China Fangda Group Co., Ltd.
2018 Annual Report
January 2019
Chapter I Important Statement, Table of Contents and Definitions
The members of the Board and the Company guarantee that theannouncement is free from any false information, misleading statement ormaterial omission and are jointly and severally liable for the information’struthfulness, accuracy and integrity.
Mr. XiongJianming, the Chairman of Board, Mr. Lin Kebin, the ChiefFinancial Officer, and Mr. Wu Bohua, the manager of accounting departmentdeclare: the Financial Report carried in this report is authentic and completed.
All the Directors have attended the meeting of the board meeting at whichthis report was examined.
Forward-looking statements involved in this report including future plansdo not make any material promise to investors. Investors should pay attention toinvestment risks.
The Company needs to comply with disclosure requirements of theShenzhen Stock Exchange Industry Information Disclosure Guideline No.6 –Listed Companies Engaged in Decoration Business and disclosure requirementsof the Shenzhen Stock Exchange Industry Information Disclosure GuidelineNo.3 – Listed Companies Engaged in Property Development.
The Company has specified market, management and production andoperation risks in this report. Please review the potential risks and measures
mentioned in the discussion and analysis of future development in IV. OperationDiscussion and Analysis.
The Board meeting reviewed and approved the profit distribution preplan:
distributing cash dividend of RMB2.00 (tax included) for each ten shares to allshareholders on the basis of 1,123,384,189 shares of the Company and nodividend share is issued to shareholders. No reserve is capitalized.
Table of Contents
Chapter I Important Statement, Table of Contents and Definitions ...... 2
Chapter II About the Company and Financial Highlights ...... 7
Chapter III Business Introduction ...... 12
Chapter IV Operation Discussion and Analysis ...... 18
Chapter V Significant Events ...... 40
Chapter VI Changes in Share Capital and Shareholders ...... 53
Chapter VII Preferred Shares ...... 60
Chapter VIII Particulars about the Directors, Supervisors, Senior Management and Employees ...... 61
Chapter IX Corporation Governance ...... 68
Chapter X. Information about the Company’s Securities ...................................................................................................................... 75
Chapter XI Financial Statements ...... 76
Chapter XII Documents for Reference ...... 200
Definitions
| Terms | Refers to | Description |
| Fangda Group, company, the Company | Refers to | China Fangda Group Co., Ltd. |
| Articles of Association | Refers to | Articles of Association of China Fangda Group Co., Ltd. |
| Meeting of shareholders | Refers to | Meetings of shareholders of China Fangda Group Co., Ltd. |
| Board of Directors | Refers to | Board of Directors of China Fangda Group Co., Ltd. |
| Supervisory Committee | Refers to | Supervisory Committee of China Fangda Group Co., Ltd. |
| Banglin Co. | Refers to | Shenzhen Banglin Technologies Development Co., Ltd. |
| Shilihe Co. | Refers to | Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) |
| Shengjiu Co. | Refers to | Shengjiu Investment Ltd. |
| FangdaJianke | Refers to | Shenzhen FangdaJianke Group Co., Ltd. |
| FangdaZhichuang | Refers to | FangdaZhichuang Science and Technology Co., Ltd. |
| Fangda New Material | Refers to | Fangda New Materials (Jiangxi) Co., Ltd. |
| Fangda New Resource | Refers to | Shenzhen Fangda New Energy Co., Ltd. |
| Fangda Property | Refers to | Shenzhen Fangda Property Development Co., Ltd. |
| Chengdu FangdaJianke | Refers to | ChengdaFangda Construction Technology Co., Ltd. |
| Dongguan Fangda New Material | Refers to | Dongguan Fangda New Material Co., Ltd. |
| Kechuangyuan Software | Refers | Shenzhen QianhaiKechuangyuan Software Co., Ltd. |
| to | ||
| Kexunda Co. | Refers to | Shenzhen Kexunda Software Co., Ltd. |
| Fangda Property | Refers to | Shenzhen Fangda Property Management Co., Ltd. |
| Jiangxi Property | Refers to | Fangda (Jiangxi) Property Development Co., Ltd. |
| Hongjun Investment Company | Refers to | Shenzhen Hongjun Investment Co., Ltd. |
| FangdaQingling | Refers to | Shanghai FangdaQingling Technology Co., Ltd. |
| Fangda Cloud Rail | Refers to | Shenzhen Fangda Cloud Rail Technology Co., Ltd. |
| Jianke Australia | Refers to | Fangda Australia Pty Ltd |
| Automatic Hong Kong | Refers to | Fangda Automation (Hong Kong) Co., Ltd. |
| Shihui International | Refers to | Shihui International Holding Co., Ltd. |
| Shenyang Decoration | Refers to | Fangda Decoration Engineering (Shenyang) Co., Ltd. |
| Shenyang Fangda | Refers to | Shenyang Fangda Semi-conductor Lighting Co., Ltd. |
| Shenzhen Woke | Refers to | Shenzhen Woke Semi-conductor Lighting Co., Ltd. |
| SZSE | Refers to | Shenzhen Stock Exchange |
Chapter IIAbout the Company and Financial Highlights
1. Company profiles
| Stock ID | Fangda Group, Fangda B | Stock code | 000055、200055 |
| Modified stock ID (if any) | None | ||
| Stock Exchange | Shenzhen Stock Exchange | ||
| Chinese name | China Fangda Group Co., Ltd. | ||
| Chinese abbreviation | Fangda Group | ||
| English name (if any) | CHINA FANGDA GROUP CO., LTD. | ||
| English abbreviation (if any) | CFGC | ||
| Registered address | Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone, Shenzhen, PR China. | ||
| Zip code | 518057 | ||
| Office address | 20F, Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone, Shenzhen, PR China. | ||
| Zip code | 518057 | ||
| Website | http://www.fangda.com | ||
| fd@fangda.com | |||
2. Contacts and liaisons
| Secretary of the Board | Representative of Stock Affairs | |
| Name | Zhou Zhigang | GuoLinchen |
| Address | 20F, Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone, Shenzhen, PR China. | 20F, Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone, Shenzhen, PR China. |
| Tel. | 86(755) 26788571 ext. 6622 | 86(755) 26788571 ext. 6622 |
| Fax | 86(755)26788353 | 86(755)26788353 |
| zqb@fangda.com | zqb@fangda.com |
3. Information disclosure and inquiring
| Press medias of information disclosure | China Securities Journal, Security Times, Shanghai Securities Daily, Hong Kong Commercial Daily |
| Website assigned by CSRC to release the online | http://www.cninfo.com.cn |
| reports | |
| Place for information inquiry | Secretarial Office of the Board |
4. Registration changes
| Organization code | None |
| Changes in main businesses since the listing of the Company | None |
| Changes in the controlling shareholders (if any) | None |
5. Other information
Public accountants employed by the Company
| Public accountants | Grant Thornton (limited liability partnership) |
| Address | 5th Floor, Scitech Place, 22 Jianguomen Wai Avenue, Chaoyang District, Beijing, China |
| Signing accountant names | Chen Zhaoxin, Zeng Hui |
Sponsor engaged by the Company to perform continued supervision and guide during the reporting period□ Applicable √ InapplicableFinancial advisor engaged by the Company to perform continued supervision and guide during the reporting period□ Applicable √ Inapplicable
6. Financial Highlight
Whether the Company needs to make retroactive adjustment or restatement of financial data of previous years□ Yes √ No
| 2018 | 2017 | Increase/decrease | 2016 | |
| Turnover (yuan) | 3,048,680,152.06 | 2,947,470,813.58 | 3.43% | 4,203,866,173.72 |
| Net profit attributable to shareholders of the listed company (yuan) | 2,246,164,571.68 | 1,144,404,441.03 | 96.27% | 697,956,378.23 |
| Net profit attributable to the shareholders of the listed company and after deducting of non-recurring gain/loss (RMB) | 21,171,063.10 | 366,212,412.32 | -94.22% | 623,075,474.92 |
| Net cash flow generated by business operation (RMB) | 387,102,719.57 | 557,833,145.73 | -30.61% | 465,717,074.92 |
| Basic earnings per share (yuan/share) | 1.91 | 0.97 | 96.91% | 0.6 |
| Diluted Earnings per share (yuan/share) | 1.91 | 0.97 | 96.91% | 0.6 |
| Weighted average net income/asset ratio | 53.17% | 41.53% | 11.64% | 38.83% |
| End of 2018 | End of 2017 | Increase/decrease from the end of last year | End of 2016 | |
| Total asset (RMB) | 10,658,854,133.73 | 7,625,422,688.63 | 39.78% | 6,787,051,278.08 |
| Net profit attributable to the shareholders of the listed company (RMB) | 5,195,187,621.88 | 3,238,939,202.18 | 60.40% | 2,364,262,560.28 |
Note: The Company's main industrial curtain wall system and materials industry realized operating income of RMB2.011 billionthis year, an increase of 21.59% over the previous year; the gross profit margin for the year was 14.41%, an increase of 3.38%over the previous year; and the net profit after deducting non-recurring gains and losses was RMB97,998,900, an increase of 1,123%over the previous year.
7. Differences in accounting data under domestic and foreign accounting standards
1. Differences in net profits and assets in financial statements disclosed according to the international andChinese account standards
□ Applicable √ InapplicableThere is no difference in net profits and assets in financial statements disclosed according to the international and Chinese accountstandards during the report period.
2. Differences in net profits and assets in financial statements disclosed according to the overseas andChinese account standards
□ Applicable √ InapplicableThere is no difference in net profits and assets in financial statements disclosed according to the international and Chinese accountstandards during the report period.
8. Financial highlights by quarters
In RMB
| Q1 | Q2 | Q3 | Q4 | |
| Turnover | 650,032,997.33 | 792,017,899.20 | 793,250,321.93 | 813,378,933.60 |
| Net profit attributable to the shareholders of the listed company | 98,377,550.44 | 131,754,112.75 | 91,338,344.89 | 1,924,694,563.60 |
| Net profit attributable to the shareholders of the listed company and after deducting of | 88,737,051.63 | 120,968,066.71 | 85,861,046.88 | -274,395,102.12 |
| non-recurring gain/loss | ||||
| Cash flow generated by business operations, net | -40,623,633.07 | 9,197,365.43 | 144,038,826.38 | 274,490,160.83 |
Where there is difference between the above-mentioned financial data or sum and related financial data in quarter report and interimreport disclosed by the Company□ Yes √ No
9. Accidental gain/loss item and amount
√ Applicable □ Inapplicable
In RMB
| Item | 2018 | 2017 | 2016 | Notes |
| Non-current asset disposal gain/loss (including the write-off part for which assets impairment provision is made) | -5,080,792.02 | 89,483,320.53 | -3,080,469.74 | |
| Subsidies accounted into the current income account (except the government subsidy closely related to the enterprise’s business and based on unified national standard quota) | 5,931,937.15 | 5,637,910.24 | 7,571,963.67 | |
| Capital using expense charged to non-financial enterprises and accounted into the current income account | 922,330.10 | |||
| Gain from entrusted investment or assets management | 27,065,331.33 | 20,455,865.70 | 1,401,717.08 | |
| Gain/loss from debt reorganization | -3,674,141.05 | -2,445,254.63 | ||
| Gain/loss from change of fair value of transactional financial asset and liabilities, and investment gains from disposal of transactional financial assets and liabilities and sellable financial assets, other than valid period value instruments related to the Company’s common businesses | -1,192,774.07 | 2,013,922.62 | 2,369,839.47 | |
| Gain/loss from change of fair value of investment property measured at fair value in follow-up measurement | 2,916,598,485.48 | 889,708,083.34 | 11,558,304.10 | |
| Other non-business income and expenditures other than the above | 1,675,521.71 | 4,054,553.86 | 5,857,845.48 | |
| Other gain/loss items satisfying the definition of non-recurring gain/loss account | 58,154,670.60 |
| Less: Influenced amount of income tax | 720,926,531.10 | 220,906,068.58 | 6,168,477.85 | |
| Influenced amount of minority shareholders’ equity (after-tax) | 8,581,417.95 | 339,234.87 | ||
| Total | 2,224,993,508.58 | 778,192,028.71 | 74,880,903.31 | -- |
Explanation statement should be made for accidental gain/loss items defined and accidentalgain/loss items defined as regular gain/loss items according to the Explanation Announcement of
Information Disclosure No. 1 - Non-recurring gain/loss mentioned.
□ Applicable √ InapplicableNo circumstance that should be defined as recurrent profit and loss according to Explanation Announcement of InformationDisclosure No. 1 - Non-recurring gain/loss occurs in the report period.
Chapter III Business Introduction
1. Major businesses of the Company during the report period
Whether the Company needs to comply with disclosure requirements of special industriesYesProperty development and decoration industriesThe Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
The Company is headquartered in Nanshan District of Shenzhen and became listed in Shenzhen Stock Exchange on November29, 1995. Currently, five major business subsidiaries of the Company are national high-tech enterprises with large modern productionbases in Shenzhen, Shanghai, Chengdu, Nanchang, Dongguan and Foshan. The Company was engaged in the following businesses inthe report period.
1. High-end curtain wall system and material business
(1) Main products and purposes
The Company’s main products include energy-saving curtain walls, photo-electricity curtain walls, LED color-display curtainwalls and aluminum plate materials. Construction curtain walls are mainly used on high-level buildings, large-area public venuessuch as airports, stations, cultural centers and exhibition centers, daylighting roof, shaped construction (ball-shaped and clock-shapedbuildings) with external retaining and decoration functions.
(2) Main business modes, specific risks and changes;
The projects implemented by the Company are mainly through the bidding method to obtain contract orders. Project design,material procurement, production and processing, and the construction and installation and after-sales service model are based on thecontract orders. The main risk of this mode is that it takes a long period of time from the completion of the order to the completion ofthe project, and it is highly dependent on raw materials and labor costs. It is greatly affected by the national industrial policy, rawmaterial prices, and labor market fluctuations. Different contract orders have different requirements, imposing high requirements onproduction management. The Company’s curtain wall products are engineered by itself. The operation mode remained unchanged inthe report period.
(3) Main business drive
See 3. Core competitiveness analysis in this chapter.
(4) Development stage of the industry, circle and industry position
The construction of office buildings and urban complexes in first- and second-tier cities in China has maintained a relativelystable rhythm and volume. The use of building curtain walls in high-end residential and apartment buildings has increased. Buildingcurtain walls remain the most common design element for public buildings such as airports, stations, cultural stadiums, schools andhospitals. The curtain wall industry is mature, the scale is stable and there is no obvious periodicity.
With the Belt and Road Initiative, Guangdong-Hong Kong-Macao Bay District and the construction of Xiong'an New Districtas a major national strategy, it has provided a broader and better development opportunity for the energy-saving curtain wall andmaterials business. The Company is a pioneer and first listed company in this industry. Over the past more than 20 years, theCompany has undertaken hundreds of large projects and received the highest award in the industry China Construction Luban Awardand Zhan Tianyou Civil Engineering Award for many times. The Company has also received nearly 100 provincial and above awards.The Company has been in the top 10 of ―China's top 100 building curtain wall industry‖ for many years, and has already had strongbrand advantages and competitiveness in the industry. The Company has a strong technology lead in the industry with 437 patents,
including 36 intention patents and two software copyrights. The Company also took part in the preparation of 22 national or industrystandards including the Public Construction Energy Saving Design Standard, making 9 records among Chinese enterprises. TheCompany has a Class A qualification for building curtain wall engineering contracting and class A qualification for building curtainwall engineering design. It is the highest level for curtain wall design and construction companies in China.
(5) Macroeconomic situation of the industry, the impact of changes in the industrial policy environment on theCompany, and the countermeasures taken by the Company
In 2018, the supply-side reform continued to deepen and industry development opportunities and challenges coexisted. Withthe continuous strengthening of the national environmental protection policy and the fluctuation of the price of international energyand metal materials, the price of most of the building materials is rising, which brings big challenge to the curtain wall industry.However, the comprehensive promotion of the construction of the Guangdong, Hong Kong, and Macau Bay Area and the Xiong'anNew District has also brought many opportunities to the industry.
In 2018, the Company will continue to steadily and securely operate traditional high-quality markets such as Guangdong-HongKong-Macao Bay District, Yangtze River Delta, Beijing-Tianjin-Hebei and Chengdu-Chongqing areas and promote overseasmarkets step by step. The Company will establish a long-term development mechanism for the team, continue to enhance brandimage, focus on key customers and enrich quality, and establish strategic alliances with outstanding companies. The Company willaccelerate the construction of the Chengdu Xinjin production base and the Shanghai Songjiang production base and create conditionsfor the Company to increase production, increase revenue and continue to develop rapidly.
(6) Quality control system, implementation standards, control measures and overall evaluation
Quality control system: The Company implements a comprehensive quality management system and has established a qualitymanagement system in accordance with ISO9001 from the aspects of design, procurement, storage, production, testing, delivery,installation, and after-sales service, and conduct regular reviews.
Implementation of the standard: In the process of building curtain wall business, the Company strictly complies withGB/T21086-2007 "Building Curtain Wall", JG/T231-2007 "Building Glass Lighting Roof" and other national and industrialstandards.
Control measures: The Company has established complete and effective quality control measures and quality managementbodies, and strictly implements various quality management and control measures.
Overall evaluation: The Company's products and project quality are in full compliance with the relevant requirements of therelevant national standards and standards, and maintain proper operation, providing customers with stable and reliable qualityproducts and engineering.
(7) Major project quality problem during the reporting period
None.
2. Rail transport equipment business
The Company’s main products in this sector are rail transport screen door systems, which are a necessary part of modernsubway system. It is installed at the edge of the subway platform and separates trains from the platform. The Company seeks to winorders through tenders and purchase raw materials and arrange production based on orders. The Company has built a completeindustry chain that integrates designing, production, engineering and after-sales services. The operation mode remained unchanged inthe report period.The Company has developed rail transport screen door systems with independent intellectual property rights. TheCompany also prepared the first Rail Transport Station Screen Door Standard. The Fangda metro screen door system which is at theinternational advanced level has been applied in subways in 37 cities around the world. More than 10 million people use the largesubway screen door system every day. The Fangda screen door system has grasped a leading market share and establishedincomparable brand influence thanks to its patents, standard and maintenance services. According to the China Urban RailAssociation, the market share of Fangda's screen door system ranks first in the world for nearly five years.
3. New energy industry: Solar PV power generation industry is largely supported by the Chinese government. The Company
is one of the first companies that possess intellectual property rights in the designing, production and integration of solar PV systems.In 2018, photovoltaic power stations in Xuanfeng Town, Pingxiang Town, Jiangxi Province, and photovoltaic power stations in theparks of Jiangxi Isuzu Automobile Co., Ltd. in Nanchang City and Dongguan Songshan Lake Photovoltaic Power Plant all operatedsteadily with a total power generation capacity of 20,737,000 kilowatt hours, meeting the designed power generation efficiency. Thesales income reached RMB 20,475,500 and operating profit of RMB 11,009,000. In the future, it will still bring long-term, stableincome and profits to the Company.
4. Real estateThe Company has basically completed one of the projects: Fangda Town ("Fangda Plaza", the same below) project in NanshanDistrict, Shenzhen; one project under development Nanchang HonggutanFenghuangzhouFangda Center Project; there are twoprojects in construction: FangdaBangshen Project in Baoan District, Shenzhen and Urban Renewal Project along the Dagang River inHenggang, Shenzhen.
For a detailed discussion of the Company’s business, please refer to “III. Analysis of Core Competencies” in this sectionof the report and Chapter VI “Operation Discussion and Analysis”.
II. Major assets change
1. Major assets change
| Main assets | Major change |
| Main assets | Major change |
| Equity assets | Long-term equity investment increased by 105.34% year-on-year mainly due to the payment of joint venture investment in the current period. |
| Fixed assets | No significant change |
| Intangible assets | Intangible assets increased by 36.43% year-on-year mainly due to the increase of land use rights of Shanghai Songjiang Base in the current period. |
| Project in progress | Construction in progress increased by 2083.85% year-on-year mainly due to the company's self-use office in the renovation of real estate. |
| Investment real estate | Investment real estate increased by 133.23% year-on-year mainly because the 1# building of Fangda Plaza project was converted into investment real estate and subsequent value added by fair value measurement |
2. Major foreign assets
□ Applicable √ Inapplicable
3 Core Competitiveness Analysis
Whether the Company needs to comply with disclosure requirements of special industriesYesProperty development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
(1) Curtain wall system and material1. Expertise and brand competitivenessThe industry and target market of the Company have high requirements for the performance of participating enterprises whichhas formed certain thresholds. Especially in the super high-rise buildings, large public buildings and special-shaped externalmaintenance structures, the company has rich experience in project implementation. It has established business contacts andcooperation with many large real estate development companies. The Company has a high reputation and strong marketcompetitiveness.
The Company has 437 patents (including 36 invention patents) and 2 software copyrights in the curtain wall system andmaterials industry which has created many firsts in the industry and is one of the high-end preferred brands in the Chinese curtainwall system materials industry.FANGDA is a nationwide well-known trademark in China.
2. Focusing on the high-end market to edge out competitors
In the fierce market competition, the Company accurately positions the market in the field of high-end energy-saving curtainwall systems with high requirements for technology, service and management, and focuses its resources on high-end curtain wallprojects.The construction of a number of curtain wall projects won the national "Luban Award", "Zhan Tianyou Civil EngineeringAward", "National Quality Engineering Award", "China Construction Engineering Decoration Award", "Magnolia" Award and"Customer Satisfaction Project" awards, and won the title of "China's curtain wall industry's most competitive top 10" and so on. TheCompany has built a leading brand and created a clear edge in the high-end curtain wall market.
3. Well-developed industry base landscape
Thanks to continued investment in facilities, the Company has established a national business landscape with Shenzhen as theheadquarters, Dongguan Songshanhu as the base in the south, Beijing in the north, Chengdu in the southwest and Shanghai andNanchang in the east. The Dongguan Songshanhu and Nanchang bases are the largest and most advanced curtain wall system andmaterial production bases in China and across the world, fueling the Company to increase its market share and competitiveness.
4. General solutions
The Company has integrated the design, production, management and engineering of curtain wall systems to enjoytechnological, cost, quality and service advantages.
5. Talent
The Company has trained a group of outstanding teams with strong marketing technical, management and financial experiencefrom a large number of project implementation experience. The core backbone personnel are stable, ensuring the execution ability oforders and bringing good user experience to customers.
6. Boost overseas market development to increase overseas orders
In recent years, the Company has increased its investment in overseas markets and gradually expanded its influence inAustralia and Southeast Asia. Thanks to good product quality and contract performance, it has continuously won the trust of new andold customers and more orders. The overseas market orders are growing steadily.
(2) Rail transport equipment business
1. National development strategy
With the implementation of major national strategies such as the Guangdong, Hong Kong, and Macao Bay District, Xiong'anNew District, and the ―Belt and Road‖ Initiative, the region has radiated into Southeast Asia, South Asia, Central Asia, and WestAsia, and has extended to Eastern Europe and North Africa with strong demand for infrastructure construction and interconnection.According to statistics as of December 31 2018, a total of 35 cities in the Chinese Mainland have completed the construction of5,766.6 kilometers of urban rail transit lines. As the world's largest supplier of rail transit shielding door systems, the Company willalso make full use of its advantages in technology, brand, and service to further consolidate and increase its domestic market share,and actively participate in rail transit construction in Guangdong, Hong Kong, Macau BayDistrict and Xiong'an New District. The
Company will vigorously expand overseas markets, especially the ―Belt and Road‖ Initiative, maintain the continuity and stability ofoverseas orders, balance the development of domestic and foreign markets, and continue to ―lead‖ the rail transit industry.
2. Technical advantageThrough continued independent innovation, the Company has developed the global leading metro screen door system with fullintellectual property right and broken the monopoly of overseas competitors. The Company has also compiled the Rail TransportStation Screen Door Standard, which is the first of its kind in China. The standard was approved in April 2006 and was implementedon March 1, 2007. As the first standard in the industry in China, the standard has played a key role in guiding the development ofChina’s rail transport screen door industry and enabled the Company a dominant lead in the industry. Currently, the Company has230 metro screen door patents, including 47 invention patents. The Company also has eight computer software copyrights.
3. Brand equitySo far, the Company has undertaken railway screen door projects in more than 30 cities including Hong Kong, Singapore,Kuala Lumpur of Malaysia, Noida of India and Bangkok of Thailand. The Fangda subway screen door system has grasped a leadingmarket share and established incomparable brand influence thanks to its patents, standard and maintenance services. The Companyhas become the largest railway screen door supplier in the world.
4. Industry chain advantageAs the first company to enter the subway screen door industry in China, the Company's subway screen doors have reached tomore than 60% of the subway cities in China, and many domestic subway screen doors have entered the maintenance period. TheCompany actively expands its industrial chain and takes the lead in the domestic market to provide metro maintenance services. TheCompany has a natural advantage in this high-end service industry. Our screen door system are independently developed by us, thusenabling us to provide prompt, overall, effective and standard maintenance services for our customers without other third parties. Asmore and more subways are opened, the business volume will continue to increase.
(3) New energy industry
The new energy business mainly comprises solar power PV application, PV construction and LED industry.1. Technical advantageWith more than ten years’ experience in developing solar energy PV power generating curtain wall technology, the Company isthe earliest company that masters the intelligent property right in the designing, production and integration of solar energy PV curtainwall systems and is a pioneer in the application of PV curtain wall technology.
2. Relation with other industriesDistributed solar power PV power generation is closely related to the Company’s existing businesses. Most distributed solarpower PV systems are closely related to construction. Moreover, the Company has more than 10 years' experience in electricalproduct integration. The Company also has more than 20 years’ experience in construction management and has the level-1construction curtain wall engineering qualification and electrical installation engineering qualification.
(4) Real Estate
1. The Company is committed to the Guangdong-Hong KongMacao Bay District, focusing on the development of urbanrenewal projects in the core area of Shenzhen. Benefiting from the continued positive economic growth of Shenzhen and the rapideconomic development, it is expected that the Company's real estate sales and property leasing will continue to contribute profits tothe company.
2. Although the company is a later comer in the industry, the Shenzhen Fangda Town project was quickly recognized by themarket and the sales rate was faster. At the same time, the Company has been rated as ―Shenzhen Real Estate Development IndustryDevelopment Potential Enterprise‖ by Shenzhen Housing Association for three consecutive years. In 2018, it has been awarded―Shenzhen Real Estate Development Industry Brand Value Enterprise‖ with professional operations for commercial and propertymanagement.
Chapter IV Operation Discussion and Analysis
1. Summary
In 2018 China's economic downward pressure increased. The Sino-US trade friction continued to affect and the prices of majorraw materials fluctuated. The Company overcamed many unfavorable factors, completed the targets set at the beginning of the yearand continued to maintain a good development trend. In the report period, the Company recorded a sales income ofRMB3,048,680,100, up 3.43% year on year. The net profit attributed to owners of the parent reached RMB2,246,164,600, up 96.27%year on year. The revenue from main businesses continued growing to RMB298,829,200, up 46.43% year on year.As of the end ofthe reporting period, the Company's order reserve was RMB4,634,830,300 (excluding real estate sales), an increase of 14.02% fromthe end of the previous year, which was 152.03% of the Company's sales revenue in 2018.
1. High-end curtain wall system and material business
In 2018, the Company adhered to the high-quality development road, made full use of the advantages of being located in thecore area of the Guangdong-Hong Kong-Macao Bay District and continued to deepen the high-end energy-saving curtain wall marketin Dawan District of Guangdong Hong Kong and Macao and achieved remarkable results. The number of new orders and the qualitywere significantly improved. During the reporting period, the Company won a series high-end curtain wall and material projectsincluding the Shenzhen International Convention and Exhibition Center, Shenzhen Tencent Digital Building, Shenzhen Bao'anCentral District Haifu Ecological Building, Shenzhen Mawan Ecological Park, Shenzhen Shenye Midtown Project, ShenzhenLongguangJiuzuan, Shenzhen HongrongyuanYicheng Center Garden, Zhuhai Youte Square, ZhongshanJiangbolong Science andTechnology Park, AIIB Beijing Headquarters, Shanghai Pudong Shipyard Phase II and III, Shanghai GemdaleJiuting Center, SuzhouSunan Vanke Yangshan North Phase II, Nanchang Business Union Center, Hefei Vanke Forest Park, Hangzhou Alibaba BabaxixiPark Phase IV, Wuhan Rongchuan Center Phase III, Lanzhou Donghu Square and Chengdu Zhaoshang Grand Rubik BuildingNo.14with a total amount of RMB2.353, including RMB1.52 billion from the Guangdong-Hong Kong-Macau Bay District, whichaccounts for 64.6% of the total, reflecting the Vompany's strong competitiveness in terms of product quality technical strength andbrand influence. During the reporting period, the Company achieved good results in the domestic market and also made newbreakthroughs in the overseas market. It signed projects such as Evermore in Melbourne Australia and Golder River in Ho Chi MinhVietnam to further expand the Company's business in the international market and improve influence of brands in overseas markets.In 2018, the Company's curtain wall system and materials business realized sales income of RMB2,010,704,000 with a year-on-yearincrease of 21.59% and net profit after deduction of RMB97,998,900, an increase of 1,123.00%. As of the end of the reporting period,the Company's curtain wall system and materials business orders reserve was RMB3,176,378,500 with an increase of 14.85% overthe same period of the previous year, which was 157.97% of the sales revenue of the curtain wall system and materials business in2018.The abundant order reserve has laid the foundation for the continuous development of the Company's curtain wall system andmaterials business. It is expected that the curtain wall system and materials business will remain an important source of sales revenueand profit for the Company.
In order to meet the Company's growing demand for orders, the Company continues to invest in hardware such as productionbase construction. In June 2018, the Fangda Western Headquarters Base in Chengdu Xinjin started construction and will be finishedin the first half of 2019. The base covers an area of 45,000 square meters and has a total construction area of about 21,000 squaremeters. It will become the most modern energy-saving and environmental protection curtain wall research and development andproduction base in western China. The new production base invested and constructed in Shanghai Songjiang was started in January2019. It is expected to be completed by the end of 2019. The base covers an area of 23,800 square meters and the total constructionarea is about 43,000 square meters. After the completion of the two bases, the national industrial layout of the upgrade company willbe improved and the production capacity of the Company's energy-saving and environmental protection curtain wall will be
enhanced to provide guarantee for the Company's sustained and rapid development.
During the reporting period, the Company tried its best to convert orders into sales revenue and successfully completed anddelivered a series of high-end curtain wall projects such as the Shenzhen Evergrande Times Financial Center Project, ShenzhenVanke Binhai Landmark Building, Shenyang Merchants Diamond Hill Plaza Project, Hangzhou Huanglong Vanke InternationalCenter and Shanghai Shipyard (Pudong) Area 2E3-2 (Phase I) and Zhonghai Taiyuan Yingze Bridge West Project. During thereporting period, Shenzhen ShenyeShangcheng (South District), Shenzhen China Energy Storage Building, Guangzhou SouthernPower Grid Project and Shenzhen Fangda Town invested and constructed by the Company won the "China Construction EngineeringDecoration Award" thanks to the outstanding design and construction quality; the Hong Kong Chinese University (Shenzhen) curtainwall project won the "Luban Award", the highest honor award in China's construction industry and the Shenzhen New CenturyWenbo Building project won the "My Favorite Curtain Wall Project" in Shenzhen. These honors highlights the Company's glory as aleading brand in the industry.
2. Rail transport equipment business
In 2018, the Chinese manufacturing, innovation and construction made great progress. As the world's largest supplier of subwayscreen door systems, the Company also seized the historical opportunity and took the "Belt and Road Initiative" opportunity toaccelerate the overseas market layout, which enabled the Company's rail transit business to achieve rapid growth in both Chinese andoverseas markets. In 2018, the Company won the first phase of the Ahmedabad Metro in India, the Golden Line of the Thai Metro,the Line 3 of Shijiazhuang Metro, the second and third phases of the Wuhan Metro Line 8, the second and third phases of ChengduMetro Line 3 and the phase one of the Nanning Subway Line No.4, Line No.2 East Extension Line, Guiyang Metro Line No.2, Xi'anMetro Line 1 Phase II, Xiamen Metro Line No.3 Phase I Project and won screen door maintenance contracts of the NanchangSubway No.1, Nanning Metro Line No.1, Nanjing Metro Line No.1, Wuhan Intercity Railway, Wuhan Metro Line No.2 and No.3,Tianjin Metro Line No.1 East Extension Line and Shenzhen Metro Line No.11 with a total amount of RMB72,5864,000. As of theend of the reporting period, the Company's rail transit industry order reached RMB1,458,451,800 with an increase of 12.25% overthe same period of last year, which is 489.93% of the Company's rail transit industry operating income in 2018.
During the reporting period, the first phase of the No.7 line of Wuhan Rail Transit, the first phase of the No. 11 line and theZhifang Line of the Wuhan City Rail Transit System were opened. All of the nine rail lines in Wuhan have adopted the Fangdascreen door system. Fangda's screen door system relies on many advantages such as "advanced performance, stable quality, reliableoperation, safety and attractive design" and participates in the historical transformation of rail transit from scratch to single line andnetwork in many cities in China. It has achieved a good market share in the world for the past five years.
Since the promulgation and implementation of the national industry standard "Urban Rail Transit Platform Screen Door" editedby the Company on March 1 2007, it has played an active role in regulating and guiding the development and technologicalinnovation of the barrier door industry in China's rail transit platform. However, with the advancement of the industry's scientific andtechnological level and the continuous emergence of new experiences and new demands in the practical application of rail transitscreen door products, this standard can no longer meet the actual needs of the industry. To this end in November 2018, the Companyonce again led the revision of the "Urban Rail Transit Platform Screen Door" standard, highlighting the Company's position as aleader in the field of urban rail transit platform screen doors, fully reflecting the Fangda screen door system in China's track leawdingadvantages in many aspects such as brand influence, market share, patent ownership, standard setting and maintenance professionalservices in the transportation sector.
3. New energy industry
During the reporting period, the three solar photovoltaic power plants that the Company had connected to the grid wereoperating safely and steadily. In 2018, the total power generation was 20,737,000 kWh, the sales revenue was RMB20,475,500 andthe operating profit was RMB11,009,000, exceeding the expectation. Among them, the 20MW distributed photovoltaic powergeneration project of Chayu Village, Xuanfeng Town, Luxi County, Jiangxi Province and the distributed photovoltaic powergeneration project of, Songshan Lake in Dongguan have been included in the Renewable Issue issued by the Ministry of Finance theNational Development and Reform Commission and the National Energy Administration. The Company's solar photovoltaic power
station will continue to bring long-term stable income and profit to the company and play a good role in promoting low-carbondevelopment ecological civilization construction and accelerating the development of circular economy.
4. Real estate(1) Industry development and impacts on the Company's future business and profitabilityDuring the reporting period, the Fangda Town project sold by the Company was in Nanshan District,Shenzhen.As a first-tiercity in China, Shenzhen has been a hot city with rapid population inflows and sustained economic growth in recent years. In 2018,Shenzhenhas adjusted the urban renewal work reform project. There are not many industrial reform projects that are on sale or aboutto enter the market. At the same time, driven by the sales price of the real estate around the project, the sales price and gross profitmargin of the Company's Fangda Town project increased significantly during the reporting period. In 2019, the remaining saleablearea of the project is approximately 10,675.75 square meters and the estimated sales price and gross profit margin can maintain orexceed the 2018 level.
During the reporting period, the 1# building of the second phase of Shenzhen Fangda Town Project has completed planningacceptance. Except for part of its own use, the remaining area is about 74,000 square meters for rental. As of the end of the reportingperiod, the lease area that has been signed reached 11,000 square meters. The commercial part of the Fangda Town project wasopened in October 2018. As of the end of the reporting period, the signing rate of commercial shops was 90%, which have beenopened. It is expected that the real estate sales and property leasing will continue to contribute profits and cash flow to the Companyin the future.
(2) Main business model, landscape, market position and competitiveness of the Company
The Company's business model adopts the traditional vertical overlap hybrid development model that includes land acquisitionand property management vertically overlapping in management and each project is independently operated by a special projectcompany.
The Company will focus on Guangdong, Hong Kong, and Macau Bay Area, focusing on the development of Shenzhen's urbanrenewal projects. The development of products will be mainly office buildings, supporting businesses, security housing, or residentialproperties. The Company has established a professional team to operate and manage the Company's businesses and properties.
Although the Company is a late comer in the real estate industry, the Fangda Town project developed by the Company has beenquickly recognized by the market and the sales rate has been fast. At the same time, the Company has been rated as "Shenzhen RealEstate Development Industry Development Potential Enterprise" by the Shenzhen Real Estate Industry Association for threeconsecutive years. In 2018, it was named "Shenzhen Real Estate Development Industry Brand Value Enterprise".With the influenceof Fangda Brand and its strong professional level, the Company has gained a firm foothold in the market competition and its marketposition has gradually increased.
(3) Land reserve
Project held by the Company:
| Project | Purpose | Development area (m2) | Building are (m2) | Location | Notes |
| Fangda Town | Industrial | 35,397.60 | 212,400.00 | Shenzhen | Basically completed, available for sale and lease |
| Nanchang HonggutanFenghuangzhou Project | Commercial | 16,608.55 | 66,433.93 | Nanchang | In construction, available for presales in 2019 |
During the reporting period, in addition to the above-mentioned projects, the Company also has a cooperative project ShenzhenFangdaBangshen Project, which covers an area of 20,714.9 square meters. During the reporting period, it is actively promotingrelated matters related to project renewal declaration.
During the reporting period, Shenzhen ZhongrongLitai Investment Co. Ltd. a controlled subsidiary of the Company andShenzhen HenggangDakang Co. Ltd. and Shenzhen HenggangDakang Co. Ltd. Shangzhong Branch signed the "Shenzhen
Henggangda". The cooperation agreement for the urban renewal project along the Dakang River area of ShenzhenHenggangDakangJoint Stock Co., Ltd. covering an area of about 80000 square meters is currently being actively promoted.
In addition, the Company does not hold other development projects and land to be developed.
(4) Real estate development
| Project under construction | Interests percentage | Starting time | Floor area (m2) | Building are (m2) | Finished building are (m2) | Estimated total investment (in RMB100 million) | Invested amount (in RMB100 million) |
| Fangda Town | 100% | May. 2014 | 35,397.6 | 212,400 | 217,763.69 | 25.85 | 23.37 |
| Nanchang HonggutanFenghuangzhou Project | 100% | May. 2018 | 16,608.55 | 66,433.93 | 0 | 6.70 | 2.3 |
(5) Project sales in the report period
| Project under construction | Interests percentage | Sellable area (m2) | Sold area (m2) |
| Shenzhen Fangda Town | 100% | 93,086.25 | 82,410.50 |
(6) Real estate lease
| Form | City | Interests percentage | Floor area (m2) | Lease ratio (leasable) | Notes |
| Office building | Shenzhen | 100% | 26,040.55 | 97.00% | Fangda Building |
| Commercial shop | Shenzhen | 100% | 31,543.00 | 90.00% | Commercial podium of Fangda Town |
| Office building | Shenzhen | 100% | 11,893.73 | 13.19% | Office building of Fangda Town |
| Office building | Jiangxi | 100% | 5,387.50 | 100.00% | Jiangxi New Material |
| Plant | Jiangxi | 100% | 45,623.82 | 96.52% | Jiangxi New Material |
(7) Financing in the report period
| Financing source | Currency | Balance (in RMB) | Financing cost (interest rate) | Due date | Collateral/guarantee |
| Bank loan | RMB | 893,978,153.39 | Interval rate, between 10% below the benchmark interest rate and 60% above the benchmark interest rate on the withdrawal date | 2023-2-11 | Pledged by equity in Fangda Real Estate Co., Ltd. and guaranteed by the Company Guarantee |
(8) Development strategy and operation plan in the next year
The Company has taken the real estate business as one of the important sectors of the Company. The Company's developmentstrategy is to become an influential and professional company in the core area and to win customer satisfaction through qualityproducts.
In 2019, the Company plans to complete the rental and sales of the Fangda Town project except for its own use; to realize thepre-sale of the Nanchang Honggutan Phoenix Island project; to actively promote the project declaration of the ShenzhenFangdaBangshen project; to complete the preparations before the Dukang project declaration .It is expected that the real estate salesand property leasing will continue to contribute profits to the Company in the future.
(9) Bank mortgage loan guarantee provided for commercial housing purchasersThe Group’s property business provides periodic mortgage guarantee for property purchasers. The term of the periodicguarantee lasts from the effectiveness of guarantee contracts to the completion of mortgage registration and transfer of housingownership certificates to banks. By 31.12.18, the Company has provided periodic guarantee of RMB778,189,500.
(10) Property management
In 2018 the wholly-owned subsidiary Fangda Property continued to improve the on-site property management quality ofShenzhen Fangda Town, Fangda Building and Dongguan Industrial Park. Through refined management, customers were satisfied bythe services.
5. Repurchase of B shares and increase in shareholding by actual controllers
The B-share market has long been in a downturn due to the loss of financing functions, poor liquidity, and small market capacity.The Company’s B share price has largely deviated from the Company’s actual operating conditions. The performance of the B sharesis not in line with the Company’s intrinsic value, and the Company’s investment value is underestimated. In order to enhance theCompany's investment value and maximize the interests of shareholders, the Company reviewed and approved two repurchases of Bshares and cancellation in 2018. As of the disclosure date of this report, the Company has repurchased 60,258,065 B shares and usedfunds of HKD227,491,556.01, which has maintained the stability of the market and enhanced investors' confidence.The followingtable shows the details:
| Repurchase | Period | Number of shares | Fund used | Date of cancellation |
| First | August 13, 2018 to August 16, 2018 | 28,160,568 | 114,478,923.89 | 29.08.18 |
| Second | December 19, 2018 to January 3, 2019 | 32,097,497 | 113,012,632.21 | 11.01.19 |
| Total | 60,258,065 | 227,491,556.10 |
Since optimistic about the Company's future development, since 2011, the company's actual controller, chairman and presidentMr. XiongJianming and Banglin Technology Company and Shengjiu Investment Co. Ltd. controlled by him have been increasingtheir shareholdings. In the reporting period, Banglin Company increased its holdings of 9,819,645A shares and Shengjiu Companyincreased its holdings of 2,103,856 B shares. These are the actions of the actual controllers to stabilize the Company's share priceduring the declining of the Company's stock price.
6. InnovationThe Company adheres to the business philosophy of "technology-based innovation" and the scientific and technologicalinnovation development path. Its independent innovation capabilities and technology level has always been at the forefront ofdomestic similar enterprises. The year 2018 is the company's management innovation year. The Company comprehensively improvesproduction efficiency and project management efficiency through management model innovation, system innovation andtechnological innovation.
In 2018, the Company edited and prepared 10 national provincial and municipal standards, applied for 27 patents and obtained23 new authorized patents including 4 invention patents, and independently developed new products "BIM system parameter designdevelopment and application" and 18 items such as "Enhanced PEDC_IBP_200 R&D" and "Functional R&D of PassengerDetectors". The company's screen door industry takes intelligent manufacturing as the starting point and develops automatic
glue-making robots and automatic welding robots to put into trial production promotes the intelligent production of welding andrubbering promotes the technical level and product quality and reduces the labor intensity of employees in order to improve productmarket competitiveness, reduce labor costs and improve economic efficiency.
In 2018, the Company focused on management refinement and service refinement, implemented virtual server solutions andindependently established a cloud terminal management system to achieve the goals of reducing office costs, cross-regionalcross-time office and data security management, effectively improve office IT systems, convenience and security. The ShenzhenFangda Town project built by the Company has gradually introduced the building intelligent control system, parking space guidancesystem, visitor management system and self-paying system. While realizing the innovation of management mode, it also savesmanagement resources.
7. Awards
During the reporting period, the Company was awarded Top 100 Listed Companies in China, the Best Employer Award inChina, Top 500 Enterprises in Guangdong, the Top 100 in Guangdong Manufacturing Industry, Top 100 Private Enterprises inGuangdong and the 40th Anniversary of Reform and Opening up, Guangdong Excellent Enterprises, Guangdong ProvincialIndependent Innovation Demonstration Enterprise, Guangdong Province Honesty Demonstration Enterprise, Guangdong ProvincialContract-honoring and Credit Enterprise, Shenzhen Top 100 Enterprises and Shenzhen Outstanding Social Responsibility Enterprise,won the National Outstanding Foreign Investment Enterprise - Harmonious Labor Relations Promotion Award, Best Board ofDirectors In 2017. In the information disclosure assessment, the Company was awarded the highest level A of the Shenzhen StockExchange and the chairman and president of the company Mr. XiongJianming was elected as the representative of the 13
th
NationalPeople's Congress.
A number of curtain wall projects undertaken by the wholly-owned subsidiary FangdaJianke won the awards such as the "LubanAward", "China Construction Engineering Decoration Award", "Excellent Quality Award" and "My Favorite Curtain Wall Project".
FangdaZhichuang, a wholly-owned subsidiary was awarded the honorary title of ―Excellent Contractor‖ issued by NanjingMetro Operation Company and Tianjin Metro Operation Company and ―Excellent Contractor‖ issued by MTR Rail Transit Co.Ltd.Mr. XiongHaigang, the general manager of FangdaZhichuang was named "the 40th anniversary of reform and opening upaffecting the innovation and development of Shenzhen equipment industry."
Fangda Real Estate Co. Ltd., a wholly-owned subsidiary, was awarded the ―Shenzhen Real Estate Development Industry BrandValue Enterprise‖.
Xu Weihua, an employee of Fangda Jiangxi New Materials Co. Ltd., a wholly-owned subsidiary, won the ―Nanchang May 1stLabor Medal‖ Fang Hongjian staff, Li Honglin and Wei Zhengpei were awarded the title of ―Star Craftsman‖ in ShenzhenDecoration Industry.
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.3 – Listed Companies Engaged in Property Development.
II. Main business analysis
1. Summary
For details see Management Discussion and Analysis – 1. Profile
2. Income and costs
(1) Turnover composition
In RMB
| 2018 | 2017 | YOY change (% ) | |||
| Amount | Proportion in operating costs (%) | Amount | Proportion in operating costs (%) | ||
| Total turnover | 3,048,680,152.06 | 100% | 2,947,470,813.58 | 100% | 3.43% |
| Industry | |||||
| Metal production | 2,010,704,004.96 | 65.95% | 1,653,688,831.23 | 56.11% | 21.59% |
| Railroad industry | 297,686,976.09 | 9.76% | 339,399,859.01 | 11.51% | -12.29% |
| New energy industry | 19,625,478.18 | 0.64% | 21,848,200.20 | 0.74% | -10.17% |
| Real estate | 697,518,090.10 | 22.88% | 911,195,066.07 | 30.91% | -23.45% |
| Others | 23,145,602.73 | 0.76% | 21,338,857.07 | 0.72% | 8.47% |
| Product | |||||
| Curtain wall system and materials | 2,010,704,004.96 | 65.95% | 1,653,688,831.23 | 56.11% | 21.59% |
| Subway screen door and service | 297,686,976.09 | 9.76% | 339,399,859.01 | 11.51% | -12.29% |
| PV power generation products | 19,625,478.18 | 0.64% | 21,848,200.20 | 0.74% | -10.17% |
| Real estate sales | 697,518,090.10 | 22.88% | 911,195,066.07 | 30.91% | -23.45% |
| Others | 23,145,602.73 | 0.76% | 21,338,857.07 | 0.72% | 8.47% |
| District | |||||
| In China | 2,969,200,798.04 | 97.39% | 2,915,698,936.74 | 98.92% | 1.83% |
| Out of China | 79,479,354.02 | 2.61% | 31,771,876.84 | 1.08% | 150.16% |
(2) Industries, products or districts that take more than 10% of the Company’s business turnover or profit
√ Applicable □ InapplicableWhether the Company needs to comply with disclosure requirements of special industriesYesProperty development and decoration industriesThe Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
In RMB
| Turnover | Operation cost | Gross margin | Year-on-year change in operating revenue | Year-on-year change in operating costs | Year-on-year change in gross margin | |
| Industry | ||||||
| Metal production | 2,010,704,004.96 | 1,720,929,280.88 | 14.41% | 21.59% | 16.97% | 3.38% |
| Real estate | 697,518,090.10 | 389,500,898.70 | 44.16% | -23.45% | 42.19% | -25.78% |
| Railroad industry | 297,686,976.09 | 219,794,604.25 | 26.17% | -12.29% | -10.68% | -1.32% |
| Product | ||||||
| Curtain wall system and materials | 2,010,704,004.96 | 1,720,929,280.88 | 14.41% | 21.59% | 16.97% | 3.38% |
| Real estate sales | 697,518,090.10 | 389,500,898.70 | 44.16% | -23.45% | 42.19% | -25.78% |
| Metro screen door | 297,686,976.09 | 219,794,604.25 | 26.17% | -12.29% | -10.68% | -1.32% |
| District | ||||||
| In China | 2,969,200,798.04 | 2,265,862,804.15 | 23.69% | 1.83% | 16.16% | -9.41% |
Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period□ Applicable √ InapplicableDifferent business types of the Company
In RMB
| Business type | Turnover | Operation cost | Gross margin |
| Curtain wall system and materials | 2,010,704,004.96 | 1,720,929,280.88 | 14.41% |
Whether the Company runs business through the Internet□ Yes √ NoWhether the Company runs overseas projects□ Yes √ NoMain business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period□ Applicable √ Inapplicable
(3) The physical sales revenue is high the labor service revenue
□ Yes √ No
(4) Performance of signed major sales contracts in the report period
√ Applicable □ InapplicableWhether the Company needs to comply with disclosure requirements of special industriesYesProperty development and decoration industriesThe Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
In RMB
| Project amount | Cumulative recognized income | Amount of unfinished part |
| Unfinished project | 5,824,972,385.87 | 2,841,786,441.83 | 2,983,185,944.04 |
In RMB
| Project | Project amount | Construction period | Completion percentage | Income recognized in this period | Cumulative recognized income | Payment collection | Balance of accounts receivable |
| Shenzhen Hanjing Financial Center curtain wall project | 382,393,042.11 | 2015.09-2019.12 | 96.00% | 117,466,077.89 | 366,756,750.91 | 291,779,941.07 | 74,976,809.84 |
| Tencent Digital Building curtain wall project | 314,399,200.00 | 2018.09-2019.11 | 0.00% | 0.00 | 0.00 | 31,440,000.00 | 0.00 |
Other note□ Applicable √ Inapplicable
In RMB
| Accumulative occurred costs | Accumulative recognized gross margin | Estimated loss | Settled amount | Balance of unpaid amount of finished project | |
| Finished but not settled project | 7,409,639,074.33 | 1,086,522,725.21 | 1,603,589.59 | 8,365,879,441.60 | 128,678,768.35 |
In RMB
| Project | Contract amount | Settled amount | Balance of unpaid amount of finished project |
Other note□ Applicable √ Inapplicable
(5) Operation cost composition
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.Main business cost
In RMB
| Cost composition | Business type | 2018 | 2017 | YOY change (% ) | ||
| Amount | Proportion in operating costs (%) | Amount | Proportion in operating costs (%) | |||
| Raw materials | Curtain wall system and | 1,236,717,752.50 | 71.86% | 983,487,997.36 | 66.85% | 5.01% |
| materials | ||||||
| Installation and engineering costs | Curtain wall system and materials | 357,806,657.79 | 20.79% | 334,781,910.86 | 22.76% | -1.97% |
| Labor cost | Curtain wall system and materials | 80,488,503.77 | 4.68% | 76,062,568.69 | 5.17% | -0.49% |
IndustryIndustry
In RMB
| Industry | Item | 2018 | 2017 | YOY change (% ) | ||
| Amount | Proportion in operating costs (%) | Amount | Proportion in operating costs (%) | |||
| Metal production | Raw materials | 1,236,717,752.50 | 71.86% | 983,487,997.36 | 66.85% | 5.01% |
| Metal production | Installation and engineering costs | 357,806,657.79 | 20.79% | 334,781,910.86 | 22.76% | -1.97% |
| Metal production | Labor cost | 80,488,503.77 | 4.68% | 76,062,568.69 | 5.17% | -0.49% |
| Real estate | Construction and installation cost | 100,803,413.00 | 25.88% | 144,887,293.21 | 52.89% | -27.01% |
| Real estate | Land cost | 222,947,137.10 | 57.24% | 71,670,682.41 | 26.16% | 31.08% |
| Real estate | Loan interest | 8,022,581.23 | 2.06% | 10,433,871.29 | 3.81% | -1.75% |
| Real estate | Labor cost | 10,943,065.48 | 2.81% | 2,950,138.93 | 1.08% | 1.73% |
Notes
(6) Change to the consolidation scope in the report period
√ Yes □ No1. In the current period, Shanghai Fangda Jingling Technology Co. Ltd. and Shenzhen Fangda Cloud Rail Technology Co. Ltd. havebeen newly established two new companies in the current consolidated statement.2. In this period, the indirect controlled subsidiary Fangda Decoration Engineering (Shenyang) Co. Ltd. was liquidated. Therefore,one subsidiary is removed from the consolidated statement of this period.
(7) Major changes or adjustment of business, products or services in the report period
□ Applicable √ Inapplicable
(8) Major sales customers and suppliers
Main customers
| Total sales amount to top 5 customers (RMB) | 563,898,240.47 |
| Proportion of sales to top 5 customers in the annual sales | 18.50% |
| Percentage of sales of related parties in top 5 customers in the annual sales | 0.00% |
Information of the Company's top 5 customers
| No. | Customer | Sales (RMB) | Percentage in the annual sales |
| 1 | No.1 | 130,394,127.62 | 4.28% |
| 2 | No.2 | 123,189,990.17 | 4.04% |
| 3 | No.3 | 114,044,735.81 | 3.74% |
| 4 | No.4 | 110,847,181.39 | 3.64% |
| 5 | No.5 | 85,422,205.48 | 2.80% |
| Total | -- | 563,898,240.47 | 18.50% |
Other information about major customers□ Applicable √ InapplicableMain suppliers
| Purchase amount of top 5 suppliers (RMB) | 380,952,155.62 |
| Proportion of purchase amount of top 5 suppliers in the total annual purchase amount | 18.58% |
| Percentage of purchasing amount of related parties in top 5 customers in the annual purchasing amount | 0.00% |
Information of the Company’s top 5 suppliers
| No. | Supplier | Purchase amount (RMB) | Percentage in the annual purchase amount |
| 1 | No.1 | 134,620,520.47 | 6.56% |
| 2 | No.2 | 69,068,820.77 | 3.37% |
| 3 | No.3 | 63,011,613.48 | 3.07% |
| 4 | No.4 | 57,243,171.56 | 2.79% |
| 5 | No.5 | 57,008,029.34 | 2.78% |
| Total | -- | 380,952,155.62 | 18.58% |
Other information about major suppliers□ Applicable √ Inapplicable
3. Expenses
In RMB
| 2018 | 2017 | YOY change (% ) | Notes | |
| Sales expense | 49,833,945.89 | 61,063,948.40 | -18.39% | |
| Administrative expense | 140,002,624.79 | 134,819,477.53 | 3.84% | |
| Financial expenses | 82,328,388.89 | 67,058,846.06 | 22.77% | Mainly due to stopping of capitalization of the annual interest expense of the Fangda Town project this year |
| R&D cost | 19,854,244.58 | 17,997,202.77 | 10.32% |
4. R&D investment
√ Applicable □ Inapplicable
The Company adheres to the business philosophy of "technology-based innovation" and the scientific and technologicalinnovation development path. Its independent innovation capabilities and technology level has always been at the forefront ofdomestic similar enterprises. The Company is committed to the research and development of independent intellectual propertyproducts and enhances its core competitiveness. In 2018, the Company edited and prepared 10 national provincial and municipalstandards, applied for 27 patents and obtained 23 new authorized patents including 4 invention patents, and independently developednew products "BIM system parameter design development and application" and 18 items such as "Enhanced PEDC_IBP_200 R&D"and "Functional R&D of Passenger Detectors". The Company's screen door industry takes intelligent manufacturing as the startingpoint and develops automatic glue-making robots and automatic welding robots to put them into trial production, promotes theintelligent production of welding and rubbering, promotes the technical level and product quality, and reduces the labor intensity ofemployees in order to improve product market competitiveness, reduce labor costs and improve economic efficiency.
R&D investment
| 2018 | 2017 | Change | |
| R&D staff number | 404 | 400 | 1.00% |
| R&D staff percentage | 18.31% | 18.60% | -0.29% |
| R&D investment amount (RMB) | 138,333,164.52 | 112,793,075.49 | 22.64% |
| Investment percentage in operation turnover | 4.54% | 3.83% | 0.71% |
| Capitalization of R&D investment amount (RMB) | 0.00 | 0.00 | 0.00% |
| Percentage of capitalization of R&D investment in the R&D investment | 0.00% | 0.00% | 0.00% |
Reason for the increase in the percentage of R&D investment in the business turnover√ Applicable □ InapplicableExplanation of the increase in the capitalization of R&D investment√ Applicable □ Inapplicable
5. Cash flow
In RMB
| Item | 2018 | 2017 | YOY change (% ) |
| Sub-total of cash inflow from business operations | 2,974,390,387.48 | 3,549,895,018.15 | -16.21% |
| Sub-total of cash outflow from business operations | 2,587,287,667.91 | 2,992,061,872.42 | -13.53% |
| Cash flow generated by business operations, net | 387,102,719.57 | 557,833,145.73 | -30.61% |
| Sub-total of cash inflow generated from investment | 7,678,717,862.02 | 11,213,677,450.42 | -31.52% |
| Subtotal of cash outflows | 7,471,021,595.30 | 11,602,815,885.41 | -35.61% |
| Cash flow generated by investment activities, net | 207,696,266.72 | -389,138,434.99 | 153.37% |
| Subtotal of cash inflow from financing activities | 708,000,000.00 | 978,503,029.59 | -27.64% |
| Subtotal of cash outflow from financing activities | 1,279,597,053.40 | 1,149,248,335.73 | 11.34% |
| Net cash flow generated by financing activities | -571,597,053.40 | -170,745,306.14 | -234.77% |
| Net increase in cash and cash equivalents | 24,905,355.13 | -4,539,039.85 | 648.69% |
+Explanation of major changes in related data from the same period last year√ Applicable □ InapplicableExplanation of major difference between the cash flow generated by operating activities and the net profit in the year√ Applicable □ InapplicableDuring the reporting period, the difference between the net cash flow of operating activities of the company and the net profit of theyear was mainly due to the fact that the changes in fair value did not generate cash flow during the current period.
III. Non-core business analysis
√ Applicable □ Inapplicable
In RMB
| Amount | Profit percentage | Reason | Whether continuous | |
| Investment income | 27,776,084.43 | 0.94% | Mainly from bank financial products | No |
| Gain/loss caused by changes in fair | 2,913,858,560.57 | 98.12% | It is mainly due to changes in fair value arising from | No |
| value | follow-up measurement of fair value of building 1# of Fangda Plaza project. | |||
| Assets impairment | 239,866,511.30 | 8.08% | Mainly bad debt provision corresponding to accounts receivable | Yes |
| Non-operating revenue | 3,712,594.09 | 0.13% | No | |
| Non-business expenses | 3,846,202.80 | 0.13% | No |
4. Assets and liabilities
1. Major changes in assets composition
In RMB
| End of 2018 | End of 2017 | Change (% ) | Notes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary capital | 1,389,062,083.76 | 13.03% | 1,180,398,479.51 | 15.48% | -2.45% | |
| Account receivable | 1,920,075,031.85 | 18.01% | 1,920,372,426.16 | 25.18% | -7.17% | |
| Inventory | 651,405,832.29 | 6.11% | 819,610,960.67 | 10.75% | -4.64% | |
| Investment real estate | 5,256,442,406.63 | 49.32% | 2,253,794,404.55 | 29.56% | 19.76% | Mainly the Fangda Plaza project 1# building was converted into investment real estate and subsequent value added by fair value |
| Long-term share equity investment | 70,105,657.88 | 0.66% | 34,142,055.62 | 0.45% | 0.21% | |
| Fixed assets | 455,274,241.83 | 4.27% | 468,118,279.18 | 6.14% | -1.87% | |
| Construction in process | 58,269,452.72 | 0.55% | 2,668,198.62 | 0.03% | 0.52% | |
| Short-term loans | 208,000,000.00 | 1.95% | 616,000,000.00 | 8.08% | -6.13% | Due to repayment of borrowing |
| Long-term loans | 1,193,978,153.39 | 11.20% | 893,978,153.39 | 11.72% | -0.52% | |
2. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
In RMB
| Item | Opening amount | Gain/loss caused by changes in fair value | Accumulative changes in fair value accounting into the income account | Impairment provided in the period | Amount purchased in the period | Amount sold in the period | Closing amount |
| Financial assets | |||||||
| 1. Financial assets measured at fair value with variations accounted into current income account (excluding derivative financial assets) | |||||||
| 2. Derivative financial assets | |||||||
| 3. Sellable financial assets | 28,562,575.67 | 6,888,567.44 | 21,674,008.23 | ||||
| Subtotal | 28,562,575.67 | 6,888,567.44 | 21,674,008.23 | ||||
| Investment real estate | 1,492,278,859.69 | 2,916,922,279.48 | 11,675,404.61 | 72,101,165.00 | 5,343,905.00 | 5,230,896,067.50 | |
| Productive biological assets | |||||||
| Others | |||||||
| Total | 1,520,841,435.36 | 2,916,922,279.48 | 11,675,404.61 | 6,888,567.44 | 72,101,165.00 | 5,343,905.00 | 5,252,570,075.73 |
| Financial | 159,000.00 | 1,625,725.00 | |||||
Major changes in the assets measurement property of the Company in the report period□ Yes √ No
3. Right restriction of assets at the end of the period
liabilitiesItem
| Item | Closing book value | Reason |
| Monetary capital | 432,871,193.08 | Warranty, time deposit, B share repurchase fund |
| Fixed assets | 51,298,617.58 | Loan by pledge |
| Investment real estate | 309,189,866.37 | Loan by pledge |
| 100% stake in Fangda Property Development held by the Company | 200,000,000.00 | Loan by pledge |
| Total | 993,359,677.03 | -- |
V. Investment
1. General situation
□ Applicable √ Inapplicable
2. Major equity investment in the report period
□ Applicable √ Inapplicable
3. Major nonequity investment in the report period
□ Applicable √ Inapplicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ InapplicableThe Company made no investment in securities in the report period
(2) Derivative investment
√ Applicable □ Inapplicable
In RMB10,000
| Derivative investment operator | Relationship | Related transaction | Type | Initial amount | Start date | End date | Initial investment amount | Amount in this period | Amount sold in this period | Impairment provision (if any) | Closing investment amount | Proportion of closing investment amount in the closing net assets in the report period | Actual gain/loss in the report period |
| Shanghai Futures Exchange | No | No | Shanghai aluminum | 151.25 | 27.09.17 | 10.07.19 | 151.25 | 16,988.75 | 14,604.24 | 2,535.76 | 0.49% | -506.34 | |
| Capital source | Self-owned fund | ||||||||||||
| Lawsuit (if any) | None | ||||||||||||
| Disclosure date of derivative investment approval by the Board of Directors (if any) | 31.10.17 | ||||||||||||
| Disclosure date of derivative investment approval by the Shareholders’ Meeting (if any) | |||||||||||||
| Risk analysis and control measures for the derivative holding in the report period (including without limitation market, liquidity, credit, operation and legal risks) | To prevent the risk of fluctuation of raw material prices, the Company adopted the aluminum futures exchanged at the domestic futures exchange to provide hedging for aluminum as a raw material for the Company. The Company has set up and implemented the Provincial Regulations on China Fangda Group Domestic Futures Hedging to prevent risks. | ||||||||||||
| Changes in the market price or fair value of the derivative in the report period, the analysis of the derivative’s fair value should disclose the method used and related assumptions and parameters. | Fair value of derivatives are measured at open prices in the futures market | ||||||||||||
| Material changes in the accounting policies and rules related to the derivative in the report period compared to last period | None | ||||||||||||
| Opinions of independent directors on the Company’s derivative investment and risk controlling | None |
5. Use of raised capital
□ Applicable √ InapplicableThe Company used no raised capital in the report period.
VI. Major assets and equity sales
1. Major assets sales
□ Applicable √ InapplicableThe Company sold no assets in the report period.
2. Major equity sales
□ Applicable √ Inapplicable
VII. Analysis of major joint stock companies
√ Applicable □ InapplicableMajor subsidiaries and joint stock companies affecting more than 10% of the Company’s net profit
In RMB
| Company | Type | Main business | Registered capital | Total assets | Net assets | Turnover | Operation profit | Net profit |
| FangdaZhichuang | Subsidiary | Subway screen door and service | 105,000,000.00 | 494,097,421.66 | 220,303,754.55 | 297,686,976.09 | 84,991,503.98 | 79,084,666.1 |
| Fangda Property | Subsidiary | Real estate | 200,000,000.00 | 6,269,497,658.70 | 3,175,084,569.41 | 681,709,471.17 | 2,859,145,455.13 | 2,153,017,263.64 |
| FangdaJianke | Subsidiary | Curtain wall system and materials | 500000000 | 3,005,611,693.29 | 1,030,991,393.40 | 1,753,981,416.61 | 219,098,842.60 | 208,352,437.88 |
Acquisition and disposal of subsidiaries in the report period√ Applicable □ Inapplicable
| Company | Acquisition and disposal of subsidiaries in the report period | Impacts on overall production, operation and performance |
| Shanghai FangdaQingling Technology Co., | Newly set | None |
| Ltd. | ||
| Shenzhen Fangda Cloud Rail Technology Co., Ltd. | Newly set | None |
| Fangda Decoration Engineering (Shenyang) Co., Ltd. | Liquidation | None |
Major joint-stock companies
VIII. Structural entities controlled by the Company
□ Applicable √ Inapplicable
IX. Future Prospect
(1) Competition map and development trned
1. Curtain wall and material system industryWith the development of the major national strategies such as the construction of Guangdong, Hong Kong, and Macau BayArea and Xiong'an New District, commercial and office buildings, urban commercial complexes, star-rated hotels and other urbancommercial spaces as well as airports, stations, rail transit, museums, libraries, Public spaces such as stadiums, schools, and hospitalshave strong demand for curtain walls, and the curtain wall system and material industry still have a good foundation. Over recentyears, a series of industry policies will be issued to push forward the industry, providing a gold opportunity for the development ofenergy-saving curtain wall and material business.
2. Rail transport equipment businessIn recent years, with the support of national policies, the urban transportation industry will continue to develop well and themarket scale will continue to expand with significant economic benefits. According to statistics as of December 31 2018, a total of 35cities in the Chinese Mainland have completed the construction of 5,766.6 kilometers of urban rail transit lines. The total number ofnewly added operation lines in the three years since the "13th Five-Year Plan" has been 2148.7 kilometers and the average annualnew line length is 716.2 kilometers.
With the implementation of major national strategies such as the Guangdong, Hong Kong, and Macao Bay District, Xiong'anNew District, and the ―Belt and Road‖ Initiative, the region has radiated into Southeast Asia, South Asia, Central Asia, and WestAsia, and has extended to Eastern Europe and North Africa with strong demand for infrastructure construction and interconnection.Therefore, the rail transit equipment industry will face new and unprecedented opportunities for development.
3. New energy industry
Photovoltaic is a clean energy source supported by the government. In 2019, the photovoltaic industry and policy trends arestill improving. The photovoltaic industry will enter a new stage of development from high-speed development that relies ongovernment subsidy to refined high-technology development, reshuffling the industry development direction.
4. Real estate
Shenzhen is located in the core area of Guangdong, Hong Kong and Macau Bay, and the economy continues growing. TheCompany focuses on the development of urban renewal projects in Shenzhen. With the rapid development of Shenzhen's economy, itis expected that there will still be some room for development in the real estate industry in Shenzhen and surrounding cities.
(2) Company development strategy and business plan
In 2019, the Company's management theme was to "reshape the management foundation of Fangda" and improve managementefficiency through reshaping. The energy-saving curtain wall and materials industry will continue to give full play to its brand
advantages and steadily and securely operate traditional high-quality markets such as Guangdong-Hong Kong-Macao Bay, YangtzeRiver Delta, Beijing-Tianjin-Hebei and Chengdu-Chongqing areas and will promote overseas markets step by step. As the world'slargest rail transit screen door system supplier, the Company will continue to consolidate its leading position in the domestic industryactively explore overseas markets vigorously develop technical maintenance services and broaden the Company's new product range.The new energy industry will continue to manage the safe operation and maintenance of the three power stations to ensure powergeneration efficiency. The Company will expand the new energy photovoltaic business in accordance with relevant national policiesand in light of the Company's own situation.The real estate business will focus on urban renewal projects in the core areas ofGuangdong-Hong Kong-Macau Bay and complete the development, rental and sales of the current four projects.
(3) Capital demand and source for projects in progressTo realize the business target in 2019, the Company will develop suitable financial and capital plans, accelerate the collectionof accounts receivable, sales payment from sales of Fangda Town, expand financing channels, and use share issuance, bank loans andother financing products to meet the demand for capital.
(4) Risks and solutions
1. Market risks and measuresAs the overall designing and engineering quality continues improving in the domestic construction curtain wall industry,curtain wall products will become increasingly standard, intensifying the market competition. In addition, the market concentrationof first- and second-tier cities will increase, and regional competition will become more intense. The Company will continue to adopta prudent management policy, refined management, and technological innovations to reduce management costs and accelerate thereturn of funds. Through new technologies and processes, we will improve product quality, lower costs and elevate earnings. Whileconsolidating the domestic market, the Company will step up the efforts in exploring overseas markets, thus elevating ourcompetitiveness in global markets and improving our resistance to risks.
2. Management risks and measuresWith an increase in orders in recent years and operation of five industry bases, the Company has continued expanding rapidlyin terms of capitalization, business and teams. The organizational structure and management system have become more complicated,leading to management risks in industry expansion. The Company will continue to improve the management mode, integratebusiness management, optimize the business flow, seeking to build a high-efficient and solid management team. We will introducehigh-quality, professional technical and management talents in different fields to strengthen the Company's core competitiveness.
3. Production and operation risks and measuresThe macro-economy and market demand have added to the fluctuation in prices of main raw materials such as aluminum andsteel and labor, affecting the Company’s profitability and creating additional production and operation risks for the Company. TheCompany has sought to lower the purchase and production costs, pay attention to technical R&D, reduce consumption of rawmaterials, introduce automatic and intelligent production equipment, strengthen staff training to improve working efficiency.
4. Solar PV power plant risks and measuresThe industry is closely related to policies of the local government. Changes in policies will have large impacts on the industry. TheCompany will continue paying attentions to the development of the industry. The Company will conduct adequate verification onproject feasibility, control costs, quality and schedules strictly, and improve its development, construction and maintenancecapabilities.
X. Acceptance of surveys, negotiation and visits
1. Reception of investigations, communications, or interviews in the reporting period
√ Applicable □ Inapplicable
| Time/date | Way | Visitor | Disclosure of information |
| 08.01.18 | Telephone communication | Individual | Inquiry about the Company's operation condition |
| 10.01.18 | Telephone communication | Individual | Inquiry about the Company's shares with sales restriction |
| 18.01.18 | Telephone communication | Individual | Inquiry about the progress of the Fangda Town project |
| 22.01.18 | Telephone communication | Individual | Inquiry about the Company's result forecast |
| 25.01.18 | Telephone communication | Institution | Inquiry about the Company's future development strategy |
| 02.02.18 | Telephone communication | Individual | Inquiry about the Company' semi-year performance |
| 05.02.18 | Telephone communication | Individual | Inquiry about project bidding |
| 09.02.18 | Telephone communication | Individual | Inquiry about the sales of the Fangda Town project |
| 23.02.18 | Telephone communication | Individual | Inquiry about the Company's profit distribution |
| 26.02.18 | Telephone communication | Institution | Inquiry about pledging of shares by major shareholders |
| 02.03.18 | Telephone communication | Individual | Inquiry about the Company's operation condition |
| 08.03.18 | Telephone communication | Individual | Inquiry about the Company's operation condition |
| 22.03.18 | Telephone communication | Individual | Inquiry about the Company's operation condition |
| 28.03.18 | Telephone communication | Individual | Inquiry about the Company's operation condition in Q1 |
| 18.07.18 | Telephone communication | Individual | Enquiry about approval progress of the B share repurchase |
| 24.07.18 | Telephone communication | Individual | Inquiry about the Company's operation condition |
| 06.08.18 | Telephone communication | Individual | Inquiry about the progress of the Fangda Town project |
| 17.08.18 | Telephone communication | Individual | Inquiry about the B share repurchase | |
| 24.08.18 | Telephone communication | Individual | Inquiry about the Company's future development strategy | |
| 04.09.18 | Telephone communication | Individual | Inquiry about the Company's operation condition | |
| 12.09.18 | Telephone communication | Individual | Inquiry about project bidding | |
| 18.09.18 | Telephone communication | Individual | Inquiry about the second repurchase of B shares | |
| 26.09.18 | Telephone communication | Individual | Inquiry about the Company's operation condition in Q3 | |
| 20.10.18 | Telephone communication | Individual | Inquiry about the B share repurchase | |
| 12.11.18 | Telephone communication | Individual | Opening of Fangda Town | |
| 05.12.18 | Telephone communication | Individual | Inquiry about the B share repurchase | |
| TIme | 26 | |||
| Number of institutes | 0 | |||
| Number of individuals | 26 | |||
| Number of other visitors | 0 | |||
| Disclosure of any non-public information | No | |||
Chapter V Significant Events
I. Profit distribution and reserve capitalization plan
Establishment, implementation or adjustment of profit distribution policies especially the cash dividend policy during the reportperiod√ Applicable □ InapplicableDuring the report period, the Company implemented the profit distribution plan for 2017. Approved at the Shareholders' Meeting2017 held on 15.05.18, the Company's profit distribution plan for 2017 is distributing a cash dividend of RMB1.50 (tax-included) forevery ten shares to all the shareholders based on a total of 1,183,642,254 shares on 31.12.17. No bonus share was issued this year.The plan was implemented on 06.06.18 (see the 2017 Share Equity Distribution Implementation Announce 2018-27).
| Explanation of Cash Dividend Distribution Policies | |
| Comply with the Articles of Association or resolution made at the General Shareholders' Meeting | Yes |
| Clear and definite distribution standard and proportion | Yes |
| Decision-making procedure and mechanism | Yes |
| Independent directors fulfill their duties | Yes |
| Middle and small shareholders express their opinions and claims. There rights are well protected. | Yes |
| Cash dividend distribution policies are adjusted or revised according to law | Inapplicable |
Profit distribution and reserve capitalizing pre-plans or plans over the recent three years (including the reporting period)2016: A cash dividend of RMB3.50 (including tax) for each ten shares is issued to all shareholders on the basis of 789,094,836shares with a total amount of RMB 276,183,192.60, on 31.12.16. Five shares were issued for every ten shares to all shareholdersthrough capitalization of capital reserve. No dividend share was issued.2017: A cash dividend of RMB1.50 (including tax) for each ten shares is issued to all shareholders on the basis of 1,183,642,254shares with a total amount of RMB 177,546,338.10, on 31.12.17.
No dividend share or capitalization share was issued in the year.2018: The Company plans to distribute a cash dividend of RMB2.00 (including tax) for each ten shares issued to all shareholders onthe basis of 1,123,384,189 shares with a total amount of RMB 224,676,837.8 upon the cancellation of the B shares repurchased as ofJanuary 11, 2019.
No dividend share or capitalization share was issued in the year.
Distribution of cash dividend over the recent three years (including this period)
In RMB
| Year | Cash dividend (including tax) | Net profit attributable to shareholders in the consolidated financial statements | Proportion in the net project attributable to shareholders in the consolidated financial statements | Cash dividend paid in other manners | Proportion of cash dividend paid in other manners |
| 2018 | 335,842,891.28 | 2,246,164,571.68 | 14.95% | 111,166,053.48 | 33.10% |
| 2017 | 177,546,338.10 | 1,144,404,441.03 | 15.51% | 0.00 | 0.00% |
| 2016 | 276,183,192.60 | 697,956,378.23 | 39.57% | 0.00 | 0.00% |
Cash dividend proposed despite the Company records profits in the report period and a positive undistributed profit/□ Applicable √ InapplicableNote: In the above table the "Cash Dividend (including tax)" of RMB 335,842,891.28 in 2018 is the sum of the amount ofRMB224,676,837.8 for the discovery of the bonus in 2018 and the repurchase amount of the B shares repurchased in 2018; "Cashdividend paid in other manners" of RMB 111,166,053.48 is the amount of B shares repurchased by the Company in 2018.
II. Profit Distribution and Reserve Capitalization Plan in the Report Period
√ Applicable □ Inapplicable
| Bonus shares for every ten shares | 0 |
| Cash dividend for every ten shares (yuan, tax-included) | 2.00 |
| Shares capitalized for every 10 shares | 0 |
| A total number of shares as the distribution basis | 1,123,384,189 |
| Total cash dividend (yuan, including tax) | 224,676,837.80 |
| Distributable profit (yuan) | 504,081,999.00 |
| Proportion of cash dividend in the distributable profit | 100% |
| Cash dividend | |
| The Company is in a fast growth stage. Therefore, the cash dividend will reach 20% of the profit distribution at least. | |
| Details of profit distribution or reserve capitalization plan | |
| The Company plans to distribute a cash dividend of RMB2.00 (including tax) for each ten shares is issued to all shareholders on the basis of 1,123,384,189 shares with a total amount of RMB 224,676,837.8. No dividend share or capitalization share was issued in the year. | |
III. Performance of promises
1. Commitments that have been fulfilled and not fulfilled by actual controller, shareholders, related parties,acquirers of the Company
□ Applicable √ InapplicableThere is no commitment that has not been fulfilled by actual controller, shareholders, related parties, acquirers of the Company
2. Explanation and reason of profit forecasts on assets or projects that remain in the report period
□ Applicable √ Inapplicable
IV. Non-operating capital use by the controlling shareholder or related parties in thereporting term
□ Applicable √ InapplicableThe controlling shareholder and its affiliates occupied no capital for non-operating purpose of the Company during the report period.
V. Statement of the Board of Directors, Supervisory Committee and Independent Directors (ifapplicable) on the “non-standard auditors’ report” issued by the CPA on the current reportperiod
□ Applicable √ Inapplicable
VI. Statement of changes to accounting policies, estimates and audit methods compared withthe financial report of the previous year
√ Applicable □ InapplicableAccording to the Notice of the Ministry of Finance on Revising the Format of the 2018 Annual General Financial Statements of theCompany (Accounting 2018 No. 15) the original "Announceable Notes" and "Accounts Receivable" line items will be consolidatedinto the "balance sheet" in the balance sheet. "Notes receivable and accounts receivable"; the original "receivable interest" and"dividends receivable" items are merged into "other receivables"; the original "fixed assets clean-up" items are merged into "fixedassets"; the original "engineering material" item will be merged into "construction in progress"; the original "payable bills" and"payables" items will be consolidated into "payable bills payables and accounts payable" items; the original "payable interest" and"payable dividend" will be merged into "other receivables"; the original "special payables" item is merged into "long-term payables".In the income statement the "R&D expenses" are separated from the original "administrative expenses"; under the "finance expenses"line item the "interest expense" and "interest income" detailed items are separately listed; the original "re-measurement settingbenefits" The change of the plan net debt or net assets is replaced by the "re-measurement of the change in the defined benefit plan";the original "share under the equity method that cannot be reclassified into other comprehensive income of the investee and the profitand loss" is changed to "equity". Other comprehensive income that cannot be transferred to profit or loss under the law"; the originalshare of the other comprehensive income that is reclassified into profit or loss after the investee is changed to the othercomprehensive income of the convertible profit and loss under the equity method. In the statement of changes in owner's equityunder the "internal transfer of shareholders' equity", item the original "transfer re-measurement of changes in net liabilities or netassets of defined benefit plans" was changed to "transfer of retained profit from change in set benefit program".
The revision of the financial statement format has no impact on the Group's total assets total liabilities, net profit and othercomprehensive income.
VII. Statement of retrospective restatement of major accounting errors in the report period
□ Applicable √ InapplicableNo retrospective restatement of major accounting errors in the report period
VIII. Statement of change in the financial statement consolidation scope compared with theprevious financial report
√ Applicable □ Inapplicable1. In the current period, Shanghai Fangda Jingling Technology Co. Ltd. and Shenzhen Fangda Cloud Rail Technology Co.Ltd. have been newly established two new companies in the current consolidated statement.2. In this period, the indirect controlled subsidiary Fangda Decoration Engineering (Shenyang) Co. Ltd. was liquidated. Therefore,one subsidiary is removed from the consolidated statement of this period.
IX. Engaging and dismissing of CPA
CPA engaged currently
| Domestic public accountants name | Grant Thornton (limited liability partnership) |
| Remuneration for the domestic public accountants (in RMB10,000) | 150 |
| Consecutive years of service by the domestic public accountants | 7 |
| Name of certified accountants of the domestic public accountants | Chen Zhaoxin, Zeng Hui |
| Consecutive years of service by the domestic public accountants | Chen Zhaoxin has provided the audit service for 2 years Zenghui for 1 year |
| Overseas public accountants name (if any) | None |
| Remuneration for the overseas public accountants (in RMB10,000) | 0 |
| Consecutive years of service by the overseas public accountants (if any) | None |
| Name of certified accountants of the overseas public accountants (if any) | None |
| Consecutive years of service by the domestic public accountants | None |
Whether the CPA is replaced□ Yes √ NoEngaging of internal control audit CPA, financial advisor and sponsor√ Applicable □ Inapplicable
This year, the Company engaged Grand Thornton China (limited liability partnership) as the financial statement and internal controlauditing CPA with a fee of RMB1.5 million.
X. Trade suspension and termination after the disclose of the annual report
□ Applicable √ Inapplicable
XI. Bankruptcy and capital reorganizing
□ Applicable √ InapplicableThe Company has no bankruptcy or reorganization events in the report period.
XII. Significant lawsuit and arbitration
□ Applicable √ InapplicableThe Company has no significant lawsuit or arbitration affair in the report period.
XIII. Punishment and rectification
□ Applicable √ InapplicableThe Company received no penalty and made no correction in the report period.
XIV. Credibility of the Company, controlling shareholder and actual controller
□ Applicable √ Inapplicable
XV. Share incentive schemes, staff shareholding program or other incentive plans
□ Applicable √ InapplicableThere is no share incentive schemes, staff shareholding program or other incentive plans in the report period
XVI. Material related transactions
1. Related transactions related to routine operation
□ Applicable √ InapplicableThe Company made no related transaction related to daily operating in the report period.
2. Related transactions related to assets transactions
□ Applicable √ InapplicableThe Company made no related transaction of assets or equity requisition and sales in the report period.
3. Related transactions related to joint external investment
□ Applicable √ InapplicableThe Company made no related transaction of joint external investment in the report period.
4. Related credits and debts
□ Applicable √ InapplicableThe Company had no related debt in the report period.
5. Other major related transactions
□ Applicable √ InapplicableThe Company has no other significant related transaction in the report period.
XVII. Significant contracts and performance
1. Asset entrusting, leasing, contracting
(1) Asset entrusting
□ Applicable √ InapplicableThe Company made no custody in the report period.
(2) Contracting
□ Applicable √ InapplicableThe Company made no contract in the report period
(3) Leasing
√ Applicable □ InapplicableLeasingThe investment real estate is used as external leasing. The rental income in the report period is RMB24,693,767.83.
Projects that create gains accounting for over 10% of the Company’s total profit in the report period□ Applicable √ InapplicableThe Company leased no projects that create gains accounting for over 10% of the Company’s total profit in the report period.
2. Significant guarantee
√ Applicable □ Inapplicable
(1) Guarantee
In RMB10,000
| External guarantees made by the Company and subsidiaries (exclude those made for subsidiaries) | ||||||||
| Guarantee provided to | Date of disclosure | Guarantee amount | Actual date | Actual amount of guarantee | Type of guarantee | Term | Completed or not | Related party |
| Guarantee provided to subsidiaries | ||||||||
| Guarantee provided to | Date of disclosure | Guarantee amount | Actual date | Actual amount of guarantee | Type of guarantee | Term | Completed or not | Related party |
| FangdaJianke | 24.04.18 | 30,000.00 | 28.08.18 | 15,771.74 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| FangdaJianke | 21.03.17 | 40,000.00 | 06.12.17 | 19,738.37 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| FangdaJianke | 21.03.17 | 40,000.00 | 01.11.17 | 2,521.05 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| FangdaJianke | 21.03.17 | 20,000.00 | 10.04.18 | 49,793.76 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| FangdaJianke | 24.04.18 | 9,000.00 | 13.07.18 | 6,288.00 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| FangdaJianke | 24.04.18 | 10,000.00 | 12.06.18 | 5,371.94 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| FangdaZhichuang | 24.04.18 | 21,600.00 | 06.08.18 | 26,059.98 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| FangdaZhichuang | 21.03.17 | 15,000.00 | 08.03.18 | 3,852.74 | Joint liability | since engage of contract to | No | Yes |
| 2 years upon due of debt | ||||||||
| Fangda New Material | 24.04.18 | 8,000.00 | 01.06.18 | 4,543.85 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda New Material | 24.04.18 | 6,500.00 | 01.06.18 | 306.02 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Fangda Property | 23.03.13 | 130,000.00 | 03.02.15 | 89,397.82 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| The Company | 21.03.17 | 60,000.00 | 22.02.18 | - | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| The Company | 21.03.17 | 25,000.00 | 29.09.18 | 20,000.00 | Joint liability | since engage of contract to 2 years upon due of debt | No | Yes |
| Total of guarantee to subsidiaries approved in the report term (B1) | 415,100 | Total of guarantee to subsidiaries actually occurred in the report term (B2) | 141,011.56 | |||||
| Total of guarantee to subsidiaries approved as of the report term (B3) | 415,100 | Total of balance of guarantee actually provided to the subsidiaries as of end of report term (B4) | 243,645.27 | |||||
| Guarantee provided to subsidiaries | ||||||||
| Guarantee provided to | Date of disclosure | Guarantee amount | Actual date | Actual amount of guarantee | Type of guarantee | Term | Completed or not | Related party |
| Total of guarantee provided by the Company (total of the above three) | ||||||||
| Total of guarantee approved in the report term (A1+B1+C1) | 415,100 | Total of guarantee occurred in the report term (A2+B2+C2) | 141,011.56 | |||||
| Total of guarantee approved as of | 415,100 | Total of guarantee occurred | 243,645.27 | |||||
| end of report term (A3+B3+C3) | as of the end of report term (A4+B4+C4) | ||
| Percentage of the total guarantee occurred (A4+B4+C4) on net asset of the Company | 46.90% | ||
| Including: | |||
| Note of immature guarantee with guarantee liabilities or possible joint damage liabilities in the report period | None | ||
| Statement of external guarantees violating the procedure (if any) | None | ||
Note of compound guarantee
(2) Incompliant external guarantee
□ Applicable √ InapplicableThe Company made no incompliant external guarantee in the report period.
3. Entrusted cash capital management
(1) Wealth management
√ Applicable □ InapplicableWealth management during the reporting period
In RMB10,000
| Type | Source of fund | Amount | Undue balance | Due balance to be recovered |
| Bank financial products | Self-owned fund | 83,200 | 0 | 0 |
Specific circumstances of high-risk entrusted financing with large individual amount or low security, poor liquidity, and no costprotection□ Applicable √ InapplicableEntrusted financial management expected to fail to recover the principal or likely result in impairment□ Applicable √ Inapplicable
(2) Trusted loans
□ Applicable √ InapplicableThe Company borrowed no trust loan in the report period.
4. Other significant contract
□ Applicable √ InapplicableThe Company entered into no other significant contract in the report.
XVI Social responsibilities
1. Fulfillment of social responsibilities
The Company has disclosed the "2018 Social Responsibility Report", the details of which are published on the website ofhttp//www.cninfo.com.cn on January 30 2019.
2. Performance of poverty relieving responsibilities(1) Annual poverty relieving summary
In 2018, the Company used funds for precision poverty alleviation projects of RMB1,936,000 as follows:
(1) In order to improve the conditions for schools in rural areas and improve the education level in poverty-stricken areas, inOctober 2018, the Company signed a donation of 1.2 million yuan for the expansion and repair of the Fangda Hope Primary Schoolin Lianyu Town, Xinjian District, Nanchang, which was originally donated by the Company. The preparation phase is expected to becompleted in the first half of 2019.
(2) In order to help the Lianhua County of Pingxiang City Jiangxi Province to achieve poverty alleviation, the Company plansto donate 1 million yuan to the Pingxiang City Charity Association to develop the lily industry.RMB500,000 was donated in July2018, with another RMB500,000 to be donated in 2019.
(3) In order to help the poor areas get rid of poverty, the Company invested 150,000 yuan to build a solar photovoltaic povertyalleviation power station in the Dongshui Village Committee of Xishan Town, Lianping County, Heyuan City, Guangdong Provinceand passed the grid inspection and acceptance and delivered it in July 2018.
(4) In order to help the Jinggangshan Revolutionary Old District to alleviate poverty, the Company purchased 56,000 yuanworth of agricultural products in November 2018.
(5) The Company donated RMB30,000 to two students in Long Village, Shahe Town, Zhanggong District, Ganzhou City,Jiangxi Province.
(2) Result of targeted poverty alleviation
| Item | Unit | Qty/Description |
| 1. General situation | —— | —— |
| Including: 1. Fund | (in RMB10,000) | 193.6 |
| II. Investment | —— | —— |
| 1. Industry development poverty relief | —— | —— |
| Including: 1.1 Industry development projects | —— | Rural and forestry industry poverty allivetion |
| 1.2 Number of industry development projects | Item | 1 |
| 1.3 Amount of industry development fund | (in RMB10,000) | 50 |
| 2. Employment transfer | —— | —— |
| 3. Relocation | —— | —— |
| 4. Education | —— | —— |
| Including: 4.1 Sponsor to students from poor families | (in RMB10,000) | 3 |
| 4.2 Number of students | Person | 2 |
| 4.3 Education investment in poor areas | (in RMB10,000) | 120 |
| 5. Health care support | —— | —— |
| 6. Eco-protection support | —— | —— |
| 7. Last-line guarantee | —— | —— |
| 8. Social poverty relieving | —— | —— |
| 8.2 Targeted poverty alleviation investment amount | (in RMB10,000) | 20.6 |
| 9. Others | —— | —— |
| III. Prizes | —— | —— |
(3) Further property relief plans
The Company will continue to fulfill its social responsibility for precision poverty alleviation, and make donations from time to timebased on business development.
3. Environmental protection
Whether the Company and its subsidiaries are key polluting companies disclosed by the environmental protection authorityNoThe Company and its subsidiaries have earnestly implemented the Environmental Protection Law of the People's Republic of China,the Law of the People's Republic of China on Water Pollution Prevention and Control, the Law of the People's Republic of China onthe Prevention and Control of Air Pollution, and the Law of the People's Republic of China on the Prevention and Control of SolidWaste Pollution. In the environmental protection laws and regulations, there were no penalties for violations of laws and regulationsduring the reporting period.
XIX. Other material events
√ Applicable □ InapplicableThe Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
Qualifications in the decoration industry:
| No. | Qualification | Effectiveness |
| 1 | Construction curtain wall designing class A | By April 16, 2020 |
| 2 | Construction curtain wall contracting class A | By 03.02.21 |
| 3 | Construction decoration contracting class B | By 04.03.21 |
| 4 | Steel structure engineering contracting class B | By 04.03.21 |
| 5 | Construction mechanical and electric equipment installation contracting class C | By 04.03.21 |
| 6 | City and road lighting engineering contracting class C | By 04.03.21 |
In the report period, the Company’s safety management is normal. The Company pays large attention to employees’ safetyawareness and capabilities of emergency processing. The Company has strengthened safety production and investigation of safetyrisks. The Company has formulated safety management guidelines to guide safety management. There was no significant safetyaccidents in the report period.
XX. Material events of subsidiaries
□ Applicable √ Inapplicable
Chapter VI Changes in Share Capital and Shareholders
I. Changes in shares
1. Changes in shares
In share
| Before the change | Change (+,-) | After the change | |||||||
| Amount | Proportion | Issued new shares | Bonus shares | Transferred from reserves | Others | Subtotal | Amount | Proportion | |
| I. Shares with trade restriction conditions | 1,417,243 | 0.12% | 14,325 | 14,325 | 1,431,568 | 0.13% | |||
| 3. Other domestic shares | 1,417,243 | 0.12% | 14,325 | 14,325 | 1,431,568 | 0.13% | |||
| Domestic natural person shares | 1,417,243 | 0.12% | 14,325 | 14,325 | 1,431,568 | 0.13% | |||
| II. Shares without trading limited conditions | 1,182,225,011 | 99.88% | -60,272,390 | -60,272,390 | 1,121,952,621 | 99.87% | |||
| 1. Common shares in RMB | 678,298,229 | 57.31% | -14,325 | -14,325 | 678,283,904 | 60.38% | |||
| 2. Foreign shares in domestic market | 503,926,782 | 42.57% | -60,258,065 | -60,258,065 | 443,668,717 | 39.49% | |||
| III. Total of capital shares | 1,183,642,254 | 100.00% | -60,258,065 | -60,258,065 | 1,123,384,189 | 100.00% | |||
Reasons√ Applicable □ Inapplicable1. The quantity and proportion of "after this change" in the above table are the data of the Company's repurchase of 60,258,065 Bshares as of January 11 2019 and cancelled (the latest data before the disclosure of this report).In 2018, the Company reviewed andapproved two cases of repurchasing B shares. As of the disclosure date of this report, the Company has repurchased 60,258,065 Bshares of which 33,902,665 shares were repurchased in 2018 and 26,355,400 shares were repurchased in 2019. For details please,refer to the "Announcement on the Completion of the Cancellation of Repurchased Shares" disclosed by the company on August 312018 and January 15 2019.2. Mr. Yin Changjian, the former employee representative supervisor of the Company applied for resignation. On December 28 2018,Mr. Ye Zhiqing was elected as the employee representative supervisor of the 8th Supervisory Committee of the Company by theCompany's employee meeting. He held 19,100 shares of the Company's A shares, of which 14,325 shares are subject to salesrestriction.
Approval of the change√ Applicable □ Inapplicable
1. In 2018 the Company implemented two repurchase approvals for B shares:
(1) First repurchase in 2018: The Company reviewed and approved the Resolution on the Repurchase of Domestically Listed ForeignShares (B Shares) of the Company at the 8
th
meeting of the 8
th
Board of Directors and the 2017 Annual General Meeting ofShareholders on April 24 2018 and May 15 2018 respectively.(2) Sescond repurchase: The Company reviewed and approved the Resolution on the Repurchase of Domestically Listed ForeignShares (B Shares) of the Company at the 10
th
meeting of the 8
th
Board of Directors and the first extraordinary shareholders' meetingin 2018 held on September 10, 2018 and September 27, 2018 respectively.2. On December 28 2018, Mr. Ye Zhiqing was elected as the employee representative supervisor of the 8th Supervisory Committeeof the Company by the company's staff meeting.
Share transfer√ Applicable □ Inapplicable1. The cancellation of the shares of B shares purchased twice(1) From August 13, 2018 to August 16, 2018, the Company repurchased 28,160,568 shares of B shares through centralized bidding,and completed the above at China Securities Depository and Clearing Co., Ltd. Shenzhen Branch on August 29, 2018. sharerepurchase and cancellation procedures.(2) From 19.12.18 to 03.01.19, the Company repurchased 32,097,497 shares of B shares through centralized bidding, and completedthe above at China Securities Depository and Clearing Co., Ltd. Shenzhen Branch on 11.01.19. share repurchase and cancellationprocedures.2. On December 28 2018, Mr. Ye Zhiqing was elected as the employee representative supervisor of the 8th Supervisory Committeeof the Company by the Company's employee meeting. He held 19,100 shares of the Company's A shares, of which 14,325 shares aresubject to sales restriction.
Progress in the implementation of share repurchase√ Applicable □ InapplicableIn 2018 the Company implemented two repurchase of B shares, the specific implementation is as follows:
| Repurchase | Period | Number of shares | Fund used | Highest price (HKD/share) | Lowest price (HKD/share) | Date of cancellation |
| First | 13.08.18 to 16.08.18 | 28,160,568 | 114,478,923.89 | 4.22 | 3.95 | 29.08.18 |
| Second | December 19, 2018 to 31.12.18 | 5,742,097 | 19,488,199.08 | 3.58 | 3.24 | 11.01.19 |
| 02.01.19 to January 3, 2019 | 26,355,400 | 93,524,433.13 | ||||
| Total | 60,258,065 | 227,491,556.10 |
Progress in the implementation of the reduction of shareholding shares by means of centralized bidding□ Applicable √ InapplicableImpacts on financial indicators including basic and diluted earnings per share, net assets per share attributable to commonshareholders of the company in the most recent year and period□ Applicable √ InapplicableOthers that need to be disclosed as required by the securities supervisor
□ Applicable √ Inapplicable
2. Changes in conditional shares
√Applicable □Inapplicable
| Shareholder | Conditional shares at beginning of the period | Released this period | Increased this period | Conditional shares at end of the period | Reason of condition | Date of releasing |
| Ye Zhiqing | 0 | 0 | 14,325 | 14,325 | Newly elected as an employee representative in the reporting period | 25% of the annual shareholding is released from the sale |
| Total | 0 | 0 | 14,325 | 14,325 | -- | -- |
II. Share placing and listing
1. Securities issuance (excluding preference shares) during the report period
□ Applicable √ Inapplicable
2. Statement of changes in share number and shareholder structure, assets and liabilities structure
√ Applicable □ Inapplicable1. As a result of the repurchase of B shares in the 2018, the company repurchased B shares and cancelled 60,258,065 shares as of thedisclosure date of this report. The total share capital decreased from 1,183,642,254 shares to 1,123,384,189 shares.2. During the reporting period, Mr. Ye Zhiqing the newly elected employee representative supervisor held 19100 A shares of theCompany of which 75% were restricted shares resulting in an increase of 14,325 shares in the company.
3. Current employees’ shares
□ Applicable √ Inapplicable
III. Shareholders and the substantial controller of the Company
1. Shareholders and shareholding
In share
| Number of shareholders of common shares | 62,746 | Total number of ordinary share shareholders at | 62,746 | Number of shareholders of preferred stocks of | None | Total number of shareholders of preference shares | None |
| at the end of the report period | the end of the month before the disclosure date of the annual report | which voting rights recovered in the report period (if any) | of which voting rights resumed at the end of the month before the disclosure date of the annual report | ||||||||||||
| Shareholders holding 5% of the Company's shares or top-10 shareholders | |||||||||||||||
| Shareholder | Nature of shareholder | Shareholding percentage | Number of shares held at the end of the reporting period | Change in the reporting period | Conditional shares | Amount of shares without sales restriction | Pledging or freezing | ||||||||
| Share status | Amount | ||||||||||||||
| Shenzhen Banglin Technologies Development Co., Ltd. | Domestic non-state legal person | 10.08% | 113,202,154 | 10,040,745 | 0 | 113,202,154 | Pledged | 37,559,997 | |||||||
| Shengjiu Investment Ltd. | Foreign legal person | 8.36% | 93,875,638 | 3,177,756 | 0 | 93,875,638 | |||||||||
| Fang Wei | Domestic natural person | 3.08% | 34,611,453 | 34,611,453 | 0 | 34,611,453 | |||||||||
| Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) | Domestic non-state legal person | 2.38% | 26,791,488 | 0 | 0 | 26,791,488 | |||||||||
| ShenwanHongyuan Securities (Hong Kong) Co., Ltd. | Foreign legal person | 1.77% | 19,879,147 | 3,580,710 | 0 | 19,879,147 | |||||||||
| GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED | Foreign legal person | 1.30% | 14,550,605 | -33,973,622 | 0 | 14,550,605 | |||||||||
| SUN HUNG KAI INVESTMENT SERVICES LTD | Foreign legal person | 0.91% | 10,169,002 | 10,169,002 | 0 | 10,169,002 | |||||||||
| VANGUARD EMERGING MARKETS STOCK INDEX | Foreign legal person | 0.71% | 7,946,483 | 0 | 0 | 7,946,483 | |||||||||
| FUND | ||||||||||
| Jiang Jing | Domestic natural person | 0.58% | 6,525,441 | -735,000 | 0 | 6,525,441 | ||||
| VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND | Foreign legal person | 0.54% | 6,025,958 | 1,150,300 | 0 | 6,025,958 | ||||
| A strategic investor or ordinary legal person becomes the Top10 shareholder due a stock issue. | None | |||||||||
| Notes to top ten shareholder relationship or "action in concert" | Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology Development Co., Ltd. and Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise are related parties. The Company is not notified of other action-in-concert or related parties among the other holders of current shares. | |||||||||
| Top 10 holders of unconditional shares | ||||||||||
| Shareholder | Amount of shares without sales restriction | Category of shares | ||||||||
| Category of shares | Amount | |||||||||
| Shenzhen Banglin Technologies Development Co., Ltd. | 113,202,154 | RMB common shares | 113,202,154 | |||||||
| Shengjiu Investment Ltd. | 93,875,638 | Foreign shares listed in domestic exchanges | 93,875,638 | |||||||
| Fang Wei | 34,611,453 | RMB common shares | 34,611,453 | |||||||
| Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) | 26,791,488 | RMB common shares | 26,791,488 | |||||||
| ShenwanHongyuan Securities (Hong Kong) Co., Ltd. | 19,879,147 | Foreign shares listed in domestic exchanges | 19,879,147 | |||||||
| GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED | 14,550,605 | Foreign shares listed in domestic exchanges | 14,550,605 | |||||||
| SUN HUNG KAI INVESTMENT SERVICES LTD | 10,169,002 | Foreign shares listed in domestic exchanges | 10,169,002 | |||||||
| VANGUARD EMERGING | 7,946,483 | Foreign shares | 7,946,483 | |||||||
| MARKETS STOCK INDEX FUND | listed in domestic exchanges | ||
| Jiang Jing | 6,525,441 | RMB common shares | 6,525,441 |
| VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND | 6,025,958 | Foreign shares listed in domestic exchanges | 6,025,958 |
| No action-in-concert or related parties among the top10 unconditional shareholders and between the top10 unconditional shareholders and the top10 shareholders | Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology Development Co., Ltd. and Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise are related parties. The Company is not notified of other action-in-concert or related parties among the other holders of current shares. | ||
| Top-10 common share shareholders participating in margin trade (if any) | Jiang Jing holds 6,525,441 stocks of the Company through the Everbright Securities customer credit transaction guarantee securities account. | ||
Agreed re-purchasing by the Company’s top 10 shareholders of common shares and top 10 shareholders of unconditional commonshares in the report period□ Yes √ NoNo agreed re-purchasing by the Company’s top 10 shareholders of common shares and top 10 shareholders of unconditional commonshares in the report periodNote: The "shareholding ratio" in the above table is calculated based on the total share capital of 1,123,384,189 shares after thecancellation of the repurchased B shares on January 11, 2019.
2. Profile of the controlling shareholders
Shareholder nature: natural person holdingType of shareholder: legal person
| Name of controlling shareholder | Legal representative/responsible person | Date of establishment | Organization code | Main business |
| Shenzhen Banglin Technologies Development Co., Ltd. | Chen Jinwu | 07.06.01 | 914403007298400552 | Industrial investment, developing of electronic products, technical consulting, domestic commerce, material trading |
Changes in the controlling shareholder in the reporting period□ Applicable √ InapplicableNo change in the controlling shareholder in the report period
3. Actual controller and persons acting in concert
Nature of actual controller: domestic natural person
Type of actual controller: natural person
| Name of substantial controller | Relationship with the actual controller | Nationality | Right of residence in another country or region |
| XiongJianming | Himself | Chinese | No |
| Job and position | Chairman of the Board and president of the Company over the past 5 years | ||
| Profiles of domestic and overseas listed companies in which the controller held shares | The controller held no share in other listed companies in the last ten years. | ||
Change in the actual controller in the report period□ Applicable √ InapplicableNo change in the actual shareholder in the report period7. Chart of the controlling relationship
Controlling over the Company by the substantial controller through trust or other asset management□ Applicable √ Inapplicable
4. Other legal person shareholders with over 10% of total shares
□ Applicable √ Inapplicable
5. Conditional decrease of shareholding by controlling shareholder, actual controller, reorganizer andother entities
□ Applicable √ Inapplicable
Chapter VII Preferred Shares
□ Applicable √ InapplicableThe Company had no preferred share in the report period.
Chapter VIII Particulars about the Directors, Supervisors, Senior
Management and Employees
I. Changes in shareholding of Directors, Supervisors and Senior Management
| Name | Position | Job status | Sex | Age | Starting date of the term | End date of the term | Number of shares held at beginning of the period | Increased shares in this period (share) | Decreased shares in this period (share) | Other increase and decrease (share) | Number of shares held at end of the period |
| XiongJianming | Chairman, president | In office | M | 61 | 20.11.95 | 11.04.20 | 1,889,657 | 1,889,657 | |||
| Lin Kebin | Director | In office | M | 41 | 11.04.17 | 11.04.20 | |||||
| Lin Kebin | Vice president | In office | M | 41 | 06.06.08 | 11.04.20 | |||||
| Zhou Zhigang | Director | In office | M | 56 | 09.04.07 | 11.04.20 | |||||
| Zhou Zhigang | Vice president | In office | M | 56 | 11.04.17 | 11.04.20 | |||||
| Zhou Zhigang | Secretary of the Board | In office | M | 56 | 22.10.03 | 11.04.20 | |||||
| XiongJianwei | Director | In office | M | 50 | 16.04.99 | 11.04.20 | |||||
| Guo Wanda | Independent director | In office | M | 53 | 31.03.14 | 11.04.20 | |||||
| Deng Lei | Independent director | In office | M | 40 | 16.02.16 | 11.04.20 | |||||
| GuoJinlong | Independent director | In office | M | 57 | 11.04.17 | 11.04.20 | |||||
| Dong Gelin | Supervisory | In office | M | 40 | 28.12.18 | 11.04.20 |
| Committee meeting convener | |||||||||||
| Dong Gelin | Supervisor | In office | M | 40 | 11.04.17 | 11.04.20 | |||||
| Cao Naisi | Supervisor | In office | F | 40 | 11.04.17 | 11.04.20 | |||||
| Ye Zhiqing | Supervisor | In office | M | 44 | 28.12.18 | 11.04.20 | 19,100 | 19,100 | |||
| Wei Yuexing | Vice president | In office | M | 50 | 29.07.11 | 11.04.20 | |||||
| Yin Changjian | Supervisory Committee meeting convener | Resigned | M | 50 | 31.03.14 | 28.12.18 | |||||
| Total | -- | -- | -- | -- | -- | -- | 1,889,657 | 0 | 0 | 19,100 | 1,908,757 |
II. Changes in the Directors, Supervisors and Senior Executives
√ Applicable □ Inapplicable
| Name | Job | Type | Date | Reason |
| Yin Changjian | Supervisory Committee meeting convener | Resigned | 28.12.18 | Resigned due to personal reason |
III. Office Description
Professional background, work experience and main duties in the Company of existing directors, supervisors and seniormanagement1. Mr. XiongJianming: PHD Management; senior engineer; part-time professor of Beijing Institute of Civil Engineering andArchitecture and Nanchang University. He was once employed by Jiangxi Provincial Machinery Design Academe, AdministrationBureau of Shekou District of Shenzhen government, etc, deputy to the 10th People’s Congress of Guangdong Province, deputy to the
nd
and 3
rd
People’s Congress of Shenzhen City. He is now the chairman and CEO of the Company, representative of the 13
th
National People's Congress and the 6
th
Shenzhen People's Congress, president of the Shenzhen Semi-conductor Lighting IndustryPromotion Association, chairman of Shenzhen Jiangxi Commerce Chamber, chairman of Shenzhen Nanshan District Industry andCommerce Association and honorary chairman of Shenzhen Nanshan District Charity.2. Mr. Lin Kebin holds a bachelor’s degree. He was once the CFO of the Company and is currently a director and vice president ofthe Company.3. Mr. XiongJianwei: MBA. He is a director of the Company, Chairman of the Board of Director of FangdaJianke and a member ofthe 14
th
Nanchang CPPCC Standing Committee.
4. Mr. Zhou Zhigang, bachelor’s degree. He is currently a director, vice president, Secretary of Board, and head of the SecuritiesDept of the Company.5. Mr. Guo Wanda: He is an Economics Ph. D and researcher. As the executive deputy president of China Development Institute, hehas studied in macro-economy, industry policies and enterprise development strategies for years and provided consulting services. Heis an independent director of the Company.6. Mr. Deng Lei is a law Ph. D and post-doctor in the financial securities law of Shenzhen Stock Exchange. He was once the vicedirector of Corporate Law Affair Commission of Shenzhen Lawyer Association and a senior partner of Guangdong ChinaCommercial Law Firm. He is an independent director of the Company.7. Mr. GuoJinlong: Master, Certified Public Accountant of China. He was a member of the fifth session of the CPPCC of ShenzhenCity. He is currently the deputy to the sixth session of the People's Congress of Shenzhen, vice chairman of Guangdong CertifiedPublic Accountants Association, partner of ShineWing Certified Public Account, and an independent director of the Company.8. Mr. Dong Gelin: Bachelor degree, senior engineer, former designer of FangdaJianke, chief engineer of the design institute,assistant to general manager, general manager of FangdaJianke Beijing Branch, currently he is currently the director of theCompany's Development Planning Department, the director of Enterprise Management, the director of Technology Innovation andthe convener of the Board of Supervisors.9. Ms. Cao Naisi: Bachelor's degree, intermediate economist, former securities affairs representative of the company, supervisor ofthe sixth session of the Supervisory Committee, director of audit supervision department, deputy director of human resourcesdepartment, general manager of FangdaJianke Beijing branch, FangdaJianke South China General Manager of the branch, currentlyDeputy General Manager of FangdaJianke, and supervisor of the Company.10. Mr. Ye Zhiqing holds a Bachelor degree and is a senior engineer. He is currently the deputy director of the company's corporatemanagement department, the general manager of FangdaJianke's Shanghai branch and the company's supervisor.11. Mr. Wei Yuexing holds a Bachelor degree and is a senior engineer. He is the vice president of the Company and general managerof FangdaJianke.
Offices held at shareholders entitie√ Applicable □ Inapplicable
| Name | Shareholder entity | Office | Starting date of the term | End date of the term | Whether any remuneration is paid at the shareholder entity |
| XiongJianming | Shengjiu Investment Ltd. | Chairman | 06.10.11 | No | |
| Wei Yuexing | Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) | Executive partner | 20.12.16 | No | |
| Office description | None | ||||
Offices held at other entities√ Applicable □ Inapplicable
| Name | Entity name | Office | Starting date of the term | End date of the term | Whether any remuneration is paid at the shareholder entity |
| Guo Wanda | General development research institute (Shenzhen, China) | Standing vice president | 01.07.07 | Yes | |
| Guo Wanda | Shenzhen Baode Technology Group Co., Ltd. | Independent director | 06.06.08 | Yes | |
| Guo Wanda | Hercules Logistics | Independent director | 01.11.13 | Yes | |
| Guo Wanda | Shenzhen Aotexun Power Equipment Co. Ltd. | Independent director | 27.03.17 | Yes | |
| Deng Lei | Guangdong China Commercial Law Firm | Senior partner | 01.11.15 | Yes | |
| Deng Lei | Wuhan Gaode Infrared Co., Ltd. | Independent director | 23.04.15 | Yes | |
| Deng Lei | Shenzhen Haimingrun Industrial Co., Ltd. | Independent director | 18.11.14 | Yes | |
| Deng Lei | Shenzhen Huaqiang Industrial Co. Ltd. | Independent director | 13.04.18 | Yes | |
| GuoJinlong | ShineWing Certified Public Accountants (limited liability partnership) | Partner | 01.07.06 | Yes | |
| Office description | The above-mentioned three are independent directors of the Company. | ||||
Penalties given by existing securities regulators on directors, supervisors and senior management and those who have resigned in thereport period√ Applicable □ Inapplicable
According to the "China Securities Regulatory Commission's Administrative Punishment Decision" (2017) No. 101 of December6, 2017, ShineWing Certified Public Account (Special General Partnership) (hereinafter referred to as ShineWing) had the followingillegal facts:
1. ShineWing violated business rules established legally during the preparation of the IPO (three-year and one period) and the2014 annual report of HuaijiDengyun Auto Parts Co., Ltd.
2. ShineWing did not diligently perform their duties and had false records of the audit report issued by HuaijiDengyun shares inthe 2013 annual report.
The signed certified public accountant and Mr. GuoJinlong, an independent director of the Company that issued the audit report,were given warnings and a fine of RMB50,000 yuan.
IV. Remunerations of the Directors, Supervisors and Senior Executives
Decision making procedures, basis and actual payment of remunerations of the Directors, Supervisors and Senior Executives1. Remuneration schemes for directors and supervisors are proposed by the Remuneration and Assessment Committee of the Board,and implemented upon approval of the Board and the Shareholders’ Meetings; the remuneration schemes for executives are approvedand implemented by the Board.Remuneration for directors and supervisors are decided by the shareholders’ meeting. Remunerations for executives are composed ofwages and performance bonus as decided by the Board.
Payment on monthly basis
Remunerations of the Directors, Supervisors and Senior Executives of the Company During the reporting period
In RMB10,000
| Name | Position | Sex | Age | Job status | Total remuneration | Remuneration from related parties |
| XiongJianming | Chairman, president | M | 61 | In office | 222.62 | No |
| Lin Kebin | Director, vice president | M | 41 | In office | 95.44 | No |
| Zhou Zhigang | Director, vice president secretary of the Board | M | 56 | In office | 71.57 | No |
| XiongJianwei | Director | M | 50 | In office | 85.1 | No |
| Guo Wanda | Independent director | M | 53 | In office | 8 | No |
| Deng Lei | Independent director | M | 40 | In office | 8 | No |
| GuoJinlong | Independent director | M | 57 | In office | 8 | No |
| Yin Changjian | Supervisory Committee meeting convener | M | 50 | Resigned | 46.34 | No |
| Cao Naisi | Supervisor | F | 40 | In office | 46.89 | No |
| Dong Gelin | Supervisor | M | 40 | In office | 47.03 | No |
| Wei Yuexing | Vice president | M | 50 | In office | 82.6 | No |
| Total | -- | -- | -- | -- | 721.6 | -- |
Equity incentive programs provided for the Directors, and Senior Executives of the Company during the reporting period□ Applicable √ Inapplicable
5. Employees
1. Staff number, professional composition and education
| Staff number of the parent | 61 |
| Staff number of major subsidiaries | 1,705 |
| Total staff number | 2,206 |
| Number of employees receiving remuneration in the period | 2,206 |
| Resigned and retired staff number to whom the parent and major subsidiaries need to pay remuneration | 0 |
| Professional composition | |
| Categories of professions | Number of people |
| Production | 727 |
| Sales & Marketing | 71 |
| Technicians | 1,220 |
| Finance & Accounting | 60 |
| Executive | 128 |
| Total | 2,206 |
| Education | |
| Categories of education | Number of people |
| High school or below | 1,072 |
| College diploma | 426 |
| Bachelor | 688 |
| Master’s degree | 19 |
| Doctor’s degree | 1 |
| Total | 2,206 |
2. Remuneration policy
Staff remuneration policy: The Company’s staff remuneration comprises post wage, performance wage, allowance and annualbonus. The Company has set up an economic responsibility assessment system according to the annual operation target andresponsibility indicators for all departments. The performance wage is determined by the economic indicators, managementindicators, optimization indicators and internal control. The annual bonus is determined by the Company's annual profit andfulfillment of targets set for various departments. The staff remuneration and welfare will be adjusted according to the Company’sbusiness operation and changes in the local standard of living and price index.
3. Training program
Staff training plan: The Company has paid continuous attention to training and development of the staff and introducesinnovative learning as part of the long-term strategy. We provide training programs through different channels and in different fieldsfor different employees will help them fulfill their works, including new staff training, on-the-job training, operation andmanagement training programs. These programs have largely elevated capabilities of the staff and underpin the success of theCompany.
4. Labor outsourcing
√ Applicable □ Inapplicable
| Total number of hours of labor outsourcing | 11,330,655.36 |
| Total remuneration paid for labor outsourcing (RMB) | 339,919,660.78 |
Chapter IX Corporation Governance
1. Overview
During the report period, the Company strictly complied with the Company Law, Securities Law, Governance Standards for ListedCompanies, Shenzhen Stock Exchange Share Listing Rules, Operation Regulations for Listed Companies in the Main Board ofShenzhen Stock Exchange, continued to improve the legal person governance structure and has formulated a series of internalmanagement systems covering various aspects. The Company has set up a comprehensive and effective internal control system inimportant decision making, related transaction decision making, financial management, HR management, administration, purchase,production and sales management, confidentiality and information disclosure.Major difference between the actual corporate governance and regulations on corporate governance of listed companies issued byCSRC□ Yes √ NoThere is no major difference between the actual corporate governance and regulations on corporate governance of listed companiesissued by CSRC.
2. Independence of the Company from the controlling shareholder in aspects of businesses,personnel, assets, organizations, and accounting
In the aspect of business: the Company has its own purchasing, production, sales, and customer service system which performingindependently. There is not any material related transactions occurred with the controlling shareholders.
In personnel: The labor management, personnel and salary management are operated independently from the controllingshareholder. The senior managements take salaries from the Company and none of them takes senior management position in thecontrolling party.
In assets: The Company owns its production, supplementary production system and accessory equipments independently, andpossesses its own industrial properties, non-patent technologies, and trademark.
In organization: The production and business operation, executive management, and department setting are completelyindependent from the controlling shareholder. No situation of combined office exists. The Company adjusts its organizing structureonly for its own practical requirement of development and management.
In accounting: The company has its own independent accounting and auditing division, established independent and completedaccounting system and management rules, has its own bank account, and exercise its liability of taxation independently.
3. Competition
□ Applicable √ Inapplicable
4. Annual and extraordinary shareholder meetings held during the report period
1. Annual shareholder meeting during the report period
| Meeting | Type | Participation | Date | Date of disclosure | Index for information disclosure |
| of investors | |||||
| 2017 Annual Shareholder Meeting | Annual shareholders’ meeting | 19.68% | 15.05.18 | 16.05.18 | Notice on Resolutions of the Annual Shareholders’ Meeting (2017) released on www.cninfo.com.cn |
| 1st Provisional Shareholders’ Meeting 2018 | Extraordinary shareholders’ meeting | 21.31% | 27.09.18 | 28.09.18 | Notice on Resolutions of the 1st Extraordinary Shareholders’ Meeting in 2018 (2018-46) |
2. Shareholders of preference shares of which voting right resume convening an extraordinaryshareholders’ meeting
□ Applicable √ Inapplicable
V. Performance of independent directors during the report period
1. Independent directors’ presenting of board meetings and shareholders’ meetings in the report period
| Independent directors’ presenting of board meetings and shareholders’ meetings in the report period | |||||||
| Name of independent director | Time of board meetings should have attended | Number of board meetings attended | Presented by telecom | Number of board meetings attended by proxy | Number of board meetings not attended | Absent for two consecutive meetings | Number of shareholders' meetings attended |
| Guo Wanda | 6 | 2 | 4 | 0 | 0 | No | 1 |
| Deng Lei | 6 | 2 | 4 | 0 | 0 | No | 2 |
| GuoJinlong | 6 | 2 | 4 | 0 | 0 | No | 1 |
Statement for absence for two consecutive board meetingsInapplicable
2. Objection raised by independent directors
Any objection raised by independent directors against the Company’s related issues□ Yes √ NoIndependent directors made no objection on related issued of the Company in the report period.
3. Other statement for performance of independent directors
Adoption of suggestion proposed by independent directors√ Yes □ NoStatement for suggestion adopted or not by the Company
During the reporting period, the Company’s independent directors strictly followed the relevant laws, regulations and the―Articles of Association‖ and paid attention to the Company’s operations, attended the Company’s Board of Directors andshareholders’ meeting, and all the independent directors carefully reviewed the various proposals of the Company’s Board of
Directors and performed their duties conscientiously. The development decision has put forward constructive opinions or suggestions,and has issued independent opinions on the improvement of the Company's system and major business management matters,corporate guarantees, profit distribution, use of raised funds, etc. Independent directors have adopted the Company’s relevantrecommendations. It has played an active role in safeguarding the interests of the Company and small and medium shareholders.
VI. Performance of specific committees under the Board
(1) Performance of the Development Strategy CommitteeDuring the report period, the Development Strategy Committee of the Company has performed its duties in accordance with theWorking Regulations for Development Strategy Committee and played its role in the decision-making process of the Company. Twomeetings were convened and details are disclosed as follows:
1. On 20.02.18, the Company held the 2
nd
meeting of the 8
th
Development Strategy Commission to listen to the report onproduction and operation in 2017 and production and operation plan for 2018.
2. On 03.08.18, the 3
rd
meeting of the Development Strategy Committee of the 8
th
term of the Board was held to view theCompany’s production and operation in the first half of 2018 and studied the fulfillment of the business plan in the first half of theyear and places to be improved in the second half.
(2) Performance of the Auditing CommitteeDuring the report period, four Auditing Committee meetings are held to review issues including the arrangement of audit,regular financial reports, engaging the CFA, and use of the fund raised. Details of the meetings are disclosed as follows:
1. On 17.04.18, the 4
th
meeting of the Auditing Committee of the 8
th
term of the Board was held to review the financialstatements with the initial opinion issued by the CFA for 2017 and approve the auditor report issued by the CFA. After the CFAissued to final auditor’s opinion, the Auditing Committee submitted the resolution on the annual financial statements to the Boardand issued the summary report on the auditing of the CFA for this year.
2. On 20.04.18, the Company held the 5
th
audit committee meeting of the 8
th
Board of Directors to listen to the 2017 financialand internal audit report and approved (1) audited 2017 financial statements; (2) 2018 Q1 financial statements; (3) proposal ofengaging the auditor in 2018; (4) 2018 internal audit plan; (5) internal control self-evaluation report in 2017.
The audit committee suggests that the internal audit body should increase communication with the audit committee to help thecommittee better under the Company's condition and make higher requirements on the audit quality. The members of the auditcommittee gave professional advice on improving the Company's processes, optimizing the system, and risk prevention from variousperspectives based on their own experience in different industries. They also put forward higher requirements for the Company'sfuture internal control work.
3. On August 3 2018, the Company held the 6
th
meeting of the Audit Committee of the 8
th
Board of Directors and reported to themembers on the financial work and internal audit work report for the first half of 2018. The company's unaudited 2018 semi-annualfinancial accounting statements were reviewed and approved.
4. On 17.10.18, the 7
th
meeting of the Auditing Committee of the 8
th
term of the Board on which the unaudited 2018 Q3financial statements were approved.
(3) Performance of the Remuneration and Assessment CommitteeDuring the reporting period, the Remuneration and Appraisal Committee of the Board of Directors held the first meeting of theRemuneration and Appraisal Committee of the 8
th
Board of Directors on April 20 2018 according to the "Working Rules of theRemuneration and Appraisal Committee" formulated by the company and reviewed the proposal for 2017 annual remuneration ofsupervisors and senior management personnel.
VII. Performance of Supervisory Committee
(1) Risks for the Company discovered by the Supervisory Committee□ Yes √ NoNo disagreement with supervisory issues by the Supervisory Committee during the report period.(2) The Supervisory Committee’ Work Report 2018
In 2018, the Supervisory Committee performed its duties and obligations in supervision and protect shareholders’ and theCompany’s interests in accordance with the Company Law, Share Listing Rules, Articles of Association and Rules of the Procedureof the Supervisory Committee.The 2018 supervisory committee's work plan is as follows:
1. Opinions
(1) Legal compliance
In the report period, the Company has been operated in accordance with law. The convening of meeting of the Board and thedecision-making process are compliant with law, regulations and Articles of Association; the internal control system is solid.Directors and senior management have performed their obligations. No violation against law, regulations, Articles of Association andinterests of the Company and shareholders was discovered.
(2) Financial condition
During the period, the accounting management has been compliant with the Accounting Law, Enterprise Accounting Standard.No false, misleading statement or significant omission was found in financial statements. The financial reports of the Companyreflect the Company’s financial position, operation performance, cash flows and major risks truthfully, accurately andcompletely.The CPA has issued the standard auditor’s report in 2018, which is objective, fair and truthful. It reflects the Company’sfinancial position and operation performance.
(3) Implementation of internal control
The design and operation of the internal control is effective and meets the Company’s management and developmentrequirements. It can ensure the truthfulness, lawfulness, completeness of the financial materials and ensure the safety andcompleteness of the Company’s property. In 2018, there was no violation by the Company against the Operation Regulations forListed Companies in the Main Board of Shenzhen Stock Exchange and the Company’s internal control system. The 2018 InternalControl Self-evaluation Report truthfully and objectively reflects the establishment, implementation and improvement of theCompany’s internal control system. There are no significant or important problems in the financial and non-financial reports in thereport period.
2. Meetings and resolutions of the supervisory meeting in the report period:
Four meetings were held in 2018, all of which are on-site meetings. All proposal were approved and disclosed as required:
| No. | Meeting | Date | Convening method | Topic |
| 1 | 5th meeting of the 8th Supervisory Committee | 20.04.18 | On-site | 1. Review the work report of the 2017 Supervisory Committee of the Company;2. Review the full text and abstract of the 2017 annual report of the company;3. Review the full text and text of the first quarterly report of the Company in 2018;4. Review the 2017 financial statements of the company;5. To consider the proposal of the Company regarding the profit distribution for 2017;6. To consider the proposal of the company to hire an audit institution in 2018;7. Review the 2017 internal control self-evaluation report of the |
| company;8. Review the special report on the deposit and use of the raised funds of the company in 2017;9. Review the proposal of the company regarding changes in accounting policies. | ||||
| 2 | 6th meeting of the 8th Supervisory Committee | 03.08.18 | On-site | 2018 Interim Report and the Summary of the Company |
| 3 | 7th meeting of the 8th Supervisory Committee | 17.10.18 | On-site | 2018 Q3 Report and text; |
| 4 | 8th meeting of the 8th Supervisory Committee | 28.12.18 | On-site | Elect the convenor of the 8th Supervisory Committee of the Company. |
VIII. Assessment and motivation of senior executives
The Company has implemented a remuneration system that combines post wage and performance bonus. The wages and bonusare determined by on the assessment of senior executives’ innovation capabilities, general quality, performance, fulfillment of profitand payment collection targets according to the Company's annual performance assess and performance assess implementationmethods for wholly-owned subsidiaries.
IX. Internal control
1. Major problems in internal control discovered in the report period
□ Yes √ No
2. Internal control self-evaluation report
| Date of disclosure of the internal control evaluation report | 30.01.19 |
| Disclosure of the internal control evaluation report | www.cninfo.com.cn |
| Percentage of assets in the evaluation scope in the total assets in the consolidated | 95.46% |
| financial statements | ||
| Percentage of operation income in the evaluation scope in the total operation income in the consolidated financial statements | 99.24% | |
| Standard | ||
| Type | Financial report | Non-financial report |
| Standard | 1. The following problems are considered major problems: 1. Non-effective control environment; 2. corrupt practice by directors, supervisor and senior management, causing substantial loss and impacts for the Company; 3. Substantial mistakes in the financial statements in the period discovered by the CPA, which are not discovered by the internal control; 4. Ineffective supervision of the internal control by the Company’s auditing department2. The following problems are considered significant problems: 1 accounting policies are selected and used without complying to widely accepted accounting standards; 2. No anti-corrupt and important balance system and control measures are taken; 3. Separate or multiple problems in the preparation of financial reports, which are serious enough to affecting the truthfulness and accuracy of the reports; no control system is established and no related compensation system is implemented for accounts of irregular or special transactions3. Other problems are considered normal problems. | I. The following condition indicates significant problems in the internal control of non-financial reports: 1. Serious violation against national laws, regulations or specifications; 2. Serious business system problems and system ineffectiveness; 3. Major or important problems cannot be corrected; 4. Lack of internal control and poor management; 5. Loss of management personnel or key employees; 6. Safety and environmental accidents that cause major adverse impacts; 7. Other situations that cause major adverse impacts on the Company. II. The following situations indicate that there may be significant problems with the internal control: 1. business system problems and system ineffectiveness; 2. Major or important problems cannot be corrected; 3. Other situations that cause major adverse impacts on the CompanyIII. The following situation indicate likely normal problems in the internal control: 1. Problems in the general business system; 2. Normal problems in the internal control supervision cannot be correctly promptly. |
| Standard | 1. Significant problem: 1 mistakes affecting 5% and more of the pre-tax profit and more than RMB5 million in the consolidated statements; 2. Mistakes affecting 5% and more of the consolidated assets and more than RMB5 million2. Important problem: 1. Mistakes affecting 1%-5% of the pre-tax profit in the consolidated statements; 2. Mistakes affecting 1%-5% the consolidated | See the recognition standard of the internal control problems for financial statements |
| assets.III. Normal problem: 1. Mistakes affecting less than 1% of the pre-tax profit and total assets of the consolidate statements. | ||
| Significant problems in financial statements | 0 | |
| Significant problems in non-financial statements | 0 | |
| Important problems in financial statements | 0 | |
| Important problems in non-financial statements | 0 | |
X. Internal control audit report
√ Applicable □ Inapplicable
| Comments in the internal control audit report | |
| We believe that China Fangda Group has maintained effective internal control on financial reports according to Basic Regulations on Enterprise Internal Control and related regulations on 31.12.18. | |
| Disclosure of internal auditor’s report | Disclosed |
| Date of disclosure of the internal control audit report | 30.01.19 |
| Source of disclosure of the internal control audit report | www.cninfo.com.cn |
| Opinion type | Standard opinion auditor’s report |
| Problems in non-financial statements | No |
Non-standard internal control audit report by the CFA□ Yes √ NoConsistency between the internal control audit report and self-evaluation report√ Yes □ No
Chapter X. Information about the Company’s Securities
Bonds publicly issued and listed in a securities exchange, immature or not fully paid by the approval date of the annual report
Chapter XI Financial Statements
I. Auditor’s report
| Type | Standard opinion auditor’s report |
| Issued on | 28.01.19 |
| Auditor | Grant Thornton (limited liability partnership) |
| Report No. | Grant Thornton (2019) No.350ZA0156 |
| CPA names | Chen Zhaoxin, Zeng Hui |
Auditors’ Report
Auditor’s Report
Grant Thornton (2019) No.350ZA0156
To the shareholders of China Fangda Group Co., Ltd.:
1. Auditors’ OpinionsWe have audited the Financial Statements of China Fangda Group Co., Ltd. (―Fangda Group‖)attached hereafter, including the Balance Sheet and Consolidated Balance Sheet ended 31.12.18 andthe Income Statement, Consolidated Income Statement, Cash Flow Statement, Consolidated CashFlow Statement, Statement on Change of Shareholders’ Equity, Consolidated Statement on Changeof Shareholders’ Equity of the year 2018, as well as the Notes to the Financial Statements.We believe that Fangda Group has been following with the Enterprise Accounting Standard inpreparing of the Financial Statements. The Financial Statements is reflecting, in all importantaspects, the financial situation of Fangda Group as of 31.12.18, and the business performance andcash flow of year 2018.
2. Basis of the OpinionsWe carried out the auditing works with compliance to Chinese CPA Auditing Standard, The―CPA's Responsibility for Auditing Financial Statements‖ section of the audit report furtherelaborated our responsibilities under these guidelines. In accordance with the Code of Ethics forChinese Certified Public Accountants, we are independent of Fangda Group and perform otherprofessional ethics duties. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.
3. Key Audit MattersThe key audit matters are the matters that we believe are most important for the audit of the
current financial statements based on professional judgment. The response to these matters is basedon the overall audit of the financial statements and the formation of an audit opinion. We do notcomment on these matters separately.
(1) Income recognition
For related information disclosure, please refer to Note III, 25, Note III, 30(3), Note V, 34 andNote XIII 2 of the financial statements.
1. Description
In 2018, China Fangda Group's operating income was RMB3.049 billion of which constructioncontract revenue accounted for 68.32% of the group's total revenue.
Fangda Group confirms revenue for the construction services provided by the constructionaccording to the percentage of completion method when the results of the construction contract canbe reliably estimated. Management needs to make a reasonable estimate of the initial total contractrevenue and total contract costs for the construction contract and continue to assess and revise itduring the contract implementation process, which involves significant accounting estimates of themanagement.
Therefore, we identify construction contracts revenue recognition as key audit matters.
2. Audit response
Our audit procedures for the implementation of revenue recognition for construction contractsmainly include:
(1) Understand and evaluate the design of internal control related to management contract andconstruction contract budget and revenue recognition, and test the effectiveness of key controlimplementation.
(2) Obtained a major construction contract, verified the contract revenue, and reviewed keycontract terms. Check the construction contract and cost budget information on which managementexpects total revenue and estimated total cost.
(3) Obtain a construction contract ledger and project income cost summary table, perform ananalytical review of the project gross profit, and recalculate the construction contract completionpercentage and income in the construction contract to verify its accuracy.
(4) Select samples to check the project engineering details of the main project, subcontractedlabor approval forms, and the owner’s production value approval documents and records to verifythe contract costs incurred.
(5) Select samples to check if the relevant contract costs are recorded in the appropriateaccounting period.
(6) Select a sample to conduct a site inspection of the progress of the project image to verify thereasonableness of the project's completion schedule.
(2) Measurement of fair value of investment real estate
For related information disclosure, please refer to Note III, 15, Note III, 30(1), Note V, 9 (2),43 and Note IX 2 of the financial statements.
1. Description
As of 31.12.18, the carrying amount of investment real estate subsequently measured in theconsolidated financial statements using the fair value model was RMB5.231 billion, accounting
49.08% of the total assets, and the gains from changes in fair value realized in the current periodwere RMB2.917 billion, with a greater impact on the Group's consolidated statements.The management of Fangda Group annually employs a third-party assessment agency with relevantqualifications to evaluate the fair value of the investment real estate. The evaluation adopts thecomparison method and the income method to comprehensively analyze various factors that affectthe real estate price of the appraisal subject. The assessment of the fair value of investment realestate involves many estimates and assumptions, such as the analysis of the economic environmentand future trends of the real estate where the investment real estate is located, discount rates, etc.The changes in estimates and assumptions will have big impacts on the fair value of the investmentreal estate evaluated. Therefore, we identify the measurement of fair value of investment real estateas a key audit matter.
2. Audit responseOur audit procedures for the measurement of fair value of investment real estate mainlyinclude:
(1) Assess the competency, professional quality, independence and objectivity of third-partyassessment agencies employed by the management.
(2) Obtain the assessment report, selected major or typical samples, and use our real estateappraisal experts to review and review the assessment methods and assumptions used in theassessment report and the rationality of the selected key assessment parameters. Check the accuracyand relevance of the data used by the management in valuation.
(3) Review the measurement, presentation and disclosure of fair value of investment real estatein the financial statements.
(3) Provision of bad debt of account receivable
For details of the disclosure of relevant information please refer to Note III 11 and Note V 2 ofthe notes to the financial statements.
1. DescriptionAs stated in Note III 11 and Note V 2 of the financial statements as of December 31 2018, thebalance of accounts receivable of the Company was RMB2.286 billion and the provision for baddebts was RMB366 million. The book value as a percentage of total assets was 21.45%. Due to thesignificant amount of accounts receivable of Fangda Group, the management needs to use importantaccounting estimates and judgments when determining the estimated recoverable amount ofaccounts receivable. If the accounts receivable cannot be recovered on time or cannot be recoveredthe impact on the financial statements is relatively high. Therefore we determined the accuracy ofthe provision for bad debts of accounts receivable as a key audit matter.
2. Audit response
(1) Understand and evaluate the effectiveness of relevant internal control design for theprovision of bad debts of Fangda Group and accounts receivable and test the effectiveness of keycontrol operations.
(2) Based on the Company's industry characteristics and actual business conditions, themanagement's standard for the significant amount of individual accounts receivable is evaluated andthe basis for the combination and the proportion of impairment based on the age of the accounts areappropriate.
(3) Review the management's accrual process for the provision for impairment of receivables
including: (1) for accounts receivable with impairment provision prepared by aging analysis method,obtain the aging analysis form of accounts receivable prepared by management and bad debtsprovision form, select the sample to check the accuracy of the ageing division of the accountsreceivable and calculate the accuracy of the calculation of the bad debt provision; (2) for theaccounts receivable for the provision for impairment provision review the management test process,the accuracy and reasonableness of the information and related assumptions are checked for theappropriateness of the provision for impairment of accounts receivable with long-term accountsreceivable.
4. Other informationThe management of Fangda Group (hereinafter referred to as management) is responsible forother information. The other information includes the information covered in Fangda Group's 2018annual report, but does not include the financial statements and our audit report.
Our audit opinions published in the financial statements do not cover other information and wedo not publish any form of assurance conclusion on other information.
In connection with our audit of the financial statements, our responsibility is to read otherinformation. In the process, we consider whether there is a material inconsistency or other materialmisstatement of other information whether it is in the financial statements or what we have learnedduring the audit process.Based on the work we have performed, if we determine that there is a material misstatement ofother information, we should report that fact. In this regard, we have nothing to report.
5. Executives’ responsibilities on the Financial Statements
(1) Preparing these financial statements according to the Accounting Standards for BusinessEnterprises and presenting them fairly; (2) designing, implementing and maintaining necessaryinternal control to make sure that these financial statements are free from material misstatement,whether due to fraud or error.In the preparation of the financial statements, the management is responsible for assessing FangdaGroup's ability to continue as a going concern, disclosing issues related to going concern (ifapplicable), and applying the going concern assumption unless management plans to liquidateFangda Group, terminate operations or there are no other realistic choices.
The management is responsible for overseeing the financial reporting process of FangdaGroup.
6. Auditor's responsibility for auditing financial statements
Our objective is to obtain reasonable assurance as to whether the entire financial statements arefree from material misstatement due to fraud or error and to issue an audit report containing auditopinions. Reasonable assurance is a high level of assurance, but it does not guarantee that an auditperformed in accordance with auditing standards can always be discovered when a majormisstatement exists. The report may be due to fraud or mistakes, and if a reasonable expectation ofmisstatement alone or aggregated may affect the economic decision-making made by users offinancial statements based on the financial statements, the misstatement is generally considered tobe material.
In the process of conducting audit work in accordance with auditing standards, we use
professional judgment and maintain professional suspicion. At the same time, we also perform thefollowing tasks:
(1) Identify and assess risks of material misstatement of financial statements due to fraud orerrors, design and implement audit procedures to address these risks, and obtain adequate andappropriate audit evidence as a basis for issuing audit opinions. Since fraud may involve collusion,falsification, intentional omission, misrepresentation or override of internal controls, the risk offailing to detect a material misstatement due to fraud is higher than the risk of failing to detect amaterial misstatement due to an error.
(2) Understand audit-related internal controls to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies adopted by the management and thereasonableness of accounting estimates and related disclosures.
(4) Conclude on the appropriateness of management's use of continuing operations assumptions.At the same time, based on the audit evidence obtained, it concludes that whether there are majoruncertainties in the matters or circumstances that may cause major doubts about the ability of theCompany’s continuing operations. If we conclude that there are significant uncertainties, theauditing standards require us to request the users of the report to pay attention to the relevantdisclosures in the financial statements in the audit report; if the disclosure is not sufficient, weshould publish non-unqualified opinions. Our conclusions are based on the information available asof the date of the audit report. However, future events or circumstances may result in FangdaGroup's inability to continue operating.
(5) Evaluate the overall presentation, structure, and content (including disclosure) of thefinancial statements and evaluate whether the financial statements fairly reflect the relevanttransactions and events.
(6) Obtain sufficient and appropriate audit evidence on the financial information of entity orbusiness activities in Fangda Group to express opinions on the financial statements. We areresponsible for directing, supervising and executing group audits and assume full responsibility foraudit opinions.
We communicate with the governance team on planned audit scope, timing, and major auditfindings, including communication of the internal control deficiencies that we identified during theaudit.
We also provide a statement to the management on compliance with ethical requirementsrelated to independence, and communicate with the management on all relationships and othermatters that may reasonably be considered to affect our independence, as well as related preventivemeasures (if applicable).
From the matters passed with the management, we determine which items are most importantfor the audit of the financial statements of the current period and thus constitute the key auditmatters. We describe these matters in our audit report, unless laws and regulations prohibit thepublic disclosure of these matters, or in rare cases, if it is reasonably expected that the negativeconsequences of communicating something in the audit report will outweigh the benefits in thepublic interest, we determine that such matter should not be communicated in the audit report.
| Grand Thornton CPA (limited liability partnership) | CPA China (project partner) Chen Zhaoxin CPA China Zeng Hui | |
| Beijing, China | January 28, 2019 | |
II. Financial statements
Unit for statements in notes to financial statements: RMB yuan
1. Consolidated Balance Sheet
Prepared by: China Fangda Group Co., Ltd.
31.12.18
In RMB
| Item | Closing balance | Opening balance |
| Current asset: | ||
| Monetary capital | 1,389,062,083.76 | 1,180,398,479.51 |
| Settlement provision | ||
| Outgoing call loan | ||
| Financial assets measured at fair value with variations accounted into current income account | ||
| Derivative financial assets | ||
| Receivable note and accounts receivable | 2,060,214,724.69 | 1,960,008,863.36 |
| Including: receivable notes | 140,139,692.84 | 39,636,437.20 |
| Account receivable | 1,920,075,031.85 | 1,920,372,426.16 |
| Prepayment | 46,454,844.74 | 54,680,269.84 |
| Insurance receivable | ||
| Reinsurance receivable | ||
| Provisions of Reinsurance contracts receivable |
| Other receivables | 139,990,188.26 | 60,904,672.69 |
| Including: interest receivable | 3,829,315.07 | |
| Dividend receivable | ||
| Repurchasing of financial assets | ||
| Inventory | 651,405,832.29 | 819,610,960.67 |
| Assets held for sales | ||
| Non-current assets due in 1 year | ||
| Other current assets | 51,698,111.14 | 439,890,493.06 |
| Total current assets | 4,338,825,784.88 | 4,515,493,739.13 |
| Non-current assets: | ||
| Loan and advancement provided | ||
| Sellable financial assets | 21,674,008.23 | 28,562,575.67 |
| Investment held until mature | ||
| Long-term receivable | ||
| Long-term share equity investment | 70,105,657.88 | 34,142,055.62 |
| Investment real estate | 5,256,442,406.63 | 2,253,794,404.55 |
| Fixed assets | 455,274,241.83 | 468,118,279.18 |
| Construction in process | 58,269,452.72 | 2,668,198.62 |
| Productive biological assets | ||
| Gas & petrol | ||
| Intangible assets | 80,313,240.67 | 58,869,444.53 |
| R&D expense | ||
| Goodwill | ||
| Long-term amortizable expenses | 2,114,331.46 | 2,046,202.29 |
| Deferred income tax assets | 356,474,925.76 | 230,597,590.58 |
| Other non-current assets | 19,360,083.67 | 31,130,198.46 |
| Total of non-current assets | 6,320,028,348.85 | 3,109,928,949.50 |
| Total of assets | 10,658,854,133.73 | 7,625,422,688.63 |
| Current liabilities | ||
| Short-term loans | 208,000,000.00 | 616,000,000.00 |
| Loans from Central Bank | ||
| Deposit received and held for others | ||
| Call loan received | ||
| Financial liabilities measured at fair value with variations accounted into |
| current income account | ||
| Derivative financial liabilities | 1,625,725.00 | 159,000.00 |
| Payable notes and accounts | 1,547,495,316.83 | 1,479,313,284.40 |
| Prepayment received | 278,577,848.54 | 175,351,686.45 |
| Selling of repurchased financial assets | ||
| Fees and commissions payable | ||
| Employees’ wage payable | 44,513,062.17 | 40,399,130.75 |
| Taxes payable | 107,709,999.19 | 136,955,516.44 |
| Other payables | 813,118,699.84 | 503,614,822.66 |
| Including: interest payable | 2,098,971.44 | 2,425,311.97 |
| Dividend payable | ||
| Reinsurance fee payable | ||
| Insurance contract provision | ||
| Entrusted trading of securities | ||
| Entrusted selling of securities | ||
| Liabilities held for sales | ||
| Non-current liabilities due in 1 year | 200,000,000.00 | 200,000,000.00 |
| Other current liabilities | 9,328,682.25 | 9,531,014.81 |
| Total current liabilities | 3,210,369,333.82 | 3,161,324,455.51 |
| Non-current liabilities: | ||
| Long-term loans | 1,193,978,153.39 | 893,978,153.39 |
| Bond payable | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Long-term payable | ||
| Long-term employees’ wage payable | ||
| Anticipated liabilities | 6,831,162.99 | 6,368,353.05 |
| Deferred earning | 10,401,161.30 | 10,489,483.94 |
| Deferred income tax liabilities | 1,042,086,700.35 | 314,323,040.56 |
| Other non-current liabilities | ||
| Total of non-current liabilities | 2,253,297,178.03 | 1,225,159,030.94 |
| Total liabilities | 5,463,666,511.85 | 4,386,483,486.45 |
| Owner’s equity: | ||
| Share capital | 1,155,481,686.00 | 1,183,642,254.00 |
| Other equity tools | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 1,454,191.59 | 72,829,484.96 |
| Less: Shares in stock | 10,831,437.66 | |
| Other miscellaneous income | 7,382,087.59 | 8,585,847.99 |
| Special reserves | ||
| Surplus reserves | 120,475,221.40 | 110,690,396.65 |
| Common risk provisions | ||
| Retained profit | 3,921,225,872.96 | 1,863,191,218.58 |
| Total of owner’s equity belong to the parent company | 5,195,187,621.88 | 3,238,939,202.18 |
| Minor shareholders’ equity | ||
| Total of owners’ equity | 5,195,187,621.88 | 3,238,939,202.18 |
| Total of liabilities and owner’s interest | 10,658,854,133.73 | 7,625,422,688.63 |
Legal representative: XiongJianming CFO: Lin Kebing Accounting Manager: Wu BohuaNote 1: The "Notes receivable and accounts receivable" line item reflects the amount that should be collected by the enterprise foroperating activities such as selling goods and providing services and the commercial drafts received including bank acceptancemeasured at amortized cost on the balance sheet date and bills of exchange and commercial acceptance bills.The item should bebased on the ending balance of the "Announceable Notes" and "Accounts Receivable" accounts less the amount of the relevant baddebt provision ending balance in the "bad debt provision" account.2. The "other receivables" line item should be filled in based on the total balance of "end of interest" "dividends receivable" and"other receivables" less the balance of bad debt provision in the "bad debt provision" account.3. The "under construction" line item reflects the closing book value of the construction in progress and the final book value of thevarious materials prepared by the enterprise for the construction in progress.The item be filled in based on the closing balance of the"construction in progress" less the amount after the closing balance of the "depreciation reserve for construction in progress" accountand the ending balance of the "engineering materials" less the "depreciation reserve for engineering materials".4. The "Notes payable and accounts payable" line item reflects the amount payable by the enterprise on the balance sheet date for thepurchase of materials commodities and services and the commercial drafts issued and accepted including bank acceptance bills andcommercial acceptance bills. The item should be filled in based on the closing balance of the "Payables Payables" account and thetotal balance of the ending credit balances of the relevant detailed accounts to which the "Accounts Payable" and "Prepaid Accounts"accounts belong.5. The "Other Payables" line item should be filled in based on the total closing balance of the "Payable Interests" "DividendsPayable" and "Other Payables" accounts.6. The "Long-term Payables" line item reflects the ending book value of various long-term payables other than long-term borrowingsand bonds payable by the company on the balance sheet date.The project should be filled in based on the closing balance of the"Long-term Payables" account less the closing balance of the relevant "Unrecognized Financing Expenses" account and the closingbalance of the "Special Payables" account.
2. Balance Sheet of the Parent Company
In RMB
| Item | Closing balance | Opening balance |
| Current asset: | ||
| Monetary capital | 410,118,157.55 | 310,299,329.68 |
| Financial assets measured at fair value with variations accounted into current income account | ||
| Derivative financial assets | ||
| Receivable note and accounts receivable | 200,471,039.12 | 408,154.54 |
| Including: receivable notes | 200,000,000.00 | |
| Account receivable | 471,039.12 | 408,154.54 |
| Prepayment | 6,733,047.16 | 349,740.31 |
| Other receivables | 822,543,653.04 | 823,793,780.45 |
| Including: interest receivable | 1,020,000.00 | |
| Dividend receivable | 100,000,000.00 | 150,000,000.00 |
| Inventory | ||
| Assets held for sales | ||
| Non-current assets due in 1 year | ||
| Other current assets | 919,388.18 | 100,176,058.36 |
| Total current assets | 1,440,785,285.05 | 1,235,027,063.34 |
| Non-current assets: | ||
| Sellable financial assets | 21,674,008.23 | 28,562,575.67 |
| Investment held until mature | ||
| Long-term receivable | ||
| Long-term share equity investment | 983,339,494.35 | 925,349,494.35 |
| Investment real estate | 309,189,866.37 | 307,321,568.00 |
| Fixed assets | 53,784,811.23 | 55,816,611.77 |
| Construction in process | ||
| Productive biological assets | ||
| Gas & petrol | ||
| Intangible assets | 2,112,301.97 | 2,293,133.59 |
| R&D expense |
| Goodwill | ||
| Long-term amortizable expenses | 917,499.68 | 460,000.00 |
| Deferred income tax assets | 34,555,598.81 | 23,409,576.18 |
| Other non-current assets | ||
| Total of non-current assets | 1,405,573,580.64 | 1,343,212,959.56 |
| Total of assets | 2,846,358,865.69 | 2,578,240,022.90 |
| Current liabilities | ||
| Short-term loans | 200,000,000.00 | 250,000,000.00 |
| Financial liabilities measured at fair value with variations accounted into current income account | ||
| Derivative financial liabilities | ||
| Payable notes and accounts | 676,941.85 | 606,941.85 |
| Prepayment received | 733,274.16 | 721,888.86 |
| Employees’ wage payable | 2,145,763.39 | 2,151,237.91 |
| Taxes payable | 341,004.65 | 11,721,681.36 |
| Other payables | 300,006,406.51 | 287,972,808.37 |
| Including: interest payable | 740,208.33 | 365,520.83 |
| Dividend payable | ||
| Liabilities held for sales | ||
| Non-current liabilities due in 1 year | ||
| Other current liabilities | ||
| Total current liabilities | 503,903,390.56 | 553,174,558.35 |
| Non-current liabilities: | ||
| Long-term loans | 500,000,000.00 | |
| Bond payable | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Long-term payable | ||
| Long-term employees’ wage payable | ||
| Anticipated liabilities | ||
| Deferred earning | ||
| Deferred income tax liabilities | 64,130,617.41 | 63,864,007.22 |
| Other non-current liabilities | ||
| Total of non-current liabilities | 564,130,617.41 | 63,864,007.22 |
| Total liabilities | 1,068,034,007.97 | 617,038,565.57 |
| Owner’s equity: | ||
| Share capital | 1,155,481,686.00 | 1,183,642,254.00 |
| Other equity tools | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 360,835.52 | 71,736,128.89 |
| Less: Shares in stock | 10,831,437.66 | |
| Other miscellaneous income | 8,756,553.46 | 8,756,553.46 |
| Special reserves | ||
| Surplus reserves | 120,475,221.40 | 110,690,396.65 |
| Retained profit | 504,081,999.00 | 586,376,124.33 |
| Total of owners’ equity | 1,778,324,857.72 | 1,961,201,457.33 |
| Total of liabilities and owner’s interest | 2,846,358,865.69 | 2,578,240,022.90 |
Note 1: The "Notes receivable and accounts receivable" line item reflects the amount that should be collected by the enterprise foroperating activities such as selling goods and providing services and the commercial drafts received including bank acceptancemeasured at amortized cost on the balance sheet date and bills of exchange and commercial acceptance bills.The item should bebased on the ending balance of the "Announceable Notes" and "Accounts Receivable" accounts less the amount of the relevant baddebt provision ending balance in the "bad debt provision" account.2. The "other receivables" line item should be filled in based on the total balance of "end of interest" "dividends receivable" and"other receivables" less the balance of bad debt provision in the "bad debt provision" account.3. The "under construction" line item reflects the closing book value of the construction in progress and the final book value of thevarious materials prepared by the enterprise for the construction in progress.The item be filled in based on the closing balance of the"construction in progress" less the amount after the closing balance of the "depreciation reserve for construction in progress" accountand the ending balance of the "engineering materials" less the "depreciation reserve for engineering materials".4. The "Notes payable and accounts payable" line item reflects the amount payable by the enterprise on the balance sheet date for thepurchase of materials commodities and services and the commercial drafts issued and accepted including bank acceptance bills andcommercial acceptance bills. The item should be filled in based on the closing balance of the "Payables Payables" account and thetotal balance of the ending credit balances of the relevant detailed accounts to which the "Accounts Payable" and "Prepaid Accounts"accounts belong.5. The "Other Payables" line item should be filled in based on the total closing balance of the "Payable Interests" "DividendsPayable" and "Other Payables" accounts.6. The "Long-term Payables" line item reflects the ending book value of various long-term payables other than long-term borrowingsand bonds payable by the company on the balance sheet date.The project should be filled in based on the closing balance of the"Long-term Payables" account less the closing balance of the relevant "Unrecognized Financing Expenses" account and the closingbalance of the "Special Payables" account.
3. Consolidated Income Statement
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| 1. Total revenue | 3,048,680,152.06 | 2,947,470,813.58 |
| Incl. Business income | 3,048,680,152.06 | 2,947,470,813.58 |
| Interest income | ||
| Insurance fee earned | ||
| Fee and commission received | ||
| 2. Total business cost | 3,022,515,653.66 | 2,529,847,562.87 |
| Incl. Business cost | 2,337,948,010.42 | 1,998,238,889.21 |
| Interest expense | ||
| Fee and commission paid | ||
| Insurance discharge payment | ||
| Net claim amount paid | ||
| Net insurance policy reserves provided | ||
| Insurance policy dividend paid | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 152,681,927.79 | 191,789,929.01 |
| Sales expense | 49,833,945.89 | 61,063,948.40 |
| Administrative expense | 140,002,624.79 | 134,819,477.53 |
| R&D cost | 19,854,244.58 | 17,997,202.77 |
| Financial expenses | 82,328,388.89 | 67,058,846.06 |
| Including: interest cost | 75,934,358.74 | 66,942,527.90 |
| Interest income | 9,255,120.60 | 7,781,596.28 |
| Asset impairment loss | 239,866,511.30 | 58,879,269.89 |
| Add: other gains | 5,681,937.15 | 6,582,481.58 |
| Investment gains (―-― for loss) | 27,776,084.43 | 102,891,113.42 |
| Incl. Investment gains from affiliates and joint ventures | -836,397.74 | -2,162,975.06 |
| Gains from change of fair value (―-― for loss) | 2,913,858,560.57 | 892,408,648.26 |
| Exchange gains (―-― for loss) | ||
| Investment gains ("-" for loss) | -3,516,357.91 | 5,027,717.19 |
| 3. Operational profit (―-― for loss) | 2,969,964,722.64 | 1,424,533,211.16 |
| Plus: non-operational income | 3,712,594.09 | 8,382,787.23 |
| Less: non-operational expenditure | 3,846,202.80 | 8,073,399.54 |
| 4. Gross profit (―-― for loss) | 2,969,831,113.93 | 1,424,842,598.85 |
| Less: Income tax expenses | 723,666,542.25 | 273,795,377.34 |
| 5. Net profit (―-― for net loss) | 2,246,164,571.68 | 1,151,047,221.51 |
| (1) Net profit from continuous operation ("-" for net loss) | 2,246,384,786.08 | 1,128,300,551.18 |
| (2) Net profit from discontinuous operation ("-" for net loss) | -220,214.40 | 22,746,670.33 |
| Net profit attributable to the owners of parent company | 2,246,164,571.68 | 1,144,404,441.03 |
| Minor shareholders’ equity | 6,642,780.48 | |
| 6. After-tax net amount of other misc. incomes | -1,203,760.40 | 6,455,393.47 |
| After-tax net amount of other misc. incomes attributed to parent's owner | -1,203,760.40 | 6,455,393.47 |
| (1) Other misc. incomes that cannot be re-classified into gain and loss | ||
| 1. Re-measure the change in the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method | ||
| (2) Other misc. incomes that will be re-classified into gain and loss | -1,203,760.40 | 6,455,393.47 |
| 1. Other comprehensive income that can be transferred to profit or loss under the equity method | ||
| 2．Change in the fair value of financial asset for sale | ||
| 3 Held-to-mature investment reclassified as gain and loss in the financial assets for sales | ||
| 4. Effective part in the gain and loss of arbitrage of cash flow | -1,170,896.25 | -1,959,992.79 |
| 5. Translation difference of foreign exchange statement | -32,864.15 | -249,335.57 |
| 6. Others | 8,664,721.83 | |
| After-tax net of other misc. income attributed to minority shareholders | ||
| 7. Total of misc. incomes | 2,244,960,811.28 | 1,157,502,614.98 |
| Total of misc. incomes attributable to the owners of the parent company | 2,244,960,811.28 | 1,150,859,834.50 |
| Total misc gains attributable to the minor shareholders | 6,642,780.48 | |
| 8. Earnings per share: | ||
| (1) Basic earnings per share | 1.91 | 0.97 |
| (2) Diluted earnings per share | 1.91 | 0.97 |
Net profit contributed by entities merged under common control in the report period was RMB , net profit realized byparties merged during the previous period is RMB .Legal representative: XiongJianming CFO: Lin Kebing Accounting Manager: Wu BohuaNote: 1. Financial expenses related to financial business need to separately list exchange income items.2. The "R&D Expenses" line item reflects the expenses incurred by the company in the research and development process.Theproject should be based on an analysis of the amount of the "R&D Expenses" detail account under the "Management Expenses"section.
4. Income Statement of the Parent Company
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| 1. Turnover | 30,830,762.76 | 29,333,583.31 |
| Less: Operation cost | 1,604,559.26 | 2,041,826.84 |
| Taxes and surcharges | 1,342,603.83 | 1,329,711.99 |
| Sales expense | ||
| Administrative expense | 24,395,947.11 | 26,156,987.68 |
| R&D cost | ||
| Financial expenses | 25,450,212.15 | -508,902.33 |
| Including: interest cost | 23,822,633.36 | 7,737,441.67 |
| Interest income | 2,758,152.15 | 8,560,615.95 |
| Asset impairment loss | 7,597,228.84 | -39,145,789.67 |
| Add: other gains | 368,589.30 | 819,420.96 |
| Investment gains (―-― for loss) | 124,133,997.29 | 158,138,502.44 |
| Incl. Investment gains from | -2,142,252.28 |
| affiliates and joint ventures | ||
| Gains from change of fair value (―-― for loss) | 1,868,298.37 | 1,820,847.37 |
| Investment gains ("-" for loss) | -55,902.90 | -3,913.82 |
| 2. Operational profit (―-― for loss) | 96,755,193.63 | 200,234,605.75 |
| Plus: non-operational income | 42,961.77 | 3,065,841.55 |
| Less: non-operational expenditure | 506,232.62 | 3,164,398.33 |
| 3. Gross profit (―-― for loss) | 96,291,922.78 | 200,136,048.97 |
| Less: Income tax expenses | -9,543,869.19 | -18,370,012.57 |
| 4. Net profit (―-― for net loss) | 105,835,791.97 | 218,506,061.54 |
| (1) Net profit from continuous operation ("-" for net loss) | 105,835,791.97 | 218,506,061.54 |
| (2) Net profit from discontinuous operation ("-" for net loss) | ||
| 5. After-tax net amount of other misc. incomes | 8,664,721.83 | |
| (1) Other misc. incomes that cannot be re-classified into gain and loss | ||
| 1. Re-measure the change in the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method | ||
| (2) Other misc. incomes that will be re-classified into gain and loss | 8,664,721.83 | |
| 1. Other comprehensive income that can be transferred to profit or loss under the equity method | ||
| 2．Change in the fair value of financial asset for sale | ||
| 3 Held-to-mature investment reclassified as gain and loss in the financial assets for sales | ||
| 4. Effective part in the gain and loss of arbitrage of cash flow | ||
| 5. Translation difference of foreign exchange statement |
| 6. Others | 8,664,721.83 | |
| 6. Total of misc. incomes | 105,835,791.97 | 227,170,783.37 |
| 7. Earnings per share: | ||
| (1) Basic earnings per share | ||
| (2) Diluted earnings per share |
Note: The "R&D Expenses" line item reflects the expenses incurred by the company in the research and development process.Theproject should be based on an analysis of the amount of the "R&D Expenses" detail account under the "Management Expenses"section.
5. Consolidated Cash Flow Statement
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| 1. Net cash flow from business operations: | ||
| Cash received from sales of products and providing of services | 2,865,682,841.59 | 3,418,351,614.70 |
| Net increase of customer deposits and capital kept for brother company | ||
| Net increase of loans from central bank | ||
| Net increase of inter-bank loans from other financial bodies | ||
| Cash received against original insurance contract | ||
| Net cash received from reinsurance business | ||
| Net increase of client deposit and investment | ||
| Increase in proposal of financial assets measured at fair value with variations accounted into current income account | ||
| Cash received as interest, processing fee, and commission | ||
| Net increase of inter-bank fund received | ||
| Net increase of repurchasing business |
| Tax refunded | 1,647,970.72 | 3,804,545.99 |
| Other cash received from business operation | 107,059,575.17 | 127,738,857.46 |
| Sub-total of cash inflow from business operations | 2,974,390,387.48 | 3,549,895,018.15 |
| Cash paid for purchasing products and services | 1,671,518,745.27 | 2,001,850,190.24 |
| Net increase of client trade and advance | ||
| Net increase of savings in central bank and brother company | ||
| Cash paid for original contract claim | ||
| Cash paid for interest, processing fee and commission | ||
| Cash paid for policy dividend | ||
| Cash paid to and for the staff | 274,922,323.91 | 253,752,112.76 |
| Taxes paid | 301,712,580.53 | 474,915,595.80 |
| Other cash paid for business activities | 339,134,018.20 | 261,543,973.62 |
| Sub-total of cash outflow from business operations | 2,587,287,667.91 | 2,992,061,872.42 |
| Cash flow generated by business operations, net | 387,102,719.57 | 557,833,145.73 |
| 2. Cash flow generated by investment: | ||
| Cash received from investment recovery | 7,573,967,278.99 | 11,062,067,410.96 |
| Cash received as investment profit | 86,864,507.03 | 135,457,226.80 |
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 17,886,076.00 | 15,664,032.91 |
| Net cash received from disposal of subsidiaries or other operational units | 488,779.75 | |
| Other investment-related cash received | ||
| Sub-total of cash inflow generated from investment | 7,678,717,862.02 | 11,213,677,450.42 |
| Cash paid for construction of fixed | 199,604,502.80 | 39,773,885.41 |
| assets, intangible assets and other long-term assets | ||
| Cash paid as investment | 7,271,417,092.50 | 11,563,042,000.00 |
| Net increase of loan against pledge | ||
| Net cash paid for acquiring subsidiaries and other operational units | ||
| Other cash paid for investment | ||
| Subtotal of cash outflows | 7,471,021,595.30 | 11,602,815,885.41 |
| Cash flow generated by investment activities, net | 207,696,266.72 | -389,138,434.99 |
| 3. Cash flow generated by financing activities: | ||
| Cash received from investment | ||
| Incl. Cash received from investment attracted by subsidiaries from minority shareholders | ||
| Cash received from borrowed loans | 708,000,000.00 | 978,503,029.59 |
| Cash received from bond placing | ||
| Other cash received from financing activities | ||
| Subtotal of cash inflow from financing activities | 708,000,000.00 | 978,503,029.59 |
| Cash paid to repay debts | 816,000,000.00 | 790,000,000.00 |
| Cash paid as dividend, profit, or interests | 264,157,464.17 | 359,248,335.73 |
| Incl. Dividend and profit paid by subsidiaries to minority shareholders | ||
| Other cash paid for financing activities | 199,439,589.23 | |
| Subtotal of cash outflow from financing activities | 1,279,597,053.40 | 1,149,248,335.73 |
| Net cash flow generated by financing activities | -571,597,053.40 | -170,745,306.14 |
| 4. Influence of exchange rate changes on cash and cash equivalents | 1,703,422.24 | -2,488,444.45 |
| 5. Net increase in cash and cash equivalents | 24,905,355.13 | -4,539,039.85 |
| Plus: Balance of cash and cash equivalents at the beginning of term | 931,285,535.55 | 935,824,575.40 |
| 6. Balance of cash and cash equivalents at the end of the period | 956,190,890.68 | 931,285,535.55 |
6. Cash Flow Statement of the Parent Company
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| 1. Net cash flow from business operations: | ||
| Cash received from sales of products and providing of services | 26,555,743.34 | 26,119,015.91 |
| Tax refunded | ||
| Other cash received from business operation | 1,976,545,022.66 | 1,250,545,372.09 |
| Sub-total of cash inflow from business operations | 2,003,100,766.00 | 1,276,664,388.00 |
| Cash paid for purchasing products and services | 2,060,345.12 | 36,569,179.86 |
| Cash paid to and for the staff | 15,053,325.83 | 16,683,356.55 |
| Taxes paid | 15,944,462.51 | 2,804,616.75 |
| Other cash paid for business activities | 2,263,461,863.27 | 1,184,826,856.40 |
| Sub-total of cash outflow from business operations | 2,296,519,996.73 | 1,240,884,009.56 |
| Cash flow generated by business operations, net | -293,419,230.73 | 35,780,378.44 |
| 2. Cash flow generated by investment: | ||
| Cash received from investment recovery | 2,646,355,978.40 | 3,757,868,645.34 |
| Cash received as investment profit | 197,678,018.89 | 514,225,411.35 |
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | ||
| Net cash received from disposal of subsidiaries or other operational units | ||
| Other investment-related cash | 10,000,000.00 |
| received | ||
| Sub-total of cash inflow generated from investment | 2,854,033,997.29 | 4,272,094,056.69 |
| Cash paid for construction of fixed assets, intangible assets and other long-term assets | 1,125,745.40 | 1,850,897.55 |
| Cash paid as investment | 2,626,870,000.00 | 3,846,012,000.00 |
| Net cash paid for acquiring subsidiaries and other operational units | ||
| Other cash paid for investment | ||
| Subtotal of cash outflows | 2,627,995,745.40 | 3,847,862,897.55 |
| Cash flow generated by investment activities, net | 226,038,251.89 | 424,231,159.14 |
| 3. Cash flow generated by financing activities: | ||
| Cash received from investment | ||
| Cash received from borrowed loans | 700,000,000.00 | 250,000,000.00 |
| Cash received from bond placing | ||
| Other cash received from financing activities | ||
| Subtotal of cash inflow from financing activities | 700,000,000.00 | 250,000,000.00 |
| Cash paid to repay debts | 250,000,000.00 | 190,000,000.00 |
| Cash paid as dividend, profit, or interests | 211,344,710.76 | 284,121,945.63 |
| Other cash paid for financing activities | 199,439,589.23 | |
| Subtotal of cash outflow from financing activities | 660,784,299.99 | 474,121,945.63 |
| Net cash flow generated by financing activities | 39,215,700.01 | -224,121,945.63 |
| 4. Influence of exchange rate changes on cash and cash equivalents | -289,429.05 | 4.86 |
| 5. Net increase in cash and cash equivalents | -28,454,707.88 | 235,889,596.81 |
| Plus: Balance of cash and cash equivalents at the beginning of term | 310,049,329.68 | 74,159,732.87 |
| 6. Balance of cash and cash equivalents at the end of the period | 281,594,621.80 | 310,049,329.68 |
7. Statement of Change in Owners’ Equity (Consolidated)
Amount of the Current Term
In RMB
| Item | Current period | ||||||||||||
| Owners’ Equity Attributable to the Parent Company | Minor shareholders’ equity | Total of owners’ equity | |||||||||||
| Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserves | Common risk provisions | Retained profit | |||||
| Preferred share | Perpetual bond | Others | |||||||||||
| 1. Balance at the end of last year | 1,183,642,254.00 | 72,829,484.96 | 8,585,847.99 | 110,690,396.65 | 1,863,191,218.58 | 3,238,939,202.18 | |||||||
| Plus: Changes in accounting policies | |||||||||||||
| Correction of previous errors | |||||||||||||
| Consolidation of entities under common control | |||||||||||||
| Others | |||||||||||||
| 2. Balance at the beginning of current year | 1,183,642,254.00 | 72,829,484.96 | 8,585,847.99 | 110,690,396.65 | 1,863,191,218.58 | 3,238,939,202.18 | |||||||
| 3. Amount of change in current term (―-― for decrease) | -28,160,568.00 | -71,375,293.37 | 10,831,437.66 | -1,203,760.40 | 9,784,824.75 | 2,058,034,654.38 | 1,956,248,419.70 | ||||||
| (1) Total of misc. incomes | -1,203,760.40 | 2,246,164,571.68 | 2,244,960,811.28 | ||||||||||
| (2) Investment or decreasing of | -28,160,568. | -71,375,293.37 | 10,831,437.66 | -798,754.45 | -111,166,053.4 | ||||||||
| capital by owners | 00 | 8 | |||||||||||
| 1. Common shares invested by owners | -28,160,568.00 | -71,375,293.37 | 10,831,437.66 | -798,754.45 | -111,166,053.48 | ||||||||
| 2. Capital contributed by other equity instrument helders | |||||||||||||
| 3. Amount of shares paid and accounted as owners’ equity | |||||||||||||
| 4. Others | |||||||||||||
| (3) Profit allotment | 10,583,579.20 | -188,129,917.30 | -177,546,338.10 | ||||||||||
| 1. Providing of surplus reserves | 10,583,579.20 | -10,583,579.20 | |||||||||||
| 2. Common risk provision | |||||||||||||
| 3. Allotment to the owners (or shareholders) | -177,546,338.10 | -177,546,338.10 | |||||||||||
| 4. Others | |||||||||||||
| (4) Internal transferring of owners’ equity | |||||||||||||
| 1. Capitalizing of capital reserves (or to capital shares) | |||||||||||||
| 2. Capitalizing of surplus reserves (or to capital shares) | |||||||||||||
| 3. Making up losses by surplus reserves | |||||||||||||
| 4. Retained gain transferred due to change in set |
| benefit program | |||||||||||||
| 5. Others | |||||||||||||
| (5) Special reserves | |||||||||||||
| 1. Provided this year | |||||||||||||
| 2. Used this term | |||||||||||||
| (6) Others | |||||||||||||
| 4. Balance at the end of this period | 1,155,481,686.00 | 1,454,191.59 | 10,831,437.66 | 7,382,087.59 | 120,475,221.40 | 3,921,225,872.96 | 5,195,187,621.88 |
Amount of the Previous Term
In RMB
| Item | Last period | ||||||||||||
| Owners’ Equity Attributable to the Parent Company | Minor shareholders’ equity | Total of owners’ equity | |||||||||||
| Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserves | Common risk provisions | Retained profit | |||||
| Preferred share | Perpetual bond | Others | |||||||||||
| 1. Balance at the end of last year | 789,094,836.00 | 467,376,902.96 | 2,130,454.52 | 88,839,790.50 | 1,016,820,576.30 | -61,949,210.11 | 2,302,313,350.17 | ||||||
| Plus: Changes in accounting policies | |||||||||||||
| Correction of previous errors | |||||||||||||
| Consolidation of entities under common control | |||||||||||||
| Others | |||||||||||||
| 2. Balance at the beginning of current year | 789,094,836.00 | 467,376,902.96 | 2,130,454.52 | 88,839,790.50 | 1,016,820,576.30 | -61,949,210.11 | 2,302,313,350.17 | ||||||
| 3. Amount of change in current | 394,547,418. | -394,547,418.0 | 6,455,393.47 | 21,850,606.15 | 846,370,642.28 | 61,949,210.11 | 936,625,852.01 | ||||||
| term (―-― for decrease) | 00 | 0 | |||||||||||
| (1) Total of misc. incomes | 6,455,393.47 | 1,144,404,441.03 | 6,642,780.48 | 1,157,502,614.98 | |||||||||
| (2) Investment or decreasing of capital by owners | 55,306,429.63 | 55,306,429.63 | |||||||||||
| 1. Common shares invested by owners | |||||||||||||
| 2. Capital contributed by other equity instrument helders | |||||||||||||
| 3. Amount of shares paid and accounted as owners’ equity | |||||||||||||
| 4. Others | 55,306,429.63 | 55,306,429.63 | |||||||||||
| (3) Profit allotment | 21,850,606.15 | -298,033,798.75 | -276,183,192.60 | ||||||||||
| 1. Providing of surplus reserves | 21,850,606.15 | -21,850,606.15 | |||||||||||
| 2. Common risk provision | |||||||||||||
| 3. Allotment to the owners (or shareholders) | -276,183,192.60 | -276,183,192.60 | |||||||||||
| 4. Others | |||||||||||||
| (4) Internal transferring of owners’ equity | 394,547,418.00 | -394,547,418.00 | |||||||||||
| 1. Capitalizing of capital reserves (or to capital shares) | 394,547,418.00 | -394,547,418.00 | |||||||||||
| 2. Capitalizing of surplus reserves |
| (or to capital shares) | |||||||||||||
| 3. Making up losses by surplus reserves | |||||||||||||
| 4. Retained gain transferred due to change in set benefit program | |||||||||||||
| 5. Others | |||||||||||||
| (5) Special reserves | |||||||||||||
| 1. Provided this year | |||||||||||||
| 2. Used this term | |||||||||||||
| (6) Others | |||||||||||||
| 4. Balance at the end of this period | 1,183,642,254.00 | 72,829,484.96 | 8,585,847.99 | 110,690,396.65 | 1,863,191,218.58 | 3,238,939,202.18 |
8. Statement of Change in Owners’ Equity (Parent Company)
Amount of the Current Term
In RMB
| Item | Current period | ||||||||||
| Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserves | Retained profit | Total of owners’ equity | |||
| Preferred share | Perpetual bond | Others | |||||||||
| 1. Balance at the end of last year | 1,183,642,254.00 | 71,736,128.89 | 8,756,553.46 | 110,690,396.65 | 586,376,124.33 | 1,961,201,457.33 | |||||
| Plus: Changes in accounting policies | |||||||||||
| Correction of previous errors | |||||||||||
| Others | |||||||||||
| 2. Balance at the | 1,183,64 | 71,736,12 | 8,756,553 | 110,690,3 | 586,376 | 1,961,201 | |||||
| beginning of current year | 2,254.00 | 8.89 | .46 | 96.65 | ,124.33 | ,457.33 | |||||
| 3. Amount of change in current term (―-― for decrease) | -28,160,568.00 | -71,375,293.37 | 10,831,437.66 | 9,784,824.75 | -82,294,125.33 | -182,876,599.61 | |||||
| (1) Total of misc. incomes | 105,835,791.97 | 105,835,791.97 | |||||||||
| (2) Investment or decreasing of capital by owners | -28,160,568.00 | -71,375,293.37 | 10,831,437.66 | -798,754.45 | -111,166,053.48 | ||||||
| 1. Common shares invested by owners | -28,160,568.00 | -71,375,293.37 | 10,831,437.66 | -798,754.45 | -111,166,053.48 | ||||||
| 2. Capital contributed by other equity instrument helders | |||||||||||
| 3. Amount of shares paid and accounted as owners’ equity | |||||||||||
| 4. Others | |||||||||||
| (3) Profit allotment | 10,583,579.20 | -188,129,917.30 | -177,546,338.10 | ||||||||
| 1. Providing of surplus reserves | 10,583,579.20 | -10,583,579.20 | |||||||||
| 2. Allotment to the owners (or shareholders) | -177,546,338.10 | -177,546,338.10 | |||||||||
| 3. Others | |||||||||||
| (4) Internal transferring of owners’ equity | |||||||||||
| 1. Capitalizing of capital reserves (or to capital shares) | |||||||||||
| 2. Capitalizing of surplus reserves |
| (or to capital shares) | |||||||||||
| 3. Making up losses by surplus reserves | |||||||||||
| 4. Retained gain transferred due to change in set benefit program | |||||||||||
| 5. Others | |||||||||||
| (5) Special reserves | |||||||||||
| 1. Provided this year | |||||||||||
| 2. Used this term | |||||||||||
| (6) Others | |||||||||||
| 4. Balance at the end of this period | 1,155,481,686.00 | 360,835.52 | 10,831,437.66 | 8,756,553.46 | 120,475,221.40 | 504,081,999.00 | 1,778,324,857.72 |
Amount of the Previous Term
In RMB
| Item | Last period | ||||||||||
| Share capital | Other equity tools | Capital reserves | Less: Shares in stock | Other miscellaneous income | Special reserves | Surplus reserves | Retained profit | Total of owners’ equity | |||
| Preferred share | Perpetual bond | Others | |||||||||
| 1. Balance at the end of last year | 789,094,836.00 | 466,283,546.89 | 91,831.63 | 88,839,790.50 | 665,903,861.54 | 2,010,213,866.56 | |||||
| Plus: Changes in accounting policies | |||||||||||
| Correction of previous errors | |||||||||||
| Others | |||||||||||
| 2. Balance at the beginning of current year | 789,094,836.00 | 466,283,546.89 | 91,831.63 | 88,839,790.50 | 665,903,861.54 | 2,010,213,866.56 | |||||
| 3. Amount of | 394,547, | -394,547, | 8,664,721 | 21,850,60 | -79,527, | -49,012,4 | |||||
| change in current term (―-― for decrease) | 418.00 | 418.00 | .83 | 6.15 | 737.21 | 09.23 | |||||
| (1) Total of misc. incomes | 8,664,721.83 | 218,506,061.54 | 227,170,783.37 | ||||||||
| (2) Investment or decreasing of capital by owners | |||||||||||
| 1. Common shares invested by owners | |||||||||||
| 2. Capital contributed by other equity instrument helders | |||||||||||
| 3. Amount of shares paid and accounted as owners’ equity | |||||||||||
| 4. Others | |||||||||||
| (3) Profit allotment | 21,850,606.15 | -298,033,798.75 | -276,183,192.60 | ||||||||
| 1. Providing of surplus reserves | 21,850,606.15 | -21,850,606.15 | |||||||||
| 2. Allotment to the owners (or shareholders) | -276,183,192.60 | -276,183,192.60 | |||||||||
| 3. Others | |||||||||||
| (4) Internal transferring of owners’ equity | 394,547,418.00 | -394,547,418.00 | |||||||||
| 1. Capitalizing of capital reserves (or to capital shares) | 394,547,418.00 | -394,547,418.00 | |||||||||
| 2. Capitalizing of surplus reserves (or to capital shares) | |||||||||||
| 3. Making up |
| losses by surplus reserves | |||||||||||
| 4. Retained gain transferred due to change in set benefit program | |||||||||||
| 5. Others | |||||||||||
| (5) Special reserves | |||||||||||
| 1. Provided this year | |||||||||||
| 2. Used this term | |||||||||||
| (6) Others | |||||||||||
| 4. Balance at the end of this period | 1,183,642,254.00 | 71,736,128.89 | 8,756,553.46 | 110,690,396.65 | 586,376,124.33 | 1,961,201,457.33 |
III. General Information
China Fangda Group Co., Ltd. (the ―Company‖ or the ―Group‖) is a joint stock company registered in Shenzhen, Guangdong andwas approved by the Government of Shenzhen with Document 深府办函 (1995) 194号, and was founded, on the basis of ShenzhenFangda Construction Material Co., Ltd., by way of share issuing in October 1995. The unified social credit code is:
91440300192448589C; registered address: Fangda Building, Kejinan Road 12, High-tech Zone, Shenzhen. Mr. XiongJianming isthe legal representative.The Company issued foreign currency shares (B shares) and local currency shares (A shares) and listed in November 1995 and April1996 respectively in Shenzhen Stock Exchange. The Company received the Reply to the Non-public Share Issuance of Fangda ChinaGroup Co., Ltd. (CSRC License [2016] No.825) to allow the Company to conduct non-public issuance of 32,184,931 A-shares inJune 20116. According to the profit distribution plan for 2016 approved by the 2016 general shareholders' meeting, the Companyissued five shares for every ten shares to all shareholders through surplus capitalization based on the total 789,094,836 shares onDecember 31, 2016. At the end of 2017, the registered capital was RMB1,183,642,254.00. In August 2018, the companyrepurchased and cancelled 28,160,568.00 B shares and the existing registered capital was RMB1,155,481,686.00.The Company has established a corporate governance structure that comprises shareholders’ meeting, board of directors andsupervisory committee. Currently, the Company sets up the President Office, Administrative Department, HR Department, EnterpriseManagement Department, Financial Department, Audit and Supervisory Department, Securities Department, Technology InnovationDepartment and IT Department and has established subsidiaries including Fangda Decoration, FangdaChuangzhi, Fangda NewMaterial, Fangda Property and Fangda New Energy.The business nature and main business operations of the Company and subsidiaries (―the Group‖) include (1) production and sales ofcurtain wall materials, design, production and installation of construction curtain walls; (2) assembly and production of subwayscreen doors; (3) development and operation of real estate projects on land, of which rights have been obtained lawfully; (4) R&D,installation and sales of PV devices, design and installation of PV power plants.
The financial statements and notes are approved at the 13
th
meeting of the 8
th
term of the Board of Directors held on 28.01.19.The consolidation scope for the consolidated financial statements includes the Company and all subsidiaries. The main entitiesincluded in the scope of consolidation in this period include two subsidiaries. In this period the company is no longer included in thescope of consolidation. In this period the subsidiary Fangda Decoration Engineering (Shenyang) Co. Ltd. (hereinafter referred to asShenyang Decoration Company) was cancelled. See Note 8 Change to consolidation scope and Note 9 Interests in other entities.
IV. Basis for the preparation of financial statements
1. Preparation basis
The financial statements are prepared according to the enterprise financial standard and guidelines, interpretation and other relatedregulations (―the Standard‖) issued by the Ministry of Finance. The Group has also disclosed related financial information accordingto the requirement of the Regulations of Information Disclosure No.15 – General Provisions for Financial Statements (Revised in2014) issued by the CSRC.The Group prepares the financial statements based on continuous operation.The Group's auditing is based on the accrual basis. Except for some financial instruments and property held for investment, thefinancial statements are prepared based on historical costs. In case of any asset impairment, the impairment provision will be made asrequired.
2. Continuous operation
The Company assessed the continuing operations capability of the Company for the 12 months from the end of the reporting period.No matters were found that would affect the Company's ability to continue as a going concern. It is reasonable for the Company toprepare financial statements based on continuing operations.
V. Significant Account Policies and Estimates
Whether the Company needs to comply with disclosure requirements of special industriesYesProperty development and decoration industriesThe Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.2 – Listed Companies Engaged in Solid Mineral Resources Related Business.Specific accounting policy and estimate prompt:
The Group determines the accounting policies and income recognition policies for investment real estate according to the productionand business features. For details, see Note V. 13 and Note V. 22.
1. Statement of compliance to the Enterprise Accounting Standard
The financial report and statements are prepared with compliance to the requirement of the Enterprise Accounting Standard. They
reflect the financial position as of 31.12.18, and business performance and cash flow situation in Year 2018 of the Company franklyand completely.
2. Fiscal Period
The fiscal year of the Group is the solar calendar year, that is from January 1 to December 31.
3. Operation period
The operation period of the Group is 12 months.
4. Bookkeeping standard money
The Company, domestic subsidiaries and overseas subsidiary Shihui International Holding Co., Ltd. use RMB as bookkeepingstandard money. Overseas subsidiaries Automatic System (Hong Kong) Co., Ltd. and Fangda Australia Pty Ltd use HKD andAUD as bookkeeping standard money respectively. The Group prepares financial statements in RMB.
5. Accounting treatment of the entities under common and different control
(1) Consolidation of entities under common controlAssets and liabilities obtained by the merging party are calculated at their book value with the merged parties at the merger day in theconsolidated financial statement of the merging party in addition to the adjustment made given the difference in accounting policies.The differences between the book value of net assets and the book value of consideration price (or the total of face value of shareissued) are adjusted to the capital reserve (share capital premium). If the share capital premium is not enough to offset the difference,it will be adjusted to the retained gains.Enterprise merger under common control through multiple transactionsIn separate financial statements, the initial investment cost is the book value of the merged party’s net assets that can be shared by themerging party in the consolidate financial statements of the final controlling party according to the shareholding percentage on themerging date; adjust the capital surplus (share premium) according to the difference between the initial investment cost and the bookvalue of the held investment before merger plus the book value of the consideration paid on the merger date. Where the capitalsurplus falls short, the retained income should be adjusted.In consolidated financial statements, assets and liabilities obtained by the merging party from the merged party should be measured atthe book value in the final controlling party’s consolidated financial statements other than the adjustment made due to differences inaccounting policies; adjust the capital surplus (share premium) according to the difference between the initial investment cost and thebook value of the held investment before merger plus the book value of the consideration paid on the merger date. Where the capitalsurplus falls short, the retained income should be adjusted.Changes in recognized related profit and loss, other misc. incomes andother owner's equity between the later one of the date when the original stock equity was obtained and the date when the mergedparty and merging party become under the common control should respectively write down the retained profit in beginning of thereport period or current period’s profit or loss.(2) Consolidation of entities under different control
For merger of entities under different control, the merger cost is the fair value of the asset paid, liability undertaken, and equitysecurities issued for exchanging of control power over the entities at the day of acquisition. On the acquisition day, the assets andliabilities (if any) acquired by the Group from the acquired party are recognized on the fair value.If the merger costs exceed the fair value of the recognizable net assets of the acquired party in the merger, it is recognized asgoodwill and measured based the costs after the accumulative impairment provision is deducted; if the the fair value exceeds thecosts, it is included in the income statement for the period after being re-examined.Where there is new or further evidence on the condition existing on the acquisition date 12 months later and adjustment needs to bemade, the good will should be adjusted and merged.(3) Treatment of related transaction fee in enterprise mergerAgency expenses and other administrative expenses such as auditing, legal consulting, or appraisal services occurred relating to themerger of entities are accounted into current income account when occurred. The transaction fees of equity certificates or liabilitycertificates issued by the purchaser for payment for the acquisition are accounted at the initial amount of the certificates.
6. Preparation of Consolidated Financial Statements
(1) Consolidation scope
The consolidate scope of consolidated financial statements is determined based on control. Control means the power possessed by theCompany on invested entities to share variable returns by participating in related activities of the invested entities and to impact theamount of the returns by using the power. Subsidiaries are enterprises controlled by the Company.(2). Preparation of Consolidated Financial StatementsThe consolidated financial statements are prepared by the Company based on financial statements of the Company and subsidiariesand according to other related information. During preparation of consolidated financial statements, the accounting policies andperiod of the Company and subsidiaries must be the same. Major transactions and balances between companies are offset.Subsidiaries and businesses increased because of merger of enterprises under the common control during the report period aredeemed consolidated into the consolidate scope from the date of becoming controlled by the final party. The operating result andcash flows of the subsidiaries and businesses from the date of becoming controlled by the final party should be incorporated into theconsolidate income statement and consolidate cash flow statement.For subsidiaries and businesses increased because of merger of enterprises not under the common control, their incomes, expensesand profits between the date of acquisition and end of the report period should be incorporated into the consolidated incomestatement, and the cash flows should be incorporated into the consolidated cash flow statement.The shareholder's equity of the subsidiary company is not part of the company's ownership and is presented separately as minorityshareholders' equity in the consolidated balance sheet. The subsidiary's current net profit or loss is the share of minority shareholders'equity is listed as "minority shareholder gains and losses" in the net profit item of the consolidated income statement. If the lossesof subsidiaries shared by the minority shareholders exceed the part of the owners’ equity of the subsudiaries at the beginning of theperiod, the excessive part will offset the minority shareholders’ equity.
(3) Acquisition of subsidiary minority interestsThe difference between the investment cost of the long-term equity obtained from acquisition of minority interests and the share ofnet assets in the subsidiary calculated continuously based on the increased shareholding percentage, and the difference between thedisposal income obtained from the partial disposal of the subsidiary’s equity investment without losing the control power and theshare of net assets in the subsidiary calculated continuously based on the increased shareholding percentage should be adjusted andconsolidated in the capital surplus in the consolidated balance sheet. Where the capital surplus falls short, the retained income shouldbe adjusted.(4) Treatment of loss of subsidiaries’ control powerFor loss of control over subsidiaries due to disposal of partial equity investment or other reasons, the remaining equity should bere-measured at the fair value on the date of loss of the control power; the sum of the consideration obtained from the disposal of stockequity and the fair value of the remaining equity, minus the sum of the share of the net assets’ book value calculated continuouslyfrom the acquisition date according to the original shareholding percentage and the goodwill should be recorded in the investmentgain of the current period of the loss of control power.Other misc. incomes related to the equity investment in the original subsidiary is transferred to the current period’s profit and losswhen the control power is losted, except for the other misc. incomes generated by remeasurement and resetting of earning plan orchange in the net assets by the invested party.
7. Recognition of cash and cash equivalents
Cash refers to cash on hand and deposits that can be used at any time for payment. Cash equivalent refers to the investments withshort term, strong liquidity and small risk of value fluctuation that are held by the Group and easily converted into cash with knownamount.
8. Foreign exchange business and foreign exchange statement translation
(1) Foreign currencies
Trades of the Group made in foreign currencies are translated into RMB basing on the spot exchange rate on the date when the tradeis conducted.At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balance sheet date. The exchangedifferences caused by the difference in exchange rates on the balance sheet date and initial recognizing date or previous balance sheetdate are included in the current profits and losses. Non-monetary items accounted in foreign currency and on historical costs areexchanged with the spot exchange rate on the transaction date. Non-monetary items accounted in foreign currency and on fair valueare exchanged with the spot exchange rate on the determination date of the fair value. The exchange difference between theaccounting standard-currency amount and the original accounting standard-currency amount are included in the current profits andlosses.(2) Translation of foreign exchange statementOn the balance sheet date, when foreign currency financial statements of overseas subsidiaries are converted, the assets and liabilitiesitems in the balance sheet are converted using the spot exchange rate on the balance sheet date. The shareholders’ equity items arecalculated as ―undistributed profits‖, except for other items. The spot exchange rate on the date of occurrence is used for conversion.
The income and expense items in the income statement are translated using the exchange rate that is determined by the system’sreasonable method and approximate to the spot exchange rate on the transaction date.All items in the cash flow statement are converted according to the exchange rate that is determined by the system's reasonablemethod and approximate to the spot exchange rate on the day the cash flow occurs. The impact of changes in exchange rates on cashis used as a reconciliation item, which is separately presented in the cash flow statement ―Items Affecting Exchange Rate Movementson Cash and Cash Equivalents‖.The difference arising from the translation of the financial statements is reflected in the "Other comprehensive income" item underthe shareholders' equity item in the balance sheet.When foreign operations are disposed of and the control rights are lost, the difference in foreign currency statements related to theoverseas operations that are listed in the shareholders' equity items in the balance sheet is transferred to the profit or loss for thecurrent period, either in whole or in proportion to the disposal of the foreign operations.
9. Financial instrument
Financial instrument refers to a company’s financial assets and contracts that form other units of financial liabilitie or equityinstruments.(1) Recognition and derecognition of financial instrumentThe Group recognizes a financial asset or liability when it becomes one party in the financial instrument contract.Financial asset is derecognized when:
(1) The contractual right to receive the cash flows of the financial assets is terminated;(2) The financial asset is transferred and meets the following derecognition condition.When partial or all of the current responsibilities attached to such financial liabilities, the partial or all of the financial liabilities arederecognized. When the Group (debtor) and creditor enter into an agreement to replace the existing financial liabilities byundertaking new financial liabilities and the contract terms for the new financial liabilities are essentially different from those for theexisting one, the existing financial liabilities will be derecognized and new financial liabilities will be recognized.Financial asset transactions in regular ways are recognized and de-recognized on the transaction date.(2) Classification and measurement of financial assetsFinancial assets of the Group are categorized as: financial assets measured at fair value with variations accounted into current incomeaccount, receivables and financial assets available for sales.Financial assets are measured at the fair value at the initial recognition.
For financial assets measured at fair value with variations accounted into current income account,
related transaction expenses are accounted into the current income. For other financial assets, the relatedtransaction expenses are accounted into the initial recognized amounts.
Financial assets measured at fair value with variations accounted into current income accountIt includes transactional financial assets and financial assets measured by fair value and with variations accounted into currentgain/loss account at initial recognition. The financial assets are further measured by fair value with the gain/loss created by variationsin fair value and related dividends and interest accounted into the current gain/loss account.ReceivablesReceivables refer to non-derivative financial assets without quotations but with fixed recoverable amount or can be confirmed,including receivable notes, receivable accounts and other receivables (Note V. 10).Receivables adopt the effective interest methodand are further measured by amortized cost. Gain/loss generated at final recognition, impairment or amortization is accounted intothe current gain/loss account.
Sellable financial assetsSellable financial asset refers to those sellable non-derivate financial assets recognized initially and financial assets otherthan theabove-mentioned types of financial assets. Sellable financial assets are further measured by fair value and the premium/discount isamortized by the effective interest method and recognized as interest income. Other than the exchange difference of impairment lossand foreign exchange monetary financial assets, which is recognized as current gain and loss, the variations in fair value of sellablefinancial assets is recognized as other comprehensive gain. When it is derecognized and transferred out, it is accounted into thecurrent gain/loss account.Dividends and interest income related to sellable financial assets are accounted into the current gain/lossaccount.Equity instrument investment without quotation in an active market and whose fair value cannot be reliably measured and derivativefinancial assets that are linked to the equity instrument and that need to be settled through delivery of the equity instruments aremeasured by costs.(3) Classification and measurement of financial liabilitiesThe Group’s financial liabilities are mainly other financial liabilitiesOther financial liabilities adopt the effective interest method and are further measured by amortized cost. Gain/loss generated at finalrecognition or amortization is accounted into the current gain/loss account.Differences between financial liabilities and equity instrumentsFinancial liabilities is liabilities that meet one of the following conditions:
(1) contractual obligation to deliver cash or other financial assets to other parties.(2) under potential adverse conditions, the contractual obligation to exchange financial assets or financial liabilities with otherparties.(3) In the future, a non-derivative instrument contract that can be settled with the company's own equity instruments will be used, andthe company will deliver a variable amount of its own equity instruments based on the contract.(4) Derivatives contracts that may be settled with the company's own equity instruments or may be settled in the future, except for aderivative contract that exchanges a fixed amount of its own equity instruments for a fixed amount of cash or other financial assets.Equity instruments refer to contracts that prove the ownership of a company’s remaining equity in assets after deducting allliabilities.If the Group cannot unconditionally avoid the performance of a contractual obligation by delivering cash or other financial assets, thecontractual obligation is in line with the definition of a financial liability.If a financial instrument is required to be settled with or can be settled with the Group's own equity instruments, the Group's ownequity instrument used to settle the instrument needs to be considered as a substitute for cash or other financial assets or for theholder of the instrument to enjoy the remaining equity in the assets after all liabilities are deducted. If it is the former, the instrumentis the financial liabilities of the Group; if it is the latter, the instrument is the equity instrument of the Group.(4) Derivative financial instruments and embedded derivativesThe Group's derivative financial instruments include futures contracts. It is initially measured at the fair value at the date of signingthe derivative transaction contract and is subsequently measured at its fair value. Derivative financial instruments with a positive fairvalue are recognized as asset, and instruments with a negative fair value are recognized as liabilities. Any gains or losses arising fromchanges in fair value that do not meet the hedge accounting requirements are directly charged to profit or loss for the current period.For hybrid instruments containing embedded derivatives, if there are no financial assets or financial liabilities that are not designatedas measured at fair value and their changes are recorded as profit or loss for the current period, there is no close relationship betweenthe embedded derivatives and the principal contract in terms of economic characteristics and risks with same conditions as embeddedderivatives, the separately existing tools are in accordance with the definition of the derivatives, the embedded derivatives are splitfrom the hybrid tools and processed as separate derivative financial instruments. If it is not possible to separately measure the
embedded derivative instrument at the time of acquisition or on the subsequent balance sheet date, the entire hybrid instrument isdesignated as financial asset or financial liabilities that are measured at its fair value and whose changes are recorded as profit or lossfor the current period.(5) Fair value of financial instrumentSee Note III. 10 for the recognition of fair value of financial assets and liabilities.(6) Impairment of financial assetsFinancial assets measured at fair value with variations accounted into current income account. The Group checks the book value offinancial assets on the balance sheet date. Impairment provision will be made in case of objective evidence proving impairment to thefinancial assets. Objective evidence proving impairment to the financial assets refers to events actually occur after the initialrecognition of financial assets, with influence on the estimated future cash flows of the financial assets and can be reliably measuredby the Group.Objective evidence proving impairment to the financial assets includes the following observable situations:
①Severe financial difficulties in the issuer or debtor;② The debtor violates the contract or defaults or delays the payment of the interest or principal;③ The Group makes compromise to the debtor with financial difficulties due to economic or legal consideration;④ The debtor may go bankruptcy or conduct other financial reorganization;⑤ The financial assets can no longer be traded in an active market due to material financial difficulties in the issuer;⑥ It cannot be recognized whether the cash flow of an asset in a group of financial assets has decreased. However, according toopen data, it can be evaluated that the estimated future cash flow of the group of financial assets has decreased and the decrease canbe measured, including:
- The payment capacity of the debtor of the financial assets continues weakening;- Situations that may lead to the payment failure of the financial assets happen in the country or region where the debtor islocated;⑦Significant adverse changes occurs to the technical, market, economic or legal environment of the debtor, leading to that the equityinstrument investor may not be able to recover the investment;⑧Other objective evidence that can prove the impairment of the financial assetsFinancial assets measured at amortized costIf there is objective evidence proving impairment to the financial assets, the book value of the financial assets will be written down tothe present value of the estimated future cash flow (excluding undiscovered future credit loss). The write-down amount is accountedinto the current gain/loss account. The present value of the estimated future cash flow is determined by the original effective discountrate with the value of the guanrantee considered.Conduct imparement test separately for major financial assets. If there is objective evidence suggesting impairement, determine theimpairment loss and account it into the current gain/loss account. For financial assets with insignificant single amounts, impairmenttests are conducted separately or included in the portfolio of financial assets with similar credit risk characteristics. Test financialassets without impairment separately (including major and minor financial assets) and conduct impairment test in the financial assetscombination with similar credit risk features. Conduct impairment test for financial assets separately recognized as impairedexcluding financial assets combination with similar credit risk features.After the Group recognizes impair loss to financial assets measured by amortized cost, if there is object evidence suggesting that thevalue of the financial assets is restored objectively due to an event after the loss, the recognized impairment loss can be reversed andaccounted into the current gain/loss account. The book value after the reversal must not exceed the amortized cost of the financialassets on the reversal date assuming that no impairment provision was made.(7) Transfer of financial assets
The transfer of financial assets refers to transferring or delivering the financial assets to another party (receiver) other than the issuingparty of the financial assets.Recognition of the financial asset is terminated as soon as all of the risks and rewards attached to the financial asset have beentransferred to the receiver. Whereas if all of the risks and rewards attached to the financial assets are reserved, recognition of thefinancial asset shall not be terminated.When the Group neither transfers nor reserve almost all risks and rewards attached to the financial assets, it will be handled as: Whenthe controlling power over the financial asset is given up, the financial assets will be derecognized and the generated assets andliabilities will be recognized; when the controlling power is not given up, financial asset and related liability shall be recognizedaccording to the extend the Company is involving in the financial asset.(8) Deduction of financial assets and liabilitiesWhen the Group has the legal right to deduct recognized financial assets and liabilities, can exercise the legal right, and the Groupplans to settle them in net, liquidate and repay the financial assets and liabilities, the amount after the deduction will be presented inthe balance sheet. Exception for the deducted part, other financial assets and liabilities are separately presented in the balance sheet.
10. Receivable note and accounts receivable(1) Receivables with major individual amount and bad debt provision provided individually
| Judging basis or standard of major individual amount | For the current year, the Company recognizes project receivables and receivable notes of over RMB10 million (inclusive) as ―individual receivable with large amount‖ while recognizes product receivables and receivable notes of over RMB2 million (included) as ―individual receivable with large amount‖ and other receivables over RMB1 million (included) as ―individual receivable with large amount‖. |
| Provision method for account receivable with major individual amount and bad debt provision provided individually | The Company performs impairment examination individually on each large amount receivables, and recognizes impairment and provides bad debt provision when the impairment is recognized based on objective evidence. Those not impaired are accounted along with the minor amount receivables and recognized in risk groups. |
(2) Recognition and providing of bad debt provisions on groups
| Group | Method of bad debt provision |
| Account age | Aging method |
| Receivables within consolidation, receivables of real estate property sold with bank mortgage and accounts and receivable notes between the Company and partners | Other method |
Note: According to the name of the specific combination, fill in the bad debt provision accrual method for each combination.Receivables adopting the aging method in the group:
√ Applicable □ Inapplicable
| Age | Providing rate for receivable account | Providing rate for other receivables |
| Within 1 year (inclusive) | 1.00% | 3.00% |
| 1-2 years | 5.00% | 10.00% |
| 2-3 years | 20.00% | 30.00% |
| 3-4 years | 30.00% | 50.00% |
| 4-5 years | 50.00% | 80.00% |
| Over 5 years | 100.00% | 100.00% |
Receivables adopting the balance percentage method in the group□ Applicable √ Inapplicable
| Group | Providing rate for receivable account | Providing rate for other receivables |
Receivables adopting other methods in the group□ Applicable √ Inapplicable
| Group | Providing rate for receivable account | Providing rate for other receivables |
Note: Fill in the specific combination name and accrual ratio.
(3) Receivables with not major individual amount and bad debt provision provided individually
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.6 – Listed Companies Engaged in Decoration Business.
| Reasons for separate bad debt provision | Long account age or deterioration of customer creditability |
| Method of bad debt provision | According to the difference between the present value of future cash flow and the book value |
11. Inventories
Whether the Company needs to comply with disclosure requirements of special industriesYesProperty development and decoration industries(1) Classification of inventoriesThe Company’s inventories include purchased materials, raw materials, low-value consumables, OEM materials, products in process,semi-finished goods, finished goods, inventory, development products, and construction in process.(2) Pricing of delivering inventoryInventories are measured at cost when procured. Raw materials, products in process and commodity stocks in transit are measured bythe weighted average method.Construction contracts are measured by the effective cost, including direct and indirect expenses generated before the contracts are
fulfilled. Costs generated and recognized accumulatively by construction in process and settled payment are listed in the balancesheet as offset net amounts.The excessive part of the sum of the generated costs and recognized gross profit (loss) over the settledpayment is listed inventories; the excessive part of the settled payment over the sum of the generated costs and recognized grossprofit (loss) is listed as the prepayment received.Travel and bidding expenses generated by execution of contracts, if they can be separated and reliably measured and it is likely toenter into contracts, are accounted as the contract cost when the contracts are entered into; or into the current gain/loss account if theconditions are not met.The development costs include land transfer payment, infrastructure and facility costs, installation engineering costs, borrows beforecompletion of the development and other costs during the development process. The special maintenance funds collected in the firstperiod are included in the development overheads. The actual costs of the development product is priced using the separate pricingmethod.(3) Recognition of inventory realizable value and providing of impairment provisionThe realizable net value of inventory is the estimated sales prices of the inventory less costs to be incurred until the completion,estimated sales expense and taxes. The realizable net value of inventory should be recognized based on solid evidence with thepurpose of the inventory and after-balance-sheet-date events taken into consideration.If the inventory cost is higher than the realizable net value on the balance sheet date, the inventory depreciation provision should bemade. The Group makes inventory depreciation provision for separate or a type of inventory. If factors affecting the inventory valuedisappear on the balance sheet date, the depreciation provision made should be reversed to the original value.
(4) Inventory system
The Group uses perpetual inventory system.(5) Amortizing of low-value consumables and packaging materialsLow-value consumables are amortized on on-off amortization basis at using.
12. Long-term share equity investment
The Group's long-term equity investment includes control on invested entities and significant impacts on equity investment. Investedentities on which the Group has significant impacts are associates of the Group.(1) Recognition of initial investment costsLong-term equity investment generated by enterprise merger: for long-term equity investment obtained by merger of enterprisesunder common control, the obtained share of book value of the interests of the merged party’s owner in the consolidate financialstatements on the merger date is the investment costs; for long-term equity investment obtained by merger of enterprises not undercommon control, the merger cost is the investment cost.For long-term equity investment obtained by cash, the actually paid consideration is the initial investment cost.(2) Subsequent measurement and recognition of gain/lossInvestments by the Company in subsidiaries are calculated using the cost method; in joint ventures are calculated using the equitymethod.For the long-term equity investment measured on the cost basis, except for the announced cash dividend or profit included in thepractical cost or price when the investment was made, the cash dividends or profit distributed by the invested entity are recognized as
investment gains in the current gain/loss account.When the equity method is used to measure long-term equity investment, the investment cost will not be adjusted if the investmentcost of the long-term equity investment is larger than the share of fair value of the recognizable assets of the invested entity. When itis smaller than the share of fair value of the recognizable assets of the invested entity, the book value will be adjusted and thedifference is included in the current gains of the investment.When the equity method is used, the current investment gain is the share of the net gain realized in the current year that can be sharedor borne, recognized as investment gain and other misc. income. The book value of the long-term equity investment is adjustedaccordingly. The book value of the long-term equity investment should be accordingly decreased based on the share of profit or cashdividend announced by the invested entity; according to other changes in the owner’s equity except for net profit and loss, other miscincome and profit distribution of the invested entity, adjust the book value of the long-term equity investment and record it in thecapital surplus (other capital surplus). When the share of the net gains that can be enjoyed is recognized, it is recognized after the netprofit of the invested entity is adjusted based on the fair value of the recognizeable assets of the invested entity according to theCompany's accounting policies and accounting period.Where substantial influence on invested entities is imposed or joint control is implemented due to increase in investment, the sum ofthe fair value of the original equity and increased investment on the conversion date is the initial investment cost under the equitymethod. The difference between the fair value and book value of the original equity on the conversion date and the accumulativechange in the fair value originally accounted in other misc. income should be transferred into the profit and loss of the current periodusing the equity method.Where joint control or substantial influence on invested entities is lost due to disposal of part of investment, the remaining equityafter the disposal should be treated according to the Enterprise Accounting Standard No.22 – Recognition and Measurement ofFinancial Instruments from the date of losing the joint control or substantial influence. The difference between the fair value andbook value should be accounted the profit and loss of the current period. For other misc. incomes of original share equity investmentdetermined using the equity method, when the equity method is no longer used, it should be treated based on the same basis of thetreatment of related assets or liability of the invested entities; the other owners' interests related to the original share equityinvestment should be transferred to gain/loss of the current period.Where the disposal of part of the equity investment leads to loss of control on the invested entity, and the remaining equity after thedisposal can impose common control or significant impacts on the invested entity, use the equity method and make adjustment as ifthe equity method was used when the remaining equity was acquired. If not, perform accounting treatment according to provisions inthe Enterprise Accounting Standard No.22 – Recognition and Measurement of Financial Tools. The difference between the fair valueand book value on the date of losing control should be transferred into the profit and loss of this period.Where the Company’s shareholding decreases and the Company loses the control due to increased investment by another investor,but the Company can still impose common control or significant impacts on the invested entity, the share of increased net assets ofthe invested entity that can be shared by the Company should be calculated based on the new shareholding, the difference betweenthe net assets and original book value of the original long-term equity investment should be recorded in the profit and loss of thisperiod and adjusted as if equity method was used when it was acquired according to the new shareholding proportion.Internal transaction gain not realized between the Company and affiliates is measured according to the shareholding proportion andthe investment gains isrecoginzied after deduction. The unrealized internal transaction loss between the Company and the investedentity is the impairment loss of transferred assets and should not be written off.(3) Basis for recognition of major influence on invested entities
Major influence refers to the power to participate in decision-making of financial and operation policies of a company, but cannotcontrol or jointly control the making of the policies. When considering whether the Company can impose significant impacts on theinvested entity, impacts of conversion of shares with voting rights held directly or indirectly by the investor and voting rights that canbe executed in this period held by the investor and other party into shares of the invested entity should be considered.When Company directly or indirectly holds 20% (inclusive) but less than 50% of the shares with voting rights of the invested entity,it is generally considered that the Company can impose significant impacts unless there is clear evidence proving that the Companyshall not participate in the production and business decision making of the company; when the Company holds less than 20% of theshares with voting rights, it is generally not considered that the Company has significant impacts on the invested entity, unless thereis clear evidence proving the contrary.(4) Equity investment held for saleFor the remaining equity investments not classified as assets held for sale, the equity method is adopted for accounting treatment.Equity investments classified as held for sale to associates that are no longer eligible to hold classified assets for sale areretrospectively adjusted using the equity method starting from the date that they are classified as held for sale.(5) Impairment examination and providing of impairment provisionSee Note V. 18 for the assets impairment provision method for investment in subsidiaries and joint ventures.
13. Investment real estates
Measuring mode of investment real estateMeasured at costDepreciation or amortization methodInvestment real estates of the Group are buildings leased.For investment real estates with an active real estate transaction market and the Group can obtain market price and other informationof same or similar real estates to reasonably estimate the investment real estates’ fair value, the Group will use the fair value mode tomeasure the investment real estates subsequently. Variations in fair value are accounted into the current gain/loss account.The fair value of investment real estate is determined with reference to the current market prices of same or similar real estates inactive markets; when no such price is available, with reference to the recent transaction prices and consideration of factors includingtransaction background, date and district to reasonably estimate the fair value; or based on the estimated lease gains and present valueof related cash flows.For investment real estate under construction (including investment real estate under construction for the first time), if the fair valuecannot be reliably determined but the expected fair value of the real estate after completion is continuously and reliably obtained, theinvestment real estate under construction is measured by cost. When the fair value can be measured reliably or after completion (theearlier one), it is measured at fair value. For an investment real estate whose fair value is proven unable to be obtained continuouslyand reliably by objective evidence, the real estate will be measured at cost basis until it is disposed and no residual value remains asassumed.The difference of the proceeds from sales, transfer, retirement or destruction of investment real estates with book value and relatedtaxes deducted is accounted into the current gain/loss account.
Investment real estate that use the cost method for further measurement adopt the straight-line depreciation provision method. SeeNote V. 18 for the provision method.
14. Fixed assets
(1) Recognition conditions
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing services, lease or foroperation & management, and have more than one accounting year of service life.The fixed assets can only be recognized heneconomic interests related to the fixed assets are very likely to flow into the company and the costs of the fixed assets can be reliablymeasured. The Group measures fixed assets at the actual costs when the fixed assets are obtained
(2) Depreciation method
| Type | Depreciation method | Service year | Residual rate | Annual depreciation rate % |
| Houses & buildings | Average age | 35-50 | 10% | 1.8%-2.57% |
| Mechanical equipment | Average age | 10 | 10% | 9% |
| Transportation facilities | Average age | 5 | 10% | 18% |
| Electronics and other devices | Average age | 5 | 10% | 18% |
| PV power plants | Average age | 20 | 5% | 4.75% |
15. Construction in process
Whether the Company needs to comply with disclosure requirements of special industriesYesProperty development and decoration industriesThe Group recognizes the cost of construction in process according to the actual construction expense, including necessaryengineering expenses, borrowing costs to be capitalized before the engineering reaches the preset service condition and other relatedcosts.Construction in process will be transferred to fixed assets when it reaches the preset service condition.See Note V. 18 for the provision method for construction in process.
16. Borrowing expenses
(1) Recognition principles for capitalization of borrowing expensesBorrowing expenses occurred to the Group that can be accounted as purchasing or production of asset satisfying the conditions ofcapitalizing, are capitalized and accounted as cost of related asset.Borrowing expenses start to be capitalized when all of thefollowings are satisfied:
(1) Asset expense has already occurred. Asset expenses include cash payment, non-cash asset transferring, or undertaking of debtwith interest done for purchasing or producing of assets;(2) The borrowing expense has already occurred;(3) Purchasing or production activity, which is necessary for the asset to reach the useful status, has already started.(2) During borrowing expense capitalizationWhen the asset satisfying the capitalizing conditions has reached its usable or sellable status, capitalizing of borrowing expenses shallbe terminated. Borrowing expenses incurred after assets that meet capitalization conditions reach the service or sales conditions areaccounted into the current gain/loss account according to the actual amounts.If the construction or production of assets satisfying the capitalizing conditions is suspended abnormally for over 3 months,capitalizing of borrowing expenses shall be suspended. During the normal suspension period, borrowing expenses will be capitalizedcontinuously.(3) Calculation of the capitalization amount of borrowing expenseInterest expenses generated by special borrowings less the interests income obtained from the deposit of unused borrowings orinvestment gains from temporary investment is capitalized; the capitalization amount for general borrowing is determined based onthe capitalization rate which is the exceeding part of the accumulative assets expense over weighted average of the assets expense ofthe special borrowing/used general borrowing. The capitalization ratio is the weighted average interest rate of general borrowings.In the capitalization period, the exchange difference of special borrowings in foreign currencies should be fully capitalized. Theexchange difference should be recorded in the profit and loss of this period.
17. Intangible assets(1) Pricing method, service life and depreciation test
The Group’s intangible assets include land using rights, trademarks, patent, special technologies, and software.Intangible assets are initially measured at costs and the useful life will be determined when obtained. Where the useful life is limited,the intangible assets will be amortized within the predicted useful life by using the amortization method that can reflect predictedrealization way of the economic benefit of the assets; whether the realization way cannot be reliably confirmed, use the straight-linemethod. If the useful life is uncertain, the intangible assets are not amortized.Intangible assets with limited useful life are amortized as followings:
| Type | Useful life | Basis of amortization |
| Land using right | Beneficial age | Average age |
| Trademarks and patents | 10 | Average age |
| Proprietary technology | 10 | Average age |
| Software | 5, 10 years | Average age |
At the end of each year, the Group will reexamine the useful life and amortization basis of intangible assets with limited useful life. Ifthey change, adjust the prediction and handle it according to accounting estimate changes.
On the balance sheet day, if the intangible assets become unlikely to bring future economic benefits for the Group, transfer all theintangible assets’ book value into the current gain/loss account.See Note V. 18 for the impairment provision method for intangible assets.
(2) Accounting policies for internal R&D expenses
The Group divides internal R&D project expenses into research and development expenses.The research expenses are accounted the current gain/loss account.Development expenses can only be capitalized when the following conditions are satisfied: the technology is feasible for use or sales;there is the intention to use or sell the intangible assets; it can be proven that the product generated by the intangible assets isdemanded or the intangible assets in demanded; if the intangible is used internally, it can be proven that it is useful; with necessarytechnical and financial resources and other resources to complete the development of the intangible assets and the intangible assetscan be used or sold; the development expense can be reliably measured. If not, the development expense is accounted into the currentgain/loss account.If a research project meets the above-mentioned conditions and passes the technical and economic feasibility study, the project willenter the development stage.Expenses in the development stage capitalized are listed as development expense on the balance sheet and transferred to intangibleassets when the project reaches the useful condition.
18. Assets impairment
The Group uses the cost mode to continue measuring the assets impairment to investment real estatement, fixed assets construction inprogress, intangible assets and goodwill (except for the inventories, investment real estate measured by the fair value mode, deferredincome tax assets and financial assets). The method is determined as follows:
The Group judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists, the Group estimatesthe recoverable amount and conducts the impairment test. Impairment test is conducted annually for goodwill generated by mergersand intangible assets that have not reached the useful condition no matter whether the impairment sign exists.The recoverable amount is determined by the higher of the net of fair value minus disposal expense and the present value of thepredicted future cash flow. The Group estimates the recoverable amount on the individual asset item basis; whether it is hard toestimate the recoverable amount on the individual asset item basis, determine the recoverable amount based on the asset group thatthe assets belong to. The assets group is determined by whether the main cash flow generated by the group is independent from thosegenerated by other assets or assets groups.When the recoverable amount of the assets or assets group is lower than its book value, the Group writes down the book value to therecoverable amount, the write-down amount is accounted into the current income account and the assets impairment provision ismade.For goodwill impairment test, the book value of goodwill generated by mergers is amortized through reasonable measures since the
purchase day to related asset groups; those cannot be amortized to related assets groups are amortized to related combination of assetgroups. The related asset groups or combination of asset groups refer to those that can benefit from the synergistic effect of mergersand must not exceed to the reporting range determined by the Group.When the impairment test is conducted, if there is sign of impairment to the asset group or combination of asset groups related togoodwill, first perform impair test for asset group or combination of asset groups without goodwill and calculate the recoverableamount and recognize the related impairment loss. Then conduct impairment test on those with goodwill, compare the book valuewith recoverable amount. If the recoverable amount is lower than the book value, recognize the impairment loss of the goodwill.Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.
19. Long-term amortizable expenses
The Group’s long-term amortizable expenses are measured at the actual costs and amortized averagely based on the beneficial term.For long-term amortizable expenses that are not beneficial in the subsequent account periods, the residual value is fully accountedinto the current gain/loss account.
20. Staff remuneration(1) Accounting of operational leasing
The Group pays for the medical insurance, job injury insurance and breeding insurance and housing fund according to employees’wages and bonus and recognizes them as liabilities, which are recorded into the profit and loss or related assets costs in the currentperiod. If the liabilities cannot be fully paid within 12 months upon the end of the report period in which the employees provideservice, and the financial impacts are substantial, the liabilities should be measured at the discounted amount.
(2) Accounting of post-employment welfare
The post-employment welfare of the Group is a defined plan, which means that the Company does not need to assume anyresponsibility after making fixed contribution to an independent fund. The defined plan includes basic pension and unemploymentinsurance. The contribution of the plan is recognized as liabilities and recorded in the profit and loss of this period or related assetscosts.
(3) Accounting of dismiss welfare
Where the Group provides dismiss welfare for employees, the staff remuneration liabilities is recognized on the earlier one of thefollowing two date: when the Group cannot cancel the dismiss welfare provided for termination of employment or layoff; when theGroup recognizes the costs or expenses of reorganization related to the payment of dismiss welfare.
21. Anticipated liabilities
When responsibilities occurred in connection to contingent issues, and all of the following conditions are satisfied, they arerecognized as expectable liability in the balance sheet:
(1) This responsibility is a current responsibility undertaken by the Group;(2) Execution of this responsibility may cause financial benefit outflow from the Group;(3) Amount of the liability can be reliably measured.Expected liabilities are initially measured at the best estimation on the expenses to exercise the current responsibility. The book valueof expected liability is revised at balance sheet day, and adjustment will be made to reflect current best estimation.
22. Revenue
Whether the Company needs to comply with disclosure requirements of special industriesYesProperty development and decoration industriesThe Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.2 – Listed Companies Engaged in Solid Mineral Resources Related Business.
(1) General principles
1. Sales of goodsWhen all of the following conditions are satisfied, the sales of goods are recognized as sales income according to the contract amountreceived or receivable from the buyer: (1) Main risks and rewards attached to the ownership of the goods have been transferred to thebuyer; (2) No succeeding power of administration or effective control is reserved which are usually attached to ownership; (3)Amount received can be reliably measured; (4) Related financial benefit may inflow to the Company; (5) Relative costs, occurred orwill occur, can be reliably measured.2. Providing of labor serviceIf they are not in the same year, then use the estimation on percentage basis when it is possible.The completion percentage is the costs occurred on the total cost.The reliable estimation of the result of providing of labor service must meet the following conditions: A. the revenue can be reliablymeasured; B. the economic benefit is very likely to flow into the company; C. the completion can be determined reliably; D. costsincurred or will be incurred can be reliably measured.If the result cannot be reliably estimated, use the service cost amount of the compensation obtained or will be obtained to recognizethe revenue of the providing of labor service and recognize the incurred laber service cost as the current expense. If no compensationcan be obtained for incurred labor service cost, no revenue can be recognized.3. Demising of asset using rightsThe revenue is recognized when the financial benefit in connection with the demising of asset using right was received and theamount can be reliably measured.4. Construction contractsOn the balance sheet day, the Group recognizes the contract income and costs using the completion percentage method if the result ofthe construction contract can be reliably estimated. If not, such contracts are treated differently. If the contract cost can be recovered,the revenue is recognized according to the actual contract costs that can be recovered and the contract cost is recognized as thecurrent expense; if not, the contract cost is recognized as the current expense and no revenue is recognized.If the estimated total costs exceed the total revenue, the Group recognizes the estimated loss as the current expense.The competition percentage is determined by the share of the costs incurred in the total cost.The reliable estimation of the result of a construction contract must meet the following conditions: A. the revenue can be reliably
measured; B. the economic benefit is very likely to flow into the company; C. the completion cost can be clearly distinguished anddetermined reliably; D. the completion and costs that will be incurred for completion of the contract can be reliably recognized.(2) Specific revenue recognition method① Construction contractsMetro screen door projects of the Company and Shenzhen Fangda Automatic System, and curtain wall project of FangdaJianke areindividual construction contracts. They are accounted by the following means:
Construction contracts completed within a fiscal year are recognized for their income and cost upon completion.Income and expenses of the construction contracts carried over-year are recognized on percentage basis at balance sheet day when allof the following conditions are satisfied: contract income can be reliably measured, relative financial benefit can inflow to theCompany; progress of the project and costs to complete the contract can be reliably recognized; cost occurred to complete thecontract can be clearly distinguished and reliably measured, which enables comparing of actual cost with predicted cost.Contract costs are direct and indirect expenses occurred since the date when the contract is engaged till the completion day. Thecompetition percentage is determined by the share of the costs incurred in the total cost.Construction contracts completed in current term are recognized for income according to the actual total income of the contract lessincome recognized in previous terms; meanwhile, the total costs of the contract less costs recognized in previous terms arerecognized as current contract costs. If the total contract cost is predicted to be greater than the predicted total income, the predictedloss shall be recognized as current cost instantly.Parts of the curtain wall project under FangdaJianke are outsourced, and administrative fees are collected at the agreed rate. For theseconstruction contracts, income will be recognized when ongoing payment for the project is received and corresponding costs aretransferred.② Sales productRevenue of products for domestic sales is recognized when the Group delivers the products and receives the sales payment or obtainsthe payment voucher; revenue for products for overseas sales is recognized at departure of the products.③ Real estate salesIncome from real estate sales is recognized when the contract is signed and performed, project is developed and completed with therecord for the completion acceptance, the handover procedure is completed or property is deemed accepted by the customer as perthe property sales contract, the payment is received or it is believed that the payment can be received, and the cost can be measuredreliably.
23. Government subsidy(1) Judgment basis and accounting treatment of assets-related government subsidy
Government subsidy is only recognized when the required conditions are met and the subsidy is received.When a government subsidy is monetary capital, it is measured at the received or receivable amount. None monetary capital aremeasured at fair value; if no reliable fair value available, recognized at RMB1.Government subsidies related to assets are obtained by the Group to purchase, build or formulate in other manners long-term assets;or subsidies related to benefits.For subsidies that can formulate long-term assets without clear government regulations, the part of the subsidies corresponding to theasset value will be measured as assets-related government subsidies, while the rest of them will be measured as benefit-relatedgovernment subsidies. Where it is difficult to distinguish them from each them, the whole subsidies will be measured as
benefit-related government subsidies.If the asset-related government subsidy is recognized as deferred gain, should be recorded in gain and loss in the service life.
(2) Judgment basis and accounting treatment of return-related government subsidy
If a government subsidy related to income is used to compensate for related costs or losses that have occurred, it shall be included inthe current profit or loss or write-down related costs; if it is used to compensate for the related costs or losses in the subsequentperiod, it shall be included in the deferred income. During the period in which the related cost, expense or loss is recognized, it isincluded in the current profit or loss or the relevant cost is written off. Government subsidy measured at the nominal amount isaccounted into current income account.The Group adopts a consistent approach to the same or similar government subsidies.Government subsidy related to routine operations should be recorded in other gains or offset related cost. Government subsidy notrelated to routine operations should be recorded in non-operating income or expense.When a confirmed government subsidy needs to be returned, the book value of the asset is adjusted against the book value of therelevant asset at initial recognition. If there is a related deferred income balance, the book balance of the related deferred income iswritten off and the excess is credited to the current profit or loss; In other cases, it is directly included in the current profit and loss.The policy-based preferential loan obtained has interest subsidy. If the government allocates the interest-subsidy funds to the lendingbank, the loan amount actually received will be used as the entry value of the loan, and the borrowing cost will be calculated basedon the loan principal and policy-based preferential interest rate. If the government allocates the interest-bearing funds directly to theGroup, discount interest will offset the borrowing costs.
24. Differed income tax assets and differed income tax liabilities
Income tax includes current and deferred income taxExcept for the adjustment goodwill generated by mergers or deferred income taxrelated to transactions or events directly accounted into the owners’ equity, income tax is accounted as income tax expense into thecurrent gain/loss account.The Group uses the temporary difference between the book value of the assets and liabilities on the balance sheet day and the taxbase and the liabilities method to recognize the deferred income tax.The taxable temporary difference recognizes the related deferred income tax liabilities, unless the taxable temporary difference iscreated by the following transactions:
(1) Initial recognition of goodwill, or of assets or liabilities generated in transactions with the following features: the transaction isnot a merger and the transaction does not affect the accounting profit or taxable proceeds;(2) For taxable temporary difference related to investment in subsudiaries and affiliates, the reversal timing for the temporarydifference can be controlled and the difference is unlikely to be reversed in the foreseeable future.For deductible temporary difference, deductible loss and tax deduction that can be accounted in subsequent years, the Grouprecognizes the incurred deferred income tax assets to the extent to the future income tax proceeds that is very likely to be received fordeducting deductible temporary difference, deductible loss and tax deduction, unless the deductible temporary difference is generatedin following transactions:
(1) the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;(2) for the taxable temporary difference related to investment in subsidiaries and affiliates, the corresponding deferred income taxassets are recognized when the following condition is met: the temporary difference is very likely to be reversed in the foreseeablefuture and it is very likely to receive the taxable proceeds that can be used to deduct the deductible temporary difference.On the balance sheet day, the Group measures the deferred income tax assets and liabilities with the tax rate applicable during thepredicted period during which the assets are recovered or the liabilities are paid off and reflects the income tax influence of the assetsrecovery and liabilities repayment way on the balance sheet day.On the balance sheet day, the Group re-exmaines the book value of the deferred income tax assets. If it is unlikely to have adequatetaxable proceeds to reduct the benefits of the deferred income tax assets, less the deferred income tax assets’ book value. When thereis adequate taxable proceeds, the lessened amount will be reversed.
25. Leasing(1) Accounting of operational leasing
The Group transfers all the risks and rewards attached to the asset at substantially transferred to the lessee, it is recognized asfinancial leasing, and the others are operational leasing. The Group's lease forms are mainly operating leases.
(1) The Group is the leasor
Rentals from operational leasing are recognized as current gains on straight basis to the periods of leasing. Initial direct expenses arerecorded to current income account.
(2) The Group is the leasee
Rentals in operational leasing are recorded to relative capital cost or current income account on straight basis to the periods of leasing.Initial direct expenses are recorded to current income account.
26. Other significant accounting policies and estimates
The Group continuously reviews significant accounting judgment and estimate adopted for the reasonable forecast of future eventsbased on its historical experience and other factors.Significant accounting judgment and assumptions that may lead to major adjustment of the book value of assets and liabilities in thenext accounting year are listed as follows:
(1) Goodwill impairment
The Group judges whether there is impairment to goodwill at least annually. This required valuation of the use value of the assetgroups with goodwill. While estimating the use value, the Group needs to estimate the cash flow from the asset group in the futureand choose the proper discount rate to calculate the present value of the future cash flow.
(2) Estimate of fair value
The Group uses fair value to measure investment real estate and needs to estimate the fair value of investment real estate at leastquarterly. This requires the management to reasonably estimate the fair value of the investment real estate with the helf of valuationexperts.(3) Deferred income tax assetsIf there is adequate taxable profit to deduct the loss, the deferred income tax assets should be recognized by all the unused tax loss.This requires the management to make a lot of judgment to forecast the time and amount of future taxable profit and determine theamount of the deferred tax assets based on the taxation strategy.
(4) Construction contracts
The Group recognizes income based on the completion of individual construction contract. The management determines thecompletion percentage based on the actual cost in the total budget and forecasts the contract income. The starting and completiondates of construction contracts fall in different account periods. The Group will review and adjust contract income and costestimation in budgets (if the actual contract income is less than the estimate or actual contract cost, contract estimation loss provisionwill be made).
(5) Development cost
For property that has been handed over with income recognized, but whose public facilities have not been constructed or not beencompleted, the management will estimate the development cost for the part that has not been started according to the budget to reflectthe operation result of the property sales.
(6) Accounting of hedging
When the hedge relationship begins, the Group specifies the hedge relationship in writing to specify the follow: risks managementtarget and hedging strategy; nature of the hedged item and quantity; nature and quantity of hedging instruments, nature andidentification of hedged risks; evaluation of the hedging effectiveness, including the economic relationship between the hedged itemand hedging instrument, hedging ratio, analysis of the hedging ineffectiveness source; the beginning date of the specified hedgingrelationship.Cash flow hedgingDuring the existence of the hedging relationship, the part of the cumulative gain or loss of the hedging instrument within the changeto the current value of the cumulative cash flow of the hedged item is included into other misc. incomes. The part that is lower orlarger than the cash flow change is included into the gain or loss of the current period.When the hedging relationship ends and related inventory is recognized, the hedging instrument gain or loss recognized in ―Othermisc. income hedging reserve‖ will be transferred to ―Raw materials‖.
27. Major changes in accounting policies and estimates(1) Changes in accounting policies
√ Applicable □ Inapplicable
| Account policy changes and reasons | Approval procedure | Notes |
| According to the Notice of the Ministry of Finance on Revising the Format of the 2018 Annual General Financial Statements of the Company (Accounting 2018 No. 15) the original "Announceable Notes" and "Accounts Receivable" line items will be consolidated into the "balance sheet" in the balance sheet. "Notes receivable and accounts receivable"; the original "receivable interest" and "dividends receivable" items are merged into "other receivables"; the original "fixed assets clean-up" items are merged into "fixed assets"; the original "engineering material" item will be merged into "construction in progress"; the original "payable bills" and "payables" items will be consolidated into "payable bills payables and accounts payable" items; the original "payable interest" and "payable dividend" will be merged into "other receivables"; the original "special payables" item is merged into "long-term payables". In the income statement the "R&D expenses" are separated from the original "administrative expenses"; under the "finance expenses" line item the "interest expense" and "interest income" detailed items are separately listed; the original "re-measurement setting benefits" The change of the plan net debt or net assets is replaced by the "re-measurement of the change in the defined benefit plan"; the original "share under the equity method that cannot be reclassified into other comprehensive income of the investee and the profit and loss" is changed to "equity". Other comprehensive income that cannot be transferred to profit or loss under the law"; the original share of the other comprehensive income that is reclassified into profit or loss after the investee is changed to the other comprehensive income of the convertible profit and loss | 13th meeting of the 8th Supervisory Committee |
The revision of the financial statement format has no impact on the Group's total assets total liabilities, net profit and othercomprehensive income.
VI. Taxation
1. Major taxes and tax rates
under the equity method. In the statementof changes in owner's equity under the"internal transfer of shareholders' equity",item the original "transfer re-measurementof changes in net liabilities or net assets ofdefined benefit plans" was changed to"transfer of retained profit from change inset benefit program".Tax
| Tax | Tax basis | Tax rate |
| VAT | Taxable income | 3%、5%、6%、10%、11%、13%、16%、17% |
| Consumption tax | ||
| City maintenance and construction tax | Taxable turnover | 1%、5%、7% |
| Enterprise income tax | Taxable turnover | See the following table |
| Education surtax | Taxable turnover | 3% |
| Local education surtax | Taxable turnover | 2% |
Tax rates applicable for different tax payers
| Tax payer | Income tax rate |
| The Company | 25% |
| Shenzhen FangdaJianke Co., Ltd. (hereinafter FangdaJianke) | 15% |
| Shenzhen Fangda Automatic System Co., Ltd. (hereinafter Fangda Automatic) | 15% |
| Fangda New Material (Jiangxi) Co., Ltd. (hereinafter Fangda New Material) | 15% |
| Dongguan Fangda New Material Co., Ltd. (hereinafter Dongguan New Material) | 15% |
| Shenzhen Kexunda Software Co., Ltd. (hereinafter Kexunda) | 25% |
| Chengdu Fangda Construction Technology Co., Ltd. (hereinafter Chengdu Fangda) | 15% |
| Fangda Decoration Engineering (Shenyang) Co., Ltd. (hereinafter Shenyang Decoration) | 25% |
| Shenzhen Fangda Property Development Co., Ltd. (hereinafter | 25% |
| Fangda Property Development) | |
| Shenzhen Fangda New Energy Co., Ltd. (hereinafter Fangda New Energy) | 25% |
| Shenzhen Fangda Property Development Co., Ltd. (hereinafter Fangda Property Development) | 25% |
| Jiangxi Fangda Property Development Co., Ltd. (hereinafter Jiangxi Property Development) | 25% |
| PingxiangFangdaLuxin New Energy Co., Ltd. (hereinafter Luxin New Energy) | 25% |
| PingxiangXiangdongFangda New Energy Co., Ltd. (hereinafter Xiangdong New Energy) | 25% |
| Nanchang Xinjian Fangda New Energy Co., Ltd. (hereinafter Xinjian New Energy) | 25% |
| Dongguan Fangda New Energy Co., Ltd. (hereinafter Dongguan New Energy) | 25% |
| Shenzhen QIanhaiKechuangyuan Software Co., Lt.d (hereinafter Kechuangyuan Software) | 15% |
| Fangda Automatic (Hong Kong) Co., Ltd. (hereinafter Automation Hong Kong) | 16.50% |
| Shihui International Holding Co., Ltd. (hereinafter Shihui International) | 16.50% |
| Shenzhen Hongjun Investment Co., Ltd. | 25% |
| Fangda Australia Pty Ltd (hereinafter Jianke Australia) | 30% |
| Shanghai Fangda Jingling Technology Co., Ltd. (hereinafter Jingling Technology) | 25% |
| Shenzhen Fangda Cloud Rail Technology Co., Ltd. (hereinafter Fangda Cloud Rail) | 25% |
2. Tax preference
(1) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation, ShenzhenCommission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureau on 19.06.15, FangdaJianke was entitled toenjoy a tax preference of enterprise income tax of 15% for three years (2015-2017) since the qualifications were awarded.(2) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation, ShenzhenCommission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureau on 19.06.15, Fangda Decoration wasentitled to enjoy a tax preference of enterprise income tax of 15% for three years (2015-2017) since the qualifications were awarded.(3) According to the Certification of High-tech Enterprise issued by Jiangxi Ministry of Science and Technology, Jiangxi Ministry ofFinance, Jiangxi National Tax Bureau, and Jiangxi Local Tax Bureau on 25.09.15, Fangda New Material was entitled to enjoy a taxpreference of enterprise income tax of 15% for three years (2015-2017) since the qualifications were awarded.
(4) On December 25, 2013, Kexunda was certified by Shenzhen Nanshan National Tax Bureau as a software and integrated circuitdesigner according to the Shenzhen National Tax Reduction Registration [2013] No.739 and will enjoy exemption from theenterprise income tax for two years and 50% reduction of the same tax for another three years from the year that the company startsmaking a net profit. Kexunda started making profits in 2013 and therefore starts to enjoy the exemption. Kexunda entered thesemi-exemption period in 2015.(5) On November 7, 2014, Chengdu Fangda was certified by Sichuan Xinjin National Tax Bureau as an encourage industry companyin the west China (Xin Jin National Tax Doc. [zzy024]) and started to enjoy a tax rate of 15%.(6) On 02.11.15, Dongguan New Energy was certified by Dongguan National Tax Bureau Songshanhu branch as the nationalsupported public infrastructure project according to the Song Shan Hu Tax Doc [2015] 3305. The company is exempted fromenterprise income tax for three years and halfly exempted for another three years. In 2015, the company entered the exemptionperiod.(7) On 02.03.16, according to the document issued by Luxi National Tax Bureau, the PV power generation project undertaken byPingxiangFangdaLuxin New Energy Co., Ltd, became the infrastructure project supported by the central government. The companyenjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016, the company entered theexemption period.(8) On 02.06.16, according to the document issued by Nanchang Xinjian District National Tax Bureau, the PV power generationproject undertaken by subsidiary Xinjian New Energy Company, became the infrastructure project supported by the centralgovernment. The company enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016, thecompany entered the exemption period.(9) On 10.03.17, according to the registration to Shenzhen National Tax Bureau, subsidiary Kechuangyuan Software became a newlyestablished software and integrated circuit designing company and can enjoy the two-year full exemption and three-yearhalf-exemption of the enterprise income tax from the first year that the company records profit. Kexunda started making profits in2016 and therefore starts to enjoy the exemption.(10) According to the Certification of High-tech Enterprise issued by Guangdong Ministry of Science and Technology, GuangdongMinistry of Finance, Guangdong National Tax Bureau, and Guangdong Local Tax Bureau on 25.09.15, Dongguan New Material wasentitled to enjoy a tax preference of enterprise income tax of 15% for three years (2016-2018) since the qualifications were awarded.Note: Explain the main tax incentives and the basis.The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.12 – Listed Companies Engaged in Software And Information Technology Services.Note: Disclose the tax incentives enjoyed by the company during the reporting period such as software VAT refunds and the impactof relevant tax incentives on the company's current profit and loss.
VII. Notes to the consolidated financial statements
1. Monetary capital
In RMB
| Item | Closing balance | Opening balance |
| Inventory cash: | 5,167.01 | 42,636.09 |
| Bank deposits | 994,706,369.72 | 923,163,199.39 |
| Other monetary capital | 394,350,547.03 | 257,192,644.03 |
| Total | 1,389,062,083.76 | 1,180,398,479.51 |
| Including: total amount deposited in overseas | 25,269,577.35 | 24,527,445.09 |
Other noteNote: 1. The book balance of other monetary funds at the end of the period is RMB394,350,547.03 mainly including money depositssuch as money order deposits, stage deposit guarantees guarantee, letters deposits of investment funds and repurchase payments of Bshares.(2) The deposit and frozen deposit shall not be treated as cash and cash equivalent in the preparation of cash flow statements.3. At the end of the period, the Group's total amount deposited abroad was RMB25,269,577.35.
2. Financial assets measured at fair value with variations accounted into current income account
In RMB
| Item | Closing balance | Opening balance |
| None |
Others:
3. Derivative financial assets
√ Applicable □ Inapplicable
| Item | Closing balance | Opening balance |
| None | ||
| Total |
Others:
4. Receivable note and accounts receivable
In RMB
| Item | Closing balance | Opening balance |
| Notes receivable | 140,139,692.84 | 39,636,437.20 |
| Account receivable | 1,920,075,031.85 | 1,920,372,426.16 |
| Total | 2,060,214,724.69 | 1,960,008,863.36 |
(1) Notes receivable
1) Classification of notes receivable
In RMB
| Item | Closing balance | Opening balance |
| Bank acceptance | 6,000,000.00 | 12,376,780.96 |
| Commercial acceptance | 134,139,692.84 | 27,259,656.24 |
| Total | 140,139,692.84 | 39,636,437.20 |
2) The Group has no endorsed or discounted immature receivable notes at the end of the period.
In RMB
| Item | De-recognized amount | Not de-recognized amount |
| Bank acceptance | 380,388,612.28 | |
| Commercial acceptance | 31,828,098.96 | |
| Total | 412,216,711.24 |
3) Notes transferred to accounts receivable due to default of the issue at the end of period
In RMB
| Item | Amount transferred to accounts receivable at the end of the period |
| Commercial acceptance | 5,960,429.45 |
| Total | 5,960,429.45 |
Other noteThere is no objective evidence that the Group’s bills receivable are impaired and no provision for impairment of bills receivable hasbeen accrued.
(2) Account receivable
1) Account receivable disclosed by categories
In RMB
| Type | Closing balance | Opening balance | ||||||||
| Remaining book value | Bad debt provision | Book value | Remaining book value | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Provision rate | Amount | Proportion | Amount | Provision rate | |||
| Account receivable with major individual amount and bad debt provision provided individually | 124,412,527.57 | 5.44% | 124,412,527.57 | 100.00% | ||||||
| Recognition and providing of bad debt provisions on groups | 2,159,461,958.27 | 94.45% | 239,386,926.42 | 11.09% | 1,920,075,031.85 | 2,123,268,342.78 | 99.38% | 202,895,916.62 | 9.56% | 1,920,372,426.16 |
| Account receivable with minor individual amount and bad debt provision provided individually | 2,624,629.35 | 0.11% | 2,624,629.35 | 100.00% | 13,339,659.73 | 0.62% | 13,339,659.73 | 100.00% | ||
| Total | 2,286,499,115.19 | 100.00% | 366,424,083.34 | 16.03% | 1,920,075,031.85 | 2,136,608,002.51 | 100.00% | 216,235,576.35 | 10.12% | 1,920,372,426.16 |
Account receivable with major individual amount and bad debt provision provided individually at the end of the period:
√ Applicable □ Inapplicable
In RMB
| Account recevable (by unit) | Closing balance | |||
| Account receivable | Bad debt provision | Provision rate | Reason | |
| Customer 1 | 54,442,394.96 | 54,442,394.96 | 100.00% | Customer credit status deteriorates and is not expected to be recovered |
| Customer 2 | 21,801,697.06 | 21,801,697.06 | 100.00% | Customer credit status deteriorates and is not expected to be recovered |
| Customer 3 | 15,239,752.83 | 15,239,752.83 | 100.00% | Customer credit status deteriorates and is not expected to be recovered |
| Customer 4 | 23,857,146.77 | 23,857,146.77 | 100.00% | Customer credit status deteriorates and is not expected to be recovered |
| Customer 5 | 9,071,535.95 | 9,071,535.95 | 100.00% | Customer credit status deteriorates and is not expected to be recovered |
| Total | 124,412,527.57 | 124,412,527.57 | -- | -- |
In the group, the account receivable of which bad debt provision is made through the account aging method:
√ Applicable □ Inapplicable
In RMB
| Age | Closing balance | ||
| Account receivable | Bad debt provision | Provision rate | |
| Sub-item of within 1 year | |||
| Less than 1 year | 1,082,115,648.39 | 13,065,923.26 | 1.21% |
| Subtotal for less than 1 year | 1,082,115,648.39 | 13,065,923.26 | 1.21% |
| 1-2 years | 401,968,099.93 | 21,020,394.92 | 5.23% |
| 2-3 years | 436,756,513.66 | 71,350,948.10 | 16.34% |
| 3-4 years | 111,421,602.78 | 33,586,546.63 | 30.14% |
| 4-5 years | 53,720,020.01 | 26,883,040.01 | 50.04% |
| Over 5 years | 73,480,073.50 | 73,480,073.50 | 100.00% |
| Total | 2,159,461,958.27 | 239,386,926.42 | 11.09% |
Group recognition basis:
Account receivable adopting the balance percentage method in the group□ Applicable √ Inapplicable
In RMB2) Bad debt provision made, returned or recovered in the periodA bad debt provision of RMB156,134,375.83 was made in the period. RMB1,090,673.03 was recovered or reversed.(3) Written-off account receivable during the period
In RMB
| Item | Amount |
| Account receivable written off | 4,855,195.81 |
4) Balance of top 5 accounts receivable at the end of the periodThe total balance of top-five accounts receivable at the end of the period is RMB425,364,678.31, accounting for 18.60 % of the totalremaining balance of all accounts receivable. The bad debt provision made at the end of the period is RMB26,324,536.97.5) Receivables derecognized due to transfer of financial assets
| Item | Way of transfer | De-recognized amount | Gain or loss related to the de-recognition |
| Customer 1 | Factoring | 18,251,388.31 | -1,068,836.06 |
| Customer 2 | Factoring | 25,042,803.45 | -1,513,194.75 |
| Customer 3 | Factoring | 840,775.56 | -50,700.63 |
| Customer 4 | Factoring | 11,040,000.00 | -605,354.30 |
| Customer 5 | Factoring | 3,368,796.73 | -224,704.23 |
| Customer 6 | Factoring | 42,213,084.55 | -3,177,891.80 |
| Customer 7 | Factoring | 607,394.44 | -40,708.68 |
| Customer 8 | Factoring | 2,783,273.27 | |
| Total | 104,147,516.31 | -6,681,390.45 |
5. Prepayment(1) Account age of prepayments
In RMB
| Age | Closing balance | Opening balance |
| Amount | Proportion | Amount | Proportion | |
| Less than 1 year | 43,589,102.44 | 93.82% | 45,346,974.64 | 82.93% |
| 1-2 years | 1,521,693.56 | 3.28% | 7,891,890.96 | 14.43% |
| 2-3 years | 444,183.24 | 0.96% | 679,375.39 | 1.24% |
| Over 3 years | 899,865.50 | 1.94% | 762,028.85 | 1.40% |
| Total | 46,454,844.74 | -- | 54,680,269.84 | -- |
Explanation of non-settlement of significant prepayments with an accounting age of more than 1 year:
(2) Balance of top 5 prepayments at the end of the period
The total of top5 prepayments in terms of the prepaid entities in the period is RMB20,943,782.68, accounting for 45.08 % of the totalprepayments at the end of the period.Others:
6. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Interest receivable | 3,829,315.07 | |
| Other receivables | 139,990,188.26 | 57,075,357.62 |
| Total | 139,990,188.26 | 60,904,672.69 |
Note: The other receivables in the above table refer to other receivables after deducting interest receivable and dividends receivable.
(1) Receivable interest
1) Receivable interest
In RMB
| Item | Closing balance | Opening balance |
| Bank financial products | 3,829,315.07 | |
| Total | 3,829,315.07 |
Others:
(2) Other receivables
1) Other receivables disclosed by categories
In RMB
| Type | Closing balance | Opening balance | ||||
| Remaining book value | Bad debt provision | Book value | Remaining book value | Bad debt provision | Book value | |
| Amount | Proportion | Amount | Provision rate | Amount | Proportion | Amount | Provision rate | |||
| Other receivables with major individual amount and bad debt provision provided individually | 13,030,000.00 | 7.20% | 13,030,000.00 | 100.00% | 69,380,548.52 | 48.04% | 69,380,548.52 | 100.00% | ||
| (2) Recognition and providing of bad debt provisions on groups | 166,934,905.77 | 92.29% | 26,944,717.51 | 16.14% | 139,990,188.26 | 74,563,729.50 | 51.62% | 17,681,770.19 | 23.71% | 56,881,959.31 |
| Other receivables with minor individual amount and bad debt provision provided individually | 910,319.94 | 0.50% | 910,319.94 | 100.00% | 495,772.63 | 0.34% | 302,374.32 | 60.99% | 193,398.31 | |
| Total | 180,875,225.71 | 100.00% | 40,885,037.45 | 22.60% | 139,990,188.26 | 144,440,050.65 | 100.00% | 87,364,693.03 | 60.49% | 57,075,357.62 |
Other receivables with major individual amount and bad debt provision provided individually at the end of the period:
√ Applicable □ Inapplicable
In RMB
| Other receivables (by entity) | Closing balance | |||
| Other receivables | Bad debt provision | Provision rate | Reason | |
| Luo Huichi | 13,030,000.00 | 13,030,000.00 | 100.00% | Cannot be recovered because of insolvency |
| Total | 13,030,000.00 | 13,030,000.00 | -- | -- |
In the group, the other receivables of which bad debt provision are made through the account aging method:
√ Applicable □ Inapplicable
In RMB
| Age | Closing balance | ||
| Other receivables | Bad debt provision | Provision rate | |
| Sub-item of within 1 year | |||
| Less than 1 year | 111,956,747.01 | 3,358,702.39 | 3.00% |
| Subtotal for less than 1 year | 111,956,747.01 | 3,358,702.39 | 3.00% |
| 1-2 years | 23,384,207.79 | 2,338,420.79 | 10.00% |
| 2-3 years | 4,963,977.00 | 1,489,193.10 | 30.00% |
| 3-4 years | 13,260,109.05 | 6,630,054.53 | 50.00% |
| 4-5 years | 1,207,591.07 | 966,072.85 | 80.00% |
| Over 5 years | 12,162,273.85 | 12,162,273.85 | 100.00% |
| Total | 166,934,905.77 | 26,944,717.51 | 16.14% |
Group recognition basis:
Other receivables adopting the balance percentage method in the group:
□ Applicable √ InapplicableOther receivables adopting other methods in the group□ Applicable √ Inapplicable2) Bad debt provision made, returned or recovered in the periodA bad debt provision of RMB10,912,038.13 was made in the period. RMB1,002,086.51 was recovered or reversed.3) Other receivable written off in the current period
In RMB
| Item | Amount |
| Other receivable written off | 56,389,607.20 |
Including significant other receivable:
In RMB
| Entity | Nature | Amount | Reason | Writing-off procedure | Related transaction |
| SOZN | Debt | 56,230,548.52 | SOZN in a business state of suspension and the debt cannot be repaid | Approved by the senior management | No |
| Total | -- | 56,230,548.52 | -- | -- | -- |
Notes to written-off other receivables:
4) Other receivables are disclosed by nature
In RMB
| By nature | Closing balance of book value | Opening balance of book value |
| Deposit | 113,697,386.43 | 48,666,321.95 |
| Construction borrowing and advanced payment | 32,493,474.69 | 8,721,385.12 |
| Staff borrowing and petty cash | 2,717,122.22 | 5,532,782.96 |
| Receivable refund of VAT | 1,334,691.51 | 445,607.69 |
| Debt of SOZN | 56,230,548.52 | |
| Luo Huichi | 13,030,000.00 | 13,150,000.00 |
| Others | 17,602,550.86 | 11,693,404.41 |
| Total | 180,875,225.71 | 144,440,050.65 |
5) Balance of top 5 other receivables at the end of the period
In RMB
| Entity | By nature | Closing balance | Age | Percentage (%) | Balance of bad debt |
| provision at the end of the period | |||||
| Shenzhen Yikang Real Estate Co. Ltd. | Deposit/advancement of service fee | 70,000,000.00 | Less than 1 year | 38.70% | 2,100,000.00 |
| Bangshen Electronics (Shenzhen) Co., Ltd. | Deposit | 20,000,000.00 | 1-2 years | 11.06% | 2,000,000.00 |
| Luo Huichi | Advancement | 13,030,000.00 | 3-4 years | 7.20% | 13,030,000.00 |
| Wang Weihong | Advanced construction fee | 9,281,670.75 | Over 5 years | 5.13% | 9,281,670.75 |
| Shenzhen ZhongrongLitai Investment Co., Ltd. | Deposit | 8,580,127.08 | Less than 1 year | 4.74% | 257,403.81 |
| Total | -- | 120,891,797.83 | -- | 66.83% | 26,669,074.56 |
7. Inventories
Note: If the Company needs to comply with the real estate industry disclosure requirements, choose Yes or refer to the disclosure. Ifthe Company does not need to comply with other industry disclosure requirements, choose No.Whether the Company needs to comply with disclosure requirements of the real estate industry.Yes
(1) Classification of inventories
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.3 – Listed Companies Engaged in Property Development.Classified by nature:
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Depreciation provision | Book value | Remaining book value | Depreciation provision | Book value | |
| Inventory equipment | ||||||
| Development cost | 232,622,862.96 | 232,622,862.96 | 209,395,947.66 | 209,395,947.66 | ||
| Development products | 235,332,474.86 | 62,777,961.10 | 172,554,513.76 | 337,505,615.12 | 337,505,615.12 | |
| Development of product by stages | ||||||
| Development of product for lease | ||||||
| Turnover house | ||||||
| Raw materials | 61,897,942.32 | 608,404.99 | 61,289,537.33 | 60,999,279.59 | 55,182.86 | 60,944,096.73 |
| Product in process | 24,655,294.74 | 24,655,294.74 | 31,718,230.82 | 31,718,230.82 | ||
| Finished goods in stock | 5,611,267.61 | 5,611,267.61 | 11,569,608.79 | 11,569,608.79 | ||
| Assets unsettled for finished construction contracts | 153,610,458.94 | 1,603,589.59 | 152,006,869.35 | 166,288,661.69 | 166,288,661.69 | |
| Low price consumable | 25,215.87 | 25,215.87 | 41,725.37 | 41,725.37 | ||
| OEM materials | 2,640,270.67 | 2,640,270.67 | 2,147,074.49 | 2,147,074.49 | ||
| Total | 716,395,787.97 | 64,989,955.68 | 651,405,832.29 | 819,666,143.53 | 55,182.86 | 819,610,960.67 |
Development cost and capitalization rate of its interest are disclosed as follows:
In RMB
| Project | Starting time | Estimated finish time | Estimated total investment | Opening balance | Transferred to development product in this period | Other decrease in this period | Increase (development cost) in this period | Closing balance | Accumulative capitalized interest | Including: capitalized interest for the current period | Capital source |
| Jiangxi Phoenix Land project | 10.07.18 | 12.12.19 | 670,000,000.00 | 209,395,947.66 | 2,326,915.30 | 232,622,862.96 | |||||
| Total | -- | -- | 670,000,000.00 | 209,395,947.66 | 2,326,915.30 | 232,622,862.96 | -- |
Note: For the untapped land, the estimated start-up time should be disclosed;Disclose the main project information of "Development Products" according to the following format:
In RMB
| Project | Completion time | Opening balance | Increase | Decrease | Closing balance | Accumulative capitalized interest | Including: capitalized interest for the current period |
| Phase I of Fangda Town | 29.12.16 | 337,505,615.12 | 106,006,353.65 | 208,179,493.91 | 235,332,474.86 | 76,421,652.26 | 7,292,522.11 |
| Total | -- | 337,505,615.12 | 106,006,353.65 | 208,179,493.91 | 235,332,474.86 | 76,421,652.26 | 7,292,522.11 |
(2) Inventory depreciation provision
The inventory depreciation provision is disclosed as follows:
Classified by nature:
In RMB
| Item | Opening balance | Increase in this period | Decrease in this period | Closing balance | Notes | ||
| Provision | Others | Recover or write-off | Others | ||||
| Inventory equipment | |||||||
| Development cost | |||||||
| Development products | 62,777,961.10 | 62,777,961.10 | |||||
| Development of product by stages | |||||||
| Development of product for lease | |||||||
| Turnover house | |||||||
| Raw materials | 55,182.86 | 553,222.13 | 608,404.99 | ||||
| Assets unsettled for finished construction contracts | 1,603,589.59 | 1,603,589.59 | |||||
| Total | 55,182.86 | 64,934,772.82 | 64,989,955.68 | -- | |||
(3) Capitalization rate of interest in the closing inventory balance
The balance at the end of the period includes capitalization of borrowing expense of Fangda Town project of RMB11,390,214.83.The capitalization amount of cumulative borrowing expenses is RMB118,293,158.25, of which RMB7,292,522.11 occurred in thisyear.
(4) Assets unsettled for finished construction contracts at the end of the period
In RMB
| Item | Amount |
| Accumulative occurred costs | 7,561,328,155.99 |
| Accumulative recognized gross margin | 1,134,698,206.05 |
| Less: estimated loss | 1,603,589.59 |
| Settled amount | 8,542,415,903.10 |
| Assets unsettled for finished construction contracts | 152,006,869.35 |
Others:
Whether Company needs to comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.4 – Listed Companies Engaged in Seed and Plantation BusinessNo
8. Other current assets
In RMB
| Item | Closing balance | Opening balance |
| Overpaid or prepaid VAT | 264,337.68 | 2,233,706.21 |
| Input tax to be deducted | 38,782,071.20 | 31,554,835.73 |
| Tax to be input | 12,498,193.14 | 228,552.26 |
| Bank financial products | 400,000,000.00 | |
| Prepaid income tax | 3,469.12 | 5,861,896.52 |
| Other prepaid taxes | 11,502.34 | |
| Others | 150,040.00 | |
| Total | 51,698,111.14 | 439,890,493.06 |
Others:
9. Sellable financial assets(1) Sellable financial assets
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
| Sellable equity instruments: | ||||||
| Sellable equity instruments: | 28,562,575.67 | 6,888,567.44 | 21,674,008.23 | 28,562,575.67 | 28,562,575.67 | |
| Measured at fair value | ||||||
| Measured at cost | 28,562,575.67 | 6,888,567.44 | 21,674,008.23 | 28,562,575.67 | 28,562,575.67 | |
| Total | 28,562,575.67 | 6,888,567.44 | 21,674,008.23 | 28,562,575.67 | 28,562,575.67 |
(2) Sellable financial assets messaged at costs at the end of the period
In RMB
| Invested entity | Remaining book value | Impairment provision | Shareholding in the invested entity | Cash dividend in the period | ||||||
| Beginning of the period | Increase | Decrease | Closing balance | Beginning of the period | Increase | Decrease | Closing balance | |||
| Shenyang Fangda | 28,562,575.67 | 28,562,575.67 | 6,888,567.44 | 6,888,567.44 | 64.58% | |||||
| Total | 28,562,575.67 | 28,562,575.67 | 6,888,567.44 | 6,888,567.44 | -- | |||||
10. Long-term share equity investment
In RMB
| Invested entity | Opening balance | Change (+,-) | Closing balance | Balance of impairment provision at the end of the period | |||||||
| Increased investment | Decreased investment | Investment gain and loss recognized using the equity method | Other miscellaneous income adjustment | Other equity change | Cash dividend or profit announced | Impairment provision | Others | ||||
| 1. Joint venture | |||||||||||
| 2. Associate | |||||||||||
| Shenzhen Ganshang Joint Investment Co., Ltd. | 8,472,360.71 | -121,179.93 | 8,351,180.78 | ||||||||
| Shenzhen HuihaiYirong Internet Service Co., Ltd. | 6,469,694.91 | -398,109.63 | 6,071,585.28 | ||||||||
| Jiangxi Business | 19,200,000.00 | 36,800,000.00 | -317,108.18 | 55,682,891.82 | |||||||
| Innovative Property Joint Stock Co., Ltd. | |||||||||||
| Subtotal | 34,142,055.62 | 36,800,000.00 | -836,397.74 | 70,105,657.88 | |||||||
| Total | 34,142,055.62 | 36,800,000.00 | -836,397.74 | 70,105,657.88 |
Other noteIn this period, the subsidiary Hongjun Investment added a new investment of RMB 36.80 million to Jiangxi Business InnovativeProperty Joint Stock Co., Ltd., holding 16% of the shares and appointing a director on the board of directors.
11. Investment real estates(1) Investment real estate measured at costs
√ Applicable □ Inapplicable
In RMB
| Item | Houses & buildings | Land using right | Construction in process | Total |
| I. Book value | ||||
| 1. Opening balance | 767,970,582.63 | 767,970,582.63 | ||
| 2. Increase in this period | 136,142,663.31 | 136,142,663.31 | ||
| (1) External purchase | ||||
| (2) Transfer-in from inventory\fixed assets\construction in progress | 136,142,663.31 | 136,142,663.31 | ||
| (3) Increase due to enterprise merger | ||||
| 3. Decrease in this period | 870,736,969.53 | 870,736,969.53 | ||
| (1) Purchase | ||||
| Other transfer-out | 870,736,969.53 | 870,736,969.53 | ||
| 4. Closing balance | 33,376,276.41 | 33,376,276.41 | ||
| II. Accumulative depreciation and amortization | ||||
| 1. Opening balance | 6,455,037.77 | 6,455,037.77 | ||
| 2. Increase in this period | 1,374,899.51 | 1,374,899.51 | ||
| (1) Provision or amortization | 848,370.54 | 848,370.54 | ||
| (2) Other increases | 526,528.97 | 526,528.97 | ||
| 3. Decrease in this period | ||||
| (1) Purchase | ||||
| Other transfer-out | ||||
| 4. Closing balance | 7,829,937.28 | 7,829,937.28 | ||
| III. Impairment provision | ||||
| 1. Opening balance | ||||
| 2. Increase in this period | ||||
| (1) Provision | ||||
| 3. Decrease in this period | ||||
| (1) Purchase | ||||
| Other transfer-out | ||||
| 4. Closing balance | ||||
| IV. Book value | ||||
| 1. Closing book value | 25,546,339.13 | 25,546,339.13 | ||
| 2. Opening book value | 761,515,544.86 | 761,515,544.86 |
(2) Investment real estate measured at fair value
√ Applicable □ Inapplicable
In RMB
| Item | Houses & buildings | Land using right | Construction in process | Total |
| I. Opening balance | 1,492,278,859.69 | 1,492,278,859.69 | ||
| II. Change in this period | ||||
| Add: external purchase | ||||
| Transfer-in from inventory\fixed assets\construction in progress | 827,038,833.33 | 827,038,833.33 | ||
| Increase due to enterprise merger | ||||
| Less: disposal | 5,343,905.00 | 5,343,905.00 | ||
| Other transfer-out | ||||
| Change in fair value | 2,916,922,279.48 | 2,916,922,279.48 | ||
| III. Closing balance | 5,230,896,067.50 | 5,230,896,067.50 |
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.3 – Listed Companies Engaged in Property Development.Disclosure of investment real estate measured at fair value by projects
In RMB
| Project | Location | Building area | Rental income in the report period | Opening fair value | Closing fair value | Change in fair value | Reason for the change and report |
| Fangda Building | Shenzhen | 18739.12 | 23,145,602.63 | 307,321,568.00 | 309,195,840.00 | 6.10% | The fair value of the investment real estate is determined based on Shenzhen Wenji Land and Property Evaluation Doc. 深文集评字(2019)AF第0001号 Real Estate Valuation Report. |
| Commercial podium of Fangda Town | Shenzhen | 22565.42 | 9,749,063.27 | 1,183,330,834.69 | 1,261,406,978.00 | 6.60% | The fair value of the investment real estate is determined based on Shenzhen |
| Wenji Land and Property Evaluation Doc. 深文集评字(2019)AF第0001号 Real Estate Valuation Report. | |||||||
| Building 1# of Fangda Town | Shenzhen | 72517.71 | 3,663,804,819.01 | The fair value of the investment real estate is determined based on Shenzhen Wenji Land and Property Evaluation Doc. 深文集评字(2019)AF第0001号Real Estate Valuation Report. | |||
| Total | —— | 113822.25 | 32,894,665.90 | 1,490,652,402.69 | 5,234,407,277.01 | 351.15% | —— |
Note: If the fair value changes more than 10% during the reporting period, the reasons for the change in the comparable items shouldbe disclosed.In the report period, the gains and losses from changes in the fair value of investment real estate accounted for more than30% of the company's latest audited net profit. The investment property fair value assessment report or market value research reportshall be separately disclosed.Whether there is new investment real estate measured at fair value in the report period√ Yes □ NoNewly-added investment real estate measured by fair value in the current period:
In RMB
| Project | Original accounting method | Original book value | Recorded fair value | Closing fair value | Different handling method and basis |
| Building 1# of Fangda Town | Cost measurement | 825,830,031.78 | 825,830,031.78 | 3,663,804,819.01 | Balance into the profits and losses of the changes in fair value of the additional investment real estate belongs to own for rental housing, is expected to be carried out in accordance with the actual cost of initial measurement and subsequent evaluation value changes into the profits and losses of the changes in fair value. |
| Total | —— | 825,830,031.78 | 825,830,031.78 | 3,663,804,819.01 | —— |
(3) Investment real estate without ownership certificate
In RMB
| Item | Book value | Reason |
| Fangda Square phase 2 (building 1#) | 3,663,804,819.01 | Conditions for applying for property right are not met |
Other note
12. Fixed assets
In RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 455,274,241.83 | 468,118,279.18 |
| Disposal of fixed assets | ||
| Total | 455,274,241.83 | 468,118,279.18 |
Note: The fixed assets in the above table refer to the fixed assets after deducting the fixed assets.
(1) Fixed assets
In RMB
| Item | Houses & buildings | PV power plants | Mechanical equipment | Transportation facilities | Electronics and other devices | Total |
| I. Original book value: | ||||||
| 1. Opening balance | 352,537,411.13 | 129,638,636.81 | 119,041,075.24 | 20,314,073.83 | 47,717,030.59 | 669,248,227.60 |
| 2. Increase in this period | 24,742,061.53 | 125,192.31 | 4,238,327.21 | 815,006.51 | 3,219,992.67 | 33,140,580.23 |
| (1) Purchase | 125,192.31 | 4,238,327.21 | 694,189.51 | 1,698,273.38 | 6,755,982.41 | |
| (2) Transfer-in of construction in progress | ||||||
| (3) Increase due to enterprise merger | ||||||
| Other increases | 24,742,061.53 | 120,817.00 | 1,521,719.29 | 26,384,597.82 |
| 3. Decrease in this period | 18,311,236.45 | 165,693.54 | 1,823,356.57 | 936,659.08 | 275,657.03 | 21,512,602.67 |
| (1) Disposal or retirement | 16,651,431.69 | 84,500.00 | 109,410.30 | 936,659.08 | 275,657.03 | 18,057,658.10 |
| (2) Investment real estate transfer-out | 1,659,804.76 | 1,659,804.76 | ||||
| (3) Other decrease | 81,193.54 | 1,713,946.27 | 1,795,139.81 | |||
| 4. Closing balance | 358,968,236.21 | 129,598,135.58 | 121,456,045.88 | 20,192,421.26 | 50,661,366.23 | 680,876,205.16 |
| II. Accumulative depreciation | ||||||
| 1. Opening balance | 56,287,505.21 | 9,896,036.60 | 95,637,048.49 | 13,893,304.21 | 24,061,664.41 | 199,775,558.92 |
| 2. Increase in this period | 9,952,093.44 | 6,157,641.13 | 3,703,280.66 | 1,617,488.53 | 3,908,246.04 | 25,338,749.80 |
| (1) Provision | 9,839,996.04 | 6,157,641.13 | 3,703,280.66 | 1,483,426.20 | 2,632,111.62 | 23,816,455.65 |
| (2) Other increases | 112,097.40 | 134,062.33 | 1,276,134.42 | 1,522,294.15 | ||
| 3. Decrease in this period | 1,306,240.45 | 0.00 | 1,614,593.30 | 807,215.99 | 228,201.77 | 3,956,251.51 |
| (1) Disposal or retirement | 779,711.48 | 97,689.26 | 807,215.99 | 228,201.77 | 1,912,818.50 | |
| (2) Investment real estate transfer-out | 526,528.97 | 526,528.97 | ||||
| (3) Other decrease | 1,516,904.04 | 1,516,904.04 | ||||
| 4. Closing balance | 64,933,358.20 | 16,053,677.73 | 97,725,735.85 | 14,703,576.75 | 27,741,708.68 | 221,158,057.21 |
| III. Impairment provision | ||||||
| 1. Opening balance | 1,354,389.50 | 1,354,389.50 | ||||
| 2. Increase in | 3,089,516.62 | 3,089,516.62 |
| this period | ||||||
| (1) Provision | 3,089,516.62 | 3,089,516.62 | ||||
| 3. Decrease in this period | ||||||
| (1) Disposal or retirement | ||||||
| 4. Closing balance | 3,089,516.62 | 1,354,389.50 | 4,443,906.12 | |||
| IV. Book value | ||||||
| 1. Closing book value | 290,945,361.39 | 113,544,457.85 | 22,375,920.53 | 5,488,844.51 | 22,919,657.55 | 455,274,241.83 |
| 2. Opening book value | 296,249,905.92 | 119,742,600.21 | 22,049,637.25 | 6,420,769.62 | 23,655,366.18 | 468,118,279.18 |
(2) Fixed assets without ownership certificate
In RMB
| Item | Book value | Reason |
| Houses in Urumuqi for offsetting debt | 525,188.43 | Historical reasons |
| Yuehai Office Building C 502 | 136,705.17 | Historical reasons |
| Tianjin Wanda Center, office building, 15th floor 1507 | 3,536,190.00 | In the process of applying for property right certificate |
Other note1. On 31.12.18, the cumulative depreciation of the original value of RMB60,287,329.40 in the Group’s houses and buildings isRMB8,988,711.82. The net value of RMB51,298,617.58 has been pledged to Shenzhen OCT branch of China Construction Bank.The relevant borrowing has been repaid, but the pledge has not been released.2. In the current period, the increase in housing and other buildings was caused by FangdaJianke, a subsidiary of the company, whichreceived the property of Tianjin Wanda Center and the other reduction of housing and buildings which was caused by Fangda NewMaterials Co. Ltd. to transfer the leased property to investment real estate this year.3. In the current period, other increases in other fixed assets such as machinery and equipment and other reductions were caused bythe reclassification of the fixed assets category of the subsidiary FangdaJianke.
13. Construction in process
In RMB
| Item | Closing balance | Opening balance |
| Construction in process | 58,269,452.72 | 2,668,198.62 |
| Engineering materials | ||
| Total | 58,269,452.72 | 2,668,198.62 |
Note: The construction in progress in the above table refers to the construction in progress after deducting the construction materials.
(1) Construction in progress
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
| Xiabu 20MWp PV power plant project | 1,703,080.57 | 1,703,080.57 | ||||
| ChengdaFangda’sXinjin energy-saving green curtain wall project | 14,150,785.10 | 14,150,785.10 | 965,118.05 | 965,118.05 | ||
| 4th and 39th floors of Building 1 of Fangda Town | 42,648,816.23 | 42,648,816.23 | ||||
| Fangda Group East China Construction Base Project | 1,368,127.25 | 1,368,127.25 | ||||
| PingxiangXuanfengChayuan Photovoltaic Power Plant Network Security Protection and Increased Dispatching Data Network Technical Transformation Project | 101,724.14 | 101,724.14 | ||||
| Total | 58,269,452.72 | 58,269,452.72 | 2,668,198.62 | 2,668,198.62 | ||
(2) Changes in major construction in process in this period
In RMB
| Project | Budget | Opening balance | Increase in this period | +Amount transfer-in to fixed assets in this period | Other decrease in this period | Closing balance | Proportion of accumulative engineering investment in the budget | Project progress | Accumulative capitalized interest | Including: capitalized interest for the current period | Interest capitalization rate | Capital source |
| ChengdaFangda’sXinjin energy-saving green curtain wall project | 46,000,000.00 | 965,118.05 | 13,185,667.05 | 14,150,785.10 | 30.76% | 30.76% | Others | |||||
| 4th and 39th floors of Building 1 of Fangda Town | 48,713,272.01 | 42,648,816.23 | 42,648,816.23 | 95.98% | 95.98% | 3,253,136.04 | 390,729.95 | 5.47% | Loans from financial institutions | |||
| Fangda Group East China Construction Base Project | 152,940,000.00 | 1,368,127.25 | 1,368,127.25 | 0.89% | In preliminary preparation, not started | Others | ||||||
| Total | 247,653,272.01 | 965,118.05 | 57,202,610.53 | 58,167,728.58 | -- | -- | 3,253,136.04 | 390,729.95 | -- |
Note: Sources of funds, generally include fundraising funds, financial institution loans and other sources.
14. Intangible assets
(1) Intangible assets
In RMB
| Item | Land using right | Patent | Unpatented technologies | Computer software | Total |
| I. Book value | |||||
| 1. Opening balance | 56,497,540.74 | 10,458,271.30 | 5,719,888.37 | 7,928,758.80 | 80,604,459.21 |
| 2. Increase in this period | 22,413,375.00 | 213,583.65 | 2,161,611.22 | 416,325.51 | 25,204,895.38 |
| (1) Purchase | 22,413,375.00 | 213,583.65 | 1,593,277.94 | 416,325.51 | 24,636,562.10 |
| (2) Internal R&D | |||||
| (3) Increase due to enterprise merger | |||||
| (2) Other increases | 568,333.28 | 568,333.28 | |||
| 3. Decrease in this period | 13,425.38 | 61,380.70 | 568,333.28 | 643,139.36 | |
| (1) Purchase | 13,425.38 | 13,425.38 | |||
| (2) Other decrease | 61,380.70 | 568,333.28 | 629,713.98 | ||
| 4. Closing balance | 78,910,915.74 | 10,658,429.57 | 7,820,118.89 | 7,776,751.03 | 105,166,215.23 |
| II. Accumulative amortization | |||||
| 1. Opening balance | 8,816,354.27 | 3,705,177.97 | 4,666,638.58 | 4,546,843.86 | 21,735,014.68 |
| 2. Increase in this period | 1,883,045.86 | 440,942.87 | 241,506.35 | 623,640.70 | 3,189,135.78 |
| (1) Provision | 1,883,045.86 | 440,942.87 | 241,506.35 | 623,640.70 | 3,189,135.78 |
| 3. Decrease in this period | 9,795.20 | 47,593.42 | 13,787.28 | 71,175.90 | |
| (1) Purchase | 9,795.20 | 9,795.20 | |||
| (2) Other decrease | 47,593.42 | 13,787.28 | 61,380.70 | ||
| 4. Closing | 10,699,400.13 | 4,136,325.64 | 4,860,551.51 | 5,156,697.28 | 24,852,974.56 |
| balance | |||||
| III. Impairment provision | |||||
| 1. Opening balance | |||||
| 2. Increase in this period | |||||
| (1) Provision | |||||
| 3. Decrease in this period | |||||
| (1) Purchase | |||||
| 4. Closing balance | |||||
| IV. Book value | |||||
| 1. Closing book value | 68,211,515.61 | 6,522,103.93 | 2,959,567.38 | 2,620,053.75 | 80,313,240.67 |
| 2. Opening book value | 47,681,186.47 | 6,753,093.33 | 1,053,249.79 | 3,381,914.94 | 58,869,444.53 |
Proportion of intangible asset formed by internal R&D of the period in the closing total book value of intangible assets1.99%.
(2) Failure to obtain the land use right certificates
In RMB
| Item | Book value | Reason |
| There is no |
Others:
15. Long-term amortizable expenses
In RMB
| Item | Opening balance | Increase in this period | Amortized amount in this period | Other decrease | Closing balance |
| XuanfengChayuan village and Zhuyuan village land transfer compensation | 1,252,933.34 | 56,101.56 | 1,196,831.78 | ||
| Dongguan separation | 77,817.13 | 77,817.13 |
| project | |||||
| Great Wall broadband network fee | 9,799.96 | 9,799.96 | |||
| Membership fee | 460,000.00 | 600,000.00 | 142,500.32 | 917,499.68 | |
| Sales center construction cost | 245,651.86 | 245,651.86 | |||
| Total | 2,046,202.29 | 600,000.00 | 531,870.83 | 2,114,331.46 |
Other noteOther non-current assets ending balance are mainly company party big jianke company's payment in advance.
16. Differed income tax assets and differed income tax liabilities(1) Non-deducted deferred income tax assets
In RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Assets impairment provision | 563,756,866.27 | 103,043,921.11 | 384,353,309.47 | 73,519,373.35 |
| Unrealized profit of internal transactions | ||||
| Deductible loss | 116,934,707.17 | 28,982,381.41 | 27,076,168.17 | 5,825,923.08 |
| Donation | 700,000.00 | 175,000.00 | 700,000.00 | 175,000.00 |
| Unrealizable gross profit | 171,832,174.62 | 42,958,043.66 | 159,943,328.49 | 39,138,879.86 |
| Reserved expense | 172,319,511.23 | 42,910,136.64 | 1,931,083.44 | 289,662.51 |
| Deferred earning | 2,588,555.38 | 383,758.20 | 2,343,160.67 | 351,474.11 |
| Anticipated liabilities | 6,831,162.99 | 1,024,674.45 | 6,368,353.05 | 955,252.96 |
| Arbitrage gain and loss | 1,625,725.00 | 243,858.75 | 159,000.00 | 23,850.00 |
| Adjustment of fair value of investment real estate | 309,641.05 | 46,446.16 | ||
| Provided unpaid taxes | 547,012,606.17 | 136,753,151.54 | 441,086,914.18 | 110,271,728.55 |
| Total | 1,583,601,308.83 | 356,474,925.76 | 1,024,270,958.52 | 230,597,590.58 |
(2) Non-deducted deferred income tax liabilities
In RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Gain/loss caused by changes in fair value | 4,059,575,421.10 | 1,014,893,855.26 | 1,143,654,805.86 | 285,913,701.47 |
| Estimated gross margin when Fangda Town records income, but does not reach the taxable income level | 108,771,380.35 | 27,192,845.09 | 113,637,356.36 | 28,409,339.09 |
| Total | 4,168,346,801.45 | 1,042,086,700.35 | 1,257,292,162.22 | 314,323,040.56 |
Note: The deferred income tax assets or deferred income tax liabilities at the beginning and ending balances and the correspondingtemporary difference amounts are presented in the categories of temporary differences.
(3) Net deferred income tax assets or liabilities listed
In RMB
| Item | Deferred income tax assets and liabilities at the end of the period | Offset balance of deferred income tax assets or liabilities after offsetting | Deferred income tax assets and liabilities at the beginning of the period | Offset balance of deferred income tax assets or liabilities after offsetting |
| Deferred income tax assets | 356,474,925.76 | 230,597,590.58 | ||
| Deferred income tax liabilities | 1,042,086,700.35 | 314,323,040.56 |
(4) Details of unrecognized deferred income tax assets
In RMB
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 144,013.55 | 946,030.45 |
| Deductible loss | 3,432,612.47 | 5,506,383.60 |
| Total | 3,576,626.02 | 6,452,414.05 |
Note: There is no uncertainty as to the deductible temporary difference and deductible loss of deferred income tax assets due to theuncertainty of whether or not sufficient taxable income can be obtained in the future.
(5) Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RMB
| Year | Closing amount | Opening amount | Notes |
| 2021 | 772,174.85 | ||
| 2022 | 1,093,587.53 | 4,734,208.75 | |
| 2023 | 2,339,024.94 | ||
| Total | 3,432,612.47 | 5,506,383.60 | -- |
Note: If it is not possible to determine all the deductible losses on the balance sheet date, only fill in the amount that can bedetermined and the year of expiration and explain it in the remarks column.Others:
17. Other non-current assets
In RMB
| Item | Closing balance | Opening balance |
| Prepaid house and equipment amount | 19,296,006.00 | 31,130,198.46 |
| Prepayment of intangible assets | 64,077.67 | |
| Total | 19,360,083.67 | 31,130,198.46 |
Others:
18. Short-term borrowings(1) Classification of short-term borrowings
In RMB
| Item | Closing balance | Opening balance |
| Guarantee loan | 416,000,000.00 | |
| Credit borrow | 8,000,000.00 | |
| Discount borrowing of acceptance bills | 200,000,000.00 | 200,000,000.00 |
| Total | 208,000,000.00 | 616,000,000.00 |
Notes to classification of short-term borrowings
19. Derivative financial liabilities
√ Applicable □ InapplicableNote: If the company's derivative financial instrument business is important, it must be listed separately.
In RMB
| Item | Closing balance | Opening balance |
| Futures contracts | 1,625,725.00 | 159,000.00 |
| Total | 1,625,725.00 | 159,000.00 |
Others:
20. Payable notes and accounts
In RMB
| Item | Closing balance | Opening balance |
| Notes payable | 507,864,518.19 | 532,921,025.48 |
| Account payable | 1,039,630,798.64 | 946,392,258.92 |
| Total | 1,547,495,316.83 | 1,479,313,284.40 |
(1) Classification of notes receivable
In RMB
| Type | Closing balance | Opening balance |
| Commercial acceptance | 89,593,075.92 | 62,954,258.46 |
| Bank acceptance | 418,271,442.27 | 469,966,767.02 |
| Total | 507,864,518.19 | 532,921,025.48 |
The total amount of payable bills that have matured but not been paid at the end of the period is RMB480,027.59.
(2) Account payable
In RMB
| Item | Closing balance | Opening balance |
| Account repayable and engineering repayables | 735,661,625.17 | 610,735,320.33 |
| Construction payable | 17,976,531.41 | 34,924,745.05 |
| Payable installation and implementation fees | 280,338,258.89 | 297,174,327.49 |
| Others | 5,654,383.17 | 3,557,866.05 |
| Total | 1,039,630,798.64 | 946,392,258.92 |
(3) Significant payables aging more than 1 year
In RMB
| Item | Closing balance | Reason |
| Supplier 1 | 69,722,724.31 | Not mature |
| Supplier 2 | 17,662,333.07 | Not mature |
| Supplier 3 | 7,470,170.85 | Not mature |
| Supplier 4 | 6,326,038.63 | Not mature |
| Supplier 5 | 5,722,268.99 | Not mature |
| Total | 106,903,535.85 | -- |
Others:
21. Prepayment received
(1) Prepayment received
In RMB
| Item | Closing balance | Opening balance |
| Curtain wall and screen door engineering payment | 223,438,696.72 | 89,485,775.55 |
| Material loan | 3,988,573.19 | 5,227,948.87 |
| Real estate sales payment | 49,542,377.00 | 78,377,257.88 |
| Others | 1,608,201.63 | 2,260,704.15 |
| Total | 278,577,848.54 | 175,351,686.45 |
(2) Significant prepayment aged more than 1 year
In RMB
| Item | Closing balance | Reason |
| Global Rail SDN BHD | 9,038,046.00 | Engineering payment received in advance |
| Total | 9,038,046.00 | -- |
22. Employees’ wage payable1. Employees’ wage payable
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Short-term remuneration | 40,387,519.16 | 270,574,149.59 | 266,464,007.98 | 44,497,660.77 |
| 2. Retirement pension program-defined contribution plan | 11,611.59 | 12,595,306.70 | 12,591,516.89 | 15,401.40 |
| 3. Dismiss compensation | 768,490.00 | 768,490.00 | ||
| 4. Other welfare due in one year |
| Total | 40,399,130.75 | 283,937,946.29 | 279,824,014.87 | 44,513,062.17 |
(2) Short-term remuneration
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Wage, bonus, allowance and subsidies | 38,779,381.74 | 244,545,367.73 | 240,450,703.80 | 42,874,045.67 |
| 2. Employee welfare | 5,093,397.28 | 5,057,397.28 | 36,000.00 | |
| 3. Social insurance | 14,403,570.36 | 14,403,570.36 | ||
| Including: medical insurance | 4,027,734.76 | 4,027,734.76 | ||
| Labor injury insurance | 767,542.96 | 767,542.96 | ||
| Breeding insurance | 471,924.70 | 471,924.70 | ||
| Unemployment insurance | 7,429,701.27 | 7,429,701.27 | ||
| Medical insurance | 1,706,666.67 | 1,706,666.67 | ||
| 4. Housing fund | 65,471.00 | 5,807,209.35 | 5,802,518.35 | 70,162.00 |
| 5. Labor union budget and staff education fund | 1,542,666.42 | 724,604.87 | 749,818.19 | 1,517,453.10 |
| 6. Short-term paid leave | ||||
| 7. Short-term profit share program | ||||
| Total | 40,387,519.16 | 270,574,149.59 | 266,464,007.98 | 44,497,660.77 |
(3) Defined contribution plan
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Basic pension | 11,611.59 | 12,206,429.38 | 12,202,639.57 | 15,401.40 |
| 2. Unemployment insurance | 388,877.32 | 388,877.32 | ||
| 3. Enterprise annuity contribution | ||||
| Total | 11,611.59 | 12,595,306.70 | 12,591,516.89 | 15,401.40 |
Others:
23. Taxes payable
In RMB
| Item | Closing balance | Opening balance |
| VAT | 7,964,966.19 | 12,300,790.83 |
| Consumption tax | ||
| Enterprise income tax | 96,212,929.73 | 114,953,308.81 |
| Personal income tax | 793,577.50 | 1,183,514.25 |
| City maintenance and construction tax | 1,234,675.98 | 1,881,115.36 |
| Land using tax | 242,021.60 | 333,906.32 |
| Property tax | 248,910.70 | 1,432,301.04 |
| Education surtax | 609,781.62 | 896,603.56 |
| Local education surtax | 278,944.66 | 460,806.13 |
| Deed tax | 3,429,437.28 | |
| Others | 124,191.21 | 83,732.86 |
| Total | 107,709,999.19 | 136,955,516.44 |
Others:
24. Other payables
In RMB
| Item | Closing balance | Opening balance |
| Interest payable | 2,098,971.44 | 2,425,311.97 |
| Other payables | 811,019,728.40 | 501,189,510.69 |
| Total | 813,118,699.84 | 503,614,822.66 |
Note: The other payables in the above table refer to other payables after deducting interest payables and dividends payable.
(1) Interest payable
In RMB
| Item | Closing balance | Opening balance |
| Long-term borrowing with interest installment and repayment of principal upon maturity | 2,087,371.44 | 1,822,719.47 |
| Short-term borrowing interests payable | 11,600.00 | 602,592.50 |
| Total | 2,098,971.44 | 2,425,311.97 |
(2) Other payables
1) Other payables presented by nature
In RMB
| Item | Closing balance | Opening balance |
| Performance and quality deposit | 47,749,632.53 | 20,867,337.69 |
| Deposit | 152,313.10 | 8,047,165.84 |
| Reserved expense | 182,260,114.71 | 11,466,723.82 |
| Tax withheld | 547,012,606.17 | 441,086,914.18 |
| Fangda Town pledge | 22,236,150.00 | 100,000.00 |
| Others | 11,608,911.89 | 19,621,369.16 |
| Total | 811,019,728.40 | 501,189,510.69 |
Other note1. The tax withheld is the land VAT that needs to be settled and paid for the property delivered of the Fangda Town developed byFangda Property.2. The major other payables aged over 1 year at the end of the year are mainly the land value-added tax of RMB418,264,992.03,which is not yet settled.
25. Non-current liabilities due within 1 year
In RMB
| Item | Closing balance | Opening balance |
| Long-term loans due within 1 year | 200,000,000.00 | 200,000,000.00 |
| Total | 200,000,000.00 | 200,000,000.00 |
Others:
26. Other current liabilities
In RMB
| Item | Closing balance | Opening balance |
| Substituted money on VAT | 9,328,682.25 | 9,531,014.81 |
| Total | 9,328,682.25 | 9,531,014.81 |
27. Long-term borrowings(1) Classification of long-term borrowings
In RMB
| Item | Closing balance | Opening balance |
| Loan by pledge | 693,978,153.39 | 893,978,153.39 |
| Credit borrow | 500,000,000.00 | |
| Total | 1,193,978,153.39 | 893,978,153.39 |
Notes to classification of long-term borrowings:
The above-mentioned borrowing is the 100% stock pledging of Fangda Property Development held by the Company.Other note, including interest rate range:
The interest rate of long-term borrowings ranges between 5.39% and 6.785%.
28. Anticipated liabilities
In RMB
| Item | Closing balance | Opening balance | Reason |
| Maintenance fee | 6,831,162.99 | 6,368,353.05 | |
| Total | 6,831,162.99 | 6,368,353.05 | -- |
Note: including related significant assumptions and estimates for anticipated liabilities
29. Deferred earning
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance | Reason |
| Government subsidy | 10,489,483.94 | 1,333,000.00 | 1,421,322.64 | 10,401,161.30 | See Note |
| Total | 10,489,483.94 | 1,333,000.00 | 1,421,322.64 | 10,401,161.30 | -- |
Items involving government subsidies:
In RMB
| Liabilities | Opening balance | Amount of new subsidy | Amount included in non-operating revenue | Other misc. gains recorded in this period | Costs offset in the period | Other change | Closing balance | Related to assets/earning |
| Major investment project prize from Industry and Trade Development | 1,738,095.50 | 57,142.80 | 1,680,952.70 | Assets-related |
| Division of Dongguan Finance Bureau | ||||||||
| Massive production project of air-breathing double-layer hollow glass energy-saving curtain call | 7,517,843.03 | 123,987.24 | 7,393,855.79 | Assets-related | ||||
| Railway transport screen door controlling system and information transmission technology | 125,065.17 | 28,507.00 | 96,558.17 | Assets-related | ||||
| Distributed PV power generation project subsidy sponsored by Dongguan Reform and Development Commission | 443,750.09 | 24,999.96 | 418,750.13 | Assets-related | ||||
| Luxi county Xuanfeng town government business introduction subsidy | 184,730.15 | 3,725.64 | 181,004.51 | Assets-related | ||||
| Shenzhen SME Service Bureau enterprise IT construction subsidy | 480,000.00 | 20,000.00 | 500,000.00 | Assets-related |
| Second batch of the 2017 Corporate Research and Development Funding Scheme | 1,113,000.00 | 1,113,000.00 | Earning-related | |||||
| Shenzhen Science and Technology Innovation Committee Technology Innovation Subsidy | 200,000.00 | -{}- | 69,960.00 | 130,040.00 | Earning-related | |||
| Total | 10,489,483.94 | 1,333,000.00 | 1,421,322.64 | 10,401,161.30 |
Others:
1. The Dongguan Finance Bureau Industry and Trade Development Division major subsidy project is a subsidized project notstipulated in Dongguan Financial Circular [2013] No.779. As the project has formed into long-term assets, the Company treats it asan assets-related government subsidy.2. The massive production project of air-breathing double-layer hollow glass energy-saving curtain wall is a subsidied projectstipulated in Guangdong Financial Doc [2013] No.183. As the project has formed into long-term assets, the Company treats it as anassets-related government subsidy.3. The railway transport screen door controlling system and information transmission technology is a subsidized project stipulated inShenzhen Tech Innovation [2013] No.242. RMB300,000 is used to purchase equipment and RMB900,000 is used to purchasematerials and for travel fees. As the project has formed into long-term assets, the Company treats RMB300,000 as assets-relatedgovernment subsidy and RMB900,000 as earning-related government subsidy. The Dongguan Municipal Development and ReformCommission on the organization of the Dongguan City distributed photovoltaic power generation subsidy program is based on the"Dongguan Municipal Development and Reform Commission's Circular on Organizing the Application of Dongguan Distributed PVGeneration Capital Subsidy Project" for various types of buildings and structures using distributed photovoltaic power generationprojects. Owners, according to the installed capacity of 250,000 yuan / MW for a one-time grant, the maximum subsidy for a singleproject does not exceed 2 million yuan, because the project is related to assets, the company will use it as a government subsidyrelated to assets.4. The Xuanfeng Town Government Investment Promotion Subsidy Project of Luxi County promoted the development of the localeconomy. Xuanfeng Town Government of Luxi County introduced Luxin New Energy Company's solar photovoltaic powergeneration project and gave Luxin New Energy Corporation subsidies for obtaining state-owned construction land use rights. As thisproject is related to assets, the Company regards it as a government grant related to the assets.5. The subsidy project of the Shenzhen Municipal Bureau of Small and Medium-sized Enterprises Service Enterprise
InformatizationProject is based on the relevant provisions of the Interim Measures for the Management of Special Funds for theDevelopment of Private and Small and Medium-sized Enterprises in Shenzhen (SCC (2012) No. 177) issued by the ShenzhenMunicipal Bureau of Small and Medium Business Administration. In 2017, the special fund enterprise informationization projectsubsidies, because the project is related to assets, the company will use it as a government grant related to assets.
30. Capital share
In RMB
| Opening balance | Change (+,-) | Closing balance | |||||
| Issued new shares | Bonus shares | Transferred from reserves | Others | Subtotal | |||
| Total of capital shares | 1,183,642,254.00 | -28,160,568.00 | -28,160,568.00 | 1,155,481,686.00 | |||
Others:
1. The decrease in share capital was due to the repurchase and cancellation of B shares by the company during the reporting period.2. By 31.12.18, the Company has 1,417,242 restricted shares, of which 1,417,242 shares are held by senior management naturalperson.
31. Capital reserve
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Capital premium (share capital premium) | 71,375,387.61 | 71,375,293.37 | 94.24 | |
| Other capital reserves | 1,454,097.35 | 1,454,097.35 | ||
| Total | 72,829,484.96 | 71,375,293.37 | 1,454,191.59 |
Other note, including explanation about the reason of the change:
The decrease in share capital was due to the repurchase and cancellation of B shares by the company during the reporting period.
32. Shares in stock
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| B share | 111,166,053.48 | 100,334,615.82 | 10,831,437.66 | |
| Total | 111,166,053.48 | 100,334,615.82 | 10,831,437.66 |
Other note, including explanation about the reason of the change:
(1) The company held the 8th meeting of the 8th Board of Directors and the 2017 Shareholders' Meeting on April 24 2018 and May15 2018 respectively and reviewed and approved the proposal of the company to repurchase domestically listed foreign shares (Bshares). From August 13th to August 18th 2018, a total of 28,160,568.00 shares were repurchased through centralized bidding. Thehighest price was HK$4.22/share, the lowest price was HK$3.95 per share and the actual accumulated payment was
HK$114,478,923.89 (including transaction costs). The treasury shares were RMB 100,334,615.82. The company held the 10thmeeting of the 8th Board of Directors and the 1st Extraordinary General Meeting of Shareholders in 2018 on September 10 2018 andSeptember 27 2018 respectively. The share (B shares) proposal as of December 31 2018 through the centralized bidding method atotal of 3670247.00 shares were purchased and the highest price was HK$3.399/share, the lowest price was HK$3.24 per share andthe actual accumulated payment was HK$12,312,442.82 (including transaction costs) accounting for treasury shares ofRMB10831437.66;(2) 28,160,568.00 shares of share capital reduced as a result of the write-off of treasury shares(3) If the cost of the cancelled stocks is higher than the corresponding cost of equity, the capital reserve of RMB71375293.37 andsurplus reserve of RMB798754.45 will be reduced.
33. Other miscellaneous income
In RMB
| Item | Opening balance | Amount occurred in the current period | Closing balance | ||||
| Amount before income tax | Less: amount written into other gains and transferred into gain/loss in previous terms | Less: Income tax expenses | After-tax amount attributed to the parent | After-tax amount attributed to minority shareholders | |||
| 2. Other misc. incomes that will be re-classified into gain and loss | 8,585,847.99 | -1,551,389.15 | -141,000.00 | -206,628.75 | -1,203,760.40 | 7,382,087.59 | |
| Effective part in the gain and loss of arbitrage of cash flow | -119,850.00 | -1,518,525.00 | -141,000.00 | -206,628.75 | -1,170,896.25 | -1,290,746.25 | |
| Translation difference of foreign exchange statement | -50,855.47 | -32,864.15 | -32,864.15 | -83,719.62 | |||
| Investment real estate measured at fair value | 8,756,553.46 | 8,756,553.46 | |||||
| Other miscellaneous income | 8,585,847.99 | -1,551,389.15 | -141,000.00 | -206,628.75 | -1,203,760.40 | 7,382,087.59 | |
34. Surplus reserves
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserves | 110,690,396.65 | 10,583,579.20 | 798,754.45 | 120,475,221.40 |
| Total | 110,690,396.65 | 10,583,579.20 | 798,754.45 | 120,475,221.40 |
35. Retained profit
In RMB
| Item | Current period | Last period |
| Adjustment on retained profit of previous period | 1,863,191,218.58 | 1,016,820,576.30 |
| Retained profit adjusted at beginning of year | 1,863,191,218.58 | 1,016,820,576.30 |
| Plus: Net profit attributable to owners of the parent | 2,246,164,571.68 | 1,144,404,441.03 |
| Less: Statutory surplus reserves | 10,583,579.20 | 21,850,606.15 |
| Common share dividend payable | 177,546,338.10 | 276,183,192.60 |
| Closing retained profit | 3,921,225,872.96 | 1,863,191,218.58 |
Details of retained profit adjusted at beginning of the period1) Retrospective adjustment due to adopting of the Enterprise Accounting Standard and related regulations, included the retainedprofit by RMB0.2) Variation of accounting policies, influenced the retained profit by RMB0.3) Correction of material accounting errors, influenced the retained profit by RMB0.4) Change of consolidation range caused by merger of entities under common control, influenced the retained profit by RMB0.5) Other adjustment influenced the retained profit by RMB0.
36. Operational revenue and costs
In RMB
| Item | Amount occurred in the current period | Occurred in previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 2,987,575,699.48 | 2,314,151,985.65 | 2,900,462,349.88 | 1,977,766,793.96 |
| Other businesses | 61,104,452.58 | 23,796,024.77 | 47,008,463.70 | 20,472,095.25 |
| Total | 3,048,680,152.06 | 2,337,948,010.42 | 2,947,470,813.58 | 1,998,238,889.21 |
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information DisclosureGuideline No.3 – Listed Companies Engaged in Property Development.Top-5 projects in terms of income received and recognized in the reporting period:
In RMB
| No. | Project | Balanace |
| 1 | Fangda Town | 697,518,090.10 |
37. Taxes and surcharges
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| City maintenance and construction tax | 7,984,304.25 | 7,814,008.40 |
| Education surtax | 5,756,258.86 | 7,797,178.90 |
| Property tax | 6,220,032.07 | 4,118,281.19 |
| Land using tax | 1,738,269.03 | 1,432,280.19 |
| Stamp tax | 1,946,004.29 | 1,357,531.03 |
| Land VAT | 128,891,545.18 | 167,899,723.69 |
| Business tax | 1,061,489.31 | |
| Others | 145,514.11 | 309,436.30 |
| Total | 152,681,927.79 | 191,789,929.01 |
Others:
38. Sales expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 20,260,198.42 | 22,338,575.61 |
| Freight and miscellaneous charges | 5,041,135.44 | 6,023,654.97 |
| Travel expense | 1,852,326.67 | 4,918,740.99 |
| Entertainment expense | 1,991,769.30 | 1,918,141.04 |
| Material consumption | 564,173.89 | 1,034,700.68 |
| Office costs | 1,081,976.69 | 2,182,168.26 |
| Rental | 781,210.79 | 848,873.82 |
| Advertisement and promotion fee | 917,550.20 | 5,698,609.97 |
| Sales agency fee | 14,128,431.60 | 14,032,712.93 |
| Others | 3,215,172.89 | 2,067,770.13 |
| Total | 49,833,945.89 | 61,063,948.40 |
Others:
39. Management expenses
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 86,778,163.52 | 81,335,907.43 |
| Depreciation and amortization | 11,119,225.43 | 15,437,399.78 |
| Agencies | 8,486,136.13 | 6,206,988.31 |
| Maintenance costs | 9,669,303.38 | 7,676,857.59 |
| Water and electricity | 622,744.97 | 656,735.35 |
| Office expense | 3,506,152.86 | 3,428,451.92 |
| Travel expense | 2,518,992.57 | 2,887,763.45 |
| Entertainment expense | 3,313,697.59 | 2,896,590.12 |
| Rental | 3,489,288.27 | 2,531,368.11 |
| Lawsuit | 463,766.14 | 237,815.52 |
| Material consumption | 255,851.35 | 313,727.03 |
| Property management fee | 689,894.03 | 1,978,270.47 |
| Others | 9,089,408.55 | 9,231,602.45 |
| Total | 140,002,624.79 | 134,819,477.53 |
Others:
40. R&D cost
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Labor costs | 14,718,049.77 | 13,216,294.50 |
| Material costs | 1,596,850.18 | 1,194,036.40 |
| Rental | 1,770,437.76 | 1,716,524.80 |
| Depreciation costs | 397,092.74 | 439,827.59 |
| Agencies | 308,497.20 | 149,175.09 |
| Amortization of intangible assets | 88,515.55 | 138,611.22 |
| Travel expense | 99,589.29 | 229,518.69 |
| Maintenance costs | 144,199.46 | 193,546.74 |
| Others | 731,012.63 | 719,667.74 |
| Total | 19,854,244.58 | 17,997,202.77 |
Others:
41. Financial expenses
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Interest expense | 83,226,880.85 | 89,495,390.12 |
| Less: interest capitalization | 7,292,522.11 | 20,766,462.22 |
| Less: discount government subsidies | 250,000.00 | 1,786,400.00 |
| Less: Interest income | 9,255,120.60 | 7,781,596.28 |
| Acceptant discount | 10,241,203.18 | 3,384,259.28 |
| Exchange gain/loss | -2,391,402.94 | 3,305,715.16 |
| Commission charges and others | 8,049,350.51 | 1,207,940.00 |
| Total | 82,328,388.89 | 67,058,846.06 |
Others:
42. Assets impairment loss
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| 1. Bad debt loss | 164,953,654.42 | 58,879,269.89 |
| 2. Inventory depreciation loss | 64,934,772.82 | |
| 3. Impairment loss on available-for-sale financial assets | 6,888,567.44 | |
| 7. Fixed assets impairment loss | 3,089,516.62 | |
| Total | 239,866,511.30 | 58,879,269.89 |
Others:
43. Other gains
In RMB
| Source | Amount occurred in the current period | Occurred in previous period |
| LED production expansion technology renovation project | 381,219.96 | |
| Luxi county Xuanfeng town government business introduction subsidy | 3,725.64 | 1,552.35 |
| Major investment project prize from Industry and Trade Development Division of Dongguan Finance Bureau | 57,142.80 | 57,142.80 |
| Distributed PV power generation project subsidy sponsored by Dongguan Reform and Development Commission | 24,999.96 | 24,999.96 |
| Railway transport screen door controlling system and information transmission technology | 28,507.00 | 43,229.28 |
| Massive production project of air-breathing double-layer hollow glass energy-saving curtain call | 123,987.24 | 123,987.24 |
| Technology achievement subsidies | 100,000.00 |
| VAT rebated into revenue | 2,280,640.07 | 2,730,971.34 |
| Nanchang Financial Bureau municipal-level enterprise technology prize | 50,000.00 | |
| Intellectual property right project subsidy by Shenzhen market and quality supervision and management committee | 100,000.00 | |
| Industry upgrade and transformation subsidy for 2017 by Shenzhen Economic and Trade Information Commission | 1,000,000.00 | |
| Industry growth subsidy | 680,000.00 | |
| Hi-tech enterprise development fund | 300,000.00 | |
| Hi-tech enterprise prize | 300,000.00 | |
| Employment subsidy | 238,968.31 | 504,878.65 |
| Others | 834,049.75 | 184,500.00 |
| Income tax commission | 376,916.38 | |
| Second batch of the 2017 Corporate Research and Development Funding Scheme | 1,113,000.00 | |
| Nanchang High-tech Development Zone Management Committee Finance Bureau allocates industrial incentives | 300,000.00 | |
| National standard preparation subsidy | 300,000.00 | |
| Total | 5,681,937.15 | 6,582,481.58 |
44. Investment income
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Gains from long-term equity investment measured by equity | -836,397.74 | -2,162,975.06 |
| Investment gain obtained from disposal of long-term equity investment | 84,959,644.45 | |
| Investment gain obtained from disposal of financial assets measured at fair value with variations accounted into current income account | 57,856,845.60 | 122,438,379.65 |
| Investment gain obtained from disposal of financial assets measured at fair value with | -56,309,694.76 | -122,795,801.32 |
| variations accounted into current income account | ||
| Investment gain of financial products | 27,065,331.33 | 20,455,865.70 |
| Others | -4,000.00 | |
| Total | 27,776,084.43 | 102,891,113.42 |
Others:
45. Income from fair value fluctuation
In RMB
| Source of income from fluctuation of fair value | Amount occurred in the current period | Occurred in previous period |
| Investment real estate measured at fair value | 2,916,598,485.48 | 890,037,303.97 |
| Effective part in the gain and loss of arbitrage of cash flow | -2,739,924.91 | 2,371,344.29 |
| Total | 2,913,858,560.57 | 892,408,648.26 |
Others:
46. Assets disposal gains
In RMB
| Source | Amount occurred in the current period | Occurred in previous period |
| Gain and loss from disposal of fixed assets ("-" for loss) | -3,516,357.91 | 5,027,717.19 |
47. Non-business income
In RMB
| Item | Amount occurred in the current period | Occurred in previous period | Amount accounted into the current accidental gain/loss |
| Penalty income | 605,723.88 | 363,980.93 | 605,723.88 |
| Payable account not able to be paid | 3,208,403.38 | ||
| Compensation received | 2,993,898.33 | 2,993,898.33 | |
| Others | 112,971.88 | 4,810,402.92 | 112,971.88 |
| Total | 3,712,594.09 | 8,382,787.23 | 3,712,594.09 |
48. Non-business expenses
In RMB
| Item | Amount occurred in the current period | Occurred in previous period | Amount accounted into the current accidental gain/loss |
| Loss from debt reorganization | 3,674,141.05 | ||
| Donation | 622,950.00 | 3,911,000.00 | 622,950.00 |
| Loss from retirement os damaged non-current assets | 1,785,203.11 | 71,025.12 | 1,785,203.11 |
| Penalty and overdue fine | 827,560.09 | 203,328.43 | 827,560.09 |
| Others | 610,489.60 | 213,904.94 | 610,489.60 |
| Total | 3,846,202.80 | 8,073,399.54 | 3,846,202.80 |
Others:
49. Income tax expenses(1) Details about income tax expense
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Income tax expenses in this period | 121,573,588.89 | 216,022,591.68 |
| Deferred income tax expenses | 602,092,953.36 | 57,772,785.66 |
| Total | 723,666,542.25 | 273,795,377.34 |
(2) Adjustment process of accounting profit and income tax expense
In RMB
| Item | Amount occurred in the current period |
| Total profit | 2,969,831,113.93 |
| Income tax expenses calculated based on the legal (or applicable) tax rates | 742,457,778.48 |
| Impacts of different tax rates applicable for some subsidiaries | -6,778,607.02 |
| Impacts of income tax before adjustment | 2,268,965.90 |
| Impact of non-taxable income | -14,545,891.42 |
| Impacts of non-deductible cost, expense and loss | 1,323,943.11 |
| Impacts of using deductible loss of unrecognized deferred income tax assets | -2,586.02 |
| Deductable temporary difference and deductable loss of | 174,496.30 |
| unrecognized deferred income tax assets | |
| Profit and loss of associates and joint ventures calculated using the equity method | 209,099.45 |
| Taxation impact of R&D expense and (presented with ―-‖) | -1,440,656.53 |
| Income tax expenses | 723,666,542.25 |
Other note
50. Other miscellaneous income
See Note VII 33.
51. Notes to the cash flow statement(1) Other cash inflow related to operation
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Interest income | 8,316,874.92 | 6,851,168.02 |
| Subsidy income | 5,681,937.15 | 6,184,809.73 |
| Retrieving of deposits for exchange bills | 32,714,226.95 | 20,929,073.67 |
| Retrieving of bidding deposits | 33,349,895.41 | 72,013,587.39 |
| Other operating accounts | 26,996,640.74 | 21,760,218.65 |
| Total | 107,059,575.17 | 127,738,857.46 |
Notes to other cash inflow related to operation:
(2) Other cash paid related to operation
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Sales expense | 29,750,837.95 | 25,196,863.33 |
| Administrative expense | 58,067,357.63 | 29,288,934.10 |
| Bidding deposit paid | 99,763,670.34 | 71,049,500.84 |
| Net draft deposit net paid | 128,198,940.32 | 110,475,014.30 |
| Other trades | 23,353,211.96 | 25,533,661.05 |
| Total | 339,134,018.20 | 261,543,973.62 |
Notes to other cash paid related to operation:
(3) Other cash paid related to financing
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Repurchase amout of B shares | 111,166,053.48 | |
| B shares only door limited funds | 88,273,535.75 | |
| Total | 199,439,589.23 |
Notes to other cash paid related to financing:
52. Supplementary data of cash flow statement(1) Supplementary data of cash flow statement
In RMB
| Supplementary information | Amount of the Current Term | Amount of the Previous Term |
| 1. Net profit adjusted to cash flow of business operation | -- | -- |
| Net profit | 2,246,164,571.68 | 1,151,047,221.51 |
| Plus: Asset impairment provision | 239,866,511.30 | 58,879,269.89 |
| Fixed asset depreciation, gas and petrol depreciation, production goods depreciation | 24,664,826.19 | 28,254,417.84 |
| Amortization of intangible assets | 3,189,135.78 | 3,377,119.80 |
| Amortization of long-term amortizable expenses | 531,870.83 | 2,992,171.54 |
| Loss from disposal of fixed assets, intangible assets, and other long-term assets (―-― for gains) | 3,295,588.91 | -4,594,701.20 |
| Loss from fixed asset discard (―-― for gains) | 1,785,203.11 | 71,025.12 |
| Loss from fair value fluctuation (―-― for gains) | -2,913,858,560.57 | -892,079,427.63 |
| Financial expenses (―-― for gains) | 84,126,977.13 | 68,088,240.21 |
| Investment losses (―-― for gains) | -27,776,084.43 | -102,891,113.42 |
| Decrease of deferred income tax asset (―-― for increase) | -125,877,335.18 | -53,779,742.02 |
| Increase of deferred income tax asset (―-― for increase) | 727,763,659.79 | 111,552,527.68 |
| Decrease of inventory (―-― for increase) | 103,270,355.56 | 163,916,553.77 |
| Decrease of operational receivable items | -566,885,607.13 | 346,476,038.35 |
| (―-― for increase) | ||
| Increase of operational receivable items (―-― for decrease) | 682,326,319.97 | -233,040,368.34 |
| Others | -95,484,713.37 | -90,436,087.37 |
| Cash flow generated by business operations, net | 387,102,719.57 | 557,833,145.73 |
| 2. Major investment and financing operation not involving with cash | -- | -- |
| 3. Net change of cash and cash equivalents | -- | -- |
| Balance of cash at period end | 956,190,890.68 | 931,285,535.55 |
| Less: Initial balance of cash | 931,285,535.55 | 935,824,575.40 |
| Net increase in cash and cash equivalents | 24,905,355.13 | -4,539,039.85 |
(2) Composition of cash and cash equivalents
In RMB
| Item | Closing balance | Opening balance |
| I. Cash | 956,190,890.68 | 931,285,535.55 |
| Including: Cash in stock | 5,167.01 | 42,636.09 |
| Bank savings can be used at any time | 953,231,178.60 | 921,773,052.65 |
| Other monetary capital can be used at any time | 2,954,545.07 | 9,469,846.81 |
| III. Balance of cash and cash equivalents at end of term | 956,190,890.68 | 931,285,535.55 |
| Including: restricted cash and cash equivalent used by parent company or subsidiaries in the Group | 432,871,193.08 | 249,112,943.96 |
Others:
53. Ownership- or use-right-restricted assets
In RMB
| Item | Closing book value | Reason |
| Monetary capital | 432,871,193.08 | Warranty, time deposit, B share repurchase fund |
| Fixed assets | 51,298,617.58 | Loan by pledge |
| Investment real estate | 309,189,866.37 | Loan by pledge |
| 100% stake in Fangda Property | 200,000,000.00 | Loan by pledge |
| Development held by the Company | ||
| Total | 993,359,677.03 | -- |
Others:
54. Foreign currency monetary items(1) Foreign currency monetary items
In RMB
| Item | Closing foreign currency balance | Exchange rate | Closing RMB balance |
| Monetary capital | -- | -- | 129,248,907.17 |
| Including: USD | 734,888.93 | 6.8632 | 5,043,689.70 |
| HK Dollar | 136,096,929.35 | 0.8762 | 119,248,129.48 |
| AUD | 352,362.62 | 4.8250 | 1,700,149.64 |
| SGD | 650,580.95 | 5.0062 | 3,256,938.35 |
| Account receivable | -- | -- | 23,584,697.27 |
| Including: USD | 3,182,153.65 | 6.8632 | 21,839,756.93 |
| HK Dollar | 369,071.47 | 0.8762 | 323,380.42 |
| AUD | 52,421.90 | 4.8250 | 252,935.67 |
| SGD | 233,435.39 | 5.0062 | 1,168,624.25 |
| Other receivables | 429,399.61 | ||
| Including: USD | 13,682.31 | 6.8632 | 93,904.43 |
| HK Dollar | 381,389.10 | 0.8762 | 334,173.13 |
| AUD | 274.00 | 4.8250 | 1,322.05 |
| Other payables | 109,485.66 | ||
| Including: HKD | 124,955.10 | 0.8762 | 109,485.66 |
| Employees’ wage payable | 4,021,941.54 | ||
| Including: HKD | 14,022.10 | 0.8762 | 12,286.16 |
| AUD | 831,016.66 | 4.8250 | 4,009,655.38 |
Others:
(2) The note of overseas operating entities should include the main operation places, book keepingcurrencies and selection basis. Where the book keeping currency is changed, the reason should also beexplained.
□ Applicable √ Inapplicable
55. Hedging
Hedging items and related tools, qualitative and quantitative information about hedging risks:
Hedging type Hedged item Hedging instrument Hedged riskCash flow hedging Aluminum plate futures transaction Aluminum futures contract Rise on raw material prices, causingpurchase cost increase
VIII. Change to Consolidation Scope
1. Change to the consolidation scope for other reasons
Change in the consolidation scope due to other reasons (such as new subsidiaries and liquidation of subsidiaries) and the situations:
1. In the current period, Shanghai Fangda Jingling Technology Co. Ltd. and Shenzhen Fangda Cloud Rail
Technology Co. Ltd. have been newly established two new companies in the current consolidated statement.
2. In this period, Fangda Decoration Engineering (Shenyang) Co. Ltd. an indirectly controlled subsidiary was cancelled and no longercontrolled. Therefore, one subsidiary is moved out of the consolidation scope in this period.
IX. Equity in Other Entities
1. Interests in subsidiaries
(1) Group Composition
| Company | Place of business | Registered address | Business | Shareholding percentage | Obtaining method | |
| Direct | Indirect | |||||
| FangdaJianke | Shenzhen | Shenzhen | Designing, manufacturing, and installation of curtain walls | 98.39% | 1.61% | Incorporation |
| Fangda Automatic | Shenzhen | Shenzhen | Production, processing and installation of subway screen doors | 14.00% | 86.00% | Incorporation |
| Fangda New Material | Nanchang | Nanchang | Prodution and sales of new-type materialsm composite materials and production of curtain walls | 75.00% | 25.00% | Incorporation |
| Kexunda | Shenzhen | Shenzhen | Computer software development | 100.00% | Incorporation | |
| Fangda Property | Shenzhen | Shenzhen | Real estate development and operation | 100.00% | Incorporation | |
| Fangda New Energy | Shenzhen | Shenzhen | Design and construction of PV power plants | 100.00% | Incorporation | |
| Chengdu Fangda | Chengdu | Chengdu | Trusted processing of building curtain wall materials | 100.00% | Incorporation | |
| Shihui International Holding Co., Ltd. | Virgin Islands | Virgin Islands | Investment | 100.00% | Incorporation | |
| Dongguan New Material | Dongguan | Dongguan | Production and sales of building curtain walls | 100.00% | Incorporation | |
| Fangda Property Management | Shenzhen | Shenzhen | Property management | 100.00% | Incorporation | |
| Jiangxi Fangda Property Development Co., Ltd. | Nanchang | Nanchang | Real estate development and operation | 100.00% | Incorporation | |
| PingxiangFangdaLuxin New Energy Co., Ltd. | Pingxiang | Pingxiang | Design and construction of PV power plants | 100.00% | Incorporation | |
| PingxiangXiangdongFangda New Energy Co., Ltd. | Pingxiang | Pingxiang | Design and construction of PV power plants | 100.00% | Incorporation | |
| Nanchang Xinjian Fangda New Energy Co., Ltd. | Nanchang | Nanchang | Design and construction of PV power plants | 100.00% | Incorporation | |
| Dongguan Fangda New Energy Co., Ltd. | Dongguan | Dongguan | Design and construction of PV power plants | 100.00% | Incorporation | |
| Kechuangyuan Software | Shenzhen | Shenzhen | Software development | 100.00% | Incorporation |
| Fangda Automation (Hong Kong) Co., Ltd. | Hong Kong | Hong Kong | Metro screen door | 100.00% | Incorporation | |
| Hongjun Investment Company | Shenzhen | Shenzhen | Investment | 98.00% | 2.00% | Incorporation |
| Jianke Australia | Australia | Australia | Designing, manufacturing, and installation of curtain walls | 100.00% | Incorporation | |
| Fangda Cloud Rail | Shenzhen | Shenzhen | Design, development and sales of cloud rail transport equipment | 100.00% | Incorporation | |
| Shanghai FangdaQingling Technology Co., Ltd. | Shanghai | Shanghai | Production and sales of building curtain walls | 100.00% | Incorporation |
Note to the difference between shareholdings in subsidiaries and percentage of votes:
Basis for holding half or less votes but controlling invested entities, and holding half or more votes but not controlling investedentities:
Basis for control of structural entities incorporated in the consolidation scope:
Basis for recognizing a company as an agent or consigner:
Others:
In this period, Shenyang Decoration Company has completed the procedures for cancellation of business.
3. Interests in joint ventures or associates(1) Financial summary of insignificant joint ventures and associates
In RMB
| Closing balance/amount occurred in this period | Opening balance/amount occurred in previous period | |
| Joint venture: | -- | -- |
| Total book value of investment | ||
| Total shareholding | -- | -- |
| Net profit |
| Other miscellaneous income | ||
| --Total of misc. incomes | ||
| Associate: | -- | -- |
| Total book value of investment | 70,105,657.88 | 34,142,055.62 |
| Total shareholding | -- | -- |
| Net profit | -836,397.74 | -2,162,975.06 |
| Other miscellaneous income | ||
| --Total of misc. incomes | -836,397.74 | -2,162,975.06 |
X. Risks of Financial Tools
Major financial tools of the Group include monetary fund, accounts receivable, receivable bills, other receivables, other current assets,financial assets measured at fair value and whose change recorded in the profit and loss of this period, accounts payable, interestpayable, payable bills, other payables, short-term borrowings, other current liabilities, non-current liabilities due within one year andlong-term borrowings. Details about the Group's financial instruments are disclosed in related notes. The following explains risksrelated to the financial instruments and risk management policies adopted by the Group to lower the risks. The management of theGroup manages and monitor the risks to ensure that the risks are within the acceptable range.1. Risk management target and policyThe target of the risk management is to balance between risk and benefit and lower financial risks’ impacts on the Group’s financialperformance. Based on the target, the Group has formulated risk management policy to identify and analyze risks facing the Groupand set an appropriate acceptable level and internal control procedures to monitor the risks. The Group regularly reviews the riskmanagement policies and related internal control system to suit the market status and changes in the Group’s operating activities. Theinternal auditing department of the Group will regularly or randomly check the implementation of the internal control system.Risks caused by the Group’s financial instruments are credit risk, liquidity risk and market risk (including interest, exchange rate andproduct price/equity tool price risks).
(1) Credit risk
Credit risk is caused by the failure of one party of a financial instrument in performing its obligations, causing the risk of financialloss for the other party.The Group manages credit risks through classification. The credit risk is mainly caused by bank deposit and receivables.The Group’s bank deposit is mainly deposited in state-owned banks and large-sized listed banks. The credit risk caused by bankdeposited is minor.For receivables, the Group sets up related policies to control the credit risk. The Group set the credit line and term for debtorsaccording to their financial status, external rating, and possibility of getting third-party guarantee, credit record and other factors. TheGroup has adopted a policy of cooperating only with creditworthy counterparties and obtaining sufficient collateral when necessaryto mitigate the risk of financial losses arising from the failure of the counterparty to perform its contractual obligations. The Groupregularly monitors debtors’ credit record. For those with poor credit record, the Group will send written payment reminders, shortenor cancel credit term to lower the general credit risk.
The debtors of the Group's accounts receivable are customers distributed in different industries and regions. The Group continues toperform credit assessments on the financial status of the receivables and when appropriate purchases credit guarantee insurance.The largest credit risk facing the Group is the book value of each financial asset on the balance sheet. The Group makes no guaranteethat may cause the Group credit risks.Among the Group’s receivables, accounts receivable from top 5 customers account for 18.60% of the total accounts receivable (2017:
12.85%); among other receivables, other receivables from top 5 customers account for 66.83% of the total other receivables (2017:
71.91%).
(2) Liquidity risk
Liquidity risk is the risk of capital shortage when the Group needs to pay cash or settled with other financial assets.The Group keeps adequate cash and cash equivalent, and monitors the level to ensure that the cash and cash equivalent can meet theoperation needs. The management of the Group monitors the use of bank loans and ensures that they are used as agreed. The Groupalso obtains guarantee from financial institutions for adequate standby fund to meet short-term and long-term capital demand.The Group can also use fund generated by operating activities and bank and other loans. On 31.12.18, bank loan credit that the Grouphas not used was RMB2,649,754,000 (31.12.17: RMB2,538,021,800).Financial liabilities and excluded guarantees held by the Group by undiscounted residual contract cash flow (in RMB10,000) at theend of the period:
| Closing amount | ||||
| Assets | Less than 1 year | Within 1-3 years | Over 3 years | Total |
| Financial liabilities: | ||||
| Short-term loans | 20,800.00 | 20,800.00 | ||
| Notes payable and accounts payable | 139,987.76 | 14,588.41 | 173.36 | 154,749.53 |
| Employees’ wage payable | 4,451.31 | 4,451.31 | ||
| Other payables | 25,200.85 | 55,107.77 | 1,003.25 | 81,311.87 |
| Non-current liabilities due in 1 year | 20,000.00 | 20,000.00 | ||
| Other current liabilities | 932.87 | 932.87 | ||
| Long-term loans | 119,397.82 | 119,397.82 | ||
| Total liabilities | 211,372.79 | 189,094.00 | 1,176.61 | 401,643.40 |
Financial liabilities and excluded guarantees held by the Group by undiscounted residual contract cash flow (in RMB10,000) at thebeginning of the period:
| Opening amount | ||||
| Assets | Less than 1 year | Within 1-3 years | Over 3 years | Total |
| Financial liabilities: | ||||
| Short-term loans | 61,600.00 | 61,600.00 | ||
| Notes payable and accounts payable | 141,188.66 | 6,732.71 | 9.96 | 147,931.33 |
| Employees’ wage payable | 4,039.91 | 4,039.91 | ||
| Other payables | 15,776.16 | 31,241.89 | 3,343.43 | 50,361.48 |
| Non-current liabilities due in 1 year | 20,000.00 | 20,000.00 | ||
| Other current liabilities | 953.1 | 953.1 | ||
| Long-term loans | 80,000.00 | 9,397.82 | 89,397.82 | |
| Total liabilities | 243,557.83 | 117,974.60 | 12,751.21 | 374,283.64 |
The amount of financial liabilities disclosed in the above table is undiscounted contractual cash flow and may therefore differ fromthe carrying amount in the balance sheet.
(3) Market risk
Market risk of financial instrument is caused by changes in the fair value of financial instruments or future cash flow, includinginterest risk, exchange rate and other price risks.Exchange rate riskInterest rate risk is caused by fluctuation of the fair value or future cash flow of financial instruments caused by changes in themarket interest rate. The interest rate risk can be caused by recognized interest-bearing financial instruments and unrecognizedfinancial instruments.The Group's interest rate risk mainly arises from long-term interest-bearing debts such as long-term bank loans. Financial liabilitieswith floating interest rate cause cash flow interest rate risk for the Group. Financial liabilities with fixed interest rate cause fair valueinterest rate risk for the Group. The Group decides the proportion between fixed interest rate and floating interest rate according tothe market environment and regularly reviews and monitors the combination of fixed and floating interest rate instruments.The Group pays close attention to the risks of changing interest rates. The Group adopts no hedging policies currently. Howevermanagement is responsible for monitoring interest rate risk and will consider hedging significant interest rate risk should the needarise. As fixed deposits are short-term borrowing, the interest rate risk of the fair value of bank deposit is minor.On December 31 2018, the current floating interest rate borrowing was RMB500 million. if the borrowing rate calculated withfloating interest rate rises or falls by 50 basis points, while other factors remain unchanged, the Group's net profit and shareholders'equity will change by RMB90,800. (December 31, 2017: 0)For the financial instruments held on the balance sheet date that expose the Group to fair value interest rate risk, the impact of the netprofit and shareholders' equity in the above sensitivity analysis is measured based on the assumption that the interest rate changes onthe balance sheet date according to the new interest rate. For floating interest rate non-derivatives held on the balance sheet date thatexpose the Group to cash flow interest rate risk, the effect of net profit and shareholder equity in the above sensitivity analysis is theinterest income or income estimated by the above interest rate changes. The previous year's analysis was based on the sameassumptions and methods.Exchange rate riskExchange rate risk is caused by fluctuation of the fair value or future cash flow of financial instruments caused by changes in theforeign exchange rates. The exchange rate risk can be caused by financial instruments priced in foreign currencies.Exchange rate risk is mainly attributable to the Group's financial position and cash flows affected by fluctuations in foreign exchangerates. Except for the subsidiaries established in Hong Kong holding assets in Hong Kong dollars as the settlement currency, there isonly a small amount of investment in the Hong Kong market. The proportion of assets and liabilities held by the Group in foreigncurrency assets and liabilities is not significant. Therefore the Group believes that the exchange rate risk is not significant.The Group pays close attention to the risks of changing exchange rate. The Group takes no measure to prevent other exchange riskscurrently.However management is responsible for monitoring exchange rate risk and will consider hedging significant exchange rate
risk should the need arise.See Note V. 51 Foreign Currency Item Note for the Group’s financial assets and liabilities priced in foreign currencies.Other price risksOther price risks refer to risks of fluctuations caused by changes to market prices, regardless of whether the changes are caused byfactors related to a single financial tool or issuer, or factors related to all similar financial tools traded in the market. Other price riskscome from changes in product prices or equity tool prices.The Group's investment in financial assets classified as fair value through changes in fair value through profit or loss, and investmentproperties measured in fair value are measured at fair value on the balance sheet date. Therefore, the Group bears risks of changes inthe securities market and real estate market prices.The Group closely follows impacts of price changes to the Company’s securities investment price and real estate price risks. TheGroup takes no measure to prevent other price risks currently.The management is responsible for monitoring the other price risks.2. Capital managementThe Group’s capital management aims to ensure continuous operation of the Group, provide returns for shareholders, help otherinterested parties make benefit, and maintain the best capital structure and lower capital cost.The Group may adjust the dividend distributed to shareholders, issue new shares or sell assets to maintain or adjust the capitalstructure.The Group monitors the capital structure based on the assets/liability ratio. On 31.12.18, the Group’s assets/liability ratio is 51.26%(December 31, 2017: 57.52%).
XI. Fair Value
1. Closing fair value of assets and liabilities measured at fair value
In RMB
| Item | Closing fair value | |||
| First level fair value | Second level fair value | Third level fair value | Total | |
| 1. Continuous fair value measurement | -- | -- | -- | -- |
| 2. Leased building | 5,234,401,663.38 | 5,234,401,663.38 | ||
| Total assets measured at fair value continuously | 5,234,401,663.38 | 5,234,401,663.38 | ||
| Derivative financial liabilities | 1,625,725.00 | 1,625,725.00 | ||
| Total assets measured at fair value continuously | 1,625,725.00 | 1,625,725.00 | ||
| 2. Discontinuous fair value measurement | -- | -- | -- | -- |
2. Recognition basis of market value of continuous and discontinuous items measured at first level fairvalue
The Group determines the fair value using quotation in an active market for financial instruments traded in an active market;
Valuation technique and qualitative and quantitative information for key parameters of continuous anddiscontinuous second level fair value items
For investment in real estate similar with real estate transaction, the Group uses valuation techniques to determine its fair value. Thetechnique is comparison and earning method. Inputs include transaction date, status, region and other factors.
4. Switch between different levels, switch reason and switching time policy
In the period, there is no switch in the financial assets measured at fair value between the first and second level or transfer in or out ofthe third level.
5. Fair value of financial assets and liabilities not measured at fair value
Financial assets and liabilities measured at amortized cost include: monetary capital, bills receivable, accounts receivable, otherreceivables, short-term borrowings, notes payable, accounts payables, other payables, and long-term payables.The difference between book value and fair value of financial assets and liabilities not measured at fair value is small.
XII. Related Parties and Transactions
1. Parent of the Company
| Parent | Registered address | Business | Registered capital | Share of the parent co. in the Company | Voting power of the parent company |
| Shenzhen Banglin Technologies Development Co., Ltd. | Shenzhen | Industrial investment | 3,000.00 | 9.85% | 9.85% |
| Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) | Jiujiang | Industrial investment | 1,978.0992 | 2.33% | 2.33% |
| Shengjiu Investment Ltd. | Hong Kong | Industrial investment | HKD1.00 | 8.16% | 8.16% |
Particulars about the parent of the Company1. All of the investors of Shenzhen Banglin Technology Development Co., Ltd., the holding shareholder of the Company, are natural
persons. Among them, Chairman XiongJianming is holding 85% of the shares, and Mr. Xiong Xi – son of Mr. XiongJianming, isholding 15% of the shares.2. Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. areparties action-in-concert. Shenzhen Banglin Technology Development Co., Ltd. and Gong Qing Cheng Shi Li He InvestmentManagement Partnership Enterprise are related parties. The Company is not notified of other action-in-concert or related partiesamong the other holders of current shares.
The final controller of the Company is XiongJianming.Others:
2. Subsidiaries of the Company
See Note IX. 1.
3. Joint ventures and associates
See Note IX. 2 for details of significant joint ventures and associates of the Company.Information about other joint ventures or associates with related transactions in this period or with balance generated by relatedtransactions in previous period:
| Joint venture or associate | Relationship with the Company |
| Shenzhen Ganshang Joint Investment Co., Ltd. | Associate |
| Shenzhen HuihaiYirong Internet Service Co., Ltd. | Associate |
| Jiangxi Business Innovative Property Joint Stock Co., Ltd. | Associate |
| Shenzhen ZhongrongLitai Investment Co. Ltd. (ZhongrongLitai) | JV |
Other noteZhongrongLitai Company was acquired by the project company for the development of Dakang Village. The cooperation agreementstipulated the acquisition of 100% equity. As of December 31 2018 Fangda Real Estate Co. Ltd. the subsidiary of the Company didnot actually pay the investment funds. The agreement pays the deposit the industrial and commercial procedures have been changedand the 55% of the shares are held which is in the common control stage.
4. Other associates
| Other related parties | Relationship with the Company |
| Shenzhen Qijian Technology Co., Ltd. (Qijian Technology) | Common actual controller |
| Director, manager and secretary of the Board | Key management |
| Shenyang party big semiconductor lighting co., LTD. (hereinafter referred to as "shenyang party big company) | The liquidation of the subsidiary |
| Shenzhen varlk semiconductor lighting co., LTD. (hereinafter referred to as "shenzhenvarlk company) | The liquidation of the youthful |
Other note
5. Related transactions(1) Related transactions for purchase and sale of goods, provision and acceptance of services
Sales of goods and services
In RMB
| Affiliated party | Related transaction | Amount occurred in the current period | Occurred in previous period |
| Qijian Technology | Property service and sales of goods | 33,117.82 | 20,126.65 |
| Ganshang Joint Investment | Property service and sales of goods | 10,121.77 | 8,434.81 |
Notes about related transactions for purchase and sale of goods, provision and acceptance of services
(2) Related leasing
The Company is the leasor:
In RMB
| Name of the leasee | Category of asset for lease | Rental recognized in the period | Rental recognized in the period |
| Ganshang Joint Investment | Houses & buildings | 131,516.47 | 125,775.90 |
| Qijian Technology | Houses & buildings | 303,164.32 | 179,744.00 |
(3) Related guarantees
The Company is the guarantor:
In RMB
| Beneficiary party | Amount guaranteed | Start date | Due date | Completed or not |
| FangdaJianke | 300,000,000.00 | 18.08.18 | 31.07.20 | No |
| FangdaJianke | 100,000,000.00 | 12.06.18 | 11.06.19 | No |
| FangdaJianke | 200,000,000.00 | 10.04.18 | 09.04.19 | No |
| FangdaZhichuang | 216,000,000.00 | 06.08.18 | 12.07.20 | No |
| FangdaZhichuang | 150,000,000.00 | 08.03.18 | 08.03.19 | No |
| Fangda New Material | 65,000,000.00 | 01.06.18 | 01.05.19 | No |
| Fangda New Material | 80,000,000.00 | 01.06.18 | 27.11.19 | No |
| Fangda Property | 1,300,000,000.00 | 03.02.15 | 02.02.23 | No |
The Company is the guarantied party:
In RMB
| Gurantor | Amount guaranteed | Start date | Due date | Completed or not |
| FangdaJianke and FangdaZhichuang | 600,000,000.00 | 22.02.18 | 22.02.19 | No |
| FangdaJianke | 250,000,000.00 | 29.09.18 | 29.09.19 | No |
Note to related guarantees1. The above-mentioned guarantees are all associated guarantees within interested entities of the Group.2. HSBC has a total credit of RMB 90 million to the Company, FangdaJianke and FangdaZhichuang and has not yet agreed on thecredit expiration date. HSBC regularly evaluates the credit status. The restriction on the use of the credit is as follows:
The company can use non-financial bank guarantees of up to 90 million yuan to grant credit;
FangdaJianke has non-committed combined revolving credits of not more than RMB90 million including revolving loans of up toRMB90 million, non-financial bank guarantees of up to RMB90 million and bank acceptances of up to RMB90 million.FangdaZhichuang has non-committed combined revolving credits of not more than RMB90 million including revolving loans of upto RMB90 million, non-financial bank guarantees of up to RMB90 million and bank acceptances of up to RMB50 million.
(4) Remuneration of key management
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Directors, supervisors and senior management | 7,215,982.18 | 9,281,475.55 |
6. Receivable and payables due with related parties
(1) Receivable interest
In RMB
| Project | Affiliated party | Closing balance | Opening balance | ||
| Remaining book value | Bad debt provision | Remaining book value | Bad debt provision | ||
| Account receivable | Qijian Technology | 957.79 | 28.73 | 735.00 | 7.35 |
| Other receivables | Shenyang Fangda | 42,877.00 | 42,877.00 | 42,877.00 | 1,286.31 |
| Other receivables | Shenzhen Woke | 865,802.94 | 865,802.94 | 865,802.94 | 86,580.29 |
| Other receivables | ZhongrongLitai | 8,580,127.08 | 257,403.81 | ||
Note If the related party transaction is settled on a net basis the amount due from the related party can be offset by the amount.
XIII. Contingent events
1. Major commitments
Major commitments that exist on the balance sheet day
On November 6, 2017, Fangda Real Estate Co., Ltd., a subsidiary of the Company, and Bangshen Electronics (Shenzhen) Co., Ltd.signed the ―Joint Development Agreement on FangdaBangshen Industrial Park (Temporary Name) Urban Renewal Project‖, and thetwo parties agreed to develop cooperatively. In order to develop urban renewing projects such as a ―renovation project‖, Fangda RealEstate provided Party A with property compensation through renovating and renovating the property allocation terms agreed upon byboth parties, and obtained independent development rights of the project. As of 31.12.18, Fangda Real Estate has paid a deposit ofRMB 20,000,000.(2) In July 2018 ,the company's subsidiary Fangda Real Estate Co. Ltd. (Party A) signed a contract with Shenzhen Yikang RealEstate Co. Ltd. (Party B1) and Shenzhen QianhaiZhongzhengDingfeng No. 6 Investment Enterprise (Limited Partnership) (Party B2),"Shenzhen HenggangDakang Village Project Cooperation Agreement". Party B agrees to transfer the entire equity of the projectcompany it holds and the entire development interest of the project to Party A. Party A shall pay Party B a total of RMB600 millionfor the cooperation price. As of December 31 2018, Fangda Real Estate has paid a guarantee deposit of RMB50 million to Party Band the project company and has paid RMB20 million service fee.(3) The sales contract of Fangda Plaza developed by Fangda Real Estate Co. Ltd., a subsidiary of the Company, stipulates that if thebuyer cannot obtain the "Property Certificate" according to the agreed time limit calculated from the date of the delivery of the housedue to the seller's reasons, the seller shall bear the liability for breach of contract as of 2018. The number of sets that have not beenissued for delivery on December 31 of the year is 439 sets.The Company has no other commitments that should be disclosed by 31.12.18.
2. Contingencies(1) Significant contingencies on the balance sheet date
(1) Contingent liabilities formed by material lawsuit or arbitration, and their influences on the financial positionIn June 2015, FangdaJianke filed a lawsuit against Wang Weihong, requiring an indemnity of RMB23 million and defreezing of theamount RMB23 million by the bank. On June 21 2018, the First Intermediate People's Court of Chongqing Municipality made thefirst-instance judgment and (2008) JuyiZhongfaMinzi No. 01205 civil judgment verdict Wang Weihong paid to FangdaJiankeCompany within 10 days from the effective date of the judgment. The material amount of RMB 6,611,425.54 the paid projectdepartment and construction team salary is 1,292,336.08 yuan the tax paid is 227,909.13 yuan the deduction of his case is executedthe execution amount is 1,150,000.00 yuan and the overdue interest is 4,688,191.35 yuan totaling 13,969,862.10 yuan. FangdaJiankeCompany refused to accept the compensation amount for the first-instance judgment and filed an appeal. At the same time, WangWeihong also filed an appeal. As of the date of this report, the second instance has not yet been decided.On November 27 2018 FangdaJianke Company a subsidiary of the Group filed a lawsuit against Quanzhou Hengan GenerationVenture Capital Co. Ltd. for Quanzhou Hengan Generation Venture Capital Co. Ltd. for the payment of 10394232.91 yuan andoverdue interest payment of 1911122.36 yuan totaling 12305355.27 yuan 2019. It was formally opened on January 21 and has not yetbeen decided.In November 2018，FangdaJianke a subsidiary of the Group sued Fujian Huapu Real Estate Development Co. Ltd. for a payment ofRMB 13810243.67 and its overdue interest payment of RMB 3044545.82 totaling RMB 16854789.49 to the Taijiang DistrictPeople's Court of Fuzhou City. The case has been filed yet.
(2) Pending major lawsuits
On September 6, 2017, Chenghua District People's Court of Chengdu Municipality sentenced Sichuan ChutaHengyuan Industrial Co.,Ltd. to pay construction money to FangdaJianke within 10 days from the date of the verdict 川0108民初1828号RMB10,242,182.99.As of the date of this report, FangdaJianke has applied for execution and has not received the relevant payment.On September 10 2018， the People's Court of Lixia District of Jinan City sentenced Shandong Zhonghong Real Estate Co. Ltd. tothe Company for payment of 5960429.45 yuan within 10 days from the date of the effective date of the (2018) Lu 0102 Minchu 5367civil judgment. As of the date of this report, FangdaJianke has applied for execution and has not received the relevant payment.
(3) Contingent liabilities formed by providing of guarantee to other companies’ debts and their influences on financial situationBy December 31, 2013, the Company has provided loan guarantees for the following entities:
| Name of guaranteed entity | Guarantee | Amount (in RMB10,000) | Start date | End date |
| Fangda Property | Pledge guarantee | 2,490.49 | 2015/11/6 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 545.76 | 2015/11/20 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 2388.91 | 2015/12/9 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 4,614.39 | 2015/12/28 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 4241.27 | 2016/1/26 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 4,260.74 | 2016/1/29 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 343.47 | 2016/3/28 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 3,615.06 | 2016/4/27 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 1,157.69 | 2016/5/22 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 414.66 | 2016/5/30 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 3,113.99 | 2016/6/13 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 1,465.99 | 2016/6/24 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 4415.64 | 2016/7/26 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 4,813.23 | 2016/8/15 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 5,519.40 | 2016/9/7 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 15,048.01 | 2016/10/8 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 7,628.15 | 2016/11/7 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 6,140.11 | 2016/11/30 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 9,889.21 | 2017/1/19 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 1,830.24 | 2017/5/31 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 2,581.45 | 2017/6/28 | 2023/2/11 |
| Fangda Property | Pledge guarantee | 2,879.95 | 2017/8/30 | 2023/2/11 |
| Total | 89,397.81 |
Note: Contingent liabilities caused by guarantees provided for other entities are all related guarantees between interested entities inthe Group.
(4) Providing guarantee for property purchasersThe Group’s property business provides periodic mortgage guarantee for property purchasers. The term of the periodic guaranteelasts from the effectiveness of guarantee contracts to the completion of mortgage registration and transfer of housing ownershipcertificates to banks. By December 31, 2018, the Company has provided periodic guarantee of RMB778 million.On 31.12.18, the Company has no other contingent events that should be disclosed.
(2) Significant contingent events that do not need to be disclosed should be explained
No such significant contingent event
XIV. Post-balance-sheet events
1. Profit distribution
In RMB
| Profit or dividend to be distributed | 224,676,837.80 |
| Profit or dividend approved to be distributed | 224,676,837.80 |
2. Notes to other issues in post balance sheet period
The Company held the 10th meeting of the 8th Board of Directors and the 1st Extraordinary General Meeting of Shareholders in2018 on September 10 2018 and September 27 2018 respectively and reviewed and approved the repurchase of some domesticallylisted foreign shares (B shares) from January 1 2019 to January 3 2019 of 28,427,250 shares through a centralized bidding method.The highest price was HK$3.58 per share, the lowest price was HK$3.31 per share and the actual payment was HK$100700189.39(including transaction costs). The company has completed the repurchase and cancellation of 320,97,497.00 shares (including3670247.00 shares that have been repurchased on December 31, 2018) on January 11, 2019.On 28.01.19, the Company has no other contingent events that should be disclosed.
XV. Other material events
1. Suspension of operations
In RMB
| Item | Income | Expense | Total profit | Income tax expenses | Net profit | Suspended operation profit attributable to the owners of parent company |
| Suspension of operations | 220,214.40 | -220,214.40 | -220,214.40 | -220,214.40 |
Other note
Shenyang Decoration completed the industrial and commercial cancellation procedures in April 2018. KeXunda completed the taxcancellation in November 2018 and the industrial and commercial cancellation procedures have not been completed by the reportingdate.(2) The net profit of termination of operations in 2018 includes KeXunda's net profit for the period is -220214.40 yuan.(3) The discontinued operating net profit for 2017 includes: Shenyang Decoration's net profit for the current period of RMB-8,074.07, Fangda Aluminum’s net profit for the period of RMB 6,340,920.55, and Fangda SOZN’s net profit for the period of RMB16,606,951.20.
2. Segment information(1) Recognition basis and accounting policy for segment report
The Group divides its businesses into five reporting segments. The reporting segments are determined based on financial informationrequired by routine internal management. The Group’s management regularly review the operating results of the reporting segmentsto determine resource distribution and evaluate their performance.The reporting segments are:
(1) Curtain wall segment, production and sales of curtain wall materials, construction curtain wall design, production and installation;(2) Rail transport segment: assembly and processing of metro screen doors;(3) Real estate segment: development and operating of real estate on land of which land use right is legally obtained by the Company;property management;(4) New energy segment, R&D, installation and sales of PV devices, design and construction of PV power plants; R&D, design,production, sales and installation of light accessories, and other lights, LED products and hardware.
(5) Others
The segment report information is disclosed based on the accounting policies and measurement standards used by the segments whenreporting to the management. The policies and standards should be consistent with those used in preparing the financial statement.
(2) Financial information
In RMB
| Item | Curtain wall | Rail transport | Real estate | New energy | Others | Offset between segments | Total |
| Turnover | 2,013,294,159.21 | 297,686,976.09 | 701,427,764.66 | 20,475,462.99 | 30,820,705.56 | 15,024,916.45 | 3,048,680,152.06 |
| Including: external | 2,010,704,004.96 | 297,686,976.09 | 697,518,090.10 | 19,625,478.18 | 23,145,602.73 | 0.00 | 3,048,680,152.06 |
| transaction income | |||||||
| Inter-segment transaction income | 2,590,154.25 | 3,909,674.56 | 849,984.81 | 7,675,102.83 | 15,024,916.45 | ||
| Including: major business turnover | 1,985,502,123.31 | 294,941,334.54 | 691,416,438.03 | 20,475,462.99 | 4,759,659.39 | 2,987,575,699.48 | |
| Operation cost | 1,721,556,010.17 | 222,509,233.98 | 399,820,333.15 | 7,723,226.59 | 1,604,559.26 | 15,265,352.73 | 2,337,948,010.42 |
| Including: major business cost | 1,704,411,374.49 | 222,027,603.18 | 393,698,880.58 | 7,723,226.59 | 1,604,559.26 | 15,313,658.45 | 2,314,151,985.65 |
| Operation cost | 34,962,227.67 | 19,856,814.30 | -2,560,679,393.86 | 1,743,249.36 | 56,449,116.61 | -188,435,404.92 | -2,259,232,581.00 |
| Operating profit/(loss) | 256,775,921.37 | 55,320,927.81 | 2,862,286,825.37 | 11,008,987.04 | -27,232,970.31 | 188,194,968.64 | 2,969,964,722.64 |
| Total assets | 3,346,940,616.51 | 494,834,450.82 | 6,314,228,331.13 | 174,423,700.91 | 2,864,290,133.79 | 2,535,863,099.43 | 10,658,854,133.73 |
| Total liabilities | 2,152,419,243.80 | 281,239,506.31 | 3,141,101,213.37 | 98,881,013.81 | 1,188,122,606.46 | 1,398,097,071.90 | 5,463,666,511.85 |
Note: The financial information of the reportable segment should be disclosed in conjunction with the company's specific conditionsincluding information on the main business income and the cost of the main business.
XVI. Notes to Financial Statements of the Parent
1. Receivable note and accounts receivable
In RMB
| Item | Closing balance | Opening balance |
| Notes receivable | 200,000,000.00 | |
| Account receivable | 471,039.12 | 408,154.54 |
| Total | 200,471,039.12 | 408,154.54 |
(1) Notes receivable
1) Classification of notes receivable
In RMB
| Item | Closing balance | Opening balance |
| Commercial acceptance | 200,000,000.00 |
| Total | 200,000,000.00 |
(2) Account receivable
1) Account receivable disclosed by categories
In RMB
| Type | Closing balance | Opening balance | ||||||||
| Remaining book value | Bad debt provision | Book value | Remaining book value | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Provision rate | Amount | Proportion | Amount | Provision rate | |||
| Recognition and providing of bad debt provisions on groups | 485,607.34 | 100.00% | 14,568.22 | 3.00% | 471,039.12 | 420,777.88 | 100.00% | 12,623.34 | 3.00% | 408,154.54 |
| Total | 485,607.34 | 100.00% | 14,568.22 | 3.00% | 471,039.12 | 420,777.88 | 100.00% | 12,623.34 | 3.00% | 408,154.54 |
Account receivable with major individual amount and bad debt provision provided individually at the end of the period:
□ Applicable √ InapplicableIn the group, the account receivable of which bad debt provision is made through the account aging method:
√ Applicable □ Inapplicable
In RMB
| Age | Closing balance | ||
| Account receivable | Bad debt provision | Provision rate | |
| Sub-item of within 1 year | |||
| Less than 1 year | 485,607.34 | 14,568.22 | 3.00% |
| Subtotal for less than 1 year | 485,607.34 | 14,568.22 | 3.00% |
| Total | 485,607.34 | 14,568.22 | 3.00% |
Group recognition basis:
Account receivable adopting the balance percentage method in the group2) Bad debt provision made, returned or recovered in the periodA bad debt provision of RMB1,944.88 was made in the period. RMB0.00 was recovered or reversed. 3) Balance of top 5 accountsreceivable at the end of the periodThe total balance of top-five accounts receivable at the end of the period is RMB4,517,278,600, accounting for 93.02% of the totalremaining balance of all accounts receivable. The bad debt provision made at the end of the period is RMB135,518,400.
2. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Interest receivable | 1,020,000.00 | |
| Dividend receivable | 100,000,000.00 | 150,000,000.00 |
| Other receivables | 722,543,653.04 | 672,773,780.45 |
| Total | 822,543,653.04 | 823,793,780.45 |
Note: The other receivables in the above table refer to other receivables after deducting interest receivable and dividends receivable.
(1) Receivable interest
1) Receivable interest
In RMB
| Item | Closing balance | Opening balance |
| Bank financial products | 1,020,000.00 | |
| Total | 1,020,000.00 |
2. Receivable dividend
1. Receivable dividend
In RMB
| Item (or invested entity) | Closing balance | Opening balance |
| Fangda Property | 100,000,000.00 | 150,000,000.00 |
| Total | 100,000,000.00 | 150,000,000.00 |
(3) Other receivables
1) Other receivables disclosed by categories
In RMB
| Type | Closing balance | Opening balance | ||||||||
| Remaining book value | Bad debt provision | Book value | Remaining book value | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Provision rate | Amount | Proportion | Amount | Provision rate | |||
| Other receivables with major individual amount and bad debt provision provided individually | 13,030,000.00 | 1.77% | 13,030,000.00 | 100.00% | 13,150,000.00 | 1.92% | 13,150,000.00 | 100.00% | ||
| (2) Recognition and providing of bad debt provisions on groups | 722,647,872.78 | 98.11% | 104,219.74 | 0.01% | 722,543,653.04 | 672,959,963.61 | 98.08% | 186,183.16 | 0.03% | 672,773,780.45 |
| Other receivables with minor individual amount and bad debt provision provided individually | 908,679.94 | 0.12% | 908,679.94 | 100.00% | ||||||
| Total | 736,586,552.72 | 100.00% | 14,042,899.68 | 1.91% | 722,543,653.04 | 686,109,963.61 | 100.00% | 13,336,183.16 | 1.94% | 672,773,780.45 |
Other receivables with major individual amount and bad debt provision provided individually at the end of the period:
√ Applicable □ Inapplicable
In RMB
| Other receivables (by entity) | Closing balance | |||
| Other receivables | Bad debt provision | Provision rate | Reason | |
| Luo Huichi | 13,030,000.00 | 13,030,000.00 | 100.00% | Unrecoverable |
| Total | 13,030,000.00 | 13,030,000.00 | -- | -- |
In the group, the other receivables of which bad debt provision are made through the account aging method:
√ Applicable □ Inapplicable
In RMB
| Age | Closing balance | ||
| Other receivables | Bad debt provision | Provision rate | |
| Sub-item of within 1 year | |||
| Less than 1 year | 1,117,339.95 | 3,520.20 | 3.00% |
| Subtotal for less than 1 year | 117,339.95 | 3,520.20 | 3.00% |
| Over 5 years | 100,699.54 | 100,699.54 | 100.00% |
| Total | 218,039.49 | 104,219.74 | 47.80% |
Group recognition basis:
Other receivables adopting the balance percentage method in the group:
□ Applicable √ InapplicableOther receivables adopting other methods in the group□ Applicable √ Inapplicable2) Bad debt provision made, returned or recovered in the periodA bad debt provision of RMB706,716.52 was made in the period. RMB0.00 was recovered or reversed.3) Other receivables are disclosed by nature
In RMB
| By nature | Closing balance of book value | Opening balance of book value |
| Associate accounts | 722,429,833.29 | 671,896,683.41 |
| Other trades | 14,156,719.43 | 14,213,280.20 |
| Total | 736,586,552.72 | 686,109,963.61 |
4) Balance of top 5 other receivables at the end of the period
In RMB
| Entity | By nature | Closing balance | Age | Percentage (%) | Balance of bad debt provision at the end of the period |
| FangdaJianke | Associate accounts | 473,183,777.60 | Less than 1 year | 64.24% | |
| Fangda New Energy | Associate accounts | 90,710,949.29 | Less than 1 year | 12.32% | |
| Fangda New Material | Associate accounts | 84,333,277.85 | Less than 1 year | 11.45% | |
| Shihui International | Associate accounts | 30,459,793.09 | Less than 1 year | 4.14% | |
| Jiangxi Property Development | Associate accounts | 27,845,287.03 | Less than 1 year | 3.78% | |
| Total | -- | 706,533,084.86 | -- | 95.93% |
3. Long-term share equity investment
In RMB
| Item | Closing balance | Opening balance | ||||
| Remaining book value | Impairment provision | Book value | Remaining book value | Impairment provision | Book value | |
| Investment in subsidiaries | 983,339,494.35 | 983,339,494.35 | 925,349,494.35 | 925,349,494.35 | ||
| Total | 983,339,494.35 | 983,339,494.35 | 925,349,494.35 | 925,349,494.35 | ||
(1) Investment in subsidiaries
In RMB
| Invested entity | Opening balance | Increase | Decrease | Closing balance | Provision made in this period | Balance of impairment provision at the end of the period |
| FangdaJianke | 491,950,000.00 | 491,950,000.00 | ||||
| FangdaZhichuang | 18,831,241.35 | 18,831,241.35 | ||||
| Fangda New Material | 74,496,600.00 | 74,496,600.00 | ||||
| Fangda Property | 200,000,000.00 | 200,000,000.00 | ||||
| Shihui International | 61,653.00 | 61,653.00 | ||||
| Hongjun Investment | 40,010,000.00 | 57,990,000.00 | 98,000,000.00 |
| Company | ||||||
| Fangda New Energy | 100,000,000.00 | 100,000,000.00 | ||||
| Total | 925,349,494.35 | 57,990,000.00 | 983,339,494.35 |
4. Operational revenue and costs
In RMB
| Item | Amount occurred in the current period | Occurred in previous period | ||
| Income | Cost | Income | Cost | |
| Other businesses | 30,830,762.76 | 1,604,559.26 | 29,333,583.31 | 2,041,826.84 |
| Total | 30,830,762.76 | 1,604,559.26 | 29,333,583.31 | 2,041,826.84 |
Others:
5. Investment income
In RMB
| Item | Amount occurred in the current period | Occurred in previous period |
| Gains from long-term equity investment measured by costs | 117,000,000.00 | 150,000,000.00 |
| Gains from long-term equity investment measured by equity | -2,142,252.28 | |
| Investment gain obtained from disposal of long-term equity investment | 5,037,221.60 | |
| Investment gain obtained from disposal of financial assets measured at fair value with variations accounted into current income account | 23,142,680.38 | 77,348,884.05 |
| Investment gain obtained from disposal of financial assets measured at fair value with variations accounted into current income account | -22,524,021.60 | -77,045,286.87 |
| Investment gain of financial products | 6,515,338.51 | 4,941,935.94 |
| Others | -2,000.00 | |
| Total | 124,133,997.29 | 158,138,502.44 |
XVII. Supplementary Materials
1. Detailed accidental gain/loss
√ Applicable □ Inapplicable
In RMB
| Item | Amount | Notes |
| Gain/loss of non-current assets | -5,080,792.02 | |
| Subsidies accounted into the current income account (except the government subsidy closely related to the enterprise’s business and based on unified national standard quota) | 5,931,937.15 | |
| Capital using expense charged to non-financial enterprises and accounted into the current income account | 922,330.10 | |
| Gain from entrusted investment or assets management | 27,065,331.33 | |
| Gain/loss from change of fair value of transactional financial asset and liabilities, and investment gains from disposal of transactional financial assets and liabilities and sellable financial assets, other than valid period value instruments related to the Company’s common businesses | -1,192,774.07 | |
| Gain/loss from change of fair value of investment property measured at fair value in follow-up measurement | 2,916,598,485.48 | |
| Other non-business income and expenditures other than the above | 1,675,521.71 | |
| Less: Influenced amount of income tax | 720,926,531.10 | |
| Total | 2,224,993,508.58 | -- |
Note: Each non-recurring profit and loss item is presented based on the pre-tax amount.
Explanation statement should be made for accidental gain/loss items defined and accidentalgain/loss items defined as regular gain/loss items according to the Explanation Announcement of
Information Disclosure No. 1 - Non-recurring gain/loss mentioned.
□ Applicable √ Inapplicable
2. Net income on asset ratio and earning per share
| Profit of the report period | Weighted average net income/asset ratio | Earning per share |
| Basic earnings per share (yuan/share) | Diluted Earnings per share (yuan/share) | ||
| Net profit attributable to common shareholders of the Company | 53.17% | 1.91 | 1.91 |
| Net profit attributable to the common owners of the PLC after deducting of non-recurring gains/losses | 0.50% | 0.02 | 0.02 |
3. Differences in accounting data under domestic and foreign accounting standards(1) Differences in net profits and assets in financial statements disclosed according to the international andChinese account standards
□ Applicable √ Inapplicable
(2) Differences in net profits and assets in financial statements disclosed according to the international andChinese account standards
□ Applicable √ Inapplicable
Chapter XII Documents for Reference
1. The Annual Report 2018 and the Summary with signature of the legal representative (Chinese and English);2. Accounting Statements with signatures and seals of the legal representative and financial principal and chief ofaccounting department;3. Original copy of the Auditors’ Report under the seal of the CPA and signed by and under the seal of certifiedaccountants.4. Originals of all documents and manuscripts of Public Notices of the Company disclosed in public in thenewspapers as designated by China Securities Regulatory Commission.