,713.24 | |
| Non-current Liabilities Due within 1 Year | 26,993,755.57 | 26,993,755.57 | |
| Long-term loan | 153,500,000.00 | 153,500,000.00 | |
| Total | 9,688,779,654.59 | 153,500,000.00 | 9,842,279,654.59 |
XI. Disclosure of Fair Values
1. Fair values of the assets and liabilities at the end of the period
Unit: RMB
| Item | Fair values at period-end | |||
| First level measurement at fair value | Second level measurement at fair value | Third level measurement at fair value | Total | |
| I. Constant measurement at fair value | -- | -- | -- | -- |
| (1) Trading financial assets | 902,431,780.82 | 902,431,780.82 | ||
| 1. The financial assets measured at fair value and whose changes are included in current profit and loss | 902,431,780.82 | 902,431,780.82 | ||
| (1) Derivative financial assets | 902,431,780.82 | 902,431,780.82 | ||
| (2) Receivables financing | 670,667,363.91 | 670,667,363.91 | ||
| (3) Other non-current financial assets | 189,937,851.78 | 189,937,851.78 | ||
| Total assets constantly measured at fair value | 1,573,099,144.73 | 189,937,851.78 | 1,763,036,996.51 | |
| II. Non-constant measurement at fair values | -- | -- | -- | -- |
2. For the continuous and non-continuous second-level fair value measurement items, thevaluation techniques adopted and the qualitative and quantitative information of importantparametersFor structured deposits, the profit and loss from changes in fair value are determined by pegging interest rates to foreignexchange options;Due to the short remaining term of the receivables financing, the book value is close to the fair value, and the nominalamount is used as the fair value.
3. For the continuous and non-continuous third-level fair value measurement items, the valuationtechniques adopted and the qualitative and quantitative information of important parametersEvaluate the value and net book assets based on the income method and asset-based method.
4. The fair value of financial assets and financial liabilities not measured at fair valueThe fair value of financial assets and financial liabilities measured by the Company at amortized cost is equivalent to thebook value.XII. Related Parties and Related-party Transactions
1. The Company's Parent Company
| Name of parent company | Registered Address | Business Nature | Registered Capital | Shareholding ratio of the parent company | Proportion of voting rights of the parent company |
| Fu Liquan | 34.09% | 34.09% | |||
| Chen Ailing | 2.37% | 2.37% |
The final controllers of the Company are Mr. Fu Liquan and Ms. Chen Ailing.
2. Information about the Company's subsidiaries
For details of subsidiaries of the Company, see Note "IX. Equities in other entities".
3. Information about the Company's joint ventures and affiliates
For details of significant joint ventures and associates of the Company, see Note "IX. Equities in other entities".Here are the information about other joint ventures and affiliates that have related-party transactions with the Company inthe current period or have balance from related-party transactions with the Company in the previous period:
| Names of joint ventures and affiliates | Relationship with the Company |
| Intelbras S.A. | Affiliate |
| Guangdong Dahua Zhishi Technology Co., Ltd. | Affiliate |
| Lishui Dahua Intelligent Technology Co., Ltd. | Affiliate |
| Leapmotor Automobile Co., Ltd. | Associates, and subsidiaries controlled by actual controllers |
| Ningbo Dahua Anbang Security Services Co., Ltd. | Affiliate |
| Ningbo Dahua-ZhiAn IOT Technology Co., Ltd. | Subsidiary of the affiliate |
| Shaoxing Dahua Security Services Co., Ltd. | Affiliate |
| Shenzhen Conwin Security Electronics Co., Ltd. (Note 1) | Affiliate |
| Taizhou Dahua Security Services Co., Ltd. | Affiliate |
| Wenzhou Dahua Security Services Co., Ltd. | Affiliate |
| Zhejiang Dahua Zhian Internet of Things Technology Co., Ltd. | Affiliate |
| Zhejiang Leapmotor Technology Co., Ltd. | Affiliate, and enterprise controlled by the Company's actual controller |
| Zhejiang Leapmotor Automobile Marketing Service Co., Ltd. | Associates, and subsidiaries controlled by actual controllers |
| China Standard Intelligent Security Technology Co., Ltd. | Affiliate |
| Ruicity Digital Technology Co., Ltd. | Affiliate |
| Zhoushan Dahua Security Service Co., Ltd. | Subsidiary of the affiliate |
| Zhoushan Dahua Technology Co., Ltd. | Affiliate |
Other notes:
Note 1: Shenzhen Conwin Security Electronics Co., Ltd. is a jointly operated enterprise of the Company, In June 2020, theCompany has transferred the equity, and ended the relationship with Shenzhen Conwin Security Electronics Co., Ltd.
4. Information about other related parties
| Names of other related parties | Relationship between the Company and other related parties |
| Hangzhou Nuojia Technology Co., Ltd. | Enterprise controlled by the senior manager of the Company |
| Hangzhou Xunwei Robotics Technology Co., Ltd. | Enterprise significantly influenced by the senior manager of the Company |
| Hangzhou Xintu Technology Co., Ltd. | Enterprise controlled by the senior manager of the Company |
| Ningbo Hualing Investment Management Partnership (Limited Partnership) | Enterprise controlled by the actual controller |
| Ningxia Shendun Security Services Co., Ltd. | Subsidiary of a company with shares held by the Company |
| Zhejiang Huanuokang Technology Co., Ltd. | Company controlled by the Company's actual controller |
| Zhejiang Lancable Technology Co., Ltd. | Enterprise controlled by the senior manager of the Company |
| Zhoushan Weixin Equity Investment Partnership (Limited Partnership) | Enterprise over which the actual controller has significant influence |
| Zhoushan Zhixin Equity Investment Partnership (Limited Partnership) | Enterprise controlled by the senior manager of the Company |
5. Information about related-party transactions
(1) Related-party transactions involving purchase and selling of merchandise and provision andacceptance of labor servicesMerchandise purchase and acceptance of labor services
Unit: RMB
| Related parties | Content of the related - party transaction | This Period's Amount of Occurrence | Approved transaction limit | Over the transaction limit or not | Previous Period's Amount of Occurrence |
| Zhejiang Leapmotor Technology Co., Ltd. | Purchase of materials | 258.26 | No | 375,334.00 | |
| Wenzhou Dahua Security Services Co., Ltd. | Acceptance of services | 2,031,266.17 | |||
| Leapmotor Automobile Co., Ltd. | Purchase of materials | 1,362,318.79 | No | ||
| Hangzhou Xunwei Robotics Technology Co., Ltd. | Purchase of materials | 3,271,015.27 | No | ||
| Hangzhou Nuojia Technology Co., Ltd. | Acceptance of services | 206,422.02 | No | ||
| Zhejiang Huanuokang Technology Co., Ltd. | Purchase of materials | 145,132.74 | No | ||
| Zhoushan Dahua Security Service Co., Ltd. | Acceptance of services | 1,020,944.24 | No |
Sales of merchandise and provision of services
Unit: RMB
| Related parties | Content of the related - party transaction | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Ningbo Dahua Anbang Security Services Co., Ltd. | Sales of merchandise | 74,075.23 | 73,619.96 |
| Lishui Dahua Intelligent Technology Co., Ltd. | Sales of merchandise | 188,679.25 | |
| Zhoushan Dahua Technology Co., Ltd. | Sales of merchandise | 12,183.18 | 13,747.79 |
| Wenzhou Dahua Security Services Co., Ltd. | Provision of services | 23,584.91 | |
| Zhejiang Leapmotor Technology Co., Ltd. | Sales of merchandise | 86,574.19 | 618,128.82 |
| Hangzhou Xintu Technology Co., Ltd. | Sell goods and provide services | 236,913.67 | 240,037.81 |
| Taizhou Dahua Security Services Co., Ltd. | Sales of merchandise | 56,206.89 | |
| Shenzhen Conwin Security Electronics CO., Ltd. | Sales of merchandise | 378,258.42 | 338,007.21 |
| Guangdong Dahua Zhishi Technology Co., Ltd. | Sales of merchandise | 4,684,747.26 | 3,806,217.57 |
| Zhejiang Dahua Zhian Internet of Things Technology Co., Ltd. | Sales of merchandise | 943,396.23 | |
| Intelbras S.A. | Sales of merchandise | 126,462,175.51 | |
| Hangzhou Xunwei Robotics Technology Co., Ltd. | Sales of merchandise | 14,159.28 | |
| Zhejiang Lancable Technology Co., Ltd. | Sales of merchandise | -56,034.48 | 1,024,715.92 |
| Hangzhou Nuojia Technology Co., Ltd. | Sell goods and provide services | 104,055.89 | 314,418.61 |
| Leapmotor Automobile Co., Ltd. | Sell goods and provide services | 1,514,174.51 | 1,859,072.29 |
| China Standard Intelligent Security Technology Co., Ltd. | Sales of merchandise | 62,220.38 | 1,790,782.38 |
| Zhejiang Huanuokang Technology Co., Ltd. | Sales of merchandise | 292,228.09 | 171,686.14 |
| Ruicity Digital Technology Co., Ltd. | Sell goods and provide services | 3,913,235.39 |
(2) Related leasing
The Company being the lessor:
Unit: RMB
| Name of the lessee | Type of the leased assets | Rental income confirmed in this period | Rental income confirmed in the previous period |
| Zhejiang Leapmotor Technology Co., Ltd. | Buildings and constructions | 344,155.74 | 330,514.26 |
| China Standard Intelligent Security Technology Co., Ltd. | Buildings and constructions | 74,697.48 | 94,999.87 |
(3) Related guarantee
The Company being the guarantor:
Unit: RMB
| Secured parties | Guarantee Amount | Starting date | Maturity date | Guarantee fulfilled completely or not |
| Zhejiang Dahua Vision Technology Co., Ltd. | 290,000,000.00 | June 6, 2016 | January 15, 2020 | Yes |
| Zhejiang Dahua Vision Technology Co., Ltd. | 240,000,000.00 | April 13, 2018 | April 12, 2020 | Yes |
| Zhejiang Dahua Vision Technology Co., Ltd. | 200,000,000.00 | January 3, 2019 | Three years after the maturity of the debts in the master contract | Yes |
| Zhejiang Dahua Vision Technology Co., Ltd. | 300,000,000.00 | January 17, 2019 | Three years after the maturity of the debts in the master contract | Yes |
| Zhejiang Dahua Vision Technology Co., Ltd. | 200,000,000.00 | March 21, 2019 | Three years after the maturity of the debts in the master contract | Yes |
| Zhejiang Dahua Vision Technology Co., Ltd. | 200,000,000.00 | April 18, 2019 | Three years after the maturity of the debts in the master contract | Yes |
| Zhejiang Dahua Vision Technology Co., Ltd. | 230,000,000.00 | May 13, 2019 | Three years after the maturity of the debts in the master contract | Yes |
| Zhejiang Dahua Vision Technology Co., Ltd. | 140,000,000.00 | September 26, 2019 | Three years after the maturity of the debts in the master contract | Yes |
| Zhejiang Dahua Vision Technology Co., Ltd. | 380,000,000.00 | August 30, 2019 | Two years after the maturity of the debts in the master contract | Yes |
| Zhejiang Dahua Vision Technology Co., Ltd. | 600,000,000.00 | August 10, 2017 | Two years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 220,000,000.00 | October 13, 2017 | Two years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 500,000,000.00 | March 27, 2018 | March 19, 2021 | No |
| Zhejiang Dahua Vision Technology Co., Ltd. (guarantee currency is US dollar) | 40,000,000.00 | September 21, 2018 | Two years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 650,000,000.00 | May 10, 2019 | Two years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 180,000,000.00 | June 26, 2019 | June 25, 2022 | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 440,000,000.00 | July 22, 2019 | Two years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 50,000,000.00 | September 20, 2019 | Three years since the date on which the debt period of master contract expires or the date on which the secured claim is determined, whichever is later | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 200,000,000.00 | September 29, 2019 | Three years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 100,000,000.00 | October 22, 2019 | Three years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 500,000,000.00 | December 10, 2019 | Three years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 300,000,000.00 | January 15, 2020 | Three years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 250,000,000.00 | February 17, 2020 | Two years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 300,000,000.00 | February 25, 2020 | Three years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 530,000,000.00 | April 7, 2020 | March 31, 2024 | No |
| Zhejiang Dahua Vision Technology Co., Ltd. | 240,000,000.00 | April 13, 2020 | Two years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Zhilian Co., Ltd. | 100,000,000.00 | April 9, 2019 | One years upon expiration of debt period of master contract | Yes |
| Zhejiang Dahua Zhilian Co., Ltd. | 60,000,000.00 | May 13, 2019 | Three years after the maturity of the debts in the master contract | Yes |
| Zhejiang Dahua Zhilian Co., Ltd. | 200,000,000.00 | December 12, 2019 | One years upon expiration of debt period of master contract | Yes |
| Zhejiang Dahua Zhilian Co., Ltd. | 200,000,000.00 | June 6, 2016 | June 30, 2020 | Yes |
| Zhejiang Dahua Zhilian Co., Ltd. | 500,000,000.00 | September 1, 2018 | September 1, 2020 | No |
| Zhejiang Dahua Zhilian Co., Ltd. | 300,000,000.00 | October 12, 2018 | October 12, 2021 | No |
| Zhejiang Dahua Zhilian Co., Ltd. | 100,000,000.00 | August 30, 2019 | Two years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Zhilian Co., Ltd. | 400,000,000.00 | November 1, 2019 | One years upon expiration of debt period of master contract | No |
| Zhejiang Dahua Zhilian Co., Ltd. | 60,000,000.00 | February 25, 2020 | Three years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua Zhilian Co., Ltd. | 100,000,000.00 | April 9, 2020 | One years upon expiration of debt period of master contract | No |
| Zhejiang Dahua Zhilian Co., Ltd. (the security deposit is made in US dollar) | 60,000,000.00 | May 1, 2020 | One years upon expiration of debt period of master contract | No |
| Zhejiang Dahua System Engineering Co., Ltd. | 100,000,000.00 | June 6, 2016 | March 30, 2020 | Yes |
| Zhejiang Dahua System Engineering Co., Ltd. | 40,000,000.00 | May 13, 2019 | Three years after the maturity of the debts in the master contract | Yes |
| Zhejiang Dahua System Engineering Co., Ltd. | 100,000,000.00 | May 10, 2019 | Two years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua System Engineering Co., Ltd. | 10,000,000.00 | August 30, 2019 | Two years after the maturity of the debts in the master contract | No |
| Zhejiang Dahua System | 60,000,000.00 | November 7, 2019 | Two years after the maturity | No |
| Engineering Co., Ltd. | of the debts in the master contract | |||
| Zhejiang Dahua System Engineering Co., Ltd. | 40,000,000.00 | February 25, 2020 | Three years after the maturity of the debts in the master contract | No |
| Dahua Technology (HK) Limited (guarantee currency is US dollar) | 50,000,000.00 | December 15, 2017 | December 15, 2020 | No |
| Dahua Technology (HK) Limited (guarantee currency is US dollar) | 7,000,000.00 | December 25, 2019 | Two years after the maturity of the debts in the master contract | No |
| DAHUA TECHNOLOGY MEXICO S.A. DE C.V (guaranteed currency is Mexican Peso) | 59,973,141.38 | March 26, 2019 | March 26, 2020 | Yes |
| DAHUA TECHNOLOGY MEXICO S.A. DE C.V (guaranteed currency is Mexican Peso) | 179,919,424.15 | April 9, 2019 | April 9, 2020 | Yes |
| Hangzhou Huacheng Network Technology Co., Ltd. | 50,000,000.00 | August 30, 2019 | Two years after the maturity of the debts in the master contract | No |
(4) Asset transfer and debt restructuring of related parties
Unit: RMB
| Related parties | Content of the related - party transaction | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| China Standard Intelligent Security Technology Co., Ltd. | Selling of fixed assets | 1,659.82 | |
| Zhejiang Huanuokang Technology Co., Ltd. | Selling of fixed assets | 64,475.38 | |
| Ruicity Digital Technology Co., Ltd. | Selling of fixed assets | 142,819.61 | |
| Zhejiang Leapmotor Technology Co., Ltd. | Procurement of fixed assets | 196,477.09 |
(5) Remuneration to key management personnel
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Salary of key management personnel | 6,528,420.50 | 6,091,781.84 |
(6) Other related-party transactions
For details of other connected transactions of the Company, please refer to "Section V. Significant Matters, XIII. MaterialConnected Transactions, 5. Other Material Connected Transactions" of this report.
6. Receivables and payables of the related parties
(1) Receivables
Unit: RMB
| Item Name | Related parties | Balance at the End of the Period | Balance at the Start of the Period | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Accounts receivable | Zhejiang Dahua Zhian Internet of Things Technology Co., Ltd. | 100,000.00 | 10,000.00 | 100,000.00 | 5,000.00 |
| Accounts receivable | Guangdong Dahua Zhishi Technology Co., Ltd. | 15,722,580.79 | 875,414.33 | 12,553,692.95 | 627,684.65 |
| Accounts receivable | Ningbo Dahua Anbang Security Services Co., Ltd. | 60,520.00 | 3,026.00 | ||
| Accounts receivable | Zhejiang Leapmotor Technology Co., Ltd. | 429,259.03 | 22,462.15 | 674,210.13 | 33,710.51 |
| Accounts receivable | Hangzhou Xintu Technology Co., Ltd. | 47,250.00 | 2,362.50 | 3,379.63 | 168.98 |
| Accounts receivable | Zhejiang Lancable Technology Co., Ltd. | 171,259.00 | 13,875.90 | 676,259.00 | 33,812.95 |
| Accounts receivable | Shenzhen Conwin Security Electronics CO., Ltd. | 68,500.00 | 3,425.00 | 207,500.00 | 10,375.00 |
| Accounts receivable | Hangzhou Xunwei Robotics Technology Co., Ltd. | 4,000.00 | 200.00 | ||
| Accounts receivable | Hangzhou Nuojia Technology Co., Ltd. | 348,362.00 | 17,418.10 | 2,902,026.06 | 1,421,211.26 |
| Accounts receivable | Leapmotor Automobile Co., Ltd. | 7,250,256.33 | 398,737.39 | 9,340,735.86 | 574,240.05 |
| Accounts receivable | Zhoushan Dahua Technology Co., Ltd. | 13,375.00 | 668.75 | 217,168.00 | 10,858.40 |
| Accounts receivable | China Standard Intelligent Security Technology Co., Ltd. | 1,017,723.17 | 100,915.15 | 1,025,951.05 | 51,297.55 |
| Accounts receivable | Zhejiang Huanuokang Technology Co., Ltd. | 688,197.78 | 44,110.16 | 357,980.05 | 17,899.00 |
| Accounts receivable | Intelbras S.A. | 114,208,124.55 | 5,710,406.23 | 123,762,782.51 | 6,188,139.13 |
| Accounts receivable | Shaoxing Dahua Security Services Co., Ltd. | 50,000.00 | 2,500.00 | 50,000.00 | 2,500.00 |
| Accounts receivable | Zhejiang Leapmotor Automobile Marketing Service Co., Ltd. | 1,062.40 | 53.12 | 1,062.40 | 53.12 |
| Accounts receivable | Ruicity Digital Technology Co., Ltd. | 351,206.03 | 17,560.30 | ||
| Other Receivables | Leapmotor Automobile Co., Ltd. | 30,000.00 | 1,500.00 | ||
| Advance payment | Hangzhou Xunwei Robotics Technology Co., Ltd. | 184,140.77 |
(2) Payables
Unit: RMB
| Item Name | Related parties | Closing balance | Opening balance |
| Accounts Payable | Ningxia Shendun Security Services Co., Ltd. | 350,375.00 | 350,375.00 |
| Accounts Payable | Zhejiang Leapmotor Technology Co., Ltd. | 562,275.88 | 706,019.53 |
| Accounts Payable | Hangzhou Nuojia Technology Co., Ltd. | 1,797,622.66 | 2,019,656.96 |
| Accounts Payable | Zhejiang Huanuokang Technology Co., Ltd. | 521,980.05 | 1,079,999.99 |
| Accounts Payable | Leapmotor Automobile Co., Ltd. | 3,121,932.67 | 1,521,631.91 |
| Contract liabilities | Guangdong Dahua Zhishi Technology Co., Ltd. | 137,687.61 | |
| Contract liabilities | Hangzhou Nuojia Technology Co., Ltd. | 353.98 | |
| Contract liabilities | Ningbo Dahua-ZhiAn IOT Technology Co., Ltd. | 23,584.91 | |
| Contract | Wenzhou Dahua Security Services Co., | 70,754.71 |
| liabilities | Ltd. | ||
| Contract liabilities | Zhejiang Leapmotor Technology Co., Ltd. | 26,455.93 | |
| Contract liabilities | Ruicity Digital Technology Co., Ltd. | 173,435.74 | |
| Other Payables | Zhejiang Leapmotor Technology Co., Ltd. | 173,520.00 | 173,520.00 |
| Other Payables | Zhoushan Weixin Equity Investment Partnership (Limited Partnership) | 6,400,000.00 | |
| Other Payables | Zhoushan Zhixin Equity Investment Partnership (Limited Partnership) | 6,600,000.00 | |
| Other Payables | Ningbo Hualing Investment Management Partnership (Limited Partnership) | 11,000,000.00 |
XIII. Share-based payment
1. Overview of share-based payment
√ Applicable □ Not applicable
Unit: RMB
| Total amount of equity instruments granted by the Company in current period | Restricted stock 13,391,480 shares |
| Total amount of equity instruments exercised by the Company in current period | Restricted stock 36,931,560 shares |
| Total amount of equity instruments of the Company invalidated in current period | Restricted stock 2,247,700 shares |
| The range of the exercise prices of other outstanding equity instruments issued by Company at the end of the period and the remaining contractual term | The granted price of the restricted stock incentive plan for the first time in 2018 was RMB 8.17 per share, and the remaining term of the contract was 32 months; the reserved price of the granted restricted stock was RMB 8.75 per share, and the remaining term of the contract was 32 months. The granted price of the restricted stock incentive plan in 2020 is RMB 7.467 per share, and the remaining term of the contract is 35 months. |
2. Situation of equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
| The method for determining the fair value of equity instruments on the day of granting | Determined based on the stock price at the grant date and the grant cost of the restricted stocks |
| The basis for determining the amount of exercisable equity | Estimated according to equity instruments held by the |
| instruments | employees |
| Reason for the significant difference between the estimation of current period and the previous period | N/A |
| The accumulated amount of equity-settled share-based payment counted into the capital reserve | 300,694,571.49 |
| Amount of equity-settled share-based payment confirmed in current period | 75,045,591.95 |
3. Situation of cash-settled share-based payment
□ Applicable √ Not applicable
XIV. Commitments and contingencies
1. Significant commitments
Important commitments on the balance sheet dateAs of June 30, 2020, the pledge matters of the Company are as follows:
(1) On August 19, 2016, the subsidiary Xinjiang Dahua Zhixin Information Technology LLC pledged its futureaccounts receivable amounting to RMB 351,064,980.00 incurred from the available service fee under the FranchiseAgreement for the Shihezi "Safe Shicheng" PPP Project, and signed the Fixed Assets Loan Contract (total contractamount: RMB 230,000,000.00, contract No.: 2016-01) with Shihezi Sub-Branch of the Construction Bank of China, toprovide guarantee for the Company's loan (loan contract No.: 2016-01) amounting to RMB 230,000,000.00 (Term ofborrowing: from August, 2016 to August, 2027). As of June 30, 2020, the pledged receivables was RMB 245,932,951.26(including the long-term receivable balance of RMB 216,551,165.91, and the balance of non-current assets due within oneyear RMB 29,381,785.35). The loan balance under the guarantee contract was RMB 154,000,000.00 (including thelong-term loan balance of RMB 128,500,000.00, and the balance of non-current liabilities due within one year of RMB25,500,000.00).
(2) On October 23, 2018, Zhejiang Dahua Technology Co., Ltd. and Hangzhou Branch of Zheshang Bank Co., Ltd.entered into the ZSZCCZ (2018) No. 22518 Asset Pool Pledge and Guarantee Contract (ID No. 33100000), to provide aguarantee for the Notes Pool Business Cooperation Agreement signed by the Company together with the subsidiaryZhejiang Dahua Technology Co., Ltd., the subsidiary Zhejiang Dahua System Engineering Co., Ltd., these subsidiaryGuangxi Dahua Information Technology Co., Ltd., Zhejiang Dahua Zhilian Co., Ltd., and Zheshang Bank Co., Ltd. Thefinancing amount for the fund pledge pool cannot be more than RMB 2.5 billion.As of June 30, 2020, Zhejiang Dahua Technology Co., Ltd. had outstanding receivable of RMB 114,689,499.83 under thebill pool (among them, RMB 110,000,000.00 is the notes of related parties within the scope of consolidation), RMB610,548,684.18 outstanding bills receivable (wherein RMB 100,000,000.00 was related party bills that should be includedin the scope of the consolidated financial statements) of the subsidiary Zhejiang Dahua Vision Co., Ltd., RMB4,245,913.20 outstanding bills of the subsidiary Zhejiang Dahua System Engineering Co., Ltd. are used to issueacceptance bills. Under this pledge, the bank acceptance bill issued by Zhejiang Dahua Technology Co., Ltd. was RMB13,022,843.50, the bank acceptance bill issued by the subsidiary Zhejiang Dahua Vision Co., Ltd. was RMB609,847,104.17, the bank acceptance bill issued by the subsidiary Zhejiang Dahua System Engineering Co., Ltd. wasRMB 8,384,814.49, and the bank acceptance bill issued by the subsidiary Zhejiang Guangxi Dahua Information
Technology Co., Ltd. was RMB 145,354.69.
(3) Zhejiang Dahua Technology Co., Ltd. and Hangzhou Branch of China Merchants Bank Co., Ltd. signed theSpecial Credit Agreement for Notes Pool Business, which promised a special credit limit of RMB 2.5 billion for the notespool, and allocated the same limit to the subsidiary Zhejiang Dahua Vision Co., Ltd., the subsidiary Zhejiang DahuaSystem Engineering Co., Ltd., the subsidiary Zhejiang Dahua Zhilian Co., Ltd., and the subsidiary Hangzhou HuachengNetwork Technology Co., Ltd. As of June 30, 2020, Zhejiang Dahua Technology Co., Ltd. had pledged RMB 2,174,440.00outstanding notes receivable, the subsidiary Zhejiang Dahua Vision Co., Ltd. had RMB 129,559,641.04 of outstandingnotes receivable (of which RMB 60,000,000.00 was related party bills that should be included in the scope of theconsolidated financial statements), the subsidiary Zhejiang Dahua System Engineering Co., Ltd. had RMB 2,000,000.00outstanding notes receivable, the subsidiary Zhejiang Dahua Zhilian Co., Ltd. had RMB 12,504,110.00 of outstandingnotes receivable, and the subsidiary Hangzhou Huacheng Network Technology Co., Ltd. had RMB 2,364,281.08 ofoutstanding notes receivable for issuing bank acceptance bills. Under the pledge, Zhejiang Dahua Technology Co., Ltd.issued RMB 9,569,824.85 of bank acceptance bill; the subsidiary Zhejiang Dahua Vision Co., Ltd. issued RMB25,219,494.65 of bank acceptance bill; the subsidiary Zhejiang Dahua System Engineering Co., Ltd. issued RMB440,000.00 bank acceptance bill; the subsidiary Zhejiang Dahua Zhilian Co., Ltd. issued RMB 27,261,423.21 of bankacceptance bill; and the subsidiary Hangzhou Huacheng Network Technology Co., Ltd. issued RMB 43,059,075.87 ofbank acceptance bill.
(4) Zhejiang Dahua Vision Co., Ltd., subsidiary of the Company, pledged a deposit certificate of US$35 million andsigned an Import and Export Documentary Bill Contract with Hangzhou Branch of Ningbo Bank Co., Ltd.. As of June 30,2020, the loan balance under the pledge contract is US$9, 373,214,11.
(5) On May 20, 2020, Zhejiang Dahua Vision Co. Ltd., subsidiary of the Company, took RMB 100,000,000.00 ofstructured deposits as a pledge and entered into a Right Pledge Contract with Hangzhou Binjiang Branch of AgriculturalBank of China Limited; as of June 30, 2020, a domestic letter of credit amounting to RMB 100,000,000.00 was issuedunder this pledge (Ref. 2019DLID00001296).
2. Contingencies
(1) If no important contingent matter to be disclosed by the Company, it should also be notedaccordingly
No important contingent matter needs to be disclosed by the Company.XV. Events after the Balance Sheet Date
1、 Important non-adjustment issues
Since January 2020, COVID-19 broke out in China and around the world, which has had an adverse impact on the entiremacro economy. The Company actively responds to and strictly implements the regulations and requirements forepidemic prevention and control of the local government. The Company anticipates that the COVID-19 epidemic andprevention and control measures will cause a certain degree of temporary impact on the Company's production andoperations. The degree of impact depends on the progress and duration of global epidemic prevention and control, andthe implementation of prevention and control policies in various regions. As of the date of approval of the financialstatements, the pandemic in China has been basically under control and the order of production and life has beenbasically restored, but the pandemic situation in some overseas regions is still severe. The Company will pay closeattention to the development of global pandemic and continue to assess the impact on the Company's performance.
2. Distribution of profits
N/A
3. Notes to other events after the balance sheet date
(1) On July 24, 2020, the "Proposal on Entering into Equity Transfer Agreement and Related Transactions ofWholly-owned Subsidiaries" was deliberated and passed at the Company's 2nd Extraordinary General Meeting ofShareholders in 2020, which agreed that the Company may transfer 100% of the equity of its subsidiary Zhejiang HuatuMicrochip Technology Co., Ltd. to Hangzhou Gancheng Equity Investment Partnership (Limited Partnership), ShaoxingGansheng Equity Investment Partnership (Limited Partnership), Zhejiang Free Trade Zone Fenghang InvestmentPartnership (Limited Partnership), Yuyao Yangming Zhixing Investment Center (Limited Partnership), Ganzhou DaewooCapital Management Partnership (Limited Partnership), Chen Heyu, Ningbo Hualing Investment Management Partnership(Limited Partnership), Zhoushan Zhixin Equity Investment Partnership (Limited Partnership), and Zhoushan Weixin EquityInvestment Partnership (Limited Partnership). The transfer price of 100% equity of Zhejiang Huatu Microchip TechnologyCo., Ltd. is RMB 1,200,000,000. The changes of industrial and commercial registrations for the above matter werecompleted in August 2020.
(2) At the 36th Session of the 6th Board of Directors held on July 8, 2020 and the 2nd Extraordinary General Meetingof Shareholders of 2020 held on July 24, 2020, the Company deliberated and approved the Proposal for ProvidingGuarantees to Wholly-owned Subsidiaries and the Proposal for Providing Guarantees to Controlling Subsidiaries.According to its actual business development needs, the Company plans to provide joint and several liability guaranteesfor its wholly-owned subsidiaries in 2020, with the total amount of guarantee not exceeding RMB 13,427,500,000. TheCompany plans to provide joint and several liability guarantees for its controlling subsidiaries in 2020, with the totalamount of guarantee not exceeding RMB 5,781 million.
(3) On July 8, 2020, the Proposal on Transferring Equity Interests of Subsidiaries and Related-party Transactions wasreviewed and approved at the Company's 36th session of the 6th Board of Directors' meeting, which agreed to transfer 49%of the equity interests of Zhejiang Dahua Robot Technology Company Co., Ltd. (hereinafter referred to as the "RobotTechnology") held by Zhejiang Huashi Investment Management Co., Ltd. The company's transfer of 49% of the equity ofRobot Technology involves a total of RMB 7,004,918 in related transactions. After completion of the transfer, the Companywill hold 100% of the equity in the Robot Technology. This transaction was completed in August.
(4). On July 27, 2020,the Company's 37th session of the 6th Board of Directors' meeting deliberated and approvedthe "Proposal on Buy-back and Cancellation of Some Granted but Unlocked Restricted Stocks" and agreed to buy backand cancel 4,822,680 authorized but not unlocked restricted stocks held by 183 incentive targets who are no longereligible for the incentive (of which, 4,337,880 shares were first granted, with the repurchase price of 8.17 yuan per share;reserved grant of 484,800 shares at a repurchase price of 8.75 yuan per share).XVI. Other Significant Events
1. Subsection information
(1) Basis for determining the reporting subsection and the accounting policy
The Company determines the operation subsection based on internal organization structure, management requirements,internal reporting system, etc. The Company has only one operation subsection, namely the R&D, production and sales ofsecurity products. The accounting policy of the reporting subsection is consistent with that of the Company.
(2) Financial information of the reporting subsection
Regional subsection
Unit: RMB
| Item | Operating income | Operating Cost |
| Domestic | 5,789,716,423.38 | 3,354,083,609.38 |
| Overseas | 4,048,612,430.24 | 1,745,166,541.19 |
| Total | 9,838,328,853.62 | 5,099,250,150.57 |
Product subsection
Unit: RMB
| Item | Operating income | Operating Cost |
| Solutions | 5,200,876,438.66 | 2,706,121,225.19 |
| Product | 4,069,496,985.96 | 1,874,094,337.42 |
| Others | 567,955,429.00 | 519,034,587.96 |
| Total | 9,838,328,853.62 | 5,099,250,150.57 |
XVII. Notes to Main Items in the Financial Statements of the Parent Company
1. Accounts receivable
(1) Categorical disclosure of accounts receivable
Unit: RMB
| Category | Balance at the End of the Period | Balance at the Start of the Period | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage | Amount | Accrued proportion | Amount | Percentage | Amount | Accrued proportion | |||
| Accounts receivables with the bad debt provision accrued based on combinations | 5,852,295,206.29 | 100.00% | 108,974,774.07 | 1.86% | 5,743,320,432.22 | 8,553,841,772.05 | 100.00% | 103,477,257.00 | 1.21% | 8,450,364,515.05 |
| Including: | ||||||||||
| Portfolio 1: Related Parties Portfolio | 4,900,323,274.44 | 83.73% | 4,900,323,274.44 | 7,626,134,745.39 | 89.15% | 7,626,134,745.39 | ||||
| Portfolio 2: Aging Analysis Portfolio | 951,971,931.85 | 16.27% | 108,974,774.07 | 11.45% | 842,997,157.78 | 927,707,026.66 | 10.85% | 103,477,257.00 | 11.15% | 824,229,769.66 |
| Total | 5,852,295,206.29 | 100.00% | 108,974,774.07 | 5,743,320,432.22 | 8,553,841,772.05 | 100.00% | 103,477,257.00 | 8,450,364,515.05 |
Bad debt provision based on combinations
Unit: RMB
| Name | Balance at the End of the Period | ||
| Book balance | Bad debt provision | Accrued proportion | |
| Within 1 year | 715,279,653.31 | 35,763,982.67 | 5.00% |
| 1 to 2 years | 146,925,778.64 | 14,692,577.86 | 10.00% |
| 2 to 3 years | 33,046,897.75 | 9,914,069.32 | 30.00% |
| 3 to 4 years | 10,539,754.80 | 5,269,877.40 | 50.00% |
| 4 to 5 years | 14,227,902.67 | 11,382,322.14 | 80.00% |
| 5 years or above | 31,951,944.68 | 31,951,944.68 | 100.00% |
| Total | 951,971,931.85 | 108,974,774.07 | -- |
Please refer to the disclosing methods of other receivables for the information disclosure of bad debts provisions, if thebad debt provisions of accounts receivable are made according to the general model of expected credit losses:
□ Applicable √ Not applicable
Disclosure by age
Unit: RMB
| Aging | Balance at the End of the Period |
| Within 1 year (including 1 year) | 5,568,246,949.73 |
| 1 to 2 years | 156,085,969.66 |
| 2 to 3 years | 44,881,795.26 |
| 3 years or above | 83,080,491.64 |
| 3 to 4 years | 11,339,164.15 |
| 4 to 5 years | 14,227,902.67 |
| 5 years or above | 57,513,424.82 |
| Total | 5,852,295,206.29 |
(2) Provision for bad debts accrued, recovered or reversed in this periodProvision for bad debts in the current period:
Unit: RMB
| Category | Balance at the Start of the Period | Amount of Changes in the Current Period | Balance at the End of the Period | |||
| Accrued | Recovered or Reversed | Written Off | Others | |||
| Accrued by aging analysis | 103,477,257.00 | 5,497,517.07 | 108,974,774.07 | |||
| Total | 103,477,257.00 | 5,497,517.07 | 108,974,774.07 |
(3) Accounts receivable of the top five balances at the end of the period collected by the arrears
According to the balance collected by the debtor at the end of the period, the total amount of the top five receivablesis 4,952,931,982.29, accounting for 84.63% of the total closing balance of accounts receivable. The balance of theprovision for bad debts accrued at the end of this period is RMB 7,598,195.78.
(4) Accounts receivable derecognized due to the transfer of financial assetsThere are no accounts receivables derecognized due to the transfer of financial assets in this period.
(5) The amount of assets and liabilities generated due to transferred receivables that theCompany still keeps recourse or retains part of corresponding rights or interestsIn this period, there are no assets and liabilities generated due to transferred receivables that the Company still keepsrecourse or retains part of corresponding rights or interests
2. Other receivables
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period |
| Other Receivables | 9,573,681,872.01 | 5,138,830,912.64 |
| Total | 9,573,681,872.01 | 5,138,830,912.64 |
(1) Other receivables
1) Other receivables categorized by the nature of the funds
Unit: RMB
| Nature of the funds | Closing balance | Opening balance |
| Deposits | 35,925,229.19 | 34,668,226.17 |
| Prepaid or advance expense | 45,332,004.52 | 60,885,579.94 |
| Employee home loan | 86,543,444.46 | 104,094,000.60 |
| Incomings and outgoings | 9,410,998,774.22 | 4,966,265,220.25 |
| Others | 22,380,301.08 | 239,332.03 |
| Total | 9,601,179,753.47 | 5,166,152,358.99 |
2) Bad debt provision
Unit: RMB
| Bad debt provision | Phase One | Phase Two | Phase Three | Total |
| Expected credit losses in the next 12 months | Expected credit losses for the entire extension (without credit impairment) | Expected credit losses for the entire extension (with credit impairment) | ||
| Balance on January 1, 2020 | 22,938,777.96 | 3,641,770.30 | 740,898.09 | 27,321,446.35 |
| Balance of the current period on January 1, 2020 | —— | —— | —— | —— |
| --Transfer to phase two | -107,272.74 | 107,272.74 | ||
| --Transfer to phase three | -48,563.70 | -7,748.50 | 56,312.20 | |
| Provisions of this period | 406,075.81 | 406,075.81 | ||
| Reversal of the current period | 229,640.70 | 229,640.70 | ||
| Balance on June 30, 2020 | 23,189,017.33 | 3,741,294.54 | 567,569.59 | 27,497,881.46 |
Book balance changes with significant changes in loss provision in the current period
□ Applicable √ Not applicable
Disclosure by age
Unit: RMB
| Aging | Balance at the End of the Period |
| Within 1 year (including 1 year) | 8,764,525,478.36 |
| 1 to 2 years | 788,131,303.13 |
| 2 to 3 years | 31,960,544.73 |
| 3 years or above | 16,562,427.25 |
| 3 to 4 years | 12,507,443.82 |
| 4 to 5 years | 2,787,207.19 |
| 5 years or above | 1,267,776.24 |
| Total | 9,601,179,753.47 |
3) Provision for bad debts accrued, recovered or reversed in this periodProvision for bad debts in the current period:
Unit: RMB
| Category | Balance at the Start of the Period | Amount of Changes in the Current Period | Balance at the End of the Period | |||
| Accrued | Recovered or Reversed | Written Off | Others | |||
| Portfolio 2: Aging Analysis Portfolio | 27,321,446.35 | 406,075.81 | 229,640.70 | 27,497,881.46 | ||
| Total | 27,321,446.35 | 406,075.81 | 229,640.70 | 27,497,881.46 | ||
4) Accounts receivable actually written off in this period
There's no actual written-off accounts receivable in this period.
5) Other receivables of the top five closing balances collected by debtors
Unit: RMB
| Name of Unit | Nature of the funds | Balance at the End of the Period | Aging | As a percentage of total other receivables at the end of the period | Bad debt provision at the end of the period |
| Company 1 | Incomings and outgoings | 6,108,253,928.28 | Within 1 year | 63.62% | |
| Company 2 | Incomings and outgoings | 1,212,455,150.99 | Within 1 year | 12.63% | |
| Company 3 | Incomings and outgoings | 1,112,566,245.62 | Within 1 year | 11.59% | |
| Company 4 | Incomings and outgoings | 560,543,529.29 | 30,056,859.69 yuan within 1 year, 530,486,669.60 yuan for 1 to 2 years | 5.84% | |
| Company 5 | Incomings and outgoings | 172,886,223.52 | 8,918,883.13 yuan within 1 year, 163,967,340.39 yuan for 1 to 2 years | 1.80% | |
| Total | -- | 9,166,705,077.70 | -- | 95.48% |
3. Long-term equity investment
Unit: RMB
| Item | Balance at the End of the Period | Balance at the Start of the Period | ||||
| Book balance | Provision for decline in value | Book value | Book balance | Provision for decline in value | Book value | |
| Investment in subsidiaries | 3,552,107,296.01 | 3,552,107,296.01 | 3,399,382,831.04 | 3,399,382,831.04 | ||
| Investment in affiliates and joint ventures | 142,982,882.37 | 142,982,882.37 | 123,876,230.74 | 123,876,230.74 | ||
| Total | 3,695,090,178.38 | 3,695,090,178.38 | 3,523,259,061.78 | 3,523,259,061.78 | ||
(1) Investment in Subsidiaries
Unit: RMB
| The invested entity | Balance at the Start of the Period (book value) | Decrease/Increase in the current period | Balance at the End of the Period (book value) | Closing balance of provision for decline in value | |||
| Investments increased | Investment decreased | Provision for impairment accrued | Others | ||||
| Zhejiang Dahua System Engineering Co., Ltd. | 521,483,038.93 | 4,865,116.96 | 526,348,155.89 | ||||
| Zhejiang Dahua Security Network Operation Service Co., Ltd. | 26,892,712.76 | 204,779.86 | 27,097,492.62 | ||||
| Zhejiang Dahua Ju'an Technology Co., Ltd. | 5,100,000.00 | 5,100,000.00 | |||||
| Guangxi Dahua Information Technology | 6,322,087.88 | 256,903.02 | 6,578,990.90 | ||||
| Co., Ltd. | |||||||
| Zhejiang Dahua Security Service Co., Ltd. | 118,808.18 | 33,823.68 | 152,631.86 | ||||
| Dahua Technology (HK) Limited | 608,628,700.00 | 608,628,700.00 | |||||
| Zhejiang Dahua Vision Technology Co., Ltd. | 659,214,949.98 | 3,448,163.44 | 662,663,113.42 | ||||
| Guangxi Dahua Security Service Co., Ltd. | 20,002,580.76 | 20,002,580.76 | |||||
| Zhejiang Huatu Microchip Technology Co., Ltd. | 10,240,451.40 | 65,050,101.94 | 75,290,553.34 | ||||
| Hangzhou Xiaohua Technology CO., LTD. | 5,455,499.43 | 212,194.04 | 5,667,693.47 | ||||
| Zhejiang Dahua Zhilian Co., Ltd. | 1,000,102,353.10 | 617,432.93 | 1,000,719,786.03 | ||||
| Hangzhou Tecomore Technology Co., Ltd. | 5,610,799.78 | -96,747.26 | 5,514,052.52 | ||||
| Guangxi Dahua Zhicheng Co., Ltd. | 71,214,032.03 | -2,279.00 | 71,211,753.03 | ||||
| Hangzhou Huacheng Network | 27,777,421.83 | 1,233,284.36 | 29,010,706.19 |
| Technology Co., Ltd. | |||||||
| Xinjiang Dahua Zhixin Information Technology Co., Ltd. | 15,730.64 | 20,513.34 | 36,243.98 | ||||
| Zhejiang Dahua Investment Management Co., Ltd. | 62,175,000.00 | 62,175,000.00 | |||||
| Zhejiang Huachuang Vision Technology Co., Ltd. | 28,424,310.27 | 995,081.09 | 29,419,391.36 | ||||
| Zhejiang HuaRay Technology Co., Ltd. | 29,518,772.60 | 1,523,759.50 | 31,042,532.10 | ||||
| Xinjiang Dahua Intelligence Technology Co., Ltd. | 10,000,000.00 | 10,000,000.00 | |||||
| Hangzhou Fuyang Hua'ao Technology Co., Ltd. | 5,100,000.00 | 5,100,000.00 | |||||
| Zhejiang Huafei Intelligent Technology CO., LTD. | 23,418,324.66 | 1,772,904.82 | 25,191,229.48 | ||||
| Zhejiang Huaxiao Technology Co., Ltd. | 27,339,060.80 | 445,593.78 | 27,784,654.58 | ||||
| Xi'an Dahua Zhilian Technology | 56,085,489.52 | 49,793.04 | 56,135,282.56 |
| Co., Ltd. | |||||||
| Wuxi Dahua Ruipin Technology Co., Ltd. | 9,663,203.80 | 1,175,814.50 | 10,839,018.30 | ||||
| Zhejiang Dahua Robot Technology Co., Ltd. | 48,109,176.80 | 92,520.63 | 48,201,697.43 | ||||
| Beijing Huayue Shangcheng Information Technology Service Co., Ltd. | 4,274,772.43 | 1,892,028.94 | 6,166,801.37 | ||||
| Sichuan Dahua Guangxun Photoelectric Technology Co., Ltd. | 5,530,000.00 | 5,530,000.00 | |||||
| DahuaTechnologyHoldingsLimited | 8,102,000.00 | 8,102,000.00 | |||||
| Shanghai Huashang Chengyue Information Technology Service Co., Ltd. | 1,276,408.38 | 220,463.72 | 1,496,872.10 | ||||
| Zhejiang Dahua Jinzhi Technology Co., Ltd. | 60,000,000.00 | 60,000,000.00 | |||||
| Guangxi Huacheng Technology Co., Ltd. | 33,786.68 | 50,680.02 | 84,466.70 | ||||
| Dahua Technology | 13,358.40 | 49,238.40 | 62,596.80 |
| Canada Inc. | |||||||
| Zhejiang Zhoushan Digital Development Operation Co., Ltd | 17,640,000.00 | 17,640,000.00 | |||||
| Guangxi Dahua Technology Co., Ltd. | 30,000,000.00 | 30,000,000.00 | |||||
| Yunnan Zhili Technology Co., Ltd | 4,500,000.00 | 4,500,000.00 | |||||
| Zhejiang Fengshi Technology Co., Ltd. | 9,000,000.00 | 9,000,000.00 | |||||
| Zhejiang Dahua Storage Technology Co., Ltd. | 8,164,692.00 | 8,164,692.00 | |||||
| Zhejiang Dahua Automobile Technology Co., Ltd. | 51,081,376.46 | 51,081,376.46 | |||||
| Chengdu Dahua Zhilian Information Technology Co., Ltd. | 11,462.90 | 11,462.90 | |||||
| Zhejiang Xinsheng Electronic Technology Co., Ltd. | 291,458.20 | 291,458.20 | |||||
| Hangzhou Huacheng Software Technology | 64,309.66 | 64,309.66 |
| Co., Ltd. | |||||||
| Total | 3,399,382,831.04 | 152,724,464.97 | 3,552,107,296.01 |
(2) Investment in affiliates and joint ventures
Unit: RMB
| Name of Investees | Balance at the Start of the Period (book value) | Decrease/Increase in the current period | Balance at the End of the Period (book value) | Closing balance of provision for decline in value | |||||||
| Investments increased | Investment decreased | Investment profit and loss recognized under the equity method | Adjustment on other comprehensive income | Other changes in equity | Cash dividends or profit declared to distribute | Provision for impairment accrued | Others | ||||
| Ⅰ. Joint ventures | |||||||||||
| Ⅱ. Affiliates | |||||||||||
| Zhejiang Leapmotor Technology Co., Ltd. | 123,065,033.65 | -42,984,111.81 | 80,080,921.84 | ||||||||
| Hangzhou Juhuanyan Information Technology Co., Ltd. | 811,197.09 | 500,000.00 | 37,312.48 | 1,348,509.57 | |||||||
| Ruicity Digital Technology Co., Ltd. | 64,000,000.00 | -2,446,549.04 | 61,553,450.96 | ||||||||
| Subtotal | 123,876,230.74 | 64,500,000.00 | -45,393,348.37 | 142,982,882.37 | |||||||
| Total | 123,876, | 64,500,0 | -45,393, | 142,982, | |||||||
| 230.74 | 00.00 | 348.37 | 882.37 |
4. Operating income and operating costs
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence | ||
| Income | Cost | Income | Cost | |
| Main Business | 3,604,445,938.19 | 448,774,239.46 | 3,262,438,993.53 | 356,954,385.57 |
| Other businesses | 20,539,391.76 | 15,525,330.75 | 18,764,966.33 | 12,394,018.41 |
| Total | 3,624,985,329.95 | 464,299,570.21 | 3,281,203,959.86 | 369,348,403.98 |
5. Investment income
Unit: RMB
| Item | This Period's Amount of Occurrence | Previous Period's Amount of Occurrence |
| Long-term equity investment income measured by equity method | -45,152,368.00 | -7,096.54 |
| Investment income from disposal of long-term equity investment | -1,000,000.00 | |
| Investment income of other non-current financial assets during the holding period | 7,307,215.11 | 10,747,186.86 |
| Investment income from treasury bond reverse repurchase | 210,491.25 | |
| Total | -37,634,661.64 | 9,740,090.32 |
XVIII. Supplementary Information
1. Breakdown of non-recurring gains and losses for this period
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount | Note |
| Gains and losses from disposal of non-current assets | 5,844,316.80 | |
| The government subsidies included in the current profits and losses (excluding the government subsidies closely related to regular businesses of the Company and issued in the quota or quantity based | 85,572,330.79 |
| on the national standards) | ||
| Profits and losses resulting from the changes in fair value for holding trading financial assets, derivative financial assets and trading financial liabilities, derivative financial liabilities and investment income from disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities, and other obligatory right investment, excluding the effective hedging businesses related to the regular business operation of the Company | 22,700,204.34 | |
| Reversal of the receivables and contract assets depreciation reserves for separate impairment test | 1,920,625.00 | |
| Non-Operating Revenue and expenses other than the above | -6,359,772.83 | |
| Other gains and losses items that fit the definition of non-recurring gains and losses | 210,491.25 | |
| Less: Impact of income tax | 15,263,612.09 | |
| Impact of minority equity | 15,909,003.92 | |
| Total | 78,715,579.34 | -- |
For items defined as non-recurring gains and losses according to the No. 1 Explanatory Announcement on InformationDisclosure for Companies Offering Their Securities to Public - Non-recurring Gains and Losses, or non-recurring gainsand losses items listed in the said document defined as recurring ones, please specify the reasons.
□ Applicable √ Not applicable
2. Return on net assets and earnings per share
| Profit for the reporting period | Weighted Average ROE | Earnings per share | |
| Basic Earnings per Share (RMB/Share) | Diluted Earnings per Share (RMB/Share) | ||
| Net profit attributable to common shareholders of the Company | 8.35% | 0.47 | 0.47 |
| Net profit attributable to common shareholders of the Company after deducting non-recurring gains and losses | 7.87% | 0.44 | 0.45 |
3. Differences in accounting data between domestic and overseas accounting standards
(1) Differences of net profits and net assets in the financial reports disclosed according to theinternational accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
(2) Differences of net profits and net assets in the financial reports disclosed according to theoverseas accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
Section XII Documents Available for Reference
1. The financial statements signed and sealed by Fu Liquan, the Company's legalrepresentative, Xu Qiaofen, chief accountant, and Ms. Zhu Zhuling, head of accountinginstitution.
2. Original of all the Company's documents and announcements published on mediadesignated by China Securities Regulatory Commission during the reporting period.
3. Other related materials.
The said documents are prepared and placed at the Company's Securities InvestmentDepartment
Zhejiang Dahua Technology Co., Ltd.
Legal representative: Fu Liquan
August 21, 2020