SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
April 2021
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Section I. Important Notice, Contents and Interpretation
Board of Directors, Supervisory Committee, all directors, supervisors and senior
executives of Shenzhen Zhongheng HUAFA Co., Ltd. (hereinafter referred to as
the Company) hereby confirm that there are no any fictitious statements,
misleading statements, or important omissions carried in this report, and shall
take all responsibilities, individual and/or joint, for the reality, accuracy and
completion of the whole contents.
Li Zhongqiu, Principal of the Company, Yang Bin, person in charger of
accounting works and Wu Ai’jie, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of 2020 Annual
Report is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
Concerning the forward-looking statements with future planning involved in the
Report, they do not constitute a substantial commitment for investors. Majority
investors are advised to exercise caution of investment risks.
Risks factors are being well-described in the Report, found more in risks factors
and countermeasures disclosed in Prospects for Future Development of the
Board of Directors’ Report.
The Company has no plan of cash dividends carried out, bonus issued and
capitalizing of common reserves either.
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Contents
Section I Important Notice, Contents and Interpretation ........................................................... 2
Section II Company Profile and Main Financial Indexes ............................................................ 5
Section III Summary of Company Business............................................................................... 10
Section IV Discussion and Analysis of the Operation ................................................................ 11
Section V Important Events ........................................................................................................ 23
Section VI Changes in shares and particular about shareholders............................................. 42
Section VII Preferred Stock ........................................................................................................ 50
section VIII Convertible Bonds.......................................................................................................51
Section IX Particulars about Directors, Supervisors, Senior Executives and Employees ........ 52
Section X Corporate Governance ............................................................................................... 60
Section XI Corporate bond ......................................................................................................... 66
Section XII Financial Report ...................................................................................................... 67
Section XIII Documents available for reference ...................................................................... 198
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Interpretation
Items Refers to Contents
Company, Shen HUAFA Refers to SHENZHEN ZHONGHENG HUAFA CO., LTD.
Hengfa Technology Refers to Wuhan Hengfa Technology Co., Ltd.
HUAFA Property Refers to Shenzhen Zhongheng HUAFA Property Co., Ltd
HUAFA Lease Refers to Shenzhen HUAFA Property Lease Management Co., Ltd
HUAFA Trade Refers to Wuhan Zhongheng HUAFA Trade Co., Ltd.
Wuhan Zhongheng New Science & Technology Industrial Group Co.,
Wuhan Zhongheng Group Refers to
Ltd
HK Yutian Refers to Hong Kong Yutian International Investment Co., Ltd.
Hengsheng Photo-electricity Refers to Wuhan Hengsheng Photo-electricity Industry Co., Ltd.
Hengsheng Yutian Refers to Wuhan Hengsheng Yutian Industrial Co., Ltd.
Yutian Henghua Refers to Shenzhen Yutian Henghua Co., Ltd.
HUAFA Hengtian Refers to Shenzhen HUAFA Hengtian Co., Ltd.
HUAFA Hengtai Refers to Shenzhen HUAFA Hengtai Co., Ltd.
Shenzhen Vanke Real Estate Co., Ltd., now renamed as Shenzhen
Shenzhen Vanke Refers to
Vanke Development Co., Ltd.
Vanke Guangming Refers to Shenzhen Vanke Guangming Real Estate Development Co., Ltd
V& T Law Firm Refers to Shenzhen V& T Law Firm
Zhongheng Semiconductor (former Shenzhen Zhongheng Semiconductor Co., Ltd. (former “Zhongheng
Refers to
“Huafa Technology ”) Huafa Technology Co., Ltd”)
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Section II. Company Profile and Main Financial Indexes
I. Company profile
Short form of the stock Shen HUAFA A, Shen HUAFA B Stock code 000020, 200020
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
深圳中恒华发股份有限公司
Chinese)
Short form of the Company
深华发
(in Chinese)
Foreign name of the
SHENZHEN ZHONGHENG HUAFA CO., LTD.
Company (if applicable)
Legal representative Li Zhongqiu
Registrations add. 411 Bldg., Huafa (N) Road, Futian District, Shenzhen
Code for registrations add 518031
Offices add. 6/F, East Tower, No.411 Building, Huafa (N) Road, Futian District, Shenzhen
Codes for office add. 518031
Company’s Internet Web
http://www.hwafa.com.cn
Site
E-mail huafainvestor@126.com.cn
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Niu Zhuo
618, 6/F, East Tower, Huafa Building,
Contact add. No.411 Building, Huafa (N) Road,
Futian District, Shenzhen
Tel. 0755-86360201
Fax. 0755-86360206
E-mail huafainvestor@126.com.cn
III. Information disclosure and preparation place
Newspaper appointed for information disclosure Securities Times; Hong Kong Commercial Daily
Website for annual report publish appointed by http://www.cninfo.com.cn
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
CSRC
Preparation place for annual report Office of the Board of SHENZHEN ZHONGHENG HUAFA CO., LTD.
IV. Registration changes of the Company
Organization code Before change: 61883037-2; after changed: 91440300618830372G
Before the change of controlling shareholders: the main business was production and
sales of color TV, printed circuit board and injection molded parts etc. After the
Changes of main business since listing
change of controlling shareholders: the main business gradually adjusted to
(if applicable)
production and sales of injection molded parts, foam part (light packaging materials)
and LCD whole machine.
The Company’s predecessor was Shenzhen Huafa Electronic Co., LTD, which was
founded in 1981, initiated and established by three legal persons-- Shenzhen
Electronics Group Co., LTD, China Zhenhua Electronic Group Co., LTD and Hong
Kong Luks Industrial Co., LTD. In June 2005, Wuhan Zhongheng Group transferred
Previous changes for controlling the 44.12% equity of company, held by original first and second largest shareholder
shareholders (if applicable) of the Company Shenzhen Electronics Group Co., LTD and China Zhenhua
Electronic Group Co., LTD, and equity transfer formalities completed in April 2007;
Wuhan Zhongheng Group became the controlling shareholder of the Company. In
September 2007, the company officially changed its name to “Shenzhen Zhongheng
HUAFA Co., Ltd”.
V. Other relevant information
CPA engaged by the Company
Name of CPA WUYIGE Certified Public Accountants LLP
Offices add. for CPA 15/F College International Mansion, No.1 Zhi Chun Road, Haidian District, Beijing
Signing Accountants Fan Zhang, Yang Ting
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes √ No
Changes over last
2020 2019 2018
year(+,-)
Operating income(RMB) 691,742,269.12 721,557,440.51 -4.13% 637,046,707.03
Net profit attributable to 6,830,187.40 5,460,049.15 25.09% 3,295,022.72
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
shareholders of the listed
company(RMB)
Net profit attributable to
shareholders of the listed
company after deducting 4,103,393.55 4,843,096.96 -15.27% 1,535,043.65
non-recurring gains and
losses(RMB)
Net cash flow arising from
59,719,269.60 74,463,707.01 -19.80% -21,894,459.66
operating activities(RMB)
Basic earnings per
0.0241 0.0193 24.87% 0.0116
share(RMB/Share)
Diluted earnings per
0.0241 0.0193 24.87% 0.0116
share(RMB/Share)
Weighted average ROE 2.05% 1.67% 0.38% 1.02%
Changes over end of
Year-end of 2020 Year-end of 2019 Year-end of 2018
last year
Total assets(RMB) 627,779,621.06 614,163,899.86 2.22% 617,090,153.46
Net assets attributable to
shareholder of listed 336,248,737.29 329,428,049.89 2.07% 323,968,000.74
company(RMB)
The lower of the company’s net profit before or after deduction of non-recurring profit (gain)/loss for the last three financial years is
negative, and the audit report for the latest year indicates that there is uncertainty about the company’s ability to continue as a going
concern
□Yes √No
The lower of the net profit before or after deduction of non-recurring profit (gain)/loss is negative
□Yes √No
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VIII. Quarterly main financial index
In RMB
Q1 Q2 Q3 Q4
Operating income 87,800,584.55 212,902,836.83 200,183,800.78 190,855,046.96
Net profit attributable to
shareholders of the listed -400,741.17 3,566,338.72 1,685,488.94 2,496,470.28
company
Net profit attributable to
shareholders of the listed
-208,179.52 3,376,075.98 1,108,517.51 344,348.95
company after deducting
non-recurring gains and losses
Net cash flow arising from
7,931,308.59 13,268,903.65 -7,509,489.19 46,028,546.55
operating activities
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the company’s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item 2020 2019 2018 Note
Gains/losses from the disposal of
non-current asset (including the write-off 817,533.49 9,298.34 49,159.75
that accrued for impairment of assets)
Governmental subsidy reckoned into
current gains/losses (not including the
subsidy enjoyed in quota or ration 2,728,618.05 534,380.00 3,795,820.00
according to national standards, which are
closely relevant to enterprise’s business)
Gain/loss of entrusted investment or assets
165,317.73 180,964.60 326,439.49
management
Switch back of provision for depreciation
of account receivable and contractual
553,901.68
assets which were singly taken
depreciation test
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Other non-operating income and
expenditure except for the aforementioned -385,232.40 -424,941.86 -167,795.70
items
Loss on assignment of claims -2,158,200.00
Less: Impact on income tax 599,443.02 236,650.57 85,444.47
Total 2,726,793.85 616,952.19 1,759,979.07 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Section III. Summary of Company Business
I. Main businesses of the company in the reporting period
After years of development, the company has gradually formed two main businesses in industry and property
management. Among them, the industrial business mainly includes injection molding, polylon (light-weight
packaging materials), and complete machine production and sales of liquid crystal display, property management
business is mainly the lease of its own property.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Equity assets No major change
Fixed assets No major change
Intangible assets No major change
Construction in progress No major change
2. Main overseas assets
□ Applicable √ Not applicable
III. Core competitiveness analysis
All industrial lands of the Company located in Shenzhen were taken into the first batch of plan under 2010
Shenzhen urban upgrade planning. In the future, development and operation of self-owned land resources would
become the income source of the Company on a long-term and stable basis.
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Section IV. Discussion and Analysis of Operation
1. Introduction
2020 was a very unusual year, the sudden outbreak of COVID-19 epidemic caused the company's important
subsidiary in Wuhan to be affected by the epidemic, the resumption of work and production was later than in other
areas of the country, and the loss of orders was relatively serious. Faced with such a difficult business
environment, all employees of the company worked together to actively overcame the adverse effects of the
epidemic, complied with the industry environment and the adjustment of national policies, broke through thinking
and management strategies, and achieved good operating results.
In 2020, the company achieved operating revenue of 691.7423 million yuan, a decrease of 4.13% on a
year-on-year basis, total profits of 8.82 million yuan, increased by 13.76% compared with the same period last
year, net profit amounted to 6.8302 million yuan, a 25.09% up from a year earlier.
●Video service business achieved annual operating income of 396.06 million yuan, an increase of 19.29% on a
year-on-year basis, operation profit amounted as 6.4795 million yuan with 132.49% up from a year earlier. During
the reporting period, the Video Business Division adjusted the product structure and optimized the sales ratio of
each brand of products. The sales ratio of AOC, VSCN and VSC series brands have increased, which opened
online sales channels such as Jingdong while completing existing customer orders, and sold 900,000 LCD
monitors in 2020, an increase of 9.68% over last year.
●Injection molding business achieved annual operating income of 185.4917 million yuan, a decrease of 25.86%
over the same period last year, operation profit amounted as 548,600 yuan, an increase of 2.39% from a year
earlier. With the unceasingly fierce competition in the market, the profit margin of injection molding was
squeezed, but the new production line put into production by this business division at the end of 2018 gave full
play to its automation advantages in 2020, which greatly improved production efficiency and reduced production
costs. The injection molding division achieved annual sales volume of 9,900 tons, completed the annual sales
target.
●Polylon business achieved annual operating income of 35.8333 million yuan, a decrease of 44.30% over the
same period last year. Actual sales for the year were 2,500 tons, basically reaching the sales target. In order to
better fulfill the sales target of 2021, the EPS business division maintained existing orders, increased the
proportion of structural parts orders, developed new customer resources, and strive to accept more domestic and
foreign large-scale household appliance customers’ orders.
●The property rental business achieved annual operating income of 40.5875 million yuan, an increase of 4.55%
from a year earlier, operating profit amounted as 6 million yuan with a growth of 7.86% over that of lat year. In
2020, the company optimized the structural proportion of commercial tenants, and the occupancy rate was greatly
improved, at the same time, the company strictly controlled costs and reduced unnecessary expenditures.
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Therefore, the company’s overall rental profits increased significantly compared with the previous year.
II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of Operation”
2. Revenue and cost
(1) Constitute of operating income
In RMB
2020 2019
Increase/decrease
Ratio in operation Ratio in operation
Amount Amount y-o-y (+,-)
income income
Total operation
691,742,269.12 100% 721,557,440.51 100% -4.13%
income
According to industries
Display 396,060,015.82 57.26% 332,014,645.59 46.01% 19.29%
Plastic injection
185,491,674.08 26.82% 250,187,919.33 34.67% -25.86%
hardware
EPS products 35,833,322.61 5.18% 64,330,319.24 8.92% -44.30%
Property leasing 40,587,453.21 5.87% 38,819,374.89 5.38% 4.55%
Scrap income 424,864.96 0.06% 30,416,394.86 4.22% -98.60%
Utilities and others 33,344,938.44 4.82% 5,788,786.60 0.80% 476.03%
According to products
Display 396,060,015.82 57.26% 332,014,645.59 46.01% 19.29%
Plastic injection
185,491,674.08 26.82% 250,187,919.33 34.67% -25.86%
hardware
EPS products 35,833,322.61 5.18% 64,330,319.24 8.92% -44.30%
Property leasing 40,587,453.21 5.87% 38,819,374.89 5.38% 4.55%
Scrap income 424,864.96 0.06% 30,416,394.86 4.22% -98.60%
Utilities and others 33,344,938.44 4.82% 5,788,786.60 0.80% 476.03%
According to region
Overseas 89,452,347.92 12.93% 46,013,771.11 6.38% 94.40%
Central China 559,316,357.64 80.86% 632,345,774.07 87.64% -11.55%
South China 42,973,563.56 6.21% 43,197,895.33 5.99% -0.52%
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
(2) About the industries, products, or regions accounting for over 10% of the company’s operating income
or operating profit
√Applicable □ Not applicable
In RMB
Increase/decrea
Increase/decrea Increase/decrea
Operating Gross profit se of gross
Operating cost se of operating se of operating
income ratio profit ratio
income y-o-y cost y-o-y
y-o-y
According to industries
Display 396,060,015.82 369,785,369.91 6.63% 19.29% 19.09% 0.15%
Plastic
injection 185,491,674.08 168,053,472.02 9.40% -25.86% -24.71% -1.39%
hardware
EPS products 35,833,322.61 37,890,056.81 -5.74% -44.30% -39.07% -9.07%
Property
40,587,453.21 5,329,922.72 86.87% 4.55% 115.05% -6.75%
leasing
According to products
Display 396,060,015.82 369,785,369.91 6.63% 19.29% 19.09% 0.15%
Plastic
injection 185,491,674.08 168,053,472.02 9.40% -25.86% -24.71% -1.39%
hardware
EPS products 35,833,322.61 37,890,056.81 -5.74% -44.30% -39.07% -9.07%
Property
40,587,453.21 5,329,922.72 86.87% 4.55% 115.05% -6.75%
leasing
According to region
Overseas 89,452,347.92 78,686,490.50 12.04% 94.40% 87.74% 3.13%
Central China 528,166,573.20 497,562,335.89 5.79% -12.05% -10.28% -1.86%
South China 40,353,544.60 4,809,995.07 88.08% 4.55% 115.05% -5.54%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
latest one year’s scope of period-end
□ Applicable √ Not applicable
(3) Income from physical sales larger than income from labors
√ Yes □ No
According to Increase/decrease(
Item Unit 2020 2019
industries +,-) y-o-y
Display Sales volume Set 900,704 821,188 9.68%
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Output Set 876,231 881,992 -0.65%
Storage Set 16,555 41,028 -59.65%
Sales volume Ton 9,902.24 10,701.62 -7.47%
Plastic injection
Output Ton 10,272.97 10,538.27 -2.52%
hardware
Storage Ton 918.25 547.52 67.71%
Sales volume Ton 2,511.02 3,902.94 -35.66%
EPS products Output Ton 2,508.54 3,886.34 -35.45%
Storage Ton 214.41 216.89 -1.14%
Reasons for y-o-y relevant data with over 30% changes
√Applicable □ Not applicable
Storage of display declined mainly due to the soaring sales volume in the period. Storage of plastic injection hardware mainly due to
the stock up in the Period. Order from EPS declined in the Period.
(4) Fulfillment of the company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
(5) Constitute of operation cost
Category of products
In RMB
Category of 2020 2019
Increase/decrea
products Item Ratio in Ratio in
Amount Amount se(+,-) y-o-y
operation cost operation cost
Display Raw materials 356,756,101.94 96.48% 297,635,346.58 95.85% 0.63%
Display Labor wages 4,188,729.59 1.13% 8,056,874.03 2.59% -1.46%
Display Depreciation 3,420,883.01 0.93% 2,707,468.22 0.87% 0.06%
Plastic
injection Raw materials 128,039,531.19 76.19% 188,922,768.85 84.54% -8.35%
hardware
Plastic
injection Labor wages 13,052,940.69 7.77% 19,712,637.41 8.82% -1.05%
hardware
Plastic
injection Depreciation 3,694,753.86 2.20% 3,758,398.37 1.68% 0.52%
hardware
Plastic
injection Utilities 6,028,382.94 3.59% 6,020,663.99 2.69% 0.90%
hardware
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
EPS products Raw materials 20,188,707.50 53.28% 37,579,378.81 60.43% -7.15%
EPS products Labor wages 3,585,503.44 9.46% 9,502,156.33 15.28% -5.82%
EPS products Depreciation 1,331,746.04 3.51% 1,545,988.21 2.49% 1.02%
EPS products Energy 6,500,077.80 17.16% 11,106,824.84 17.86% -0.70%
Explanation
Nil
(6) Whether the changes in the scope of consolidation in Reporting Period
√Yes □No
Combined Percentage Constitute Combining Basis for Income of the Net profit of Income of Net profit
party of equity the basis for date determinin combined the combined the of the
acquired in the g the date party from the party from the combined combined
enterprise enterprise of beginning of beginning of party party
combinatio combination combinatio the period of the period of during the during the
n under n combination to combination to compariso comparison
the same the date of the date of n period period
control combination combination
Ruth Co., 100.00% 2020.11.10 Equity Tr
Ltd. ansfer A
greement
Ruth Co., Ltd was established in Hong Kong dated 25 October 2020 with registered capital of HK$ 10,000.00, no actual capital
contributed and has not yet commenced production and operation activities.
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period
□ Applicable √ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) 430,413,456.39
Proportion in total annual sales volume for top five
69.72%
clients
Ratio of related parties in annual total sales among the
25.90%
top five clients
Information of top five clients of the Company
Serial Clients Sales (RMB) Proportion in total annual sales
1 No.1 178,588,504.49 28.93%
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
2 No.2 115,083,586.10 18.64%
3 No.3 53,115,268.80 8.60%
4 No.4 44,794,067.79 7.26%
5 No.5 38,832,029.21 6.29%
Total -- 430,413,456.39 69.72%
Other situation of main clients
□ Applicable √ Not applicable
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 396,183,756.23
Proportion in total annual purchase amount for top five
68.51%
suppliers
Ratio of related parties in annual total sales among the
49.18%
top five suppliers
Information of top five suppliers of the Company
Serial Supplier Purchase (RMB) Proportion in total purchase
1 No.1 152,365,734.55 26.35%
2 No.2 132,041,813.88 22.83%
3 No.3 74,847,951.50 12.94%
4 No.4 24,318,911.86 4.21%
5 No.5 12,609,344.44 2.18%
Total -- 396,183,756.23 68.51%
Other notes of main suppliers
□ Applicable √ Not applicable
3. Expenses
In RMB
Increase/decreas
2020 2019 Note of major changes
e(+,-) y-o-y
Sales expense 15,417,760.60 20,879,256.97 -26.16%
Administrative
34,481,219.11 38,034,071.63 -9.34%
expense
Financial expense 12,640,702.89 9,946,778.92 27.08%
R&D expenses 7,285,833.84 6,649,163.02 9.58%
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SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
4. R&D investment
√Applicable □Not applicable
Investment of the R&D expenses for the year mainly conducts in order to reducing the production costs and increase productivity.
R&D investment of the Company
2020 2019 Ratio changes (+,-)
Number of R&D (people) 76 65 16.92%
Ratio of number of R&D 9.07% 8.72% 0.35%
R&D investment (RMB) 7,399,966.31 7,525,869.98 -1.67%
R&D investment accounted
1.07% 1.04% 0.03%
for R&D income
R&D investment
0.00 0.00
capitalization (RMB)
Capitalization R&D
investment accounted for 0.00% 0.00%
R&D investment
The reason of great changes in the proportion of total R&D investment accounted for operation income than last year
□ Applicable √ Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
□ Applicable √ Not applicable
5. Cash flow
In RMB
Item 2020 2019 Increase/decrease(+,-) y-o-y
Subtotal of cash in-flow from
580,631,785.58 567,726,597.98 2.27%
operation activity
Subtotal of cash out-flow
520,912,515.98 493,262,890.97 5.61%
from operation activity
Net cash flow arising from
59,719,269.60 74,463,707.01 -19.80%
operating activities
Subtotal of cash in-flow from
56,951,415.71 75,379,501.53 -24.45%
investment activity
Subtotal of cash out-flow
60,471,921.66 78,288,039.15 -22.76%
from investment activity
Net cash flow arising from
-3,520,505.95 -2,908,537.62 -21.04%
investment activities
Subtotal of cash in-flow from
34,380,634.80 215,911,217.10 -84.08%
financing activity
17
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Subtotal of cash out-flow
96,093,364.01 278,912,458.77 -65.55%
from financing activity
Net cash flow arising from
-61,712,729.21 -63,001,241.67 2.05%
financing activities
Net increased amount of cash
-6,594,072.28 8,683,852.01 -175.93%
and cash equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
Bank loans declined in the Period.
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□ Applicable √ Not applicable
III. Analysis of the non-main business
√Applicable □Not applicable
In RMB
Amount Ratio in total profit Description of formation Whether be sustainable
Investment Income from short-term
165,317.73 1.81% N
income financial products
Mainly due to the current
accrued for inventory loss
Asset impairment 170,241.33 1.93% N
and loss of intangible
assets impairment
Mainly due to the
Non-operating government grants not
488,657.30 5.34% N
income related to the day-to-day
activities of the business
Non-operating Mainly due to the tax
408,809.90 4.47% N
expense delay charge paid.
IV. Assets and liability
1. Major changes of assets composition
New revenue standards or new leasing standards implemented by the Company at first time since 2020 and adjusted relevant items of
the financial statement on beginning of the year when implemented the Standards
Applicable
In RMB
Year-end of 2020 Year-end of 2020 Ratio Notes of major changes
18
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Ratio in Ratio in changes
Amount Amount
total assets total assets
60,968,053.5 38,095,501.0
Monetary fund 9.71% 6.20% 3.51%
8 0
Account 128,063,911. 138,755,691.
20.39% 22.59% -2.19%
receivable 79 43
70,166,013.4 66,971,551.9
Inventory 11.18% 10.90% 0.28%
9 6
Investment real 47,224,662.2 48,952,992.5
7.52% 7.97% -0.45%
estate 7 7
Long-term
equity 0.00% 0.00% 0.00%
investment
193,605,444. 198,229,817.
Fixed assets 30.83% 32.28% -1.45%
53 31
Construction in
740,000.00 0.12% 0.00% 0.12%
process
Short-term 12,527,808.0 24,633,898.2
1.99% 4.01% -2.02%
loans 0 0
61,000,000.0 73,000,000.0
Long-term 9.71% 11.89% -2.18%
0 0
2. Assets and liability measured by fair value
□ Applicable √ Not applicable
3.Assets right restriction till end of reporting period
Item Ending book value Restriction reasons
Monetary fund 30,917,064.25 Note deposit, judicial freeze
Receivable financing 6,752,967.68 Pledge of notes
Account receivable
Investment real estate 35,526,155.89 Secured bank loans
Fixed assets 12,577,333.12 Secured bank loans
Disposal of fixed assets 92,857,471.69 Court seizure
Intangible assets 6,799,575.98 Secured bank loans
Total 185,430,568.61 --
19
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
V. Investment
1. Overall situation
□ Applicable √ Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company has no securities investment in the Period.
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivatives investment in the Period.
5. Application of raised proceeds
□ Applicable √ Not applicable
The Company has no application of raised proceeds in the Period.
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
VII. Analysis of main holding company and stock-jointly companies
√ Applicable □ Not applicable
20
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
The condition of major subsidiaries and joint-stock companies which have an impact on the company’s net profit by more than 10%
Unit：Yuan
Name of Type of Main Registered Total Operating Operating
Net assets Net profits
companies companies business capital assets revenue profits
Wuhan
Hengfa Production 181,643,11 486,156,92 226,199,03 648,768,70 2,287,769. 3,045,356.
Subsidiary
Technolog and Sales 1.00 0.70 3.23 5.56 88 05
y Co., Ltd.
Shenzhen
Zhongheng Property
1,000,000. 8,958,666. -621,839.9 5,711,449. 1,897,153. 1,709,517.
Huafa Subsidiary Manageme
00 85 8 55 42 40
Property nt
Co., Ltd.
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
Methods of acquiring and disposing of Impact on overall production and
Name of companies
subsidiaries during the reporting period performance
Ruth Co., Ltd. Transfer agreements None
Description of the major holding and joint-stock corporations
No operating activities yet.
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
（一）Operation analysis
As an important subsidiary of Wuhan Constant Fa Technology Co., Ltd., the pressure of Wuhan Constant Fa
Technology Co., Ltd. is increasing due to the intensification of market competition and the shortage of raw and
auxiliary materials supply. The core to solve the dilemma is to improve the added value of technology and
profitability through technological upgrading. In the context of downstream consumer demand upgrading, by
increasing research and development of new products, adjusting and improving the product structure, improving
the production process, improve production efficiency; At the same time, the supply channels of raw and auxiliary
materials should be expanded to avoid material shortage affecting production.
For a certain period of time, property leasing is still another important business for the development of the
company. Making full use of self-owned property to provide business of operation, leasing and service will bring
certain contributions to the cash flow of the company. After the urban renewal project is gradually implemented
and implemented, it will bring a long-term and stable source of income for the company.
21
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
（二）New Annual Business Plan
◆Industrial Business Upgrade
Although affected by the COVID-19 epidemic, all colleagues in the company continued to work hard to serve
existing customers, vigorously expanded the market, and gained more market share; actively looked for
high-quality technology projects in consumer electronics, and gradually realized industrial upgrading through
technology optimization and management optimization; at the same time, it strengthened management, improved
production efficiency, improved product quality, and made full use of the geographical advantages of the company
to make the business bigger and stronger.
◆Promote the urban renewal project
Speed up the promotion of renewal unit project of Huafa District, Gongming Street, Guangming New District,
Shenzhen and the renewal project renovation progress of Huafa Building, Huaqiang North Street, Futian District,
Shenzhen, accelerate the settlement of project procedures, and strive to make stage progress as early as possible.
◆Continue to focus on strengthening the company’s internal control
In 2020, the company will further optimize the corporate governance structure and improve the internal control
system and process and strictly implement and improve the executive ability of relevant system in accordance
with the governance requirements of listed companies, the company’s management and relevant departments will
execute the administrative provisions for approval procedures of fund utilizing, management system of related
transactions, working system of internal audit, internal reporting system of major information in strict accordance
with the requirements of internal control documents.
X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
√Applicable □ Not applicable
Main content
Reception Reception and Basic situation index
Time Way Object
location type information of investigation
provided
Operation of
Office of the the Company
Telephone
BOD locates and progress
2020-01-04 communicatio Other Individual N/A
in 6/F, Huafa of the urban
n
Building renewal
projects
22
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Reception (times) 20
Number of hospitality 0
Number of individual reception 20
Number of other reception 0
Disclosed, released or let out major undisclosed
No
information
23
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during
the Reporting Period
□ Applicable √ Not applicable
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years
(including the reporting period)
In recent three years the Company accumulated retained net profit is negative and it did not have the conditions for profit distribution,
so the Company did not undertake profit allocation in recent years and no capital reserve shall be converted into share capital either.
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Ratio of the
Ratio of the
total cash
Ratio of the cash bonus
bonus (other
Net profit cash bonus in by other
ways
attributable net profit ways in net
Proportion included) in
to common attributable profit
for cash net profit
Amount for stock to common attributable Total cash
bonus by attributable
Year for cash bonus shareholders stock to common bonus
other to common
bonus shares (tax of listed shareholders stock (including
ways(i.e. stock
included) company in of listed shareholders other ways)
share shareholders
consolidation company of listed
buy-backs) of listed
statement for contained in company
company
bonus year consolidation contained in
contained in
statement consolidation
consolidation
statement
statement
2020 0.00 6,830,187.40 0.00% 0.00 0.00% 0.00 0.00%
2019 0.00 5,460,049.15 0.00% 0.00 0.00% 0.00 0.00%
2018 0.00 3,295,022.72 0.00% 0.00 0.00% 0.00 0.00%
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent company is
positive but no plan of cash dividend proposed of common stock
□ Applicable √ Not applicable
24
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the year.
III. Implementation of commitment
1. Commitments that the actual controller, shareholders, related party, offeror and committed party as the
Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting
period
√Applicable □ Not applicable
Type of
Commitmen Commitmen
Commitments Promise commitme Content of commitments Implementation
t date t term
nts
The enterprise and its
subsidiaries will not
participate directly or
indirectly in operation of
the business with
Implement
competitive of Shen Huafa
Wuhan since 12
and its controlling subsidiary In normal
Zhonghen 2007-03-29 April 2007
concerned, and not to implementing
g Group throughout
damage the interest of the
the year
Shen Huafa and its
controlling subsidiary by
making use of the potential
controlling-ship of the Shen
Commitments for
Huafa either
share reform
The enterprise and its
subordinate enterprise shall
avoid a related transaction as
far as possible with Shen
Huafa and its controlling Implement
Wuhan subsidiary, as for the related since 12
In normal
Zhonghen dealings occurred inevitable 2007-03-29 April 2007
implementing
g Group or have reasonable cause, the throughout
enterprise promise to follow the year
the principle of fair-ness,
justice and open-ness, signed
the agreement in line with
the laws, perform legal
25
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
program, fulfill information
disclosure obligation and
relevant approval procedures
according to the relevant
laws, regulations and
“Listing Rules” of the
Shenzhen Stock Exchange,
guarantee not to damage the
legal interest of Shen Huafa
and its shareholders through
related transactions
After acquisition and assets
restructuring, guarantee to
Implement
have an independent staff,
Wuhan since 12
owns independent and In normal
Zhonghen 2007-03-29 April 2007
completed assets, and implementing
g Group throughout
independent in aspect of
the year
business, financial and
institution from Shen Huafa
Commitments in
report of
acquisition or equity
change
Commitments in
assets reorganization
Commitments make
in initial public
offering or
re-financing
Equity incentive
commitment
Regarding the lawsuit with
Shenzhen Vanke: 1. If the
arbitration judges Shenzhen
Vanke to win, the arbitration
losses caused by the contract Implemente
Other commitments Wuhan
disputes shall be undertaken d since 20 In normal
for medium and small Zhonghen 2016-12-20
by Wuhan Zhongheng Group December implementing
shareholders g Group
in full; 2. The contingent 2016
losses and risks arising from
the termination of relevant
contracts shall be undertaken
by Wuhan Zhongheng Group
26
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
in advance.
Completed on
Yes
time(Y/N)
If the commitments is
not fulfilled on time,
shall explain the Not applicable
specify reason and the
next work plan
2. Concerning assets or project of the Company, which has profit forecast, and reporting period still in
forecasting period, explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors
(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculation
method compared with the financial report of last year
□ Applicable √ Not applicable
There was no changes in aspect of accounting policy, estimates and calculation method
VII. Major accounting errors within reporting period that needs retrospective restatement
□Applicable √Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
√Applicable □Not applicable
Combined Percentage Constitute Combining Basis for Income of the Net profit of Income of Net profit
party of equity the basis for date determinin combined the combined the of the
acquired in the g the date party from the party from the combined combined
enterprise enterprise of beginning of beginning of party party
27
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
combinatio combination combinatio the period of the period of during the during the
n under the n combination to combination to compariso comparison
same control the date of the date of n period period
combination combination
Ruth Co., 100.00% 2020.11.10 Equity
Ltd. Transfer
Agreeme
nt
Ruth Co., Ltd was established in Hong Kong dated 25 October 2020 with registered capital of HK$ 10,000.00, no actual capital
contributed and has not yet commenced production and operation activities.
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm WUYIGE Certified Public Accountants LLP
Remuneration for domestic accounting firm (in 10 thousand
50
Yuan)
Continuous life of auditing service for domestic accounting
5
firm
Name of domestic CPA Fan Zhang, Yang Ting
Consecutive years for auditing service from domestic CPA 1
Name of foreign accounting firm (if applicable) N/A
Remuneration for foreign accounting firm (in 10 thousand
0
Yuan) (if applicable)
Continuous life of auditing service for foreign accounting firm
N/A
(if applicable)
Name of foreign CPA N/A
Consecutive years for auditing services from foreign CPA (If
0
applicable)
Re-appointed accounting firms in this period
□Yes √ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
The Company employed WUYIGE Certified Public Accountants LLP as internal control audit institutions in the year.
X. Particular about delisting after annual report disclosed
□ Applicable √ Not applicable
28
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
XI. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitration of the Company
√Applicable □Not applicable
Amount of
Advances
The basic money The results and
Predicted in Execution of
situation of involved effects of Disclosure Disclosure
liabilities litigation the litigation
litigation (in 10 litigation date index
(Y/N) (Arbitrati (Arbitration)
(Arbitration) thousand (Arbitration)
on)
Yuan)
In September
2018,
Shenzhen http://www
Vanke applied .cninfo.co
for m.cn/cninf
Ruling on
compulsory o-new/discl
16
In September execution. In osure/szse_
August
2016, Wuhan October 2019, main/bullet
2017; put
Zhongheng Group due to the in_detail/tr
forward
Co., Ltd. and the application of ue/120440
the
Company and "objection to 6606?anno
applicatio
Shenzhen Vanke execution" unceTime=
n for
were applied for and "no 2018-02-09
dismantli
arbitration due to execution" by ；
ng by the Found more in
the dispute case of the outsider, http://www
46,460 N Company notice of the 2018-02-09
“Contract for the the execution .cninfo.co
and Company
Cooperative procedure m.cn/new/d
controllin
Operation of the was isclosure/d
g
Old Projects at terminated. If etail?plate=
sharehold
Huafa Industrial the outsider's szse&stock
er, the
Park, Gongming application Code=0000
applicatio
Street, was rejected 20&annou
n was
Guangming New by Shenzhen ncementId
rejected
District”. intermediate =12053268
by the
people's 46&annou
court
court, ncementTi
Shenzhen me=2018-0
Vanke has the 8-25
right to
continue to
29
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
apply for
resumption of
compulsory
execution.
The
In March 2016,
second
the Company and
trial http://www
HUAFA Property
decides .cninfo.co
suit against
the m.cn/cninf
Shenzhen
Company o-new/discl
Huayongxing
wins the osure/szse_
Environmental Completion
lawsuit main/bullet
Technology Co., 947.26 N Implementing of 2016-09-14
on 15 in_detail/tr
Ltd., and enforcement
March ue/120270
Shenzhen Yidaxin
2018, and 2423?anno
Technology Co.,
has unceTime=
Ltd. for contract
applied 2016-09-14
violation and
for 07:41
refuse to move the
enforcem
site
ent
http://www
.cninfo.co
Application for m.cn/new/d
arbitration in case isclosure/d
of contract dispute A decision was etail?plate=
The
between the V&T issued and the szse&stock
arbitratio
Law Firm and Company’s Code=0000
1,940.2 N n has Implementing 2018-11-14
Shenzhen motion to 20&annou
been
Zhongheng Huafa dismiss was ncementId
heard
Co., Ltd. and denied =12056020
Wuhan 53&annou
Zhongheng Group ncementTi
me=2018-1
1-14
XIII. Penalty and rectification
□ Applicable √ Not applicable
No penalties or rectifications during the reporting period.
XIV. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
30
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
XV. Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives
□ Applicable √ Not applicable
The Company had no stock incentive plan, employee stock ownership plan or other employee incentive in the reporting period.
XVI. Major related transaction
1. Related transaction with routine operation concerned
√Applicable □Not applicable
Relat
Co ed Whethe
Trading
nte trans Pro r over Clear
Type nt Rela actio port limit ing Date
of of ted n ion the form
approv of
Relat relat rel trans amo in approv for Available similar Index of
Relate
ionsh ed ate Pricing principle actio unt simi ed (in relate discl
d party ed market price disclosure
ip trans d n (in lar d
10 osur
actio tra pric 10 tran limited trans
n ns e thous sacti thousan actio e
act and ons or not n
d Yuan)
ion Yuan (Y/N)
)
http://www.cn
info.com.cn/n
The average
ew/disclosure
market price refers
/detail?stock
to the price of
Code=000020
products of the
&announcem
In principle, the same specification
entId=120727
transaction price that can be found
Shari 6013&orgId=
Hong of purchased raw in the website of
ng gssz0000020
Kong materials is globally renowned
the &announcem
Yutian determined at Teleg professional
same entTime=202
Interna Di approximately 1% 15,2 15,2 raphi market research 2020
contr Purc 38.5 16,208. 0-01-22、
tional spl lower than the 36.5 36.5 N c companies -01-
ollin hase 3% 94 http://www.cn
Invest ay prevailing average 7 7 transf (http://www.displa 22
g info.com.cn/n
ment market price, with er ysearch.com) and
share ew/disclosure
Co., reference to the LCD professional
holde /detail?stock
Ltd. respective market research
r Code=000020
bargaining power companies
&announcem
of both parties. (http://www.witsvi
entId=120882
ew.com) that are
8787&orgId=
recognized in the
gssz0000020
industry
&announcem
entTime=202
0-12-02
31
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Shari
Wuhan
ng
Hengs
the
heng Teleg
same
Photo- Di raphi
contr Purc 9,25 9,25 23.4 13,592. Ditt
electri spl Ditto N c Ditto Ditto
ollin hase 2.23 2.23 0% 4 o
city ay transf
g
Industr er
share
y Co.,
holde
Ltd.
r
Shari
Wuhan
ng
Hengs
the
heng Teleg
same
Photo- Di Synchronize with raphi
contr Purc 3,95 3,95 100. 16,310. Ditt
electri spl the market N c Ditto Ditto
ollin hase 1.95 1.95 00% 88 o
city ay situation transf
g
Industr er
share
y Co.,
holde
Ltd.
r
Shari
Hong
ng
Kong
the
Yutian Teleg
same
Interna Di Synchronize with 11,5 raphi
contr 11,50 31.1 27,184. Ditt
tional Sales spl the market 08.3 N c Ditto Ditto
ollin 8.36 2% 8 o
Invest ay situation 6 transf
g
ment er
share
Co.,
holde
Ltd.
r
Shari
Wuhan
ng
Hengs
the
heng Teleg
same
Photo- Di Synchronize with raphi
contr 4,10 4,10 11.1 8,495.2 Ditt
electri Sales spl the market N c Ditto Ditto
ollin 5.68 5.68 0% 5 o
city ay situation transf
g
Industr er
share
y Co.,
holde
Ltd.
r
Wuhan Shari M Synchronize with Teleg
299. 299. 20.1 1,631.0 Ditt
Hengs ng Sales ate the market N raphi Ditto Ditto
03 03 5% 9 o
heng the ria situation c
32
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Photo- same l transf
electri contr er
city ollin
Industr g
y Co., share
Ltd. holde
r
44,3
83,423.
Total -- -- 53.8 -- -- -- -- -- --
36
2
Detail of sales return with
N/A
major amount involved
Report the actual
In the reporting, Hengfa Technology purchased LCD monitors from HK Yutian with US $ 22.12 million approximately,
implementation of the daily
92.75% of the annual amount predicted at the beginning of the year; purchased LCD monitor from Hengsheng
related transactions which
Photo-electricity with US $ 13.61 million approximately, 68.07% of the annual amount predicted at the beginning of the
were projected about their
year; purchasing LCD Display from Hengsheng Photo-electricity with about US$ 5.81 million, 24.23% of the annual
total amount by types during
amount predicted at the beginning of the year; sold LCD Display whole machine to HK Yutian with US$ 16.67 million
the reporting period(if
approximately, 41.68% of the annual amount predicted at the beginning of the year.
applicable)
Reasons for major differences
between trading price and N/A
market reference price
2. Related transactions by assets acquisition and sold
□Applicable √Not applicable
No above mentioned transactions occurred
3. Main related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
□ Applicable √ Not applicable
No contact of related credit and debt during the reporting period.
5. Other related transactions
□ Applicable √ Not applicable
The company had no other significant related transactions in reporting period.
33
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in reporting period.
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period.
(3) Leasing
□ Applicable √ Not applicable
No leasing for the Company in reporting period.
2. Major guarantees
√Applicable □ Not applicable
(1) Guarantees
In 10 thousand Yuan
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Related Guaran
Name of the Announc Actual Implem tee for
Guarante Actual date of Guarantee Guarantee
Company ement guarantee ented related
e limit happening type term
guaranteed disclosur limit (Y/N) party
e date (Y/N)
N/A
Guarantee of the Company and the subsidiaries
Related Guaran
Name of the Announc Actual Implem tee for
Guarante Actual date of Guarantee Guarantee
Company ement guarantee ented related
e limit happening type term
guaranteed disclosur limit (Y/N) party
e date (Y/N)
Wuhan Hengfa Joint
2021-04-
Technology Co., 30,000 3,356.33 liability One year N N
27
Ltd. guarantee
34
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in 30,000 3,356.33
subsidiaries in report
report period (B1)
period (B2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries
guarantee for subsidiaries at the 30,000 1,252.78
at the end of reporting
end of reporting period (B3)
period (B4)
Guarantee of the subsidiaries for the subsidiaries
Related Comple
Guaran
Name of the Announc Actual te
Guarante Actual date of Guarantee Guarantee tee for
Company ement guarantee implem
e limit happening type term related
guaranteed disclosur limit entatio
party
e date n or not
Total amount of guarantee of the Company (total of three above mentioned guarantee)
Total amount of actual
Total amount of approving
occurred guarantee in
guarantee in report period 30,000 3,356.33
report period
(A1+B1+C1)
(A2+B2+C3)
Total balance of actual
Total amount of approved
guarantee at the end of
guarantee at the end of report 30,000 1,252.78
report period
period (A3+B3+C2)
(A4+B4+C4)
The proportion of the total amount of actually guarantee in the
3.73%
net assets of the Company (that is A4+ B4+C4)
Including:
Explanation on compound guarantee
Nil
(2) Guarantee outside against the regulation
□Applicable √Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
√Applicable □Not applicable
Trust financing in the period
In 10 thousand Yuan
35
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
Type Capital sources Amount occurred Outstanding balance Overdue amount
Bank financial
Own funds 5,500 0 0
products
Total 5,500 0 0
Details of the single major amount, or high-risk trust investment with low security, poor fluidity and non-guaranteed
□Applicable √Not applicable
Entrust financial expected to be unable to recover the principal or impairment might be occurred
□ Applicable √ Not applicable
(2) Entrusted loans
□ Applicable √ Not applicable
The company had no entrusted loans in the reporting period.
4.Material contracts for daily operations
□ Applicable √ Not applicable
5. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period.
XVIII. Social responsibility
1. Performance of social responsibility
Not applicable
2. Execution of social responsibility of targeted poverty alleviation
(1) Targeted poverty alleviation scheme
Not applicable
(2) Summary of targeted poverty alleviation
Not applicable
(3) Targeted poverty alleviation effect
Index Unit of measure Quantity /implementation
36
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
I. Overall condition —— ——
II. Poverty alleviation by items —— ——
1.Industry development —— ——
2.Shift employment —— ——
3. Relocating in other places —— ——
4. Education —— ——
5. Health —— ——
6.Ecological protection —— ——
7. Reveal all the details —— ——
8. Society —— ——
9.Other —— ——
III. Award received (content and grade) —— ——
(4) Follow-up targeted poverty alleviation scheme
Not applicable
3. Environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
□ Yes √No
No
The listed Company and its subsidiary don’t belongs to the key sewage units released from environmental protection department
XIX. Explanation on other significant events
√ Applicable □ Not applicable
(i) The Company signed Asset Exchange Contract with Wuhan Zhongheng New Science & Technology Industrial
Group Co., Ltd (hereinafter referred to as Wuhan Zhongheng Group) on 29 April 2009 (details were referred to in
the announcement dated 30 April 2009), and pursuant to the contract, since part of the assets of the Company
(namely two parcel of industrial lands located at Huafa road, Gongming town, Guangming new district, Shenzhen
(the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763, No. of parcels were A627-005
andA627-007, and the aggregate area was 48,200 sq.m) were the lands listed in the first batch of plan for 2010
Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and joint
cooperation, the Company has not completed the transfer procedures in respect of the aforesaid land.
The Company convoked the first extraordinary meeting of the Board in 2015 on February 16, 2015 and the first
extraordinary general meeting of the Board in 2015 on March 4, 2015, which considered and approved the
37
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
“Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area at
Gongming street, Guangming new district, Shenzhen”, specified that the Company and Wuhan Zhongheng Group
shall obtain the corresponding compensatory consideration for removal from the respectively owned project plots
and the respectively contributed and constructed above-ground buildings before the land development, it is
estimated that the compensatory consideration obtained by the Company accounts for 50.5% of the total
consideration and Wuhan Zhongheng Group accounts for 49.5% by calculation.
The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting of
2015 have considered and adopted the “Proposal on the project promotion and implementation of urban renewal
and the progress of related transactions of ‘the updated units at Huafa Area, Gong Ming Street, Guangming New
District, Shenzhen’”, the company has signed the “Agreement on the cooperation of urban renewal project of the
updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”, “Contract for the
cooperative venture of reconstruction project for Huafa Industrial Park, Gong Ming Street, Guangming New
District” and “Agreement on housing acquisition and removal compensation and resettlement” with Wuhan
Wuhan Zhongheng Group, Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as “Shenzhen Vanke”),
and Shenzhen Vanke Guangming Real Estate Development Co., Ltd. (hereinafter referred to as “Vanke
Guangming”).
On 12 September 2016, Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation of
urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”
against the Company and Wuhan Zhongheng Group. Shenzhen Court of International Arbitration (SCIA) has
given a ruling in August 2017. On August 29, 2018, the court accepted the compulsory execution application of
Shenzhen Vanke. In October 2019, as a number of outsiders filed an “execution objection” and applied for “no
execution” to Shenzhen Intermediate People’s Court, the Shenzhen Intermediate People’s Court ruled to terminate
the enforcement procedure on March 20, 2020. If the “execution objection” and “no execution” proposed by
outsiders are rejected according to law, Shenzhen Vanke may continue to apply to the Shenzhen Intermediate
People’s Court to resume execution. In mid April 2020, Heng semiconductor sued the company in Shenzhen
intermediate people's court, requiring the company to transfer the above two pieces of land and compensate for the
economic loss of 52 million yuan. As of the disclosure date of this report, the case has not yet been
concluded.Progress of the case found more in the Notices released on Juchao website dated 14 Sept. 2016, 1 Nov.
2016, 16 Nov. 2016, on 18 Feb. 2017, 24 March 2017, 25 April 2017, 1 July 2017, 18 August 2017, 9 Feb. 2018,
25 Aug. 2018 and 7 Sept. 2018 respectively.
(ii) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to China
Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. On 1 Feb. 2016, Wuhan Zhongheng
Group pledge the 27,349,953 shares held to China Merchants Securities Assets Co., Ltd. with due date of 31
December 2016. The above-mentioned pledged shares are deferred by Wuhan Zhongheng Group; pledge expired
on 31 December 2017. The trading day for repurchase put off to the date when pledge actually removed. Till end
38
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2020
of this period released, controlling shareholder still not removed the pledge and the Company has apply by letter,
relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice
released on Juchao website date 2 Feb. 2018.
Wuhan Zhongheng Group received the first-instance judgment of Guangdong Higher People’s Court to the
“pledged securities repurchase dispute” case sued by China Merchants Securities Asset Management Co., Ltd. in
March 2021. Wuhan Zhongheng Group refused to accept the judgment and has appealed to the Supreme People's
Court, the judgment of first instance has not yet taken effect. For details, please refer to the company
announcement issued by the company on www.cninfo.com.cn on March 19, 2021.
(iii) The controlling shareholder Wuhan Zhongheng Group holds 119,289,894 shares of the Company’ stock,
accounting for 42.13% of the total share capital of the Company, of which 116,489,894 shares were judicially frozen
by Shenzhen Intermediate People's Court (hereinafter referred to as "Shenzhen Intermediate Court") on September
27, 2016, which were frozen again by the Shenzhen Intermediate People's Court on December 14, 2018, with a
frozen period of 36 months; the remaining 2,800,000 shares were frozen by the Shenzhen Intermediate People's
Court on May 29, 2019, and were frozen again by the Higher People’s Court of Guangdong Province on July 5,
2019. For details, please refer to the company’s announcements published on Juchao Website dated October 27,
2016, January 11, 2019, May 31, 2019 and August 7, 2019.
(iv) On September 29, 2016, the company and its controlling shareholder, Wuhan Zhongheng Group, signed the
“Agency Contract” with V&T Law Firm. On October 8, 2016, the three parties also signed the “Supplemental
Agreement for Agency Contract”, it was agreed that V&T acted as an agent for the company and Wuhan
Zhongheng Group to deal with the arbitration case with Shenzhen Vanke. After losing the lawsuit, due to
differences in the payment of attorney fees, V&T sued our company and Wuhan Zhongheng Group to the
Shenzhen Court of International Arbitration, and applied to the court to seize a bank account under our company’s
name and part of our company dormitories, please refer to “Other Announcements on the Progress Involving
Litigation and Arbitration” (Announcement Numbers: 2018-43, 2019-02) released by our company on Juchao
Website dated November 14, 2018 and March 6, 2019. 02. In November 2019, the Shenzhen Court of
International Arbitration ruled that the company and Wuhan Zhongheng Group paid the corresponding fees.
According to the “Agency Contract” and “Supplemental Agreement for Agency Contract” signed by the three
parties, the loss of the arbitrament in this case was borne by Wuhan Zhongheng Group, so it had no impact on the
company’s profit. For details, see the company’s “Other Announcements on the Progress Involving Litigation and
Arbitration” (Announcement No.: 2019-34) released on Juchao Website dated November 25, 2019.
XX. Significant event of subsidiary of the Company
□ Applicable √Not applicable
39
深圳中恒华发股份有限公司 2020 年年度报告全文
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Capitali
New zation
Proporti Bonus Amoun Proport
Amount shares of Others Subtotal
on shares t ion
issued public
reserve
I. Restricted shares 0 0.00% 0 0 0 0 0 0 0.00%
1. State-owned shares
2. State-owned legal
person’s shares
3. Other domestic shares
Including: Domestic
legal person’s shares
Domestic natural
person’s shares
4. Foreign shares
Including: Foreign legal
person’s shares
Foreign natural
person’s shares
283,161 100.00 283,16 100.00
II. Unrestricted shares 0 0 0 0 0
,227 % 1,227 %
181,165 181,16
1. RMB ordinary shares 63.98% 0 0 0 0 0 63.98%
,391 5,391
2. Domestically listed 101,995 101,99
36.02% 0 0 0 0 0 36.02%
foreign shares ,836 5,836
3. Overseas listed foreign
shares
4. Others
283,161 100.00 283,16 100.00
III. Total shares 0 0 0 0 0
,227 % 1,227 %
Reasons for share changed
40
深圳中恒华发股份有限公司 2020 年年度报告全文
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changed
□ Applicable √ Not applicable
Progress of shares buy-back
□ Applicable √ Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□ Applicable √ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and
liability structure
□ Applicable √ Not applicable
3. Existing internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
Total Total common Total preference Total
common stock shareholders preference
21,840 22,456 0 0
stock shareholders at with voting shareholders
shareholders end of last rights recovered with voting
41
深圳中恒华发股份有限公司 2020 年年度报告全文
in reporting month before at end of rights
period-end annual report reporting period recovered at
disclosed (if applicable) end of last
(found in note 8) month before
annual report
disclosed (if
applicable)
(found in note
8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Total Number of share pledged/frozen
Amoun Amount
shareho
Change t of of
Proport lders at
Full name of Nature of ion of s in restrict un-restri
the end
Shareholders shareholder shares report ed cted State of share Amount
held of
period shares shares
report
held held
period
Wuhan Domestic Pledged 116,100,000
119,28 119,289,
Zhongheng non-state-owne 42.13% 0 0
9,894 894 Frozen 119,289,894
Group d legal person
SEG (HONG Pledged 0
Overseas legal 16,569, 16,569,
KONG) CO., 5.85% 0 0
person 560 560 Frozen 0
LTD.
GOOD HOPE Pledged 0
CORNER Overseas legal 7,072,0 7,072,0
2.50% 0 0
INVESTMENTS person 00 00 Frozen 0
LTD.
Changjiang Pledged 0
Securities
Overseas legal 5,355,2 5,355,2
Brokerage 1.89% 0 0
person 49 49 Frozen 0
(Hong Kong)
Co., Ltd.
Guoyuan Pledged 0
Securities
Overseas legal 3,870,1 3,870,11
Brokerage 1.37% 0 0
person 17 7 Frozen 0
(Hong Kong)
Limited
Overseas nature 2,830,0 2,830,0 Pledged 0
Li Zhongqiu 1.00% 0 0
person 00 00 Frozen 0
LI SHERYN Overseas nature 1,446,1 1,446,1 Pledged 0
0.51% 0 0
ZHAN MING person 00 00 Frozen 0
42
深圳中恒华发股份有限公司 2020 年年度报告全文
China Merchants Pledged 0
State-owned 1,413,8 1,413,8
Securities Hong 0.50% 0 0
legal person 88 88 Frozen 0
Kong Co., Ltd.
Shengyin Pledged 0
Overseas legal 1,408,6 1,408,6
Investment Co., 0.50% 0 0
person 00 00 Frozen 0
Ltd.
Domestic nature 1,041,0 1,041,0 Pledged 0
Li Senzhuang 0.37% 0 0
person 73 73 Frozen 0
Strategy investors or general
corporation comes top 10
N/A
shareholders due to rights issue (if
applicable) (see note 3)
Among the top ten shareholders, Li Zhongqiu is the actual controller of Wuhan Zhongheng
New Science & Technology Industrial Group Co., Ltd. and is a party acting in concert.
Explanation on associated Shengyin Investment Co., Ltd. is an overseas wholly-owned subsidiary of Wuhan
relationship among the aforesaid Zhongheng group.The Company neither knew whether there exists associated
shareholders relationship among the other shareholders, nor they belong to consistent actors that are
prescribed in Measures for the Administration of Disclosure of Shareholder Equity
Changes of Listed Companies.
Description of the above
shareholders in relation to
N/A
delegate/entrusted voting rights and
abstention from voting rights.
Particular about top ten shareholders with un-restrict shares held
Type of shares
Shareholders’ name Amount of un-restrict shares held at Period-end
Type Amount
RMB common
Wuhan Zhongheng Group 119,289,894 119,289,894
share
Domestically
SEG (HONG KONG) CO., LTD. 16,569,560 listed foreign 16,569,560
shares
Domestically
GOOD HOPE CORNER
7,072,000 listed foreign 7,072,000
INVESTMENTS LTD.
shares
Domestically
Changjiang Securities Brokerage
5,355,249 listed foreign 5,355,249
(Hong Kong) Co., Ltd.
shares
Domestically
Guoyuan Securities Brokerage
3,870,117 listed foreign 3,870,117
(Hong Kong) Limited
shares
43
深圳中恒华发股份有限公司 2020 年年度报告全文
Domestically
Li Zhongqiu 2,830,000 listed foreign 2,830,000
shares
Domestically
LI SHERYN ZHAN MING 1,446,100 listed foreign 1,446,100
shares
Domestically
China Merchants Securities Hong
1,413,888 listed foreign 1,413,888
Kong Co., Ltd.
shares
Domestically
Shengyin Investment Co., Ltd. 1,408,600 listed foreign 1,408,600
shares
Domestically
Li Senzhuang 1,041,073 listed foreign 1,041,073
shares
Among the top ten unrestricted shareholders, Li Zhongqiu is the actual controller of
Expiation on associated relationship Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd. and is a party
or consistent actors within the top 10 acting in concert.Shengyin Investment Co., Ltd. is an overseas wholly-owned subsidiary
un-restrict shareholders and between of Wuhan Zhongheng group.
top 10 un-restrict shareholders and The Company neither knew whether there exists associated relationship among the other
top 10 shareholders shareholders, nor they belong to consistent actors that are prescribed in Measures for the
Administration of Disclosure of Shareholder Equity Changes of Listed Companies.
Explanation on top 10 shareholders
involving margin business (if N/A
applicable) (see note 4)
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: Foreign-funds controlling
Type of controlling shareholders: legal person
Legal
Controlling shareholders person/person in Date of foundation Organization code Main operation business
charge of the unit
Production, sales of
91420114711954601 computers, TV set,
Wuhan Zhongheng Group Li Zhongqiu March 21, 1996
W display, other hardware
and computer software;
44
深圳中恒华发股份有限公司 2020 年年度报告全文
development of internal
data communication
network, building of
packing materials and
light weight building
material for packaging;
management of exports
business for the own
products and
technologies for the
Company and member
enterprise; management
of export business on raw
material, apparatus and
instrument, machinery
equipment, spare parts
and technologies (not
including goods and
technologies that import
and export are national
restricted or prohibited );
dry clean and steam iron
service; copy & print;
business information
consulting; house
tenancy; property
management; wholesale
and retails of the
hardware metal products,
plastic products, audio
electronic products,
electronic equipment,
textile, toys, clothing &
shoes, luggage, bedding
article, general
merchandise, curtain,
household appliances and
building materials;
development of
real-estate and sales of
commercial housings
(projects with special
provision of the state can
be operation after
45
深圳中恒华发股份有限公司 2020 年年度报告全文
approval)
Equity of other
domestic/oversea listed
company control by
Not applicable
controlling shareholder as
well as stock-joint in report
period
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Actual controller and persons acting in concert
Nature of actual controller: Overseas nature person
Type of actual controller: Natural person
Enjoy the residence rights in the other
Actual controller’s name Relationship Nationality
country or area (Y/N)
Li Zhongqiu
Li Zhongqiu Hong Kong N
himself
Person acting in
concert (including
Li Li agreement, P.R.C N
relatives, share the
same controlling)
Main occupation in position Chairman and General Manager
Listed companies in and out of
China that controlled in last 10 The Company
years
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controllers for the Company in reporting period.
Property right and controlling relationship between the actual controller and the Company is as follow:
Li Zhongqiu Li Li (Son of Li Zhongqiu)
51% 49%
Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd
42.21%
46
深圳中恒华发股份有限公司 2020 年年度报告全文
Shenzhen Zhongheng Huafa Co., Ltd.
Actual controller controlling the Company by entrust or other assets management
□ Applicable √ Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
□ Applicable √ Not applicable
5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,
restructuring side and other commitment subjects
□ Applicable √ Not applicable
47
深圳中恒华发股份有限公司 2020 年年度报告全文
Section VII. Preferred Stock
□ Applicable √Not applicable
The Company had no preferred stock in the Period.
48
深圳中恒华发股份有限公司 2020 年年度报告全文
Section VIII. Convertible Bonds
□ Applicable √Not applicable
The Company had no convertible bonds in the Period.
49
深圳中恒华发股份有限公司 2020 年年度报告全文
Section IX. Particulars about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Amoun Amoun
t of t of
Shares Shares
Start shares shares
End held at Other held at
Workin dated increas decreas
Sex date of period-
Title Age of period- changes
Name g status (F/M) office ed in ed in
office
term begin (share) end
term this this
(Share) (Share)
period period
(Share) (Share)
Li Current Septem
Chairm July 8, 2,830,0 2,830,0
Zhongq ly in M 56 ber 11, 0 0 0
an 2007 00 00
iu office 2022
Jiang Vice Current Septem Septem
Junmin Chairm ly in M 42 ber 12, ber 11, 0 0 0 0 0
g an office 2019 2022
Chen Current Septem Septem
Directo
Zhigan ly in M 47 ber 12, ber 11, 0 0 0 0 0
r
g office 2019 2022
Zheng Indepen Current Septem Septem
Chunm dent ly in F 55 ber 12, ber 11, 0 0 0 0 0
ei director office 2019 2022
Indepen Current Septem Septem
Wu
dent ly in M 42 ber 12, ber 11, 0 0 0 0 0
Weihua
director office 2019 2022
Yang Indepen Current Septem Septem
Xiongw dent ly in M 50 ber 12, ber 11, 0 0 0 0 0
en director office 2019 2022
Chairm
an of
Current January Septem
Huang the
ly in F 58 16, ber 11, 0 0 0 0 0
Yanbo Supervi
office 2012 2022
sory
Board
Chen Supervi Current F 34 Novem Septem 0 0 0 0 0
50
深圳中恒华发股份有限公司 2020 年年度报告全文
Qin sor ly in ber 6, ber 11,
office 2015 2022
Current October Septem
Wu Supervi
ly in F 49 10, ber 11, 0 0 0 0 0
Aijie sor
office 2019 2022
Deputy
General
Manage Current Novem Septem
Yang
r, Chief ly in M 48 ber 6, ber 11, 0 0 0 0 0
Bin
Financi office 2015 2022
al
Officer
Deputy
August October
Tang General Leave
F 43 23, 21, 0 0 0 0 0
Ganyu Manage office
0013 2020
r
Secreta
Current October Septem
Niu ry of
ly in F 38 25, ber 11, 0 0 0 0 0
Zhuo the
office 2019 2022
Board
2,830,0 2,830,0
Total -- -- -- -- -- -- 0 0 0
00 00
II. Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Title Type Date Reasons
Deputy
October 21,
Tang Ganyu General Leave office Personal reasons
2020
Manager
III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors,
supervisors and senior executive
Li Zhongqiu: Male, was born in 1964 with Master of Engineering, members of the Hubei Political Consultative
Conference, May the first of labor medalist of Wuhan. He serves as Chairman of Wuhan Zhongheng New Science
& Technology Industrial Group Co., Ltd. since 1996. And he serves as Chairman and the General Manager of the
Company since July 2007.
Jiang Junming, male, born in February 1978 in Dalian, Liaoning, Han nationality, holds a bachelor degree in Law
from Shenyang University of Technology and a master degree in Finance from Peking University. He is currently
51
深圳中恒华发股份有限公司 2020 年年度报告全文
deputy general manager of Risk Control Department of Shenzhen SEG Group Co., Ltd. He has served
successively as legal assistant of Shenzhen Gemdale Real Estate Co., Ltd., legal supervisor of Shenzhen Maoye
(Group) Co., Ltd., legal deputy manager of Shenzhen Changcheng Investment Holding Co., Ltd., legal affairs post
of Shenzhen SEG Group Co., Ltd., and partner of Guangdong Guanghe Law Firm.
Chen Zhigang, male, born in 1973, master of business administration, he is currently the assistant to chairman of
Wuhan Zhongheng Group. He has successively served as supervisor, investment manager and securities affairs
representative of Wuhan Huaxin High-Tech Co., Ltd., financial director, secretary of the board of directors and
executive deputy general manager of Wuhan Zhongheng New Technology Industry Group Co., Ltd., and director
of the Company, etc.
Ms. Zheng Chunmei, Chinese nationality, without permanent residency abroad, female, born in 1965. She
graduated from the Department of Economics and Management of Wuhan University in June 1986, in 1990, she
was awarded the certificate of completion of the University Teachers Training Course of International Accounting
and International Finance and Taxation (Co-sponsored by the World Bank and the State Education Commission)
of the School of Economics, Xiamen University, she received a master’s degree in business management
(accounting) from Wuhan University in 1997 and a doctorate degree in economics from Wuhan University in
2005. She acted as a visiting scholar at St. Mary's University in Canada, Seoul National University in South Korea,
and Ohio State University in the United States. She has been teaching at Wuhan University since June 1986, and is
currently a professor and a doctoral tutor in the School of Economics and Management of Wuhan University, a
member of Canadian Management Science (ASAC), an independent director of Routon Electronics Co., Ltd., and
Wuhan Accelink Co., Ltd.
Yang Xiongwen, male, born in 1970, Doctor of Civil and Commercial Law, Renmin University of China, a
visiting scholar at the Faculty of Law, University of Oxford, he is currently a professor at the School of Law of
South China University of Technology, a senior engineer, a member of the Local People’s Congress of Panyu
District (2016.9.26), a member of the Supervision and Judicial Work Committee of the Standing Committee of the
17th Local People’s Congress of Panyu District, a member of the Legal Committee of the Guangdong Provincial
Committee of the China Democratic National Construction Association, a part-time attorney of Guangdong
Hanrui Law Firm, and is concurrently serving as deputy secretary general and executive director of China
Intellectual Property Law Research Association.
Wu Weihua, male, born in 1978, master of law at Peking University, he is currently General Manager of Shenzhen
Headquarters of Huajin Securities Co., Ltd. Investment Bank, he once served as General Manager of Investment
Banking Division 3 of Founder Securities Underwriting Sponsor Co., Ltd., served as the managing director of the
investment banking department and principal of the M & A financing business department of Huachuang
Securities Co., Ltd.; the managing director of the investment banking department and principal of Shenzhen
business department of Tianfeng Securities Co., Ltd.; executive deputy general manager of the investment
banking department X of Guosen Securities Co., Ltd.; assistant director of the investment banking department of
Dapeng Securities Co., Ltd.; auditor of Shenzhen Tianjian Xinde Certified Public Accountants.
Huang Yanbo: female, born in 1962, a university background and a senior accountant. She served as financial
director of Wuhan Zhongda Shopping Mall since 1985 to 1998; and worked as financial manager of Wuhan
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深圳中恒华发股份有限公司 2020 年年度报告全文
Zhongheng New Science & Technology Industrial Group Co., Ltd. from 1998 to 2007 and GM assistant in charge
of auditing supervise from 2007 to 2011; she serves as CFO of the Company from 2012 to 2016; she serves as
deputy GM of Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd. since October 2016, and
the supervisor of the Company since January 2012 and she is the chairman of supervisory committee of the
Company since August 2013.
Chen Qin: Female, born in 1986, bachelor degree, human resources professional. Worked on administrative work
in Merida Bicycle (China) Co., Ltd. from July 2002 to July 2003, engaged in purchasing work in Hui Pu
Electronics (Shenzhen) Co., Ltd. from August 2003 to September 2004, and served as the administration manager
in Huake United Technology (Shenzhen) Co., Ltd. from September 2004 to 2005 October; works in the Company
since October 2005 and serves as supervisor of the Company since 2015.
Wu Aijie, female, born in 1971, bachelor degree, she is currently the person in charge of the company’s
accounting organization. She successively served as the accounting director of Wuhan No. 2 Pharmaceutical
Factory, Wuhan Benben Electronics Co., Ltd., Wuhan Hengsheng Photo-electricity Industry Co., Ltd., and Wuhan
Zhongheng New Science & Technology Industrial Group Co., Ltd
Yang Bin, male, born in April 1972, a master degree holder graduated from Xi’an Jiaotong University. He once
served as the executive deputy general manager and secretary of the board of Shenzhen China Agricultural
University Technology Co., Ltd., an independent director of Livzon Group, and an independent director of CTL
Testing. Now served as the Supervisor of Shenzhen Moyi Investment Co., Ltd., he used to be the company's
director and secretary to the board of directors, and now serves as the company's deputy general manager and
chief financial officer.
Niu Zhuo, former name was Niu Yuxiang, female, born in 1982, master, intermediate economist. From July 2006
to August 2010, she worked on securities affairs at Shenzhen OFILM Technology Co., Ltd. From September 2010
to present, she has been serving in the Company, she once held the posts of deputy director of the office of the
board of directors, securities affairs representative, and currently holds the post of the company’s board secretary.
Post-holding in shareholder’s unit
√ Applicable □ Not applicable
Received
Position in remuneration
Start dated of End date of
Name Name of shareholder’s unit shareholder from
office term office term
’s unit n shareholder’s
unit (Y/N)
Wuhan Zhongheng Group and its March 21,
Li Zhongqiu Chairman N
subsidiaries 1996
Jiang Deputy
Shenzhen SEG Group Co., Ltd. July 2, 2018 Y
Junming GM
Chen Assistant to January 1,
Wuhan Zhongheng Group Y
Zhigang the 2019
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深圳中恒华发股份有限公司 2020 年年度报告全文
chairman
Deputy October 12,
Huang Yanbo Wuhan Zhongheng Group Y
GM 2016
Post-holding in other unit
√ Applicable □ Not applicable
Received
Position in Start dated of End date of remuneration
Name Name of other units
other unit n office term office term from other unit
(Y/N)
Zheng
Wuhan University Teacher June 1, 1986 Y
Chunmei
Zheng Independen October 1,
Jinglun Electronics Co., Ltd. Y
Chunmei t director 2015
Zheng Independen August 1,
Wuhan Guangxun Technology Co., Ltd. Y
Chunmei t director 2016
January 1,
Wu Weihua Huajin Securities Co., Ltd. GM Y
2020
Yang August 1,
South China University of Technology Teacher Y
Xiongwen 2008
Yang Part-time January 14,
Guangdong Hanrui Law Firm N
Xiongwen lawyer 2021
Explanation
on
N/A
post-holding
in other unit
Punishment of securities regulatory authority in recent three years to the company’s current and outgoing directors, supervisors and
senior management during the reporting period
√ Applicable □ Not applicable
1. Mr. Yang Bin, deputy general manager and Chief Financial Officer of the Company, due to the failure to urge and organize the
information disclosure work for the temporary announcement of Shenzhen China Agricultural University Technology Co., Ltd. in
accordance with relevant regulations during his tenure as Secretary of the Board of Directors of Shenzhen China Agricultural
University Science and Technology Co., Ltd., in August 2018, he was given a warning and fined 30000 yuan by Shenzhen Securities
Regulatory Bureau of China Securities Regulatory Commission.
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
Remuneration of directors and supervisors are determined by general meeting, and the allowance standard for
each independent director is RMB 60, 000 per year (tax included).
Remuneration of senior management is determined by the board based on the unified remuneration management
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深圳中恒华发股份有限公司 2020 年年度报告全文
system and actual completion of operational targets, and the “Proposal of Basic Remuneration for High-ranking
Managers of the Company” was deliberated and approved in 2nd extraordinary meeting of the Board for year of
2012.
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Total Whether
remuneration remuneration
Post-holding
Name Title Sex (F/M) Age obtained from obtained from
status
the Company related party of
(before taxes) the Company
Currently in
Li Zhongqiu Chairman, GM M 56 49.9 N
office
Currently in
Jiang Junming Vice Chairman M 42 0 Y
office
Currently in
Chen Zhigang Director M 47 0 Y
office
Deputy General
Manager, Chief Currently in
Yang Bin M 48 34.6 N
Financial office
Officer
Zheng Independent Currently in
F 55 6 N
Chunmei director office
Yang Independent Currently in
M 42 6 N
Xiongwen director office
Independent Currently in
Wu Weihua M 50 6 N
director office
Currently in
Huang Yanbo Supervisor F 58 0 Y
office
Currently in
Chen Qin Supervisor F 34 14.7 N
office
Deputy General
Tang Ganyu F 43 Leave office 24 N
Manager
Employee Currently in
Wu Aijie F 49 14.26 N
supervisor office
Secretary of the Currently in
Niu Zhuo F 38 25.4 N
Board office
Total -- -- -- -- 180.86 --
Delegated equity incentive for directors, supervisors and senior executives in reporting period
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深圳中恒华发股份有限公司 2020 年年度报告全文
□ Applicable √ Not applicable
V. Particulars of workforce
1. Number of Employees, Professional composition, Education background
Employee in-post of the parent Company (people) 12
Employee in-post of main Subsidiaries (people) 1,120
The total number of current employees (people) 1,132
The total number of current employees to receive pay (people) 1,132
Retired employee’ s expenses borne by the parent Company
0
and main Subsidiaries (people)
Professional composition
Category of professional composition Numbers of professional composition (people)
Production personnel 914
Sales personnel 33
Technical personnel 94
Financial personnel 18
Administrative personnel 73
Total 1,132
Education background
Category of education background Numbers (people)
Master and on-the-job graduate students 6
Undergraduate 65
Junior college 84
Other 977
Total 1,132
2. Remuneration Policy
The company’s directors (excluding independent directors), supervisors and senior management personnel are
monthly paid by basic pay and performance pay, and the annual remunerations are paid after annual assessment;
the company’s independent directors are paid 60,000 Yuan per person per year as allowances (including tax), the
travel expenses for attending the board meeting and stockholders' meeting and the necessary expenses generated
by exercising their powers in accordance with relevant laws and regulations can be applied for reimbursement
according to the company’s regulations; the remuneration ordinary employees are decided by the positions,
including probationary period salary regular employee salary, and the company pays social security and public
accumulated funds for them in accordance with the national regulations.
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深圳中恒华发股份有限公司 2020 年年度报告全文
3. Training programs
(1) The directors, supervisors and senior management personnel actively participate in the relevant training and
assessment organized by the regulatory agencies, such as Shenzhen Stock Exchange, Shenzhen Securities
Regulatory Bureau, etc.
(2) The company regularly or irregularly organizes professional training for employees according to the
departments and division of labor, including internal training and external training, therein to, internal training are
provided by specialized personnel in the company; external training are provided by organizing employees to
participate in the trade associations and the training organized by supervision department.
(3) Organize staff in all positions to actively participate in the learning and assessment of technical professional
qualifications required by different positions.
4. Labor outsourcing
□ Applicable √ Not applicable
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深圳中恒华发股份有限公司 2020 年年度报告全文
Section X. Corporate Governance
I. Corporate governance of the Company
During the reporting period, in accordance with the laws and regulations of the "Company Law", "Securities Law",
and "Governance Norms of Listed Companies", and the relevant rules and requirements promulgated by the China
Securities Regulatory Commission, the company has constantly improved the corporate governance structure,
established a sound internal control system, enhanced the level of standard operation, strictly followed the
provisions of the production and management control and the financial management and control and the
information disclosure and control, carried out the work on the basis of the "Articles of Association", "Rules of
Procedure of the Board of Directors”, "Rules of Procedure of the Board of Supervisors”, “Working System of the
Independent Directors”, and “Working Rules of the General Manager”, and ensured that the shareholders' meeting,
the board of directors and the board of supervisors can perform their duties and responsibilities normally. The
company's governance meets the requirements on the documents of governance norms of listed companies issued
by China Securities Regulatory Commission.
Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for
listed company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance
for listed company from CSRC.
II. Independent of the Company relative to controlling shareholders’ in aspect of businesses,
personnel, assets, organization and finance
During the reporting period, the company’s controlling shareholder - Wuhan Zhongheng Group has separated the
business, personnel, assets, organization and finance from the controlling shareholders in accordance with the laws
and regulations of the "Company Law" and "Articles of Association", and had the independent and complete
business system and the capabilities of independent management.
1. Personnel: The company fully and independently operates in the labor, personnel and salary management
systems and has established the independent management system, all of the company's senior executives are
working in the Company and receive the salaries, no senior executive has held a post in both the Company and the
controlling shareholder’s company, and no financial staff has held a post in two or more of the related companies.
2. Assets: The company has the clear property rights with the controlling shareholders and the capabilities of
independent management, possesses the full rights to control the production system, supporting facilities and land
use rights, no major shareholder has occupied or dominated the assets.
3. Finance: The company has established the independent, complete, standardized financial accounting system and
financial management system, and the corresponding internal control system and internal audit system in
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深圳中恒华发股份有限公司 2020 年年度报告全文
accordance with the requirements of the" Accounting Standards for Business Enterprises" to make the independent
financial decisions.
4. Organization: the board of directors, the board of supervisors, and other internal organizations are sound and
operate independently, the organization is completely separated from the controlling shareholders, all organizations
of the company are set up based on the norms and requirements of the listed company and the company’s actual
business features which have the independent office addresses and there is no mixed operation or co-working, and
the controlling shareholders legally exercise the investors’ rights and undertake the corresponding obligations.
5. Business: the company has the completely independent business operation system, the capabilities of
independent management, the independent purchasing system, production system and marketing system, doesn’t
depend on the controlling shareholders to gain profits or have the horizontal competition relationship with the
controlling shareholders or the subsidiaries.
III. Horizontal competition
□ Applicable √ Not applicable
IV. In the report period, the Company held annual general meeting and extraordinary
shareholders’ general meeting
1. Shareholders’ General Meeting in the report period
Ratio of investor Index of
Session of meeting Type Date Date of disclosure
participation disclosure
http://www.cninfo.
com.cn/new/disclo
sure/detail?stockC
2020 First
Extraordinary ode=000020&ann
Extraordinary
shareholders’ 6.26% February 11, 2020 February 12, 2020 ouncementId=120
shareholders’
general meeting 7302289&orgId=g
general meeting
ssz0000020&anno
uncementTime=20
20-02-12
http://www.cninfo.
com.cn/new/disclo
sure/detail?stockC
ode=000020&ann
Annual General
AGM 48.03% May 22, 2020 ouncementId=120
Meeting of 2019
7845176&orgId=g
ssz0000020&anno
uncementTime=20
20-05-22
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深圳中恒华发股份有限公司 2020 年年度报告全文
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and shareholders’ general meeting
The attending of Board Meeting and shareholders’ general meeting by independent directors
Times of Absent the
Times
Board Times of Board
Times of Times of presented in
Independent meeting attending by Times of Meeting for
present in entrusted shareholders
director supposed to communicati Absence the second
person presence ’ general
attend in the on time in a
meeting
report period row (Y/N)
Zheng Chunmei 5 0 5 0 0 N 2
Yang Xiongwen 5 0 5 0 0 N 2
Wu Weihua 5 0 5 0 0 N 2
Explanation of absent the Board Meeting for the second time in a row
Nil
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□Yes √No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directors
Advises about the Company from independent directors are all accepted in the reporting period.
VI. Duty performance of the special committees under the board during the reporting period
1. Duty performance of the audit committee
During the reporting period, the work carried out by the audit committee mainly included: listening to the
company's annual operating, financial and internal audit work, continuing to concern and guide the company’s
financial affairs and internal audit supervision, carrying forward the audit work to the company’s annual financial
report, sending a letter to urge the audit report to be submitted on time, communicating with the certified public
accountants time after time during the annual audit, objectively evaluating the annual audit work of the accounting
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深圳中恒华发股份有限公司 2020 年年度报告全文
firm, and making the resolution to agree to re-appoint the accounting firm.
2. Remuneration & appraisal committee
During the reporting period, the remuneration & appraisal committee has audited remuneration of the company’s
directors, supervisors and senior management which was considered to be consistent with the actual situation and
in line with the provisions of relevant laws and the regulations of remuneration and appraisal system.
3. The nominations committee
During the reporting period, the nominations committee has investigated the proposal for the supplement of
independent directors, and made the decision to agree to submit to the board of directors for consideration.
4. The Strategic Committee
In the reporting period, the Strategic Committee puts forward reasonable suggestions for the strategic
development of the Company by combining with actual situation of the Company.
VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting period.
VIII. Examination and incentives of senior management
During the reporting period, in order to enable the senior management to better perform their duties and maintain
the interests of the company and its shareholders, the company has variable paid the remuneration to urge the
company's management to work more diligently and ensure the realization of the company's development strategy
and operation target accordingly to the “Staff rank and basic salary system” and the performance assessment and
combining with the company's actual operating conditions.
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
2. Appraisal Report of Internal Control
Disclosure date of full internal control
April 27, 2021
evaluation report
Disclosure index of full internal control
Juchao Website http://www.cninfo.com.cn
evaluation report
The ratio of the total assets of units
included in the scope of evaluation 100.00%
accounting for the total assets on the
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深圳中恒华发股份有限公司 2020 年年度报告全文
company's consolidated financial
statements
The ratio of the operating income of
units included in the scope of evaluation
accounting for the operating income on 100.00%
the company's consolidated financial
statements
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
1. General deficiencies: the amount of 1. General deficiencies: when facing
direct property loss is between 50,000 low-risk matters in the process of
yuan and 150,000 yuan, penalized by the business operation, the unit being
district-level (including district-level) inspected didn’t take corresponding
government sector but not having a internal control measures and respond
negative impact on the company’s regular effectively;
disclosure; 2. Important deficiencies: the 2. Important deficiencies: when facing
amount of direct property loss is between matters at a moderate risk level in the
150,000 yuan and 450,000 yuan, penalized process of business operation, the unit
Qualitative criteria
by the provincial level (including being inspected didn’t take
provincial level) government sector but corresponding internal control
not having a negative impact on the measures and respond effectively;
company’s regular disclosure; 3. Major 3. Major deficiencies: when facing
deficiencies: the amount of direct property high-risk matters in the process of
loss is more than 450,000 yuan, penalized business operation, the unit being
by the government sector and having a inspected didn’t take corresponding
negative impact on the company’s regular internal control measures and respond
disclosure; effectively.
1. It belongs to important deficiency if the
misstatement of the company’s cash on
hand, bank deposits, notes receivable, and
notes payable caused by internal control
deficiencies is less than RMB 1000 Yuan; General deficiencies: misstatement
it belongs to major deficiency if the index 1 ≥0.5‰, and misstatement
misstatement caused by internal control index 2 < 0.5‰;
Quantitative standard deficiencies is greater than or equal to Important deficiencies: 0.5‰ ≤
RMB 1000 Yuan. misstatement index 2 < 1‰;
2. Other deficiencies in internal controls: Major deficiencies: misstatement index
general deficiencies: misstatement index 1 2≥1‰
≥ 0.5 ‰, and misstatement index 2 < 0.5
‰; important deficiencies: 0.5 ‰ ≤
misstatement index 2 <1 ‰; major
deficiencies: misstatement index 2 ≥ 1 ‰
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深圳中恒华发股份有限公司 2020 年年度报告全文
Amount of significant defects in
0
financial reports
Amount of significant defects in
0
non-financial reports
Amount of important defects in financial
0
reports
Amount of important defects in
0
non-financial reports
X. Auditing report of internal control
√ Applicable □ Not applicable
Deliberations in Internal Control Audit Report
We believe that the Huafa Company was in accordance with the "basic norms of internal control" and the relevant provisions and
maintained effective internal control of financial reporting in all material respects
Disclosure details of audit report
Disclosed
of internal control
Disclosure details of audit report
April 27, 2021
of internal control
Disclosure date of audit report of
Juchao Website http://www.cninfo.com.cn
internal control (full-text)
Opinion type of auditing report of
Standard unqualified
IC
Whether the non-financial report
No
had major defects
Carried out modified opinion for internal control audit report from CPA
□Yes √ No
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
√ Yes □ No
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深圳中恒华发股份有限公司 2020 年年度报告全文
Section XI. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without
due on the date when annual report approved for released or fail to cash in full on due
No
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深圳中恒华发股份有限公司 2020 年年度报告全文
Section XII. Financial Report
I. Audit report
Type of audit opinion Standard unqualified opinion
Signing date of audit report April 23, 2021
Name of audit institute DAXIN Certified Public Accountants (LLP)
Document serial of audit report Da Xin Shen Zi[2021] No.: 5-10006
Name of CPA Fan Zhang, Yang Ting
Text of Audit report
To all shareholders of SHENZHEN ZHONGHENG HUAFA CO., LTD.:
I. Auditing opinions
We have audited the financial statement under the name of SHENZHEN ZHONGHENG HUAFA CO., LTD.
(hereinafter referred to as the Company), including the consolidated and parent Company’s balance sheet of 31
December 2020 and profit statement, and cash flow statement, and statement on changes of shareholders’ equity
for the year ended, and notes to the financial statements for the year ended.
In our opinion, the Company’s financial statements have been prepared in accordance with the Enterprises
Accounting Standards and Enterprises Accounting System, and they fairly present the financial status of the
Company and of its parent company as of 31 December 2020 and its operation results and cash flows for the year
ended.
II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our
responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the
Financial Statements” section of the auditor’s report. We are independent of the Company in accordance with the
Certified Public Accountants of China’s Code of Ethics for Professional Accountants, and we have fulfilled our
other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
III. Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
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深圳中恒华发股份有限公司 2020 年年度报告全文
(i) Revenue recognition
1. Description of the matter
As stated in Note V (33) to the consolidated statement of your company, the main business income from display and
injection molded foam of 2020 recognized by your company was RMB 623,096,462.06, accounting for 90.08% of
operating income. The revenue generated from the sale of products is recognized when the control of the product
has been transferred to the customer, for domestic sales, the income is confirmed by the other party’s receipt of the
product, for export sales, the income is confirmed by the relevant customs declaration documents when the
product has been shipped and the declaration formalities have been completed.
Since income is one of your company’s key performance indicators, in order to prevent the inherent risks of
manipulating the time point of income recognition for achieving specific goals or expectations, we identify the
authenticity of income recognition for displays and injection molded foam as key audit items.
2. Audit response
(1) We understand, evaluate, and test the design and implementation of key internal controls related to the revenue
cycle, and test the effectiveness of internal controls;
(2) Select samples to inspect the sales contract or order, check the invoice, outbound order, receipt, customs
declaration and freight bill of lading, identify the contract terms and conditions related to the risks and reward
transfer of the ownership of the goods, and evaluate whether the time point of revenue recognition meets the
requirements of Accounting Standards for Business Enterprises
(3) Enquire the business information of major customers to identify whether there is related relationship; conduct
terminal sales penetrating inspections on related transactions; check the rationality and fairness of the related
transactions;
(4) For the income transactions recorded before and after the balance sheet date, select samples, check the
outbound order, receipt, logistics records, bills of lading and other supporting documents to assess whether the
income is recorded in the appropriate accounting period;
(5) Send correspondence to significant customers to confirm the amount of current sales revenue and account
receivable balance, and maintain controls over the correspondence during the sending process.
(ii) Related transaction
1. Description of the matter
As stated in Note IX (4) to the consolidated statement of your company, your company purchased a total of 284
million yuan of materials and finished products from the related parties, Hong Kong Yutian International
Investment Co., Ltd. and Wuhan Hengsheng Photoelectric Industry Co., Ltd., and sold a total of 198 million yuan
of goods to the related parties, Hong Kong Yutian International Investment Co., Ltd. and Wuhan Hengsheng
Photoelectric Industry Co., Ltd. As the related transactions involve a large amount of money, and for the same
related party at the same time there are sales and purchase business, there is a risk of circular transactions, we
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深圳中恒华发股份有限公司 2020 年年度报告全文
classify the related transaction as a key audit matter.
2. Audit response
(1) Understand, evaluate and test the internal control of your company’s related relationships and related
transactions;
(2) Obtain the related party relationship table compiled by your company, and conduct appropriate background
investigation to identify and verify related parties through Internet information inquiry;
(3) Obtain a list of related transactions of your company, understand the commercial reasons of related
transactions, check related contracts or agreements, invoices, customs declarations, etc. of related transactions,
and conduct letter confirmation for the accrual and balance of major related transactions to verify whether the
accounting treatment is appropriate;
(4) Understand the authorization and approval procedures for related transactions of your company, check the
procurement and sales vouchers to third parties, compare the purchase and sales prices of related parties and
non-related parties, and verify whether the related transactions are fair;
(5) Obtain the related party’s final procurement and sales lists to the third party provided by your company, check
the relevant contract agreements and bank slip of the procurement and sales of the related party to the third party,
and verify the authenticity of the transaction and whether it constitutes a transaction cycle.
(iii) Material arbitration
1. Description of the matter
As stated in Note XII (1) (2)to the consolidated statement, on August 16, 2017, the South China International
Economic and Trade Arbitration Commission made a ruling of HNGZSC [2017] No. D376, ruled that your
company and Wuhan Zhongheng had to pay a total of 234 million yuan of liquidated damages and other cost.On
November 5, 2019, the South China International Economic and Trade Arbitration Commission issued the ruling
HNGZSC [2019] No. D618 that your company and Wuhan Zhongheng Group should pay V&T Law Firm the
lawyer fee of RMB 19,402,000 and the liquidated damages. Your company believed that case [2017] No. D376
(Vanke arbitration case for short) had problems in the arbitration procedure and the determination of the so-called
breach of contract facts, and the ruling results damaged the company’s legitimate rights and interests. Your
company believed that the liability for breach of contract in the Vanke arbitration case should be fully borne by
Wuhan Zhongheng Group and Wuhan Zhongheng promised to bear all arbitration losses in full. If the company
paid in advance due to the execution of the case, it will immediately request Wuhan Zhongheng to fulfill its
commitment and eliminate the impact.
Your company believed that case [2019] No. D618 (referred to as the lawyer fee arbitration case) was caused by
the Vanke arbitration case, there’s a close causal relationship between the two cases, and Wuhan Zhongheng
Group issued a Commitment Letter to Shenzhen Hwafa in December 2016 that Wuhan Zhongheng Group shall
bear the full amount if the arbitration determines that Vanke wins the lawsuit and the disputes caused by the
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深圳中恒华发股份有限公司 2020 年年度报告全文
contract lead to arbitration losses. As the case has not yet been completed, and the uncertainty of the division of
liability for fault of internal performance the defaulting entity and the possibility of the transfer of interest in
Wuhan Zhongheng, the management needs to make significant judgments and estimates on whether the matter is
recognized as the estimated liability or the current profits or losses, so we recognize the major arbitration matter
as a key audit matter.
As stated in Note XII (3) to the consolidated statement, on April 17, 2020, Zhongheng Semiconductor sued your
company , demanding that your company transfer ownership pf the aforesaid two plots of land and compensate
economic losses of 52 million yuan. Zhongheng Semiconductor has promised your company that its main appeal
is the transfer of land to its name. If it wins, it will waive its claim for financial compensation. Since the case has
not yet been heard in court, the management needs to make significant judgments and estimates on whether the
matter is recognized as an estimated liability or current profit and loss. Therefore, we recognize the significant
arbitration matter as a key audit matter.
2. Audit response
(1) Understand the company’s policies and procedures for determining major issues by conducting inspections,
consulting with management and corporate legal counsel;
(2) Collect your company’s asset replacement contracts, asset replacement and related transaction announcements
and old contracts, cooperation agreement between your company and Wuhan Zhongheng Group, and the
Arbitration Award HNGZSC [2017] No. D376. related to this major issue, your company’s application for repeal
of arbitration, the ruling of Shenzhen Intermediate People’s Court for rejection, the enforcement notice of
Shenzhen Intermediate People’s Court, and the Arbitration Award HNGZSC [2019] No. D618, counsel's legal
opinion and other documents and materials, and understand the supporting evidence for the management of your
company to make judgments on the important matters;
(3) Engage legal experts to make independent judgments on the matter, and make independent judgments on legal
special opinions issued by legal experts;
(4) Sending a communication letter to company’s legal counsel to get an update on the progress of major litigation
cases, and determine if there is a material impact on the company’s financial statements;
(5) Check whether the major arbitration matter is sufficiently and properly disclosed in the financial report.
IV. Other information
The management of the Company (the “Management”) is responsible for other information which includes the
information covered in the Company’s 201X annual report excluding the financial statement and our audit report.
The audit opinion issued by us for the financial statement has not covered other information, for which we do not
issue any form of assurance opinions.
Considering our audit on financial statements, we are liable to read other information, during which, we shall
consider whether other information differs materially from the financial statements or that we understand during
our audit, or whether there is any material misstatement.
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深圳中恒华发股份有限公司 2020 年年度报告全文
Based on the works executed by us, we should report the fact if we find any material misstatement in other
information. In this regards, we have nothing to report.
V. Responsibilities of management and those charged with governance for the financial statements
The management is responsible for the preparation of the financial statements in accordance with the Accounting
Standards for Enterprise to secure a fair presentation, and for the design, establishment and maintenance of the
internal control necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing matters (if applicable) related to going concern and using the going
concern assumption unless the management either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern assumption and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
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深圳中恒华发股份有限公司 2020 年年度报告全文
uncertainty exists, we are required by the CAS to draw users’ attention in audit report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are based
on the information obtained up to the date of audit report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express audit opinion on the financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguard measures.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in the auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in the auditor’s report because of the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
II. Financial Statement
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by SHENZHEN ZHONGHENG HUAFA CO., LTD.
December 31, 2020
In RMB
Item December 31, 2020 December 31, 2019
Current assets:
Monetary funds 60,968,053.58 38,095,501.00
Settlement provisions
Capital lent
Transaction financial assets
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深圳中恒华发股份有限公司 2020 年年度报告全文
Derivative financial assets
Note receivable 20,240,464.79
Account receivable 128,063,911.79 138,755,691.43
Receivable financing 10,057,385.11 42,096,834.02
Accounts paid in advance 39,643,255.11 23,007,637.46
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance
receivable
Other account receivable 4,466,949.96 6,351,361.16
Including: Interest receivable
Dividend receivable
Buying back the sale of financial
assets
Inventories 70,166,013.49 66,971,551.96
Contractual assets
Assets held for sale
Non-current asset due within one
year
Other current assets 4,255,643.19 1,395,071.36
Total current assets 338,198,437.05 316,673,648.39
Non-current assets:
Loans and payments on behalf
Debt investment
Other debt investment
Long-term account receivable
Long-term equity investment
Investment in other equity
instrument
Other non-current financial
assets
Investment real estate 47,224,662.27 48,952,992.57
Fixed assets 193,605,444.53 198,229,817.31
Construction in progress 740,000.00
Productive biological asset
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深圳中恒华发股份有限公司 2020 年年度报告全文
Oil and gas asset
Right-of-use assets
Intangible assets 40,820,657.80 42,968,600.44
Expense on Research and
Development
Goodwill
Long-term expenses to be
77,445.31 309,781.15
apportioned
Deferred income tax asset 7,383,734.13 6,803,360.00
Other non-current asset 66,000.00 225,700.00
Total non-current asset 289,917,944.04 297,490,251.47
Total assets 627,779,621.06 614,163,899.86
Current liabilities:
Short-term loans 12,527,808.00 24,633,898.20
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability
Note payable 37,416,381.20 16,761,590.51
Account payable 98,318,239.88 108,804,905.20
Accounts received in advance 356,446.21
Contractual liability 287,140.66
Selling financial asset of
repurchase
Absorbing deposit and interbank
deposit
Security trading of agency
Security sales of agency
Wage payable 5,737,366.59 5,877,341.25
Taxes payable 14,204,642.62 12,877,944.98
Other account payable 27,608,281.01 28,027,592.62
Including: Interest payable 26,335.66 89,365.28
Dividend payable
Commission charge and
commission payable
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深圳中恒华发股份有限公司 2020 年年度报告全文
Reinsurance payable
Liability held for sale
Non-current liabilities due
12,000,000.00 12,000,000.00
within one year
Other current liabilities 18,322,972.81
Total current liabilities 226,422,832.77 209,339,718.97
Non-current liabilities:
Insurance contract reserve
Long-term loans 61,000,000.00 73,000,000.00
Bonds payable
Including: Preferred stock
Perpetual capital
securities
Lease liability
Long-term account payable
Long-term wages payable
Accrual liability 64,411.00 64,411.00
Deferred income 4,043,640.00 2,331,720.00
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 65,108,051.00 75,396,131.00
Total liabilities 291,530,883.77 284,735,849.97
Owner’s equity:
Share capital 283,161,227.00 283,161,227.00
Other equity instrument
Including: Preferred stock
Perpetual capital
securities
Capital public reserve 146,577,771.50 146,587,271.50
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus public reserve 77,391,593.25 77,391,593.25
Provision of general risk
Retained profit -170,881,854.46 -177,712,041.86
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深圳中恒华发股份有限公司 2020 年年度报告全文
Total owner’ s equity attributable to
336,248,737.29 329,428,049.89
parent company
Minority interests
Total owner’ s equity 336,248,737.29 329,428,049.89
Total liabilities and owner’ s equity 627,779,621.06 614,163,899.86
Legal Representative: Li Zhongqiu
Person in charge of accounting works: Yang Bin
Person in charge of accounting institute: Wu Aijie
2. Balance Sheet of Parent Company
In RMB
Item December 31, 2020 December 31, 2019
Current assets:
Monetary funds 966,379.17 3,494,245.90
Trading financial assets
Derivative financial assets
Note receivable
Account receivable
Receivable financing
Accounts paid in advance 73,685.03
Other account receivable 93,922,057.92 97,165,023.85
Including: Interest receivable
Dividend
receivable
Inventories 14,806.50 14,806.50
Contractual assets
Assets held for sale
Non-current assets maturing
within one year
Other current assets 173,950.26
Total current assets 94,976,928.62 100,848,026.51
Non-current assets:
Debt investment
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深圳中恒华发股份有限公司 2020 年年度报告全文
Other debt investment
Long-term receivables
Long-term equity investments 186,618,400.00 186,608,900.00
Investment in other equity
instrument
Other non-current financial
assets
Investment real estate 23,957,898.42 25,166,301.06
Fixed assets 96,674,476.52 98,410,024.38
Construction in progress 740,000.00
Productive biological assets
Oil and natural gas assets
Right-of-use assets
Intangible assets 4,408,763.52 4,553,709.24
Research and development costs
Goodwill
Long-term deferred expenses
Deferred income tax assets 7,443,826.11 7,367,646.35
Other non-current assets
Total non-current assets 319,843,364.57 322,106,581.03
Total assets 414,820,293.19 422,954,607.54
Current liabilities
Short-term borrowings
Trading financial liability
Derivative financial liability
Notes payable
Account payable 10,745,840.16 10,745,840.16
Accounts received in advance 57,266.01
Contractual liability 79,195.32
Wage payable 1,476,601.12 1,220,979.02
Taxes payable 7,892,878.33 8,489,130.72
Other accounts payable 21,304,919.43 19,100,375.42
Including: Interest payable
Dividend payable
Liability held for sale
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深圳中恒华发股份有限公司 2020 年年度报告全文
Non-current liabilities due
12,000,000.00 12,000,000.00
within one year
Other current liabilities 3,959.77
Total current liabilities 53,503,394.13 51,613,591.33
Non-current liabilities:
Long-term loans 61,000,000.00 73,000,000.00
Bonds payable
Including: preferred stock
Perpetual capital
securities
Lease liability
Long-term account payable
Long term employee
compensation payable
Accrued liabilities 64,411.00 64,411.00
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 61,064,411.00 73,064,411.00
Total liabilities 114,567,805.13 124,678,002.33
Owners’ equity:
Share capital 283,161,227.00 283,161,227.00
Other equity instrument
Including: preferred stock
Perpetual capital
securities
Capital public reserve 146,587,271.50 146,587,271.50
Less: Inventory shares
Other comprehensive income
Special reserve
Surplus reserve 77,391,593.25 77,391,593.25
Retained profit -206,887,603.69 -208,863,486.54
Total owner’s equity 300,252,488.06 298,276,605.21
Total liabilities and owner’s equity 414,820,293.19 422,954,607.54
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深圳中恒华发股份有限公司 2020 年年度报告全文
3. Consolidated Profit Statement
In RMB
Item 2020 2019
I. Total operating income 691,742,269.12 721,557,440.51
Including: Operating income 691,742,269.12 721,557,440.51
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 686,630,062.93 713,911,668.31
Including: Operating cost 613,228,694.51 634,502,127.35
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal
of insurance contract reserve
Bonus expense of
guarantee slip
Reinsurance expense
Tax and extras 3,575,851.98 3,900,270.42
Sales expense 15,417,760.60 20,879,256.97
Administrative expense 34,481,219.11 38,034,071.63
R&D expense 7,285,833.84 6,649,163.02
Financial expense 12,640,702.89 9,946,778.92
Including: Interest
8,508,919.02 10,638,951.99
expenses
Interest
838,314.39 631,958.95
income
Add: other income 2,264,506.66 259,080.00
Investment income (Loss is
165,317.73 180,964.60
listed with “-”)
Including: Investment
income on affiliated company and joint
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深圳中恒华发股份有限公司 2020 年年度报告全文
venture
The termination of
income recognition for financial assets
measured by amortized cost(Loss is
listed with “-”)
Exchange income (Loss is
listed with “-”)
Net exposure hedging
income (Loss is listed with “-”)
Income from change of fair
value (Loss is listed with “-”)
Loss of credit impairment
207,383.73 190,618.99
(Loss is listed with “-”)
Losses of devaluation of
170,241.33 -385,333.82
asset (Loss is listed with “-”)
Income from assets disposal
817,533.49 9,298.34
(Loss is listed with “-”)
III. Operating profit (Loss is listed with
8,737,189.13 7,900,400.31
“-”)
Add: Non-operating income 488,657.30 334,950.66
Less: Non-operating expense 408,809.90 484,592.52
IV. Total profit (Loss is listed with “-”) 8,817,036.53 7,750,758.45
Less: Income tax expense 1,986,849.13 2,290,709.30
V. Net profit (Net loss is listed with
6,830,187.40 5,460,049.15
“-”)
(i) Classify by business continuity
1.continuous operating net profit
6,830,187.40 5,460,049.15
(net loss listed with ‘-”)
2.termination of net profit (net
loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to
6,830,187.40 5,460,049.15
owner’s of parent company
2.Minority shareholders’ gains
and losses
VI. Net after-tax of other
comprehensive income
Net after-tax of other comprehensive
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深圳中恒华发股份有限公司 2020 年年度报告全文
income attributable to owners of parent
company
(i) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss
1.Changes of the defined
benefit plans that re-measured
2.Other comprehensive
income under equity method that
cannot be transfer to gain/loss
3.Change of fair value of
investment in other equity instrument
4.Fair value change of
enterprise's credit risk
5. Other
(ii) Other comprehensive income
items which will be reclassified
subsequently to profit or loss
1.Other comprehensive
income under equity method that can
transfer to gain/loss
2.Change of fair value of
other debt investment
3.Amount of financial
assets re-classify to other
comprehensive income
4.Credit impairment
provision for other debt investment
5.Cash flow hedging
reserve
6.Translation differences
arising on translation of foreign
currency financial statements
7.Other
Net after-tax of other comprehensive
income attributable to minority
shareholders
VII. Total comprehensive income 6,830,187.40 5,460,049.15
Total comprehensive income 6,830,187.40 5,460,049.15
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深圳中恒华发股份有限公司 2020 年年度报告全文
attributable to owners of parent
Company
Total comprehensive income
attributable to minority shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.0241 0.0193
(ii) Diluted earnings per share 0.0241 0.0193
As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before combination while 0
Yuan achieved last period.
Legal Representative: Li Zhongqiu
Person in charge of accounting works: Yang Bin
Person in charge of accounting institute: Wu Aijie
4. Profit Statement of Parent Company
In RMB
Item 2020 2019
I. Operating income 37,262,114.01 38,216,680.42
Less: Operating cost 6,784,029.31 7,304,872.41
Taxes and surcharge 935,273.64 1,302,971.22
Sales expenses
Administration expenses 17,981,589.32 15,825,546.36
R&D expenses
Financial expenses 7,719,720.37 8,665,845.55
Including: interest
7,717,101.68 8,631,842.66
expenses
Interest income 10,145.09 16,312.01
Add: other income 5,145.25
Investment income (Loss is
listed with “-”)
Including: Investment
income on affiliated Company and
joint venture
The termination of
income recognition for financial
assets measured by amortized cost
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深圳中恒华发股份有限公司 2020 年年度报告全文
(Loss is listed with “-”)
Net exposure hedging
income (Loss is listed with “-”)
Changing income of fair
value (Loss is listed with “-”)
Loss of credit impairment
-304,719.05 557,038.21
(Loss is listed with “-”)
Losses of devaluation of
asset (Loss is listed with “-”)
Income on disposal of
910,907.16
assets (Loss is listed with “-”)
II. Operating profit (Loss is listed
4,452,834.73 5,674,483.09
with “-”)
Add: Non-operating income 89,455.80 11,431.87
Less: Non-operating expense 433.38 440,391.48
III. Total Profit (Loss is listed with
4,541,857.15 5,245,523.48
“-”)
Less: Income tax 2,565,974.30 2,253,579.61
IV. Net profit (Net loss is listed with
1,975,882.85 2,991,943.87
“-”)
(i) continuous operating net
1,975,882.85 2,991,943.87
profit (net loss listed with ‘-”)
(ii) termination of net profit (net
loss listed with ‘-”)
V. Net after-tax of other
comprehensive income
(i) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss
1.Changes of the defined
benefit plans that re-measured
2.Other comprehensive
income under equity method that
cannot be transfer to gain/loss
3.Change of fair value of
investment in other equity instrument
4.Fair value change of
enterprise's credit risk
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深圳中恒华发股份有限公司 2020 年年度报告全文
5. Other
(ii) Other comprehensive
income items which will be
reclassified subsequently to profit or
loss
1.Other comprehensive
income under equity method that can
transfer to gain/loss
2.Change of fair value of
other debt investment
3.Amount of financial
assets re-classify to other
comprehensive income
4.Credit impairment
provision for other debt investment
5.Cash flow hedging
reserve
6.Translation differences
arising on translation of foreign
currency financial statements
7.Other
VI. Total comprehensive income 1,975,882.85 2,991,943.87
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share
5. Consolidated Cash Flow Statement
In RMB
Item 2020 2019
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor 570,954,717.52 553,928,004.01
services
Net increase of customer deposit
and interbank deposit
Net increase of loan from
central bank
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深圳中恒华发股份有限公司 2020 年年度报告全文
Net increase of capital borrowed
from other financial institution
Cash received from original
insurance contract fee
Net cash received from
reinsurance business
Net increase of insured savings
and investment
Cash received from interest,
commission charge and commission
Net increase of capital borrowed
Net increase of returned business
capital
Net cash received by agents in
sale and purchase of securities
Write-back of tax received 126,477.24
Other cash received concerning
9,550,590.82 13,798,593.97
operating activities
Subtotal of cash inflow arising from
580,631,785.58 567,726,597.98
operating activities
Cash paid for purchasing
commodities and receiving labor 416,696,575.23 378,873,939.95
service
Net increase of customer loans
and advances
Net increase of deposits in
central bank and interbank
Cash paid for original insurance
contract compensation
Net increase of capital lent
Cash paid for interest,
commission charge and commission
Cash paid for bonus of
guarantee slip
Cash paid to/for staff and
58,223,463.86 64,417,822.74
workers
Taxes paid 11,877,060.89 12,372,419.54
Other cash paid concerning 34,115,416.00 37,598,708.74
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深圳中恒华发股份有限公司 2020 年年度报告全文
operating activities
Subtotal of cash outflow arising from
520,912,515.98 493,262,890.97
operating activities
Net cash flows arising from operating
59,719,269.60 74,463,707.01
activities
II. Cash flows arising from investing
activities:
Cash received from recovering
investment
Cash received from investment
147,502.66 180,964.60
income
Net cash received from disposal
of fixed, intangible and other 1,803,913.05 198,536.93
long-term assets
Net cash received from disposal
of subsidiaries and other units
Other cash received concerning
55,000,000.00 75,000,000.00
investing activities
Subtotal of cash inflow from
56,951,415.71 75,379,501.53
investing activities
Cash paid for purchasing fixed,
5,471,921.66 3,288,039.15
intangible and other long-term assets
Cash paid for investment
Net increase of mortgaged loans
Net cash received from
subsidiaries and other units obtained
Other cash paid concerning
55,000,000.00 75,000,000.00
investing activities
Subtotal of cash outflow from
60,471,921.66 78,288,039.15
investing activities
Net cash flows arising from investing
-3,520,505.95 -2,908,537.62
activities
III. Cash flows arising from financing
activities
Cash received from absorbing
investment
Including: Cash received from
absorbing minority shareholders’
investment by subsidiaries
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深圳中恒华发股份有限公司 2020 年年度报告全文
Cash received from loans 34,380,634.80 215,911,217.10
Other cash received concerning
financing activities
Subtotal of cash inflow from
34,380,634.80 215,911,217.10
financing activities
Cash paid for settling debts 56,765,100.20 267,928,436.03
Cash paid for dividend and
8,639,896.64 10,984,022.74
profit distributing or interest paying
Including: Dividend and profit
of minority shareholder paid by
subsidiaries
Other cash paid concerning
30,688,367.17
financing activities
Subtotal of cash outflow from
96,093,364.01 278,912,458.77
financing activities
Net cash flows arising from financing
-61,712,729.21 -63,001,241.67
activities
IV. Influence on cash and cash
equivalents due to fluctuation in -1,080,106.72 129,924.29
exchange rate
V. Net increase of cash and cash
-6,594,072.28 8,683,852.01
equivalents
Add: Balance of cash and cash
36,645,061.61 27,961,209.60
equivalents at the period -begin
VI. Balance of cash and cash
30,050,989.33 36,645,061.61
equivalents at the period -end
6. Cash Flow Statement of Parent Company
In RMB
Item 2020 2019
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor 28,455,496.04 31,130,517.17
services
Write-back of tax received 4,854.01
Other cash received concerning
12,618,059.59 126,052,122.79
operating activities
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深圳中恒华发股份有限公司 2020 年年度报告全文
Subtotal of cash inflow arising from
41,078,409.64 157,182,639.96
operating activities
Cash paid for purchasing
commodities and receiving labor 1,580,720.38 5,137,335.48
service
Cash paid to/for staff and
1,943,628.52 3,853,129.50
workers
Taxes paid 5,824,850.36 3,503,529.69
Other cash paid concerning
15,908,119.05 130,808,236.27
operating activities
Subtotal of cash outflow arising from
25,257,318.31 143,302,230.94
operating activities
Net cash flows arising from operating
15,821,091.33 13,880,409.02
activities
II. Cash flows arising from investing
activities:
Cash received from recovering
investment
Cash received from investment
income
Net cash received from disposal
of fixed, intangible and other 1,590,000.00 1,000.00
long-term assets
Net cash received from disposal
of subsidiaries and other units
Other cash received concerning
investing activities
Subtotal of cash inflow from
1,590,000.00 1,000.00
investing activities
Cash paid for purchasing fixed,
228,914.40
intangible and other long-term assets
Cash paid for investment
Net cash received from
subsidiaries and other units obtained
Other cash paid concerning
investing activities
Subtotal of cash outflow from
228,914.40
investing activities
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深圳中恒华发股份有限公司 2020 年年度报告全文
Net cash flows arising from investing
1,590,000.00 -227,914.40
activities
III. Cash flows arising from financing
activities
Cash received from absorbing
investment
Cash received from loans 1,000,000.00 90,000,000.00
Other cash received concerning
financing activities
Subtotal of cash inflow from
1,000,000.00 90,000,000.00
financing activities
Cash paid for settling debts 12,000,000.00 105,000,000.00
Cash paid for dividend and
7,717,101.68 8,631,842.66
profit distributing or interest paying
Other cash paid concerning
financing activities
Subtotal of cash outflow from
19,717,101.68 113,631,842.66
financing activities
Net cash flows arising from financing
-18,717,101.68 -23,631,842.66
activities
IV. Influence on cash and cash
equivalents due to fluctuation in -2,451.00 1,311.90
exchange rate
V. Net increase of cash and cash
-1,308,461.35 -9,978,036.14
equivalents
Add: Balance of cash and cash
2,046,143.44 12,024,179.58
equivalents at the period -begin
VI. Balance of cash and cash
737,682.09 2,046,143.44
equivalents at the period -end
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
In RMB
2020
Owners’ equity attributable to the parent Company Min Tota
Item Other ority l
Sha Capi Less Othe Reas Surp Prov Reta Othe Subt
equity inter own
re tal : r onab lus ision ined r otal
instrument ests ers’
87
深圳中恒华发股份有限公司 2020 年年度报告全文
cap Per reser Inve com le reser of profi equit
ital pet ve ntor preh reser ve gene t y
Pre
ual y ensi ve ral
fer
cap Ot shar ve risk
red
ital her es inco
sto
sec me
ck
urit
ies
283
146, 77,3 -177 329, 329,
I. Balance at ,16
587, 91,5 ,712, 428, 428,
the end of the 1,2
271. 93.2 041. 049. 049.
last year 27.
50 5 86 89 89
00
Add:
Changes of
accounting
policy
Error
correction of
the last period
Enterprise
combine
under the
same control
Other
283
146, 77,3 -177 329, 329,
II. Balance at ,16
587, 91,5 ,712, 428, 428,
the beginning 1,2
271. 93.2 041. 049. 049.
of this year 27.
50 5 86 89 89
00
III. Increase/
Decrease in
-9,5 6,83 6,82 6,82
this year
00.0 0,18 0,68 0,68
(Decrease is
0 7.40 7.40 7.40
listed with
“-”)
(i) Total 6,83 6,83 6,83
comprehensiv 0,18 0,18 0,18
e income 7.40 7.40 7.40
88
深圳中恒华发股份有限公司 2020 年年度报告全文
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other
(III) Profit
distribution
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general
risk
provisions
3.
Distribution
for owners (or
shareholders)
4. Other
(IV) Carrying
forward
internal
owners’
equity
1. Capital
reserves
89
深圳中恒华发股份有限公司 2020 年年度报告全文
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4．Carry-over
retained
earnings from
the defined
benefit plans
5．Carry-over
retained
earnings from
other
comprehensiv
e income
6. Other
(V)
Reasonable
reserve
1. Withdrawal
in the report
period
2. Usage in
the report
period
-9,5 -9,5 -9,5
(VI)Others 00.0 00.0 00.0
0 0 0
283
146, 77,3 -170 336, 336,
IV. Balance at ,16
577, 91,5 ,881, 248, 248,
the end of the 1,2
771. 93.2 854. 737. 737.
report period 27.
50 5 46 29 29
00
90
深圳中恒华发股份有限公司 2020 年年度报告全文
Last period
In RMB
2019
Owners’ equity attributable to the parent Company
Other
equity
instrument
Pe Othe
Less
rpe r Prov Total
: Reas Mino
Sha tua Capi com Surp ision Reta owne
Item Inve onab rity
Pr rs’
re l tal preh lus of ined Othe Subt
efe ntor le intere
cap ca reser ensi reser gene profi r otal equit
rre Oth y reser sts
ital pit ve ve ve ral t y
d er shar ve
al inco risk
sto es
sec me
ck
uri
tie
s
283
146, 77,3 -183 323,
I. Balance at ,16 323,9
587, 91,5 ,172, 968,
the end of the 1,2 68,00
271. 93.2 091. 000.
last year 27. 0.74
50 5 01 74
00
Add:
Changes of
accounting
policy
Error
correction of
the last
period
Enterprise
combine
under the
same control
Other
II. Balance at 283 146, 77,3 -183 323, 323,9
the beginning ,16 587, 91,5 ,172, 968, 68,00
of this year 1,2 271. 93.2 091. 000. 0.74
91
深圳中恒华发股份有限公司 2020 年年度报告全文
27. 50 5 01 74
00
III. Increase/
Decrease in
5,46 5,46 5,460
this year
0,04 0,04 ,049.
(Decrease is
9.15 9.15 15
listed with
“-”)
(i) Total 5,46 5,46 5,460
comprehensi 0,04 0,04 ,049.
ve income 9.15 9.15 15
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners
equity with
share-based
payment
4. Other
(III) Profit
distribution
1.
Withdrawal
of surplus
reserves
2.
Withdrawal
of general
risk
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深圳中恒华发股份有限公司 2020 年年度报告全文
provisions
3.
Distribution
for owners
(or
shareholders)
4. Other
(IV) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3.
Remedying
loss with
surplus
reserve
4．Carry-over
retained
earnings
from the
defined
benefit plans
5．Carry-over
retained
earnings
from other
comprehensi
ve income
6. Other
(V)
93
深圳中恒华发股份有限公司 2020 年年度报告全文
Reasonable
reserve
1.
Withdrawal
in the report
period
2. Usage in
the report
period
(VI)Others
283
IV. Balance 146, 77,3 -177 329,
,16 329,4
at the end of 587, 91,5 ,712, 428,
1,2 28,04
the report 271. 93.2 041. 049.
27. 9.89
period 50 5 86 89
00
8. Statement of Changes in Owners’ Equity (Parent Company)
Current period
In RMB
2020
Other equity
instrument Other
Capita
Perp Less: compr Reaso Surplu Retai
Share l Total
Item etual Invent ehensi nable s ned
capit Prefe public Other owners’
capit Othe ory ve reserv reserv profi
al rred reserv equity
al r shares incom e e t
stock e
secur e
ities
-208,
I. Balance at 283,1 146,58 77,391
863, 298,276,
the end of the 61,22 7,271. ,593.2
486. 605.21
last year 7.00 50 5
54
Add:
Changes of
accounting
policy
Error
correction of
the last period
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深圳中恒华发股份有限公司 2020 年年度报告全文
Other
-208,
II. Balance at 283,1 146,58 77,391
863, 298,276,
the beginning 61,22 7,271. ,593.2
486. 605.21
of this year 7.00 50 5
54
III. Increase/
Decrease in 1,97
1,975,88
this year 5,88
2.85
(Decrease is 2.85
listed with “-”)
(i) Total 1,97
1,975,88
comprehensive 5,88
2.85
income 2.85
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other
(III) Profit
distribution
1. Withdrawal
of surplus
reserves
2. Distribution
for owners (or
shareholders)
95
深圳中恒华发股份有限公司 2020 年年度报告全文
3. Other
(IV) Carrying
forward
internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus reserve
4．Carry-over
retained
earnings from
the defined
benefit plans
5．Carry-over
retained
earnings from
other
comprehensive
income
6. Other
(V)
Reasonable
reserve
1. Withdrawal
in the report
period
2. Usage in the
report period
(VI)Others
IV. Balance at 283,1 146,58 77,391 -206,
300,252,
the end of the 61,22 7,271. ,593.2 887,
96
深圳中恒华发股份有限公司 2020 年年度报告全文
report period 7.00 50 5 603. 488.06
69
Last period
In RMB
2019
Other equity
instrument
Other
Perp Capit
Shar Less: compr Surpl
Pref etual al Reason Total
Item e Invent ehensi us Retaine
erre capit public able Other owners’
capit Othe ory ve reserv d profit
d al reserv reserve equity
al r shares incom e
stoc secu e
e
k ritie
s
283,
I. Balance at 146,5 77,39 -211,85
161, 295,284,
the end of the 87,27 1,593 5,430.4
227. 661.34
last year 1.50 .25 1
00
Add:
Changes of
accounting
policy
Error
correction of
the last
period
Other
283,
II. Balance at 146,5 77,39 -211,85
161, 295,284,
the beginning 87,27 1,593 5,430.4
227. 661.34
of this year 1.50 .25 1
00
III. Increase/
Decrease in
this year 2,991,9 2,991,94
(Decrease is 43.87 3.87
listed with
“-”)
(i) Total
2,991,9 2,991,94
comprehensiv
43.87 3.87
e income
97
深圳中恒华发股份有限公司 2020 年年度报告全文
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other
(III) Profit
distribution
1.
Withdrawal
of surplus
reserves
2.
Distribution
for owners
(or
shareholders)
3. Other
(IV) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
98
深圳中恒华发股份有限公司 2020 年年度报告全文
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4．Carry-over
retained
earnings from
the defined
benefit plans
5．Carry-over
retained
earnings from
other
comprehensiv
e income
6. Other
(V)
Reasonable
reserve
1.
Withdrawal
in the report
period
2. Usage in
the report
period
(VI)Others
283,
IV. Balance at 146,5 77,39 -208,86
161, 298,276,
the end of the 87,27 1,593 3,486.5
227. 605.21
report period 1.50 .25 4
00
III. Company profile
(1)The registration place of the enterprise, the form of organization and the headquarters address
99
深圳中恒华发股份有限公司 2020 年年度报告全文
Shenzhen Zhongheng HUAFA Company Limited (hereinafter referred to as Company or the Company),
established on 8 December 1981. Uniform social credit code 91440300618830372G.
Registered place and head office of the Company: 411 Bldg., Huafa (N) Road, Futian District, Shenzhen
Legal representative: Li Zhongqiu
Registered capital: RMB 283,161,227.00
(2) The nature of the business and the main business activities. (for example, the industry in which the
company operates, the main products or services it offers, the nature of its customers, its sales
strategy, nature of its regulatory environment etc.)
The Company belongs to the computer, telecommunication and manufacturing of other electronic equipment.
Business scope: producing and sales of vary color TV set, liquid crystal display, LCD (operates in branch),
radio-recorder, sound equipment, electronic watch, electronic game and computers, the printed wiring board,
precision injection parts, light packaging material (operates in Wuhan) and hardware (including tool and mould)
for various electronic products and supporting parts, plating and surface treatment and tin wire, development and
operation of real estate (Shen Fang Di Zi No.: 7226760) and property management. Funded affiliated companies
in Wuhan and Jilin. Setting up branches in capital of the province (Lhasa City excluded) in China and
municipality directly under the central government.
(3)Relevant party offering approval reporting of financial statements and date thereof
The financial statement has been deliberated and approved by BOD on 15 April 2021. According to Article of
Association, the statement shall be submitted for deliberation in shareholders general meeting.
(4) Consolidation scope of the financial statement for the year
Consolidate scope in the Period: subsidiaries including Shenzhen HUAFA Property Lease Management Co., Ltd
(no annual inspection in 2011, and business license revoke on 1 April 2014), Shenzhen Zhongheng HUAFA
Property Co., Ltd, Wuhan Hengfa Technology Co., Ltd., Shenzhen HUAFA Hengtian Co., Ltd. and Shenzhen
HUAFA Hengtai Co., Ltd. More of subsidiaries found in “Note VII. Equity in other subjects”.
IV. Preparation basis of Financial Statements
1. Preparation basis
Base on the running continuously and actual transactions and events, in line with the Accounting Standards for
Business Enterprise – Basic Standards and specific principle of accounting standards issued by the Ministry of
Finance (hereinafter collectively referred to as Accounting Standards for Business Enterprise), the Company
prepared and formulate the financial statement lies on the followed important accounting policy and estimation.
2. Going concern
The Company expects that the production and sales will be in a virtuous cycle within 12 months from the end of
100
深圳中恒华发股份有限公司 2020 年年度报告全文
he reporting period, and there is no risk that affects the continued operations.
V. Important accounting policy and estimation
Notes on specific accounting policies and accounting estimation:
The following disclosure has covered the specific accounting policies and accounting estimates formulated by the Company
according to the actual production and operation characteristics.
1. Declaration of obedience to Accounting Standards for Business Enterprise
The Financial Statements of the Company are up to requirements of Accounting Standards for Business Enterprise
and also a true and thorough reflection to the relevant information as the Company’s financial position dated 31st
December 2020 and the operation results as well as cash flow for the year of 2020.
2. Accounting period
The Company’s accounting year is Gregorian calendar year, namely from 1 st January to 31st December of every
year.
3. Business cycle
The Company’s business cycle is one year (12 months) as a normal cycle, and the business cycle is the
determining criterion for the liquidity of assets and liabilities of the Company.
4. Bookkeeping standard currency
The Renminbi (RMB) is taken as the book-keeping standard currency.
5. Accounting methods for consolidation of enterprises under the same control or otherwise
1. Consolidation of enterprises under the same control
Where the Company for long term equity investment arising from business combination under common control
satisfies the combination consideration by payment of cash, transfer of non-cash assets or assumption of debt, the
carrying value of the net assets of the acquire in combined financial statement of the ultimate controller shared by
the Company as at the combination date shall be deemed as the initial investment cost of such long term equity
investment. If the equity instrument issued by combining party are consider as the combination consideration,
than the total value of the issuing shares are consider as the share capital. The difference between the initial cost of
long-term equity investment and book value of consideration (or total face value of the shares issued) paid, capital
surplus adjusted; if the capital surplus not enough to written down, than retained earning adjusted.
2. Business combination not under common control
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深圳中恒华发股份有限公司 2020 年年度报告全文
As for business combination not under common control, combination costs refer to the sum of the fair value of the
assets paid, liabilities occurred or assumed as well as equity securities issued by the acquirer to obtain control over
the acquire as at the acquisition date. As for acquiree that obtained by consolidation not under the same control,
the qualified confirmation of identified assets, liability and contingency liabilities should calculated by fair value
on day of purchased. If the consolidation cost larger than the fair value amount of identified net assets from
acquiree’s, the differences should be recognized as goodwill. If the consolidation cost less than the fair value
amount of identified net assets from acquiree’s, the differences should reckoned into current non-operating
income.
6. Preparation methods for consolidated financial statements
1. Consolidation financial statement range
The Company includes all the subsidiaries (including the separate entities controlled by the Company) into
consolidated financial statement, including companies controlled by the Company, non-integral part of the
investees and structural main body.
2. Centralize accounting policies, balance sheet dates and accounting periods of parent and subsidiaries.
As for the inconsistency between the subsidiaries and the Company in the accounting policies and periods, the
necessary adjustment is made on the subsidiaries’ financial statements in the preparation of the consolidated
financial statements according to the Company’s accounting policies and periods.
3. Offset of consolidated financial statement
The consolidated financial statements shall be prepared on the basis of the balance sheet of the parent company
and subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries and
within subsidiaries. The owner’s equity of the subsidiaries not attributable to the parent company shall be
presented as minority equity under the owner’s equity item in the consolidated balance sheet. The long term equity
investment of the parent company held by the subsidiaries, deemed as treasury stock of the corporate group as
well as the reduction of owners’ equity, shall be presented as “Less: treasury stock” under the owners’ equity item
in the consolidated balance sheet.
4. Accounting for acquisition of subsidiary through combination
For subsidiaries acquired under enterprise merger involving enterprises under common control,
the assets, liabilities, operating results and cash flows of the subsidiaries are included in the consolidated financial
statements from the beginning of the financial year in which the combination took place. When
preparing the consolidated financial statements, for the subsidiaries acquired from business
combination not involving entities under common control, the identifiable net assets of the subsidiaries are
adjusted on the basis of their fair values on the date of acquisition.
5. Accounting treatment of disposal subsidiaries
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深圳中恒华发股份有限公司 2020 年年度报告全文
In the case of partial disposal of long-term equity investments in subsidiaries without loss of control, in the
consolidated financial statements, the difference between the disposal price and the net asset share corresponding
to the disposal of long-term equity investments and enjoying the subsidiaries’ continued calculation from the
purchase date or the merger date is used to adjust the capital reserve (capital premium or equity premium). If the
capital reserve is insufficient to offset, the retained earnings are adjusted.
If the control power of the investee is lost due to the disposal of part of the equity investment, etc., when preparing
the consolidated financial statements, the remaining equity shall be re-measured according to its fair value on the
date of loss of control. The sum of the consideration obtained from the disposal of equity and the fair value of the
remaining equity minus the difference between the share of the original subsidiary’s net assets that should be
continuously calculated from the purchase date or the merger date is included in the current investment income
when the control is lost and also offsets goodwill. Other comprehensive income related to the equity investment of
the original subsidiary is converted into current investment income when the control is lost.
7. Determination criteria of cash and cash equivalent
The cash recognized in the preparation of the cash flow statements, is the Company’s storage cash and deposits
available for payment anytime. The cash equivalents recognized in the preparation of the cash flow statements
refers to the investment held by the Company with characteristic of short-term, strong mobility, easy transfer to
known sum cash and has slim risk from value changes.
8. Foreign currency exchange and the conversion of foreign currency statements
1. Foreign currency exchange
The approximate exchange rate of the spot exchange rate on transaction occurred should be used for standard
money conversion while foreign currency exchange occurred On the balance sheet day, the monetary items are
converted on the current rate on the balance sheet day, concerning the exchange differences between the spot
exchange rate on that date and initial confirmation or the sport exchange rate on previously balance sheet date,
should reckoned in to current gains/losses except the capitalizing on exchange differences for foreign specific
loans, which was reckoned into cost for capitalizing. The non-monetary items measured on the historic cost are
still measured by the original bookkeeping rate with the sum of the bookkeeping standard currency unchanged.
Items of non-monetary foreign currency which was calculated by fair value, should converted by spot exchange
rate on the confirmation day of fair value, difference between the converted amount of bookkeeping currency and
original amount of bookkeeping currency, was treated as changes of fair value (including exchange rate changed)
reckoned into current gains/losses or recognized as other consolidated income.
2. Conversion of foreign currency financial statements
Upon the conversion of the foreign currency financial statements of the controlling subsidiaries, joint enterprises,
and the affiliated enterprises on the bookkeeping standard currency different from the Company’s, the accounting
check and preparation of the consolidated financial statements are made. Assets and liabilities items in the balance
103
深圳中恒华发股份有限公司 2020 年年度报告全文
sheet are converted on the current rate on the balance sheet day; owners’ equity items besides the “retained profit”
item, the other items are converted on the actual rate. Items of revenue and expenses in profit statement, should
converted by the approximate exchange rate of spot exchange rate on occurring date. The conversion difference of
the foreign currency financial statements is listed specifically in the owners’ equity in the balance sheet. If the
foreign cash flow determined by rational system method, the approximate exchange rate of spot exchange rate on
occurring date should prevail. The cash influenced by the rate fluctuation is listed specifically in the cash flow
statement. As for the foreign operation, the conversion difference of the foreign currency statement related to the
foreign operation is transferred in proportion into the disposal of the current loss/gain.
9. Financial instrument
1. Category and recognition of financial instrument
Financial instrument is the contract that taken shape of the financial asses for an enterprise and of the financial
liability or equity instrument for other units.
(1) Financial assets
The Company classifies financial assets that meet the following conditions as financial assets measured at
amortized cost: ① The Company’s business model for managing financial assets is to collect contractual cash
flows as its goal; ② The contractual terms of the financial assets stipulate that the cash flow generated on a
specific date is only the payment of principal and interest based on the outstanding principal amount.
The Company classifies financial assets that meet the following conditions as financial assets measured at fair
value and whose changes are included in other comprehensive income: ① The Company’s business model for
managing financial assets is to collect contractual cash flows and sell the financial assets as its goal; ② The
contractual terms of the financial assets stipulate that the cash flow generated on a specific date is only for the
payment of principal and interest based on the outstanding principal amount
For investment in non-trading equity instruments, the Company may irrevocably designate it as a financial asset
measured at fair value and its changes included in other comprehensive income at initial recognition. The
designation is made on the basis of a single investment, and the relevant investment meets the definition of equity
instruments from the perspective of the issuer.
Except for financial assets classified as financial assets measured at amortized cost and financial assets measured
at fair value and whose changes are included in other comprehensive income, the Company classifies the financial
assets as financial assets measured at fair value and whose changes are included in current profit or loss. At the
initial recognition, if the accounting mismatch can be eliminated or reduced, the Company can irrevocably
designate the financial asset as a financial asset measured at fair value and its changes are included in the current
profit and loss.
When the Company changes the business model for managing financial assets, it will reclassify all affected related
financial assets on the first day of the first reporting period after the business model has been changed, and will
apply future applicable methods from the date of reclassification for relevant accounting treatment, no retroactive
104
深圳中恒华发股份有限公司 2020 年年度报告全文
adjustments shall be made for previously recognized gains, losses (including impairment losses or gains) or
interest.
(2) Financial liabilities
Financial liabilities are classified as financial liabilities measured at fair value and whose changes are included in
the current profit or loss, financial liabilities formed by the transfer of financial assets that does not meet the
conditions for derecognition or continues to be involved in the transferred financial assets, and financial liabilities
measured at amortized cost at initial recognition. All financial liabilities are not reclassified.
2. Measurement of financial instruments
The initial recognition of the Company’s financial instruments is measured at fair value. For financial assets and
financial liabilities measured at fair value and whose changes are included in the current profit and loss, the
related transaction costs are directly included in the current profit and loss; for other types of financial assets or
financial liabilities, the related transaction costs are included in the initial recognition amount. For the accounts
receivable or bills receivable arising from the sale of products or the provision of labor services, not containing or
not considering significant financing components, the Company shall use the amount of consideration expected to
be received as the initial recognition amount. The subsequent measurement of financial instruments depends on
their classification.
(1) Financial assets
① Financial assets measured at amortized cost. After initial recognition, such financial assets are measured at
amortized cost by using the effective interest method. Gains or losses arising from financial assets that are
measured at amortized cost and do not belong to any hedging relationship are included in the current profit or loss
when they are derecognized, reclassified, amortized in accordance with the effective interest rate method, or
recognized for impairment.
② Financial assets measured at fair value and whose changes are included in the current profit and loss. After
initial recognition, for such financial assets (except for a part of financial assets that belong to the hedging
relationship), the fair value is used for subsequent measurement, and the resulting gains or losses (including
interest and dividend income) are included in the current profit and loss.
③ Investment in debt instruments measured at fair value and whose changes are included in other comprehensive
income. After initial recognition, the subsequent measurement of such financial assets is conducted at fair value.
Interest, impairment losses or gains calculated by using the effective interest rate method and the exchange gains
and losses are included in the current profit and loss, and other gains or losses are included in other
comprehensive income. In derecognition, the accumulated gains or losses previously included in other
comprehensive income are transferred out of other comprehensive income and included in the current profit and
loss.
(2) Financial liabilities
① Financial liabilities measured at fair value and whose changes are included in the current profit and loss. Such
financial liabilities include transactional financial liabilities (including derivatives that belong to financial
liabilities) and financial liabilities designated to be measured at fair value and whose changes are included in the
current profit and loss. After initial recognition, the subsequent measurement of such financial liabilities is at fair
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value, except for those related to hedge accounting, gains or losses (including interest expenses) resulting from
changes in the fair value of transactional financial liabilities are included in the current profit and loss. If a
financial liability designated to be measured at fair value and whose changes are included in the current profit or
loss, the amount of change in the fair value of the financial liability caused by changes in the enterprise’s own
credit risk is included in other comprehensive income, other changes in fair value are included in the current profit
and loss. If the impact of changes in the financial liability’s own credit risk included in other comprehensive
income causes or expands the accounting mismatch in profit or loss, the Company will include all gains or losses
on the financial liability in the current profit and loss.
② Financial liabilities measured at amortized cost. After initial recognition, such financial liabilities are
measured at amortized cost by using the effective interest method.
3. The Company’s methods for confirming the fair value of financial instruments
If the financial instrument has an active market, the fair value is determined by the quoted price in the active
market; if the financial instrument doesn’t have an active market, the fair value is determined by adopting the
valuation technique. Valuation techniques mainly include market approach, income approach and cost approach.
In limited circumstances, if the recent information used to determine fair value is insufficient, or the range of
possible estimated amounts of fair value is widely distributed, and the cost represents the best estimate of fair
value within this range, the cost may represent the appropriate estimates of fair value within this distribution range.
The Company uses all information on the performance and operation of the investee gettable after the initial
recognition date to determine whether the cost represents the fair value or not.
4. Confirmation basis and measurement method for the transfer of liabilities of financial assets
(1)Financial assets
If the Company’s financial asset meets one of the following conditions, it shall be terminated for confirmation: ①
The contract right to receive the cash flow of the financial asset is terminated; ② The financial asset has been
transferred, and the Company has transferred almost all risks and rewards of ownership of the financial asset; ③
The financial asset has been transferred, although the Company has neither transferred nor retained almost all the
remuneration in the ownership of the financial asset, it has not retained control of the financial asset.
If the Company neither transfers nor retains almost all the remuneration in the ownership of financial assets, and
retains control over the financial assets, the relevant financial assets are recognized according to the extent that
they continue to be involved in the transferred financial assets, and the related liabilities are accordingly
recognized.
If the transfer of financial assets meets the conditions for derecognition, the difference between the following two
amounts shall be included in the current profit and loss: ① The book value of the transferred financial assets on
the date of derecognition; ② The sum of the consideration received for the transfer of financial assets and the
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amount corresponding to the derecognized part of the cumulative amount of changes in fair value that was directly
included in other comprehensive income (the financial assets involved in the transfer are classified as financial
assets measured at fair value and their changes are included in other comprehensive income).
If partial transfer of financial assets satisfies the conditions for derecognition, the book value of the transferred
financial assets as a whole is apportioned respectively according to the relative fair value on the transfer date
between the derecognition portion and the non- derecognition portion, and then the difference of following two
amounts is included in the current profit and loss: ①The book value of the derecognition part on the
derecognition date; ② The sum of the consideration received in the derecognition part and the amount
corresponding to the derecognized part of the cumulative amount of changes in fair value that was directly
included in other comprehensive income (the financial assets involved in the transfer are classified as financial
assets measured at fair value and their changes are included in other comprehensive income).
(2)Financial liability
If the current obligation of the financial liability (or part of it) has been discharged, the Company derecognizes the
financial liability (or part of the financial liability).
If the financial liability (or part of it) is derecognized, the Company shall include the difference between its book
value and the consideration paid (including non-cash assets transferred out or liabilities assumed) into the current
profit and loss.
10.Note receivable
1. How to determine expected credit losses
Based on expected credit losses, the Company makes impairment accounting treatment and confirm loss
provisions for financial assets (including receivables) measured at amortized cost and financial assets (including
receivables financing) that are measured at fair value and whose changes are included in other comprehensive
income, and lease receivables.
The Company assesses on each balance sheet date whether the credit risk of relevant financial instruments has
increased significantly since initial recognition, and divides the process of credit impairment of financial
instruments into three stages, and adopts different accounting treatment methods for financial instruments
impairment at different stages: (1) In the first stage, if the credit risk of a financial instrument has not increased
significantly since its initial recognition, the Company shall measure the loss provisions according to the expected
credit losses of the financial instrument in the next 12 months, and calculate the interest income according to its
book balance (i.e. without deducting impairment) and actual interest rate; (2) In the second stage, if the credit risk
of a financial instrument has increased significantly since the initial recognition but no credit impairment has
occurred, the Company shall measure the loss provisions according to the expected credit losses of the financial
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instrument during the entire duration, and calculate the interest income according to its book balance and actual
interest rate; (3) In the third stage, if the credit impairment occurs after initial recognition, the Company shall
measure loss provisions based on the expected credit losses of the financial instrument for the entire duration, and
calculate the interest income according to its book balance and actual interest rate.
(1) Methods of measuring loss provisions for financial instruments with lower credit risk
For financial instruments with lower credit risk on the balance sheet date, the Company can directly make the
assumption that the credit risk of the instrument has not increased significantly since the initial recognition
without comparing with the credit risk at the initial recognition.
If the default risk of financial instruments is low, the debtor’s ability to fulfill its contractual cash flow obligations
is strong in the short term, and even if there are adverse changes in the economic situation and operating
environment over a long period of time, it may not necessarily reduce the borrower’s ability to fulfill the
contractual cash flow obligations, the financial instrument shall be considered to have lower credit risk.
(2) Methods of measuring loss provisions for accounts receivable and lease receivables
①Receivables that do not contain significant financing components. For the receivables formed by transactions
regulated by “Accounting Standards for Business Enterprises No.14-Revenue” and without containing significant
financing components, the Company adopts a simplified method, that is, it always calculates the loss provisions
based on the expected credit losses for the entire duration.
Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantly
on the basis of individual financial assets or financial assets portfolios. The Company divides the notes receivable
and accounts receivable into several portfolios based on the characteristics of credit risk, and calculates the
expected credit losses on the basis of the portfolios, the basis for determining the portfolios is as follows:
Accounts receivable portfolio 1: A portfolio that uses the aging of accounts receivables as credit risk
characteristics,
Accounts receivable portfolio 2: Combination of related parties included in the scope of consolidated statements
Notes receivable portfolio 1: Same as the division of accounts receivable portfolio
Notes receivable portfolio 2: Management evaluates that this type of fund is bank acceptance portfolio with lower
credit risk
For the accounts receivable and notes receivable being divided into portfolio 1, the Company refers to the
historical credit loss experience, combines with the current conditions and the prediction of future economic
situation, and prepares a comparison table of the aging of accounts receivable and the expected credit loss rate of
the entire duration, and calculates the expected credit losses.
For accounts receivable and notes receivable being divided into portfolio 2, the Company refers to historical credit
loss experience, combines with the current conditions and the predictions of future economic conditions, and
calculates the expected credit losses of 0% through default risk exposure and expected credit loss rate for the
entire duration.
②Accounts receivables and leases receivables that contain significant financing components. For accounts
receivables that contain significant financing components and leases receivables regulated by “Accounting
Standards for Business Enterprises No. 21-Leases”, the Company measures loss provisions in accordance with the
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general method, that is, the “third stage” model.
(3) Methods of measuring loss reserves for other financial assets
For financial assets other than the above, such as debt investment, other debt investment, other receivables,
long-term receivables other than lease receivables, etc., the Company uses the general method, that is, the
three-stage model to measure loss reserves.
When measuring the credit impairment of financial instruments, the Company considers the following factors in
assessing whether the credit risk has increased significantly:
The Company divides other receivables into a number of portfolios based on the nature of the money, and
calculates the expected credit loss on the basis of the portfolio. The basis for determining the portfolio is as
follows:
Other receivables portfolio 1: A portfolio of unrelated parties with provision for impairment in accordance with
the expected loss rate
Other receivables portfolio 2: A portfolio of related parties included in the scope of the consolidated statement
For other receivables classified into portfolio 1, the Company refers to historical credit loss experience, combines
with current conditions and forecasts of future economic conditions, compiles a comparison table of accounts
receivable aging and expected credit loss rate of the entire duration, and calculates the expected credit loss.
For other receivables classified into portfolio 2, the Company refers to historical credit loss experience, combines
with current conditions and forecasts of future economic conditions, and calculates an expected credit loss of 0%
through the default risk exposure and the expected credit loss rate of the entire duration .
(4)Accrual method of bad debt provision for those accrual by account age as the portfolio
Account age Expected credit loss rate of receivable (%) Expected credit loss rate of other receivable
(%)
Within one year (one year included) 0 0
1-2 years 5 5
2-3 years 10 10
Over 3 years 30 30
2. Accounting treatment methods of expected credit losses
In order to reflect the changes in the credit risk of financial instruments since initial recognition, the Company
remeasures the expected credit losses on each balance sheet date, and the resulting increase or reversal of the loss
provisions should be counted as an impairment loss or gain and included in the current profit and loss, and based
on the type of financial instrument, offsets the book value of the financial asset listed in the balance sheet or
includes in the estimated liability (loan commitment or financial guarantee contract) or includes in other
comprehensive income (debt investments measured at fair value and whose changes are included in other
comprehensive income).
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11. Account receivable
Same as 10. Note receivable
12.Receivable financing
Same as 10. Note receivable
13. Other account receivable
Determination and accounting treatment on the expected credit losses of other account receivable
Same as 10. Note receivable
14. Inventory
1. Categories of inventory
The inventory is goods or manufactured products held for sale, products in process, and materials and matters
utilized in the production or supply of labor. Mainly including raw material, revolving materials (wrappage and
low-value consumption goods etc.), outside processing materials, goods in process, semi-finished goods, stocks
and so on.
2. Accounting method for inventory delivery
When inventories are issued, the actual cost is determined by the first in first out method.
3. Accrual method inventory falling price reserves
On the balance sheet day, the inventory is measured on the lower one between the cost and the net realizable value,
and the provision for the falling price reserves is accrued on each inventory item; however, as for the inventory of
large quantity and low price, the provision is accrued on the inventory category.
4. Inventory system
Inventory system of the Company is perpetual inventory system
5. Amortization method for the low-value consumables and wrap page
Low-value consumables and packages are amortized by one-point method
15. Long-term equity investment
1. Recognition of initial investment cost
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For a long-term equity investment obtained by a business combination, if it is a business combination under the
same control, take the share of the combine party obtained in the book value of the net assets in the consolidated
financial statements of the ultimate controlling party on the combination date as the initial investment cost; in the
case of the consolidation of enterprises not under the same control, recognized as the initial cost is the recognized
consolidation cost on the purchase day. As for the long term equity investment obtained by cash payment, the
initial investment cost is the actual purchase payment. As for the long term equity investment obtained by the
equity securities offering, the initial investment cost is the fair value of the equity securities. As for the long-term
equity investment obtained by debt reorganization, initial investment cost of such investment should determine by
relevant regulation of the “Accounting Standards for Business Enterprise No.12- Debt Reorganization”; as for the
long term equity investment obtained by the exchange of the non-monetary assets, the initial investment cost is
recognized on the relevant rules in the “Accounting Standards for Business Enterprise No. 7- Exchange of
Non-Monetary Assets”
2. Subsequent measurement and profit or loss recognition
Where the company has a control over the investee, long-term equity investments are measured using cost method.
Long-term equity investments in associates and joint ventures are measured using equity method. Where part of
the equity investments of an investor in its associates are held indirectly through venture investment institutions,
common fund, trust companies or other similar entities including investment linked insurance funds, such part of
equity investments indirectly held by the investor shall be measured at fair value through profit or loss according
to according to relevant requirements of Accounting Standards for Business Enterprises No.22—Recognition
and measurement of Financial Instruments regardless whether the above entities have significant influence on
such part of equity investments, while the remaining part shall be measured using equity method.
3. Basis of conclusion for common control and significant influence over the investee
Joint control over an investee refers to where the activities which have a significant influence on return on certain
arrangement could be decided only by mutual consent of the investing parties sharing the control, which includes
the sales and purchase of goods or services, management of financial assets, acquisition and disposal of assets,
research and development activities and financing activities, etc.; Significant influence on the investee refers to
that: significant influence over the investee exists when holding more than 20% but less than 50% of the shares
with voting rights or even if the holding is below 20%, there is still significant influence if any of the following
conditions is met: there is representative in the board of directors or similar governing body of the investee;
participation in the investee’s policy setting process; assign key management to the investee; the investee relies on
the technology or technical information of the investing company; or major transactions with the investee.
16. Investment real estate
Measurement for investment real estate
Cost method
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Depreciation or amortization method
The types of investment real estate of the Company include the leased land use rights, leased buildings, and land
use rights held and prepared for transfer after appreciation. Investment real estate is initially measured at cost and
subsequently measured by using the cost model.
The leased buildings in the Company’s investment property adopts straight-line depreciation to calculate and
distill depreciation, specific accounting policy are same as part of the fixed assets. The leased land use rights in
the investment property and the land use rights to be transferred after appreciation adopt straight-line amortization,
specific accounting policy are same as part of the intangible assets.
17. Fixed assets
(1) Recognition
Fixed assets refers to the tangible assets holding for purpose of producing goods, providing labor services, leasing
or operation management, which has one accounting fiscal year of using life. Meanwhile as up to the following
conditions, they are recognized: the economic interest related to the fixed assets probably flow into the Company;
the cost of the fixed assets can be measured reliably.
(2) Depreciation method
Annual depreciation
Category Depreciation method Depreciation life (year) Salvage rate
rate
Straight-line
House building 20-50 10.00 1.80-4.50
depreciation
Straight-line
Machinery equipment 10 10.00 9.00
depreciation
Straight-line
Mold equipment 3 10.00 30.00
depreciation
Transportation Straight-line
5 10.00 18.00
equipment depreciation
Straight-line
Instrument equipment 5 10.00 18.00
depreciation
Straight-line
Tool equipment 5 10.00 18.00
depreciation
Straight-line
Office equipment 5 10.00 18.00
depreciation
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N/A
(3) Recognition basis, valuation and depreciation method for fixed assets under financing lease
The fixed assets under financing lease are the lease that has substantially transferred all the risks and rewards
associated with asset ownership. The initial valuation of the fixed assets under financing lease is to take the lower
one between the fair value of the leased assets and the present value of the minimum lease payments on the start
date of the lease period as the entry value; the subsequent valuation of the fixed assets under financing lease
adopts the depreciation policy consistent with the own fixed assets to make depreciation and impairment
provision.
18. Construction in process
Construction in process of the Company divided as self-run construction and out-bag construction. The
Construction in process of the Company carried forward as fixed assets while the construction is ready for the
intended use. Criteria of the expected condition for use should apply one of the follow conditions: The substance
construction (installation included) of the fixed assets has completed all or basically; As the projects have been in
test production or operation, and the results show that the assets can operate properly and produce the qualified
products stably, or the test operation result shows the assets can operate or open properly. The expenditure of the
fixed assets on the construction is a little or little. The fixed assets of the project constructed have been up to the
requirements of the design or contract, or basically up to.
19. Borrowing expenses
1. Recognition principle on capitalization of borrowing expenses
As for the Company’s actual borrowing expenses directly attributable to the assets construction or production, it is
capitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on the
actual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capital
assets, investment real estate, and inventory reaching the expectant availability or sale ability.
2. Calculation of the capitalization
Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The period
of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while
the abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction or
production.
As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actual
interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the
return of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum is
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recognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, and
times the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount or
premium to be diluted in every accounting period is recognized in the actual rate method.
The effective interest method is the method for the measurement of the diluted discount or premium or interest
expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the future
cash flow in the expectant duration period as the current book value of the borrowing.
20. Intangible assets
(1) Accounting method, service life and impairment test
1. Recognition principle on capitalization of borrowing expenses
As for the Company’s actual borrowing expenses directly attributable to the assets construction or production, it is
capitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on the
actual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capital
assets, investment real estate, and inventory reaching the expectant availability or sale ability.
2. Calculation of the capitalization
Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The period
of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while
the abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction or
production.
As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actual
interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the
return of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum is
recognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, and
times the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount or
premium to be diluted in every accounting period is recognized in the actual rate method.
The effective interest method is the method for the measurement of the diluted discount or premium or interest
expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the future
cash flow in the expectant duration period as the current book value of the borrowing.
(2) Accounting policies for internal research and development expenditure
Specific criteria for the research phase and development phase of internal R&D projects, and specific criteria for
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development phase expenditures to qualify for capitalization
Expenditures for internal research and development projects at the research phase shall be included in the current
profit or loss when incurred; expenditures incurred at the development phase and recognized as intangible assets
shall be transferred to intangible assets accounting.
21. Long-term assets impairment
Long-term equity investments, investment properties measured at cost and long-term assets such as fixed assets,
construction in progress, productive biological assets at cost method, oil and gas assets, intangible assets and
goodwill are tested for impairment if there is any indication that an asset may be impaired at the balance date. If
the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount,
a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carrying
amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future
cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on
the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the
recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest
group of assets that is able to generate independent cash inflows.
Goodwill arising from a business combination is tested for impairment at least at each year end, irrespective of
whether there is any indication that the asset may be impaired. For the purpose of impairment testing, the carrying
amount of goodwill acquired in a business combination is allocated from the acquisition date on a reasonable
basis to each of the related asset groups; if it is impossible to allocate to the related asset groups, it is allocated to
each of the related set of asset groups. If the carrying amount of the asset group or set of asset groups is higher
than its recoverable amount, the amount of the impairment loss first reduced by the carrying amount of the
goodwill allocated to the asset group or set of asset groups, and then the carrying amount of other assets (other
than the goodwill) within the asset group or set of asset groups, pro rata based on the carrying amount of each
asset.
Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent period.
22. Long-term deferred expenditure
The Company’s long-term deferred expenditure are expenses paid out and with one year above (one-year
excluded) benefit period. The long-term deferred expenses are diluted by periods according to the benefit period.
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As the long-term deferred expenses cannot enable the accounting period’s beneficiary, all dilution values of the
project undiluted yet, are transferred into the current loss/gain.
23. Contract liability
The company presents the obligation to transfer goods or provide services to customers for consideration received
or receivable as a contract liability.
24. Employees remuneration
(1) Accounting for short-term benefits
In the period of employee services, short-term benefits are actually recognized as liabilities and charged to profit
or loss, or if otherwise required or allowed by other accounting standards, to the related costs of assets for the
current period. At the time of actual occurrence, The Company’s employee benefits are recorded into the profits
and losses of the current year or assets associated costs according to the actual amount. The non-monetary
employee benefits are measured at fair value. Regarding to the medical and health insurance, industrial injury
insurance, maternity insurance and other social insurances, housing fund and labor union expenditure and
personnel education that the Company paid for employees, the Company should recognize corresponding
employees benefits payable according to the appropriation basis and proportion as stipulated by relevant
requirements and recognize the corresponding liabilities and include these expenses in the profits or losses of the
current period or recognized as respective assets costs.
(2) Accounting for post-employment benefits
During the accounting period in which an employee provides service, the amount payable calculated under
defined contribution scheme shall be recognized as a liability and recorded in profit and loss of the current period
or in assets. In respect of the defined benefit scheme, the Company shall use the projected unit credit method and
attribute the welfare obligations calculated using the formula stipulated by the defined benefit scheme to the
service period of the employee, and record the obligation in the current profit and loss or related assets cost.
(3) Accounting for termination benefits
The Company recognizes a liability and expenses in the current profit or loss for termination benefits at the earlier
of the following dates: when the Company can no longer withdraw the offer of those benefits; and when the
Company recognizes costs for restructuring involving the payment of termination costs.
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(4) Accounting for other long-term employee benefits
The Company provides other long-term employee benefits to its employees. For those falling within the scope of
defined contribution scheme, the Company shall account for them according to relevant requirements of the
defined contribution scheme. In addition, the Company recognizes and measures the net liabilities or net assets of
the other long-term employee benefits according to relevant requirements of the defined contribution scheme.
25. Accrual liability
The obligation related to contingencies is the current obligation assumed by the company, and performing this
obligation may result in an outflow of economic benefits, and this obligation can be determined as the estimated
liabilities when the amount can be reliably measured. The Company makes initial measurement in accordance
with the best estimate for performing the related current obligation, if the expenditure as needed has a continuous
range, and the likelihood of occurrence of various results in this range is the same, the best estimate is determined
by the median value within the range; if a number of items are involved, the best estimate is determined by the
calculation of various possible outcomes and related probabilities.
At the balance sheet date, the book value of estimated liabilities should be rechecked, if there is conclusive
evidence indicates that this book value cannot truly reflect the current best estimate, and then the book value
should be adjusted in accordance with the current best estimate.
26. Revenue (income)
Accounting policy for recognition and measurement of revenue(income)
The Company recognizes revenue based on the transaction price allocated to the performance obligations at the
time when it has fulfilled the performance obligations in the contract, that is, when the customer obtains control
rights of the relevant goods or services. Obtaining control rights of related goods means being able to lead the use
of the goods and obtain almost all economic benefits from them. Performance obligations refer to the Company's
commitment to transfer clearly distinguishable goods to customers in the contract. The transaction price refers to
the amount of consideration that the Company expects to be entitled to receive due to the transfer of goods to the
customer, not including the amount collected on behalf of a third party and the amount that the Company expects
to return to the customer.
Whether the performance obligation is to be performed within a certain period of time or at a certain point of time
depends on the terms of the contract and relevant legal provisions. If the performance obligation is performed
within a certain period of time, the Company recognizes revenue in accordance with the progress of the
performance. Otherwise, the Company recognizes revenue at a certain point when the customer obtains control
rights of the relevant assets.
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The Company's specific revenue recognition methods:
The sales contract between the Company and the customer usually only contains the performance obligation for
the transferred goods. The Company’s performance obligation for the transfer of goods does not meet the three
conditions for performance within a certain period of time, therefore, the Company usually recognizes revenue at
the time-point of completion of the inspection of incoming on the basis of comprehensive consideration of the
following factors, i.e. for domestic sales, the revenue is recognized when the product has been sent out and the
other party has signed for confirmation. For export sales, the revenue is recognized by the relevant customs
declaration documents when the product has been shipped and customs declaration procedures have been
completed.
The house lease contract signed by the Company and the customer usually only contains the performance
obligation for the provision of lease and property services, the Company recognizes revenue according to the
progress of performance when a performance obligation is performed within a certain period of time, i.e. as
agreed in the lease contract, revenue is recognized when related payments are received or evidence of collections
is obtained.
Different business models of similar business resulted in different accounting policies for revenue recognition
N/A
27. Government subsidy
1.Category of government subsidy and accounting treatment
Governments subsidy of the Company refer to the monetary and non-monetary assets obtained from government
for free (excluding the capital invested by government as an owner). If the government grants are monetary assets,
it shall be measured according to the amount received or receivable. If the government grants are non-monetary
assets, it shall be measured at fair value; if the fair value cannot be obtained reliably, it shall be measured at the
nominal amount.
Government grants related to daily activities are included in other income in accordance with the economic
business. Government grants not related to daily activities are included in the non-operating income and
expenditure.
Government grants that the government documents clearly stipulate to be used for the purchase and establishment
or forming long-term assets in other way are recognized as government grants related to assets. For the
government grants that the government documents do not clearly specify the subsidy target and can form
long-term assets, the part corresponding to the asset value is recognized as the government grants related to the
assets, and the rest is recognized as the government grants related to the income. For the government grants which
are difficult to be distinguished, recognize the whole as the government grants related to the income. Government
grants related to assets are recognized as deferred income. The amount recognized as deferred income is included
in the current profit and loss in a reasonable and systematic manner within the useful life of the relevant asset.
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Government grants other than government grants related to assets are recognized as government grants related to
income. If the government grants related to the income are used to compensate the related expenses or losses of
the enterprise in the future period, recognize them as deferred income and include them in the current profit and
loss during the period of recognizing the related expenses. The government grants used to compensate the relevant
expenses or losses incurred by the enterprise are directly included in the current profit and loss.
The Company obtained the policy preferential loan interest subsidy, and the finance allocated the interest subsidy
funds to the loan bank, and the loan bank provides loans to the Company at a preferential interest rate, take the
actual amount of the loan received as the entry value of the loan, and calculate the relevant borrowing costs
according to the loan principal the policy preferential interest rate. If the finance directly appropriates the interest
subsidy funds to the Company, the Company will offset the relevant borrowing costs with the corresponding
interest subsidy.
2. Time points to recognize the government grants
Government grants are recognized when they meet the conditions attached to government grants and can be
received. Government grants measured in accordance with the amount receivable are recognized when there is
conclusive evidence at the end of the period that it meets the relevant conditions stipulated in the financial support
policy and is expected to receive financial support funds. Other government grants other than government grants
measured in accordance with the receivable amount are recognized when the grant is actually received.
28. Deferred income tax asset / deferred income tax liability
1. Where there is difference between the carrying amount of the assets or liabilities and its tax base, (as for an item
that has not been recognized as an asset or liability, if its tax base can be determined in light of the tax law, the tax
base shall recognized as the difference) the deferred income tax and deferred income tax liabilities shall be
determined according to the applicable tax rate in period of assets expected to recover or liability expected to pay
off.
2. The deferred income tax assets shall be recognized to the extent of the amount of the taxable income which it is
most likely to obtain and which can be deducted from the deductible temporary difference. On balance sheet date,
if there have concrete evidence of obtaining, in future period, enough taxable amounts to deduct the deductible
temporary difference, the un-confirmed deferred income tax assets in previous accounting period shall be
recognized. If there has no enough taxable amounts, obtained in future period, to deducted the deferred income tax
assets, book value of the deferred income tax assets shall be kept in decreased.
3. The taxable temporary differences related to the investments of subsidiary companies and associated enterprises
shall recognized as deferred income tax liability, unless the Company can control the time of the reverse of
temporary differences and the temporary differences are unlikely to be reversed in the expected future. As for the
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深圳中恒华发股份有限公司 2020 年年度报告全文
deductible temporary difference related to the investment of the subsidiary companies and associated enterprises,
deferred income tax assets shall be recognized while the temporary differences are likely to be reversed in the
expected future and it is likely to acquire any amount of taxable income tax that may be used for making up the
deductible temporary differences.
29. Leasing
(1) Accounting treatment for operating lease
Operating lease payments are recognized on a straight-line basis over the term of the relevant lease, and are either
included in the cost of related asset or charged to profit or loss for the period.
(2) Accounting treatment for finance lease
Accounting treatment for finance lease: At the commencement of the lease term, the Group records the leased
asset at an amount equal to the lower of the fair value of the leased asset and the present value of the minimum
lease payments. The difference between the recorded amounts is accounted for as unrecognized finance charge,
using the effective interest method amortization during the lease term. Minimum lease payments deducting
unrecognized financing charges are listed as long-term payable.
30. Changes in important accounting policies and estimates
(1) Changes in important accounting policies
√ Applicable □ Not applicable
Content and reason of changes in
Approval procedure Note
accounting policies
1. Change in accounting policies and basis
The revised Accounting Standards for Business Enterprise No. 14- Revenue (hereinafter referred to as New
Revenue Standard) was released by the Ministry of Finance in 2017. the Company implemented the New Revenue
Standards and Notice since 1 Jan. 2020. and relevant content of the accounting polices are adjusted.
The new revenue standards replaced the "Accounting Standards for Business Enterprises No. 14-Revenue" and
"Accounting Standards for Business Enterprises No. 15-Construction Contracts" (collectively referred to as the
"original revenue standards") promulgated by the Ministry of Finance in 2006. Under the original revenue
standards, the Company used the transfer of risk rewards as the judgment standard for the timing of revenue
recognition. The new revenue standards introduce the “five-step method” of revenue recognition and
measurement, and provide more guidance for specific transactions or events. Under the new revenue standards,
the Company uses the transfer of control as the judgment standard for revenue recognition. For the specific
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深圳中恒华发股份有限公司 2020 年年度报告全文
accounting policies of revenue recognition and measurement, please refer to "Note III. (22) Revenue".
The Company has adjusted relevant accounting policies in accordance with the specific provisions of the new
revenue standards on specific matters or transactions. According to the provisions of the new revenue standards,
the contract assets or contract liabilities are listed in the balance sheet based on the relationship between
performance obligations and customer payments. At the same time, the Company provides more disclosures on
income-related information disclosure requirements in accordance with the new revenue standards, such as
information related to important contracts or business and performance obligations and information related to
transaction prices allocated to the remaining performance obligations, including the usual performance time of
performance obligations, the important payment terms, the nature of the goods the company promises to transfer
(including the explanation of whether the company is an agent), the company’s expected return to customers and
other similar obligations, the expected refund to the customer assumed by the company and other similar
obligations, the type of quality assurance and related obligations.
The Company reviews revenue sources and customer contract procedures to assess the impact of the new revenue
standards on financial statements. The Company’s revenue is mainly derived from the sale of goods, and revenue
is recognized when the goods are delivered or the service acceptance is completed. The adoption of the new
revenue standards has no significant impact on the Company except for the presentation of financial statements.
The Company adjusts the amount of retained earnings and financial statements related items of January 1, 2020
based on the cumulative influence number of the first implementation of the new revenue standards, and does not
adjust the information for the comparable period. The Company only adjusts the cumulative influence number of
the contract that has not been completed on the first implementation date.
2.Impact from the changes in accounting policies
Summary of impacts on items of consolidated balance sheet and parent company’s dated 1 Jan. 2020 when
implemented the New Revenue Standard:
Item of consolidated balance sheet Balance before accounting policy Impact from new revenue Balance after accounting
changed (dated 31 December standard policy changed (dated 1 Jan.
2019) 2020)
Liability:
Account received in advance 356,446.21 -356,446.21
Contract liability 331,322.82 331,322.82
Other current liability 25,123.39 25,123.39
Item of balance sheet of parent Balance before accounting Impact from new revenue Balance after accounting
company’s policy changed (dated 31 standard policy changed (dated 1 Jan.
December 2019) 2020)
Liability:
Account received in advance 57,266.01 -57,266.01
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深圳中恒华发股份有限公司 2020 年年度报告全文
Contract liability 54,539.06 54,539.06
Other current liability 2,726.95 2,726.95
(2)Changes in important accounting estimates
□ Applicable √Not applicable
(3) Adjustment the financial statements at the beginning of the first year of implementation of new revenue
standards and new leasing standards since 2020
Applicable
Whether needs to adjust the balance sheet at the beginning of the year
√Yes □No
Consolidate balance sheet
In RMB
Item 2019-12-31 2020-01-01 Adjustments
Current assets:
Monetary fund 38,095,501.00 38,095,501.00
Settlement provisions
Capital lent
Trading financial
assets
Derivative financial
assets
Note receivable
Account receivable 138,755,691.43 138,755,691.43
Receivable financing 42,096,834.02 42,096,834.02
Accounts paid in
23,007,637.46 23,007,637.46
advance
Insurance receivable
Reinsurance
receivables
Contract reserve of
reinsurance receivable
Other account
6,351,361.16 6,351,361.16
receivable
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深圳中恒华发股份有限公司 2020 年年度报告全文
Including: Interest
receivable
Dividend
receivable
Buying back the sale
of financial assets
Inventory 66,971,551.96 66,971,551.96
Contract assets
Assets held for sale
Non-current asset due
within one year
Other current assets 1,395,071.36 1,395,071.36
Total current assets 316,673,648.39 316,673,648.39
Non-current assets:
Loans and payments
on behalf
Debt investment
Other debt investment
Long-term account
receivable
Long-term equity
investment
Investment in other
equity instrument
Other non-current
financial assets
Investment real estate 48,952,992.57 48,952,992.57
Fixed assets 198,229,817.31 198,229,817.31
Construction in
process
Productive biological
asset
Oil and gas asset
Right-of-use assets
Intangible assets 42,968,600.44 42,968,600.44
Expense on Research
and Development
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深圳中恒华发股份有限公司 2020 年年度报告全文
Goodwill
Long-term expenses
309,781.15 309,781.15
to be apportioned
Deferred income tax
6,803,360.00 6,803,360.00
asset
Other non-current
225,700.00 225,700.00
asset
Total non-current asset 297,490,251.47 297,490,251.47
Total assets 614,163,899.86 614,163,899.86
Current liabilities:
Short-term loans 24,633,898.20 24,633,898.20
Loan from central
bank
Capital borrowed
Trading financial
liability
Derivative financial
liability
Note payable 16,761,590.51 16,761,590.51
Account payable 108,804,905.20 108,804,905.20
Account received in
356,446.21 0.00
advance
Contract liability 331,322.82 331,322.82
Selling financial asset
of repurchase
Absorbing deposit and
interbank deposit
Security trading of
agency
Security sales of
agency
Wage payable 5,877,341.25 5,877,341.25
Taxes payable 12,877,944.98 12,877,944.98
Other account payable 28,027,592.62 28,027,592.62
Including: Interest
89,365.28 89,365.28
payable
Dividend
payable
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深圳中恒华发股份有限公司 2020 年年度报告全文
Commission charge
and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities
12,000,000.00 12,000,000.00
due within one year
Other current liability 25,123.39 25,123.39
Total current liabilities 209,339,718.97 209,339,718.97
Non-current liabilities:
Insurance contract
reserve
Long-term 73,000,000.00 73,000,000.00
Bonds payable
Including:
Preferred stock
Perpetual
capital securities
Lease liability
Long-term account
payable
Long-term wages
payable
Accrual liability 64,411.00 64,411.00
Deferred income 2,331,720.00 2,331,720.00
Deferred income tax
liabilities
Other non-current
liabilities
Total non-current liabilities 75,396,131.00 75,396,131.00
Total liabilities 284,735,849.97 284,735,849.97
Owner’s equity:
Share capital 283,161,227.00 283,161,227.00
Other equity
instrument
Including:
Preferred stock
Perpetual
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深圳中恒华发股份有限公司 2020 年年度报告全文
capital securities
Capital public reserve 146,587,271.50 146,587,271.50
Less: Inventory shares
Other comprehensive
income
Reasonable reserve
Surplus public reserve 77,391,593.25 77,391,593.25
Provision of general
risk
Retained profit -177,712,041.86 -177,712,041.86
Total owner’ s equity
attributable to parent 329,428,049.89
company
Minority interests
Total owner’ s equity 329,428,049.89 329,428,049.89
Total liabilities and owner’
614,163,899.86 614,163,899.86
s equity
Explanation on adjustment
N/A
Balance sheet of parent company
In RMB
Item 2019-12-31 2020-01-01 Adjustments
Current assets:
Monetary fund 3,494,245.90 3,494,245.90
Trading financial
assets
Derivative financial
assets
Note receivable
Account receivable
Receivable financing
Accounts paid in
advance
Other account
97,165,023.85 97,165,023.85
receivable
Including: Interest
receivable
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深圳中恒华发股份有限公司 2020 年年度报告全文
Dividend
receivable
Inventory 14,806.50 14,806.50
Contract assets
Assets held for sale
Non-current asset due
within one year
Other current assets 173,950.26 173,950.26
Total current assets 100,848,026.51 100,848,026.51
Non-current assets:
Debt investment
Other debt investment
Long-term account
receivable
Long-term equity
186,608,900.00 186,608,900.00
investment
Investment in other
equity instrument
Other non-current
financial assets
Investment real estate 25,166,301.06 25,166,301.06
Fixed assets 98,410,024.38 98,410,024.38
Construction in
process
Productive biological
asset
Oil and gas asset
Right-of-use assets
Intangible assets 4,553,709.24 4,553,709.24
Expense on Research
and Development
Goodwill
Long-term expenses
to be apportioned
Deferred income tax
7,367,646.35 7,367,646.35
asset
Other non-current
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深圳中恒华发股份有限公司 2020 年年度报告全文
asset
Total non-current asset 322,106,581.03 322,106,581.03
Total assets 422,954,607.54 422,954,607.54
Current liabilities:
Short-term loans
Trading financial
liability
Derivative financial
liability
Note payable
Account payable 10,745,840.16 10,745,840.16
Account received in
57,266.01 0.00
advance
Contract liability 54,539.06 54,539.06
Wage payable 1,220,979.02 1,220,979.02
Taxes payable 8,489,130.72 8,489,130.72
Other account payable 19,100,375.42 19,100,375.42
Including: Interest
payable
Dividend
payable
Liability held for sale
Non-current liabilities
12,000,000.00 12,000,000.00
due within one year
Other current liability 2,726.95 2,726.95
Total current liabilities 51,613,591.33 51,613,591.33
Non-current liabilities:
Long-term 73,000,000.00 73,000,000.00
Bonds payable
Including:
Preferred stock
Perpetual
capital securities
Lease liability
Long-term account
payable
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深圳中恒华发股份有限公司 2020 年年度报告全文
Long-term wages
payable
Accrual liability 64,411.00 64,411.00
Deferred income
Deferred income tax
liabilities
Other non-current
liabilities
Total non-current liabilities 73,064,411.00 73,064,411.00
Total liabilities 124,678,002.33 124,678,002.33
Owner’s equity:
Share capital 283,161,227.00 283,161,227.00
Other equity
instrument
Including:
Preferred stock
Perpetual
capital securities
Capital public reserve 146,587,271.50 146,587,271.50
Less: Inventory shares
Other comprehensive
income
Reasonable reserve
Surplus public reserve 77,391,593.25 77,391,593.25
Retained profit -208,863,486.54 -208,863,486.54
Total owner’ s equity 298,276,605.21 298,276,605.21
Total liabilities and owner’
422,954,607.54 422,954,607.54
s equity
Explanation on adjustment
N/A
(4) Retrospective adjustment of early comparison data description when initially implemented the new
revenue standards and new leasing standards since 2020
□ Applicable √ Not applicable
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深圳中恒华发股份有限公司 2020 年年度报告全文
VI. Taxes
1. Major tax and tax rate
Taxes Taxation basis Tax rate
VAT Domestic sales revenue 13%, 9%, 6%, 5%, 3%
Consumption tax Turnover tax payable 7%
Corporate income tax Taxable income 15%, 25%
Educational surtax Turnover tax payable 3%
Local educational surtax Turnover tax payable 2%, 1.5%
Property tax 70% of original value of the property 1.2%
Explain the different taxation entity of the enterprise income tax
Taxation entity Income tax rate
Shenzhen Zhongheng Huafa Co., Ltd. 25%
Wuhan Hengfa Technology Co., Ltd. 15%
2. Tax preferences
According to the “Measures for the Determination of High-tech Enterprises”, and through the enterprise
application, expert review, and public announcement and other procedures, the Company’s wholly-owned
subsidiary, Wuhan Hengfa Technology Co., Ltd., has been identified as a high-tech enterprise, and obtained the
“High-tech Enterprise Certificate” jointly issued by the Science and Technology Department of Hubei Province,
Hubei Provincial Finance Department, Hubei Provincial Office, SAT, and Local Taxation Bureau of Hubei
Province on December 1, 2020, the certificate number is GR202042003237, which is valid for 3 years. The
applicable corporate income tax rate of the subsidiary Wuhan Hengfa Technology Co., Ltd. for 2020 was 15%.
3. Other
Nil
VII. Notes to main items in consolidated financial statement
1. Monetary fund
In RMB
Item Closing balance Opening balance
Cash on hand 138,673.02 432,301.32
Bank deposit 30,141,013.39 37,660,862.75
Other monetary fund 30,688,367.17 2,336.93
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深圳中恒华发股份有限公司 2020 年年度报告全文
Total 60,968,053.58 38,095,501.00
Other explanation
Nil
2. Note receivable
(1) Category
In RMB
Item Closing balance Opening balance
Commercial acceptance bill 20,240,464.79
Total 20,240,464.79
In RMB
Closing balance Opening balance
Bad debt
Book balance Book balance Bad debt provision
Category provision Book Book
Amoun Proport Amoun Accrua value Amoun Proport Accrual value
Amount
t ion t l ratio t ion ratio
Including:
Including:
Accrual of bad debt provision on single basis:
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Accrual of bad debt provision on portfolio:
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please refer to
the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
(2) Notes endorsement or discount and undue on balance sheet date
In RMB
Item Amount derecognition at period-end Amount not derecognition at period-end
Commercial acceptance bill 18,309,336.77
131
深圳中恒华发股份有限公司 2020 年年度报告全文
Total 18,309,336.77
3. Account receivable
(1) Category
In RMB
Closing balance Opening balance
Bad debt
Book balance Book balance Bad debt provision
Category provision Book Book
Amoun Proport Amoun Accrua value Amoun Proport Amoun Accrual value
t ion t l ratio t ion t ratio
Account receivable
with bad debt 13,146, 13,146, 100.00 13,146, 13,146, 100.00
9.31% 0.00 8.65%
provision accrual 290.18 290.18 % 290.18 290.18 %
on a single basis
Including:
Account receivable
128,07 128,06 138,75
with bad debt 90.69 9,893.7 4,188.0 138,755,
3,805.5 0.01% 3,911.7 9,879.4 91.35% 0.00%
provision accrual % 8 6 691.43
7 9 9
by combination
Including:
Combination 1:
Take account ages
128,07 128,06 138,75
of receivables as a 90.69 9,893.7 4,188.0 138,755,
3,805.5 0.01% 3,911.7 9,879.4 91.35% 0.00%
combination of % 8 6 691.43
7 9 9
credit risk
characteristics
141,22 128,06 151,90
100.00 13,156, 100.00 13,150, 138,755,
Total 0,095.7 9.32% 3,911.7 6,169.6 8.66%
% 183.96 % 478.24 691.43
5 9 7
Accrual of bad debt provision on single basis: 13146290.18
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Shenzhen Portman
Bowling Club Co., 2,555,374.75 2,555,374.75 100.00% Uncollectible
Ltd.
Hong Kong Haowei
1,870,887.18 1,870,887.18 100.00% Uncollectible
Industrial Co., Ltd.
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深圳中恒华发股份有限公司 2020 年年度报告全文
TCL ACE ELECTRIC
APPLIANCE
1,325,431.75 1,325,431.75 100.00% Uncollectible
(HUIZHOU) CO.,
LTD.
Qingdao Haier Parts
1,225,326.15 1,225,326.15 100.00% Uncollectible
Procurement Co., Ltd.
SKYWORTH
Multimedia 579,343.89 579,343.89 100.00% Uncollectible
(Shenzhen) Co., Ltd.
Shenzhen Huixin
Video Technology Co., 381,168.96 381,168.96 100.00% Uncollectible
Ltd.
Shenzhen Wandelai
Digital Technology 351,813.70 351,813.70 100.00% Uncollectible
Co., Ltd.
Shenzhen Dalong
344,700.00 344,700.00 100.00% Uncollectible
Electronic Co., Ltd.
Shenzhen Keya
332,337.76 332,337.76 100.00% Uncollectible
Electronic Co., Ltd.
Shenzhen Qunping
304,542.95 304,542.95 100.00% Uncollectible
Electronic Co., Ltd.
China Galaxy
Electronics (Hong 288,261.17 288,261.17 100.00% Uncollectible
Kong) Co., Ltd.
Dongguan Weite
274,399.80 274,399.80 100.00% Uncollectible
Electronic Co., Ltd.
Chuangjing 247,811.87 247,811.87 100.00% Uncollectible
Hong Kong New
Century Electronics 207,409.40 207,409.40 100.00% Uncollectible
Co., Ltd.
Shenyang Beitai
203,304.02 203,304.02 100.00% Uncollectible
Electronic Co., Ltd.
Beijing Xinfang Weiye
193,000.00 193,000.00 100.00% Uncollectible
Technology Co., Ltd.
TCL Electronics (Hong
145,087.14 145,087.14 100.00% Uncollectible
Kong) Co., Ltd.
Huizhou TCL Xinte
142,707.14 142,707.14 100.00% Uncollectible
Electronics Co., Ltd.
Sky Worth – RGB 133,485.83 133,485.83 100.00% Uncollectible
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深圳中恒华发股份有限公司 2020 年年度报告全文
Electronic Co., Ltd.
Other 2,039,896.72 2,039,896.72 100.00% Uncollectible
Accrual of bad debt provision on single basis:
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Accrual of bad debt provision on portfolio: 9893.78
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio
Within one year 127,954,502.85
1-2 years 50,840.84 2,542.04 5.00%
2-3 years 65,934.11 6,593.41 10.00%
Over 3 years 2,527.77 758.33 30.00%
0.01%
Total 128,073,805.57 9,893.78 --
Explanation on portfolio basis:
Accrual of bad debt provision on portfolio:
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
Nil
Accrual of bad debt provision on portfolio:
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
Nil
Accrual of bad debt provision on portfolio:
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
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深圳中恒华发股份有限公司 2020 年年度报告全文
□ Applicable √Not applicable
By account age
In RMB
Account ages Book balance
Within one year (one year included) 127,954,502.85
127,954,502.85
1-2 years 50,840.84
2-3 years 65,934.11
Over 3 years 13,148,817.95
3-4 years 2,527.77
Over 5 years 13,146,290.18
Total 141,220,095.75
(2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
Amount changed in the period
Opening Closing
Category Collected or
balance Accrual Written-off Other balance
reversal
Take account
ages of
receivables as a
4,188.06 5,705.72 9,893.78
combination of
credit risk
characteristics
Total 4,188.06 5,705.72 9,893.78
Including major amount bad debt provision that collected or reversal in the period:
In RMB
Company Amount collected or reversal Way of collection
Nil
(3) Top 5 account receivables collected by arrears party at ending balance
In RMB
Closing balance of account Proportion in total account Closing balance of bad debt
Company
receivable receivables at year-end provision
Hong Kong Yutian
41,513,718.58 29.40%
International Investment
135
深圳中恒华发股份有限公司 2020 年年度报告全文
Co., Ltd.
Qingdao Haidayuan
Purchasing Service Co., 41,499,152.56 29.39%
Ltd.
Hefei Hangjia Display
8,224,775.00 5.82%
Technology Co., Ltd.
ViewSonic Technology
5,925,987.00 4.20%
(China) Co., Ltd.
Xiamen Edmond
Electronic Technology 5,510,646.01 3.90%
Co., Ltd.
Total 102,674,279.15 72.71%
4. Receivable financing
In RMB
Item Closing balance Opening balance
Bank acceptance draft 10,057,385.11 42,096,834.02
Total 10,057,385.11 42,096,834.02
Receivable financing Changes in the period and changes in fair value
□ Applicable √Not applicable
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
Other explanation:
Nil
5. Accounts paid in advance
(1) By account age
In RMB
Closing balance Opening balance
Account ages
Amount Proportion Amount Proportion
Within one year 39,454,164.61 99.52% 22,879,096.29 99.44%
1-2 years 106,781.00 0.27% 128,541.17 0.56%
2-3 years 82,309.50 0.21%
Total 39,643,255.11 -- 23,007,637.46 --
Explanation on reasons of failure to settle on important account paid in advance with age over one year:
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深圳中恒华发股份有限公司 2020 年年度报告全文
Nil
(2) Top 5 account paid in advance at ending balance by prepayment object
Company Closing balance Proportion in total accounts paid
in advance (%)
Hong Kong Yutian International Investment 27,025,766.19 68.40
Co., Ltd.
Qingdao Haidacheng Purchasing Service 3,942,243.48 9.87
Co., Ltd.
AU Optronics Co., Ltd. 2,214,440.14 5.55
Guangzhou Huitong Electronics Co., Ltd. 1,818,784.80 4.55
Haier Digital Technology (Qingdao) Co., 1,294,732.59 3.24
Ltd.
Total 36,295,967.20 91.62
Other explanation:
Nil
6. Other account receivable
In RMB
Item Closing balance Opening balance
Other account receivable 4,466,949.96 6,351,361.16
Total 4,466,949.96 6,351,361.16
(1) Other account receivable
1) Other account receivable by nature
In RMB
Nature Closing book balance Opening book balance
Margin & deposit 1,681,688.00 1,583,408.99
Borrow money 2,124,073.12 1,944,700.12
Intercourse funds 8,924,093.42 11,534,893.51
Rental receivable 6,224,167.48 5,847,389.48
Other 364,429.79 505,560.36
Less: Bad debt provision -14,851,501.85 -15,064,591.30
Total 4,466,949.96 6,351,361.16
137
深圳中恒华发股份有限公司 2020 年年度报告全文
2) Accrual of bad debt provision
In RMB
Phase I Phase II Phase III
Expected credit losses for Expected credit losses for
Expected credit
Bad debt provision the entire duration the entire duration (with Total
losses over next 12
(without credit credit impairment
months
impairment occurred) occurred)
Balance on1 Jan. 2020 252,531.52 14,812,059.78 15,064,591.30
Balance of 1 Jan. 2020
—— —— —— ——
in the period
Accrual in current
-252,531.52 111.75 39,330.32 -213,089.45
period
Balance on Dec. 31,
111.75 14,851,390.10 14,851,501.85
2020
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
In RMB
Account ages Book balance
Within one year (one year included) 3,100,690.03
3,100,690.03
1-2 years 297,671.40
2-3 years 312,212.44
Over 3 years 15,607,877.94
3-4 years 1,446,706.00
4-5 years 943,020.00
Over 5 years 13,218,151.94
Total 19,318,451.81
3) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
Amount changed in the period
Opening
Category Collected or Closing balance
balance Accrual Written-off Other
reversal
Phase I 252,531.52 -252,531.52 0.00
138
深圳中恒华发股份有限公司 2020 年年度报告全文
Phase II 111.75 111.75
14,812,059.
Phase III 39,330.32 14,851,390.10
78
15,064,591.
Total -213,089.45 14,851,501.85
30
Including the important amount collected or switches back in the period:
In RMB
Company Amount collected or switches back Way of collection
4) Top 5 other receivables collected by arrears party at ending balance
In RMB
Proportion in total
Closing balance of
Company Nature Closing balance Account ages other receivables
bad debt provision
at period-end
Portman Rental receivable 4,021,734.22 Over 3 years 20.82% 4,021,734.22
Shenzhen Jifang
Investment Co., Rental receivable 1,380,608.00 Over 3 years 7.15% 1,380,608.00
Ltd
Fujian Jielian
Electronics Co., Margin & deposit 800,000.00 Over 3 years 4.14% 240,000.00
Ltd.
Compensation for
Intercourse funds 555,785.81 Over 3 years 2.88% 555,785.81
traffic accidents
Hebei Botou Court Intercourse funds 520,021.00 Over 3 years 2.69% 520,021.00
Total -- 7,278,149.03 -- 37.67% 6,718,149.03
7. Inventories
Whether companies need to comply with the disclosure requirements of the real estate industry
No
(1) Category
In RMB
Closing balance Opening balance
Inventories fall Inventories fall
Item provision or provision or
Book balance Book value Book balance Book value
contract contract
performance performance
139
深圳中恒华发股份有限公司 2020 年年度报告全文
costs costs
impairment impairment
provision provision
Raw materials 39,735,101.27 1,691,320.92 38,043,780.35 33,817,180.23 2,844,484.06 30,972,696.17
Inventory
27,562,913.38 1,673,369.82 25,889,543.56 27,590,425.68 486,362.31 27,104,063.37
goods
Homemade
semi-finished 6,213,029.56 29,363.73 6,183,665.83 8,775,225.16 232,090.00 8,543,135.16
products
Low priced and
easily worn 159,646.13 110,622.38 49,023.75 463,639.07 111,981.81 351,657.26
articles
Total 73,670,690.34 3,504,676.85 70,166,013.49 70,646,470.14 3,674,918.18 66,971,551.96
(2) Inventories fall provision or contract performance costs impairment provision
In RMB
Current increased Current decreased
Opening Closing
Item Reversal or
balance Accrual Other Other balance
write-off
Raw materials 2,844,484.06 -1,153,163.14 1,691,320.92
Inventory
486,362.31 1,187,007.51 1,673,369.82
goods
Homemade
semi-finished 232,090.00 -202,726.27 29,363.73
products
Low priced and
easily worn 111,981.81 -1,359.43 110,622.38
articles
Total 3,674,918.18 -170,241.33 3,504,676.85
Nil
8. Other current assets
In RMB
Item Closing balance Opening balance
Value-added tax to be deducted 4,255,643.19 1,352,757.06
Advance payment of income tax 42,314.30
Total 4,255,643.19 1,395,071.36
140
深圳中恒华发股份有限公司 2020 年年度报告全文
Other explanation:
Nil
9. Investment real estate
(1) Investment real estate measured at cost
√ Applicable □ Not applicable
In RMB
Construction in
Item House and building Land use right Total
process
I. Original book value
1. Opening balance 133,661,686.94 133,661,686.94
2. Current increased
(1) Outsourcing
(2) Inventory\fixed
assets\construction in
process transfer-in
(3) Increased by
combination
3. Current decreased
(1) Disposal
(2) Other transfer-out
4. Closing balance 133,661,686.94 133,661,686.94
II. Accumulated
depreciation and
accumulated
amortization
1. Opening balance 84,708,694.37 84,708,694.37
2. Current increased 1,728,330.30 1,728,330.30
(1) Accrual or
1,728,330.30 1,728,330.30
amortization
3. Current decreased
(1) Disposal
(2) Other transfer-out
141
深圳中恒华发股份有限公司 2020 年年度报告全文
4. Closing balance 86,437,024.67 86,437,024.67
III. Impairment
provision
1. Opening balance
2. Current increased
(1) Accrual
3. Current decreased
(1) Disposal
(2) Other transfer-out
4. Closing balance
IV. Book value
1. Ending book value 47,224,662.27 47,224,662.27
2. Opening book value 48,952,992.57 48,952,992.57
10. Fixed assets
In RMB
Item Closing balance Opening balance
Fixed assets 100,747,972.84 105,372,345.62
Disposal of fixed assets 92,857,471.69 92,857,471.69
Total 193,605,444.53 198,229,817.31
(1) Fixed asset
In RMB
Means of
House Machinery Office Instrument Tool Mold
Item transportati Total
building equipment equipment equipment equipment equipment
on
I. Original
book value
1. Opening 73,200,617 94,646,254 6,170,584. 7,180,143. 3,211,408. 8,754,968. 21,193,658 214,357,63
balance .41 .95 89 39 06 35 .84 5.89
2. Current 5,422,808. 3,757,301. 10,005,633
148,429.93 41,519.97 635,574.26
increased 01 61 .78
142
深圳中恒华发股份有限公司 2020 年年度报告全文
(1) 5,422,808. 3,757,301. 10,005,633
148,429.93 41,519.97 635,574.26
Purchasing 01 61 .78
(2)
Constructio
n in
process
transfer-in
(3)
Increased
by
combinatio
n
3. Current 4,906,595. 2,580,776. 7,781,197.
42,281.72 21,550.00 229,994.56
decreased 42 07 77
(1)
4,906,595. 2,580,776. 7,781,197.
Disposal or 42,281.72 21,550.00 229,994.56
42 07 77
scrapping
4. Closing 73,200,617 95,162,467 3,589,808. 7,286,291. 3,231,378. 9,160,548. 24,950,960 216,582,07
balance .41 .54 82 60 03 05 .45 1.90
II.
Accumulati
ve
depreciatio
n
1. Opening 18,788,535 61,361,126 3,689,064. 5,980,483. 2,573,318. 3,809,126. 12,783,635 108,985,29
balance .27 .34 83 22 14 76 .71 0.27
2. Current 2,046,963. 4,793,077. 1,158,027. 3,623,442. 12,823,677
743,045.69 328,344.54 130,775.11
increased 65 51 82 90 .22
2,046,963. 4,793,077. 1,158,027. 3,623,442. 12,823,677
(1) Accrual 743,045.69 328,344.54 130,775.11
65 51 82 90 .22
3. Current 3,839,103. 1,901,876. 5,974,868.
38,053.55 19,395.00 176,439.88
decreased 69 31 43
(1)
3,839,103. 1,901,876. 5,974,868.
Disposal or 38,053.55 19,395.00 176,439.88
69 31 43
scrapping
143
深圳中恒华发股份有限公司 2020 年年度报告全文
4. Closing 20,835,498 62,315,100 2,530,234. 6,270,774. 2,684,698. 4,790,714. 16,407,078 115,834,09
balance .92 .16 21 21 25 70 .61 9.06
III.
Depreciatio
n reserves
1. Opening
balance
2. Current
increased
(1) Accrual
3. Current
decreased
(1)
Disposal or
scrapping
4. Closing
balance
IV. Book
value
1. Ending 52,365,118 32,847,367 1,059,574. 1,015,517. 4,369,833. 8,543,881. 100,747,97
546,679.78
book value .49 .38 61 39 35 84 2.84
2. Opening 54,412,082 33,285,128 2,481,520. 1,199,660. 4,945,841. 8,410,023. 105,372,34
638,089.92
book value .14 .61 06 17 59 13 5.62
(2) Fixed assets leasing-out by operational lease
In RMB
Item Ending book value
House building 800,418.77
(3) Disposal of fixed assets
In RMB
Item Closing balance Opening balance
Renovation of Gongming Huafa Electric
92,857,471.69 92,857,471.69
Town
Total 92,857,471.69 92,857,471.69
144
深圳中恒华发股份有限公司 2020 年年度报告全文
Other explanation
Nil
11. Construction in process
In RMB
Item Closing balance Opening balance
Construction in process 740,000.00
Total 740,000.00
(1) Construction in process
In RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Huafa Building
Reconstruction 240,000.00 240,000.00
Project
Gongming
Electronic City
500,000.00 500,000.00
Reconstruction
Project
Total 740,000.00 740,000.00
12. Intangible assets
(1) Intangible assets
In RMB
Non-patented Computer
Item Land use right Patent right Total
technology software
I. Original book
value
1. Opening
55,415,814.36 3,533,396.41 58,949,210.77
balance
2. Current
increased
(1) Purchasing
(2) Internal R&D
145
深圳中恒华发股份有限公司 2020 年年度报告全文
(3) Increased by
combination
3. Current
420,000.00 420,000.00
decreased
(1) Disposal 420,000.00 420,000.00
4. Closing balance 55,415,814.36 3,113,396.41 58,529,210.77
II. Accumulated
amortization
1. Opening
15,205,546.53 665,635.90 15,871,182.43
balance
2. Current
1,445,488.89 282,453.75 1,727,942.64
increased
(1) Accrual 1,445,488.89 282,453.75 1,727,942.64
3. Current
decreased
(1) Disposal
4. Closing balance 16,651,035.42 948,089.65 17,599,125.07
III. Depreciation
reserves
1. Opening
109,427.90 109,427.90
balance
2. Current
increased
(1) Accrual
3. Current
decreased
(1) Disposal
4. Closing balance 109,427.90 109,427.90
IV. Book value
1. Ending book
38,764,778.94 2,055,878.86 40,820,657.80
value
146
深圳中恒华发股份有限公司 2020 年年度报告全文
2. Opening book
40,210,267.83 2,758,332.61 42,968,600.44
value
The proportion of intangible assets form by internal R&D in total book value of intangible assets at period-end 0.00%
13. Long-term deferred expenses
In RMB
Amortized in
Item Opening balance Current increased Other decreased Closing balance
Period
Amortization of
309,781.15 232,335.84 77,445.31
cloud service fees
Total 309,781.15 232,335.84 77,445.31
Other explanation
Nil
14. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets without offset
In RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences assets differences assets
Provision for assets
28,458,252.74 6,761,085.38 28,835,877.80 6,787,257.25
impairment
Accrual liability 64,411.00 16,102.75 64,411.00 16,102.75
Deferred income 4,043,640.00 606,546.00
Total 32,566,303.74 7,383,734.13 28,900,288.80 6,803,360.00
(2) Amount of deferred income tax asset and deferred income tax liability after trade-off
In RMB
Ending balance of Trade-off between the Opening balance of
Trade-off between the
deferred income tax deferred income tax deferred income tax
Item deferred income tax
assets or liabilities assets and liabilities at assets or liabilities
assets and liabilities
after off-set period-begin after off-set
Deferred income tax
7,383,734.13 6,803,360.00
assets
147
深圳中恒华发股份有限公司 2020 年年度报告全文
(3) Deferred income tax asset without recognized
In RMB
Item Closing balance Opening balance
Deductible temporary differences 3,163,837.81 3,163,837.81
Deductible loss 4,098,904.69
Total 7,262,742.50 3,163,837.81
(4) Deductible losses of un-recognized deferred income tax assets expired on the followed year
In RMB
Year Ending amount Opening amount Note
2021
2022 742,401.79
2023 404,207.57
2024 1,318,067.59
2025 1,634,227.74
Total 4,098,904.69 --
Other explanation:
Nil
15. Other non-current assets
In RMB
Closing balance Opening balance
Item Book Impairment Book Impairment
Book value Book value
balance provision balance provision
Advance payment for equipment 66,000.00 66,000.00 225,700.00 225,700.00
Total 66,000.00 66,000.00 225,700.00 225,700.00
Other explanation:
Nil
16. Short-term borrowings
(1) Category
In RMB
Item Closing balance Opening balance
148
深圳中恒华发股份有限公司 2020 年年度报告全文
Loan in pledge 12,000,000.00
Secured portfolio loan 12,527,808.00 12,633,898.20
Total 12,527,808.00 24,633,898.20
Explanation on category of short-term loans:
Nil
17. Notes payable
In RMB
Category Closing balance Opening balance
Bank acceptance draft 37,416,381.20 16,761,590.51
Total 37,416,381.20 16,761,590.51
Totally 0 Yuan due note payable are paid at period-end
18. Account payable
(1) Account payable
In RMB
Item Closing balance Opening balance
Within one year (one year included) 85,862,573.31 95,647,603.05
Over one year 12,455,666.57 13,157,302.15
Total 98,318,239.88 108,804,905.20
(2) Major account payable over one year
In RMB
Item Closing balance Reasons for non-payment or carry over
Shenzhen Yuehai Global Logistics Co.,
2,858,885.97 Without settlement
Ltd.
LG 1,906,267.50 Without settlement
Kunshan Zhongji Mould Co., Ltd. 766,775.87 Without settlement
Total 5,531,929.34 --
Other explanation:
Nil
149
深圳中恒华发股份有限公司 2020 年年度报告全文
19. Accounts received in advance
(1) Accounts received in advance
In RMB
Item Closing balance Opening balance
Within one year (one year included) 0.00
Over one year 0.00
Total 0.00
20. Contract liabilities
In RMB
Item Closing balance Opening balance
Sales received in advance 207,945.34 276,783.76
Lease received in advance 79,195.32 54,539.06
Total 287,140.66 331,322.82
Amount and reasons for significant changes in book value during the reporting period
In RMB
Item Change Amount Reason for change
21. Wage payable
(1) Wage payable
In RMB
Increase during the Decrease during the
Item Opening balance Closing balance
period period
I. Short-term benefits 5,848,652.79 56,261,292.45 56,405,128.71 5,704,816.53
II. Post-employment
benefits-defined 28,688.46 411,813.11 407,951.51 32,550.06
contribution plans
III. Dismiss welfare 466,848.37 466,848.37
Total 5,877,341.25 57,139,953.93 57,279,928.59 5,737,366.59
(2) Short-term benefits
In RMB
Item Opening balance Increase during the Decrease during the Closing balance
150
深圳中恒华发股份有限公司 2020 年年度报告全文
period period
1. Wages, bonuses,
4,854,064.03 49,082,761.05 49,227,170.16 4,709,654.92
allowances andsubsidies
2. Employee benefits 754.00 4,958,298.97 4,958,298.97 754.00
3. Social insurance
36,694.18 1,841,258.59 1,840,685.74 37,267.03
premium
Including:
34,964.92 1,647,673.81 1,647,229.78 35,408.95
Medical insurance
Work
740.73 9,914.78 9,887.21 768.30
injury insurance
Maternity
988.53 183,670.00 183,568.75 1,089.78
insurance
4. Housing
24,310.00 373,870.44 373,870.44 24,310.00
accumulation fund
5. Labor union
expenditure and
932,830.58 5,103.40 5,103.40 932,830.58
personnel education
expense
Total 5,848,652.79 56,261,292.45 56,405,128.71 5,704,816.53
(3) Defined contribution plans
In RMB
Increase during the Decrease during the
Item Opening balance Closing balance
period period
1. Basic endowment
27,561.59 394,973.41 391,173.41 31,361.59
insurance
2. Unemployment
1,126.87 16,839.70 16,778.10 1,188.47
insurance
Total 28,688.46 411,813.11 407,951.51 32,550.06
Other explanation:
Nil
22. Taxes payable
In RMB
Item Closing balance Opening balance
VAT 2,980,929.11 3,192,458.47
Corporate income tax 6,558,810.68 7,032,715.76
151
深圳中恒华发股份有限公司 2020 年年度报告全文
Individual income tax 25,195.14 30,265.20
Urban maintenance and construction tax 1,902,436.52 1,050,282.59
Property tax 318,681.51 310,683.11
Land use tax 33,280.48 25,424.98
Educational surtax 816,098.15 450,889.35
Local educational surtax 418,611.03 234,049.86
Dike fee 1,665.00 1,665.00
Stamp tax 28,895.00 39,940.66
Disposal fund of waste electrical
1,120,040.00 509,570.00
products
Total 14,204,642.62 12,877,944.98
Other explanation:
Nil
23. Other accounts payable
In RMB
Item Closing balance Opening balance
Interest payable 26,335.66 89,365.28
Other payable 27,581,945.35 27,938,227.34
Total 27,608,281.01 28,027,592.62
(1) Interest payable
In RMB
Item Closing balance Opening balance
Interest of short-term loans payable 26,335.66 89,365.28
Total 26,335.66 89,365.28
Significant overdue and unpaid interest:
In RMB
Loan unit Overdue amount Reason for overdue
Other explanation:
Nil
152
深圳中恒华发股份有限公司 2020 年年度报告全文
(2) Other accounts payable
1) Other account payable by nature
In RMB
Item Closing balance Opening balance
Margin & deposit 11,523,316.67 10,354,134.67
Lease management fee 3,227,985.19 3,251,610.67
Intercourse funds 5,546,586.51 8,544,383.61
After sale and repairment 1,454,341.68 1,747,809.47
Energy consumption (water, electricity
1,443,603.28
and steam)
Shipping 902,242.26
Reserve fund 1,346,345.00
Other 2,137,524.76 4,040,288.92
Total 27,581,945.35 27,938,227.34
2) Significant other account payable with over one year age
In RMB
Item Closing balance Reasons for non-payment or carry over
Shenzhen SED Property Development
1,853,393.35 Without settlement
Co., Ltd.
Shenzhen Huayongxing Environmental
1,000,000.00 Margin
Protection Technology Co., Ltd.
Linghang Technology (Shenzhen) Co.,
656,345.28 Without settlement
Ltd
Shenzhen Tongxing Electronics Co., Ltd. 578,259.83 Without settlement
Shenzhen Yongdasheng Investment
558,970.00 Margin
Development Co., Ltd.
Total 4,646,968.46 --
Other explanation
Nil
24. Non-current liabilities due within one year
In RMB
Item Closing balance Opening balance
153
深圳中恒华发股份有限公司 2020 年年度报告全文
Long-term loans due within one year 12,000,000.00 12,000,000.00
Total 12,000,000.00 12,000,000.00
Other explanation:
Nil
25. Other current liabilities
In RMB
Item Closing balance Opening balance
Unterminated confirmation on note
18,309,336.77
receivable
Pending sales tax 13,636.04 25,123.39
Total 18,322,972.81 25,123.39
Changes in short-term bonds payable:
In RMB
Premiu
Repay
Interest m and
Bond Issue Openin ment in
Name Face Issue Current accrued discoun Closing
maturit Amoun g the
of bond value date issue at face t balance
y t balance current
value amortiz
period
ation
Other explanation:
Nil
26. Long-term loans
(1) Category
In RMB
Item Closing balance Opening balance
Mortgage loan 61,000,000.00 73,000,000.00
Total 61,000,000.00 73,000,000.00
Description of Long-term loans classification:
Nil
Other explanation, including interest rate range:
Interest rate 9.5%
27. Accrual liability
In RMB
154
深圳中恒华发股份有限公司 2020 年年度报告全文
Item Closing balance Opening balance Causes
Pending action 64,411.00 64,411.00 Business and labor disputes
Total 64,411.00 64,411.00 --
Other explanations, including important assumptions and estimation about important estimated liabilities:
Nil
28. Deferred income
In RMB
Increase during Decrease during
Item Opening balance Closing balance Causes
the period the period
Industrial
Government
2,331,720.00 2,190,000.00 478,080.00 4,043,640.00 transformation
subsidy
subsidies
Total 2,331,720.00 2,190,000.00 478,080.00 4,043,640.00 --
Items involving Government subsidy:
In RMB
Amount
Amount Amount of
New reckoned
included cost and
subsidy in Assets-rel
Opening in other expense Other Closing
Liability increased non-operat ated/Inco
balance income in offset in change balance
in the ing me-related
the current the current
period income in
period period
the period
Provincial
special
fund for
transforma
tion and Assets-rel
1,800,000.00 1,600,000.00
upgrading ated
of
traditional
industry
for 2018
Incentive
fund for
Wuhan
Assets-rel
industrial 531,720.00 472,640.00
ated
intelligent
transforma
tion
155
深圳中恒华发股份有限公司 2020 年年度报告全文
demonstra
tion
project in
2019
Special
funds for
industrial
investment
and
technologi
Assets-rel
cal 1,971,000.00
ated
transforma
tion and
intelligent
transforma
tion in
2020
2,190,000. 478,080.0 Assets-rel
Total 2,331,720.00 4,043,640.00
00 0 ated
Other explanation:
Nil
29. Share capital
In RMB
Changes in the Period (+,-)
Shares
Opening Closing
Issuing new transfer from
balance Bonus shares Other Subtotal balance
shares public
reserves
283,161,227. 283,161,227.
Total shares
00 00
Other explanation:
Nil
30. Capital public reserve
In RMB
Increase during the Decrease during the
Item Opening balance Closing balance
period period
Capital premium 96,501,903.02 96,501,903.02
156
深圳中恒华发股份有限公司 2020 年年度报告全文
(equity premium)
Other capital public
50,085,368.48 9,500.00 50,075,868.48
reserve
Total 146,587,271.50 9,500.00 146,577,771.50
Other explanation, including changes and reasons of changes:
The decrease in other capital reserves in the current period was caused by the merger of enterprises under the same control.
31. Surplus public reserve
In RMB
Increase during the Decrease during the
Item Opening balance Closing balance
period period
Statutory surplus
21,322,617.25 21,322,617.25
reserves
Discretionary surplus
56,068,976.00 56,068,976.00
reserve
Total 77,391,593.25 77,391,593.25
Other explanation, including changes and reasons for changes:
Nil
32. Retained profit
In RMB
Item Current period Last period
Retained profit at the end of the previous period
-177,712,041.86 -183,172,091.01
before adjustment
Retained profit at period-begin after adjustment -177,712,041.86 -183,172,091.01
Add: net profit attributable to owners of the
6,830,187.40 5,460,049.15
parent company
Retained profit at period-end -170,881,854.46 -177,712,041.86
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained
profits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.
5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
157
深圳中恒华发股份有限公司 2020 年年度报告全文
33. Operating revenue and cost
In RMB
Current Period Last Period
Item
Revenue Cost Revenue Cost
Main business 617,385,012.51 575,728,898.74 646,532,884.16 596,169,654.97
Other business 74,357,256.61 37,499,795.77 75,024,556.35 38,332,472.38
Total 691,742,269.12 613,228,694.51 721,557,440.51 634,502,127.35
Whether the lower of the audited net profit before and after deduction of non-recurring gains and losses is negative
□Yes √No
Information relating to revenue:
In RMB
Category Branch 1 Branch 2 Total
Including:
Including:
Including:
Including:
Including:
Including:
Including:
Information relating to performance obligations:
Nil
Information related to the transaction price apportioned to the remaining performance obligations:
The amount of income corresponding to the performance obligations that have been signed at the end of this reporting period but
have not yet been fulfilled or have not done with fulfillment is 0.00 yuan, among them, yuan of revenue is expected to be recognized
in YEAR, yuan of revenue is expected to be recognized in YEAR, and yuan of revenue is expected to be recognized in YEAR.
Other explanation
Nil
34. Tax and surcharges
In RMB
Item Current Period Last Period
Urban maintenance and construction tax 1,016,287.94 804,287.45
Educational surtax 435,551.94 344,694.60
Property tax 1,037,125.69 1,521,853.12
Land use tax 434,724.29 579,168.99
158
深圳中恒华发股份有限公司 2020 年年度报告全文
Vehicle use tax 360.00 24,828.58
Stamp tax 421,993.80 443,943.26
Local education development fee 229,808.32 181,494.42
Total 3,575,851.98 3,900,270.42
Other explanation:
35. Sales expense
In RMB
Item Current Period Last Period
Employee compensation 3,181,384.76 4,301,179.20
Freight 6,467,421.32
Commodity inspection fee 2,648,430.44 876,706.96
Customs fee 90,913.66 143,589.91
Commodity loss 4,869,738.37 3,797,231.43
After-sales service fee 3,815,389.24 4,383,391.47
Business entertainment expense 198,137.01 184,161.63
Other 613,767.12 725,575.05
Total 15,417,760.60 20,879,256.97
Other explanation:
Nil
36. Administrative expense
In RMB
Item Current Period Last Period
Salary 9,921,865.34 10,633,657.05
Depreciation charge 2,208,645.49 2,092,560.37
Social insurance premium 799,110.40 2,361,102.10
Business entertainment expense 5,592,000.14 4,726,829.54
Employee benefits 790,303.01 925,014.07
Travel expenses 1,449,073.69 1,012,373.74
Depreciation and amortization cost 1,605,138.91 1,678,449.61
Traffic expenses 572,727.46 757,169.92
Intermediary agency service fee 1,919,335.23 1,832,218.55
Security fee 2,098,103.57 1,111,784.83
159
深圳中恒华发股份有限公司 2020 年年度报告全文
Repair cost 2,991,269.94 2,266,890.44
Office expenses 1,095,896.50 723,894.04
Communication fee 150,322.79 209,777.84
Amortization of low cost and short lived
271,997.21 183,182.49
articles
Securities information disclosure fee 283,386.75 344,524.44
Litigation fee 150,400.00 53,050.00
Lease fee 1,048,880.52 4,395,032.42
Staff education and labor union funds 14,603.40 117,653.63
Water and electricity 152,374.57 646,754.82
Other expenses 1,365,784.19 1,962,151.73
Total 34,481,219.11 38,034,071.63
Other explanation:
Nil
37. R& D expenses
In RMB
Item Current Period Last Period
Employee compensation 4,791,827.59 4,804,190.42
Direct material input 1,644,898.53 390,914.57
Depreciation and amortization 593,756.40 650,145.58
Power and manufacturing cost 120,699.24 698,061.22
Other 134,652.08 105,851.23
Total 7,285,833.84 6,649,163.02
Other explanation:
Nil
38. Financial expense
In RMB
Item Current Period Last Period
Interest costs 8,508,919.02 10,638,951.99
Less: Interest income 838,314.39 631,958.95
Exchange loss 8,048,826.28 4,801,837.04
Less: exchange gains 3,248,154.95 5,145,385.72
Handing expense 167,866.93 281,574.56
160
深圳中恒华发股份有限公司 2020 年年度报告全文
Other expense 1,560.00 1,760.00
Total 12,640,702.89 9,946,778.92
Other explanation:
Nil
39. Other income
In RMB
Sources Current Period Last Period
Three-agency handling fee for individual
6,113.66
tax
Provincial special fund for
transformation and upgrading of 59,080.00 59,080.00
traditional industry for 2018
Incentive fund for Wuhan industrial
intelligent transformation demonstration 200,000.00 200,000.00
project in 2019
Special funds for industrial investment
and technological transformation and 219,000.00
intelligent transformation in 2020
Enterprise stabilization subsidy refund 232,313.00
Subsidies for training on behalf of
1,016,000.00
workers
2020 Caidian District Patent Award Fund 12,000.00
2020 Municipal Manufacturing and
Internet Integration Development 520,000.00
Special Fund
Total 2,264,506.66 259,080.00
40. Investment income
In RMB
Item Current Period Last Period
Investment income from financial products 165,317.73 180,964.60
Total 165,317.73 180,964.60
Other explanation:
Nil
161
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41. Credit impairment loss
In RMB
Item Current Period Last Period
Bad debt loss of other account receivable 213,089.45 196,278.74
Credit impairment loss of account
-5,705.72 -5,659.75
receivable
Total 207,383.73 190,618.99
Other explanation:
Nil
42. Losses on assets impairment
In RMB
Item Current Period Last Period
II. Inventory falling price loss and
impairment loss of contract performance 170,241.33 -275,905.92
cost
X. Impairment loss of Intangible assets -109,427.90
Total 170,241.33 -385,333.82
Other explanation:
Nil
43. Asset disposal income
In RMB
Source of asset disposal income Current Period Last Period
Disposal gains arising from the disposal
of not held for sale fixed assets 817,533.49 9,298.34
\intangible assets
44. Non-operating income
In RMB
Amount included in current
Item Current Period Last Period
non-recurring profits or losses
Government subsidy 465,079.80 275,300.00 465,079.80
Fine income 40,702.97
Other 23,577.50 18,947.69 23,577.50
162
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Total 488,657.30 334,950.66 488,657.30
Government subsidy reckoned into current gains/losses:
In RMB
Subsidy
impact The special Assets-rela
Issuing Offering Amount in Amount in
Item Nature current subsidy ted/Income
subject causes the Period last period
gains/losse (Y/N) -related
s (Y/N)
Subsidy
2019
obtained
Central
for
Foreign
conforms
Economic
Wuhan with the
and Trade
Municipal local Income-rel
Developme Subsidy Y N 210,900.00
Bureau of support ated
nt Special
Commerce policy for
Fund
investment
Processing
incentive to
Trade
encourage
Matters
investment
Steady Subsidy
growth in obtained
foreign for
trade of the conforms
audited Wuhan with the
foreign Municipal local Income-rel
Subsidy Y N 90,400.00
economic Bureau of support ated
and trade Commerce policy for
developme investment
nt special incentive to
funds in encourage
2019 investment
Subsidy
2020
obtained
Provincial
for
Special
Wuhan conforms
Funds for
Municipal with the Income-rel
Foreign Subsidy Y N 36,100.00
Bureau of local ated
Economic
Commerce support
and Trade
policy for
Developme
investment
nt
incentive to
163
深圳中恒华发股份有限公司 2020 年年度报告全文
encourage
investment
Subsidy
obtained
2020 for
Municipal conforms
Bureau of
Foreign with the
Commerce
Economic local Income-rel
in Wuhan Subsidy Y N 41,500.00
and Trade support ated
Caidian
Developme policy for
District
nt Special investment
Fund incentive to
encourage
investment
Subsidy
obtained
for
conforms
Governme
Futian with the
nt subsidies
District local Income-rel
for Subsidy Y N 10,000.00
Governme support ated
epidemic
nt policy for
prevention
investment
incentive to
encourage
investment
Subsidy
obtained
for
conforms
with the
Shenzhen
Sewage fee local Income-rel
Water Co., Subsidy Y N 15,778.80
refund support ated
Ltd.
policy for
investment
incentive to
encourage
investment
Subsidy
Shenzhen
obtained
Electricity Power Income-rel
Subsidy for Y N 60,401.00
subsidy Supply ated
conforms
Bureau
with the
164
深圳中恒华发股份有限公司 2020 年年度报告全文
local
support
policy for
investment
incentive to
encourage
investment
Subsidy
obtained
for
2018 conforms
Municipal with the
Ministry of
Foreign local Income-rel
Finance of Subsidy Y N 50,000.00
Economic support ated
Wuhan
and Trade policy for
Funds investment
incentive to
encourage
investment
Subsidy
obtained
Job search
Labor and for
and
employme conforms
entreprene
nt with the
urship
administrat local Income-rel
subsidy Subsidy Y N 6,000.00
ion bureau support ated
received
of Wuhan policy for
for
Caidian investment
injection
District incentive to
molding
encourage
investment
Subsidy
obtained
for
Financial
conforms
branch of
Award for with the
Economic
excellent local Income-rel
Developme Award Y N 200,000.00
enterprises support ated
nt Zone of
in 2018 policy for
Wuhan
investment
Caidian
incentive to
encourage
investment
165
深圳中恒华发股份有限公司 2020 年年度报告全文
Subsidy
obtained
for
Zero
Foreign conforms
balance
trade funds with the
special
at local Income-rel
account of Subsidy Y N 17,300.00
provincial support ated
Wuhan
level in policy for
Finance
2018 investment
Bureau
incentive to
encourage
investment
Subsidy
obtained
for
Provincial conforms
Departmen
foreign with the
t of
economic local Income-rel
Commerce Subsidy Y N 2,000.00
and trade support ated
of Hubei
developme policy for
Province
nt project investment
incentive to
encourage
investment
Other explanation:
Nil
45. Non-operating expenditure
In RMB
Amount included in current
Item Current Period Last Period
non-recurring profits or losses
Penalties and liquidated
7,302.38 484,592.52 7,302.38
damages
Tax overdue fine 362,411.75 362,411.75
Other expenses 39,095.77 39,095.77
Total 408,809.90 484,592.52
Other explanation:
Nil
166
深圳中恒华发股份有限公司 2020 年年度报告全文
46. Income tax expense
(1) Statement of income tax expense
In RMB
Item Current Period Last Period
Current income tax expense 2,550,845.51 2,264,212.71
Deferred income tax expense -580,374.13 26,496.59
Other 16,377.75
Total 1,986,849.13 2,290,709.30
(2) Adjustment on accounting profit and income tax expenses
In RMB
Item Current Period
Total profit 8,817,036.53
Income tax based on statutory/applicable rate 2,204,259.13
Impact by different tax rate applied by subsidies -227,859.48
Effect of adjusting the income tax in previous period 16,377.75
Impact on cost, expenses and losses that unable to deducted 1,257,662.83
Impact of deductible loss of un-recognized deferred income
-311,960.12
tax assets in the prior period of use
The deductible temporary differences or deductible losses of
-118,532.18
the un-recognized deferred income tax assets in the Period
Other (additional deduction for R&D expenses) -833,098.80
Income tax expense 1,986,849.13
Other explanation
Nil
47. Annotation of cash flow statement
(1) Cash received with other operating activities concerned
In RMB
Item Current Period Last Period
Unit intercourse account 3,566,766.97 2,484,797.74
Collection management fee and utilities
148,431.32 2,977,706.16
etc.
167
深圳中恒华发股份有限公司 2020 年年度报告全文
Repayment from employees 129,319.77 160,311.00
Margin, deposit 296,101.74 3,289,643.20
Interest income 13,328.40 689,183.43
Refunds 8,175.34 597,038.28
Claim deduction etc. 756,526.93 722,943.15
Government subsidy 4,477,329.40 2,866,100.00
Other 154,610.95 10,871.01
Total 9,550,590.82 13,798,593.97
Note of cash received with other operating activities concerned:
Nil
(2) Cash paid with other operating activities concerned
In RMB
Item Current Period Last Period
Unit intercourse account 2,613,872.25 1,975,618.44
Borrowings paid by employees 2,384,958.00 879,995.14
Shipping fee 6,995,192.43 5,104,276.56
Communication fee 1,580,667.08 4,471,380.81
Utility bill 2,697,056.69 1,493,292.41
Transportation expenses 454,078.69 870,970.33
Repair cost 3,396,243.22 2,153,601.68
Financial institution fee 59,840.09 120,224.97
Other 1,582,172.00 1,607,835.54
Courier fee 1,086,119.77
After-sales service fee 700,744.50 1,055,553.88
Inspection fee 693,871.75 310,390.97
Office expenses 1,286,080.79 724,155.68
Margin 2,244,276.97 8,161,965.07
Travel expenses 4,424,533.42 1,117,219.86
Audit consulting fee 377,867.92 3,008,697.45
Rental fees 193,840.43 3,386,329.51
Securities Information Disclosure Fee 283,386.75 344,524.44
Security fee 1,060,613.25 812,676.00
Total 34,115,416.00 37,598,708.74
Note of cash paid with other operating activities concerned:
168
深圳中恒华发股份有限公司 2020 年年度报告全文
Nil
(3) Cash received with other investment activities concerned
In RMB
Item Current Period Last Period
Redemption of principal of financial
55,000,000.00 75,000,000.00
products
Total 55,000,000.00 75,000,000.00
Note of cash received with other investment activities concerned:
Nil
(4) Cash paid related with investment activities
In RMB
Item Current Period Last Period
Purchasing financial products 55,000,000.00 75,000,000.00
Total 55,000,000.00 75,000,000.00
Note of cash paid related with investment activities:
Nil
(5) Cash paid related with financing activities
In RMB
Item Current Period Last Period
Bill margin 30,688,367.17
Total 30,688,367.17
Note of cash paid related with financing activities:
Nil
48. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB
Supplementary information This Period Last Period
1. Net profit adjusted to cash flow of
-- --
operation activities:
Net profit 6,830,187.40 5,460,049.15
169
深圳中恒华发股份有限公司 2020 年年度报告全文
Add: Assets impairment provision -377,625.06 -194,714.83
Depreciation of fixed assets,
consumption of oil assets and depreciation 14,552,007.52 11,730,115.29
of productive biology assets
Depreciation of right-of-use
assets
Amortization of intangible assets 1,727,942.64 1,772,198.84
Amortization of long-term deferred
232,335.84 232,335.84
expenses
Loss from disposal of fixed assets,
intangible assets and other long-term -817,533.49 -9,298.34
assets (gain is listed with “-”)
Losses on scrapping of fixed assets
(gain is listed with “-”)
Gain/loss of fair value changes
(gain is listed with “-”)
Financial expenses (gain is listed
13,309,590.35 10,295,403.31
with “-”)
Investment loss (gain is listed
-165,317.73 -180,964.60
with “-”)
Decrease of deferred income tax
-529,860.13 26,496.59
asset ((increase is listed with “-”)
Increase of deferred income tax
liability (decrease is listed with “-”)
Decrease of inventory (increase is
-3,024,220.20 -4,273,548.50
listed with “-”)
Decrease of operating receivable
4,984,706.25 18,484,235.02
accounts (increase is listed with “-”)
Increase of operating payable
21,335,650.21 31,121,399.24
accounts (decrease is listed with “-”)
Other 1,711,920.00
Net cash flows arising from
59,719,269.60 74,463,707.01
operating activities
2. Material investment and financing not
-- --
involved in cash flow
Conversion of debt into capital
Switching Company bonds due
within one year
170
深圳中恒华发股份有限公司 2020 年年度报告全文
Financing lease of fixed assets
3. Net change of cash and cash
-- --
equivalents:
Balance of cash at period end 30,050,989.33 36,645,061.61
Less: Balance of cash equivalent at
36,645,061.61 27,961,209.60
year-begin
Add: Balance at year-end of cash
equivalents
Less: Balance at year-begin of cash
equivalents
Net increase of cash and cash
-6,594,072.28 8,683,852.01
equivalents
(2) Constitution of cash and cash equivalent
In RMB
Item Closing balance Opening balance
I. Cash 30,050,989.33 36,645,061.61
Including: Cash on hand 138,673.02 432,301.32
Bank deposit available for payment
29,912,316.31 36,212,760.29
at any time
III. Balance of cash and cash equivalent at
30,050,989.33 36,645,061.61
period-end
Other explanation:
Nil
49. Assets with ownership or use right restricted
In RMB
Item Ending book value Reason for restriction
Monetary funds 30,917,064.25 Bill deposit, judicial freeze
Fixed assets 12,577,333.12 Loan mortgage
Intangible assets 6,799,575.98 Loan mortgage
Receivable financing 6,752,967.68 Bill pledge
Investment real estate 35,526,155.89 Loan mortgage
Disposal of fixed assets 92,857,471.69 Court closure
Total 185,430,568.61 --
Other explanation:
171
深圳中恒华发股份有限公司 2020 年年度报告全文
Nil
50. Item of foreign currency
(1) Item of foreign currency
In RMB
Closing balance of foreign Ending RMB balance
Item Rate of conversion
currency converted
Monetary funds -- -- 9,763,489.57
Including: USD 1,496,338.96 6.5249 9,763,462.08
Euro
HKD 32.66 0.8417 27.49
Account receivable -- -- 52,507,767.40
Including: USD 8,047,290.55 6.5249 52,507,767.40
Euro
HKD
Long-term loans -- --
Including: USD
Euro
HKD
Account paid in advance 30,287,750.94
Including: USD 4,641,872.05 6.5249 30,287,750.94
Accounts payable 23,508.43
Including: USD 3,602.88 6.5249 23,508.43
Account received in advance 133,512.50
Including: USD 20,462.00 6.5249 133,512.50
Short-term borrowings 12,527,808.00
Including: USD 1,920,000.00 6.5249 12,527,808.00
Other explanation:
Nil
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深圳中恒华发股份有限公司 2020 年年度报告全文
(2) Explanation on foreign operational entity, including as for the major foreign operational entity,
disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping
currency changed, explain reasons
□ Applicable √Not applicable
51. Government subsidy
(1) Government subsidy
In RMB
Amount reckoned into current
Category Amount Item for presentation
gains/losses
2019 Central Foreign
Economic and Trade
210,900.00 Non-operating income 210,900.00
Development Special Fund
Processing Trade Matters
Steady growth in foreign
trade of the audited foreign
economic and trade 90,400.00 Non-operating income 90,400.00
development special funds in
2019
2020 Provincial Special
Funds for Foreign Economic 36,100.00 Non-operating income 36,100.00
and Trade Development
2020 Municipal Foreign
Economic and Trade 41,500.00 Non-operating income 41,500.00
Development Special Fund
Government subsidies for
10,000.00 Non-operating income 10,000.00
epidemic prevention
Sewage fee refund 15,778.80 Non-operating income 15,778.80
Electricity subsidy 60,401.00 Non-operating income 60,401.00
Three-agency handling fee
6,113.66 Other income 6,113.66
for individual tax
Special funds for industrial
investment and technological
2,190,000.00 Deferred income 219,000.00
transformation and intelligent
transformation in 2020
Enterprise stabilization
232,313.00 Other income 232,313.00
subsidy refund
Subsidies for training on 1,016,000.00 Other income 1,016,000.00
173
深圳中恒华发股份有限公司 2020 年年度报告全文
behalf of workers
2020 Caidian District Patent
12,000.00 Other income 12,000.00
Award Fund
2020 Municipal
Manufacturing and Internet
520,000.00 Other income 520,000.00
Integration Development
Special Fund
Total 4,441,506.46 2,470,506.46
(2) Government grants rebate
□ Applicable √Not applicable
Other explanation:
Nil
VIII. Changes of consolidation scope
1. Enterprise combination under the same control
(1) Enterprise combination under the same control in Period
In RMB
Combined Percentage Constitute Combining Basis for Income of the Net profit of Income of Net profit
party of equity the basis for date determinin combined the combined the of the
acquired in the g the date party from the party from the combined combined
enterprise enterprise of beginning of beginning of party party
combinatio combination combinatio the period of the period of during the during the
n under the n combination to combination to compariso comparison
same control the date of the date of n period period
combination combination
Ruth Co., 100.00% 2020.11.10 Equity
Ltd. Transfer
Agreeme
nt
Other explanation:
Nil
(2) Consolidation cost
In RMB
Consolidation cost
--cash 9,500.00
174
深圳中恒华发股份有限公司 2020 年年度报告全文
Contingent explanation of the consideration and its changes:
Nil
Other explanation:
Nil
(3) Book value of the assets/liabilities from combined party at date of combination
In RMB
Combination date At the end of the previous period
Contingent liabilities of the combined party assumed in the enterprise combination:
Ruth Co., Ltd was established in Hong Kong dated 25 October 2020 with registered capital of HK$ 10,000.00, no actual capital
contributed and has not yet commenced production and operation activities.
Other explanation:
Nil
IX. Equity in other subjects
1. Equity in subsidiary
(1) Constitute of enterprise group
Main operation Registration Share-holding ratio
Subsidiary Business nature Acquired way
place place Directly Indirectly
Shenzhen
HUAFA
Property Investment
Property Lease Shenzhen Shenzhen 60.00%
management establishment
Management
Co., Ltd
Shenzhen
Zhongheng
Property Investment
HUAFA Shenzhen Shenzhen 100.00%
management establishment
Property Co.,
Ltd
Wuhan Hengfa
Production & Investment
Technology Wuhan Wuhan 100.00%
sales establishment
Co., Ltd.
Shenzhen
Property Investment
HUAFA Shenzhen Shenzhen 100.00%
management establishment
Hengtian Co.,
175
深圳中恒华发股份有限公司 2020 年年度报告全文
Ltd.
Shenzhen
HUAFA Property Investment
Shenzhen Shenzhen 100.00%
Hengtai Co., management establishment
Ltd.
Equity
Ruth Co., Ltd. Hong Kong Hong Kong -- 100.00%
acquisition
Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Nil
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over
half and over voting rights:
Nil
Major structured entity included in consolidates statement:
Nil
Basis of termination of agent or consignor:
Nil
Other explanation
Nil
X. The risk associated with financial instruments
The Group's main financial instruments include loans, receivables, payable, tradable financial assets, trading
financial liabilities, etc., please refer to the details of each financial instrument in Note V. The risks associated
with these financial instruments and the risk management policies adopted by the Group to reduce these risks are
described below. The management of the Group manages and monitors these risk exposures to ensure that the
above risks are controlled within the limits.
1. Various risk management objectives and policies
The objective of the Group's risk management is to strike a proper balance between risks and profits, minimize the
negative impact of risks on the Group's operating results, and maximize the benefits of shareholders and other
equity investors. Based on this risk management objectives, the Group's basic strategy for risk management is to
identify and analyze the risks faced by the Group, establish appropriate risk bottom lines and carry out risk
management, and timely and reliably monitor the risks control them within the limits.
(1) Market risk
The market risk of financial instruments refers to the risk that the fair value or the future cash flows of financial
instruments fluctuate due to the changes in market prices, including foreign exchange risk, interest rate risk and
other price risk.
1) Exchange rate risk
The Group's exchange rate risk is mainly related to US dollars and Hong Kong dollars. Except the Group's second
level subsidiary, Hengfa Technology Company’s monitor business has day-to-day operations in US dollars; other
principal business activities of the Group settle accounts in RMB. On December 31, 2020, except for the US
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深圳中恒华发股份有限公司 2020 年年度报告全文
dollar balance of assets and liabilities in below table and the sporadic Hong Kong dollar balance, the Group's
assets and liabilities are all RMB balance. The exchange rate risk arising from the assets and liabilities of the US
dollar, Hong Kong dollar balance may have an impact on the Group's operating results.
Item December 31, 2020 (RMB conversion) December 31, 2019 (RMB conversion)
Monetary funds-USD 9,763,462.08 1,687,939.31
Monetary funds-HKD 27.49 89,609.26
Account receivable-USD 52,507,767.40 40,658,907.54
Account paid in advance- USD 30,287,750.94 15,930,428.80
Accounts payable-USD 23,508.43
Account received in advance-USD 133,512.50
Short-term borrowings-USD 12,527,808.00 12,633,898.20
The Company eyes on the influence from variation of exchange
2) Interest rate risk
The interest rate risk of the Group arises from bank loans. The financial liabilities of floating interest rate make
the Group face cash flow interest rate risk, and the financial liabilities of fixed rate make the Group face the
interest rate risk of fair value. The Group determines the relative proportion of fixed rate and floating interest rate
contracts based on the prevailing market environment. On December 31, 2020, the Group's interest-bearing debt
was mainly the fixed rate and floating interest rate loan contract denominated in Renminbi and US dollars,
amounting to RMB 12,527,808.00 (December 31, 2019: RMB 109,633,898.20).
The Group's risk of changes in the cash flow of financial instruments due to changes in interest rates is mainly
related to the floating interest rate bank loans. The Group's policy is to maintain the floating interest rate of these
loans so as to eliminate the fair value risk of the interest rate changes.
3) Price risk
The Group sells monitors and so on at market prices and is therefore affected by such price fluctuations.
(2) Credit risk
Credit risk refers to the risk that a party of the financial instrument does not fulfill its obligations and causes
property loss to another party. On December 31, 2020, the maximum credit risk exposure that may cause financial
losses to the Group is mainly attributable to the failure of the other party to fulfill its obligations resulting in the
losses of the Group's financial assets and the Group's financial guarantees, including:
The carrying amount of the financial assets recognized in the consolidated balance sheet; for the financial
instruments measured at fair value, the book value reflects its risk exposures but not the maximum risk exposure,
and its maximum risk exposure changes with the future changes in fair value.
In order to reduce the credit risk, the Group has set up a special department to determine the credit line, carry out
the credit approval, and implement other monitoring procedures to take necessary measures to recover the overdue
credit. In addition, the Group reviews the recovery of each individual receivable at every balance sheet date to
accrue sufficient provision for bad debts of uncollectible funds. As a result, the Group's management believes that
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深圳中恒华发股份有限公司 2020 年年度报告全文
the Group's credit risk has been greatly reduced.
The Group's working capital is deposited in banks with higher credit ratings, so the credit risk of working capital
is low.
The Group has adopted necessary policies to ensure that all customers have good credit records. In addition to the
top five account receivables, the Group has no other significant credit risk.
The total amount of the top five account receivables is: 102,674,279.15 Yuan.
(3) Liquidity risk
The liquidity risk is the risk that the Group is unable to fulfill its financial obligations on the due date. The Group's
approach to manage liquidity risk is to ensure that there is sufficient financial liquidity to fulfill its due debts but
not cause unacceptable losses or damages to the corporate reputation. The Group regularly analyzes the structure
and duration of liabilities to ensure there are sufficient funds. The management of the Group monitors the use of
bank loans and ensures the compliance with loan agreement, and conducts financing consultations with financial
institutions in order to maintain a certain line of credit and reduce the liquidity risk.
The financial assets and financial liabilities held by the Group based on the maturity of the undiscounted
outstanding contractual obligations are analyzed as follows:
Amount on December 31, 2020
Item Within one year 1-2years 2-3years Over 3 years Total
Financial assets
Monetary funds 60,968,053.58 60,968,053.58
Receivable financing 10,057,385.11 10,057,385.11
Account receivable 127,954,502.85 50,840.84 65,934.11 13,148,817.95 141,220,095.75
Other account 3,100,690.03 297,671.40 312,212.44 15,607,877.94 19,318,451.81
receivable
Account paid in 39,743,291.88 106,781.00 82,309.50 39,932,382.38
advance
Financial liabilities
Short-term borrowings 12,527,808.00 12,527,808.00
Notes payable 37,416,381.20 37,416,381.20
Account payable 86,151,700.58 12,455,666.57 98,607,367.15
Other accounts 27,245,869.26 27,245,869.26
payable
Contract liabilities 287,140.66 287,140.66
Wage payable 5,737,366.59 5,737,366.59
2. Sensitivity analysis
The Group uses the sensitivity analysis technique to analyze the possible impacts of the reasonable and possible
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深圳中恒华发股份有限公司 2020 年年度报告全文
changes in risk variable on the currents profit and losses or the owner's equity. Since any risk variable rarely
changes in isolation, and the correlation among the variables has a significant effect on the final effect amount of a
certain risk variable changes, and the following contents are on the assumption that the change in each variable is
independent.
(1) Sensitivity analysis of foreign exchange risk
Sensitivity analysis of foreign exchange risk assumes that all overseas operating net investment hedges and cash
flow hedges are highly effective.
On the basis of the above assumptions, in case that other variable doesn’t change, the after-tax effect of the
possible and reasonable changes in the exchange rate on the current profits and losses are as follows:
Item Exchange rate 2020 2019
fluctuation Impact on net profit Impact on owner's Impact on net profit Impact on owner's
equity equity
All foreign 5% appreciation of 3,993,707.59 3,993,707.59 -2,281,529.08 -2,281,529.08
currency the RMB
All foreign 5% devaluation of the -3,993,707.59 -3,993,707.59 2,281,529.08 2,281,529.08
currency RMB
XI. Related party and related transactions
1. Parent company of the enterprise
Share-holding
ratio on the Voting right ratio
Parent company Registration place Business nature Registered capital
enterprise for on the enterprise
parent company
Production and
Wuhan Zhongheng
sales, real estate
New Science &
development and
Technology Wuhan 138000000 42.13% 42.13%
sales, housing
Industrial Group
leasing and
Co., Ltd
management
Explanation on parent company of the enterprise
Nil
The ultimate control of the enterprise is Li Zhongqiu.
Other explanation:
Nil
2. Subsidiary of the Enterprise
Found more in IX. Equity in other entity in the Note
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深圳中恒华发股份有限公司 2020 年年度报告全文
3. Other Related party
Other related party Relationship with the Enterprise
Control by same controlling shareholder and ultimate
Shenzhen Zhongheng Semiconductor Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Hengsheng Yutian Industrial Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Hengsheng Photo-electricity Industry Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Hong Kong Yutian International Investment Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan New Oriental Real Estate Development Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Zhongheng Property Management Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Optical Valley Display System Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Yutian Dongfang Property Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Xiahua Zhongheng Electronics Co. Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Zhongheng Yutian Trading Co,, Ltd
controller
Control by same controlling shareholder and ultimate
Wuhan Yutian Hongguang Real Estate Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Shenzhen Zhongheng Huayu Investment Holding Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Famous Sky Capital Limited
controller
Control by same controlling shareholder and ultimate
Yutian International Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Hong Kong Zhongheng Yutian Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Shenzhen Zhongheng Yongye Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Shenzhen Yutian Hengrui Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Henglian Optoelectronics Co., Ltd.
controller
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深圳中恒华发股份有限公司 2020 年年度报告全文
Other explanation
Nil
4. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB
Whether over the
Trading limit
Related party Content Current Period approved limited or Last Period
approved
not (Y/N)
Hong Kong
Yutian
International Purchasing 152,365,734.55 166,382,370.00 N 122,172,251.41
Investment Co.,
Ltd.
Wuhan
Hengsheng
Purchasing 92,522,296.13 139,524,000.00 N 110,747,651.72
Photo-electricity
Industry Co., Ltd.
Wuhan
Hengsheng
Purchasing 39,519,517.75 167,428,800.00 N 28,387,151.42
Photo-electricity
Industry Co., Ltd.
Goods sold/labor service providing
In RMB
Related party Content Current Period Last Period
Hong Kong Yutian
International Investment Co., Sales of display 153,256,701.17 107,934,645.13
Ltd.
Wuhan Hengsheng
Photo-electricity Industry Sales of display 41,056,775.49 13,253,190.28
Co., Ltd.
Wuhan Hengsheng
Photo-electricity Industry Sales of materials 2,900,164.83 8,305,534.66
Co., Ltd.
Wuhan Hengsheng
Photo-electricity Industry Sales of foam parts 90,175.49
Co., Ltd.
Wuhan Zhongheng Yutian Sales of display 58,479.76
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深圳中恒华发股份有限公司 2020 年年度报告全文
Trading Co., Ltd.
Explanation on goods purchasing, labor service providing and receiving
Nil
(2) Related guarantee
As the guarantor
In RMB
Completed or not
Secured party Amount guarantee Start End
(Y/N)
Hengfa Technology
36,000,000.00 April 20, 2018 April 20, 2022 N
Company
As the secured party
In RMB
Completed or not
Guarantor Amount guarantee Start End
(Y/N)
Li Zhongqiu 90,000,000.00 July 01, 2019 July 01, 2022 N
Explanation on related guarantee
Nil
(3) Remuneration of key manager
In RMB
Item Current Period Last Period
Total 1,403,000.40 1,443,000.00
5. Receivable/payable items of related parties
(1) Receivable
In RMB
Closing balance Opening balance
ItemName Related party
Book balance Bad debt provision Book balance Bad debt provision
Hong Kong Yutian
Account International
41,513,718.58 25,582,267.94
receivable Investment Co.,
Ltd.
Wuhan Hengsheng
Account
Photo-electricity 12,676.70 350,779.63
receivable
Industry Co., Ltd.
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深圳中恒华发股份有限公司 2020 年年度报告全文
Wuhan Zhongheng
Account
Yutian Trading 58,479.76
receivable
Co., Ltd.
Hong Kong Yutian
Accounts paid in International
27,025,766.19 13,902,631.23
advance Investment Co.,
Ltd.
Total 68,552,161.47 39,894,158.56
(2) Payable
In RMB
ItemName Related party Closing book balance Opening book balance
Wuhan Hengsheng
Account payable Photo-electricity Industry 6,795,240.85 3,186,713.37
Co., Ltd.
Wuhan Hengsheng
Notes payable Photo-electricity Industry 138,355.71
Co., Ltd.
Total 6,795,240.85 3,325,069.08
XII. Commitment or contingency
1. Contingency
2. Other
As of the date of this report, the company has no undisclosed commitments or contingencies that should be
disclosed.
XIII. Events after the balance sheet date
1. Explanation on other events after the balance sheet date
As of the date of this report, the company has no undisclosed after the balance sheet events that should be
disclosed.
XIV. Other important events
1. Other
1. Matters of adjudication of Southern International Arbitration Shen [2017] No. D376 from Southern China
International Economic & Trade Arbitration Commission
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(1) Arbitration
In August 2015, Shenzhen Zhongheng Huafa Co., Ltd. (hereinafter referred to as “Shenzhen HUAFA”) and
Wuhan Zhongheng New Technology Industry Group Co., Ltd. (hereinafter referred to as “Wuhan Zhongheng”)
signed the “Cooperation Agreement on Urban Renewal Project of Update Units at Huafa Industrial Park,
Gongming Street, Guangming New District, Shenzhen”. As Shenzhen HUAFA and Wuhan Zhongheng planned to
cooperate with Shenzhen Vanke Real Estate CO., Ltd. (hereinafter referred to as “Shenzhen Vanke”) on the Huafa
urban renewal project (hereinafter referred to as “Huafa Renovation Project) at Gongming Street, Guangming
New District, Shenzhen, both parties appointed that Shenzhen HUAFA entrusted Wuhan Zhongheng to represent
it in this cooperation, and established project company - Shenzhen Vanke Guangming Real Estate Co., Ltd.
(hereinafter referred to as “Vanke Guangming”) as the subject of project implementation with Shenzhen Vanke;
Vanke Guangming signed “Demolition Compensation Agreement” with Shenzhen HUAFA and Wuhan
Zhongheng, and paid the compensation for demolition.
On August 21, 2015, Shenzhen HUAFA, Wuhan Zhongheng and Shenzhen Vanke signed the “Cooperative
Operation Contract of Renovation Project at Huafa Industrial Park, Gongming Street, Guangming New
District”(hereinafter referred to as “Cooperative Operation Contract”), the contract refined and appointed the
cooperation model and operating steps of both sides. And then Shenzhen HUAFA, Wuhan Zhongheng and
Shenzhen Vanke signed the “Agreement on the Housing Acquisition and Removal Compensation and Settlement”.
After signing the above agreement, Shenzhen Vanke paid the cooperation price of 600 million Yuan to Wuhan
Zhongheng through Vanke Guangming.
In September 2016, Shenzhen Vanke filed an arbitration to South China International Economic and Trade
Arbitration Commission (hereinafter referred to as “South China Arbitration”) as Shenzhen HUAFA and Wuhan
Zhongheng violated the appointment of “Cooperative Operation Contract” and handled the “Confirmation of
Subject of Reconstruction Implementation” at an overdue time, and required Shenzhen HUAFA and Wuhan
Zhongheng to pay liquidated damages and attorneys' fees of 464.60 million yuan.
While filing the arbitration, Shenzhen Vanke also applied for property preservation of 400 million Yuan of
property under the name of Shenzhen Huafa and Wuhan Zhongheng to Shenzhen Intermediate People’s Court.
According to the ruling of Shenzhen Intermediate People's Court and “Notification of Sealing up, Seizing and
Freezing Assets” (The reference numbers are (2016) Yue 03 Cai Bao No. 51, (2016) Yue 03 Cai Bao No. 53), the
27 house properties (Note: the property within the scope of Huafa renovation project) under the name of Shenzhen
HUAFA and 116,489,894 shares (Note: of which 116,100,000 shares have been pledged) of Shenzhen HUAFA
stock held by Wuhan Zhongheng were frozen.
(2) Progress of arbitration
On November 12, 2016, the arbitration court held a hearing on this case.
In December 2016, Wuhan Zhongheng to Shenzhen HUAFA issued a “Commitment Letter” which included that if
the arbitration (Note: the case) ruled in favor of Shenzhen Vanke, the loss of arbitration caused by the contract
disputes should be fully assumed by our company. In the above contingent losses, if the judicial decision ruled
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深圳中恒华发股份有限公司 2020 年年度报告全文
your company to pay the compensation in advance, our company promised to pay your company in cash within
one month, if our company could not pay on time due to uncontrollable factors, our company would like to pay the
corresponding interest according to the benchmark interest rate of bank loans in the corresponding period.
Because the plots in the renovation project placed in our company hadn’t been applied for transfer procedures and
were still under your company’s name (Note: based on the “Asset Replacement Contract” signed by Wuhan
Zhongheng and Shenzhen HUAFA on April 29, 2009), therefore, there was no risk of compliance, at the same time,
our company promised to give priority to paying the above compensation with the compensation for demolition of
renovation project.
On August 16, 2017, South China International Economic and Trade Arbitration Commission made the “Arbitral
Award” SCIA [2017] D376, according to the arbitral award, the applicant and counterclaim respondent in
arbitration case SCIA [2017] D376 were Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as
“Applicant” and “Vanke”). The first respondent and the first applicant for counterclaim were Wuhan Zhongheng
New Science & Technology Industrial Group Co., Ltd (hereinafter referred to as “Wuhan Zhongheng” and “First
Respondent”). The second respondent and the second applicant for counterclaim were Zhongheng Huafa. The
award results were as follows:
① The first respondent and the second respondent pay liquidated damages to the applicant with a base number of
RMB 600 million, calculating by the annual interest rate of 36% from October 1, 2015 to November 11, 2016;
② The first respondent and the second respondent pay the lawyer fees of RMB 1.4 million to the applicant due to
the case;
③ The first respondent and the second respondent pay the property preservation fees of RMB 10,000 to the
applicant;
④ The arbitration fees for this request and case was RMB 3,101,515.00, the first respondent and the second
respondent should bear 70%, i.e. RMB 2,171,060.50, and the applicant should bear 30%, i.e. RMB 930,454.50.
The applicant had already paid the arbitration fees in full amount for this request which could be used as the
arbitration fees of this case and request and shall not be refunded. The first respondent and the second respondent
should directly pay RMB 2,171,060.50 to the applicant;
The arbitration fee of counterclaim in this case was RMB 76,050 which was undertaken by the first respondent
and the second respondent at their own expense. The first respondent and the second respondent paid the
arbitration fees in full amount for this request which could be used as the arbitration fees of this case and request
and shall not be refunded;
The actual expenses of the arbitrators in this case amounted to RMB 7,754.90, the first respondent and the second
respondent assumed 70%, i.e. RMB 5,428.43, and the applicant assumed 30%, i.e. RMB 2,326.47; the above
actual expenses of the arbitrators had been paid by the Commission, so the first respondent and the second
respondent and the applicant should directly pay RMB 5,428.43 and RMB 2,326.47 respectively to the
Commission;
⑤ Reject the applicant’s other arbitration requests;
⑥ Reject the arbitration counterclaims of the first respondent and the second respondent.
In summary, Wuhan Zhongheng and Shenzhen Huafa should pay liquidated damages, interest, lawyer fees,
property preservation fees, and arbitration fees for this request to Vanke and pay actual expenses of the arbitrators
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深圳中恒华发股份有限公司 2020 年年度报告全文
in this case and pay the actual expenses incurred by the arbitrators in this case to South China International
Economic and Trade Arbitration Commission.
On February 7, 2018, the company and Wuhan Zhongheng Group applied to Shenzhen Intermediate People’s
Court to revoke the Ruling HNGZSC [2017] D376, the court made a judgment on August 16, 2018, rejecting the
company’s request for revocation. The company and its controlling shareholder Wuhan Zhongheng Group
received the “Execution Notice of Shenzhen Intermediate People’s Court” ([2018] Yue03Zhi No. 1870), and the
executor applied to the court for compulsory execution, the company was listed as dishonest person subject to
execution by Shenzhen Intermediate People’s Court. On December 13, 2019, the company announced that it had
been removed from the list of dishonest persons subject to execution by the Shenzhen Intermediate People’s
Court.
The Company and Wuhan Zhongheng Group received an enforcement decision in 2020, terminate the execution
process and wait for the conditions for continuation to be fulfilled before restarting.
(3) The response of the company’s management and the identification of the event
The company engaged lawyers to make an independent investigation and judgment on the event, and issued
special legal opinion that the reasons of Wuhan Zhongheng resulted in a failure of a net handover, and Wuhan
Zhongheng received the full amount of 600 million yuan paid by Vanke Guangming. Therefore, Wuhan
Zhongheng should bear all responsibilities for faults in response to the breach of contract. Wuhan Zhongheng
issued the Commitment Letter in December 2016, pledged that if the arbitration judged Vanke to win the case,
Wuhan Zhongheng should bear all arbitration losses caused by the contract dispute; after the award came into
effect, Wuhan Zhongheng issued the Confirmation Letter again on November 23, 2017 to divide the duty of
performance of the award; the independent directors of the company issued independent opinions after careful
study and judgment that Wuhan Zhongheng should bear all liability for satisfaction on the Award HNGZSC [2017]
D376.
2. Arbitration case of legal service contract dispute with V&T (Shenzhen) Law Firm
On March 12, 2018, the company received the arbitration notice No. SHEN DX20180087 from Shenzhen Court
of International Arbitration, V&T (Shenzhen) Law Firm requested to make a ruling that the Company and Wuhan
Zhongheng pay the delinquent lawyer’s fees of RMB 19,402,000 and the liquidated damages (The liquidated
damages shall take five ten-thousandths of a day as a standard based on RMB 19,402,000 from August 24, 2017 to
the date of payment of the above-mentioned lawyer’s fees, and the liquidated damages up to February 12, 2018
was RMB 1,678,273.00). The company should bear all the arbitration fees for this case.
On November 5, 2019, the company received the arbitration award HNGZSC [2019] D618 from Shenzhen Court
of International Arbitration, ruling that the company and its controlling shareholder Wuhan Zhongheng New
Science & Technology Industrial Group Co., Ltd should pay Shenzhen V & T Law Firm the arrears of legal fees
of RMB 19,402,000 and the liquidated damages.
Guangdong Haibu Attorneys-at-Law engaged by the company made verification opinion on the legal
responsibility assumed for the performance of the arbitration result and believed that this case was caused by the
Vanke arbitration case No. SHEN DP20160334, and the net land was not handed over on time due to Wuhan
Zhongheng, and Wuhan Zhongheng Heng received 600 million yuan paid by Vanke Guangming in full, so the
company is not liable for compensation under the judgment of the Vanke case. The nature of the attorney fees of
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深圳中恒华发股份有限公司 2020 年年度报告全文
V&T Law Firm is deduction of royalties. V&T Law Firm's deduction for the company is 0, and V&T Law Firm's
attorney fees paid by the company is 0. In addition, Wuhan Zhongheng Group has issued a "Letter of
Commitment" to Shenzhen Huafa in December 2016, if the arbitration decides that Vanke wins the lawsuit,
Wuhan Zhongheng Group will bear the full amount of the arbitration losses caused by the contract disputes.
Wuhan Zhongheng Group, as the beneficiary of the "Entrusted Agency Contract", shall bear all the payment
responsibilities for the “Award” HNGZSC [2019] No. D618, and the company shall not be liable for the losses in
this case.
On November 17, 2020, the court enforced the attorney fees that Wuhan Zhongheng Group should assume. As a
joint defendant, the company was forced to enforce partial payment of 1,564,767.46 yuan, Wuhan Zhongheng
Group returned this partial payment to the listed company on the 24th of that month.
3. Dispute with Shenzhen Zhongheng Semiconductor Co., Ltd. (formerly known as "Shenzhen Zhongheng Huafa
Technology Co., Ltd.") concerning land transfer
(1) Cause of the case
On April 29, 2009, the company signed an Asset Replacement Contract with Wuhan Zhongheng Group.
According to the contract, the company would use the the land use rights of two plots of land located at Huafa
Road, Gongming Town, Bao’an District, Shenzhen, i.e. land parcel number A627-0005 (real estate registration
number 8000101219) and A627-0007 (real estate registration number 8000101218), which are worth 18.55
million yuan, to increase capital to Shenzhen Zhongheng Semiconductor Co., Ltd. (former Zhongheng Huafa
Technology Co., Ltd., hereinafter referred to as "Zhongheng Semiconductor") and transfer ownership to
Zhongheng Semiconductor, Wuhan Zhongheng Group replaced the company's 100% equity in Zhongheng
Semiconductor with its 56% equity in Wuhan Hengfa Technology Co., Ltd. For the main content of the
above-mentioned Asset Replacement Contract, please refer to the Announcement on Related Transactions of Asset
Replacement with Controlling Shareholders published by the company on Juchao Website dated April 30, 2009,
with the announcement number 2009-17. After Wuhan Zhongheng Group fulfilled its obligations under the Asset
Replacement Contract, the company transferred 100% of its equity in Zhongheng Semiconductor to Wuhan
Zhongheng Group on December 21, 2009; the company also handed over the above two plots of land to
Zhongheng Semiconductor for possession, management, and use, but the land use right has not been transferred to
Zhongheng Semiconductor.
(2) Case progress
On April 17, 2020, the company received the "Notice of Response" (2020) Yue 03 Min Chu No. 17 and other
related materials delivered by the Shenzhen Intermediate People’s Court of Guangdong Province. Zhongheng
Semiconductor sued the company and required the company and the third party (Wuhan Zhongheng Group) to
continue to perform the contract, and transfer ownership of the above two plots of land and compensate for
economic losses of 52 million yuan. The Shenzhen Intermediate People's Court has filed a case with the case
number (2020) Yue 03 Min Chu No. 17.
Since Zhongheng Semiconductor's main appeal is the transfer of land to its name, the company is reaching a
settlement with Zhongheng Semiconductor. The company promises to actively cooperate with the land transfer.
Zhongheng Semiconductor has issued a letter of commitment to the company promising to abandon the demand
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深圳中恒华发股份有限公司 2020 年年度报告全文
for economic compensation. As of the disclosure date of this report, the case has been heard in court and no results
have yet been issued.
XV. Principle notes of financial statements of parent company
1. Account receivable
(1) Category of account receivable
In RMB
Closing balance Opening balance
Bad debt
Book balance Book balance Bad debt provision
Category provision Book Book
Amoun Proport Amoun Accrua value Amoun Proport Amoun Accrual value
t ion t l ratio t ion t ratio
Account receivable
with bad debt 10,293, 100.00 10,293, 100.00 10,293, 100.00 10,293, 100.00
0.00 0.00
provision accrual 424.29 % 424.29 % 424.29 % 424.29 %
on a single basis
Including:
Including:
10,293, 10,293, 10,293, 10,293,
Total
424.29 424.29 424.29 424.29
Accrual of bad debt provision on single basis: 10,293,424.29
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Hong Kong Haowei
1,870,887.18 1,870,887.18 100.00% Uncollectible
Industrial Co., Ltd.
TCL ACE ELECTRIC
APPLIANCE
1,325,431.75 1,325,431.75 100.00% Uncollectible
(HUIZHOU) CO.,
LTD.
Qingdao Haier Parts
1,225,326.15 1,225,326.15 100.00% Uncollectible
Procurement Co., Ltd.
SKYWORTH
Multimedia 579,343.89 579,343.89 100.00% Uncollectible
(Shenzhen) Co., Ltd.
188
深圳中恒华发股份有限公司 2020 年年度报告全文
Shenzhen Huixin
Video Technology Co., 381,168.96 381,168.96 100.00% Uncollectible
Ltd.
Shenzhen Wandelai
Digital Technology 351,813.70 351,813.70 100.00% Uncollectible
Co., Ltd.
Shenzhen Dalong
344,700.00 344,700.00 100.00% Uncollectible
Electronic Co., Ltd.
Shenzhen Keya
332,337.76 332,337.76 100.00% Uncollectible
Electronic Co., Ltd.
Shenzhen Qunping
304,542.95 304,542.95 100.00% Uncollectible
Electronic Co., Ltd.
China Galaxy
Electronics (Hong 288,261.17 288,261.17 100.00% Uncollectible
Kong) Co., Ltd.
Dongguan Weite
274,399.80 274,399.80 100.00% Uncollectible
Electronic Co., Ltd.
Hong Kong New
Century Electronics 207,409.40 207,409.40 100.00% Uncollectible
Co., Ltd.
Shenyang Beitai
203,304.02 203,304.02 100.00% Uncollectible
Electronic Co., Ltd.
Beijing Xinfang Weiye
193,000.00 193,000.00 100.00% Uncollectible
Technology Co., Ltd.
TCL Electronics (Hong
145,087.14 145,087.14 100.00% Uncollectible
Kong) Co., Ltd.
Huizhou TCL Xinte
142,707.14 142,707.14 100.00% Uncollectible
Electronics Co., Ltd.
Sky Worth – RGB
133,485.83 133,485.83 100.00% Uncollectible
Electronic Co., Ltd.
Other 1,990,217.45 1,990,217.45 100.00% Uncollectible
Total 10,293,424.29 10,293,424.29 -- --
Accrual of bad debt provision on single basis:
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Accrual of bad debt provision on portfolio:
In RMB
189
深圳中恒华发股份有限公司 2020 年年度报告全文
Closing balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
Nil
Accrual of bad debt provision on portfolio:
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
Nil
Accrual of bad debt provision on portfolio:
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
Nil
Accrual of bad debt provision on portfolio:
In RMB
Closing balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
By account age
In RMB
Account ages Book balance
Within one year (one year included) 0.00
1-2 years 0.00
2-3 years 0.00
Over 3 years 10,293,424.29
3-4 years 0.00
4-5 years 0.00
Over 5 years 10,293,424.29
Total 10,293,424.29
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深圳中恒华发股份有限公司 2020 年年度报告全文
(2) Top 5 account receivables collected by arrears party at ending balance
In RMB
Closing balance of account Proportion in total account Closing balance of bad debt
Company
receivable receivables at year-end provision
Hong Kong Haowei
1,870,887.18 18.18% 1,870,887.18
Industrial Co., Ltd.
TCL ACE ELECTRIC
APPLIANCE (HUIZHOU) 1,325,431.75 12.88% 1,325,431.75
CO., LTD.
Qingdao Haier Parts
1,225,326.15 11.90% 1,225,326.15
Procurement Co., Ltd.
SKYWORTH Multimedia
579,343.89 5.63% 579,343.89
(Shenzhen) Co., Ltd.
Shenzhen Huixin Video
381,168.96 3.70% 381,168.96
Technology Co., Ltd.
Total 5,382,157.93 52.29%
2、Other account receivable
In RMB
Item Closing balance Opening balance
Other account receivable 93,922,057.92 97,165,023.85
Total 93,922,057.92 97,165,023.85
(1) Other account receivable
1) Other account receivable by nature
In RMB
Nature Closing book balance Opening book balance
Margin & deposit 304,608.00 304,608.00
Borrow money 2,089,073.12 1,869,073.12
Intercourse funds 103,959,672.35 107,488,541.28
Rental receivable 6,224,167.48 5,847,389.48
Other 162,006.14 168,162.09
Less: Bad debt provision -18,817,469.17 -18,512,750.12
Total 93,922,057.92 97,165,023.85
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深圳中恒华发股份有限公司 2020 年年度报告全文
2) Accrual of bad debt provision
In RMB
Phase I Phase II Phase III
Expected credit losses for Expected credit losses for
Expected credit
Bad debt provision the entire duration the entire duration (with Total
losses over next 12
(without credit credit impairment
months
impairment occurred) occurred)
Balance on1 Jan. 2020 0.30 18,512,749.82 18,512,750.12
Balance of 1 Jan. 2020
—— —— —— ——
in the period
Accrual in current
-0.30 111.75 304,607.70 304,719.15
period
Balance on Dec. 31,
0.00 111.75 18,817,357.42 18,817,469.17
2020
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
In RMB
Account ages Book balance
Within one year (one year included) 14,726,087.85
Within one year 14,726,087.85
1-2 years 79,196,078.82
2-3 years 312,212.44
Over 3 years 18,505,147.98
Over 5 years 18,505,147.98
Total 112,739,527.09
3) Top 5 other receivables collected by arrears party at ending balance
In RMB
Proportion in total
Closing balance of
Company Nature Closing balance Account ages other receivables
bad debt provision
at year-end
Wuhan Hengfa
Within one year;
Technology Co., Intercourse funds 84,133,311.06 74.63%
1-2 years
Ltd.
Shenzhen
Intercourse funds 8,958,256.81 Within one year 7.95%
Zhongheng HUAFA
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深圳中恒华发股份有限公司 2020 年年度报告全文
Property Co., Ltd
Shenzhen HUAFA
Rental fee
Property Leasing 4,558,859.15 Over 3 years 4.04% 4,558,859.15
receivable
Co., Ltd.
Portman Intercourse funds 4,021,734.22 Over 3 years 3.57% 4,021,734.22
Shenzhen Jifang Rental fee
1,071,160.00 Over 3 years 0.95% 1,071,160.00
Investment Co., Ltd receivable
Total -- 102,743,321.24 -- 9,651,753.37
3. Long-term equity investments
In RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment for
187,218,400.00 600,000.00 186,618,400.00 187,208,900.00 600,000.00 186,608,900.00
subsidiary
Total 187,218,400.00 600,000.00 186,618,400.00 187,208,900.00 600,000.00 186,608,900.00
(1) Investment for subsidiary
In RMB
Changes in the period Closing
Opening Closing
The invested Accrual of balance of
balance Additional Reduce balance
entity impairment Other impairment
(Book value) investment investment (Book value)
provision provision
Shenzhen
Huafa
Property 0.00 600,000.00
Leasing Co.,
Ltd.
Shenzhen
Zhongheng
HUAFA 1,000,000.00 1,000,000.00
Property Co.,
Ltd
Wuhan
Hengfa 183,608,900. 183,608,900.
Technology 00 00
Co., Ltd.
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深圳中恒华发股份有限公司 2020 年年度报告全文
Shenzhen
HUAFA
1,000,000.00 1,000,000.00
Hengtian Co.,
Ltd.
Shenzhen
HUAFA
1,000,000.00 1,000,000.00
Hengtai Co.,
Ltd.
Ruth Co., Ltd. 9,500.00 9,500.00
186,608,900. 186,618,400.
Total 9,500.00 600,000.00
00 00
4. Operating revenue and cost
In RMB
Current Period Last Period
Item
Revenue Cost Revenue Cost
Main business 37,262,114.01 6,784,029.31 38,216,680.42 7,304,872.41
Total 37,262,114.01 6,784,029.31 38,216,680.42 7,304,872.41
Information relating to revenue:
In RMB
Category Branch 1 Branch 2 Total
Including:
Including:
Including:
Including:
Including:
Including:
Including:
Information relating to performance obligations:
Nil
Information relating to the transaction price assigned to the remaining performance obligation:
At end of the period, the corresponding revenue amount for performance obligations that have been signed but have not been
performed or have not been performed is 0.00 yuan, of which, yuan expected to recognized as revenue in the year.
Other explanation:
Nil
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深圳中恒华发股份有限公司 2020 年年度报告全文
XVI. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable □ Not applicable
In RMB
Item Amount Note
Gains/losses from the disposal of
817,533.49
non-current asset
Governmental subsidy reckoned into
current gains/losses (not including the
subsidy enjoyed in quota or ration 2,728,618.05
according to national standards, which are
closely relevant to enterprise’s business)
Gain/loss of entrusted investment or assets
165,317.73
management
Other non-operating income and
expenditure except for the aforementioned -385,232.40
items
Loss on assignment of claims
Less: Impact on income tax 599,443.02
Total 2,726,793.85 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √Not applicable
2. ROE and earnings per share
Earnings per share
Profits during report period Weighted average ROE Basic earnings per Diluted earnings per
share (RMB/Share) share (RMB/Share)
Net profits belong to common
stock stockholders of the 2.05% 0.0241 0.0241
Company
Net profits belong to common
stock stockholders of the
1.23% 0.0145 0.0145
Company after deducting
nonrecurring gains and losses
195
深圳中恒华发股份有限公司 2020 年年度报告全文
Section XIII. Documents available for reference
I. Text of the Annual Report caring signature of the Chairman;
II. Financial statement carrying the signatures and seals of the person in charge of the Company, principal of the
accounting works and person in charge of accounting organ;
III. All documents of the Company and manuscripts of public notices that disclosed in the China Securities journal,
Securities Times and Hong Kong Commercial Daily designated by CSRC in the report period;
IV. Article of Association
V. Other relevant files.
196
