Annual Report 2023 of China Fangda Group Co., Ltd.
China Fangda Group Co., Ltd.
2023 Annual Report
April 2024
1
Annual Report 2023 of China Fangda Group Co., Ltd.
2023 Annual Report
Chapter 1 Important Statement, Table of Contents and Definitions
The members of the Board and the Company guarantee that the
announcement is free from any false information, misleading statement or
material omission and are jointly and severally liable for the information's
truthfulness, accuracy and integrity.
Mr. Xiong Jianming, the legal representative of the Company, Mr. Lin
Kebin, the Chief Financial Officer, and Mr. Wu Bohua, the manager of
accounting department declare: the Financial Report carried in this report is
authentic and completed.
All the Directors have attended the meeting of the board meeting at
which this report was examined.
Forward-looking statements involved in this report including future
plans do not make any material promise to investors. Investors should pay
attention to investment risks.
The company has described the existing market risks, management risks
and production and operation risks in this report. Please refer to the risks that
may be faced mentioned in"X. Prospects for the Company's Future
Development" in III Management Discussion and Analysis.
The Board meeting reviewed and approved the profit distribution preplan:
distributing cash dividend of RMB0.80 (tax included) for each ten shares to all
shareholders on the basis of 1,073,874,227 shares of the Company and no
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Annual Report 2023 of China Fangda Group Co., Ltd.
dividend share is issued to shareholders. No reserve is capitalized.
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Annual Report 2023 of China Fangda Group Co., Ltd.
Contents
Chapter 1 Important Statement, Table of Contents and Definitions .................................................................. 2
Chapter II About the Company and Financial Highlights ................................................................................... 9
I. Company profiles ......................................................................................................................................... 9
II. Contacts and liaisons .................................................................................................................................. 9
III. Information disclosure and inquiring ..................................................................................................... 9
IV. Registration changes ................................................................................................................................ 10
V. Other information ..................................................................................................................................... 10
VI. Financial Highlight.................................................................................................................................. 10
VII. Differences in accounting data under domestic and foreign accounting standards......................... 11
VIII. Financial highlights by quarters ......................................................................................................... 11
IX. Accidental gain/loss item and amount ................................................................................................... 12
Chapter III Management Discussion and Analysis............................................................................................. 14
I. Major businesses of the Company during the report period ......................................................................... 14
II. Core Competitiveness Analysis................................................................................................................... 22
III. Core business analysis............................................................................................................................. 25
V. Non-core business analysis........................................................................................................................ 33
VI. Assets and Liabilities ............................................................................................................................... 33
VII. Investment .............................................................................................................................................. 35
VIII. Major assets and equity sales .............................................................................................................. 39
IX. Analysis of major joint stock companies ............................................................................................... 39
X. Structural entities controlled by the Company ...................................................................................... 40
XI. Future Prospect ....................................................................................................................................... 40
XII. Reception of investigations, communications, or interviews in the reporting period ...................... 43
XIII. Implementation of the Action Plan for "Double Improvement of Quality and Return" ............... 44
Chapter IV Corporation Governance .................................................................................................................. 46
I. Overview ..................................................................................................................................................... 46
II. The independence of the Company relative to the controlling shareholders and actual controllers
in ensuring the company's assets, personnel, finance, institutions, business, etc ..................................... 46
III. Competition ............................................................................................................................................. 46
IV. Annual and extraordinary shareholder meetings held during the report period .............................. 46
V. Particulars about the Directors, Supervisors, and Senior Management .............................................. 47
VI. Performance of directors during the report period.............................................................................. 53
VII. Special committees under the board of directors during the reporting period ................................ 57
VIII. Performance of Supervisory Committee ............................................................................................ 60
IX. Employees ................................................................................................................................................ 62
X. Profit distribution of the Company and conversion of capital reserve into share capital .................. 63
XI. Share incentive schemes, staff shareholding program or other incentive plans ................................ 64
XII. Construction and implementation of internal control system during the reporting period............ 65
XIII. Management and control of subsidiaries during the reporting period............................................ 65
XIV. Internal control evaluation report or internal control audit report ................................................. 65
XV. Rectification of problems in self inspection of special actions for governance of listed companies 67
V. Environmental and social responsibility ......................................................................................................... 68
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Annual Report 2023 of China Fangda Group Co., Ltd.
1. Major environmental problem ................................................................................................................. 68
2. Social responsibilities ................................................................................................................................. 69
3. Consolidate and expand the achievements of poverty alleviation and rural revitalization ................ 69
Chapter VI Significant Events .............................................................................................................................. 70
I. Performance of promises ........................................................................................................................... 70
II. Non-operating capital use by the controlling shareholder or related parties in the reporting term . 70
III. Incompliant external guarantee ............................................................................................................. 70
IV. Description of the board of directors on the latest "non-standard audit report" .............................. 70
V. Statement of the Board of Directors, Supervisory Committee and Independent Directors (if
applicable) on the "non-standard auditors' report" issued by the CPA on the current report period .. 70
VI. Description of changes in accounting policies, accounting estimates or correction of major
accounting errors compared with the financial report of the previous year ............................................ 70
VII. Statement of change in the financial statement consolidation scope compared with the previous
financial report............................................................................................................................................... 71
VIII. Engaging and dismissing of CPA ........................................................................................................ 71
IX. Delisting after disclosure of annual report ............................................................................................ 71
X. Bankruptcy and capital reorganizing ..................................................................................................... 72
XI. Significant lawsuit and arbitration ........................................................................................................ 72
XII. Punishment and rectification ................................................................................................................ 72
XIII. Credibility of the Company, controlling shareholder and actual controller ................................... 72
XIV. Material related transactions ............................................................................................................... 72
XV. Significant contracts and performance................................................................................................. 73
XVI. Other material events ........................................................................................................................... 80
XVII. Material events of subsidiaries .......................................................................................................... 81
Chapter VII Changes in Share Capital and Shareholders ................................................................................. 82
I. Changes in shares ....................................................................................................................................... 82
II. Share placing and listing .......................................................................................................................... 84
III. Shareholders and the substantial controller of the Company ............................................................. 84
IV. Specific implementation of share repurchase in the reporting period ................................................ 88
Chapter VIII Preferred Shares ............................................................................................................................. 90
Chapter IX Information about the Company's Securities ................................................................................. 91
Chapter X Financial Statements .......................................................................................................................... 92
I. Auditor's report .......................................................................................................................................... 92
II. Financial statements ............................................................................................................................... 100
III. General Information ............................................................................................................................. 117
IV. Basis for the preparation of financial statements................................................................................ 119
V. Significant Account Policies and Estimates ........................................................................................... 120
VI. Taxation .................................................................................................................................................. 197
VII. Notes to the consolidated financial statements .................................................................................. 200
VIII. R&D expenses ..................................................................................................................................... 245
IX. Change to Consolidation Scope ............................................................................................................ 245
X. Equity in Other Entities ......................................................................................................................... 246
XI. Government Subsidies .......................................................................................................................... 251
XII. Risks of Financial Tools ....................................................................................................................... 251
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Annual Report 2023 of China Fangda Group Co., Ltd.
XIII. Fair Value ............................................................................................................................................ 258
XIV. Related Parties and Transactions ...................................................................................................... 260
XV. Commitment and Contingent Events ................................................................................................. 263
XVI. Post-balance-sheet Events .................................................................................................................. 268
XVII. Other material events ....................................................................................................................... 268
XVIII. Notes to Financial Statements of the Parent ................................................................................. 270
XIX. Supplementary Materials .................................................................................................................. 276
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Annual Report 2023 of China Fangda Group Co., Ltd.
Reference
1. Financial statements stamped and signed by the legal representative, CFO and accounting manager;
2. Original copy of the Auditors' Report under the seal of the CPA and signed by and under the seal of certified accountants;
3. Originals of all documents and manuscripts of Public Notices of the Company disclosed in public.
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Annual Report 2023 of China Fangda Group Co., Ltd.
Definitions
Terms Refers to Description
Fangda Group, company, the Company Refers to China Fangda Group Co., Ltd.
Articles of Association of China Fangda
Articles of Association Refers to
Group Co., Ltd.
Meetings of shareholders of China
Meeting of shareholders Refers to
Fangda Group Co., Ltd.
Board of Directors of China Fangda
Board of Directors Refers to
Group Co., Ltd.
Supervisory Committee of China Fangda
Supervisory Committee Refers to
Group Co., Ltd.
Shenzhen Banglin Technologies
Banglin Technology Refers to
Development Co., Ltd.
Gong Qing Cheng Shi Li He Investment
Shilihe Co. Refers to Management Partnership Enterprise
(limited partner)
Shengjiu Co. Refers to Shengjiu Investment Ltd.
Fangda Jianke Refers to Shenzhen Fangda Jianke Group Co., Ltd.
Fangda Zhiyuan Refers to Fangda Zhichuang Technology Co., Ltd.
Fangda New Materials (Jiangxi) Co.,
Fangda Jiangxi New Material Refers to
Ltd.
Fangda New Resource Refers to Shenzhen Fangda New Energy Co., Ltd.
Shenzhen Fangda Property Development
Fangda Property Refers to
Co., Ltd.
Chengda Fangda Construction
Fangda Chengdu Technology Refers to
Technology Co., Ltd.
Dongguan Fangda New Material Co.,
Fangda Dongguan New Material Refers to
Ltd.
Shenzhen Qianhai Kechuangyuan
Kechuangyuan Software Refers to
Software Co., Ltd.
Shenzhen Fangda Property Management
Fangda Property Refers to
Co., Ltd.
Fangda (Jiangxi) Property Development
Fangda Jiangxi Property Refers to
Co., Ltd.
Fangda Hongjun Investment Refers to Shenzhen Hongjun Investment Co., Ltd.
Shenzhen Fangda Investment Partnership
Fangda Investment Refers to
(Limited Partnership)
Shenzhen Fangda Yunzhu Technology
Fangda Yunzhu Refers to
Co., Ltd.
Shanghai Fangda Zhijian Technology
Fangda Zhijian Refers to
Co., Ltd
SZSE Refers to Shenzhen Stock Exchange
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Annual Report 2023 of China Fangda Group Co., Ltd.
Chapter II About the Company and Financial Highlights
I. Company profiles
Stock ID Fangda Group, Fangda B Stock code 000055, 200055
Modified stock ID (if any) No
Stock Exchange Shenzhen Stock Exchange
Chinese name China Fangda Group Co., Ltd.
Chinese abbreviation Fangda Group
English name (if any) CHINA FANGDA GROUP CO.,LTD.
English abbreviation (if any) CFGC
Legal representative Xiong Jianming
Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone,
Registered address
Nanshan District, Shenzhen, PR China.
Zip code 518057
Changes in the Company's
No
registered address
Office address 39th Floor, Building T1, Fangda Town, No.2, Longzhu 4th Road, Nanshan District, Shenzhen
Zip code 518055
Website http://www.fangda.com
Email fd@fangda.com
II. Contacts and liaisons
Secretary of the Board Representative of Stock Affairs
Name Xiao Yangjian Guo Linchen
39th Floor, Building T1, Fangda Town, 39th Floor, Building T1, Fangda Town,
Address No.2, Longzhu 4th Road, Nanshan No.2, Longzhu 4th Road, Nanshan
District, Shenzhen District, Shenzhen
Telephone 86(755) 26788571 ext. 6622 86(755) 26788571 ext. 6622
Fax 86(755)26788353 86(755)26788353
Email zqb@fangda.com zqb@fangda.com
III. Information disclosure and inquiring
Website of the stock exchange where the company discloses its
Shenzhen Stock Exchange http://www.szse.cn
annual report
China Securities Journal, Security Times, Shanghai Securities
Names and websites of the media where the Company discloses
Daily, Securities Daily, Hong Kong Commercial Daily and
its annual report
www.cninfo.com.cn
39th Floor, Building T1, Fangda Town, No.2, Longzhu 4th
Place for information inquiry
Road, Nanshan District, Shenzhen
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Annual Report 2023 of China Fangda Group Co., Ltd.
IV. Registration changes
Unified Social Credit Code 91440300192448589C
Changes in main businesses since the listing of the Company None
Changes in the controlling shareholders (if any) None
V. Other information
Public accountants employed by the Company
Public accountants RSM Thornton (limited liability partnership)
90122 to 90126, Foreign Trade Building, No.22,
Address
Fuchengmenwai Street, Xicheng District, Beijing, China
Signing accountant names Zhou Junchao, Xu Yuxia, Hu Gaosheng
Sponsor engaged by the Company to perform continued supervision and guide during the reporting period
□ Applicable Inapplicable
Financial advisor engaged by the Company to perform continued supervision and guide during the reporting period
□ Applicable Inapplicable
VI. Financial Highlight
Whether the Company needs to make retroactive adjustment or restatement of financial data of previous years
□ Yes No
2023 2022 Increase/decrease 2021
Turnover (yuan) 4,292,204,716.01 3,846,975,948.44 11.57% 3,557,724,397.54
Net profit attributable to
shareholders of the listed 272,758,249.50 282,933,854.32 -3.60% 222,168,142.53
company (yuan)
Net profit attributable to
the shareholders of the
listed company and after 272,138,072.87 270,965,220.96 0.43% 167,650,395.54
deducting of non-recurring
gain/loss (yuan)
Net cash flow generated by
299,742,202.08 221,211,632.30 35.50% -63,425,296.29
business operation (yuan)
Basic earnings per share
0.25 0.26 -3.85% 0.21
(yuan/share)
Diluted Earnings per share
0.25 0.26 -3.85% 0.21
(yuan/share)
Weighted average net
4.67% 5.03% -0.36% 4.09%
income/asset ratio
Increase/decrease
End of 2023 End of 2022 from the end of last End of 2021
year
Total asset (yuan) 13,376,351,856.86 12,745,185,294.02 4.95% 12,261,338,518.66
Net profit attributable to
the shareholders of the 5,960,140,567.07 5,749,940,874.92 3.66% 5,524,039,886.94
listed company (RMB)
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Annual Report 2023 of China Fangda Group Co., Ltd.
Note: The Company's operating income increased by 11.57% and net profit attributable to shareholders of the listed company
decreased by 3.60% during the reporting period, which was mainly due to the decrease in net profit of commercial real estate
business by RMB 37,018,800, and after deducting the impact of commercial real estate, the Company's operating income
increased by 17.04% and net profit attributable to shareholders of the listed company increased by 13.65% during the reporting
period.
The Company's net profit before and after non-recurring gains and losses was negative for the last three fiscal years, and the latest
audit report showed uncertainty about the Company's ability to continue operating
□ Yes No
Net profit before and after deducting non-re current gains and losses is negative
□ Yes No
VII. Differences in accounting data under domestic and foreign accounting standards
1. Differences in net profits and assets in financial statements disclosed according to the international and
Chinese account standards
□ Applicable Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account
standards during the report period.
2. Differences in net profits and assets in financial statements disclosed according to the overseas and
Chinese account standards
□ Applicable Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account
standards during the report period.
VIII. Financial highlights by quarters
In RMB
Q1 Q2 Q3 Q4
Turnover 815,219,822.90 1,263,627,054.42 1,137,526,186.81 1,075,831,651.88
Net profit attributable
to the shareholders of 70,822,028.03 111,333,240.15 84,282,378.36 6,320,602.96
the listed company
Net profit attributable
to the shareholders of
the listed company and 68,478,134.64 104,006,202.11 83,317,333.85 16,336,402.27
after deducting of non-
recurring gain/loss
Cash flow generated by
business operations, -143,876,246.96 106,562,535.83 16,569,686.47 320,486,226.74
net
Note: The lower net profit of the Company in the fourth quarter as compared to the previous three quarters was mainly attributable
to the decrease in revenue and gross profit due to settlement adjustments for the curtain wall system and rail transit screen door
projects in the fourth quarter, as well as the loss arising from the fair value assessment of investment properties.
Where there is difference between the above-mentioned financial data or sum and related financial data in quarter report and
interim report disclosed by the Company
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Annual Report 2023 of China Fangda Group Co., Ltd.
□ Yes No
IX. Accidental gain/loss item and amount
Applicable □ Inapplicable
In RMB
Item 2023 2022 2021 Notes
Non-current asset disposal gain/loss
(including the write-off part for
381,572.12 -1,421,880.09 -2,291,048.05
which assets impairment provision is
made)
Government grants recognized in the
current period's profit or loss (except
for government grants that are
closely related to the Company's
normal business operations, in line 8,781,578.52 10,138,362.96 12,459,417.63
with national policies and in
accordance with defined criteria, and
have a continuous impact on the
Company's profit or loss)
Gains and losses from changes in the
fair value of financial assets and
liabilities held by non-financial
corporations and gains and losses
from the disposal of financial assets 509,477.49 4,666,147.76 8,060,481.70
and liabilities, except for effective
hedging operations related to the
Company's normal business
operations
Capital using expense charged to
non-financial enterprises and
3,790,999.98 8,619,807.35
accounted into the current income
account
Write-back of impairment provision
of receivables for which impairment 13,228,201.06 6,138,338.91 31,951,043.05
test is performed individually
Net gain between the beginning and
merger day of subsidiaries generated
18,912.61
by merger of companies under
common control
Gain/loss from change of fair value
of investment property measured at -28,482,701.26 -10,095,973.89 20,921,813.65
fair value in follow-up measurement
Other non-business income and
1,262,814.78 -2,764,570.20 -3,897,195.15
expenditures other than the above
Less: Influenced amount of income
-1,262,507.89 3,172,419.69 12,358,051.51
tax
Influenced amount of minority
114,273.95 139,179.75 347,626.94
shareholders' equity (after-tax)
Total 620,176.63 11,968,633.36 54,517,746.99 --
Other gain/loss items satisfying the definition of non-recurring gain/loss account:
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Annual Report 2023 of China Fangda Group Co., Ltd.
□ Applicable Inapplicable
The Company has no other gain/loss items satisfying the definition of non-recurring gain/loss account
Circumstance that should be defined as recurrent profit and loss to Explanation Announcement of Information Disclosure No. 1 -
Non-recurring gain/loss
□ Applicable Inapplicable
The Company has no circumstance that should be defined as recurrent profit and loss to Explanation Announcement of
Information Disclosure No. 1 - Non-recurring gain/loss
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Annual Report 2023 of China Fangda Group Co., Ltd.
Chapter III Management Discussion and Analysis
I. Major businesses of the Company during the report period
The Company mainly engages in high-end smart curtain wall systems and new materials, rail transit screen door equipment,
new energy, and commercial real estate businesses. The Company fully leverages its technological advantage and brand advantage,
vigorously promotes smart manufacturing and green manufacturing. Our main products, such as Fangda Intelligent Curtain Wall
and Rail Transit Platform Screen Door System, have become industry benchmarks worldwide. Fangda Intelligent Curtain Wall is
among the top players in terms of comprehensive strength, while Fangda Rail Transit Platform Screen Door System has been
recognized by the Ministry of Industry and Information Technology as a "manufacturing industry single champion product." The
Company currently has 7 national high-tech enterprises, 6 "specialized and innovative" enterprises, 2 "national intellectual
property advantageous enterprises," and 2 provincial-level engineering technology research centers. We have established a layout
with Shenzhen as the headquarters and industrial bases in Dongguan, Foshan, Nanchang, Shanghai, Chengdu, and Ganzhou (under
construction). Branch offices have been set up in countries and regions along the Belt and Road Initiative, such as Singapore, India,
Australia, Bangladesh, the United Arab Emirates, and Hong Kong.
In 2023, despite the weak global economic recovery, intensified geopolitical conflicts, and insufficient domestic effective
demand, the Company, under the leadership of the Board of Directors and management team, fully utilized its comprehensive
advantages in technology, brand, and market. Through the collective efforts of all employees, the Company has largely achieved
its expected operational objectives. During the reporting period, the Company achieved operating revenue of RMB4,292,204,700,
an increase of 11.57% compared to the same period last year. The net profit attributable to the owners of the parent company was
RMB272,758,200, a decrease of 3.60% compared to the same period last year. The net profit attributable to the owners of the
parent company after deducting non-recurring gains and losses was RMB272,138,100, an increase of 0.43% compared to the same
period last year. The newly secured contract orders amounted to RMB6,957,494,200, an increase of 34.14% compared to the same
period last year, including overseas contract orders of RMB1,244,397,400, an increase of 197.06% compared to the same period
last year. As at the end of the reporting period, the Company's order reserves amounted to RMB9,269,790,600 (excluding pre-sale
of commercial properties), representing an increase of 17.52% over the same period of the previous year, which is 2.16 times of
the operating income in 2023, laying a good foundation for the realization of the Company's production and operation targets in
the future.
(I) Smart curtain wall system and new materials
1. Industry development
The main business of the Company belongs to the architectural curtain wall industry, and the architectural curtain wall
industry is closely connected with the level of macroeconomic development, and the large volume and strong toughness of China's
economy provides a guarantee for the development of the architectural curtain wall industry. National Bureau of Statistics data
show that in 2023, the gross domestic product of RMB126,058.2 billion, an increase of 5.2% over the previous year, the added
value of the construction industry was RMB8,569.1 billion, an increase of 7.1% over the previous year, and the scale of the total
output value of the construction industry is still maintaining a steady growth.
The State Council Government Work Report 2024 proposes to vigorously promote the construction of modernized industrial
system and accelerate the development of new productivity. National implementation of science and technology innovation to
promote industrial innovation a series of initiatives for the building curtain wall industry to bring new opportunities for industry
chain optimization and upgrading, artificial intelligence, big data and other digital technology depth of application, will drive the
building curtain wall industry to high-end, green, intelligent transformation and upgrading, injecting new kinetic energy for the
development of the industry. Guangdong, Hong Kong and Macao Bay Area, Yangtze River Delta and other economic
development advantageous areas of high-quality development power is stronger, the accelerated pace of construction of regional
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Annual Report 2023 of China Fangda Group Co., Ltd.
center cities, the construction of urban supporting infrastructure will also play a role in promoting the development of the building
curtain wall industry. The accelerated construction of the national unified market has provided more market opportunities for the
industry's leading enterprises. The high-quality construction of "One Belt, One Road" is going deeper and deeper, creating a
favorable market environment for enterprises to expand overseas markets.
2. Business Status
(1) Main products and purposes
Smart curtain wall is one of the Company's main products, widely used in high-end office buildings, corporate headquarters,
urban complexes, hotels, large venues, urban public buildings, high-grade residential buildings and other buildings of the external
wall or roof, can effectively improve the visual aesthetics of the building, enhance the energy-saving and environmentally friendly
buildings, to better meet the needs of people's work and life. With high quality products trusted by customers, the Company's
smart curtain wall products have won the highest award in China's construction field, Luban Award (National Quality Engineering
Award), reflecting the high quality characteristics of the new quality productivity, and the Company's competitiveness of the smart
curtain wall ranks at the forefront of the same industry in the world, and it is a well-known brand of the curtain wall in the world.
By focusing on intelligence, low-carbon, environmental protection, and sustainability, the new material industry fosters the
development of curtain walls and innovative materials in China. The Company has strong R&D strength and advanced
manufacturing bases for PVDF aluminum veneer and aluminum honeycomb panels, and its intelligent curtain wall system, which
integrates energy saving, environmental protection and intelligence, is widely used in major projects in more than 160 cities
around the world.
(2) Main business modes, specific risks and changes;
During the reporting period, the Company's main business model did not change. The Company's smart curtain wall design
and installation and construction contract orders are mainly obtained through the bidding mode (open bidding, invitational
bidding). Based on the orders, the Company provides the overall solution of design, raw material procurement, production and
processing, installation and construction and after-sales service. Due to the long period of order implementation, it is greatly
affected by national industrial policies, raw material prices, and fluctuations in the labor market. Different orders have different
technical requirements. It is impossible to simply copy the existing experience, and the requirements for technology and
management are relatively high. The engineering payment settlement process for orders is divided into stages such as engineering
advance payment, engineering progress payment, completion acceptance, completion settlement payment, and quality guarantee
deposit. The specific settlement situation depends on the completion progress and contract agreement.
(3) Market competition pattern in which the Company is located and the Company's
market position
In recent years, the domestic construction curtain wall market has gradually matured, industry competition has intensified,
and the degree of industry concentration and scale will continue to deepen. Industry head enterprises with talent, technology and
brand advantages, and the ability to undertake complex, innovative and comprehensive projects have highlighted their advantages
in the market competition, and will drive changes in the competitive landscape of the market in the future. Scientific and
technological innovation based on intelligence, assembly, BIM, VR and other technologies continues to deepen. In the future,
along with the wave of industrial upgrading, green building, scientific and technological innovation, information technology, etc.
will become an important driving force for the new round of growth cycle of the industry. The domestic building curtain wall
market still has bright prospects for the development of leading companies in the industry.
The Company has been deeply involved in the curtain wall industry for more than 30 years and has a profound technical
accumulation. Fangda Jianke Co., Ltd., a wholly-owned subsidiary of the Company, has the highest qualifications for curtain wall
design and construction enterprises in China - the first-class qualification for professional contracting of architectural curtain wall
engineering and the first-class qualification for architectural curtain wall engineering design. It is the leading enterprise in China's
curtain wall industry. Fangda Jianke has won the highest awards in the national construction industry, including "Luban Award",
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Annual Report 2023 of China Fangda Group Co., Ltd.
"National Quality Engineering Award", "Zhan Tianyou Civil Engineering Award", "China Building Decoration Award", and over
200 provincial and ministerial awards. Fangda Jianke has participated in the preparation of more than 22 national or industrial
standards such as the Design Standard for Energy Efficiency of Public Buildings, and has created 18 new records for Chinese
enterprises. It is an intellectual property demonstration enterprise in Guangdong Province. It is the first one in the same industry in
the country to set up enterprise post-doctoral workstations, provincial engineering technology research centers, research and
design institutes and other research and development institutions, with independent innovation capability and technology level
reaching the advanced level in the same industry in the country, with the innovative characteristics of new quality productivity.
Good social credibility, high quality service quality, successfully established the company's brand awareness and reputation, fully
demonstrated the strength of the Company as the industry leader.
(4) Business drive
During the reporting period, the Company's curtain wall system and new material industry achieved a revenue of
RMB3,477,210,000, an increase of 20.86% compared to the same period last year; The net profit achieved was RMB163,312,500,
an increase of 5.50% compared to the same period last year. The key drivers of performance are as follows:
① High-quality development, focusing on high-end intelligent curtain wall and new material industry
The Company adheres to the road of high-quality development, relying on excellent brand influence, exquisite technical
quality, good project implementation capacity and complete industrial chain, focusing on high-quality customers, focusing on key
regions and major projects, and continuing to plough into the field of high-end intelligent curtain wall of ultra-high-rise buildings,
governmental public cultural venues and buildings, and corporate headquarters buildings. During the reporting period, the
Company has harvested a number of high-quality orders, including Shenzhen Prince Bay Building, Wenzhou Lucheng Plaza
curtain wall project height of more than 300 meters; Shenzhen Bay Cultural Plaza (Shenzhen Science and Technology Life
Museum) project is one of the "Ten Cultural Facilities in the New Era" in Shenzhen, which will become a new landmark of
Shenzhen urban culture after completion; Shenzhen China Resources Snow Brewery Global Headquarters Building of China
Resources Snow Breweries in Shenzhen, TCL Advanced Semiconductor Display Industry Headquarters in Shenzhen, Kingboard
Headquarters Building in Shenzhen, OPPO Intelligent Manufacturing Center in Dongguan (Lot 2), Haitian Group Building in
Foshan, Alibaba's Central China Headquarters in Wuhan, Tianfu Headquarters Base in Chengdu, and a large number of other
corporate headquarters projects, as well as the 3 McNab Apartments in Melbourne, the Neue Grand Apartments, the Pinnacle
high-end office building project in Bangladesh, and other overseas curtain wall projects. Overseas curtain wall projects such as
Melbourne 3 McNab Apartments, Neue Grand Apartments, Pinnacle High-end Office Building Project in Bangladesh, etc., have
played an important role in supporting the Company's sustained and healthy development, and the Company's brand, technical
service advantages and market competitiveness are highlighted.
During the reporting period, the company's intelligent curtain wall and new material industry won the contracted project order
of RMB5,254,102,000, an increase of 8.60% compared with the previous year; the amount of order reserves amounted to
RMB6,840,837,500, an increase of 6.08% compared with the previous year, which is 1.97 times of the Company's operating
income of the curtain wall system and material industry in 2023.
② Digital intelligence empowerment, continue to enhance core competitiveness
The Company adheres to innovation-driven development, the independent innovation ability and technology level is in the
leading position in the industry, has obtained 650 patented technologies for curtain wall products, 19 software copyrights,
participated in the preparation of 22 national/industry technical specifications and standards, during the reporting period, the
company has applied for 52 new patents, 44 new authorized patents. The six subsidiaries engaged in intelligent curtain wall system
and new material industry are all national high-tech enterprises, five of which are "specialized, special and new" enterprises, and
have been evaluated as National Intellectual Property Advantageous Enterprises, "Specialized, Special and New" giants,
Guangdong Provincial Engineering Technology Research Center It has been awarded as National Intellectual Property Advantage
Enterprise, "Specialized, Specialized, Specialized and New" Small Giant, Guangdong Engineering Technology Research Center,
Jiangxi Enterprise Technology Center, Jiangxi Intelligent Manufacturing Benchmarking Enterprise, Guangdong Innovative Small
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Annual Report 2023 of China Fangda Group Co., Ltd.
and Medium-sized Enterprises, Polaris Prize, the Second Prize of the First CBDA Architectural Curtain Wall Design "Silicon
Treasure Cup" Competition, and Enterprise Innovation Record and other honors, which demonstrated the Company's leading
position and comprehensive strength in the design and construction technology of the curtain wall products.
With the rapid development of new-generation information technologies such as cloud computing, big data, and AI artificial
intelligence, the Company, centered around the vision of "Digital Fangda," is vigorously promoting digitization and intelligent
technologies, aiming to reduce costs, increase efficiency, improve quality, and foster innovation. This seeks to empower the
Company's management and industrial development. The Company has taken the lead in building intelligent production lines in
the industry, applying information management tools such as BIM technology, PMS project management platform, and MES
production management platform to the construction of intelligent factories, and conducting refined management of curtain wall
production, achieving comprehensive monitoring from material production status, factory processing progress, to project
management status. In addition, the Company uses information technology to trace the information of all products, in order to
achieve scientific and efficient management.
③ Overseas expansion, steadily advancing internationalization strategy
During the reporting period, the Company leveraged its strong technological advantages, market advantages, advanced
manufacturing capabilities, and refined management accumulated in the field of intelligent curtain wall business. It made full
efforts to promote layout and market development in key overseas regions. Building upon the foundation in the Australian market,
it expanded into overseas markets more extensively and deeply, aiming to enhance the company's competitiveness and brand
influence in the international market, as well as optimizing the customer portfolio. During the reporting period, the Company's
overseas sales revenue in the curtain wall system and new materials business grew by 33.96% compared to the previous year.
④ Strengthening talent pool construction, improving training and management systems
Talent is the cornerstone and a crucial core resource for the growth and development of a company. In order to meet the
Company's strategic development plans, it is essential to further improve the talent development system by recruiting and retaining
versatile talents through various channels to meet the complex talent demands for business development. To fulfill the Company's
development strategy in overseas markets, the company has actively recruited, trained, and reserved a group of outstanding talents
with overseas backgrounds and skills that match our overseas operations. This provides the Company with a strong talent reserve
to support high-quality development.
The Company has established a comprehensive training management system, and during the reporting period, it adopted both
online and offline methods. It has conducted 993 training programs in various fields, including management, production, safety,
technology, quality, finance, law, and integrity. The total course hours were 79251.17 hours. This has improved the comprehensive
quality and professional ability of employees. In 2023, several employees of the Company were awarded honors such as
"Excellent Constructor of China Construction Engineering Decoration Award", "Excellent Young Designer", "Shenzhen Excellent
Craftsman", and "Shenzhen Excellent Craftsman".
(5) Industry qualification types and validity period
The Company has a Class A qualification for building curtain wall engineering contracting and class A qualification for
building curtain wall engineering design. It is the highest level for curtain wall design and construction companies in China.
During the reporting period, the Company's relevant qualifications have not changed significantly, and the validity period has not
expired.
(6) Quality control system, implementation standards, control measures and overall
evaluation
Quality control system: As a leading enterprise of high-end curtain wall, the Company pays attention to quality management.
It is the first in the industry to pass ISO9001, ISO14001, OHSAS18001 international and domestic dual certification, GB/T29490
intellectual property management system certification, and is the first to establish sales, design, supply, production, one-stop
quality control system such as construction, after-sales, customer service, etc., implement strict quality control and supervision for
each link, and create a strong quality management system.
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Annual Report 2023 of China Fangda Group Co., Ltd.
Implementation of the standard: In the process of building curtain wall business, the Company strictly complies with
GB/T21086-2007 "Building Curtain Wall", JG/T231-2007 "Building Glass Lighting Roof" and other national and industrial
standards.
Control measures: The Company has established complete and effective quality control measures and quality management
institutions, introduced digital information management, and digitized the Company's various businesses, raw materials, factory
workshops, and construction site operating procedures through computer information integration systems. Through cloud terminal
technology, information is quickly transmitted and shared for collaborative application. Strictly implement various quality
management and control measures to provide customers with high-quality products and services.
Overall evaluation: The Company's quality control system and executive standards meet the relevant requirements of the
current relevant national norms and standards, maintain good operation, and provide customers with stable and reliable products
and services.
(7) Major project quality problem during the reporting period
None.
(II) Rail transport screen door business
1. Industry development
Rail transit screen doors are an indispensable component of the urban rail transit industry chain, closely related to the
development of urban rail transit and intercity (city) railway construction. According to the National Comprehensive Vertical
Transportation Network Planning Outline released by the State Council, the future will promote the integrated development of
urban transportation, build an urban public transportation system with urban rail transit as the backbone and conventional public
transportation as the main body, fully utilize the underground space and buildings of rail transit in mega cities, and optimize
passenger flow evacuation. The Draft Outline of the Fourteenth Five-Year Plan and the Long-term Goals for 2035 proposes to
speed up the construction of a powerful transportation country. It is expected that China will add 3000 kilometers of urban rail
transit operating kilometers, 3000 kilometers of intercity railways and urban (suburban) railways during the "Fourteenth Five-Year
Plan", and the total investment completed is expected to exceed 3 trillion yuan. The urban rail transit market in China is still
relatively large, and the platform screen doors of urban rail transit still have a large market scale.
According to data from the Ministry of Transport, as of December 31, 2023, a total of 306 urban rail transit lines with an
operating mileage of 10165.7 kilometers and 5,897 stations have been opened and operated in 55 cities across 31 provinces
(autonomous regions, municipalities directly under the central government) and Xinjiang Production and Construction Corps. In
2023, 16 new urban rail transit operating lines were added, with an additional operating mileage of 581.7 kilometers. Two new
cities opened their urban rail transit for the first time. With the orderly development of urban rail transit in China, as a high value-
added and high-tech product, the market demand for platform screen doors in urban rail transit is constantly increasing.
2. Business Status
(1) Main products and purposes
The Company's main products are platform screen door systems applied to urban rail transit, and also provide operation and
maintenance services for the above products. The platform screen door system of urban rail transit is installed at the edge of the
platform of urban rail transit station to isolate the running track area from the waiting area of the platform. It is equipped with a
continuous movable door body barrier corresponding to the train door, which can be opened and closed by multi-level control,
including the full-height closed screen door system, the full-height non-closed screen door system, and the half-height screen door
system. In addition, the Company has successfully developed the platform safety door system that can be applied to the complex
environment of high-speed railroads, which can realize the opening of platform safety doors according to different models of
incoming high-speed railways and intelligent corresponding train doors, which will open up new application scenarios and new
market space in the future.
Railway platform screen door system has an indispensable position in urban rail transportation operation. The platform screen
door system isolates the track from the platform waiting area, effectively ensuring the safety of passengers, preventing them from
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Annual Report 2023 of China Fangda Group Co., Ltd.
falling off the track, and also preventing unauthorized entry into the tunnel; In case of fire or other fault modes, it can be linked
and controlled with relevant systems to achieve rapid smoke exhaust and passenger evacuation and escape functions. At the same
time, the platform screen door system can effectively reduce the dust, noise, and tunnel wind pressure entering the platform from
the tunnel, providing passengers with a quiet, comfortable, and safe riding environment. In addition, the platform screen door
system also has a passenger flow counting function, which can guide passengers to low-density carriages during peak passenger
hours. The platform screen door system can also serve as a platform for passenger consultation systems, achieving multimedia
interaction functions such as information broadcasting, consultation dissemination, and commercial promotion for passengers.
(2) Main business model
The operating entity of the Company's rail transit screen door equipment business is its holding subsidiary, Fangda Zhiyuan.
Fangda Zhiyuan is a supplier and service provider of rail transit screen door systems that integrates research and development,
design, manufacturing, installation and debugging, and technical services, with a complete industrial chain. A mature and
complete management system for research and development, procurement, production, sales and O&M has been established. In
terms of research and development, the Company has formed a research and development project initiation mechanism that
combines independent basic research with project needs; In terms of procurement, suppliers are mainly selected and purchased by
the project, and a special procurement team is set up to carry out the procurement work; In terms of production, manage the
Company's production activities according to contract requirements and customer's production instructions; In terms of sales, the
Company's customers are metro companies around the world and electromechanical general contracting units in the rail transit
industry, all of which are direct sales, and there is no distribution; in terms of operation and maintenance, the Company already has
an intelligent operation and maintenance guarantee system for platform screen doors, which can monitor the operation data in real
time and quickly diagnose and eliminate faults.
(3) Market competition pattern in which the Company is located and the Company's
market position
The Company has successfully researched and developed the rail transportation platform screen door system with
independent intellectual property rights earlier, and maintains the leading edge of technology, with new quality productivity
innovation characteristics. The Company has a complete professional team from research and development, design to
manufacturing, construction and after-sales service, and has taken the lead in drafting and revising the first national industry
standard for platform screen doors for rail transit, "Platform Screen Doors for Urban Rail Transit" (CJ/T236-2022), and
participated in compiling the group standard "Acceptance Specification for Fully Automated Urban Rail Transit Operation
System" (T/URTA0009-2022). In 2021, the Ministry of Industry and Information Technology of the People's Republic of China
awarded the Company the "Manufacturing Industry Single Champion Product" for the safety door product of urban rail transit
platforms. Fangda Zhiyuan Technology has received various honors and qualifications, including being recognized as a National
Intellectual Property Advantage Enterprise, winning the Guangdong Science and Technology Award, obtaining the National Key
New Product Certificate, being certified as a demonstration project in the National Torch Program for industrialization,
establishing the Guangdong Intelligent Rail Transit Platform Door Engineering Research Center, winning the Shenzhen Science
and Technology Progress Award, and being awarded the title of "Specialized, Refined, Special, and New" Enterprise in Shenzhen.
Additionally, the company has obtained the International Railway Industry Standard (IRIS) management system certification. The
Company has domestic and foreign patents and computer software copyrights, forming a core technology group and intellectual
property system with independent intellectual property rights.
Through 20 years of intensive work in the field of platform screen doors of rail transit, the Company has occupied a high
market share in the domestic market. The Company has undertaken over 100 subway platform door projects worldwide, totaling
over 80000 platform door units, and has become a global supplier of platform screen door systems for urban rail transit.
(4) Business drive
① Foresight layout, strong expansion in overseas markets
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Annual Report 2023 of China Fangda Group Co., Ltd.
As a pioneer and leader in the rail transit shielding door industry, the Company relies on precise strategic layout, leading
technical strength, and profound market insights to achieve significant business development against the background of
increasingly fierce competition in the industry, and to strongly promote the brand power enhancement and overseas strategic
layout. During the reporting period, the Company has won the bid, contract Athens Line 4, Singapore Metro CRL152 project,
Singapore Metro R152A project, Hong Kong Metro 1254 project, Qingdao Metro Line 6, Suzhou City, Suzhou City, Metro Line 8,
Xi'an City Metro Line 15 Phase I, Dongguan City, Dongguan City Railway Line 1 Phase I, Wuhan City, Wuhan City, Railway
Line 12 (Jiangbei section, Wuchang section), Tianjin Railway Line B1 Phase I, Guiyang Railway Line S1 Phase I and other
shielding door system project orders. Line B1 Phase I, Guiyang Rail Transit Line S1 Phase I and other shielding door system
project orders, while also obtaining the Hong Kong Shatin to Central Link Phase II, Xiamen Metro Line 1, 3, Nanning Metro Line
2, 4, Wuhan Rail Transit Line 7, Line 8, Line 11, Nanjing Metro Line 1, Shenzhen Metro Line 2, Phase III, Line 8 Phase I, Line 6,
Line 10 and other projects shielding door professional and technical maintenance service orders The total amount of
RMB1,703,394,000, an increase of 388.78% over the same period of the previous year, the new order was explosive growth, the
annual order and its overseas orders, maintenance order amount rose to a record high. As of the end of the reporting period, the
Company's order backlog in the rail transit platform door industry amounted to RMB2,428.95 million, representing a growth of
68.78% compared to the previous year-end. The company achieved operating revenue of RMB558.42 million. The order backlog
is 4.35 times the operating revenue of the rail transit platform door industry in 2023, indicating abundant order reserves. This solid
foundation ensures the continuous release of future performance. Despite the weak global economic recovery and insufficient
domestic demand, the rail transit platform door industry of the Company has shown strong vitality, demonstrating its
comprehensive strength in technology, brand, market, and strong competitiveness, as well as significant advantages in new
production capacity.
As early as 2012, the Company entered the overseas market and successfully secured an order for the Singapore metro project,
taking a proactive stance in its foresight layout. Since then, the Company has accelerated its efforts in exploring overseas markets
and promoting its international expansion. It has successfully secured rail transit platform door system projects in countries and
regions along the "Belt and Road" initiative, including Singapore, Malaysia, Hong Kong, Taipei, Thailand, India, Colombia, and
many more. Through these projects, the company has accumulated rich experience in implementing overseas projects and gained
widespread recognition from international market customers. In 2023, the Company continued to secure overseas orders,
strengthening its brand advantage in markets like Singapore and Hong Kong. It also achieved its first order for the Athens Metro
platform door system project in Europe, expanding its international presence. The recognition of the Fangda brand overseas has
been continuously increasing, establishing the Company as the world's largest producer and service provider of rail transit platform
door systems. Furthermore, the Company has successfully developed a platform safety door system suitable for high-speed railway
environments. This system allows intelligent opening of platform safety doors based on different train models entering the station.
The product has obtained 36 patents. Currently, the Company is actively promoting the product in the market to realize its
application as soon as possible, opening up new application scenarios and market opportunities.
Strengthening the foundation and becoming an industry innovation benchmark
The Company has been adhering to the business philosophy of "technology-based, innovation-driven" since its foray into the
field of rail transit platform equipment. It has made full efforts to invest in independent research and development of core
technologies for platform door systems, becoming one of the early domestic enterprises to achieve full localization of this product.
Through years of continuous engineering practice and technological innovation, the Company has strong core competitiveness in
areas such as core technology, data accumulation, talent reserves, and industry status, making it a benchmark enterprise in the
industry. As of the end of the reporting period, the Company owns 131 patents in the field of rail transit platform doors, both
domestically and internationally (including 53 invention patents and 20 international PCT patents). In addition, the company has
also obtained 8 copyrights for computer software. The "Urban Rail Transit Platform Safety Door" has been recognized by the
Ministry of Industry and Information Technology as a "Manufacturing Industry Championship Product". Fangda Zhizhuan
Technology has been awarded as a national intellectual property advantage enterprise and selected as a "Specialized, Refined,
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Annual Report 2023 of China Fangda Group Co., Ltd.
Unique, and New" enterprise in Shenzhen. It has led the drafting of China's first industry standard for "Urban Rail Transit Platform
Screen Door" and participated in the compilation of the group standard "Acceptance Specification for Urban Rail Transit Fully
Automatic Operation System". It is the only platform screen door system enterprise involved in the preparation of this standard.
During the reporting period, the modular assembly platform door independently developed and designed by the company was
successfully installed on site in Shenzhen Metro Line 8. It is the first modular assembly platform door landing application in
Shenzhen urban rail transit, and has important demonstration significance for promoting the construction of smart subways and
leading the transformation and upgrading of the rail transit industry.
Application of intelligent technology to enhance maintenance service quality
With the continuous expansion of urban rail transit network and the increasing service life of existing subway screen doors,
professional maintenance and upkeep have become a key link in rail transit operation. The screen door system belongs to a highly
specialized equipment system, and maintenance work must be guaranteed by a professional company with a solid technical
foundation for its services. The Company possesses a full industry chain technological service advantage in the field of urban rail
transit platform screen door systems. It has an intelligent operation and maintenance support system for platform screen door
systems, which allows for real-time statistics and analysis of equipment operation at stations, remote guidance of on-site technical
service teams, and timely and efficient provision of professional technical support to customers. Furthermore, the Company is
capable of accurately identifying potential faulty components, locations, and causes, reducing the need for personnel involvement
in system maintenance, improving the reliability and safety of platform screen door systems, and enhancing the intelligence level
of station operations.
After years of operation, the Company has accumulated extensive experience in the field of urban rail transit platform screen
door system maintenance and has a professional maintenance team. The Company's maintenance services have received praise
from clients on multiple occasions and have been awarded accolades such as the "Outstanding Contribution Award in Rail
Transit," "Excellent Equipment Supplier," and "Advanced Unit in Engineering Construction." In terms of maintenance service
orders, the Company has also consolidated its maintenance market position in areas such as Shenzhen, Wuhan, Xiamen, and
Nanning. Additionally, it has successfully obtained its first maintenance service contract in Hong Kong, demonstrating high
recognition and affirmation from client organizations for the company's specialized services.
(3) New energy industry
The Company's photovoltaic building integration (BIPV) and distributed solar photovoltaic power plants are important
components of the company's new energy business. Against the backdrop of the national dual carbon strategy and green
development, the Company has been practicing the concepts of low-carbon, energy saving, green and environmental protection. It
is an early developer and application of photovoltaic building integration (BIPV) and photovoltaic power generation system design,
manufacturing, integration and operation, and has mature technology. In China, the Company has completed the first batch of
integrated photovoltaic buildings (BIPV) and multiple distributed solar photovoltaic power stations. Jiangxi Pingxiang distributed
photovoltaic power station, Jiangxi Isuzu automobile parking lot photovoltaic power station in Nanchang City, and Songshan Lake
Base photovoltaic power station in Dongguan, Guangdong, have all operated efficiently, contributing to the Company's stable
profitability and cash flow.
(4) Commercial real estate industry
At present, the company operates commercial real estate projects in Shenzhen and Nanchang. Shenzhen, as a special
economic zone and an advanced demonstration zone, has a relatively concentrated market heat and demand. With the construction
of the Guangdong-Hong Kong-Macao Greater Bay Area advancing in depth, the strong development trend of Shenzhen and the
positive signals continuously released by the national policy are highly recognized by the market, and the Company's Shenzhen
Fangda Town project has a relatively fast demobilization rate in terms of sales and leasing. At the end of the reporting period, the
sales rate of Shenzhen Fangda Town project was 98.44%, and the leasing rate of self owned properties was 81.47%. The
company's Fangda Center project is located in Honggutan New District, Nanchang City, with obvious geographical advantages
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Annual Report 2023 of China Fangda Group Co., Ltd.
and good market expectations. At the end of the reporting period, the sale rate of Nanchang Fangda Center project was 39.64%,
and the occupancy rate of self-owned properties was 86.57%.
In addition, the Company's two urban renewal projects in Shenzhen are also actively progressing. The planning document for
the Henggang Dakang project in Shenzhen has been completed and published for public review, and the project's planning and
initiation work is being carried out in an orderly manner. The Fuyong Fangdabang project in Shenzhen has completed its planning
adjustment and is steadily advancing the review of the renewal plan.
II. Core Competitiveness Analysis
(I) Smart curtain wall system and material
1. Advantages of technology and industry experience
The Company has worked in the field of smart curtain wall for more than 30 years, continuously strengthened technical
innovation, grasped the development trend of curtain wall industry in the process of meeting market demand, improved the
competitiveness of the Company's products, solutions and services, and gained rich experience in project design and
implementation and well-known cases.
As a leading enterprise in the curtain wall industry, the Company has taken the lead in setting up enterprise postdoctoral
workstations, engineering technology centers, research and design institutes and other research and development institutions in the
industry in China, creating many firsts in the industry, and is one of the preferred brands in the domestic high-end curtain wall
system material industry. The company's six subsidiaries engaged in the smart curtain wall system and materials industry are all
national-level high-tech enterprises. Among them, five are recognized as "specialized, refined, and new" enterprises. They have
been successively awarded honors such as National Intellectual Property Advantage Enterprise, "specialized, refined, and new"
gazelle enterprise, Guangdong Province Engineering Technology Research Center, Jiangxi Province Enterprise Technology Center,
Jiangxi Province Intelligent Manufacturing Benchmark Enterprise, Guangdong Province Innovation-oriented Small and Medium-
sized Enterprise, Polar Star Award, and Enterprise Innovation Record. The Company's independent innovation and continuous
innovation have contributed to its leading technological level and manufacturing capabilities.
2. Advantages of product service and refined management
With years of technical precipitation and experience accumulation, the Company's smart curtain wall system and material
industry has formed an overall solution integrating R&D, design, production, project management, construction and maintenance
services. The industry is complete and has strong comprehensive strength in terms of quality, cost and service.
The Company is actively promoting intelligent construction and refined management by incorporating emerging technologies
such as big data, cloud computing, and 5G into production and management. Through the construction of digital and intelligent
production lines, the Company is building modern factories to continuously enhance scientific decision-making levels and
operational efficiency. This has effectively improved product and service quality, while also enhancing the Company's
competitiveness.
3. Brand equity
The Company's brand advantage can bring more business opportunities and partnerships. The Company has always adhered
to the principle of quality first and has gained high recognition from the industry and numerous professionals, thanks to its
technological expertise and innovative strength. It has built a good reputation. The Company has won "National Quality Award",
"National Quality Engineering Award", Luban Award, Zhan Tianyou award, China Architectural Decoration Award and more
than 200 provincial and ministerial awards. It has created thousands of landmark projects worldwide and has become one of the
leading brands in the field of high-end curtain wall. The Fangda trademark has been recognized as a "China Well-known
Trademark," and has also been awarded the titles of "International Reputation Brand" and "Shenzhen Old Brand."
4. Industrial layout advantages
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Annual Report 2023 of China Fangda Group Co., Ltd.
After years of development, the intelligent curtain wall system and material industry of the Company have formed a national
industrial layout with Shenzhen as its headquarters and production bases established in Shanghai, Chengdu, Nanchang, Dongguan,
Foshan, and Ganzhou (under construction) in Jiangxi province. Among them, Dongguan Songshanhu Base is one of the most
advanced high-end curtain wall system production bases in the industry, with industry-leading capabilities in R&D design,
manufacturing, and curtain wall system delivery. At present, the under-construction Fangda (Ganzhou) Low-carbon Intelligent
Headquarters Base project aims to create a modern and green factory with a beautiful environment, advanced equipment,
optimized processes, and leading technologies through the promotion of digitalization and intelligent manufacturing lines,
integrating lean management and intelligent manufacturing. This will further drive the development of the Company's curtain wall
system and PVDF aluminum veneer new materials industries towards intelligence and high-end. As of the disclosure date of this
report, the main structure of the first phase of the Fangda (Ganzhou) Low-carbon Intelligent Headquarters Base project has been
completed and the major equipment has been procured as planned. The first-phase project is expected to start operation in 2024.
The Company's well-established production base layout optimizes production costs, enhances efficiency, and enables rapid
response to changes in market demand, providing an important guarantee for increasing market share and overall competitiveness.
5. Talent
The Company always adheres to the "people-oriented" talent concept, actively introduces and trains all kinds of professional
technology and management talents, and is committed to building an efficient and innovative management and operation team.
The Company has a highly experienced top management team with an international perspective and solid middle-level managers
who are dedicated to their roles and possess strong execution capabilities. The Company also has a well-established talent
development system and talent pool. During the reporting period, we continuously optimized the effective incentive and
assessment system and implemented quantitative management. In order to meet the needs of the Company's business development,
the Company continued to introduce outstanding fresh graduates, build an industry university research integration platform,
promote school-enterprise cooperation and industry-university combination mechanism, and ensure that the Company's scientific
research strength in the field of high-end curtain wall is at the leading level in the industry. Over the years, it has always paid
attention to the cultivation of "craftsman spirit". It has held "Fangda Craftsman" skill competition every year and "Fangda Lecture
Hall" training from time to time, continuously improved the theoretical knowledge and operation skill level of employees, created
a skilled talent team with reasonable structure, exquisite technology and excellent style, cultivated a number of "Shenzhen 100
excellent craftsmen", and has been rated as "Shenzhen craftsman cultivation demonstration unit" for many times.
(II) Rail transport screen door business
1. Technical R&D advantage
The Company has always attached great importance to technological innovation and has been a pioneer in the domestic
market. It has independently developed a track traffic platform screen door system with proprietary intellectual property rights,
breaking the monopoly of foreign companies in the field of platform screen doors for rail transportation in China. Through years
of continuous engineering practice and technological innovation, the Company has accumulated profound technical expertise,
establishing itself as a leader in the industry. The Company's technology research and development system is mature, and the
platform screen door system research and development center of Fangda Zhiyuan Technology was awarded the Guangdong
Provincial Engineering Technology Center by the Ministry of Science and Technology of Guangdong Province; The technical
research and development team has rich experience, and its members have won provincial and municipal awards for scientific and
technological progress. Fangda Zhiyuan Technology's "Urban Rail Transit Platform Safety Door" has been recognized by the
Ministry of Industry and Information Technology as a "Single Champion Product" in the manufacturing industry. Fangda Zhiyuan
Technology has been selected as a "National Intellectual Property Advantage Enterprise", "Guangdong Intelligent Rail Transit
Platform Door System Engineering Technology Research Center", and a "Specialized, Refined, Unique, and New" (SRUN)
enterprise in Shenzhen. They have also taken the lead in drafting China's first industry standard for "Urban Rail Transit Platform
Screen Doors". Their research and development of the urban rail transit visualized multimedia full-height platform door project
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Annual Report 2023 of China Fangda Group Co., Ltd.
has been recognized as a "Shenzhen Enterprise Innovation Record", highlighting Fangda's sustained comprehensive leading
strength and industry benchmark position in the field of urban rail transit equipment.
During the operation and development, the Company has always maintained a high level of R&D investment, formed a
wealth of innovative achievements, and obtained a number of intellectual property rights in the structure, electrical, control,
system reliability and safety of PSD system. Through the accumulation of its own patents, software copyrights and proprietary
technologies, the Company has built a completely independent and controllable platform for the basic technology of platform door
control system. They are developed and produced by the Company, which can quickly diagnose and eliminate various system
control problems. On the basis of the basic platform, the Company has successively developed anti-pinch system based on image
recognition, embedded display system, intelligent operation and maintenance system and other modules, which can be flexibly
customized according to specific requirements and can better meet customer needs. In addition, through the practice of a large
number of urban rail transit projects at home and abroad over the years, the Company has also formed a rich technical
accumulation in the intelligent manufacturing process, quality control and construction technology of the core components of
platform screen door system products.
The Company has innovatively developed a safety door product for high-speed rail platforms, specifically targeting high-
speed or intercity platforms where multiple train models dock. The product allows for the arbitrary setting of door unit positions
and sizes, accommodating different train body specifications and door opening positions. It serves as an ideal platform door
solution for high-speed and intercity platforms with multiple train models docking or uncertain train models docking. This product
satisfies the needs of trunk railways, intercity railways, urban (suburban) railways, and seamless integration scenarios between
urban rail transit systems. It can automatically open and close doors at any position and ensures passenger safety protection on
station platforms. Currently, the Company is actively promoting the product in the market to achieve early implementation and
explore new application scenarios and market opportunities.
2. Industry chain advantage
As the first enterprise to enter the metro screen door industry in China, the Company is able to provide R & D, design,
manufacturing, engineering construction, technical services, technical training, system maintenance, spare parts supply as part of
the whole industry chain. A complete industrial chain helps the Company to realize resource sharing at all stages and meet the
market demand for specialized products and services, thereby effectively reducing the Company's production and management
costs and improving profitability and competitive advantages.
With many domestic metro platform screen door systems entering the maintenance period, the Company actively expands the
industrial chain and takes the lead in developing Metro maintenance business in China. The intelligent maintenance management
system developed by the Company can count and analyze the operation status of site equipment in real time, remotely guide the
on-site technical service team, and provide professional technical support to customers in a timely and efficient manner. The
Company's operations and maintenance service team is now present in over 30 cities worldwide. With the continuous
improvement of service capabilities and customer recognition, the contribution of technical service revenue is expected to increase
year by year.
3. Organizational structure advantage
The Company offers customized urban rail transit platform screen door systems, which involve various management stages
from order acquisition to final project delivery, including research and development, design, manufacturing, testing, installation,
and maintenance. These services are characterized by high contract work refinement and long performance cycles. To provide
more comprehensive services, the Company has established an organizational structure that meets customer needs, equipped with
professionals in each service stage.
The Company possesses outstanding professional capabilities and a well-configured research and development team, capable
of providing technical solutions for customers' special requirements. In terms of product design, the Company's technical team has
extensive experience. In product manufacturing, the Company owns a large-scale production factory and has a complete and
reliable supply chain. For product testing, the Company has well-equipped and professional testing equipment and methods. In
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Annual Report 2023 of China Fangda Group Co., Ltd.
terms of installation, the Company holds the first-level qualification of national construction mechanical and electrical installation
engineering, enabling it to independently undertake installation work as stipulated by contracts. In terms of maintenance, the
Company has an operations and maintenance center with professional maintenance teams. Maintenance centers are established at
customer locations and project sites, allowing for faster and more considerate services.
4. Professional and stable team
The company boasts a stable and highly skilled technical workforce. The core technical team exhibits a balanced age
structure and exceptional professional proficiency, including senior engineers and other advanced technical personnel expertise in
fields such as mechanical engineering, electrical, systems reliability, railway communications, software, engineering mechanics,
among others. The management and R&D teams have an average tenure surpassing 7 years, demonstrating high stability. They
share a common recognition of the company culture, collaborate harmoniously, and exhibit strong stability and a spirit of
perseverance. At the same time, the management team and R&D team have a deep understanding of the Company's business and
industry, can quickly respond to changes in the external competitive environment, and ensure the sustainable and stable
development of the industry.
(3) New energy industry
The Company's new energy industry primarily focuses on the application of new energy and energy-saving technologies,
such as solar photovoltaic power plants and building-integrated photovoltaics (BIPV). Its business scope spans across the
construction and photovoltaic power generation industries. The Company has been actively developing solar photovoltaic curtain
wall system technology for over twenty years. It is one of the domestic enterprises that started early in the design, manufacturing,
and integration of solar photovoltaic building-integrated (BIPV) systems.
Distributed solar power PV power generation is closely related to the Company's curtain wall business. Part of the distributed
solar power PV systems are closely related to construction. Moreover, in terms of product system integration, the Company has
over twenty years of experience in electromechanical product integration and project management. It possesses professional
qualifications in mechanical and electrical installation, among others.
(4) Commercial real estate industry
Located in the core area of the Guangdong-Hong Kong-Macao Greater Bay Area, the Company adopts a differentiation
competition strategy, with a focus on operating self-owned properties like Fangda Town, and promoting two urban renewal
projects in Shenzhen. Benefiting from the dividend of Shenzhen's rapid economic development and the opportunity of further
promotion of Shenzhen-Hong Kong integration, it is expected that the Company's commercial real estate business will contribute
profits to the Company in the future.
III. Core business analysis
1. Summary
See "I. Main Business Conditions of the Company During the Reporting Period" in Chapter III Management Discussion and
Analysis.
2. Income and costs
(1) Turnover composition
In RMB
2023 2022
YOY change
Proportion in Proportion in (%)
Amount Amount
operating costs operating costs (%)
25
Annual Report 2023 of China Fangda Group Co., Ltd.
(%)
Total turnover 4,292,204,716.01 100% 3,846,975,948.44 100% 11.57%
Industry
Metal production 3,477,209,982.02 81.01% 2,877,126,181.59 74.78% 20.86%
Railroad industry 558,421,443.33 13.01% 564,551,749.10 14.68% -1.09%
New energy
19,389,107.63 0.45% 19,707,669.06 0.51% -1.62%
industry
Commercial real
222,262,890.97 5.18% 369,529,923.55 9.61% -39.85%
estate
Others 14,921,292.06 0.35% 16,060,425.14 0.42% -7.09%
Product
Curtain wall
system and 3,477,209,982.02 81.01% 2,877,126,181.59 74.78% 20.86%
materials
Subway screen
558,421,443.33 13.01% 564,551,749.10 14.68% -1.09%
door and service
PV power
generation 19,389,107.63 0.45% 19,707,669.06 0.51% -1.62%
products
Real estate rental
and sales and 222,262,890.97 5.18% 369,529,923.55 9.61% -39.85%
property services
Others 14,921,292.06 0.35% 16,060,425.14 0.42% -7.09%
District
In China 3,886,216,878.96 90.54% 3,563,436,690.09 92.63% 9.06%
Out of China 405,987,837.05 9.46% 283,539,258.35 7.37% 43.19%
Sub-sales mode
Direct sales 4,292,204,716.01 100.00% 3,846,975,948.44 100.00% 11.57%
(2) Industry, product, region and sales mode accounting for more than 10% of the Company's operating revenue or
operating profit
Applicable □ Inapplicable
In RMB
Year-on-year
Year-on-year Year-on-year
Gross change in
Turnover Operating cost change in change in
margin operating
operating costs gross margin
revenue
Industry
Metal
3,477,209,982.02 2,935,675,944.04 15.57% 20.86% 24.02% -2.16%
production
Commercial
222,262,890.97 55,252,159.90 75.14% -39.85% -47.92% 3.85%
real estate
Railroad
558,421,443.33 405,548,804.42 27.38% -1.09% -6.49% 4.20%
industry
Product
Curtain wall
system and 3,477,209,982.02 2,935,675,944.04 15.57% 20.86% 24.02% -2.16%
materials
Real estate
rental and sales 222,262,890.97 55,252,159.90 75.14% -39.85% -47.92% 3.85%
and property
26
Annual Report 2023 of China Fangda Group Co., Ltd.
services
Subway screen
door and 558,421,443.33 405,548,804.42 27.38% -1.09% -6.49% 4.20%
service
District
In China 3,886,216,878.96 3,135,462,631.21 19.32% 9.06% 16.20% -4.96%
Sub-sales mode
Direct sales 4,292,204,716.01 3,404,642,473.33 20.68% 11.57% 16.69% -3.47%
Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable Inapplicable
The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the Guidelines for the
Self-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
Different business types of the Company
In RMB
Business type Turnover Operating cost Gross margin
Curtain wall system and
3,477,209,982.02 2,935,675,944.04 15.57%
materials
Whether the Company runs business through the Internet
□ Yes No
The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the Guidelines for the
Self-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
Whether the Company runs overseas projects
Yes □ No
Number of overseas projects in Total contract amount for overseas
No. Location the curtain wall and material projects in the curtain wall and material
industry (number) industry (RMB10,000)
1 Australia 9 25,912.12
2 Asia 9 8,118.74
Total 18 34,030.85
(3) The physical sales revenue is high the labor service revenue
□ Yes No
(4) Performance of major sales contracts and major purchase contracts signed by the Company as of the reporting period
□ Applicable Inapplicable
(5) Operation cost composition
Industry
In RMB
Industry Item 2023 2022 YOY change
27
Annual Report 2023 of China Fangda Group Co., Ltd.
Proportion Proportion (%)
Amount in operating Amount in operating
costs (%) costs (%)
Metal
Raw materials 1,931,108,749.70 65.78% 1,570,953,065.18 66.37% -0.59%
production
Metal Installation and
694,932,443.71 23.67% 517,779,780.10 21.87% 1.80%
production engineering costs
Metal
Labor cost 167,420,546.08 5.70% 151,791,696.66 6.41% -0.71%
production
Railroad
Raw materials 233,784,899.78 57.65% 284,311,719.62 65.56% -7.91%
industry
Railroad Installation and
66,075,375.05 16.29% 59,413,282.43 13.70% 2.59%
industry engineering costs
Railroad
Labor cost 51,119,439.37 12.61% 50,149,325.46 11.56% 1.05%
industry
Commercial Construction and
2,885,553.07 5.22% 28,586,334.63 26.95% -21.73%
real estate installation cost
Commercial
Land cost 2,436,118.72 4.41% 18,256,200.85 17.21% -12.80%
real estate
Commercial Water and
14,072,626.36 25.47% 13,033,203.43 12.29% 13.18%
real estate electricity
Commercial
Labor cost 17,680,251.05 32.00% 15,720,818.75 14.82% 17.18%
real estate
Note: In addition to the above costs, other cost items in the metal manufacturing and rail transit industries mainly include energy
consumption costs such as water and electricity, rent, etc., while commercial real estate mainly includes costs such as property
maintenance and cleaning.
The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the Guidelines for the
Self-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
Main business cost
In RMB
2023 2022
Proportion YOY
Cost Proportion
Business type in change
composition Amount Amount in operating
operating (%)
costs (%)
costs (%)
Curtain wall
Raw materials system and 1,931,108,749.70 65.78% 1,570,953,065.18 66.37% -0.59%
materials
Installation and Curtain wall
engineering system and 694,932,443.71 23.67% 517,779,780.10 21.87% 1.80%
costs materials
Curtain wall
Labor cost system and 167,420,546.08 5.70% 151,791,696.66 6.41% -0.71%
materials
(6) Change to the consolidation scope in the report period
Yes □ No
28
Annual Report 2023 of China Fangda Group Co., Ltd.
In this period, the Company has added one wholly-owned subsidiary through establishment: Shenzhen Fangda Jianchuang
Technology Co., Ltd.
(7) Major changes or adjustment of business, products or services in the report period
□ Applicable Inapplicable
(8) Major sales customers and suppliers
Main customers
Total sales amount to top 5 customers (RMB) 539,644,272.71
Proportion of sales to top 5 customers in the annual sales 12.58%
Percentage of sales of related parties in top 5 customers in the
0.00%
annual sales
Information of the Company's top 5 customers
Percentage in the annual
No. Customer Sales (RMB)
sales
Shenzhen Shengrunfeng Investment Development
1 134,575,646.88 3.14%
Co., Ltd
2 Anbang Property Insurance Co., Ltd. 106,237,001.24 2.48%
Shenzhen Qianhai Construction Investment
3 101,737,707.89 2.37%
Holdings Group Co., Ltd.
China Construction 8th Engineering Division Corp.
4 99,152,106.02 2.31%
Ltd.
Shenzhen-Shantou Cooperation Zone Shentoukong
5 97,941,810.68 2.28%
Investment Development Co., Ltd.
Total -- 539,644,272.71 12.58%
Other information about major customers
Applicable □ Inapplicable
There is no affiliation between the company and its top five customers. There are no direct or indirect ownership interests held by
the company's directors, supervisors, senior management personnel, core technical personnel, shareholders with more than 5%
stake, actual controllers, or other related parties among its major clients.
Main suppliers
Purchase amount of top 5 suppliers (RMB) 696,070,749.42
Proportion of purchase amount of top 5 suppliers in the total
18.26%
annual purchase amount
Percentage of purchasing amount of related parties in top 5
0.00%
customers in the annual purchasing amount
Information of the Company's top 5 suppliers
Percentage in the annual
No. Supplier Purchase amount (RMB)
purchase amount
1 No.1 212,485,537.87 5.57%
2 No.2 158,212,697.29 4.15%
3 No.3 123,505,852.25 3.24%
4 China Construction Science & 106,666,024.41 2.80%
29
Annual Report 2023 of China Fangda Group Co., Ltd.
Industry Corporation Limited
5 No.5 95,200,637.60 2.50%
Total -- 696,070,749.42 18.26%
Other information about major suppliers
Applicable □ Inapplicable
There is no affiliation between the Company and its top five suppliers. There are no direct or indirect ownership interests held by
the Company's directors, supervisors, senior management personnel, core technical personnel, shareholders with more than 5%
stake, actual controllers, or other related parties among its major suppliers.
3. Expenses
In RMB
2023 2022 YOY change (%) Notes
Sales expense 58,488,714.76 54,970,163.01 6.40%
Administrative expense 174,674,755.81 157,138,338.83 11.16%
Financial expenses 72,826,944.85 96,701,795.34 -24.69%
R&D cost 180,070,801.25 161,812,913.02 11.28%
4. R&D investment
Applicable □ Inapplicable
Expected impact on the
R&D project name Purpose Progress Objective future development of
the Company
This approach aligns
with the national
By enhancing policies on low-carbon,
standardization, energy efficiency, and
Improve product
modularization, and environmental
quality, improve Some projects have
low-carbon product protection. By
installation efficiency, completed research and
design, we aim to expanding the
Research and improve construction development,
elevate the level of application scenarios of
development of new safety and reduce performance testing,
prefabricated our products and
industrialized curtain energy consumption and prototype
construction improving our
wall system and construction production, and will be
development and technological
energy consumption in deployed in actual
building energy advantages in the
the construction projects.
efficiency, maintaining industry, we will drive
process.
a leading position in continuous company
the industry. growth and enhance
our market
competitiveness.
This aligns with
Some projects have
By enhancing the level national policy
completed research and
Reduce energy of system intelligence, guidelines and helps to
Research and development,
consumption and we aim to reduce improve the comfort of
development of performance testing,
improve the building energy residential and
intelligent curtain wall and prototype
performance of consumption and meet workspaces while
system production, and will be
intelligent products. the demands of the reducing building
deployed in actual
market. energy consumption. It
projects.
holds promising market
30
Annual Report 2023 of China Fangda Group Co., Ltd.
prospects and can
adapt to the future
development trends of
building curtain walls.
Improve the
automation and
Improve the intelligence level of
automation and production equipment,
Research and intelligence of comply with the
development of an Improve production production processes, concept of green
Scheme design in
integrated flexible efficiency and adapt to increase production factory and green
progress
intelligent production customized production. capacity, output and production, ensure
system product quality, and production capacity
reduce production and product quality,
costs. and reduce
manufacturing and
management costs.
Further enhance the
design and
manufacturing of
platform door systems,
Research and Enhance product
Optimize product enhance independent
development of a new safety, reliability and
Some projects have system performance research and
generation of platform availability to meet the
been completed and maintain industry development
door control system for advanced requirements
leadership. capabilities, and
rail transit of the core system.
enhance the company's
market competitiveness
in the field of platform
doors.
Improving the design
and manufacturing of
the company's platform
Solve the problem of To provide safety
door system,
precise alignment protection support for
Research and expanding the
between sliding doors high-speed
development of new application scenarios of
and train doors under R&D in progress rail/intercity bus
generation full height the Company's
mixed driving operations and improve
platform door products, is beneficial
conditions of multiple the efficiency of train
for the company to
vehicle models. organization.
maintain its
technological
leadership advantage.
Develop products that
Solve the problem of conform to the concept
forming metal plates of green and
Research on metal such as high-density environmentally
Improve processing
plate forming methods punched plates and friendly buildings,
efficiency and product Completed
and surface treatment curved panels, and enhance industry
quality.
processes improve the surface technological leading
treatment accuracy of advantages, and
metal plates. enhance
competitiveness.
R&D personnel
2023 2022 Change
R&D staff number 678 589 15.11%
R&D staff percentage 21.50% 20.19% 1.31%
31
Annual Report 2023 of China Fangda Group Co., Ltd.
Academic structure of R&D personnel
Bachelor 394 368 7.07%
Master's degree 8 7 14.29%
Age composition of R&D personnel
Under 30 242 249 -2.81%
30-40 273 227 20.26%
R&D investment
2023 2022 Change
R&D investment amount
180,070,801.25 161,812,913.02 11.28%
(RMB)
Investment percentage in
4.20% 4.21% -0.01%
operation turnover
Capitalization of R&D
0.00 0.00 0.00%
investment amount (RMB)
Percentage of capitalization
of R&D investment in the 0.00% 0.00% 0.00%
R&D investment
Reasons and effects of major changes in the composition of R&D personnel of the Company
□ Applicable Inapplicable
Reason for the increase in the percentage of R&D investment in the business turnover
□ Applicable Inapplicable
Explanation of the increase in the capitalization of R&D investment
□ Applicable Inapplicable
5. Cash flow
In RMB
Item 2023 2022 YOY change (%)
Sub-total of cash inflow from business
4,318,247,194.04 3,570,297,784.48 20.95%
operations
Sub-total of cash outflow from business
4,018,504,991.96 3,349,086,152.18 19.99%
operations
Cash flow generated by business
299,742,202.08 221,211,632.30 35.50%
operations, net
Sub-total of cash inflow generated from
375,640.16 2,909,289,689.63 -99.99%
investment
Subtotal of cash outflows 118,940,749.97 3,000,271,914.92 -96.04%
Cash flow generated by investment
-118,565,109.81 -90,982,225.29 -30.32%
activities, net
Subtotal of cash inflow from financing
2,876,228,738.64 1,670,354,493.21 72.19%
activities
Subtotal of cash outflow from financing
3,063,841,135.33 1,917,379,871.34 59.79%
activities
Net cash flow generated by financing
-187,612,396.69 -247,025,378.13 24.05%
activities
Net increase in cash and cash equivalents -4,016,810.64 -108,573,142.53 96.30%
32
Annual Report 2023 of China Fangda Group Co., Ltd.
Explanation of major changes in related data from the same period last year
Applicable □ Inapplicable
During the reporting period, the Company's net cash flow from operating activities increased by 35.50% compared to the previous
year. This increase was primarily due to the growth in net cash flow from operating activities of the smart curtain wall systems and
new materials business. The net cash flow from investment activities decreased by 30.32% compared to the previous year. This
decrease was mainly attributed to changes in net cash flow from investment activities related to financial investments. On the other
hand, the net cash flow from financing activities increased by 24.05% compared to the previous year. This increase was mainly
due to an increase in net cash flow from bank borrowings during the reporting period.
Explanation of major difference between the cash flow generated by operating activities and the net profit in the year
□ Applicable Inapplicable
V. Non-core business analysis
Applicable □ Inapplicable
In RMB
Amount Profit percentage Reason Whether continuous
Investment income -4,562,134.58 -1.44% No
Gain/loss caused by
Mainly due to adjustment of fair
changes in fair -28,534,518.77 -8.98% No
value of investment real estate
value
Mainly the provision for impairment
Assets impairment 6,020,287.93 1.89% No
of contract assets
Non-operating
2,639,291.21 0.83% No
revenue
Non-business
1,376,476.43 0.43% No
expenses
Credit impairment Mainly bad debt provision
-35,051,664.32 -11.03% No
loss corresponding to accounts receivable
VI. Assets and Liabilities
1. Major changes in assets composition
In RMB
End of 2023 Beginning of 2023
Change
Proportion in Proportion in Notes
Amount Amount (% )
total assets total assets
Monetary
1,425,151,116.24 10.65% 1,238,754,216.50 9.72% 0.93%
capital
Account
911,486,914.19 6.81% 832,292,348.17 6.53% 0.28%
receivable
Contract assets 2,488,429,802.41 18.60% 2,158,860,658.43 16.94% 1.66%
Inventory 755,624,486.51 5.65% 710,532,397.32 5.57% 0.08%
Investment real
5,756,809,168.26 43.04% 5,760,517,577.11 45.20% -2.16%
estate
33
Annual Report 2023 of China Fangda Group Co., Ltd.
Long-term
share equity 54,757,017.40 0.41% 54,969,042.14 0.43% -0.02%
investment
Fixed assets 620,828,178.38 4.64% 646,812,853.36 5.07% -0.43%
Construction in
109,414,347.33 0.82% 0.00% 0.82%
process
Use right assets 20,776,829.58 0.16% 19,449,693.40 0.15% 0.01%
Short-term
2,208,055,039.21 16.51% 1,318,238,522.78 10.34% 6.17%
loans
Contract
198,164,209.47 1.48% 207,993,671.55 1.63% -0.15%
liabilities
Long-term
660,000,000.00 4.93% 1,263,500,000.00 9.91% -4.98%
loans
Lease liabilities 6,675,870.04 0.05% 6,907,456.55 0.05% 0.00%
Non-current
liabilities due in 64,135,136.46 0.48% 83,778,647.06 0.66% -0.18%
1 year
The proportion of overseas assets is relatively high
□ Applicable Inapplicable
2. Assets and liabilities measured at fair value
Applicable □ Inapplicable
In RMB
Accumulati
ve changes
Gain/loss in fair Amount
Impairment Amount
Opening caused by value purchased Other Closing
Item provided in sold in the
amount changes in accounting in the change amount
the period period
fair value into the period
income
account
Financial assets
1.
Derivative
789,205.34 173,737.06
financial
assets
2.
- -
Investment 11,968,973.
11,968,973. 32,341,853.
in other 86
86 19
equity tools
3. Other
non-current 7,507,434.6 7,455,617.1
-51,817.51
financial 8 7
assets
4.
1,338,202.0 6,979,428.1
Receivable
1 4
financing
21,603,815. - - 14,608,782.
Subtotal
89 12,020,791. 32,341,853. 37
34
Annual Report 2023 of China Fangda Group Co., Ltd.
37 19
-
Investment 5,750,831,1 63,887,326. 25,223,700. 5,747,572,1
28,482,701.
real estate 72.12 00 45 71.31
26
-
5,772,434,9 31,545,472. 25,223,700. 5,762,180,9
Total 40,503,492.
88.01 81 45 53.68
63
Financial
293,400.00 0.00
liabilities
Other change:
The increase in other changes is mainly due to the receipt of mortgaged properties as investment properties in the current period.
Major changes in the assets measurement property of the Company in the report period
□ Yes No
3. Right restriction of assets at the end of the period
Item Book value on December 31, 2023 (RMB) Reason
Monetary capital 645,489,997.82 Various deposits
Notes receivable 27,843,496.17 Bills endorsed or discounted but not yet due
Account receivable 38,094,032.45 Loan by pledge
Non-current assets due in 1
327,120,273.54 Loan by pledge
year
Fixed assets 43,108,073.24 Loan by pledge
Investment real estate 1,943,287,098.56 Loan by pledge
100% stake in Fangda Property
Equity pledge 200,000,000.00
Development held by the Company
Total 3,224,942,971.78
VII. Investment
1. General situation
Applicable □ Inapplicable
Investment (yuan) in the report period Investment (yuan) in the previous period Change
69,500,000.00 500,000.00 13,800.00%
2. Major equity investment in the report period
□ Applicable Inapplicable
3. Major non-equity investment in the report period
Applicable □ Inapplicable
In RMB
Project Metho Wheth Industr Invest Actual Capital Progre Estima Accum Reaso Date Index
name d of er it is ies ment invest source ss te ulated ns for of for
35
Annual Report 2023 of China Fangda Group Co., Ltd.
invest fixed involv in the ment return incom failing disclos inform
ment assets ed in report by the e to ure ation
invest invest period end of realize reach disclos
ment ment the d by the ure
project report the end planne
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36
Annual Report 2023 of China Fangda Group Co., Ltd.
4. Financial assets investment
(1) Securities investment
□ Applicable Inapplicable
The Company made no investment in securities in the report period
2. Derivative investment
Applicable □ Inapplicable
1) Derivative investments for hedging purposes during the reporting period
Applicable □ Inapplicable
In RMB10,000
Proportion
Accumulati
of closing
ve changes
investment
Gain/loss in fair
Initial Amount amount in
Opening caused by value Amount in Closing
Type investment sold in this the closing
amount changes in accounting this period amount
amount period net assets
fair value into the
in the
income
report
account
period
Shanghai
449.25 449.25 29.34 0.00 11,244.1 11,693.36 0.00 0.00%
aluminum
Forward
foreign 3,087.95 3,087.95 -61.55 17.37 9,777.94 6,655.16 6,210.72 1.04%
exchange
Total 3,537.20 3,537.20 -32.21 17.37 21,022.04 18,348.52 6,210.72 1.04%
Accounting
policies
and
specific
accounting
principles
of hedging
business
during the
The aluminum futures and forward foreign exchange businesses of the Company meet the applicable conditions of
reporting
hedge accounting specified in the accounting standards and are applicable to hedge accounting, which are classified
period, as
as cash flow hedging. The corresponding accounting policies and accounting principles have not changed from the
well as
previous reporting period.
whether
there are
significant
changes
compared
with the
previous
reporting
period
Description The actual income of the aluminum futures hedging instrument and the spot value change of the hedged aluminum
of actual ingot in the reporting period is RMB306,400; The gains and losses arising from forward foreign exchange hedging
37
Annual Report 2023 of China Fangda Group Co., Ltd.
profit and instruments offset the value changes of the hedged items due to exchange rate fluctuations.
loss during
the
reporting
period
Description
The profit and loss generated by the company's hedging instrument can offset the value change of the hedged item,
of hedging
and the hedging effect of the hedging business is good.
effect
Capital
Self-owned fund
source
Risk
analysis
and control
measures
for the
derivative The aluminum futures hedging and foreign exchange derivatives trading businesses carried out by the Company are
holding in derivative investment businesses. The derivative investment business carried out by the Company follows the basic
the report principle of locking the price and exchange rate of raw materials, does not carry out speculative trading operations,
period and carries out strict risk control when signing hedging contracts and closing positions. The Company has
(including established and implemented the "Derivatives Investment Business Management Measures" and "Commodity
without Futures Hedging Business Internal Control and Risk Management System". It has made clear regulations on the
limitation approval authority, business management, risk management, information disclosure and file management of
market, derivatives trading business, which can effectively control the risk of the Company's derivatives holding positions.
liquidity,
credit,
operation
and legal
risks)
Changes in
the market
price or fair
value of the
derivative
in the
report
period, the
analysis of
the
Fair value of derivatives are measured at open prices in the open market
derivative's
fair value
should
disclose the
method
used and
related
assumption
s and
parameters.
Lawsuit (if
No
any)
Disclosure
date of
derivative
October 30, 2023
investment
approval by
the Board
38
Annual Report 2023 of China Fangda Group Co., Ltd.
of
Directors
The Company carries out the hedging business of commodity futures, which can effectively prevent and resolve the
operational risks caused by commodity price fluctuations, make full use of the hedging function of the futures
market, and avoid the adverse impact that the large fluctuation of commodity prices may bring to the Company's
operation. There is no speculative operation, which is in the interests of the Company and all shareholders. The
Company has set up the Internal Control and Risks Management Regulations for Commodity Futures Hedging. It
strengthens internal control and prevent risks, and provides the detailed operation procedures for the Company’s
hedging business. The relevant examination and approval procedures for the Company to use its own funds to carry
Opinions of out hedging business in the commodity futures markets comply with relevant national laws, regulations and the
independen relevant provisions of the Articles of Association.
t directors
on the The relevant approval procedures for the Company's foreign exchange derivatives trading business comply with
Company's relevant national laws, regulations and the relevant provisions of the Articles of Association. The Company has
derivative formulated the Management Measures for Derivatives Investment Business, which is conducive to strengthening
investment the risk management and risk control of the Company's foreign exchange derivatives transactions. The Company's
and risk foreign exchange derivatives trading business follows the principles of legality, prudence, safety and effectiveness,
controlling and the Company does not carry out foreign exchange transactions solely for profit. All foreign exchange
derivatives trading businesses are based on normal production and operation, rely on specific business operations,
and aim at avoiding and preventing exchange rate risks, which meet the needs of the Company's business
development. There is no speculative operation or situation that damages the interests of the company and all
shareholders, especially minority shareholders.
Based on the above, the independent directors have agreed for the Company to continue conducting futures
hedging and foreign exchange derivative trading business.
2) Derivative investment for the purpose of speculation during the reporting period
□ Applicable Inapplicable
During the reporting period, there was no derivative investment for the purpose of speculation.
5. Use of raised capital
□ Applicable Inapplicable
The Company used no raised capital in the report period.
VIII. Major assets and equity sales
1. Major assets sales
□ Applicable Inapplicable
The Company sold no assets in the report period.
2. Major equity sales
□ Applicable Inapplicable
IX. Analysis of major joint stock companies
Applicable □ Inapplicable
Major subsidiaries and joint stock companies affecting more than 10% of the Company's net profit
39
Annual Report 2023 of China Fangda Group Co., Ltd.
In RMB
Main Registered Operation
Company Type Total assets Net assets Turnover Net profit
business capital profit
Curtain
Fangda Subsidiarie wall system 600,000,00 5,698,648,8 1,764,287,4 3,181,964,3 134,299,41 129,228,79
Jianke s and 0.00 56.88 65.91 47.35 5.85 9.62
materials
Subway
Fangda Subsidiarie 105,000,00 915,436,51 390,100,77 543,639,35 119,701,25 114,071,19
screen door
Zhiyuan s 0.00 4.17 0.03 7.42 8.41 3.87
and service
Subway
Kechuangy Subsidiarie 5,000,000.0 39,577,375. 36,364,300. 34,523,537. 32,242,127. 27,757,208.
screen door
uan s 0 38 85 50 95 10
and service
Acquisition and disposal of subsidiaries in the report period
Applicable □ Inapplicable
Acquisition and disposal of subsidiaries Impacts on overall production, operation
Company
in the report period and performance
Shenzhen Fangda Jianchuang
Newly set None
Technology Co., Ltd.
X. Structural entities controlled by the Company
□ Applicable Inapplicable
XI. Future Prospect
(1) Competition map and development trned
1. Smart curtain wall and material system industry
National implementation of science and technology innovation to promote industrial innovation a series of initiatives for the
curtain wall industry to bring new opportunities for industry chain optimization and upgrading, artificial intelligence, big data and
other digital technology depth of application, will drive the building curtain wall industry to high-end, green, intelligent
transformation and upgrading, injecting new kinetic energy for the development of the industry. Guangdong, Hong Kong and
Macao Bay Area, Yangtze River Delta and other economic development advantageous areas of high-quality development power is
stronger, the accelerated pace of construction of regional center cities, the construction of urban supporting infrastructure will also
play a role in promoting the development of the building curtain wall industry. The accelerated construction of the national unified
market has provided more market opportunities for the industry's leading enterprises. The high-quality construction of "One Belt,
One Road" is going deeper and deeper, creating a favorable market environment for enterprises to expand overseas markets.
2. Rail transport screen door business
As an advanced mode of transportation, rail transit has many advantages such as fast, efficient, low carbon and environmental
protection, which have increasingly become the consensus of the society and are supported by national industrial policies. From
the perspective of the global urban rail transit industry, the construction of urban rail transit in emerging countries and regions is in
the ascendant, while the rail transit systems of major cities in developed countries are constantly being updated and upgraded.
From the perspective of domestic urban rail transit industry, in recent years, the urbanization development strategy at the national
level has also continuously injected power into the urban rail transit industry. Some large cities have successively built a number
of rail transit projects, which has significantly improved the urban traffic situation and played an important role in giving full play
40
Annual Report 2023 of China Fangda Group Co., Ltd.
to urban functions, improving the environment and promoting economic and social development. The Draft Outline of the
Fourteenth Five-Year Plan and the Long-term Goals for 2035 proposes to speed up the construction of a powerful transportation
country. It is expected that China will add 3000 kilometers of urban rail transit operating kilometers, 3000 kilometers of intercity
railways and urban (suburban) railways during the "Fourteenth Five-Year Plan", and the total investment completed is expected to
exceed 3 trillion yuan.
3. New energy industry
Currently, carbon neutrality has become a global consensus for sustainable development. Guided by the "dual carbon"
strategy and supported by national policies in China, the photovoltaic power generation industry has entered a new stage of high-
quality development. As a green and environmentally friendly power generation method, the Company's distributed photovoltaic
power stations will leverage its industrial advantages to undertake the construction of photovoltaic power stations and promote the
business of building-integrated photovoltaics (BIPV) based on market conditions. This will drive the high-quality development of
the new energy industry.
4. Commercial real estate industry
In 2024, the main theme of China's real estate market regulation is safety, stability, and development. With continuous policy
efforts, confidence in the real estate market is gradually strengthening, and the socio-economic situation is steadily improving.
Regional differentiation will bring new development opportunities to the Guangdong-Hong Kong-Macao Greater Bay Area. The
industry has matured, and it has strong population attractiveness. There is a strong demand in the real estate market. The
integration of Shenzhen and Hong Kong is continuously progressing, indicating that the Shenzhen market still holds great potential
in the future.
(2) Company development strategy and business plan
In 2024, the Company will focus on the management theme of "strengthening the foundation and forging ahead". It will
maintain a high sense of responsibility and urgency, continue to solidify its core business, and consolidate existing advantageous
markets. Through technological innovation, process upgrades, digital empowerment, and other means, the company will take
advantage of new productive forces. It will actively seize the commanding heights in the future curtain wall industry and railway
transit platform screen door industry. In line with the annual operational goals, the Company will comprehensively carry out the
following key tasks:
(1) Increase innovation efforts to enhance company competitiveness.
The Company must have a strong sense of crisis, realizing that not progressing means falling behind, and fully promote
innovation work. Leveraging the characteristics of its business, the Company will drive industrial innovation through
technological innovation, transform technological achievements into practical applications in the company's value chain,
accelerate the upgrading of industries toward higher-end, intelligent, and green development, and continuously promote the high-
quality development of the company. It will strive to create new productive forces in line with the Fangda model, contributing to
the accelerated formation of new productive forces. Deeply contemplate the direction of management innovation, explore
innovative measures for business models, and further enhance the Company's competitiveness. Fully utilize existing customer and
project resources, expand higher value-added businesses along the resource chain, and find breakthroughs in product, technology,
service, and business model innovation. Strengthen the learning and application of advanced technologies such as AI, utilizing
them to improve production efficiency. Enhance cooperation with external institutions such as universities and research institutes,
leveraging external resources to facilitate technological innovation. Furthermore, as part of the vision of "Digital Fangda," the
company will focus on "cost reduction, efficiency enhancement, quality improvement, and innovation" as objectives, carry out
digital construction, and empower the Company's management and industrial development through digital means.
(2) Make every effort to seize high-quality orders and strengthen risk control from the source.
Although the Company saw good growth in new orders in 2023, the imbalances in market distribution are still prominent, and
further optimization of the order structure is needed. Continue to focus on key clients and projects, improve negotiation and
bargaining capabilities, and secure higher-quality orders. While maintaining stability in the domestic market, increase efforts and
41
Annual Report 2023 of China Fangda Group Co., Ltd.
accelerate progress in expanding into key overseas areas and exploring new markets. Strengthen team building and talent
development for overseas business personnel, enhance knowledge and understanding of local laws and regulations, standardize
operations, and manage risks effectively.
(3) Take effective measures to strengthen accounts receivable management.
Enhance contract quality and continually strengthen contract and project schedule management while ensuring effective
supervision of the payment plan implementation. Implement a settlement and payment responsibility system, establish clear
reward and punishment mechanisms, and adopt multiple measures to promote project settlements. Improve measures for
controlling and monitoring payment collection processes and lay a solid foundation. Adhere to the "zero tolerance" policy and
perform well in on-going project payment collection. For customers who fail to make timely and full payments as agreed in the
contracts, issue timely warnings and take decisive actions to protect the interests of the Company.
(4) Strengthen talent reserve and optimize human resources management.
Coordinate efforts to ensure the construction of a talented workforce, with a focus on reserving and cultivating exceptional
individuals, particularly those suitable for overseas assignments. Maintain strict quality control in the recruitment process to ensure
that outstanding talents who meet business requirements are brought in, promoting a younger talent structure. Implement tailored
strategies for each department, improve standardized systems for compensation and performance evaluation, inspire and mobilize
employees' potential and enthusiasm for work, and establish long-term human resources development plans.
(3) Capital demand and source for projects in progress
To realize the business target in 2024, the Company will develop suitable financial and capital plans, accelerate the collection
of accounts receivable, sales payment from sales of Fangda Town, expand financing channels, and use share issuance, bank loans
and other financing products to meet the demand for capital.
(4) Risks
1. Risks of macro environment and policy changes
The Company's main business segments are closely related to macroeconomic and industrial policies and are greatly affected
by the overall macro environment. The year 2024 is a year in which the Company takes significant strides towards the global
market. If there are adverse changes in the international and domestic macroeconomic environment, slow economic development
and reduced investment in fixed assets in the future, which will affect the demand of public building curtain wall industry and rail
transit equipment industry, or face industry depression or excessive competition, which will have an adverse impact on the
Company's future profitability, even project delay or suspension, deferred payment of projects under construction, etc, thus
affecting the Company's operating performance.
In order to better cope with the opportunities and challenges brought by changes in the economic environment and policies,
the Company will pay close attention to the changes in the macroeconomic and policy situation at home and abroad, timely adjust
the Company's business strategy, further enhance the product competitiveness and operation and management ability, improve the
market share, and deal with the risks brought by changes in the macro environment and policies.
2. Market competition risks
In the rail transit PSD market, the technology of other domestic manufacturers is becoming more and more mature, and the
company may face the risk of intensified market competition. If the Company cannot maintain a leading position in the market, it
will have a certain adverse impact on the development and benefits of the Company's rail transit PSD business. In this regard, the
Company will continue to adopt a stable business policy, improve the competitive advantage of products through technological
innovation and fine management, accelerate the return of funds, and improve the operation efficiency and market competitiveness
of the Company.
In this regard, the Company will continue to adopt a stable business policy, improve the competitive advantage of products
through technological innovation and fine management, accelerate the return of funds, and improve the operation efficiency and
42
Annual Report 2023 of China Fangda Group Co., Ltd.
market competitiveness of the Company. While consolidating the domestic market, the Company will step up the efforts in
exploring overseas markets, thus elevating our competitiveness in global markets and improving our resistance to risks.
3. Production and operation risks
The macro-economy and market demand have added to the fluctuation in prices of main raw materials and labor, affecting the
Company's profitability and creating additional production and operation risks for the Company.
The Company will hedge and transfer the price fluctuation risk of some raw materials by using futures product hedging,
negotiating with partners to supplement the contract amount, reasonably arranging material procurement plan and other measures;
The Company implements a strict supplier management mechanism, actively improves the scientific and technological level of
production management, increases technology research and development, is committed to process improvement, landing smart
factories, improves the automation and intelligence of production equipment, and reduces the loss of raw materials. The Company
will continue to promote intelligent and digital construction system, widely apply new technologies and processes, strengthen staff
skill training, and improve quality and efficiency on the basis of ensuring safety.
4. Management risks
In recent years, with the expansion of the Company's business scale and the increase of the number of subsidiaries, the daily
management of the company is becoming more and more difficult, which may face the management risk of industrial scale
expansion. In addition, in recent years, the regulatory requirements for listed companies have been continuously improved and
deepened. The Company needs to further strengthen management, continue to promote management reform, constantly optimize
process and organizational structure, improve various rules and regulations, and vigorously introduce high-quality, highly skilled
and multidisciplinary technology and management talents, gradually optimize the allocation of human resources, optimize the
echelon structure, and effectively reduce the management risks brought by business development.
XII. Reception of investigations, communications, or interviews in the reporting period
Applicable □ Inapplicable
Main content
involved and Disclosure of
Time/date Place Way Visitor Visitor
materials information
provided
Investors Investor
Online participating in Relationship
Business and
Network communication the Company's Record Form
March 9, 2023 Others future
platform on online 2022 on
development
platforms Performance www.cninfo.co
Presentation m.cn
Investor
Relationship
Haitong Business and
Onsite Record Form
March 14, 2023 Meeting room Institution Securities: Cao future
investigation on
Youcheng development
www.cninfo.co
m.cn
Xiangcai
Securities: Li
Junhui, Investor
Xiaozhong Relationship
Business and
Onsite Capital: Liang Record Form
July 24, 2023 Meeting room Institution future
investigation Xing, Zhejiang on
development
Merchants www.cninfo.co
Futures: Li m.cn
Bangfei, Dexun
Securities: Zhu
43
Annual Report 2023 of China Fangda Group Co., Ltd.
Xiaofei, Cai
Manqiang,
Guochuang
Lianxing: Li
Xianhong
Investor
Huatai Relationship
Business and
Onsite Securities: Record Form
Meeting room Institution future
investigation Fang Yanhe, on
development
Wang Xijie www.cninfo.co
July 26, 2023 m.cn
Investor
Hua'an Fund:
Relationship
Liu Business and
Record Form
Online Others Institution Changchang future
on
and Li development
www.cninfo.co
Zhenxing
m.cn
Investor
Relationship
Great Wall Business and
September 21, Onsite Record Form
Meeting room Institution Securities: future
2023 investigation on
Wang Long development
www.cninfo.co
m.cn
Investor
Investors
Online Relationship
participating in Business and
November 15, http://rs.p5w.ne communication Record Form
Others the Company's future
2023 t/ on online on
collective development
platforms www.cninfo.co
reception day
m.cn
Investor
Relationship
Guolian Business and
December 1, Onsite Record Form
Meeting room Institution Securities: Wu future
2023 investigation on
Huidong development
www.cninfo.co
m.cn
XIII. Implementation of the Action Plan for "Double Improvement of Quality and Return"
(1) Has the Company disclosed an action plan for "Double Improvement of Quality and Return".
□ Yes No
(2) Implement measures to improve the Company's investment value
1、 Focus on core business and pursue high-quality development
Over the past 30 years, the Company has devoted its efforts to excel in its core business and has become a leading enterprise
in China's high-end intelligent curtain wall industry and rail transit platform screen door industry. The Company's main products,
intelligent curtain walls and rail transit platform screen door systems, have become global industry benchmarks. Fangda's
comprehensive strength in intelligent curtain walls places it at the forefront, while Fangda's rail transit platform screen door system
has been recognized as a "Manufacturing Industry Single-item Champion Product" by the Ministry of Industry and Information
Technology. The Company's operating revenue has grown continuously, reaching RMB4,292,204,700 in 2023, an increase of
11.57% compared to the same period the previous year. By the end of 2023, the Company's order backlog amounted to
RMB9,269,790,600 (excluding pre-sales of commercial real estate), representing a growth of 17.52% compared to the same period
the previous year. This backlog is 2.16 times the Company's operating revenue, laying a solid foundation for its sustained high-
44
Annual Report 2023 of China Fangda Group Co., Ltd.
quality development. In the future, the Company will continue to focus on and strengthen its core business, striving to create value
for shareholders in a practical and solid manner.
2、 Continue to invest in research and development to drive growth through innovation
The Company adheres to the business philosophy of "technology-based innovation" and the scientific and technological
innovation development path. Its independent innovation capabilities and technology level has always been at the forefront of
domestic similar enterprises. The Company currently has 7 national high-tech enterprises, 6 "specialized and innovative" enterprises,
2 "national intellectual property advantageous enterprises," and 2 provincial-level engineering technology research centers. By
continuously investing in the research and development of new technologies, processes, and materials, we aim to enhance the
company's market competitiveness. Through digitalization and intelligentization, we will introduce advanced management concepts
and methods, continuously improving our enterprise management system and enhancing management efficiency and effectiveness.
During the reporting period, the company invested RMB180 million in research and development, representing an increase of 11.28%
compared to the previous year. This accounted for 4.20% of the Company's operating revenue. In the future, the Company will
continue to strengthen its research and development efforts, leveraging technological innovation to drive industrial innovation. We
will apply the results of scientific and technological innovation to our industrial chain, accelerating the high-end, intelligent, and
green upgrades of our industries. By cultivating and developing new productive forces, we aim to continuously enhance the
company's competitiveness and profitability, promoting high-quality development and rewarding shareholders.
3、 Actively implement profit distribution and continuously return value to shareholders
The Company is dedicated to enhancing shareholder returns and protecting the rights and interests of small and medium-sized
shareholders. The Company has implemented a policy of continuous and stable profit distribution, which takes into consideration the
overall business performance, financial position, and development goals of the company, while emphasizing returns to shareholders.
In 2023, the Company's revenue continued to grow, and construction began on the Ganzhou production base. While ensuring
the normal operation and sustainable long-term development of the company, we will continue to strive for a dynamic balance
between the development of our core business and returns to shareholders. The proposed profit distribution plan for the year 2023 is
to distribute a cash dividend of RMB0.80 (including tax) per 10 shares to all shareholders. The total cash dividend to be distributed is
RMB85,909,938.16. The cash dividend amount accounts for 31.50% of the net profit attributable to shareholders of the listed
company, which is a further increase compared to the cash dividend ratios of 18.98% and 24.17% in 2022 and 2021, respectively.
Since its listing, the Company has cumulatively distributed cash dividends and repurchased shares with a total amount of 1.658
billion yuan (including the cash dividend amount for 2023), which is approximately 118% of the cumulative funds raised. In the
future, the Company will continue to uphold the principle of returning value to investors and actively share the dividends of
development through high-quality corporate growth. We are committed to continuously rewarding shareholders.
4、 Meet investor demand and effectively convey corporate value
We strictly adhere to laws, regulations, and regulatory requirements, ensuring that our information disclosure remains truthful,
accurate, complete, timely, and fair. We adhere to an investor-oriented approach to information disclosure, continuously improving
the quality of information disclosure. In 2023, we received an "A" rating (excellent) for information disclosure from the Shenzhen
Stock Exchange. We will continue to fulfill our information disclosure obligations with high quality, highlighting the importance and
relevance of information disclosure. We proactively disclose useful information for investors' investment decisions, emphasizing key
information related to industry competition, company operations, and risk factors while reducing redundant disclosures. We attach
great importance to investor relationship management and continually strengthen communication with investors. We will continue to
communicate with investors through various channels, deepening their understanding of our production and operations. By better
conveying the company's investment value, we aim to enhance investors' identification with the Company and foster market
confidence.
45
Annual Report 2023 of China Fangda Group Co., Ltd.
Chapter IV Corporation Governance
I. Overview
During the reporting period, the Company strictly adhered to the requirements of relevant laws, regulations, and normative
documents, such as the Company Law, Securities Law, Measures for the Administration of Independent Directors of Listed
Companies, and Guidelines for Corporate Governance of Listed Companies. We continuously optimized the corporate governance
structure, established and improved the internal control system and various internal management systems. We fully utilized the
participation of independent directors in decision-making, supervisory checks and balances, and professional consultation roles.
We clarified the responsibilities and authority in decision-making, execution, and supervision, forming an effective division of
responsibilities and a system of checks and balances. We constantly promoted standardized operation levels and safeguarded the
interests of investors and the company.
Any significant difference between the actual situation of corporate governance and the laws, administrative regulations and the
provisions on the governance of listed companies issued by the CSRC
□ Yes No
There is no significant difference between the actual situation of corporate governance and the laws, administrative regulations and
the provisions on the governance of listed companies issued by the CSRC.
II. The independence of the Company relative to the controlling shareholders and actual
controllers in ensuring the company's assets, personnel, finance, institutions, business, etc
(1) In the aspect of business: the Company has its own purchasing, production, sales, and customer service system which
performing independently. There is not any material related transactions occurred with the controlling shareholders.
(2) In personnel, the labor management, personnel and salary management are operated independently from the controlling
shareholder. The senior managements take salaries from the Company and none of them takes senior management position in the
controlling party.
(3) In assets, the Company owns its production, supplementary production system and accessory equipments independently,
and possesses its own industrial properties, non-patent technologies, and trademark.
(4) In organization, the production and business operation, executive management, and department setting are completely
independent from the controlling shareholder. No situation of combined office exists. The Company adjusts its organizing
structure only for its own practical requirement of development and management.
(5) In accounting, the company has its own independent accounting and auditing division, established independent and
completed accounting system and management rules, has its own bank account, and exercise its liability of taxation independently.
III. Competition
□ Applicable Inapplicable
IV. Annual and extraordinary shareholder meetings held during the report period
1. Annual shareholder meeting during the report period
Meeting Type Participation of Date Date of disclosure Meeting resolution
46
Annual Report 2023 of China Fangda Group Co., Ltd.
investors
Please refer to the
information
published on
http://www.cninfo.
com.cn
2022 Annual Annual
Announcement on
Shareholder shareholders' 25.46% March 20, 2023 March 21, 2023
the Resolution of
Meeting meeting
the 2022 General
Meeting of
Shareholders of
China Fangda
Group Co., Ltd.
2. Shareholders of preference shares of which voting right resume convening an extraordinary
shareholders' meeting
□ Applicable Inapplicable
V. Particulars about the Directors, Supervisors, and Senior Management
1. Profiles
Numb
Numb
er of Increas Decrea Other
er of
Startin End shares ed sed increas
shares
Gende Positio Job g date date of held at shares shares e and Reaso
Name Age held at
r n status of the the beginn in this in this decrea ns
end of
term term ing of period period se
the
the (share) (share) (share)
period
period
Nove
Xiong March
Chair In mber 5,110, 5,110, Inappli
Jianmi M 66 19, 0 0 0
man office 20, 257 257 cable
ng 2026
1995
Chair
March March
Xiong man, In Inappli
M 41 20, 19, 0 0 0 0 0
Xi Presid office cable
2023 2026
ent
Xiong April March
Direct In Inappli
Jianwe M 55 16, 19, 0 0 0 0 0
or office cable
i 1999 2026
April March
Lin Direct In Inappli
M 46 11, 19, 0 0 0 0 0
Kebin or office cable
2017 2026
Vice March
Lin In June 6, Inappli
M 46 preside 19, 0 0 0 0 0
Kebin office 2008 cable
nt 2026
Indepe
Cao March
ndent In May 8, Inappli
Zhong M 45 19, 0 0 0 0 0
directo office 2020 cable
xiong 2026
r
Indepe March March
Zhan In Inappli
M 59 ndent 20, 19, 0 0 0 0 0
Weizai office cable
directo 2023 2026
47
Annual Report 2023 of China Fangda Group Co., Ltd.
r
Indepe
Januar March
Song ndent In Inappli
F 45 y 8, 19, 0 0 0 0 0
Ming directo office cable
2024 2026
r
Superv
isory
Comm
March March
Cao ittee In Inappli
F 45 20, 19, 0 0 0 0 0
Naisi meetin office cable
2023 2026
g
conven
er
Fan March
Superv In May 8, Inappli
Xiaod M 37 19, 8,800 0 0 0 8,800
isor office 2020 cable
ong 2026
Ye March March
Superv In Inappli
Zhiqin M 49 20, 19, 29,000 0 0 0 29,000
isor office cable
g 2023 2026
Wei Vice July March
In Inappli
Yuexin M 55 preside 29, 19, 0 0 0 0 0
office cable
g nt 2011 2026
Vice March March
Dong In Inappli
M 45 preside 20, 19, 0 0 0 0 0
Gelin office cable
nt 2023 2026
Secret
Xiao June March
ary of In Inappli
Yangji M 39 23, 19, 0 0 0 0 0
the office cable
an 2020 2026
Board
Zhou April March
Direct Resign Inappli
Zhigan M 61 9, 20, 0 0 0 0 0
or ed cable
g 2007 2023
Zhou Vice April March
Resign Inappli
Zhigan M 61 preside 11, 20, 0 0 0 0 0
ed cable
g nt 2017 2023
Indepe
Guo April March
ndent Resign Inappli
Jinlon M 62 11, 20, 0 0 0 0 0
directo ed cable
g 2017 2023
r
Indepe
Januar
Huang ndent Resign May 8, Inappli
M 61 y 8, 0 0 0 0 0
Yaying directo ed 2020 cable
2024
r
Superv
isory
Comm
Decem March
Dong ittee Resign Inappli
M 45 ber 28, 20, 0 0 0 0 0
Gelin meetin ed cable
2018 2023
g
conven
er
5,148, 5,148,
Total -- -- -- -- -- -- 0 0 0 --
057 057
During the reporting period, whether there was any resignation of directors and supervisors and dismissal of senior managers
during their term of office
□ Yes No
48
Annual Report 2023 of China Fangda Group Co., Ltd.
Changes in the Directors, Supervisors and Senior Executives
Applicable □ Inapplicable
Name Job Type Date Reason
Xiong Xi Chairman, President Elected March 20, 2023 Re-elected
Zhan Weizai Independent director Elected March 20, 2023 Re-elected
By election due to the
resignation of
Song Ming Independent director Elected January 8, 2024
independent director
Huang Yaying
Supervisory
Cao Naisi Committee meeting Elected March 20, 2023 Re-elected
convener
Ye Zhiqing Supervisor Elected March 20, 2023 Re-elected
Dong Gelin Vice president Engaged March 20, 2023 Re-elected
Zhou Zhigang Director, vice president Leaving office March 20, 2023 Office term expires
Guo Jinlong Independent director Leaving office March 20, 2023 Office term expires
Resigned due to
Huang Yaying Independent director Resigned January 8, 2024
personal reason
Supervisory
Dong Gelin Committee meeting Leaving office March 20, 2023 Office term expires
convener
2. Office Description
Professional background, work experience and main duties in the Company of existing directors, supervisors and senior
management
1. Mr. Xiong Jianming: Ph.D. in Business Administration Philosophy, Senior Engineer, Founder of the Company, and currently
Chairman of the Company. He is a deputy to the 13th and 14th National People's Congress, a member of the sixth session of the
China Society for Promotion of the Guangcai Program, the president of the Gan Merchants Association, and the chairman of the
Federation of Industry and Commerce of Nanshan District, Shenzhen. Previously worked at Jiangxi Machinery Industry Design
and Research Institute, Shenzhen Municipal People's Government Shekou District Management Bureau, and other units. Served as
a representative of the 10th Guangdong Provincial People's Congress, a member of the 11th Jiangxi Provincial Political
Consultative Conference, a representative of the 4th Party Congress of the Communist Party of China in Shenzhen, a
representative of the 2nd, 3rd, and 6th Shenzhen Municipal People's Congress, a member of the 5th Shenzhen Municipal Political
Consultative Conference, and the founding president of the Shenzhen Semiconductor Lighting Promotion Association.
2. Mr. Xiong Xi: Master's student, currently serving as a director and president of the Company, Chairman of Fangda Zhiyuan
Technology Company, and member of the 7th Shenzhen Municipal Committee of the Chinese People's Political Consultative
Conference. He has served as a database engineer of China Merchants Bank Co., Ltd, deputy director of the Company's Technical
Information Department, deputy director of the Human Resources Department and assistant to the president, deputy general
manager of Shenzhen Fangda Jianke.
3. Mr. Xiong Jianwei: Master of business administration. Now he is the director of the Company, chairman of Fangda Jianke
company, and member of the 14th Nanchang CPPCC Standing Committee.
4. Mr. Lin kebing: Bachelor degree. He is now the director and vice president of the Company. He was once the financial director
of the Company.
5. Mr. Cao Zhongxiong: doctor, now is an independent direction of the Company, the executive director of New Economy
Research Institute of comprehensive development and Research Institute (Shenzhen, China), engaged in research and consulting
work on new economy and corporate strategy. He used to be a technician of China Chemical Group Bluestar Detergent Co., Ltd.
49
Annual Report 2023 of China Fangda Group Co., Ltd.
and the executive director of the New Economy Research Institute of the Comprehensive Development Research Institute
(Shenzhen, China).
6. Zhan Weizai: doctor, senior accountant. He is currently an independent direction of the Company, chairman of Shenzhen
Jiangcairen Education Management Co., Ltd., the supervisor of Shenzhen Devo Industrial Development Co., Ltd., Shenzhen Devo
Investment Development Co., Ltd., the director of Tianyin Communication Holdings Co., Ltd., the independent director of
Shenzhen Weiye Decoration Group Co., Ltd., Shenzhen Changying Precision Technology Co., Ltd., Chongqing Zijian Electronics
Co., Ltd., visiting professor of the School of Economics and Management of Wuhan University, the School of Mathematics and
Statistics of Central China Normal University, part-time tutor of Jiangxi University of Finance and Economics. He used to be the
deputy general manager of Hua'an Insurance Asset Management Center.
7. Ms. Song Ming: Doctor of Laws, currently an independent director of the Company, Executive Director of the Research Center
for SAR Legislation of Shenzhen University, Director of the Department of Constitutional and Administrative Law of the School
of Law of Shenzhen University, Director of the Research Center for the Administrative Rule of Law of Shenzhen University, and
Executive Director of the Shenzhen Law Society, Chairman of the Research Society for the Study of Administrative Law of the
Shenzhen Law Society, Invited Supervisor of the Shenzhen Municipal Party Committee of Political and Legal Affairs, and Expert
Juror of the Shenzhen Administrative Trial Center. She also serves as an invited supervisor of the Shenzhen Municipal Committee
of Political and Legal Affairs, and an expert juror of the Shenzhen Administrative Trial Center.
8. Ms. Cao Naisi: Bachelor's degree, intermediate economist, currently the convenor of the Supervisory Committee of the
Company and the deputy general manager of Fangda Jianke. She once served as the securities affairs representative of the
Company, the director of the audit and supervision department, the deputy director of the human resources department, the general
manager of Fangda Jianke Beijing Branch, the general manager of Fangda Jianke South China Branch and so on.
9. Mr. Fan Xiaodong: Bachelor degree, major in law. He joined the legal department of the Company in 2011. He is now the
supervisor and vice minister of the legal department of the Company.
10. Mr. Ye Zhiqing: Bachelor's degree, currently a supervisor of the Company, general manager of Fangda Real Estate Company
and chairman of the supervisory committee of Fangda Zhiyuan Technology Company. He has served as the vice president of the
Design Institute of Fangda Construction Technology, the assistant to the general manager of Fangda Construction Technology, and
the general manager of Fangda Construction Technology Shanghai Branch.
11. Mr. Wei Yuexing: Undergraduate, Senior Engineer, currently Vice President of the Company and General Manager of Fangda
Jianke.
12. Mr. Dong Green: Bachelor's degree, Senior Engineer, currently Vice President of the Company, Deputy to the Eighth National
People's Congress of Nanshan District, Shenzhen. He has served as a supervisor of the Company, a designer of Fangda
Construction Engineering Company, a chief engineer of a design institute, a general manager of Fangda Construction Engineering
Beijing Branch, and a deputy general manager of Fangda Construction Engineering.
13. Mr. Xiao Yangjian: Master's degree holder, currently the secretary of the Board of Directors of the Company. He once served
as deputy general manager and Secretary of the board of directors of Shenzhen Xiongtao Power Technology Co., Ltd. and deputy
general manager and Secretary of the board of directors of Shenzhen Guangfeng Technology Co., Ltd.
Offices held at shareholders entitie
Applicable □ Inapplicable
Whether any
Starting date of the End date of the remuneration is
Name Shareholder entity Office
term term paid at the
shareholder entity
Shengjiu
Xiong Jianming Director October 6, 2011 No
Investment Ltd.
Gong Qing Cheng
December 20,
Wei Yuexing Shi Li He Executive partner No
2016
Investment
50
Annual Report 2023 of China Fangda Group Co., Ltd.
Management
Partnership
Enterprise (limited
partner)
Office description No
Offices held at other entities
Applicable □ Inapplicable
Whether any
Position held in Starting date of the End date of the remuneration is
Name Entity name
another entity term term paid at the
shareholder entity
Jiangxi Business
Innovative
Xiong Jianming Director January 10, 2018 No
Property Joint
Stock Co., Ltd.
Gongqing City
Shengtai
Investment
Xiong Jianming Executive partner December 1, 2022 No
Partnership
(Limited
Partnership)
General Director of
Development Institute of Digital
Cao Zhongxiong January 1, 2022 Yes
Research Institute Strategy and
(Shenzhen, China) Economics
Shenzhen Dewo
Industrial
Zhan Weizai Supervisor June 1, 2010 Yes
Development Co.,
Ltd.
Shenzhen Jiangcai
Education
Zhan Weizai Chairman July 1, 2017 No
Management Co.,
Ltd.
Shenzhen Dewo
Investment
Zhan Weizai Supervisor June 1, 2012 No
Development Co.,
Ltd.
Weiye
Independent
Zhan Weizai Construction September 3, 2018 Yes
director
Group Co., Ltd.
Shenzhen Everwin
Precision Independent
Zhan Weizai May 15, 2020 Yes
Technology Co, director
Ltd.
Chongqing Zijian
Independent
Zhan Weizai Electronics Co., October 18, 2019 Yes
director
Ltd.
Telling
Telecommunicatio November 26,
Zhan Weizai Director Yes
n Holding Co., 2021
Ltd.
Guangdong Huilai
Zhan Weizai Rural Commercial Supervisor July 29, 2020 Yes
Bank Co., Ltd.
Song Ming Law School of Director of the April 3, 2017 Yes
51
Annual Report 2023 of China Fangda Group Co., Ltd.
Shenzhen Center for
University Administrative
Rule of Law
Research
Office description No
Penalties given by existing securities regulators on directors, supervisors and senior management and those who have resigned in
the report period
□ Applicable Inapplicable
III. Remunerations of the Directors, Supervisors and Senior Executives
Decision making procedures, basis and actual payment of remunerations of the Directors, Supervisors and Senior Executives
1. Remuneration schemes for directors and supervisors are proposed by the Remuneration and Assessment Committee of the
Board, and implemented upon approval of the Board and the Shareholders' Meetings; the remuneration schemes for executives are
approved and implemented by the Board.
The remuneration scheme for directors and supervisors of the Company shall be determined by the shareholders' general meeting,
while the compensation scheme for senior executives shall be determined by the Board of Directors. Additionally, the
remuneration and assessment committee of the Board of Directors shall review the actual payment of remuneration on an annual
basis.
Remunerations of the Directors, Supervisors and Senior Executives of the Company During the reporting period
In RMB10,000
Remuneration
Total
Name Gender Age Position Job status from related
remuneration
parties
Xiong Jianming M 66 Chairman In office 224.76 No
Chairman,
Xiong Xi M 41 In office 166.30 No
President
Xiong Jianwei M 55 Director In office 118.28 No
Director, vice
Lin Kebin M 46 In office 120.15 No
president
Cao Independent
M 45 In office 8.00 No
Zhongxiong director
Independent
Zhan Weizai M 59 In office 6.26 No
director
Supervisory
Committee
Cao Naisi F 45 In office 63.76 No
meeting
convener
Fan Xiaodong M 37 Supervisor In office 48.71 No
Ye Zhiqing M 49 Supervisor In office 61.50 No
Wei Yuexing M 55 Vice president In office 115.60 No
Dong Gelin M 45 Vice president In office 78.08 No
Secretary of the
Xiao Yangjian M 39 In office 73.61 No
Board
Director, vice
Zhou Zhigang M 61 Resigned 19.47 No
president
Independent
Guo Jinlong M 62 Resigned 1.74 No
director
Independent
Huang Yaying M 61 Resigned 8.00 No
director
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Annual Report 2023 of China Fangda Group Co., Ltd.
Total -- -- -- -- 1,114.22 --
Other matters
□ Applicable Inapplicable
VI. Performance of directors during the report period
1. Board of Directors in the reporting period
Meeting Date Date of disclosure Meeting resolution
Proposal approved:
1. Chairman's Work Report
for 2022;
2. The Board of Directors'
Work Report 2022;
3. Annual Report 2022 and
the Summary;
4. Financial Settlement
Report 2022;
5. Proposal of dividend
distribution for year 2022;
6. The Company’s internal
control self-evaluation report
2022;
7. Proposal on applying for
credit guarantee from banks
and other financial
18th meeting of the 9th Board
February 24, 2023 February 28, 2023 institutions;
of Directors
8. The Company's proposal on
engaging of the CPA for year
2023;
9. The Company's 2022
Social Responsibility Report;
10. Proposal of re-electing the
10th Board of Directors of the
Company;
11. Reviewing the
remuneration plan for the
10th Board of Directors
(including independent
directors) and Supervisory
Committee;
12. The proposal of
convening the 2022 General
Shareholders' Meeting.
Proposal approved:
1. Proposal on Election of the
Chairman of the 10th Board
of Directors of the Company;
2. Proposal on the Senior
1st Meeting of the 10th Board
March 20, 2023 March 21, 2023 Management Personnel of the
of Directors
Company;
3. Proposal on Appointing the
Company's Securities Affairs
Representative;
4. Proposal on the election of
53
Annual Report 2023 of China Fangda Group Co., Ltd.
members of the Development
Strategy Committee of the
10th Board of Directors;
5. Proposal on Election of
Audit Committee Members of
the 10th Board of Directors;
6. Proposal on Election of
Members of the
Remuneration and Evaluation
Committee of the 10th Board
of Directors;
7. Remuneration for the 10th
senior management of the
Company;
8. Proposal on reviewing
organizations of the
Company.
The proposal on the
2nd Meeting of the 10th Company's First Quarter
April 21, 2023
Board of Directors Report 2023 was reviewed
and passed.
Reviewing and approving the
3rd Meeting of the 10th
August 25, 2023 Interim Report 2023 and the
Board of Directors
Summary of the Report
Proposal approved:
1. Proposal regarding the
Company's 2023 Q3 Report;
2. Resolution on continuing to
engage in futures hedging and
4th Meeting of the 10th Board
October 27, 2023 October 30, 2023 foreign exchange derivative
of Directors
trading business in the
Company;
3. Proposal on continue using
of idle self-owned funds for
cash management.
The resolution to terminate
the plan of spinning off a
4th Meeting of the 10th Board
November 17, 2023 November 18, 2023 subsidiary for listing on the
of Directors
GEM board has been
approved.
Proposal approved:
1. Proposal of providing
guarantee for the Company's
subsidiaries;
2. Proposal of the Company
to add independent directors
to the 10th Board of
Directors;
6th Meeting of the 10th Board 3. Proposal of the Company
December 22, 2023 December 23, 2023
of Directors to adjust the members of the
Audit Committee of the
Board of Directors;
4. Review the propose of
revising the Articles of
Association;
5. Review the proposal of
Revising Shareholders’
Meeting Criteria;
54
Annual Report 2023 of China Fangda Group Co., Ltd.
6. Review the propose of
revising Rules of the
Procedure of the Supervisory
Committee;
7. Proposal of the Company
to revise the Independent
Director Work System;
8. Proposal of the Company
to revise the "Foreign
Investment Management
System";
9. Proposal of the Company
to revise the Related Party
Transaction System;
10. Proposal of the Company
to revise the "Accounting
Firm Selection and
Appointment System";
11. Proposal of the Company
to revise the "Work Rules of
the President";
12. Proposal of the Company
to revise the Work
Regulations of the Audit
Committee;
13. Proposal of the Company
to revise the Work
Regulations of the
Development Strategy
Committee;
14. Proposal of the Company
to revise the Work
Regulations of the Salary and
Assessment Committee;
15. Proposal of the Company
to revise the "Management
System for External
Information Users";
16. Proposal of the Company
on formulating the "Investor
Relations Management Work
System";
17. Proposal of the Company
to formulate the "Work
System for Special Meetings
of Independent Directors";
18. Proposal of the Company
to convene the first
extraordinary general meeting
of shareholders in 2024.
2. Directors' presenting of board meetings and shareholders' meetings in the report period
Directors' presenting of board meetings and shareholders' meetings in the report period
Name of Time of Number of Presented by Number of Number of Absent for Number of
director board board telecom board board two shareholders'
55
Annual Report 2023 of China Fangda Group Co., Ltd.
meetings meetings meetings meetings not consecutive meetings
should have attended attended by attended meetings attended
attended proxy
Xiong
7 4 3 0 0 No 1
Jianming
Xiong Xi 6 3 3 0 0 No 1
Xiong
7 4 3 0 0 No 1
Jianwei
Lin Kebin 7 4 3 0 0 No 1
Huang
7 1 6 0 0 No 1
Yaying
Cao
7 2 5 0 0 No 1
Zhongxiong
Zhan Weizai 6 1 5 0 0 No 1
Zhou
1 1 0 0 0 No 1
Zhigang
Guo Jinlong 1 1 0 0 0 No 1
Statement for absence for two consecutive board meetings
Inapplicable
3. Objection raised by directors
Any objection raised by directors against the Company's related issues
□ Yes No
Directors made no objection on related issued of the Company in the report period.
4. Other statement for performance of directors
Adoption of suggestion proposed by directors
Yes □ No
Statement for suggestion adopted or not by the Company
The directors of the Company strictly comply with the provisions of laws and regulations such as the Company Law,
Securities Law, Measures for the Administration of Independent Directors of Listed Companies, Guidelines for Corporate
Governance of Listed Companies, Shenzhen Stock Exchange Listing Rules, Articles of Association, and other relevant company
systems. They fulfill their responsibilities in accordance with the law. During the reporting period, the directors of the Company
attended the meetings of the Board of Directors, and expressed their views and in-depth discussions on various proposals
submitted to the board of directors for consideration, made suggestions for the healthy development of the Company, fully
considered the interests and demands of minority shareholders when making decisions, and effectively strengthened the
scientificity and feasibility of the decision-making of the board of directors. At the same time, the directors of the Company
actively participate in relevant training, improve their ability to perform their duties, actively pay attention to the company's
operation and management information, financial status and major events, and promote the sustainable, stable and healthy
development of the Company's production and operation. The independent directors have diligently performed their duties and
carefully reviewed various resolutions of the Board of Directors, playing an active role in safeguarding the interests of the
Company and minority shareholders.
56
Annual Report 2023 of China Fangda Group Co., Ltd.
VII. Special committees under the board of directors during the reporting period
Important
Number of Other Details of
Committee Meeting opinions and
Membership meetings Date performance objections (if
name content suggestions
held of duties any)
put forward
Heard and
considered:
1. Review of
the After full
Xiong
Company's communicati
Jianming,
production on and
Cao
February 24, and operation discussion,
Zhongxiong, 1
2023 in 2022; 2. all proposals
Lin kebing,
The were
Zhou
Company's unanimously
Zhigang
2023 annual passed.
production
Development and operation
Strategy work plan.
Committee Listened to
and reviewed
the review of
After full
Xiong the
communicati
Jianming, Company's
on and
Xiong Xi, production
August 25, discussion,
Cao 1 and operation
2023 all proposals
Zhongxiong, in the first
were
Xiong half of 2023
unanimously
Jianwei and the main
passed.
work in the
second half
of 2021.
The financial
and
accounting
report of the
Company for
2022 has
Listened to been
and reviewed prepared in
the financial accordance
statements of with the new
Guo Jinlong, the Company accounting
Audit Huang February 20, in 2022 after standards for
2
Committee Yaying, Lin 2023 the business
kebing preliminary enterprises
opinions and relevant
issued by the financial
annual audit regulations
accountant of the
Company,
which truly
reflects the
financial
status of the
Company as
57
Annual Report 2023 of China Fangda Group Co., Ltd.
of December
31, 2022 and
the operating
results and
cash flow in
2022. It is
agreed to
determine the
final
financial
report for
2022 on this
basis.
Listened to
the 2022
financial
work report
and internal
audit work
report, the
following
items were After full
considered communicati
and adopted: on and
1. The discussion, it
Company's was
audited unanimously
financial and approved and
February 24,
accounting agreed to
2023
statements submit all
for 2022; 2. proposals to
The the board of
Company's directors of
proposal to the company
hire an for
auditor in deliberation.
2023; 3. The
Company's
self-
evaluation
report on
internal
control in
2022.
After full
communicati
on and
The financial discussion,
statements of the proposal
Zhan Weizai, the Company was
Audit Huang April 21, for the first unanimously
3
Committee Yaying, Lin 2023 quarter of adopted and
Kepeng 2023 were agreed to be
reviewed and submitted to
approved. the board of
directors of
the Company
for
58
Annual Report 2023 of China Fangda Group Co., Ltd.
deliberation.
listened to
the financial
work report After full
and internal communicati
audit work on and
report for the discussion,
first half of the proposal
2023, and was
have unanimously
August 25,
reviewed and adopted and
2023
approved the agreed to be
unaudited submitted to
financial and the board of
accounting directors of
statements the Company
for the first for
half of 2023 deliberation.
of the
Company.
Reviewed
and
approved: 1.
The After full
Company's communicati
financial and on and
accounting discussion, it
statements was
for the third unanimously
quarter of approved and
October 27,
2023; 2. agreed to
2023
Proposal on submit all
continuing to proposals to
carry out the board of
futures directors of
hedging and the company
foreign for
exchange deliberation.
derivatives
trading
business.
(1) The In 2022, the
proposal on directors and
the senior
remuneration managers of
of directors the Company
and senior have
Huang managers in diligently
Remuneratio
Yaying, Cao 2022 was and
n and February 24,
Zhongxiong, 1 considered conscientious
Assessment 2023
Xiong and adopted; ly completed
Committee
Jianwei (2) the business
Reviewing objectives
the and other
remuneration work tasks in
plan for the 2022. The
10th Board remuneration
of Directors of directors
59
Annual Report 2023 of China Fangda Group Co., Ltd.
(including and senior
independent managers in
directors) 2022 is in
and line with the
Supervisory management
Committee; plan of
directors'
allowance
and senior
managers'
remuneration
of the
Company.
The salary
system for
senior
management
Reviewed personnel in
and approved the company
Huang
Remuneratio remuneration is combined
Yaying,
n and March 20, for the 10th with
Xiong Xi, 1
Assessment 2023 senior performance
Cao
Committee management bonuses, and
Zhongxiong
of the it is agreed to
Company. submit this
proposal to
the Board of
Directors for
review.
VIII. Performance of Supervisory Committee
(1) Risks for the Company discovered by the Supervisory Committee
□ Yes No
No disagreement with supervisory issues by the Supervisory Committee during the report period.
(2) The Supervisory Committee' Work Report 2023
In 2023, the Supervisory Committee performed its duties and obligations in supervision and protect all shareholders' and the
Company's interests in accordance with the Company Law, Share Listing Rules, Articles of Association and Rules of the Procedure
of the Supervisory Committee. The 2023 supervisory committee's work plan is as follows:
1. Opinions
(1) Legal compliance
In 2023, the Board of Supervisors of the Company supervised the operation of the Company in accordance with the law. In the
report period, the Company has been operated in accordance with law. The convening of meeting of the Board and the decision-
making process are compliant with law, regulations and Articles of Association; the internal control system is solid. Directors and
senior management have performed their obligations. No violation against law, regulations, Articles of Association and interests of
the Company and shareholders was discovered.
(2) Financial condition
In 2023, the Board of Supervisors supervised the financial affairs of the Company. The accounting management has been
compliant with the Accounting Law, Enterprise Accounting Standard. No false, misleading statement or significant omission was
found in financial statements. The financial reports of the Company reflect the Company's financial position, operation performance,
cash flows and major risks truthfully, accurately and completely. The CPA has issued the standard auditor's report in 2023, which is
60
Annual Report 2023 of China Fangda Group Co., Ltd.
objective, fair and truthful. It reflects the Company's financial position and operation performance.
(3) Implementation of internal control
According to the board of supervisors, the design and operation of the internal control is effective and meets the Company's
management and development requirements. It can ensure the truthfulness, lawfulness, completeness of the financial materials and
ensure the safety and completeness of the Company's property. In 2023, the company did not violate the securities law, the standards
for the governance of listed companies, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 -
standardized operation of listed companies on the main board and the Company's internal control system. The 2023 Internal Control
Self-evaluation Report truthfully and objectively reflects the establishment, implementation and improvement of the Company's
internal control system. There are no significant or important problems in the financial and non-financial reports in the report period.
(4) Fulfillment of social responsibilities
In 2023, the Company has made due contributions to economic development and environmental protection, actively participated
in public welfare and charity, conscientiously fulfilled its due social responsibility, and safeguarded the interests of shareholders,
customers and employees.
2. Meetings and resolutions of the supervisory meeting in the report period
Four meetings were held in 2023, all of which are on-site meetings. All proposal were approved and disclosed as required:
Convening
No. Meeting Date Topic
method
1. Reviewing the Company's 2022 Supervisory Committee’s
Work Report;2. Reviewing the Company's 2022 Annual
Report and Summary3. Reviewing the Company's 2022
12th meeting of Financial Settlement Report;4. Reviewing the Company's
the 9th February Proposal of Profit Distribution in 2022;5. Reviewing the
1 On-site
Supervisory 24, 2023 Company's Proposal of Engaging Auditor for 2023;6.
Committee Reviewing the Company's 2022 Internal Control Self-
evaluation Report;
7. Reviewing the proposal of the Company regarding the
election of the 10th Board of Supervisors.
1st Meeting of
March 20, Elect the convener of the 10th Board of Supervisors of the
2 the 10th Board of On-site
2023 Company.
Supervisors
2nd Meeting of
April 21,
3 the 10th Board of On-site The Company's First Quarter Report 2023
2023
Supervisors
3rd Meeting of
August 25, Proposal regarding the Interim Report 2023 and the Summary
4 the 10th Board of On-site
2023 of the Report
Supervisors
4th Meeting of
October 27,
5 the 10th Board of On-site Proposal regarding the Company's 2023 Q3 Report
2023
Supervisors
5th Meeting of November Resolution to terminate the plan of spinning off a subsidiary for
6 On-site
the 10th Board of 17, 2023 listing on the GEM board has been approved.
61
Annual Report 2023 of China Fangda Group Co., Ltd.
Supervisors
6th Meeting of
December Proposal of revising Rules of the Procedure of the Board of
7 the 10th Board of On-site
22, 2023 Directors
Supervisors
(III) The Supervisory Committee's Work Report 2024
In 2024, the Supervisory Committee of the Company will closely focus on the overall business objectives of the Company,
actively perform the supervision function of the Supervisory Committee and supervise the standardized operation of the Company in
accordance with the Company Law and other laws and regulations, the articles of association and the rules of procedure of the
Supervisory Committee; at the same time, it will continuously strengthen its professional quality, strive to improve its professional
ability and performance level; and strengthen the supervision of major projects and related parties of the Company, pay attention to
the Company's risk management and internal control system construction, ensure that the Company implements effective internal
control measures, and further promote the Company's standardized operation.
IX. Employees
1. Staff number, professional composition and education
Staff number of the parent at the end of the reporting period 55
Number of on-the-job employees of major subsidiaries at the
2,898
end of the reporting period (person)
Total number of active employees at the end of the reporting
3,154
period (person)
Number of employees receiving remuneration in the period 3,154
Resigned and retired staff number to whom the parent and
0
major subsidiaries need to pay remuneration
Professional composition
Categories of professions Number of people
Production 1,538
Sales & Marketing 121
Technicians 1,243
Finance & Accounting 60
Administration 192
Total 3,154
Education
Categories of education Number of people
High school or below 1,400
College diploma 660
Bachelor 1,052
Master's degree 40
Doctor's degree 2
Total 3,154
62
Annual Report 2023 of China Fangda Group Co., Ltd.
2. Remuneration policy
Staff remuneration policy: The Company's staff remuneration comprises post wage, performance wage, allowance and annual
bonus. The Company has set up an economic responsibility assessment system according to the annual operation target and
responsibility indicators for all departments. The performance wage is determined by the economic indicators, management
indicators, optimization indicators and internal control. The annual bonus is determined by the Company's annual profit and
fulfillment of targets set for various departments. The staff remuneration and welfare will be adjusted according to the Company's
business operation and changes in the local standard of living and price index.
Since 2008, the Company has been implementing the Regulations on Paid Annual Leave for Employees (State Council Order
No. 514) issued by the State Council. All employees of the Company are entitled to paid annual leave in accordance with these
regulations.
3. Training program
Staff training plan: The Company has paid continuous attention to training and development of the staff and introduces
innovative learning as part of the long-term strategy. We provide training programs through different channels and in different
fields for different employees will help them fulfill their works, including new staff training, on-the-job training, operation and
management training programs. These programs have largely elevated capabilities of the staff and underpin the success of the
Company.
4. Labor outsourcing
Applicable □ Inapplicable
Total number of hours of labor outsourcing 17,331,883.07
Total remuneration paid for labor outsourcing (RMB) 667,491,156.10
X. Profit distribution of the Company and conversion of capital reserve into share capital
Establishment, implementation or adjustment of profit distribution policies especially the cash dividend policy during the report
period
Applicable □ Inapplicable
During the report period, the Company implemented the profit distribution plan for 2022. According to the deliberation and
approval of the 2022 annual general meeting held on March 20, 2023, the Company's 2022 profit distribution plan is as follows:
the Company will distribute cash dividends of RMB0.50 (including tax) per 10 shares to all shareholders based on the total share
capital of RMB1,073,874,227 shares after the closing of the stock market on the equity registration date when the profit
distribution plan is implemented, with a total of RMB53,693,711.35 in cash, and will not distribute bonus shares nor transfer
capital reserves to share capital.
The Company attaches importance to the reasonable return to investors, implements a continuous and stable profit
distribution policy, the formulation and implementation of the profit distribution policy comply with the relevant provisions of the
Articles of Association and the requirements of the resolutions of the General Meeting of Shareholders, the dividend standard and
proportion are clear and clear, the relevant decision-making procedures and mechanisms are complete, the independent directors
perform their duties and play their due role, and the company's profit distribution plans are submitted to the General Meeting of
Shareholders for consideration, The profit distribution policy is compliant and transparent. Small and medium-sized shareholders
have the opportunity to fully express their opinions and appeals, and their legitimate rights and interests have been fully protected.
Explanation of Cash Dividend Distribution Policies
Comply with the Articles of Association or resolution made at Yes
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Annual Report 2023 of China Fangda Group Co., Ltd.
the General Shareholders' Meeting
Clear and definite distribution standard and proportion Yes
Decision-making procedure and mechanism Yes
Independent directors fulfill their duties Yes
If the Company does not distribute cash dividends, specific
reasons should be disclosed, as well as the measures to be taken Inapplicable
next to enhance investor returns:
Middle and small shareholders express their opinions and
Yes
claims. There rights are well protected.
Cash dividend distribution policies are adjusted or revised
Inapplicable
according to law
The company made profits during the reporting period and the profit available to shareholders of the parent company was positive,
but no cash dividend distribution plan was proposed
□ Applicable Inapplicable
Profit Distribution and Reserve Capitalization in the Report Period
Applicable □ Inapplicable
Bonus shares for every ten shares 0
Cash dividend for every ten shares (yuan, tax-included) 0.80
A total number of shares as the distribution basis 1,073,874,227
Cash dividend (including tax) 85,909,938.16
Cash dividend paid in other manners (such as repurchase of
0.00
shares)
Total cash dividend (including other manners) 85,909,938.16
Distributable profit (yuan) 1,159,988,498.20
Proportion of cash dividend in the distributable profit
100%
(including other manners)
Cash dividend
The Company is in a fast growth stage. Therefore, the cash dividend will reach 20% of the profit distribution at least.
Details of profit distribution or reserve capitalization plan
The profit distribution plan for 2023 approved by the board of directors of the Company is: the Company plans to distribute cash
dividends of RMB0.80 (tax included) for every 10 shares to all shareholders based on the total share capital of 1,073,874,227
shares on December 31, 2023, with a total cash distribution of RMB85,909,938.16. No dividend share or capitalization share was
issued in the year. After the announcement of the Company's profit distribution plan to the time of implementation, if the total
share capital changes, in accordance with the principle of “distributing cash dividends of RMB 0.80 (tax included) for every 10
shares”, the total share capital after the market closes on the equity registration date when the profit distribution plan is
implemented shall be used. The total amount of cash dividends will be disclosed in the Company's profit distribution
implementation announcement.
XI. Share incentive schemes, staff shareholding program or other incentive plans
□ Applicable Inapplicable
There is no share incentive schemes, staff shareholding program or other incentive plans in the report period
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Annual Report 2023 of China Fangda Group Co., Ltd.
XII. Construction and implementation of internal control system during the reporting
period
1. Construction and implementation of internal control
The Company has established and improved its internal control system in accordance with the Basic Norms for Enterprise
Internal Control and its supporting guidelines, as well as other internal control supervision requirements, combined with the actual
situation of the company. The risk internal control management organizational system of the company is jointly composed of the
Audit Committee and the Internal Audit Department, which supervises and evaluates the Company's internal control management,
improves the Company's standardized operation level, and promotes the healthy and sustainable development of the Company.
The 2023 Internal Control Self Evaluation Report disclosed by the Company on http://www.cninfo.com.cn, truthfully, and
accurately reflects the actual situation of the Company's internal control. During the reporting period, the Company did not have
any significant deficiencies in internal control.
2. Major problems in internal control discovered in the report period
□ Yes No
XIII. Management and control of subsidiaries during the reporting period
Problems
Integration Solution Follow up
Company Integration plan encountered in Solutions taken
progress progress solution plan
integration
Inapplicable No No No No No No
XIV. Internal control evaluation report or internal control audit report
1. Internal control report
Date of disclosure of the internal control
April 2, 2024
evaluation report
Disclosure of the internal control
www.cninfo.com.cn
evaluation report
Percentage of assets in the evaluation
scope in the total assets in the 94.20%
consolidated financial statements
Percentage of operation income in the
evaluation scope in the total operation
92.26%
income in the consolidated financial
statements
Standard
Type Financial report Non-financial report
1. The following problems are I. The following condition indicates
considered major problems: 1. Non- significant problems in the internal
effective control environment; 2. corrupt control of non-financial reports: 1.
Standard practice by directors, supervisor and Serious violation against national laws,
senior management, causing substantial regulations or specifications; 2. Serious
loss and impacts for the Company; 3. business system problems and system
Substantial mistakes in the financial ineffectiveness; 3. Major or important
65
Annual Report 2023 of China Fangda Group Co., Ltd.
statements in the period discovered by problems cannot be corrected; 4. Lack of
the CPA, which are not discovered by the internal control and poor management; 5.
internal control; 4. Ineffective Loss of management personnel or key
supervision of the internal control by the employees; 6. Safety and environmental
Company's auditing department 2. The accidents that cause major adverse
following problems are considered impacts; 7. Other situations that cause
significant problems: 1 accounting major adverse impacts on the Company.
policies are selected and used without II. The following situations indicate that
complying to widely accepted there may be significant problems with
accounting standards; 2. No anti-corrupt the internal control: 1. business system
and important balance system and problems and system ineffectiveness; 2.
control measures are taken; 3. Separate Major or important problems cannot be
or multiple problems in the preparation corrected; 3. Other situations that cause
of financial reports, which are serious major adverse impacts on the Company
enough to affecting the truthfulness and III. The following situation indicate
accuracy of the reports; no control likely normal problems in the internal
system is established and no related control: 1. Problems in the general
compensation system is implemented for business system; 2. Normal problems in
accounts of irregular or special the internal control supervision cannot be
transactions 3. Other problems are correctly promptly.
considered normal problems.
1. Significant problem: 1 mistakes
affecting 5% and more of the pre-tax
profit and more than RMB5 million in
the consolidated statements; 2. Mistakes
affecting 5% and more of the
consolidated assets and more than RMB5
See the recognition standard of the
million 2. Important problem: 1.
Standard internal control problems for financial
Mistakes affecting 1%-5% of the pre-tax
statements
profit in the consolidated statements; 2.
Mistakes affecting 1%-5% the
consolidated assets. III. Normal problem:
1. Mistakes affecting less than 1% of the
pre-tax profit and total assets of the
consolidate statements.
Significant problems in financial
0
statements
Significant problems in non-financial
0
statements
Important problems in financial
0
statements
Important problems in non-financial
0
statements
2. Internal control audit report
Applicable □ Inapplicable
Comments in the internal control audit report
We believe that China Fangda Group has maintained effective internal control on financial reports according to Basic Regulations
on Enterprise Internal Control and related regulations on December 31, 2023.
Disclosure of internal auditor's report Disclosed
Date of disclosure of the internal control audit report April 2, 2024
Source of disclosure of the internal control audit report www.cninfo.com.cn
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Annual Report 2023 of China Fangda Group Co., Ltd.
Opinion type Standard opinion auditor's report
Problems in non-financial statements No
Non-standard internal control audit report by the CFA
□ Yes No
Consistency between the internal control audit report and self-evaluation report
Yes □ No
XV. Rectification of problems in self inspection of special actions for governance of listed
companies
No
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Annual Report 2023 of China Fangda Group Co., Ltd.
V. Environmental and social responsibility
I. Major environmental problem
Whether the Company and its subsidiaries are key polluting companies disclosed by the environmental protection authority
□ Yes No
Administrative penalties for environmental problems during the reporting period
Impact on the
Rectification
Company or production and
Reason Violations Punishment result measures of the
subsidiary operation of listed
Company
companies
No No No No No No
Refer to other environmental information disclosed by key pollutant discharge units
During the reporting period, the listed company and its subsidiaries were not key pollutant discharge units announced by the
environmental protection department, and there were no administrative penalties for environmental problems.
Measures and effects taken to reduce carbon emissions during the reporting period
Applicable □ Inapplicable
Since its inception, the Company has adhered to the mission of green and environmental protection, actively exploring the path
of environmental friendliness and complementary development of the enterprise. The Company's smart curtain wall, photovoltaic
building integration (BIPV) project, rail transit PSD system, solar photovoltaic power station and other industries have environmental
protection genes. Combined with the characteristics of the industry, the Company integrates the concept of environmental protection
into technological innovation, successively develops national and provincial key environmental protection new products such as
ventilated and photovoltaic curtain walls, nano self-cleaning and fireproof honeycomb aluminum composite plates, and takes the lead
in developing the subway PSD system with independent intellectual property rights in China. The Company's "full height open
platform screen door of rail transit" technology has reduced the energy consumption of air conditioning and ventilation system by
more than 20%, and the products of double-layer breathing curtain wall system save energy by more than 30% compared with the
traditional curtain wall.
In 2023, the photovoltaic power generation in the new energy industry reached 19.4659 million kilowatt hours, which is
equivalent to saving 7,007.72 tons of standard coal, reducing carbon dioxide emissions by nearly 19,407.5 tons, sulfur dioxide
emissions by 229.698 tons, and water resource usage by 77,863.6 tons. In 2023, the Company was awarded the National (Shenzhen)
Excellent Foreign-Funded Enterprise - Green Carbon Reduction Promotion Award and the Top 10 Green Carbon Reduction Projects
by Shenzhen Foreign Investment.
The Company focuses on environmental protection and sustainable development, and is committed to building green buildings.
The curtain wall project of the Headquarters Building of Shenzhen Longhua Design Industry Park and the curtain wall project of the
General Contracting Ⅰ Bidding Section Project of Shenzhen Qianhai Trading Plaza South undertaken by the Company passed the
certification of "Green Building Evaluation Standard" GB/T50378-2014, with an evaluation grade of three stars; the General
Contracting Ⅱ Bidding Section Project of Shenzhen Qianhai Trading Plaza South undertaken by the Company passed the certification
of "Green Building Evaluation Standard" GB/T50378-2014, with an evaluation grade of three stars; the Company's General
Contracting The Ⅱ bidding section project of Shenzhen Qianhai Trading Plaza passed the certification of "Green Building Evaluation
Standard" GB/T50378-2014, and the evaluation grade is two-star.
The Company advocates energy conservation and emission reduction, safety and environmental protection, and adheres to the
comprehensive implementation of "green environmental protection" measures from the aspects of infrastructure construction, waste
water treatment, lighting and greening of office areas, so as to create a good, green and healthy office environment. The Company
advocates green office, reduces the standby energy consumption of air conditioners, computers and other electrical equipment, and
reasonably sets the air conditioning temperature in the office area to save energy. At the same time, the Company has established a
combination of electronic, networked and remote office mode, promoted "paperless office" by improving OA system and ERP
system, and actively used video conference and teleconference to replace on-site meetings, so as to improve work efficiency and
reduce various costs of on-site meetings.
Reasons for non-disclosure of other environmental information
No
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Annual Report 2023 of China Fangda Group Co., Ltd.
II. Social responsibilities
While creating enterprise value, the company adheres to its original mission, attaches great importance to the sustainable
development of the environment and society, and actively performs its social responsibilities. In 2023, the Company has earnestly
performed social responsibilities in regulating governance and operation, protecting the rights and interests of shareholders and
creditors, safe production, environmental protection, energy conservation and emission reduction, protecting the rights and
interests of employees, protecting the rights and interests of suppliers, customers and consumers, public relations and social public
welfare undertakings. See cninfo.com for details http://www.cninfo.com.cn for the 2021 social responsibility report of China
Fangda Group Co., Ltd.
III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
Since its establishment, the company has been actively practicing corporate social responsibility and promoting the sustainable
development of the society while creating economic value. By making positive examples in the fields of ecological environmental
protection and promoting social development, the Company has demonstrated the responsibility of an industry leader. The Company
has carried out industrial support in Guangdong, Shaanxi, Guizhou, Jiangxi and Tibet, helping rural areas to plant cash crops such as
tea mushrooms and lilies according to local conditions, supporting rural collective breeding industry projects, constructing
greenhouse photovoltaic power stations, distributed photovoltaic power stations and other rural industrial "blood-creation" projects,
and fostering new impetus to the development of rural economy, helping to build a thriving industry and ecological development.
Helping to build a beautiful countryside in the new era of prosperous industry, ecological livability, civilized countryside, effective
governance, and affluent life, which has achieved good social effects and gained high praise from all walks of life.
In addition, the Company has been actively involved in various public welfare activities, including public education, public
health, rural medical care, disaster relief, environmental protection, rural revitalization and many other aspects. In 2023, the
Company was awarded the honors of "Outstanding Enterprise in Fulfilling Social Responsibility" and "The Sixth Pengcheng Charity
Award Pengcheng Charity Donation Enterprise".
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Annual Report 2023 of China Fangda Group Co., Ltd.
Chapter VI Significant Events
I. Performance of promises
1. Commitments that have been fulfilled and not fulfilled by actual controller, shareholders, related
parties, acquirers of the Company
□ Applicable Inapplicable
There is no commitment that has not been fulfilled by actual controller, shareholders, related parties, acquirers of the Company
2. Explanation and reason of profit forecasts on assets or projects that remain in the report period
□ Applicable Inapplicable
II. Non-operating capital use by the controlling shareholder or related parties in the
reporting term
□ Applicable Inapplicable
The controlling shareholder and its affiliates occupied no capital for non-operating purpose of the Company during the report
period.
III. Incompliant external guarantee
□ Applicable Inapplicable
The Company made no incompliant external guarantee in the report period.
IV. Description of the board of directors on the latest "non-standard audit report"
□ Applicable Inapplicable
V. Statement of the Board of Directors, Supervisory Committee and Independent Directors
(if applicable) on the "non-standard auditors' report" issued by the CPA on the current
report period
□ Applicable Inapplicable
VI. Description of changes in accounting policies, accounting estimates or correction of
major accounting errors compared with the financial report of the previous year
Applicable □ Inapplicable
(1) Changes in accounting policies
Implementation of ASBE Interpretation No. 16, "Accounting for Deferred Income Taxes Related to Assets and Liabilities
Arising from a Single Transaction to Which the Initial Recognition Exemption Does Not Apply"
On November 30, 2022, the Ministry of Finance ("MOF") issued ASBE Interpretation No. 16 ("ASBE Interpretation No. 16")
("ASBE Interpretation No. 31"), of which "Accounting for Deferred Income Taxes on Assets and Liabilities Arising from Individual
Transactions to which the Exemption from Initial Recognition Does Not Apply" has become effective as of January 1, 2023. The
Company implemented this provision of Interpretation No.16 on January 1, 2023. The implementation of this provision did not have
70
Annual Report 2023 of China Fangda Group Co., Ltd.
any significant impact on the Company's financial position and results of operations, and did not involve any retroactive adjustments
or restatements.
(2) Changes in accounting estimates
During the reporting period, the Company had no significant changes in accounting estimates.
VII. Statement of change in the financial statement consolidation scope compared with the
previous financial report
Applicable □ Inapplicable
In this period, the Company has added one wholly-owned subsidiary through establishment: Shenzhen Fangda Jianchuang
Technology Co., Ltd.
VIII. Engaging and dismissing of CPA
CPA engaged currently
Domestic public accountants name RSM Thornton (limited liability partnership)
Remuneration for the domestic public accountants (in
150
RMB10,000)
Consecutive years of service by the domestic public
5
accountants
Name of certified accountants of the domestic public
Zhou Junchao, Xu Yuxia, Hu Gaosheng
accountants
Zhou Junchao and Xu Yuxia provided audit services for 1 year
Consecutive years of service by the domestic public
each, while Hu Gaosheng provided continuous audit services
accountants
for 4 years.
Overseas public accountants name (if any) No
Remuneration for the overseas public accountants (in
0
RMB10,000)
Consecutive years of service by the overseas public
No
accountants (if any)
Name of certified accountants of the overseas public
No
accountants (if any)
Consecutive years of service by the domestic public
No
accountants
Whether the CPA is replaced
□ Yes No
Engaging of internal control audit CPA, financial advisor and sponsor
Applicable □ Inapplicable
During the reporting period, the Company continued engaging RSM China (limited liability partnership) as the financial statement
and internal control auditing CPA with a fee of RMB1.5 million.
IX. Delisting after disclosure of annual report
□ Applicable Inapplicable
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Annual Report 2023 of China Fangda Group Co., Ltd.
X. Bankruptcy and capital reorganizing
□ Applicable Inapplicable
The Company has no bankruptcy or reorganization events in the report period.
XI. Significant lawsuit and arbitration
□ Applicable Inapplicable
As of the end of this reporting period, the Company has not met the disclosure standards for major litigation, and the total amount
of litigation in other litigation and arbitration proceedings is about RMB364,000,000, while the total amount of litigation in the
sued cases is about RMB45,000,000. The above litigation matters are multiple independent cases and will not have a significant
adverse impact on the Company's financial condition and ability to continue operating.
XII. Punishment and rectification
□ Applicable Inapplicable
The Company received no penalty and made no correction in the report period.
XIII. Credibility of the Company, controlling shareholder and actual controller
Applicable □ Inapplicable
The Company and its controlling shareholders and actual controllers do not fail to perform the effective judgment of the court, and
the debts with a large amount are not paid off when due.
XIV. Material related transactions
1. Related transactions related to routine operation
□ Applicable Inapplicable
The Company made no related transaction related to daily operating in the report period.
2. Related transactions related to assets transactions
□ Applicable Inapplicable
The Company made no related transaction of assets or equity requisition and sales in the report period.
3. Related transactions related to joint external investment
□ Applicable Inapplicable
The Company made no related transaction of joint external investment in the report period.
4. Related credits and debts
□ Applicable Inapplicable
The Company had no related debt in the report period.
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Annual Report 2023 of China Fangda Group Co., Ltd.
5. Transactions with related financial companies
□ Applicable Inapplicable
There is no deposit, loan, credit or other financial business between the company and the related financial company.
6. Transactions between financial companies controlled by the company and related parties
□ Applicable Inapplicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the company and its
related parties.
7. Other major related transactions
□ Applicable Inapplicable
The Company has no other significant related transaction in the report period.
XV. Significant contracts and performance
1. Asset entrusting, leasing, contracting
(1) Asset entrusting
□ Applicable Inapplicable
The Company made no custody in the report period.
(2) Contracting
□ Applicable Inapplicable
The Company made no contract in the report period
(3) Leasing
□ Applicable Inapplicable
There is no leasing during the reporting period.
2. Significant guarantee
Applicable □ Inapplicable
In RMB10,000
External guarantees made by the Company and subsidiaries (exclude those made for subsidiaries)
Actual
Guarant
Date of Guarante amount Type of Counter
ee Actual Collatera Complet Related
disclosur e of guarante guarante Term
provided date l (if any) ed or not party
e amount guarante e e (if any)
to
e
No
Total of external Total of external
0 0
guarantee approved guarantee actually
73
Annual Report 2023 of China Fangda Group Co., Ltd.
in the report term occurred in the
(A1) report term (A2)
Total of external Total of external
guarantee approved guarantee actually
0 0
as of end of report occurred as of end of
term (A3) report term (A4)
Guarantee provided to subsidiaries
Actual
Guarant Colla
Date of Guarante amount Counter
ee Actual Type of teral Complet Related
disclosur e of guarante Term
provided date guarantee (if ed or not party
e amount guarante e (if any)
to any)
e
since
engage
of
Decemb contract
Fangda February Joint
93,000 er 28, 54,293.7 No No to 3 No Yes
Jianke 28, 2023 liability
2023 years
upon
due of
debt
since
engage
of
contract
Fangda February May 5, 15,070.9 Joint
24,000 No No to 3 No Yes
Jianke 28, 2023 2023 4 liability
years
upon
due of
debt
since
engage
of
Septemb contract
Fangda February 15,832.6 Joint
30,000 er 25, No No to 3 No Yes
Jianke 28, 2023 2 liability
2023 years
upon
due of
debt
since
engage
of
Septemb contract
Fangda February 33,332.6 Joint
50,000 er 28, No No to 3 No Yes
Jianke 28, 2023 5 liability
2023 years
upon
due of
debt
since
engage
of
Fangda February October Joint contract
30,000 20,300 No No No Yes
Jianke 28, 2023 20, 2023 liability to 3
years
upon
due of
74
Annual Report 2023 of China Fangda Group Co., Ltd.
debt
since
engage
of
Decemb contract
Fangda March 38,802.2 Joint
39,000 er 9, No No to 3 No Yes
Jianke 30, 2022 4 liability
2022 years
upon
due of
debt
since
engage
of
contract
Fangda March May 25, Joint
15,000 9,000 No No to 3 No Yes
Jianke 30, 2022 2022 liability
years
upon
due of
debt
since
engage
of
Decemb contract
Fangda February 32,344.3 Joint
48,000 er 15, No No to 3 No Yes
Jianke 28, 2023 4 liability
2023 years
upon
due of
debt
since
engage
of
contract
Fangda February March Joint
20,000 20,000 No No to 3 No Yes
Jianke 28, 2023 31, 2023 liability
years
upon
due of
debt
since
engage
of
contract
Fangda February August Joint
11,400 4,207.12 No No to 3 No Yes
Jianke 28, 2023 16, 2023 liability
years
upon
due of
debt
since
engage
of
contract
Fangda February October Joint
20,000 7,200 No No to 3 No Yes
Jianke 28, 2023 9, 2023 liability
years
upon
due of
debt
Fangda February May 15, Joint since
4,000 4,000 No No No Yes
Jianke 28, 2023 2023 liability engage
75
Annual Report 2023 of China Fangda Group Co., Ltd.
of
contract
to 3
years
upon
due of
debt
since
engage
of
contract
Fangda March January Joint
60,000 40,000 No No to 3 No Yes
Jianke 30, 2022 21, 2023 liability
years
upon
due of
debt
since
engage
of
Decemb contract
Fangda February Joint
30,000 er 21, No No to 3 No Yes
Jianke 28, 2023 liability
2023 years
upon
due of
debt
since
engage
of
Novemb contract
Fangda February Joint
20,000 er 2, 20,000 No No to 3 No Yes
Jianke 28, 2023 liability
2023 years
upon
due of
debt
since
engage
of
contract
Fangda February June 20, 15,534.8 Joint
36,000 No No to 3 No Yes
Zhiyuan 28, 2023 2023 2 liability
years
upon
due of
debt
since
engage
of
contract
Fangda February May 5, Joint
15,000 209.23 No No to 3 No Yes
Zhiyuan 28, 2023 2023 liability
years
upon
due of
debt
since
engage
Fangda February October Joint of
20,000 3,194.28 No No No Yes
Zhiyuan 28, 2023 7, 2023 liability contract
to 3
years
76
Annual Report 2023 of China Fangda Group Co., Ltd.
upon
due of
debt
since
engage
of
Septemb contract
Fangda February Joint
15,000 er 25, 5,645.38 No No to 3 No Yes
Zhiyuan 28, 2023 liability
2023 years
upon
due of
debt
since
engage
of
contract
Fangda March May 23, Joint
10,000 1,662.4 No No to 3 No Yes
Zhiyuan 30, 2022 2022 liability
years
upon
due of
debt
since
engage
of
Decemb contract
Fangda February Joint
18,000 er 15, 1,190.41 No No to 3 No Yes
Zhiyuan 28, 2023 liability
2023 years
upon
due of
debt
since
engage
of
Novemb contract
Fangda February Joint
15,550 er 21, 8,071.55 No No to 3 No Yes
Zhiyuan 28, 2023 liability
2023 years
upon
due of
debt
since
engage
of
Septemb contract
Fangda February Joint
10,000 er 25, 70.41 No No to 3 No Yes
Zhiyuan 28, 2023 liability
2023 years
upon
due of
debt
since
engage
of
Decemb contract
Fangda February Joint
10,000 er 21, No No to 3 No Yes
Zhiyuan 28, 2023 liability
2023 years
upon
due of
debt
77
Annual Report 2023 of China Fangda Group Co., Ltd.
since
engage
of
contract
Fangda February May 11, Joint
600 34.85 No No to 3 No Yes
Yunzhu 28, 2023 2023 liability
years
upon
due of
debt
since
engage
of
contract
Fangda February March Joint
1,000 980 No No to 3 No Yes
Yunzhu 28, 2023 30, 2023 liability
years
upon
due of
debt
since
engage
of
Fangda Novemb contract
February Joint
New 8,500 er 2, 1,245.27 No No to 3 No Yes
28, 2023 liability
Material 2023 years
upon
due of
debt
since
engage
of
Fangda contract
February April 18, Joint
New 10,000 2,716.31 No No to 3 No Yes
28, 2023 2023 liability
Material years
upon
due of
debt
since
engage
of
Decemb contract
Fangda February Joint
er 4, 135,000 66,000 No No to 3 No Yes
Property 25, 2020 liability
2019 years
upon
due of
debt
since
engage
of
contract
Fangda February May 15, Joint
7,000 4,678.62 No No to 3 No Yes
Zhijian 28, 2023 2023 liability
years
upon
due of
debt
Total of guarantee to Total of guarantee to
subsidiaries 547,050 subsidiaries actually 486,172.99
approved in the occurred in the report
78
Annual Report 2023 of China Fangda Group Co., Ltd.
report term (B1) term (B2)
Total of balance of
Total of guarantee to
guarantee actually
subsidiaries
806,050 provided to the 425,617.15
approved as of the
subsidiaries as of end of
report term (B3)
report term (B4)
Guarantee provided to subsidiaries
Actual
Guarant
Date of Guarante amount Type of Counter
ee Actual Collatera Complet Related
disclosur e of guarante guarante Term
provided date l (if any) ed or not party
e amount guarante e e (if any)
to
e
No
Total of guarantee to Total of guarantee to
subsidiaries subsidiaries actually
0 0
approved in the occurred in the
report term (C1) report term (C2)
Total of balance of
Total of guarantee to guarantee actually
subsidiaries provided to the
0 0
approved as of the subsidiaries as of
report term (C3) end of report term
(C4)
Total of guarantee provided by the Company (total of the above three)
Total of guarantee Total of guarantee
approved in the occurred in the
547,050 486,172.99
report term report term
(A1+B1+C1) (A2+B2+C2)
Total of guarantee Total of guarantee
approved as of end occurred as of the
806,050 425,617.15
of report term end of report term
(A3+B3+C3) (A4+B4+C4)
Percentage of the total guarantee occurred
71.41%
(A4+B4+C4) on net asset of the Company
Including:
Guarantees provided to the shareholders,
substantial controllers and the related parties 0
(D)
Guarantee provided directly or indirectly to
objects with over 70% of liability on asset 0
ratio (E)
Amount of guarantee over 50% of the net
127,610.12
asset (F)
Total of the above 3 (D+E+F) 127,610.12
For the unexpired guarantee contract, the
guarantee liability has occurred during the
reporting period or there is evidence that it is No
possible to bear joint and several repayment
liability (if any)
Statement of external guarantees violating
No
the procedure (if any)
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Annual Report 2023 of China Fangda Group Co., Ltd.
Note of compound guarantee
No
3. Entrusted cash capital management
(1) Wealth management
□ Applicable Inapplicable
The Company made no trust investment in the report period
(2) Trusted loans
□ Applicable Inapplicable
The Company borrowed no trust loan in the report period.
4. Other significant contract
□ Applicable Inapplicable
The Company entered into no other significant contract in the report.
XVI. Other material events
Applicable □ Inapplicable
1. Based on the current market environment and other factors, in order to coordinate and arrange the capital operation plan of
Fangda Zhiyuan Technology Co., Ltd. (hereinafter referred to as "Fangda Zhiyuan"), after full communication and careful
deliberation with relevant parties, the company held the 5th meeting of the 10th Board of Directors on November 17, 2023, and
approved the proposal to terminate the spin off of Fangda Zhiyuan for listing on the GEM Board. For specific details, please refer
to the relevant announcement disclosed by the Company on November 18, 2023 on http://www.cninfo.com.cn.
2. In order to meet the needs of future business development, the Company has invested in and constructed the Fangda
(Ganzhou) Low Carbon Intelligent Headquarters Base project in Zhanggong District, Ganzhou City, Jiangxi Province. The specific
situation is detailed in the relevant announcement disclosed by the company on December 17, 2022 on http://www.cninfo.com.cn.
As of the disclosure date of this report, the main structure of the first phase of the Fangda (Ganzhou) Low-carbon Intelligent
Headquarters Base project has been completed and the major equipment has been procured as planned. The first-phase project is
expected to start operation in 2024.
3. In accordance with the disclosure requirements of the decoration industry in the Self-Regulatory Guidelines for Listed
Companies in Shenzhen Stock Exchange No. 3 - Industry Information Disclosure, the main industry qualifications obtained by the
company are as follows:
No. Qualification Valid period
1 Construction curtain wall designing class A Until March 16, 2025
2 Construction curtain wall contracting class A Until December 04, 2028
Construction mechanical and electric equipment
3 By December 31, 2024
installation contracting class C
4 Construction decoration contracting class B By December 11, 2028
5 Steel structure engineering contracting class B By December 11, 2028
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Annual Report 2023 of China Fangda Group Co., Ltd.
City and road lighting engineering contracting
6 By December 31, 2024
class C
Design and construction of metal roof (wall)
7 By December 18, 2026
surface of building
4. According to the disclosure requirements of the decoration industry in the Self-discipline Supervision Guidance for Listed
Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure, the company's production safety during the
reporting period
In the report period, the Company’s safety management is normal. The Company pays large attention to employees’ safety
awareness and capabilities of emergency processing. The Company has strengthened safety production and investigation of safety
risks. The Company has formulated safety management guidelines to guide safety management. There was no significant safety
accidents in the report period.
XVII. Material events of subsidiaries
□ Applicable Inapplicable
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Annual Report 2023 of China Fangda Group Co., Ltd.
Chapter VII Changes in Share Capital and Shareholders
I. Changes in shares
1. Changes in shares
In share
Before the change Change (+,-) After the change
Issued Transferre
Proportio Bonus Proportio
Quantity new d from Others Subtotal Quantity
n shares n
shares reserves
I. Shares
with trade
restriction 3,839,293 0.36% 21,750 21,750 3,861,043 0.36%
condition
s
1.
State-
owned
shares
2.
State-
owned
legal
person
shares
3.
Other
3,839,293 0.36% 21,750 21,750 3,861,043 0.36%
domestic
shares
Inclu
ding:
Shares
held by
domestic
legal
persons
Dom
estic
natural 3,839,293 0.36% 21,750 21,750 3,861,043 0.36%
person
shares
4.
Shares
held by
foreign
investors
Inclu
ding:
Shares
held by
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Annual Report 2023 of China Fangda Group Co., Ltd.
foreign
legal
persons
Dom
estic
natural
person
shares
II.
1,070,034 1,070,013
Unrestrict 99.64% -21,750 -21,750 99.64%
,934 ,184
ed shares
1.
Common 675,876,1 675,854,4
62.94% -21,750 -21,750 62.94%
shares in 79 29
RMB
2.
Foreign
394,158,7 394,158,7
shares in 36.70% 36.70%
55 55
domestic
market
3.
Foreign
shares in
overseas
market
4.
Others
III. Total
1,073,874 1,073,874
of capital 100.00% 0 0 100.00%
,227 ,227
shares
Reasons
Applicable □ Inapplicable
Mr. Ye Zhiqing, a supervisor elected at the 2022 shareholders' meeting of the company on March 20, 2023, holds 29,000 A-shares
of the Company. According to relevant regulations, 21750 shares are executive lock-in shares with limited sales conditions.
Therefore, the Company added 21750 shares with limited sales conditions and reduced 21750 shares with limited sales conditions.
Approval of the change
□ Applicable Inapplicable
Share transfer
□ Applicable Inapplicable
Impacts on financial indicators including basic and diluted earnings per share, net assets per share attributable to common
shareholders of the Company in the most recent year and period
□ Applicable Inapplicable
Others that need to be disclosed as required by the securities supervisor
□ Applicable Inapplicable
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Annual Report 2023 of China Fangda Group Co., Ltd.
2. Changes in conditional shares
Applicable □ Inapplicable
In share
Conditional
Conditional
Shareholder shares at Increased this Released this Reason of Date of
shares at end of
name beginning of period period condition releasing
the period
the period
Newly elected 25% of the
supervisors annual
Ye Zhiqing 0 21,750 0 21,750 during the shareholding is
reporting released from
period the sale
Total 0 21,750 0 21,750 -- --
II. Share placing and listing
1. Securities issuance (excluding preference shares) during the report period
□ Applicable Inapplicable
2. Statement of changes in share number and shareholder structure, assets and liabilities structure
□ Applicable Inapplicable
3. Current employees' shares
□ Applicable Inapplicable
III. Shareholders and the substantial controller of the Company
1. Shareholders and shareholding
In share
Number of
Total
shareholder
number of
s of
ordinary
Number of preferred Total number of
share
shareholder stocks of shareholders of preference
shareholder
s of which shares of which voting
s at the end
common voting rights resumed at the end
50,570 of the 49,564 0 0
shares at rights of the month before the
month
the end of recovered disclosure date of the
before the
the report in the annual report (if any) (see
disclosure
period report note 8)
date of the
period (if
annual
any) (note
report
8)
Shareholdings of shareholders holding more than 5% or the top 10 shareholders (excluding shares lent through refinancing)
Name of Nature of Shareholdi Number of Change in Conditional Amount of Pledge, marking or
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Annual Report 2023 of China Fangda Group Co., Ltd.
shareholder shareholder ng shares held the shares shares freezing
percentage at the end reporting without
of the period sales Share
reporting restriction Quantity
status
period
Shenzhen
Banglin Domestic
Technologi non-state 119,332,84 119,332,84 Inapplicabl
11.11% - 0 0
es legal 6 6 e
Developme person
nt Co., Ltd.
Shengjiu Foreign
110,116,27 110,116,27 Inapplicabl
Investment legal 10.25% 1,536,958 0 0
6 6 e
Ltd. person
Domestic
Inapplicabl
Fang Wei natural 4.13% 44,328,539 7,854,151 0 44,328,539 0
e
person
Gong Qing
Cheng Shi
Li He
Investment Domestic
Manageme non-state Inapplicabl
1.48% 15,860,609 - 0 15,860,609 0
nt legal e
Partnership person
Enterprise
(limited
partner)
Domestic
Zhou Inapplicabl
natural 1.00% 10,761,210 7,877,950 0 10,761,210 0
Youming e
person
Shenwan
Hongyuan
Foreign
Securities Inapplicabl
legal 0.51% 5,470,550 -38,240 0 5,470,550 0
(Hong e
person
Kong) Co.,
Ltd.
Domestic
Wu Inapplicabl
natural 0.50% 5,385,750 -21,850 0 5,385,750 0
Xuandong e
person
Domestic
Xiong Inapplicabl
natural 0.48% 5,110,257 - 3,832,693 1,277,564 0
Jianming e
person
VANGUA
RD
EMERGIN
Foreign
G Inapplicabl
legal 0.45% 4,870,237 -539,375 0 4,870,237 0
MARKET e
person
S STOCK
INDEX
FUND
VANGUA
RD
TOTAL Foreign
Inapplicabl
INTERNA legal 0.44% 4,714,045 -549,394 0 4,714,045 0
e
TIONAL person
STOCK
INDEX
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Annual Report 2023 of China Fangda Group Co., Ltd.
FUND
A strategic investor or
ordinary legal person
becomes the Top10 share No
shareholder due a stock
issue (see note 3)
Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu
Notes to top ten Investment Co., Ltd. are parties action-in-concert with Xiong Jianming. Shenzhen Banglin
shareholder relationship Technology Development Co., Ltd. and its parties action-in-concert and Gong Qing Cheng Shi Li He
or "action in concert" Investment Management Partnership Enterprise are related parties. The Company is not notified of
other action-in-concert or related parties among the other holders.
Description of the above
shareholders involved in
entrusted / entrusted No
voting right and waiver of
voting right
Special explanation for
the existence of a
repurchase account among No
the top 10 shareholders (if
any) (see Note 10)
Top 10 holders of unconditional shares
Category of shares
Shareholder name Amount of shares without sales restriction Category of
Quantity
shares
RMB
Shenzhen Banglin Technologies 119,332,84
119,332,846 common
Development Co., Ltd. 6
shares
Domestical
ly listed 110,116,27
Shengjiu Investment Ltd. 110,116,276
foreign 6
shares
RMB
Fang Wei 44,328,539 common 44,328,539
shares
Gong Qing Cheng Shi Li He RMB
Investment Management Partnership 15,860,609 common 15,860,609
Enterprise (limited partner) shares
RMB
Zhou Youming 10,761,210 common 10,761,210
shares
Domestical
Shenwan Hongyuan Securities (Hong ly listed
5,470,550 5,470,550
Kong) Co., Ltd. foreign
shares
RMB
Wu Xuandong 5,385,750 common 5,385,750
shares
Domestical
VANGUARD EMERGING ly listed
4,870,237 4,870,237
MARKETS STOCK INDEX FUND foreign
shares
VANGUARD TOTAL Domestical
INTERNATIONAL STOCK INDEX 4,714,045 ly listed 4,714,045
FUND foreign
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Annual Report 2023 of China Fangda Group Co., Ltd.
shares
RMB
Qu Chunlin 4,444,000 common 4,444,000
shares
No action-in-concert or related Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and
parties among the top10 Shengjiu Investment Co., Ltd. are parties action-in-concert with Xiong Jianming.
unconditional shareholders and Shenzhen Banglin Technology Development Co., Ltd. and its parties action-in-concert
between the top10 unconditional and Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise are
shareholders and the top10 related parties. The Company is not notified of other action-in-concert or related parties
shareholders among the other holders.
Top-10 common share shareholders
Wu Xuandong holds 5,385,750 stocks of the Company through the Huaxi Securities
participating in margin trade (if any)
customer credit transaction guarantee securities account.
(see note 4)
Note: As this report was disclosed on April 2, 2024, the number of shareholders of Company B shares as of March 29, 2024 (last
trading day) cannot be obtained. Therefore, the total number of common shareholders in the previous month before the disclosure
date of the annual report in the table above represents the total number of shareholders of Company A shares as of March 29, 2024
and B shares as of March 20, 2024 (last trading day).
Top-10 shareholders participating in the lending of shares through refinancing business
□ Applicable Inapplicable
Change in top-10 shareholders from the previous period
□ Applicable Inapplicable
Agreed re-purchasing by the Company's top 10 shareholders of common shares and top 10 shareholders of unconditional common
shares in the report period
□ Yes No
No agreed re-purchasing by the Company's top 10 shareholders of common shares and top 10 shareholders of unconditional
common shares in the report period
2. Profile of the controlling shareholders
Shareholder nature: natural person holding
Type of shareholder: legal person
Legal
Date of
Name of controlling shareholder representative/res Organization code Main business
Establishment
ponsible person
Industrial investment,
developing of
Shenzhen Banglin Technologies electronic products,
Chen Jinwu June 7, 2001 914403007298400552
Development Co., Ltd. technical consulting,
domestic commerce,
material trading
Stock ownership of other
domestic and overseas listed
company controlled or whose No
shares are held by controlling
shareholders
Changes in the controlling shareholder in the reporting period
□ Applicable Inapplicable
No change in the controlling shareholder in the report period
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Annual Report 2023 of China Fangda Group Co., Ltd.
3. Actual controller and persons acting in concert
Nature of actual controller: domestic natural person
Type of actual controller: natural person
Relationship with the actual Right of residence in another
Name of substantial controller Nationality
controller country or region
Xiong Jianming Himself Chinese Yes
Job and position Served as Chairman of the Company.
Profiles of domestic and
overseas listed companies in
The controller held no share in other listed companies in the last ten years.
which the controller held
shares
Change in the actual controller in the report period
□ Applicable Inapplicable
No change in the actual shareholder in the report period
7. Chart of the controlling relationship
Controlling over the Company by the substantial controller through trust or other asset management
□ Applicable Inapplicable
4. The cumulative number of Pledged Shares of the Company's controlling shareholder or the largest
shareholder and its concerted actors accounts for 80% of the Company's shares
□ Applicable Inapplicable
5. Other legal person shareholders with over 10% of total shares
□ Applicable Inapplicable
6. Conditional decrease of shareholding by controlling shareholder, actual controller, reorganizer and
other entities
□ Applicable Inapplicable
IV. Specific implementation of share repurchase in the reporting period
Progress in the implementation of share repurchase
□ Applicable Inapplicable
Progress in the implementation of the reduction of shareholding shares by means of centralized bidding
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Annual Report 2023 of China Fangda Group Co., Ltd.
□ Applicable Inapplicable
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Annual Report 2023 of China Fangda Group Co., Ltd.
Chapter VIII Preferred Shares
□ Applicable Inapplicable
The Company had no preferred share in the report period.
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Annual Report 2023 of China Fangda Group Co., Ltd.
Chapter IX Information about the Company's Securities
□ Applicable Inapplicable
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Annual Report 2023 of China Fangda Group Co., Ltd.
Chapter X Financial Statements
I. Auditor's report
Type Standard opinion auditor's report
Issued on March 29, 2024
Auditor RSM China (Special General Partnership)
Report No. RSM [2024] No.510Z0002
CPA names Zhou Junchao, Xu Yuxia, Hu Gaosheng
Auditors' Report
RSM [2024] No.510Z0002
To the shareholders of China Fangda Group Co., Ltd.:
1. Auditors' Opinions
We have audited the financial statements of Fangda Group Co., Ltd. (hereinafter referred to
as Fangda group company), including the consolidated and parent company's balance sheet as of
December 31, 2023, the consolidated and parent company's income statement, consolidated and
parent company's cash flow statement, consolidated and parent company's statement of changes in
owner's equity and notes to relevant financial statements in 2023.
We believe that Fangda Group has been following with the Enterprise Accounting Standard
in preparing of the Financial Statements. The Financial Statements is reflecting, in all important
aspects, the financial situation of Fangda Group as of December 31, 2023, and the business
performance and cash flow of year 2023.
2. Basis of the Opinions
We carried out the auditing works with compliance to Chinese CPA Auditing Standard, The
"CPA's Responsibility for Auditing Financial Statements" section of the audit report further
elaborated our responsibilities under these guidelines. In accordance with the Code of Ethics for
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Annual Report 2023 of China Fangda Group Co., Ltd.
Chinese Certified Public Accountants, we are independent of Fangda Group and perform other
professional ethics duties. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
3. Key Audit Matters
The key audit matters are the matters that we believe are most important for the audit of the
current financial statements based on professional judgment. The response to these matters is
based on the overall audit of the financial statements and the formation of an audit opinion. We do
not comment on these matters separately.
(1) Income recognition
For related information disclosure, please refer to Note III, 25, Note V, 45 and Note XV, 2 of
the financial statements.
1. Description
In 2023, the operating revenue of Fangda Group is RMB4.292 billion, of which the revenue
of curtain wall and metro platform screen door accounts for 94.02% of the total revenue of the
Group.
Fangda Group's performance obligations related to the construction subcontracting contract
include building curtain wall and metro platform screen door. As the customer can control the
commodity under construction in the process of performance of Fangda group, the Company
regards it as the performance obligation within a certain period of time, and recognizes the
revenue according to the performance progress. The Company shall determine the performance
schedule of services according to the input method. The performance schedule shall be
determined according to the proportion of the actual contract cost to the estimated total contract
cost. Management needs to make a reasonable estimate of the initial total contract revenue and
total contract costs for the Engineering contracting contract and continue to assess and revise it
during the contract implementation process, which involves significant accounting estimates of
the management.
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Annual Report 2023 of China Fangda Group Co., Ltd.
Therefore, we identify revenue recognition related to construction contracts as key audit
matters.
2. Audit response
Our audit procedures for revenue recognition related to construction subcontracting contracts
mainly include:
(1) Understand and evaluate the design of internal control related to management contract
and engineering subcontracting contract budget and revenue recognition, and test the
effectiveness of key control implementation.
(2) Obtained a major engineering subcontracting contract, verified the contract revenue, and
reviewed key contract terms. Check the engineering contracting contract and cost budget
information on which management expects total revenue and estimated total cost.
(3) Obtain the construction subcontracting contract account and project revenue and cost
summary table, carry out analytical review on the gross profit of the project, and recalculate the
performance progress and revenue in the construction subcontracting contract account to verify its
accuracy.
(4) Select samples to check the project engineering details of the main project, subcontracted
labor approval forms, and the owner's production value approval documents and records to verify
the contract costs incurred.
(5) Select samples to check if the relevant contract costs are recorded in the appropriate
accounting period.
(6) Select a sample to conduct a site inspection of the progress of the project image to verify
the reasonableness of the project's performance schedule.
(2) Measurement of fair value of investment real estate
For related information disclosure, please refer to Note III, 16, Note V, 15 (2), Note V 53
and Note XI of the financial statements.
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Annual Report 2023 of China Fangda Group Co., Ltd.
1. Description
As of Saturday, December 31, 2023, the book balance of the investment real estate of Fangda
Group which adopts the fair value model for subsequent measurement is 5.748 billion yuan,
accounting for 42.97% of the total assets. The income from changes in fair value realized in the
current period is RMB-28,000,000 which has a great impact on the financial indicators of the
Group's consolidated statements.
The management of Fangda Group annually employs a third-party assessment agency with
relevant qualifications to evaluate the fair value of the investment real estate. The evaluation
adopts the market comparison method and the income method to comprehensively analyze
various factors that affect the real estate price of the appraisal subject. The assessment of the fair
value of investment real estate involves many estimates and assumptions, such as the analysis of
the economic environment and future trends of the real estate where the investment real estate is
located, discount rates, etc. The changes in estimates and assumptions will have big impacts on
the fair value of the investment real estate evaluated. Therefore, we identify the measurement of
fair value of investment real estate as a key audit matter.
2. Audit response
Our audit procedures for the measurement of fair value of investment real estate mainly
include:
(1) Assess the competency, professional quality, independence and objectivity of third-party
assessment agencies employed by the management.
(2) Obtain the assessment report, selected major or typical samples, and use our real estate
appraisal experts to review and review the assessment methods and assumptions used in the
assessment report and the rationality of the selected key assessment parameters. Check the
accuracy and relevance of the data used by the management in valuation.
(3) Review the measurement, presentation and disclosure of fair value of investment real
estate in the financial statements.
(III) Measurement of expected credit loss of accounts receivable and contract assets
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Annual Report 2023 of China Fangda Group Co., Ltd.
For related information disclosure, please refer to Note III, 10, Note V, 4, Note V, 9 and
Note V, 22 of the financial statements.
1. Description
As of December 31, 2023, the total amount of accounts receivable of the company was
RMB1.178 billion, the provision for bad debts accrued was RMB266 million, the total amount of
contract assets of the company was RMB2.748 billion, the provision for impairment accrued was
RMB1.93 billion, and the total book value of accounts receivable and contract assets accounted
for 25.90% of the total assets. Due to the large amount of accounts receivable and contract assets
of Fangda group, the management needs to use important accounting estimation and judgment
when determining the expected recoverable amount of accounts receivable and contract assets,
and the expected credit loss of accounts receivable and contract assets is important for financial
statements. Therefore, we determine the measurement of expected credit loss of accounts
receivable and contract assets as the key audit accounting matters.
2. Audit response
(1) Understand and evaluate the effectiveness of internal control design related to the
provision for bad debts of accounts receivable and provision for impairment of contract assets of
Fangda Group, and test the effectiveness of key control operation.
(2) Review the relevant considerations and objective evidence of the management's credit
risk assessment of accounts receivable and contract assets, and evaluate whether the management
has properly identified the credit risk characteristics of various accounts receivable.
(3) Review the accrual process of bad debt provision for accounts receivable and impairment
provision for contract assets of the management, including: ① for accounts receivable and
contract assets that measure expected credit loss based on portfolio, evaluate the rationality of the
management's division of portfolio according to credit risk characteristics; Check the
measurement model of expected credit loss and evaluate the rationality of major assumptions and
key parameters in the model; Obtain the comparison table between the aging of accounts
receivable and the expected credit loss rate for the whole duration prepared by the management,
and test the accuracy and integrity of the data used by the management and whether the
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Annual Report 2023 of China Fangda Group Co., Ltd.
calculation of bad debt reserves is accurate; ② For accounts receivable and contract assets with
individual provision for expected credit loss, review the accuracy and rationality of the
information and relevant assumptions used by the management in the test process; Check the
accuracy of the provision for impairment of accounts receivable and contract assets with long
aging, accounts receivable and contract assets involving litigation matters.
(4) According to the characteristics and nature of customer transactions, select samples to
implement the accounts receivable confirmation procedure and check the collection after the
period, and evaluate the rationality of the provision for bad debts of accounts receivable.
4. Other information
The management of Fangda Group (hereinafter referred to as management) is responsible for
other information. The other information includes the information covered in Fangda Group's
2023 annual report, but does not include the financial statements and our audit report.
Our audit opinions published in the financial statements do not cover other information and
we do not publish any form of assurance conclusion on other information.
In connection with our audit of the financial statements, our responsibility is to read other
information. In the process, we consider whether there is a material inconsistency or other
material misstatement of other information whether it is in the financial statements or what we
have learned during the audit process.
Based on the work we have performed, if we determine that there is a material misstatement
of other information, we should report that fact. In this regard, we have nothing to report.
5. Executives' responsibilities on the Financial Statements
(1) Preparing these financial statements according to the Accounting Standards for Business
Enterprises and presenting them fairly; (2) designing, implementing and maintaining necessary
internal control to make sure that these financial statements are free from material misstatement,
whether due to fraud or error.
In the preparation of the financial statements, the management is responsible for assessing
Fangda Group's ability to continue as a going concern, disclosing issues related to going concern
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Annual Report 2023 of China Fangda Group Co., Ltd.
(if applicable), and applying the going concern assumption unless management plans to liquidate
Fangda Group, terminate operations or there are no other realistic choices.
The management is responsible for overseeing the financial reporting process of Fangda
Group.
6. Auditor's responsibility for auditing financial statements
Our objective is to obtain reasonable assurance as to whether the entire financial statements
are free from material misstatement due to fraud or error and to issue an audit report containing
audit opinions. Reasonable assurance is a high level of assurance, but it does not guarantee that an
audit performed in accordance with auditing standards can always be discovered when a major
misstatement exists. The report may be due to fraud or mistakes, and if a reasonable expectation
of misstatement alone or aggregated may affect the economic decision-making made by users of
financial statements based on the financial statements, the misstatement is generally considered to
be material.
In the process of conducting audit work in accordance with auditing standards, we use
professional judgment and maintain professional suspicion. At the same time, we also perform the
following tasks:
(1) Identify and assess risks of material misstatement of financial statements due to fraud or
errors, design and implement audit procedures to address these risks, and obtain adequate and
appropriate audit evidence as a basis for issuing audit opinions. As fraud may involve collusion,
forgery, willful omission, misrepresentation or override of internal control, the risk of not
discovering a material misstatement due to fraud is higher than the risk of not discovering a
material misstatement resulting from a mistake.
(2) Understand audit-related internal controls to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies adopted by the management and the
reasonableness of accounting estimates and related disclosures.
(4) Conclude on the appropriateness of management's use of continuing operations
assumptions. At the same time, based on the audit evidence obtained, it concludes that whether
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Annual Report 2023 of China Fangda Group Co., Ltd.
there are major uncertainties in the matters or circumstances that may cause major doubts about
the ability of the Company's continuing operations. If we conclude that there are significant
uncertainties, the auditing standards require us to request the users of the report to pay attention to
the relevant disclosures in the financial statements in the audit report; if the disclosure is not
sufficient, we should publish non-unqualified opinions. Our conclusions are based on the
information available as of the date of the audit report. However, future events or circumstances
may result in Fangda Group's inability to continue operating.
(5) Evaluate the overall presentation, structure, and content of the financial statements and
evaluate whether the financial statements fairly reflect the relevant transactions and events.
(6) Obtain sufficient and appropriate audit evidence on the financial information of entity or
business activities in Fangda Group to express opinions on the financial statements. We are
responsible for directing, supervising and executing group audits and assume full responsibility
for audit opinions.
We communicate with the governance team on planned audit scope, timing, and major audit
findings, including communication of the internal control deficiencies that we identified during
the audit.
We also provide a statement to the management on compliance with ethical requirements
related to independence, and communicate with the management on all relationships and other
matters that may reasonably be considered to affect our independence, as well as related
preventive measures (if applicable).
From the matters passed with the management, we determine which items are most
important for the audit of the financial statements of the current period and thus constitute the key
audit matters. We describe these matters in our audit report, unless laws and regulations prohibit
the public disclosure of these matters, or in rare cases, if it is reasonably expected that the
negative consequences of communicating something in the audit report will outweigh the benefits
in the public interest, we determine that such matter should not be communicated in the audit
report.
99
Annual Report 2023 of China Fangda Group Co., Ltd.
(This page has no text. It is the signature and stamp page of audit report No.
[2024]510Z0002 of China Fangda Group Co., Ltd. ）
RSM China CPA:
(limited liability Zhou Junchao (Project Partner)
partnership)
Beijing, China CPA:
Xu Yuxia
CPA:
Hu Gaosheng
March 29, 2024
II. Financial statements
Unit for statements in notes to financial statements: RMB yuan
1. Consolidated Balance Sheet
Prepared by: China Fangda Group Co., Ltd.
December 31, 2023
In RMB
Item December 31, 2023 January 1, 2023
Current asset:
Monetary capital 1,425,151,116.24 1,238,754,216.50
Settlement provision
Outgoing call loan
Transactional financial assets
Derivative financial assets 173,737.06 789,205.34
Notes receivable 47,372,881.27 130,428,554.49
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Annual Report 2023 of China Fangda Group Co., Ltd.
Account receivable 911,486,914.19 832,292,348.17
Receivable financing 6,979,428.14 1,338,202.01
Prepayment 33,976,569.36 20,631,650.59
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts
receivable
Other receivables 145,113,323.33 155,379,024.22
Including: interest receivable
Dividend receivable
Repurchasing of financial assets
Inventory 755,624,486.51 710,532,397.32
Contract assets 2,488,429,802.41 2,158,860,658.43
Assets held for sales
Non-current assets due in 1 year 327,120,273.54
Other current assets 248,401,322.80 200,981,963.60
Total current assets 6,389,829,854.85 5,449,988,220.67
Non-current assets:
Loan and advancement provided
Debt investment
Other debt investment
Long-term receivables
Long-term share equity investment 54,757,017.40 54,969,042.14
Investment in other equity tools 11,968,973.86
Other non-current financial assets 7,455,617.17 7,507,434.68
Investment real estate 5,756,809,168.26 5,760,517,577.11
Fixed assets 620,828,178.38 646,812,853.36
Construction in process 109,414,347.33
Productive biological assets
Gas & petrol
Use right assets 20,776,829.58 19,449,693.40
Intangible assets 140,073,209.88 72,679,444.26
R&D expense
Goodwill
Long-term amortizable expenses 6,749,314.04 9,744,661.01
Deferred income tax assets 182,858,549.07 220,060,976.88
Other non-current assets 86,799,770.90 491,486,416.65
Total of non-current assets 6,986,522,002.01 7,295,197,073.35
Total of assets 13,376,351,856.86 12,745,185,294.02
Current liabilities
Short-term loans 2,208,055,039.21 1,318,238,522.78
Loans from Central Bank
Call loan received
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Annual Report 2023 of China Fangda Group Co., Ltd.
Transactional financial liabilities
Derivative financial liabilities 293,400.00
Notes payable 868,886,946.79 734,890,208.56
Account payable 1,972,293,782.27 1,718,036,375.78
Prepayment received 1,432,885.03 1,439,653.84
Contract liabilities 198,164,209.47 207,993,671.55
Selling of repurchased financial assets
Deposit received and held for others
Entrusted trading of securities
Entrusted selling of securities
Employees' wage payable 74,063,112.26 67,150,863.91
Taxes payable 42,375,068.55 85,827,331.09
Other payables 117,581,764.15 113,425,377.70
Including: interest payable
Dividend payable
Fees and commissions payable
Reinsurance fee payable
Liabilities held for sales
Non-current liabilities due in 1 year 64,135,136.46 83,778,647.06
Other current liabilities 53,524,655.05 48,133,198.49
Total current liabilities 5,600,512,599.24 4,379,207,250.76
Non-current liabilities:
Insurance contract provision
Long-term loans 660,000,000.00 1,263,500,000.00
Bond payable
Including: preferred stock
Perpetual bond
Lease liabilities 6,675,870.04 6,907,456.55
Long-term payable 48,400,000.00 197,640,219.18
Long-term employees' wage payable
Anticipated liabilities 4,842,411.47 3,372,553.84
Deferred earning 8,978,678.72 8,999,880.44
Deferred income tax liabilities 1,012,146,459.12 1,065,172,771.00
Other non-current liabilities
Total of non-current liabilities 1,741,043,419.35 2,545,592,881.01
Total liabilities 7,341,556,018.59 6,924,800,131.77
Owner's equity:
Share capital 1,073,874,227.00 1,073,874,227.00
Other equity tools
Including: preferred stock
Perpetual bond
Capital reserves 11,459,588.40 11,459,588.40
Less: Shares in stock
Other miscellaneous income 23,121,870.79 31,986,716.79
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Annual Report 2023 of China Fangda Group Co., Ltd.
Special reserves
Surplus reserve 79,324,940.43 79,324,940.43
Common risk provisions
Retained profit 4,772,359,940.45 4,553,295,402.30
Total of owner's equity belong to the
5,960,140,567.07 5,749,940,874.92
parent company
Minor shareholders' equity 74,655,271.20 70,444,287.33
Total of owners' equity 6,034,795,838.27 5,820,385,162.25
Total of liabilities and owner's interest 13,376,351,856.86 12,745,185,294.02
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua
2. Balance Sheet of the Parent Company
In RMB
Item December 31, 2023 January 1, 2023
Current asset:
Monetary capital 45,926,194.32 87,710,288.64
Transactional financial assets
Derivative financial assets
Notes receivable
Account receivable 683,592.53 647,944.58
Receivable financing
Prepayment 324,209.77 277,763.31
Other receivables 1,684,718,397.92 1,046,500,428.02
Including: interest receivable
Dividend receivable
Inventory
Contract assets
Assets held for sales
Non-current assets due in 1 year
Other current assets 1,849,530.81 1,395,020.37
Total current assets 1,733,501,925.35 1,136,531,444.92
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term share equity investment 1,526,831,253.00 1,457,331,253.00
Investment in other equity tools 11,968,973.86
Other non-current financial assets 30,000,001.00 30,000,001.00
Investment real estate 333,236,768.00 333,236,768.00
Fixed assets 63,599,689.10 66,203,194.37
Construction in process
Productive biological assets
Gas & petrol
Use right assets 8,346,277.85 12,055,734.65
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Annual Report 2023 of China Fangda Group Co., Ltd.
Intangible assets 852,064.55 1,038,211.65
R&D expense
Goodwill
Long-term amortizable expenses 472,845.61 393,807.16
Deferred income tax assets 30,304,587.98
Other non-current assets
Total of non-current assets 1,963,338,899.11 1,942,532,531.67
Total of assets 3,696,840,824.46 3,079,063,976.59
Current liabilities
Short-term loans 300,270,416.67 300,247,500.00
Transactional financial liabilities
Derivative financial liabilities
Notes payable
Account payable 804,004.81 803,645.08
Prepayment received 736,644.20 820,758.71
Contract liabilities
Employees' wage payable 2,781,026.66 3,444,985.79
Taxes payable 364,147.97 353,816.35
Other payables 1,041,696,906.24 308,443,521.52
Including: interest payable
Dividend payable
Liabilities held for sales
Non-current liabilities due in 1 year 3,936,569.69 3,613,300.13
Other current liabilities 41,741.14 25,213.92
Total current liabilities 1,350,631,457.38 617,752,741.50
Non-current liabilities:
Long-term loans
Bond payable
Including: preferred stock
Perpetual bond
Lease liabilities 5,464,762.02 9,401,331.72
Long-term payable
Long-term employees' wage payable
Anticipated liabilities
Deferred earning
Deferred income tax liabilities 37,279,049.28 74,007,022.67
Other non-current liabilities
Total of non-current liabilities 42,743,811.30 83,408,354.39
Total liabilities 1,393,375,268.68 701,161,095.89
Owner's equity:
Share capital 1,073,874,227.00 1,073,874,227.00
Other equity tools
Including: preferred stock
Perpetual bond
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Annual Report 2023 of China Fangda Group Co., Ltd.
Capital reserves 360,835.52 360,835.52
Less: Shares in stock
Other miscellaneous income -10,082,945.37 -1,106,214.97
Special reserves
Surplus reserve 79,324,940.43 79,324,940.43
Retained profit 1,159,988,498.20 1,225,449,092.72
Total of owners' equity 2,303,465,555.78 2,377,902,880.70
Total of liabilities and owner's interest 3,696,840,824.46 3,079,063,976.59
3. Consolidated Income Statement
In RMB
Item 2023 2022
1. Total revenue 4,292,204,716.01 3,846,975,948.44
Incl. Business income 4,292,204,716.01 3,846,975,948.44
Interest income
Insurance fee earned
Fee and commission received
2. Total business cost 3,931,058,087.22 3,455,330,616.20
Incl. Business cost 3,404,642,473.33 2,917,753,967.52
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Net insurance policy responsibility contract
reserves provided
Insurance policy dividend paid
Reinsurance expenses
Taxes and surcharges 40,354,397.22 66,953,438.48
Sales expense 58,488,714.76 54,970,163.01
Administrative expense 174,674,755.81 157,138,338.83
R&D cost 180,070,801.25 161,812,913.02
Financial expenses 72,826,944.85 96,701,795.34
Including: interest cost 87,186,232.75 100,581,343.99
Interest income 29,144,115.88 23,892,574.84
Add: other gains 17,113,408.26 13,909,584.57
Investment gains ("-" for loss) -4,562,134.58 6,185,954.47
Incl. Investment gains from affiliates and joint
-212,024.74 -249,904.00
ventures
Financial assets derecognised as a result
-4,656,380.30 -3,778,070.96
of amortized cost
Exchange gains ("-" for loss)
Net open hedge gains ("-" for loss)
Gains from change of fair value ("-" for loss) -28,534,518.77 -10,113,947.45
Credit impairment ("-" for loss) -35,051,664.32 -34,635,724.91
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Annual Report 2023 of China Fangda Group Co., Ltd.
Investment impairment loss ("-" for loss) 6,020,287.93 -35,575,418.55
Investment gains ("-" for loss) 381,572.12 -1,421,880.09
3. Operational profit ("-" for loss) 316,513,579.43 329,993,900.28
Plus: non-operational income 2,639,291.21 1,403,387.89
Less: non-operational expenditure 1,376,476.43 4,167,958.09
4. Gross profit ("-" for loss) 317,776,394.21 327,229,330.08
Less: Income tax expenses 40,817,495.88 41,074,830.04
5. Net profit ("-" for net loss) 276,958,898.33 286,154,500.04
(1) By operating consistency
1. Net profit from continuous operation ("-" for net loss) 276,958,898.33 286,154,500.04
2. Net profit from discontinuous operation ("-" for net
loss)
(2) By ownership
1. Net profit attributable to the shareholders of the
272,758,249.50 282,933,854.32
parent company
2. Minor shareholders' equity 4,200,648.83 3,220,645.72
6. After-tax net amount of other misc. incomes -8,854,510.96 -3,281,545.04
After-tax net amount of other misc. incomes attributed to
-8,864,846.00 -3,339,154.99
parent's owner
(1) Other misc. incomes that cannot be re-classified into
-8,976,730.40 -1,658,759.09
gain and loss
1. Re-measure the change in the defined benefit plan
2. Other comprehensive income that cannot be
transferred to profit or loss under the equity method
3. Fair value change of investment in other equity
-8,976,730.40 -1,658,759.09
tools
4. Fair value change of the Company's credit risk
5. Others
(2) Other misc. incomes that will be re-classified into
111,884.40 -1,680,395.90
gain and loss
1. Other comprehensive income that can be
transferred to profit or loss under the equity method
2. Fair value change of other debt investment
3. Gains and losses from changes in fair value of
available-for-sale financial assets
4. Other credit investment credit impairment
provisions
5. Cash flow hedge reserve -273,758.04 -477,624.42
6. Translation difference of foreign exchange
385,642.44 1,238,329.43
statement
7. Others -2,441,100.91
After-tax net of other misc. income attributed to minority
10,335.04 57,609.95
shareholders
7. Total of misc. incomes 268,104,387.37 282,872,955.00
Total of misc. incomes attributable to the owners of the
263,893,403.50 279,594,699.33
parent company
Total misc gains attributable to the minor shareholders 4,210,983.87 3,278,255.67
8. Earnings per share
(1) Basic earnings per share 0.25 0.26
(2) Diluted earnings per share 0.25 0.26
Net profit contributed by entities merged under common control in the report period was RMB0.00, net profit realized by parties
merged during the previous period is RMB0.00.
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua
106
Annual Report 2023 of China Fangda Group Co., Ltd.
4. Income Statement of the Parent Company
In RMB
Item 2023 2022
1. Turnover 24,692,199.04 28,268,463.91
Less: Operation cost 26,289.08 207,701.70
Taxes and surcharges 1,317,388.51 1,047,368.79
Sales expense
Administrative expense 30,558,951.47 32,282,732.92
R&D cost
Financial expenses 8,388,228.10 10,510,674.85
Including: interest cost 9,288,176.00 10,543,271.85
Interest income 831,166.04 1,232,336.85
Add: other gains 117,077.52 160,960.32
Investment gains ("-" for loss) 566,025.88
Incl. Investment gains from affiliates and joint
ventures
Financial assets derecognised as a result
of amortized cost ("-" for loss)
Net open hedge gains ("-" for loss)
Gains from change of fair value ("-" for loss) -1,772,536.00
Credit impairment ("-" for loss) 360,899.21 1,722,726.79
Investment impairment loss ("-" for loss)
Investment gains ("-" for loss) -26,464.40
2. Operational profit ("-" for loss) -15,120,681.39 -15,129,301.76
Plus: non-operational income 44,168.07 1,771.93
Less: non-operational expenditure 121,511.80 54,784.14
3. Gross profit ("-" for loss) -15,198,025.12 -15,182,313.97
Less: Income tax expenses -3,431,141.95 -3,445,357.33
4. Net profit ("-" for net loss) -11,766,883.17 -11,736,956.64
(1) Net profit from continuous operation ("-" for net
-11,766,883.17 -11,736,956.64
loss)
(2) Net profit from discontinuous operation ("-" for net
loss)
5. After-tax net amount of other misc. incomes -8,976,730.40 -585,428.86
(1) Other misc. incomes that cannot be re-classified
-8,976,730.40 -1,658,759.09
into gain and loss
1. Re-measure the change in the defined benefit
plan
2. Other comprehensive income that cannot be
transferred to profit or loss under the equity method
3. Fair value change of investment in other equity
-8,976,730.40 -1,658,759.09
tools
4. Fair value change of the Company's credit risk
5. Others
(2) Other misc. incomes that will be re-classified into
1,073,330.23
gain and loss
1. Other comprehensive income that can be
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Annual Report 2023 of China Fangda Group Co., Ltd.
transferred to profit or loss under the equity method
2. Fair value change of other debt investment
3. Gains and losses from changes in fair value of
available-for-sale financial assets
4. Other credit investment credit impairment
provisions
5. Cash flow hedge reserve
6. Translation difference of foreign exchange
statement
7. Others 1,073,330.23
6. Total of misc. incomes -20,743,613.57 -12,322,385.50
7. Earnings per share
(1) Basic earnings per share
(2) Diluted earnings per share
5. Consolidated Cash Flow Statement
In RMB
Item 2023 2022
1. Net cash flow from business operations:
Cash received from sales of products and providing of services 4,203,440,613.14 3,400,391,396.08
Net increase of customer deposits and capital kept for brother
company
Net increase of loans from central bank
Net increase of inter-bank loans from other financial bodies
Cash received against original insurance contract
Net cash received from reinsurance business
Net increase of client deposit and investment
Cash received as interest, processing fee, and commission
Net increase of inter-bank fund received
Net increase of repurchasing business
Net cash received from trading securities
Tax refunded 8,419,916.54 100,113,710.79
Other cash received from business operation 106,386,664.36 69,792,677.61
Sub-total of cash inflow from business operations 4,318,247,194.04 3,570,297,784.48
Cash paid for purchasing products and services 3,045,048,069.68 2,501,276,962.17
Net increase of client trade and advance
Net increase of savings in central bank and brother company
Cash paid for original contract claim
Net increase in funds dismantled
Cash paid for interest, processing fee and commission
Cash paid for policy dividend
Cash paid to and for the staff 459,342,426.54 434,624,232.39
Taxes paid 245,852,193.38 194,268,739.66
Other cash paid for business activities 268,262,302.36 218,916,217.96
Sub-total of cash outflow from business operations 4,018,504,991.96 3,349,086,152.18
Cash flow generated by business operations, net 299,742,202.08 221,211,632.30
2. Cash flow generated by investment:
Cash received from investment recovery 2,896,345,770.15
Cash received as investment profit 9,837,299.48
Net cash retrieved from disposal of fixed assets, intangible
375,640.16 3,106,620.00
assets, and other long-term assets
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Annual Report 2023 of China Fangda Group Co., Ltd.
Net cash received from disposal of subsidiaries or other
operational units
Other investment-related cash received
Sub-total of cash inflow generated from investment 375,640.16 2,909,289,689.63
Cash paid for construction of fixed assets, intangible assets and
118,890,749.97 128,217,974.92
other long-term assets
Cash paid as investment 0.00 2,872,004,000.00
Net increase of loan against pledge
Net cash paid for acquiring subsidiaries and other operational
units
Other cash paid for investment 50,000.00 49,940.00
Subtotal of cash outflows 118,940,749.97 3,000,271,914.92
Cash flow generated by investment activities, net -118,565,109.81 -90,982,225.29
3. Cash flow generated by financing activities:
Cash received from investment
Incl. Cash received from investment attracted by subsidiaries
from minority shareholders
Cash received from borrowed loans 2,876,228,738.64 1,670,354,493.21
Other cash received from financing activities
Subtotal of cash inflow from financing activities 2,876,228,738.64 1,670,354,493.21
Cash paid to repay debts 2,647,603,587.53 1,705,142,253.30
Cash paid as dividend, profit, or interests 141,883,286.28 152,414,163.36
Incl. Dividend and profit paid by subsidiaries to minority
shareholders
Other cash paid for financing activities 274,354,261.52 59,823,454.68
Subtotal of cash outflow from financing activities 3,063,841,135.33 1,917,379,871.34
Net cash flow generated by financing activities -187,612,396.69 -247,025,378.13
4. Influence of exchange rate changes on cash and cash equivalents 2,418,493.78 8,222,828.59
5. Net increase in cash and cash equivalents -4,016,810.64 -108,573,142.53
Plus: Balance of cash and cash equivalents at the beginning of
783,677,929.06 892,251,071.59
term
6. Balance of cash and cash equivalents at the end of the period 779,661,118.42 783,677,929.06
6. Cash Flow Statement of the Parent Company
In RMB
Item 2023 2022
1. Net cash flow from business operations:
Cash received from sales of products and providing of services 17,959,740.25 20,735,985.55
Tax refunded 278,140.90
Other cash received from business operation 5,000,885,248.92 3,977,104,356.14
Sub-total of cash inflow from business operations 5,019,123,130.07 3,997,840,341.69
Cash paid for purchasing products and services 4,266,205.51 3,197,334.25
Cash paid to and for the staff 18,497,935.21 20,177,382.13
Taxes paid 2,566,398.39 9,132,198.00
Other cash paid for business activities 4,903,847,461.83 3,663,216,835.55
Sub-total of cash outflow from business operations 4,929,178,000.94 3,695,723,749.93
Cash flow generated by business operations, net 89,945,129.13 302,116,591.76
2. Cash flow generated by investment:
Cash received from investment recovery 1,082,000,000.00
Cash received as investment profit 566,025.88
Net cash retrieved from disposal of fixed assets, intangible
691,000.00
assets, and other long-term assets
Net cash received from disposal of subsidiaries or other
operational units
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Annual Report 2023 of China Fangda Group Co., Ltd.
Other investment-related cash received
Sub-total of cash inflow generated from investment 1,083,257,025.88
Cash paid for construction of fixed assets, intangible assets and
285,589.76 2,154,542.00
other long-term assets
Cash paid as investment 69,500,000.00 1,342,500,000.00
Net cash paid for acquiring subsidiaries and other operational
units
Other cash paid for investment
Subtotal of cash outflows 69,785,589.76 1,344,654,542.00
Cash flow generated by investment activities, net -69,785,589.76 -261,397,516.12
3. Cash flow generated by financing activities:
Cash received from investment
Cash received from borrowed loans 300,000,000.00 300,000,000.00
Other cash received from financing activities
Subtotal of cash inflow from financing activities 300,000,000.00 300,000,000.00
Cash paid to repay debts 300,000,000.00 300,000,000.00
Cash paid as dividend, profit, or interests 62,021,628.02 64,834,502.57
Other cash paid for financing activities
Subtotal of cash outflow from financing activities 362,021,628.02 364,834,502.57
Net cash flow generated by financing activities -62,021,628.02 -64,834,502.57
4. Influence of exchange rate changes on cash and cash equivalents 77,994.33 -22,821.27
5. Net increase in cash and cash equivalents -41,784,094.32 -24,138,248.20
Plus: Balance of cash and cash equivalents at the beginning of
87,460,288.64 111,598,536.84
term
6. Balance of cash and cash equivalents at the end of the period 45,676,194.32 87,460,288.64
7. Statement of Change in Owners' Equity (Consolidated)
Amount of the Current Term
In RMB
2023
Owners' Equity Attributable to the Parent Company
Other equity tools Othe Min Total
or of
r Com
Item Shar Capi Less: Spec Surp Retai share
misc mon own
e tal Shar ial lus ned Othe Subt hold
Prefe Perp ellan risk ers'
capit Othe reser es in reser reser profi rs otal ers'
rred etual eous provi equit equit
al rs ves stock ves ve t
share bond inco sions y y
me
1.
Bala
nce
1,07 11,4 31,9 79,3 4,55 5,74 70,4 5,82
at
3,87 59,5 86,7 24,9 3,29 9,94 44,2 0,38
the
4,22 88.4 16.7 40.4 5,40 0,87 87.3 5,16
end
7.00 0 9 3 2.30 4.92 3 2.25
of
last
year
2.
Bala 1,07 11,4 31,9 79,3 4,55 5,74 70,4 5,82
nce 3,87 59,5 86,7 24,9 3,29 9,94 44,2 0,38
at 4,22 88.4 16.7 40.4 5,40 0,87 87.3 5,16
the 7.00 0 9 3 2.30 4.92 3 2.25
begi
110
Annual Report 2023 of China Fangda Group Co., Ltd.
nnin
g of
curre
nt
year
3.
Chan
ge
amo
unt
in - 219, 210, 214,
4,21
the 8,86 064, 199, 410,
0,98
curre 4,84 538. 692. 676.
3.87
nt 6.00 15 15 02
perio
d ("-
" for
decr
ease)
(1)
Total - 272, 263, 268,
4,21
of 8,86 758, 893, 104,
0,98
misc. 4,84 249. 403. 387.
3.87
inco 6.00 50 50 37
mes
(2)
Inve
stme
nt or
decr
easin
g of
capit
al by
own
ers
(3) - - -
Profi 53,6 53,6 53,6
t 93,7 93,7 93,7
allot 11.3 11.3 11.3
ment 5 5 5
1.
Prov
ision
of
surpl
us
reser
ves
2.
Distr - - -
ibuti 53,6 53,6 53,6
on to 93,7 93,7 93,7
own 11.3 11.3 11.3
ers 5 5 5
(or
111
Annual Report 2023 of China Fangda Group Co., Ltd.
share
hold
ers)
(4)
Inter
nal
carry
-over
of
own
ers'
equit
y
(5)
Spec
ial
reser
ves
(6)
Othe
rs
4.
Bala
nce
at 1,07 11,4 23,1 79,3 4,77 5,96 74,6 6,03
the 3,87 59,5 21,8 24,9 2,35 0,14 55,2 4,79
end 4,22 88.4 70.7 40.4 9,94 0,56 71.2 5,83
of 7.00 0 9 3 0.45 7.07 0 8.27
this
perio
d
Amount of the Previous Term
In RMB
2022
Owners' Equity Attributable to the Parent Company
Min
Other equity tools Othe Total
or
r Com of
Item Shar Capi Less: Spec Surp Retai share
misc mon own
e Prefe Perp tal Shar ial lus ned Othe Subt hold
Othe ellan risk ers'
capit rred etual reser es in reser reser profi rs otal ers'
rs eous provi equit
al share bond ves stock ves ve t equit
inco sions y
y
me
1.
Bala
nce
1,07 11,4 35,3 79,3 4,32 5,52 67,1 5,59
at
3,87 59,5 25,8 24,9 4,05 4,03 66,0 1,20
the
4,22 88.4 71.7 40.4 5,25 9,88 31.6 5,91
end
7.00 0 8 3 9.33 6.94 6 8.60
of
last
year
1,07 11,4 35,3 79,3 4,32 5,52 67,1 5,59
2.
3,87 59,5 25,8 24,9 4,05 4,03 66,0 1,20
Bala
4,22 88.4 71.7 40.4 5,25 9,88 31.6 5,91
112
Annual Report 2023 of China Fangda Group Co., Ltd.
nce 7.00 0 8 3 9.33 6.94 6 8.60
at
the
begi
nnin
g of
curre
nt
year
3.
Chan
ge
amo
unt
in - 229, 225, 229,
3,27
the 3,33 240, 900, 179,
8,25
curre 9,15 142. 987. 243.
5.67
nt 4.99 97 98 65
perio
d ("-
" for
decr
ease)
(1)
Total - 282, 279, 282,
3,27
of 3,33 933, 594, 872,
8,25
misc. 9,15 854. 699. 955.
5.67
inco 4.99 32 33 00
mes
(2)
Inve
stme
nt or
decr
easin
g of
capit
al by
own
ers
(3) - - -
Profi 53,6 53,6 53,6
t 93,7 93,7 93,7
allot 11.3 11.3 11.3
ment 5 5 5
1.
Prov
ision
of
surpl
us
reser
ves
2. - - -
Distr 53,6 53,6 53,6
ibuti 93,7 93,7 93,7
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Annual Report 2023 of China Fangda Group Co., Ltd.
on to 11.3 11.3 11.3
own 5 5 5
ers
(or
share
hold
ers)
(4)
Inter
nal
carry
-over
of
own
ers'
equit
y
(5)
Spec
ial
reser
ves
(6)
Othe
rs
4.
Bala
nce
at 1,07 11,4 31,9 79,3 4,55 5,74 70,4 5,82
the 3,87 59,5 86,7 24,9 3,29 9,94 44,2 0,38
end 4,22 88.4 16.7 40.4 5,40 0,87 87.3 5,16
of 7.00 0 9 3 2.30 4.92 3 2.25
this
perio
d
8. Statement of Change in Owners' Equity (Parent Company)
Amount of the Current Term
In RMB
2023
Other equity tools Other
Less: Specia Total
Item Capital miscell Surplu Retain
Share Preferr Perpet Shares l of
reserve aneous s ed Others
capital ed ual Others in reserve owners
s incom reserve profit
share bond stock s ' equity
e
1.
Balanc
1,073, - 79,324 1,225, 2,377,
e at the 360,83
874,22 1,106, ,940.4 449,09 902,88
end of 5.52
7.00 214.97 3 2.72 0.70
last
year
2. 1,073, 360,83 - 79,324 1,225, 2,377,
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Annual Report 2023 of China Fangda Group Co., Ltd.
Balanc 874,22 5.52 1,106, ,940.4 449,09 902,88
e at the 7.00 214.97 3 2.72 0.70
beginn
ing of
current
year
3.
Chang
e
amoun
- -
t in -
65,460 74,437
the 8,976,
,594.5 ,324.9
current 730.40
2 2
period
("-" for
decrea
se)
(1)
Total - -
-
of 11,766 20,743
8,976,
misc. ,883.1 ,613.5
730.40
incom 7 7
es
(2)
Invest
ment
or
decrea
sing of
capital
by
owners
(3) - -
Profit 53,693 53,693
allotm ,711.3 ,711.3
ent 5 5
1.
Provisi
on of
surplus
reserve
s
2.
Distrib
ution - -
to 53,693 53,693
owners ,711.3 ,711.3
(or 5 5
shareh
olders)
(4)
Interna
l carry-
over of
owners
115
Annual Report 2023 of China Fangda Group Co., Ltd.
'
equity
(5)
Specia
l
reserve
s
(6)
Others
4.
Balanc -
1,073, 79,324 1,159, 2,303,
e at the 360,83 10,082
874,22 ,940.4 988,49 465,55
end of 5.52 ,945.3
7.00 3 8.20 5.78
this 7
period
Amount of the Previous Term
In RMB
2022
Other equity tools Other
Less: Specia Total
Item Capital miscell Surplu Retain
Share Preferr Perpet Shares l of
reserve aneous s ed Others
capital ed ual Others in reserve owners
s incom reserve profit
share bond stock s ' equity
e
1.
Balanc
1,073, - 79,324 1,290, 2,443,
e at the 360,83
874,22 520,78 ,940.4 879,76 918,97
end of 5.52
7.00 6.11 3 0.71 7.55
last
year
2.
Balanc
e at the 1,073, - 79,324 1,290, 2,443,
360,83
beginn 874,22 520,78 ,940.4 879,76 918,97
5.52
ing of 7.00 6.11 3 0.71 7.55
current
year
3.
Chang
e
amoun
- -
t in -
65,430 66,016
the 585,42
,667.9 ,096.8
current 8.86
9 5
period
("-" for
decrea
se)
(1)
Total - -
-
of 11,736 12,322
585,42
misc. ,956.6 ,385.5
8.86
incom 4 0
es
116
Annual Report 2023 of China Fangda Group Co., Ltd.
(2)
Invest
ment
or
decrea
sing of
capital
by
owners
(3) - -
Profit 53,693 53,693
allotm ,711.3 ,711.3
ent 5 5
1.
Provisi
on of
surplus
reserve
s
2.
Distrib
ution - -
to 53,693 53,693
owners ,711.3 ,711.3
(or 5 5
shareh
olders)
(4)
Interna
l carry-
over of
owners
'
equity
(5)
Specia
l
reserve
s
(6)
Others
4.
Balanc
1,073, - 79,324 1,225, 2,377,
e at the 360,83
874,22 1,106, ,940.4 449,09 902,88
end of 5.52
7.00 214.97 3 2.72 0.70
this
period
III. General Information
China Fangda Group Co., Ltd. (the "Company" or the "Group") is a joint stock company
registered in Shenzhen, Guangdong and was approved by the Government of Shenzhen with
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Annual Report 2023 of China Fangda Group Co., Ltd.
Document 深 府 办 函 (1995) 194 号 , and was founded, on the basis of Shenzhen Fangda
Construction Material Co., Ltd., by way of share issuing in October 1995. The unified social
credit code is: 91440300192448589C; registered address: Fangda Technology Building, Keji
South 12th Road, South District, High-tech Industrial Park, Nanshan District, Shenzhen. Mr.
Xiong Jianming is the legal representative.
The Company issued foreign currency shares (B shares) and local currency shares (A shares)
and listed in November 1995 and April 1996 respectively in Shenzhen Stock Exchange. The
Company received the Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd.
(CSRC License [2016] No.825) to allow the Company to conduct non-public issuance of
32,184,931 A-shares in June 20116. According to the 2016 profit distribution plan approved by
the 2016 general meeting of shareholders, based on the total share capital of 789,094,836 shares
as of December 31, 2016, the Company transferred 5 shares for every 10 shares to all
shareholders with the capital reserve. The registered capital at the end of 2017 was RMB
1,183,642,254.00. The Company repurchased and canceled 28,160,568.00 B shares in August
2018, 32,097,497.00 B shares in January 2019, 35,105,238.00 B shares in May 2020,
14404724.00 B shares in April 2021 and cancelled in April 2021. The existing registered capital
is RMB1,073,874,227.00 yuan.
The Company has established the corporate governance structure of the General Meeting of
Shareholders, the Board of Directors and the Board of Supervisors. At present, it has set up the
President's Office, the Administration Department, the Human Resources Department, the
Enterprise Management Department, the Finance Department, the Audit and Supervision
Department, the Securities Department, the Legal Department, the Information Management
Department, the Technology Innovation Department, the Development Planning Department and
other departments, and has Shenzhen Fangda Construction Technology Group Co., Ltd.
(hereinafter referred to as Fangda Construction Technology Co., Ltd.) Fangda Zhiyuan
Technology Co., Ltd. (hereinafter referred to as Fangda Zhiyuan Technology Co., Ltd.), Fangda
Jiangxi New Materials Co., Ltd., Fangda Real Estate Co., Ltd., Fangda New Energy Co., Ltd. and
other subsidiaries.
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Annual Report 2023 of China Fangda Group Co., Ltd.
The business nature and main business activities of the Company and its subsidiaries include:
(1) curtain wall division, production and sales of curtain wall materials, design, production and
installation of building curtain walls, and curtain wall testing and maintenance services; (2) Rail
transit branch, assembly and processing of subway screen doors, screen door detection and
maintenance services; (3) The real estate division is engaged in real estate development, operation
and property management on the land that has legally obtained the right to use; (4) New energy
division, photovoltaic power generation and sales; R&D, installation and sales of photovoltaic
equipment, design and installation of photovoltaic power station project.
Date of financial statement approval: This financial statement is approved by the Board of
Directors of the Company on March 29, 2024.
IV. Basis for the preparation of financial statements
1. Preparation basis
The Company prepares the financial statements based on continuous operation and according
to actual transactions and events, with figures confirmed and measured in compliance with the
Accounting Standards for Business Enterprises and other specific account standards, application
guide and interpretations. The Company has also disclosed related financial information
according to the requirement of the Regulations of Information Disclosure No.15 – General
Provisions for Financial Statements (Revised in 2023) issued by the CSRC.
2. Continuous operation
The Company assessed the continuing operations capability of the Company for the 12
months from the end of the reporting period. No matters were found that would affect the
Company's ability to continue as a going concern. It is reasonable for the Company to prepare
financial statements based on continuing operations.
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Annual Report 2023 of China Fangda Group Co., Ltd.
V. Significant Account Policies and Estimates
The following major accounting policies and accounting estimates shall be formulated in
accordance with the accounting standards of the enterprise. Unmentioned operations are carried
out in accordance with the relevant accounting policies in the enterprise accounting standards.
1. Statement of compliance to the Enterprise Accounting Standard
These financial statements meet the requirements of the Accounting Standards for Business
Enterprises and truly and fully reflect the Company's financial status, performance result, changes
in shareholders' equity and cash flows.
2. Fiscal Period
The Company The fiscal period ranges between January 1 and December 31 of the
Gregorian calendar.
3. Operation period
Our normal business cycle is one year
4. Bookkeeping standard money
The Company's bookkeeping standard currency is Renminbi, and overseas subsidiaries are
based on the currency of the main economic environment in which they operate.
5. Method for determining importance criteria and selection criteria
Applicable □ Inapplicable
Item Importance criteria
Amount of bad debt reserves recovered or reversed for
Amount greater than 5% of the total consolidated profit and
important accounts receivable in the current period; important
greater than RMB5 million
accounts receivable write off
Important ongoing projects Amount greater than 1% of total consolidated net assets
A single project is greater than 0.1% of the combined total
Important payables with an aging of over 1 year
assets
Individual net assets greater than 1% of the total consolidated
Major non wholly-owned subsidiaries
net assets
The investment return is greater than 5% of the total
Important joint ventures and associates
consolidated profit and is greater than RMB5 million
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Annual Report 2023 of China Fangda Group Co., Ltd.
6. Accounting treatment of the entities under common and different control
(1) Consolidation of entities under common control
The assets and liabilities acquired by the Company in a business combination are measured
at the book value of the combined party in the consolidated financial statements of the ultimate
controlling party on the date of combination. Among them, if the accounting policy adopted by
the merger party is different from that adopted by the Company before the merger, the accounting
policy is unified based on the principle of importance, that is, the book value of the assets and
liabilities of the merger party is adjusted according to the accounting policy of the Company. If
there is a difference between the book value of the net assets acquired by the Company in the
business combination and the book value of the consideration paid, first adjust the balance of the
capital reserve (capital premium or equity premium), the balance of the capital reserve (capital
premium or equity premium) If it is insufficient to offset, the surplus reserve and undistributed
profits will be offset in sequence.
For the accounting treatment method of business combination not under the same control
through step-by-step transactions, see Chapter X, V. important accounting policies and accounting
estimates 7. (5).
(2) Consolidation of entities under different control
All identifiable assets and liabilities acquired by the Company during the merger shall be
measured at its fair value on the date of purchase. Among them, if the accounting policy adopted
by the merger party is different from that adopted by the Company before the merger, the
accounting policy is unified based on the principle of importance, that is, the book value of the
assets and liabilities of the merger party is adjusted according to the accounting policy of the
Company. The merger cost of the Company on the date of purchase is greater than the fair value
of the assets and liabilities recognized by the purchaser in the merger, and is recognized as
goodwill. If the merger cost is less than the difference between the identifiable assets and the fair
value of the liabilities obtained by the purchaser in the enterprise merger, the merger cost and the
fair value of the identifiable assets and the liabilities obtained by the purchaser in the enterprise
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Annual Report 2023 of China Fangda Group Co., Ltd.
merger are reviewed, and the merger cost is still less than the fair value of the identifiable assets
and liabilities obtained by the purchaser after the review, the difference is considered as the profit
and loss of the current period of the merger.
For the accounting treatment method of business combination not under the same control
through step-by-step transactions, see Chapter X, V. important accounting policies and accounting
estimates. 7. (5).
(3) Treatment of related transaction fee in enterprise merger
Agency expenses and other administrative expenses such as auditing, legal consulting, or
appraisal services occurred relating to the merger of entities are accounted into current income
account when occurred. The transaction fees of equity certificates or liability certificates issued by
the purchaser for payment for the acquisition are accounted at the initial amount of the certificates.
7. Judgment criteria for control and preparation methods for consolidated financial
statements
(1) Determination of control criteria and consolidation scope
Control means the power possessed by the Company on invested entities to share variable
returns by participating in related activities of the invested entities and to impact the amount of
the returns by using the power. The definition of control includes three basic elements: first, the
investor has the power over the investee; second, enjoys variable returns due to participation in
the investee's related activities; and third, has the ability to use the power over the investee to
influence its return amount. When the Company's investment in the invested party meets the
above three elements, it indicates that the Company can control the invested party.
The consolidated scope of the consolidated financial statements is determined on a control
basis and includes not only subsidiaries determined on the basis of voting rights (or similar voting
rights) themselves or in conjunction with other arrangements, but also structured subjects
determined on the basis of one or more contractual arrangements.
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Annual Report 2023 of China Fangda Group Co., Ltd.
The subsidiary company is the subject controlled by the Company (including the enterprise,
the divisible part of the invested unit and the structured subject controlled by the enterprise, etc.).
The structured subject is the subject which is not designed to determine the controlling party by
taking the voting right or similar right as the decisive factor.
(2) Special provisions regarding the parent company being an investment entity
If the parent company is an investment entity, only those subsidiary companies that provide
services related to investment activities of the investment entity shall be included in the
consolidation scope. Other subsidiary companies shall not be consolidated and their equity
investments shall be recognized as financial assets measured at fair value with changes in fair
value recognized in profit or loss.
The parent company qualifies as an investment entity when it simultaneously meets the
following conditions:
① The company obtains funds from one or more investors with the purpose of providing
investment management services to the investors.
② The sole purpose of the company's operations is to generate returns for the investors
through capital appreciation, investment income, or both.
③ The company evaluates and assesses the performance of almost all of its investments
based on fair value.
When the parent company changes from a non-investment entity to an investment entity, it
shall only include those subsidiary companies that provide relevant services for its investment
activities in the preparation of consolidated financial statements. Other subsidiary companies shall
no longer be consolidated, and the principle of recognizing partially disposed subsidiary
companies' equity while retaining control shall be applied.
When the parent company changes from an investment entity to a non-investment entity, the
subsidiary companies that were previously not included in the consolidation financial statements
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Annual Report 2023 of China Fangda Group Co., Ltd.
shall be included as of the date of the change. The fair value of these subsidiary companies on the
date of the change shall be regarded as the transaction price of the acquisition and accounted for
using the accounting treatment for business combinations under common control.
(3) Preparation of Consolidated Financial Statements
The Company prepares consolidated financial statements based on the financial statements
of itself and its subsidiaries and based on other relevant information.
The Company compiles consolidated financial statements, regards the whole enterprise
group as an accounting entity, reflects the overall financial status, operating results and cash flow
of the enterprise group according to the confirmation, measurement and presentation requirements
of the relevant enterprise accounting standards, and the unified accounting policy and accounting
period.
① Merge the assets, liabilities, owner's rights and interests, income, expenses and cash flow
of parent company and subsidiary company.
② Offset the long-term equity investment of the parent company to the subsidiary company
and the share of the parent company in the ownership rights of the subsidiary company.
③ Offset the influence of internal transaction between parent company, subsidiary company
and subsidiary company. If an internal transaction indicates that the relevant asset has suffered an
impairment loss, the part of the loss shall be confirmed in full.
④ adjust the special transaction from the angle of enterprise group.
(4) Processing of subsidiaries during the reporting period
① Increase of subsidiaries or business
A. Subsidiary or business increased by business combination under the same control
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Annual Report 2023 of China Fangda Group Co., Ltd.
(a) When preparing the consolidated balance sheet, adjust the opening number of the
consolidated balance sheet and adjust the related items of the comparative statement. The same
report entity as the consolidated balance sheet will exist from the time of the final control party.
(b) When preparing the consolidated cash flow statement, the cash flows of the subsidiary
and the business combination from the beginning of the current period to the end of the reporting
period are included in the consolidated cash flow statement, and the related items of the
comparative statement are adjusted, which is regarded as the combined report body since the final
The controller has been there since the beginning of control.
(c) When preparing the consolidated cash flow statement, the cash flows of the subsidiary
and the business combination from the beginning of the current period to the end of the reporting
period are included in the consolidated cash flow statement, and the related items of the
comparative statement are adjusted, which is regarded as the combined report body since the final
The controller has been there since the beginning of control.
B. Subsidiary or business increased by business combination under the same control
(a) When preparing the consolidated balance sheet, the opening number of the consolidated
balance sheet is not adjusted.
(b) When preparing the consolidated profit statement, the income, expense and profit of the
subsidiary company and the business Purchase date and Closing balance shall be included in the
consolidated profit statement.
(c) When the consolidated cash flow statement is prepared, the cash flow from the purchase
date of the subsidiary to the end of the reporting period is included in the consolidated cash flow
statement.
② Disposal of subsidiaries or business
A. When preparing the consolidated balance sheet, the opening number of the consolidated
balance sheet is not adjusted.
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Annual Report 2023 of China Fangda Group Co., Ltd.
B. When preparing the consolidated profit statement, the income, expense and profit of the
subsidiary company and the business opening and disposal date shall be included in the
consolidated profit statement.
C. When the consolidated cash flow statement is prepared, the cash flow from the Beginning
of the period of the subsidiary to the end of the reporting period is included in the consolidated
cash flow statement.
(5) Special considerations in consolidation offsets
① The long-term equity investment held by a subsidiary company shall be regarded as the
inventory shares of the Company as a subtraction of the owner's rights and interests, which shall
be listed under the item of "subtraction: Stock shares" under the item of owner's rights and
interests in the consolidated balance sheet.
The long-term equity investments held by the subsidiaries are offset by the shares of the
shareholders of the subsidiaries.
② The "special reserve" and "general risk preparation" projects, because they are neither
real capital (or share capital) nor capital reserve, but also different from the retained income and
undistributed profits, are restored according to the ownership of the parent company after the
long-term equity investment is offset by the ownership rights and interests of the subsidiary
company.
③ If there is a temporary difference between the book value of assets and liabilities in the
consolidated balance sheet and the taxable basis of the taxpayer due to the offset of the unrealized
internal sales gain or loss, the deferred income tax asset or the deferred income tax liability is
confirmed in the consolidated balance sheet, and the income tax expense in the consolidated profit
statement is adjusted, with the exception of the deferred income tax related to the transaction or
event directly included in the owner's equity and the merger of the enterprise.
126
Annual Report 2023 of China Fangda Group Co., Ltd.
④ The unrealized internal transaction gains and losses incurred by the company from
selling assets to subsidiaries shall be fully offset against the "net profit attributable to the owners
of the parent company". The unrealized internal transaction gains and losses arising from the sale
of assets by the subsidiary to the Company shall be offset between the “net profit attributable to
the owners of the parent company” and the “minority shareholder gains and losses” in accordance
with the Company’s distribution ratio to the subsidiary. The unrealized internal transaction gains
and losses arising from the sale of assets between subsidiaries shall be offset between the "net
profit attributable to the owners of the parent company" and the "minority shareholders' gains and
losses" in accordance with the Company's distribution ratio to the seller's subsidiary .
⑤ If the current loss shared by the minority shareholders of the subsidiary exceeds the share
of the minority shareholders in the owner 's equity of the subsidiary at the beginning of the period,
the balance should still be offset against the minority shareholders 'equity.
(6) Accounting treatment of special transactions
① Purchase minority shareholders' equity
The Company purchases the shares of the subsidiaries owned by the minority shareholders of
the subsidiaries. In the individual financial statements, the investment costs of the newly acquired
long-term investments of the minority shares shall be measured at the fair value of the price paid.
In the consolidated financial statements, the difference between the newly acquired long-term
equity investment due to the purchase of minority equity and the share of net assets that should be
continuously calculated by the subsidiary since the purchase date or the merger date should be
adjusted according to the new shareholding ratio. The product (capital premium or equity
premium), if the capital reserve is insufficient to offset, the surplus reserve and undistributed
profits are offset in turn.
② Step-by-step acquisition of control of the subsidiary through multiple transactions
A. Enterprise merger under common control through multiple transactions
127
Annual Report 2023 of China Fangda Group Co., Ltd.
On the date of the merger, the Company determines the initial investment cost of the long-
term equity investment in the individual financial statements based on the share of the subsidiary
's net assets that should be enjoyed after the merger in the final controller 's consolidated financial
statements; the initial investment cost and the The difference between the book value of the long-
term equity investment before the merger plus the book value of the consideration paid for new
shares acquired on the merger date, the capital reserve (capital premium or equity premium) is
adjusted, and the capital reserve (capital premium or equity premium) is insufficient to offset
Reduced, in turn offset the surplus reserve and undistributed profits.
In consolidated financial statements, assets and liabilities obtained by the merging party from
the merged party should be measured at the book value in the final controlling party's
consolidated financial statements other than the adjustment made due to differences in accounting
policies; adjust the capital surplus (share premium) according to the difference between the initial
investment cost and the book value of the held investment before merger plus the book value of
the consideration paid on the merger date. Where the capital surplus falls short, the retained
income should be adjusted.
If the merging party holds the equity investment before acquiring the control of the merged
party and is accounted for according to the equity method, the date of acquiring the original
equity and the merging party and the merged party are in the same party's final control from the
later date to the merger date The relevant gains and losses, other comprehensive income and other
changes in owner's equity have been confirmed between them, and the retained earnings at the
beginning of the comparative statement period should be offset separately.
B. Enterprise merger under common control through multiple transactions
On the merger day, in individual financial statements, the initial investment cost of the long-
term equity investment on the merger day is based on the book value of the long-term equity
investment previously held plus the sum of the additional investment costs on the merger day.
In the consolidated financial statements, the equity of the purchaser held prior to the date of
purchase is revalued according to the fair value of the equity at the date of purchase, and the
128
Annual Report 2023 of China Fangda Group Co., Ltd.
difference between the fair value and its book value is credited to the current investment income;
If the shares held by the purchaser prior to the date of purchase involve other consolidated gains
under the equity law accounting, the other consolidated gains related thereto shall be converted to
the current gains on the date of purchase, with the exception of the other consolidated gains
arising from the remeasurement of the net assets or net liabilities of the merged party. The
Company disclosed in the notes the fair value of the equity of the purchased party held before the
purchase date and the amount of related gains or losses remeasured according to the fair value.
(3) The Company disposes of long-term equity investment in subsidiaries without losing
control
The parent company partially disposes of the long-term equity investment in the subsidiary
company without losing control. In the consolidated financial statements, the disposal price
corresponds to the disposal of the long-term equity investment. The difference between the shares
is adjusted for the capital reserve (capital premium or equity premium). If the capital reserve is
insufficient to offset, the retained earnings are adjusted.
④ The Company disposes of long-term equity investment in subsidiaries and loses control
A. One transaction disposition
If the Company loses control over the Invested Party due to the disposal of part of the equity
investment, it shall remeasure the remaining equity according to its fair value at the date of loss of
control when compiling the consolidated financial statement. The sum of the consideration
obtained from the disposal of equity and the fair value of the remaining equity minus the
difference between the share of the original subsidiary 's net assets that should be continuously
calculated from the purchase date or the merger date, calculated as the loss of control The
investment income of the current period.
Other comprehensive income and other owner's equity changes related to the equity
investment of the atomic company are transferred to the current profit and loss when the control is
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Annual Report 2023 of China Fangda Group Co., Ltd.
lost, except for other comprehensive income arising from the remeasurement of the net benefits or
net assets of the defined benefit plan by the investee. .
B. Multi-transaction step-by-step disposition
In consolidated financial statements, you should first determine whether a step-by-step
transaction is a "blanket transaction".
If the step-by-step transaction does not belong to a "package deal", in the individual financial
statements, for each transaction before the loss of control of the subsidiary, the book value of the
long-term equity investment corresponding to each disposal of equity is carried forward, the price
received and the disposal The difference between the book value of the long-term equity
investment is included in the current investment income; in the consolidated financial statements,
it should be handled in accordance with the relevant provisions of "the parent company disposes
of the long-term equity investment in the subsidiary without losing control."
If a step-by-step transaction belongs to a "blanket transaction", the transaction shall be
treated as a transaction that disposes of the subsidiary and loses control; In individual financial
statements, the difference between each disposal price before the loss of control and the book
value of the long-term equity investment corresponding to the equity being disposed of is first
recognized as other consolidated gains and then converted to the current loss of control at the time
of the loss of control; In the consolidated financial statements, for each transaction prior to the
loss of control, the difference between the disposition of the price and the disposition of the
investment corresponding to the share in the net assets of the subsidiary shall be recognized as
other consolidated gains and shall, at the time of the loss of control, be transferred to the loss of
control for the current period.
Where the terms, conditions, and economic impact of each transaction meet one or more of
the following conditions, usually multiple transactions are treated as a "package deal":
(a) These transactions were concluded at the same time or in consideration of mutual
influence.
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(b) These transactions can only achieve the business result as a whole;
(c) The effectiveness of one transaction depends the occurance of at least another transaction;
(d) A single transaction is not economic and is economic when considered together with
other transactions.
(5) Proportion of minority shareholders in factor companies who increase capital and dilute
ownership of parent companies
Proportion of Others ( minority shareholders in factor companies who increase capital , dilute
Subsidiaries of parent companies. In the consolidated financial statements, the share of the parent
company in the net book assets of the former subsidiary of the capital increase is calculated
according to the share ratio of the parent company before the capital increase, the difference
between the share and the net book assets of the latter subsidiary after the capital increase is
calculated according to the share ratio of the parent company, the capital reserve (capital premium
or capital premium), the capital reserve (capital premium or capital premium) is not offset, and
the retained income is adjusted.
8. Recognition of cash and cash equivalents
Cash refers to cash in stock and deposits that can be used for payment at any time. Cash
equivalents refer to investments with a short holding period (generally referring to expiry within
three months from the date of purchase), strong liquidity, easy to convert to a known amount of
cash, and little risk of value change.
9.Foreign exchange business and foreign exchange statement translation
(1) Methods for determining conversion rates in foreign currency transactions
The Company translates foreign currency transactions into the functional currency at the
initial recognition using the spot exchange rate on the transaction date or an approximate
exchange rate that is determined according to a reasonable method and is close to the spot
exchange rate on the transaction date. The resulting amount is recorded in the accounting
currency.
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(2) Methods of conversion of foreign currency currency currency items on balance
sheet days
At the balance sheet date, foreign currency items are translated on the spot exchange rate of
the balance sheet date. The exchange differences caused by the difference in exchange rates on
the balance sheet date and initial recognizing date or previous balance sheet date are included in
the current profits and losses. Non-monetary items accounted in foreign currency and on historical
costs are exchanged with the spot exchange rate on the transaction date. Non-monetary items
accounted in foreign currency and on fair value are exchanged with the spot exchange rate on the
determination date of the fair value. The exchange difference between the accounting standard-
currency amount and the original accounting standard-currency amount are included in the current
profits and losses.
(3) Translation of foreign exchange statements
Prior to the conversion of the financial statements of an enterprise's overseas operations, the
accounting period and policy of the overseas operations should be adjusted to conform to the
accounting period and policy of the enterprise. The financial statements of the corresponding
currency (other than the functional currency) should be prepared according to the adjusted
accounting policy and the accounting period. The financial statements of the overseas operations
should be converted according to the following methods:
① The assets and liabilities items in the balance sheet are translated at the spot exchange
rate on the balance sheet date. Except for the "undistributed profits" items, the owner's equity
items are translated at the spot exchange rate when they occur.
② The income and expense items in the profit statement are converted at the spot exchange
rate on the transaction date or the approximate exchange rate of the spot exchange rate.
③ The foreign currency cash flow and the foreign subsidiary's cash flow are converted
using the immediate exchange rate or the approximate exchange rate at the date of the cash flow.
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The impact of exchange rate changes on cash should be used as an adjustment item and presented
separately in the cash flow statement.
④ During the preparation of the consolidated financial statements, the resulting foreign
currency financial statement conversion variance is presented separately under the owner's equity
item in the consolidated balance sheet.
When foreign operations are disposed of and the control rights are lost, the difference in
foreign currency statements related to the overseas operations that are listed in the shareholders'
equity items in the balance sheet is transferred to the profit or loss for the current period, either in
whole or in proportion to the disposal of the foreign operations.
10. Financial instrument
Financial instrument refers to a company's financial assets and contracts that form other units
of financial liabilities or equity instruments.
(1) Recognition and de-recognition of financial instrument
The Company recognizes a financial asset or liability when it becomes one party in the
financial instrument contract.
Financial asset is derecognized when:
① The contractual right to receive the cash flows of the financial assets is terminated;
② The financial asset is transferred and meets the following derecognition condition.
If the current obligation of a financial liability (or part of it) has been discharged, the
Company derecognises the financial liability (or part of the financial liability). When the
Company (borrower) and lender enter into an agreement to replace the original financial liabilities
by undertaking new financial liabilities and the contract terms for the new financial liabilities are
essentially different from those for the original one, the original financial liabilities will be
derecognized and new financial liabilities will be recognized. Where the Company makes
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substantial amendments to the contract terms of the original financial liability (or part thereof), it
shall terminate the original financial liability and confirm a new financial liability in accordance
with the amended terms.
Financial asset transactions in regular ways are recognized and de-recognized on the
transaction date. The conventional sale of financial assets means the delivery of financial assets in
accordance with the contractual terms and conditions, at the time set out in the regulations or
market practices. Transaction date refers to the date when the Company promises to buy or sell
financial assets.
(2) Classification and subsequent measurement of financial assets
At initial recognition, the Company classifies financial assets into the following three
categories based on the business model of managing financial assets and the contractual cash flow
characteristics of financial assets: financial assets measured at amortized cost are measured at fair
value and their changes are included in other financial assets with current profit and loss and
financial assets measured at fair value through profit or loss. Unless the Company changes the
business model for managing financial assets, in this case, all affected financial assets are
reclassified on the first day of the first reporting period after the business model changes,
otherwise the financial assets may not be initially confirmed.
Financial assets are measured at the fair value at the initial recognition. For financial assets
measured at fair value with variations accounted into current income account, related transaction
expenses are accounted into the current income. For other financial assets, the related transaction
expenses are accounted into the initial recognized amounts. Bills receivable and accounts
receivable arising from the sale of commodities or the provision of labor services that do not
contain or do not consider significant financing components, the Company performs initial
measurement according to the transaction price defined by the income standard.
The subsequent measurement of financial assets depends on their classification:
① Financial assets measured at amortized cost
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Financial assets that meet the following conditions at the same time are classified as financial
assets measured at amortized cost: The Company 's business model for managing this financial
asset is to collect contractual cash flows as its goal; the contract terms of the financial asset
stipulate that Cash flow is only the payment of principal and interest based on the outstanding
principal amount. For such financial assets, the actual interest rate method is used for subsequent
measurement according to the amortized cost. The gains or losses arising from the termination of
recognition, amortization or impairment based on the actual interest rate method are included in
the current profit and loss.
② Financial assets measured at fair value and whose changes are included in other
comprehensive income
Financial assets that meet the following conditions at the same time are classified as financial
assets measured at fair value and their changes are included in other comprehensive income: The
Company's business model for managing this financial asset is to both target the collection of
contractual cash flows and the sale of financial assets. Objective; The contractual terms of the
financial asset 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 such financial assets, fair
value is used for subsequent measurement. Except for impairment losses or gains and exchange
gains and losses recognized as current gains and losses, changes in the fair value of such financial
assets are recognized as other comprehensive income. Until the financial asset is derecognized, its
accumulated gains or losses are transferred to current gains and losses. However, the relevant
interest income of the financial asset calculated by the actual interest rate method is included in
the current profit and loss.
The Company irrevocably chooses to designate a portion of non-tradable equity instrument
investment as a financial asset measured at fair value and whose variation is included in other
consolidated income. Only the relevant dividend income is included in the current profit and loss,
and the variation of fair value is recognized as other consolidated income.
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③ Financial assets measured at fair value with variations accounted into current income
account
The above financial assets measured at amortized cost and other financial assets measured at
fair value and whose changes are included in other comprehensive income are classified as
financial assets measured at fair value and whose changes are included in the current profit and
loss. For such financial assets, fair value is used for subsequent measurement, and all changes in
fair value are included in current profit and loss.
(3) Classification and measurement of financial liabilities
The Company classifies financial liabilities into financial liabilities measured at fair value
and their changes included in the current profit and loss, loan commitments and financial
guarantee contract liabilities for loans below market interest rates, and financial liabilities
measured at amortized cost.
The subsequent measurement of financial liabilities depends on their classification:
① Financial liabilities measured at fair value with variations accounted into current income
account
Such financial liabilities include transactional financial liabilities (including derivatives that
are financial liabilities) and financial liabilities designated as at fair value through profit or loss.
After the initial recognition, the financial liabilities are subsequently measured at fair value.
Except for the hedge accounting, the gains or losses (including interest expenses) are recognized
in profit or loss. However, for the financial liabilities designated as fair value and whose
variations are included in the profits and losses of the current period, the variable amount of the
fair value of the financial liability due to the variation of credit risk of the financial liability shall
be included in the other consolidated income. When the financial liability is terminated, the
cumulative gains and losses previously included in the other consolidated income shall be
transferred out of the other consolidated income and shall be included in the retained income.
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② Loan commitments and financial security contractual liabilities
A loan commitment is a promise that the Company provides to customers to issue loans to
customers with established contract terms within the commitment period. Loan commitments are
provided for impairment losses based on the expected credit loss model.
A financial guarantee contract refers to a contract that requires the Company to pay a
specific amount of compensation to the contract holder who suffered a loss when a specific debtor
is unable to repay the debt in accordance with the original or modified debt instrument terms.
Financial guarantee contract liabilities are subsequently measured based on the higher of the loss
reserve amount determined in accordance with the principle of impairment of financial
instruments and the initial recognition amount after deducting the accumulated amortization
amount determined in accordance with the revenue recognition principle.
③ Financial liabilities measured at amortized cost
After initial recognition, other financial liabilities are measured at amortized cost using the
effective interest method.
Except in special circumstances, financial liabilities and equity instruments are distinguished
according to the following principles:
a. If the Company cannot unconditionally avoid delivering cash or other financial assets to
fulfill a contractual obligation, the contractual obligation meets the definition of financial liability.
While some financial instruments do not explicitly contain terms and conditions for the delivery
of cash or other financial assets, they may indirectly form contractual obligations through other
terms and conditions.
B. If a financial instrument is required to be settled with or can be settled with the
Company's own equity instruments, the Company's own equity instrument used to settle the
instrument needs to be considered as a substitute for cash or other financial assets or for the
holder of the instrument to enjoy the remaining equity in the assets after all liabilities are deducted.
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If it is the former, the instrument is the financial liabilities of the issuer; if it is the latter, the
instrument is the equity instrument of the issuer. In some cases, a financial instrument contract
provides that the Company shall or may use its own instrument of interest, in which the amount of
a contractual right or obligation is equal to the amount of the instrument of its own interest which
may be acquired or delivered multiplied by its fair value at the time of settlement, whether the
amount of the contractual right or obligation is fixed or is based entirely or in part on a variation
of a variable other than the market price of the instrument of its own interest, such as the rate of
interest, the price of a commodity or the price of a financial instrument, the contract is classified
as a financial liability.
(4) Derivative financial instruments and embedded derivatives
Derivative financial instruments are initially measured at the fair value of the day when the
derivative transaction contract is signed, and are subsequently measured at their fair values.
Derivative financial instruments with a positive fair value are recognized as asset, and instruments
with a negative fair value are recognized as liabilities.
The gains and losses arising from the change in fair value of derivatives are directly included
in the profits and losses of the current period, except that the part of the cash flow that is valid in
the hedge is included in the other consolidated income and transferred out when the hedged item
affects the gain and loss of the current period.
For a hybrid instrument containing an embedded derivative instrument, if the principal
contract is a financial asset, the hybrid instrument as a whole applies the relevant provisions of the
financial asset classification. If the main contract is not a financial asset, and the hybrid
instrument is not measured at fair value and its changes are included in the current profit and loss
for accounting, the embedded derivative does not have a close relationship with the main contract
in terms of economic characteristics and risks, and it is If the instruments with the same
conditions and exist separately meet the definition of derivative instruments, the embedded
derivative instruments are separated from the mixed instruments and treated as separate derivative
financial instruments. If the fair value of the embedded derivative on the acquisition date or the
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subsequent balance sheet date cannot be measured separately, the hybrid instrument as a whole is
designated as a financial asset or financial liability measured at fair value and whose changes are
included in the current profit or loss.
(5) Financial instrument Less
The Company shall confirm the preparation for loss on the basis of expected credit loss for
financial assets measured at amortization costs, creditor's rights investments measured at fair
value, contractual assets, leasing receivables, loan commitments and financial guarantee contracts,
etc.
① Measurement of expected credit losses of accounts receivable
The expected credit loss refers to the weighted average of the credit losses of financial
instruments that are weighted by the risk of default. Credit loss refers to the difference between all
contractual cash flows receivable from the contract and all cash flows expected to be received by
the Company at the original actual interest rate, that is, the present value of all cash shortages.
Among them, the financial assets which have been purchased or born by the Company shall be
discounted according to the actual rate of credit adjustment of the financial assets.
The expected lifetime credit loss is the expected credit loss due to all possible default events
during the entire expected life of the financial instrument.
Expected credit losses in the next 12 months are expected to result from possible defaults in
financial instruments within 12 months after the balance sheet date (or estimated duration of
financial instruments if the expected duration is less than 12 months) Credit losses are part of the
expected lifetime credit loss.
On each balance sheet day, the Company measures the expected credit losses of financial
instruments at different stages. Where the credit risk has not increased significantly since the
initial confirmation of the financial instrument, it is in the first stage. The Company measures the
preparation for loss according to the expected credit loss in the next 12 months. Where the credit
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risk has increased significantly since the initial confirmation but the credit impairment has not
occurred, the financial instrument is in the second stage. Where a credit impairment has occurred
since the initial confirmation of the financial instrument, it shall be in the third stage, and the
Company shall prepare for measuring the expected credit loss of the whole survival period of the
instrument.
For financial instruments with low credit risk on the balance sheet date, the Company
assumes that the credit risk has not increased significantly since the initial recognition, and
measures the loss provision based on the expected credit losses in the next 12 months.
For financial instruments that are in the first and second stages and with lower credit risk, the
Company calculates interest income based on their book balances and actual interest rates without
deduction for impairment provision. For financial instruments in the third stage, interest income is
calculated based on the amortized cost and the actual interest rate after the book balance minus
the provision for impairment.
Regarding bills receivable, accounts receivable and financing receivables, regardless of
whether there is a significant financing component, the Company measures the loss provision
based on the expected credit losses throughout the duration.
Accounts receivable/contract assets
Where there is objective evidence of impairment, as well as other receivable instruments,
receivables, other receivables, receivables financing and long-term receivables applicable to
individual assessments, separate impairment tests are performed to confirm expected credit losses
and prepare individual impairment. For notes receivable, accounts receivable, other receivables,
financing of receivables, long-term receivables, and contract assets for which there is no objective
evidence of impairment, or when individual financial assets cannot be assessed at a reasonable
cost, the Company divides bills receivable, accounts receivable, other receivables, receivable
financing, long-term receivables, and contract assets into several combinations based on credit
risk characteristics, and calculates expected credit losses on the basis of the combination. The
basis for determining the combination is as follows:
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The basis for determining the combination of notes receivable is as follows:
Notes Receivable Combination 1 Commercial Acceptance Bill
Notes Receivable Combination 2 Bank Acceptance Bill
For Notes receivable divided into portfolios, the Company refers to historical credit loss
experience, combined with current conditions and predictions of future economic conditions, and
calculates through default risk exposure and expected credit loss rate within the next 12 months or
the entire duration Expected credit losses.
The basis for determining the combination of accounts receivable is as follows:
Accounts receivable combination 1 Accounts receivable business
Accounts receivable combination 2 Real estate receivable business
Accounts receivable combination 3 Others receivable business
Other receivable portfolio 4 Receivables from related parties within the scope of
consolidation
For the accounts receivable divided into a combination, the Company refers to the historical
credit loss experience, combined with the current situation and the forecast of the future economic
situation, compiles the account receivable age and the whole expected credit loss rate table, and
calculates the expected credit loss.
The basis for determining the combination of other receivables is as follows:
Other receivable portfolio 1 Interest receivable
Portfolio of other receivables 2 Dividends receivable
Other combinations of receivables 3 Deposit and margin receivable
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Other receivable portfolio 4 Receivable advances
Combination of other receivables 5 Value-added tax receivable is increased and refunded
Other receivable portfolio 6 Receivables from related parties within the scope of
consolidation
Other receivables portfolio 7 Other receivables
For other receivables divided into portfolios, the Company refers to historical credit loss
experience, combined with current conditions and predictions of future economic conditions, and
calculates through default risk exposure and expected credit loss rate within the next 12 months or
the entire duration Expected credit losses.
The basis for determining the combination of receivables financing is as follows:
Receivables financing portfolio 1 bank acceptance bill
For Notes receivable divided into portfolios, the Company refers to historical credit loss
experience, combined with current conditions and predictions of future economic conditions, and
calculates through default risk exposure and expected credit loss rate within the next 12 months or
the entire duration Expected credit losses.
The basis for determining the portfolio of contract assets is as follows:
Contract assets portfolio 1 conditional collection right of sales
Contract assets portfolio 2 Completed and unsettled project not meeting collection conditions
Contract assets portfolio 3 Quality guarantee deposit not meeting collection conditions
For contract assets divided into portfolios, the Company refers to historical credit loss
experience, combined with current conditions and predictions of future economic conditions, and
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calculates through default risk exposure and expected credit loss rate within the next 12 months or
the entire duration Expected credit losses.
B. Other debt investment
For other receivables divided into portfolios, the Company refers to historical credit loss
experience, combined with current conditions and predictions of future economic conditions, and
calculates through default risk exposure and expected credit loss rate within the next 12 months or
the entire duration Expected credit losses.
② Lower credit risk
If the risk of default on financial instruments is low, the borrower's ability to meet its
contractual cash flow obligations in the short term is strong, and even if the economic situation
and operating environment are adversely changed over a long period of time, it may not
necessarily reduce the receivables' performance of their contractual cash. The ability of the flow
obligation, the financial instrument is considered to have a lower credit risk.
③ Significant increase in credit risk
The Company compares the default probability of the financial instrument during the
expected lifetime determined by the balance sheet date with the default probability of the
expected lifetime during the initial confirmation to determine the relative probability of the
default probability of the financial instrument during the expected lifetime Changes to assess
whether the credit risk of financial instruments has increased significantly since initial recognition.
In determining whether the credit risk has increased significantly since the initial recognition,
the Company considers reasonable and evidenced information, including forward-looking
information, that can be obtained without unnecessary additional costs or effort. The information
considered by the Company includes:
A. Significant changes in internal price indicators resulting from changes in credit risk;
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B. Adverse changes in business, financial or economic conditions that are expected to cause
significant changes in the debtor’s ability to perform its debt service obligations;
C. Whether the actual or expected operating results of the debtor have changed significantly;
whether the regulatory, economic or technical environment of the debtor has undergone
significant adverse changes;
D. Whether there is a significant change in the value of the collateral used as debt collateral
or the guarantee provided by a third party or the quality of credit enhancement. These changes are
expected to reduce the debtor's economic motivation for repayment within the time limit specified
in the contract or affect the probability of default;
E. Whether there is a significant change in the economic motivation that is expected to
reduce the debtor's repayment according to the contractual deadline;
F. Anticipated changes to the loan contract, including whether the expected violation of the
contract may result in the exemption or revision of contract obligations, granting interest-free
periods, rising interest rates, requiring additional collateral or guarantees, or making other
changes to the contractual framework of financial instruments change;
G. Whether the expected performance and repayment behavior of the debtor has changed
significantly;
H. Whether the contract payment is overdue for more than (including) 30 days.
Based on the nature of financial instruments, the Company assesses whether credit risk has
increased significantly on the basis of a single financial instrument or combination of financial
instruments. When conducting an assessment based on a combination of financial instruments, the
Company can classify financial instruments based on common credit risk characteristics, such as
overdue information and credit risk ratings.
If the overdue period exceeds 30 days, the Company has determined that the credit risk of
financial instruments has increased significantly. Unless the Company does not have to pay
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excessive costs or efforts to obtain reasonable and warranted information, it proves that although
it has exceeded the time limit of 30 days agreed upon in the Contract, credit risks have not
increased significantly since the initial confirmation.
④ Financial assets with credit impairment
The Company assesses on the balance sheet date whether financial assets measured at
amortized cost and credit investments measured at fair value and whose changes are included in
other comprehensive income have undergone credit impairment. When one or more events that
adversely affect the expected future cash flows of a financial asset occur, the financial asset
becomes a financial asset that has suffered a credit impairment. Evidence that credit impairment
has occurred in financial assets includes the following observable information:
Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by
the debtor, such as payment of interest or default or overdue of principal; (B) The concession that
the debtor would not make under any other circumstances for economic or contractual
considerations relating to the financial difficulties of the debtor; The debtor is likely to be
bankrupt or undertake other financial restructuring; The financial difficulties of the issuer or
debtor lead to the disappearance of the active market for the financial asset; To purchase or
generate a financial asset at a substantial discount, which reflects the fact that a credit loss has
occurred.
⑤ Presentation of expected credit loss measurement
In order to reflect the changes in the credit risk of financial instruments since the initial
recognition, the Company re-measures the expected credit losses on each balance sheet date, and
the increase or reversal of the loss provision resulting therefrom is included as an impairment loss
or gain. Current profit and loss. For financial assets measured at amortized cost, the loss
allowance offsets the book value of the financial asset listed on the balance sheet; for debt
investments measured at fair value and whose changes are included in other comprehensive
income, the Company Recognition of its loss provisions in gains does not offset the book value of
the financial asset.
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⑥ Canceled
If it is no longer reasonably expected that the contract cash flow of the financial assets will
be fully or partially recovered, the book balance of the financial assets will be directly reduced.
Such write-off constitute the derecognition of related financial assets. This usually occurs when
the Company determines that the debtor has no assets or sources of income that generate
sufficient cash flow to cover the amount that will be written down.
If the financial assets that have been written down are recovered in the future, the reversal of
the impairment loss is included in the profit or loss of the current period.
(6) Transfer of financial assets
The transfer of financial assets refers to the following two situations:
A. Transfer the contractual right to receive cash flow of financial assets to another party;
B. Transfers the financial assets to the other party in whole or in part, but reserves the
contractual right to collect the cash flow of the financial assets and undertakes the contractual
obligation to pay the collected cash flow to one or more recipients.
① De-identification of transferred financial assets
Those who have transferred almost all risks and rewards in the ownership of financial assets
to the transferee, or have neither transferred nor retained almost all the risks and rewards in the
ownership of financial assets, but have given up control of the financial assets, terminate the
confirmation The financial asset.
In determining whether control over the transferred financial asset has been waived, the
actual capacity of the transferor to sell the financial asset is determined. If the transferor is able to
sell the transferred financial assets wholly to a third party that does not have a relationship with
them, and has no additional conditions to limit the sale, it indicates ds has waived control over the
financial assets.
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The Company pays attention to the essence of financial asset transfer when judging whether
financial asset transfer meets the condition of financial asset termination.
If the overall transfer of financial assets meets the conditions for termination of confirmation,
the difference between the following two amounts is included in the current profit and loss:
A. Continuing identification of transferred Book value；
B. The sum of the amount received as a result of the transfer and the amount accrued as a
result of the change in the fair value of the transfer in respect of the termination recognized
portion of the amount previously charged directly to the other consolidated proceeds (the financial
assets involved in the transfer are those classified in accordance with Article 18 of Enterprise
Accounting Standard No. 22 - Financial Instruments Recognition and Measurement as measured
by the fair value and whose change is charged to the other consolidated proceeds).
If the partial transfer of financial assets meets the conditions for derecognition, the book
value of the entire transferred financial assets will be included in the derecognized part and the
unterminated part (in this case, the retained service assets are regarded as part of the continued
recognition of financial assets) Between them, they are apportioned according to their respective
relative fair values on the transfer date, and the difference between the following two amounts is
included in the current profit and loss:
A. Termination of the book value of the recognized portion on the date of derecognition;
B. The sum of the amount received as a result of the transfer and the amount accrued as a
result of the change in the fair value of the transfer in respect of the termination recognized
portion of the amount previously charged to the other consolidated proceeds (the financial assets
involved in the transfer are those classified in accordance with Article 18 of Enterprise
Accounting Standard No. 22 - Financial Instruments Recognition and Measurement as measured
by the fair value and whose change is charged to the other consolidated proceeds).
② Continue to be involved in the transferred financial assets
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If neither transfer nor retain almost all the risks and rewards of the ownership of financial
assets, and have not given up control of the financial assets, the relevant financial assets should be
confirmed according to the extent of their continued involvement in the transferred financial
assets, and the relevant liabilities should be recognized accordingly.
The extent to which the transferred financial assets continue to be involved refers to the
extent to which the enterprise undertakes the risk or compensation of the value change of the
transferred financial assets.
(III) Continuing identification of transferred financial assets
Where almost all risks and remuneration in relation to ownership of the transferred financial
assets are retained, the whole of the transferred financial assets shall continue to be recognized
and the consideration received shall be recognized as a financial liability.
The financial asset and the recognized related financial liabilities shall not offset each other.
In the subsequent accounting period, the enterprise shall continue to recognize the income (or
gain) generated by the financial asset and the costs (or losses) incurred by the financial liability.
(7) Deduction of financial assets and liabilities
Financial assets and financial liabilities should be listed separately in the balance sheet, and
cannot be offset against each other. However, if the following conditions are met, the net amount
offset by each other is listed in the balance sheet:
The Company has a statutory right to offset the confirmed amount, and such legal right is
currently enforceable;
The Company plans to settle the net assets or realize the financial assets and liquidate the
financial liabilities at the same time.
The transferring party shall not offset the transferred financial assets and related liabilities if
it does not meet the conditions for terminating the recognition.
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(8) Recognition of fair value of Finance instruments
For the method for determining the fair value of financial assets and financial liabilities, see
33 (3) in Chapter X, V. Important accounting policies and accounting estimates.
11. Notes receivable
See Chapter X, V, Important Accounting Policies and Accounting Estimates 10. Financial Tools.
12. Account receivable
See Chapter X, V, Important Accounting Policies and Accounting Estimates 10. Financial Tools.
The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the
Guidelines for the Self-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 -
Industry Information Disclosure.
13. Receivable financing
See Chapter X, V, Important Accounting Policies and Accounting Estimates 10. Financial Tools.
14. Other receivables
See Chapter X, V, Important Accounting Policies and Accounting Estimates 10. Financial Tools.
15. Contract assets
The Company presents contract assets or liabilities in the balance sheet according to the
relationship between performance obligation and customer payment. The consideration for which
the Company is entitled to receive (subject to factors other than the passage of time) for the
transfer of goods or the provision of services to customers is listed as contract assets. The
Company's obligation to transfer goods or provide services to customers for consideration
received or receivable from customers is listed as contractual liabilities.
Contract assets and contract liabilities are listed separately in the balance sheet. Contract
assets and contract liabilities under the same contract are listed in net amount. If the net amount is
the debit balance, it shall be listed in "contract assets" or "other non current assets" according to
its liquidity; if the net amount is the credit balance, it shall be listed in "contract liabilities" or
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"other non current liabilities" according to its liquidity. Contract assets and contract liabilities
under different contracts cannot offset each other.
For the determination method and accounting treatment method of the Company's expected
credit loss of contract assets, see 10. Financial instruments in Chapter X, V. Important accounting
policies and accounting estimates.
16. Inventories
(1) Classification of inventories
Inventory refers to the finished products or commodities held by the Company for sale in
daily activities, the products in process of production, the materials and materials consumed in the
process of production or providing labor services, including entrusted processing materials, raw
materials, products in process, materials in transit, stored goods, low value consumables,
development costs, development products and contract performance costs, etc.
(2) Pricing of delivering inventory
Inventories are measured at cost when procured. Raw materials, products in process and
commodity stocks in transit are measured by the weighted average method.
The inventory of real estate business mainly includes inventory materials, development costs,
development products, etc. The actual costs of development products include land transfer
payment, infrastructure and facility costs, installation engineering costs, borrows before
completion of the development and other costs during the development process. The special
maintenance funds collected in the first period are included in the development overheads. When
the control right of development products is transferred, the individual valuation method is used
to determine its actual cost.
(3) Inventory system
The Company inventory adopts the perpetual inventory system, counting at least once a year,
the inventory profit and loss amount is included in the current year's profit and loss.
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(4) Criteria for recognizing and providing for provision for decline in value of
inventories
On the balance sheet date, inventories are accounted depending on which is lower between
the cost and the net realizable value. If the cost is higher than the net realizable value, the
impairment provision will be made.
The realizable net value of inventory should be recognized based on solid evidence with the
purpose of the inventory and after-balance-sheet-date events taken into consideration.
(1) In the course of normal production and operation, the net realizable value of finished
goods, commodities and materials directly used for sale shall be determined by the estimated
price of the inventory minus the estimated cost of sale and related taxes. The inventory held for
the execution of a sales contract or a labor contract shall be measured on the basis of the contract
price as its net realizable value; If the quantity held is greater than the quantity ordered under the
sales contract, the net realizable value of the excess inventory is measured on the basis of the
general sales price. For materials used for sale, the market price shall be used as the measurement
basis for the net realizable value.
②In the normal production and operation process, the inventory of materials that need to be
processed is determined by the amount of the estimated selling price of the finished product
minus the estimated cost to be incurred at the time of completion, estimated sales expenses and
related taxes Realize the net value. If the net realizable value of the finished product produced by
it is higher than the cost, the material is measured at cost; If the decrease in the price of the
material indicates that the net realizable value of the finished product is lower than the cost, the
material is measured as the net realizable value and the inventory is prepared for a decrease based
on its difference.
③ If the factors affecting the previous write-down of inventory value have disappeared on
the balance sheet date, the amount of the write-down will be restored and transferred back within
the amount of inventory depreciation reserve that has been accrued, and the amount returned will
be included in the current profit and loss.
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(5) Methods of amortization of swing materials
Low-value consumables are amortized on on-off amortization basis at using.
17. Long-term share equity investment
The Group's long-term equity investment includes control on invested entities and significant
impacts on equity investment. Invested entities on which the Group has significant impacts are
associates of the Group.
(1) Basis for recognition of common control and major influence on invested entities
Common control refers to the common control of an arrangement in accordance with the
relevant agreement, and the relevant activities of the arrangement must be agreed upon by the
participants who share control. In determining whether there is common control, the first step is to
determine whether all or a group of participants collectively control the arrangement, which is
considered collective control by all or a group of participants if all or a group of participants must
act together to determine the activities associated with the arrangement. Secondly, it is judged
whether the decision on related activities of the arrangement must be agreed by the participants
who collectively control the arrangement. If there is a combination of two or more parties that can
collectively control an arrangement, it does not constitute joint control. When judging whether
there is joint control, the protective rights enjoyed are not considered.
Major influence refers to the power to participate in decision-making of financial and
operation policies of a company, but cannot control or jointly control the making of the policies.
When considering whether the Company can impose significant impacts on the invested entity,
impacts of conversion of shares with voting rights held directly or indirectly by the investor and
voting rights that can be executed in this period held by the investor and other party into shares of
the invested entity should be considered.
If the Company directly or through subsidiaries holds more than 20% (inclusive) but less
than 50% of the shares with voting rights of the invested entity, unless there is clear evidence
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proving that the Company cannot participate the decision-making of production and operation of
the invested entity, the Company has major influence on the invested entity.
(2) Recognition of initial investment costs
Long-term equity investments formed by merger of enterprises shall be determined in
accordance with the following provisions:
A. In the case of an enterprise merger under the same control, where the merging party
makes a valuation of the merger by payment of cash, transfer of non-cash assets or undertaking
liabilities, the share of the book value of the owner's interest in the final controlling party's
consolidated financial statements as the initial investment cost of the long-term equity investment
at the date of the merger. The difference between the initial investment cost of long-term equity
investment and the cash paid, the transferred non-cash assets and the book value of the debt
assumed shall be adjusted to the capital reserve; if the capital reserve is insufficient to offset, the
retained earnings shall be adjusted;
B. Long-term equity investment generated by enterprise merger: for long-term equity
investment obtained by merger of enterprises under common control, the obtained share of book
value of the interests of the merged party’s owner in the consolidate financial statements on the
merger date is costs; for long-term equity investment obtained by merger of enterprises not under
common control, the merger cost is the investment cost. Adjust the capital reserve according to
the difference between the initial investment cost of long-term equity investment and the total
face value of the issued shares. If the capital reserve is insufficient to offset or reduce, the retained
income shall be adjusted;
C. For merger of entities under different control, the merger cost is the fair value of the asset
paid, liability undertaken, and equity securities issued for exchanging of control power over the
entities at the day of acquisition. Agency expenses and other administrative expenses such as
auditing, legal consulting, or appraisal services occurred relating to the merger of entities are
accounted into current income account when occurred.
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Long-term equity investments formed by merger of enterprises shall be determined in
accordance with the following provisions:
A. For long-term equity investment obtained by cash, the actually paid consideration is the
initial investment cost. Initial investment costs include expenses, taxes and other necessary
expenditures directly related to the acquisition of long-term equity investments;
B. Long-term equity investments acquired from the issuance of interest securities are the
initial investment costs based on the fair value of the issue interest securities;
C. For long-term equity investments obtained through non-monetary asset exchanges, if the
exchange has commercial substance and the fair value of the exchanged assets or exchanged
assets can be reliably measured, the fair value of the exchanged assets and relevant taxes shall be
used as the initial Investment cost, the difference between the fair value and book value of the
swapped-out asset is included in the current profit and loss; if the non-monetary asset exchange
does not meet the above two conditions at the same time, the book value of the swapped-out asset
and relevant taxes will be used as the initial investment cost.
D. Long-term equity investments acquired through debt restructuring determine their
recorded value at the fair value of the waived claims and other costs such as taxes directly
attributable to the assets and account for the difference between the fair value and the book value
of the waived claims.
(3) Subsequent measurement and recognition of gain/loss
The Company uses the cost method to measure long-term share equity investment in which
the Company can control the invested entity; and uses the equity method to measure long-term
share equity investment in which the Company has substantial influence on the invested entity.
① Cost
For the long-term equity investment measured on the cost basis, except for the announced
cash dividend or profit included in the practical cost or price when the investment was made, the
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cash dividends or profit distributed by the invested entity are recognized as investment gains in
the current gain/loss account.
Equity
Gains from long-term equity investment measured by equity
When the equity method is used to measure long-term equity investment, the investment cost
will not be adjusted if the investment cost of the long-term equity investment is larger than the
share of fair value of the recognizable assets of the invested entity. When it is smaller than the
share of fair value of the recognizable assets of the invested entity, the book value will be adjusted
and the difference is included in the current gains of the investment.
When the equity method is used, the current investment gain is the share of the net gain
realized in the current year that can be shared or borne, recognized as investment gain and other
misc. income. The book value of the long-term equity investment is adjusted accordingly. The
book value of the long-term equity investment should be accordingly decreased based on the
share of profit or cash dividend announced by the invested entity; according to other changes in
the owner's equity except for net profit and loss, other misc income and profit distribution of the
invested entity, adjust the book value of the long-term equity investment and record it in the
capital surplus (other capital surplus). When the share of the net gains that can be enjoyed is
recognized, it is recognized after the net profit of the invested entity is adjusted based on the fair
value of the recognizeable assets of the invested entity according to the Company's accounting
policies and accounting period. Where the accounting policy and accounting period adopted by
the Invested unit are inconsistent with the Company, the financial statements of the Invested unit
shall be adjusted in accordance with the accounting policy and accounting period of the Company,
and the investment income and other consolidated income shall be recognized. Internal
transaction gain not realized between the Company and affiliates is measured according to the
shareholding proportion and the investment gains is recoginzied after deduction. The unrealized
internal transaction loss between the Company and the invested entity is the impairment loss of
transferred assets and should not be written off.
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Where substantial influence on invested entities is imposed or joint control is implemented
due to increase in investment, the sum of the fair value of the original equity and increased
investment on the conversion date is the initial investment cost under the equity method. If the
equity investment originally held is classified as other equity instrument investment, the
difference between the fair value and the book value, as well as the accumulated gains or losses
originally included in other comprehensive income, shall be transferred out of other
comprehensive income and included in retained income in the current period when the equity
method is adopted.
Where joint control or substantial influence on invested entities is lost due to disposal of part
of investment, the remaining equity after the disposal should be treated according to the
Enterprise Accounting Standard No.22 – Recognition and Measurement of Financial Instruments
from the date of losing the joint control or substantial influence. The difference between the fair
value and book value should be accounted the profit and loss of the current period. For other misc.
incomes of original share equity investment determined using the equity method, when the equity
method is no longer used, it should be treated based on the same basis of the treatment of related
assets or liability of the invested entities; the other owners' interests related to the original share
equity investment should be transferred to gain/loss of the current period.
(4) Equity investment held for sale
For the remaining equity investments not classified as assets held for sale, the equity method
is adopted for accounting treatment.
Equity investments classified as held for sale to associates that are no longer eligible to hold
classified assets for sale are retrospectively adjusted using the equity method starting from the
date that they are classified as held for sale. The classification is adjusted to hold the financial
statements for the period to be sold.
(5) Impairment examination and providing of impairment provision
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For investments in subsidiaries, associates and joint ventures, the method of accruing asset
impairment is shown in 23. Long-term asset impairment in Chapter X, V. Important accounting
policies and accounting estimates.
XVIII. Investment real estates
(1) Classification of investment real estate
Investment real estates are held for rent or capital appreciation, or both. These include, inter
alia:
① Leased land using right
(2) the right to use the land that is transferred after holding and preparing for the increment.
③ Leased building
(2) Measurement of investment real estate
For investment real estates with an active real estate transaction market and the Company
can obtain market price and other information of same or similar real estates to reasonably
estimate the investment real estates' fair value, the Company will use the fair value mode to
measure the investment real estates subsequently. Variations in fair value are accounted into the
current gain/loss account.
The fair value of investment real estate is determined with reference to the current market
prices of same or similar real estates in active markets; when no such price is available, with
reference to the recent transaction prices and consideration of factors including transaction
background, date and district to reasonably estimate the fair value; or based on the estimated lease
gains and present value of related cash flows.
For investment real estate under construction (including investment real estate under
construction for the first time), if the fair value cannot be reliably determined but the expected fair
value of the real estate after completion is continuously and reliably obtained, the investment real
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estate under construction is measured by cost. When the fair value can be measured reliably or
after completion (the earlier one), it is measured at fair value. For an investment real estate whose
fair value is proven unable to be obtained continuously and reliably by objective evidence, the
real estate will be measured at cost basis until it is disposed and no residual value remains as
assumed.
If the cost model is used for subsequent measurement of investment real estate, depreciation
or amortization is calculated according to the straight-line method after the cost of investment real
estate minus accumulated impairment and net residual value. See this Chapter X V. Important
accounting policies, for the method of accruing asset impairment 23. Impairment of long-term
assets in accounting estimates.
The types of investment real estate, estimated economic useful life and estimated net residual
value rate are determined as follows:
Annual depreciation
Type Service year (year) Residual rate %
rate %
Houses & buildings 20-50 10.00 1.80-4.50
19. Fixed assets
(1) Recognition conditions
Fixed assets are recognized at the actual cost of acquisition when the following conditions are
met: (1) The economic benefits associated with the fixed assets are likely to flow into the
enterprise.
Fixed assets are recognized at the actual cost of acquisition when the following conditions are
met: (1) The economic benefits associated with the fixed assets are likely to flow into the
enterprise.
② The cost of the fixed assets can be measured reliably.
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Overhaul cost generated by regular examination on fixed assets is recognized as fixed assets
costs when there is evidence proving that it meets fix assets recognition conditions. If not, it will
be accounted into the current gain/loss account.
(2) Depreciation method
Annual depreciation
Type Depreciation method Service year (year) Residual rate %
rate %
Houses & buildings Average age 20-50 10.00 1.80-4.50
Mechanical equipment Average age 10 10.00 9.00
Transportation
Average age 5 10.00 18.00
facilities
Electronics and other
Average age 5 10.00 18.00
devices
PV power plants Average age 20 5.00 4.75
20. Construction in process
(1) Construction in progress is accounted for by project classification.
(2) Standard and timing for transferring construction in process into fixed assets
The full expenditure incurred on the construction-in-progress project as a fixed asset is
recorded as the value of the asset before the asset is constructed to the intended usable state. This
includes construction costs, the original cost of equipment, other necessary expenditures incurred
in order to enable the construction works to reach the intended usable status and the borrowing
costs incurred for the specific borrowing of the project and the general borrowing expenses
incurred before the assets reach the intended usable status. Construction in process will be
transferred to fixed assets when it reaches the preset service condition. The fixed assets that have
reached the intended usable state but have not been completed shall be transferred to the fixed
assets according to the estimated value according to the estimated value according to the
estimated value according to the project budget, cost or actual project cost, etc. The depreciation
of the fixed assets shall be accrued according to the Company's fixed assets depreciation policy.
The original estimated value shall be adjusted according to the actual cost after the completion.
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XXI. Borrowing expenses
(1) Recognition principles for capitalization of borrowing expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or
production of asset satisfying the conditions of capitalizing, are capitalized and accounted as cost
of related asset.
(1) Asset expenditure has occurred;
② The borrowing expense has already occurred;
③ Purchasing or production activity, which is necessary for the asset to reach the useful
status, has already started.
Other interest on loans, discounts or premiums and exchange differences are included in the
income and loss incurred in the current period.
If the construction or production of assets satisfying the capitalizing conditions is suspended
abnormally for over 3 months, capitalizing of borrowing expenses shall be suspended. During the
normal suspension period, borrowing expenses will be capitalized continuously.
When the asset satisfying the capitalizing conditions has reached its usable or sellable status,
capitalizing of borrowing expenses shall be terminated.
(2) Calculation of the capitalization amount of borrowing expense
Interest expenses generated by special borrowings less the interests income obtained from
the deposit of unused borrowings or investment gains from temporary investment is capitalized;
the capitalization amount for general borrowing is determined based on the capitalization rate
which is the exceeding part of the accumulative assets expense over weighted average of the
assets expense of the special borrowing/used general borrowing.
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If the assets that are constructed or produced under the condition of capitalization occupy the
general borrowing, the interest amount to be capitalized in the general borrowing shall be
calculated and determined by multiplying the capital rate of the general borrowing by the
weighted average of the asset expenditure of the accumulated assets whose expenditure exceeds
that of the specialized borrowing. The capitalization ratio is the weighted average interest rate of
general borrowings.
XXII. Intangible assets
Recorded at the actual cost of acquisition.
(1) Amortization of intangible assets
① Useful life of intangible assets with limited useful life
Estimated useful
Item Basis
life
Land using right Term Use right assets
Reference to determine the lifetime of a company for
Trademarks and patents 10
which it can bring economic benefits
Reference to determine the lifetime of a company for
Proprietary technology 10
which it can bring economic benefits
Reference to determine the lifetime of a company for
Software 5 and 10 years
which it can bring economic benefits
At the end of each year, the Company will reexamine the useful life and amortization basis
of intangible assets with limited useful life. Upon review, the service life and amortization
methods of intangible assets at the end of the period are not different from those previously
estimated.
(2) Intangible assets which cannot be foreseeable to bring economic benefits to enterprises
shall be regarded as intangible assets whose useful life is uncertain. For intangible assets with
uncertain service life, the Company reviews the service life of intangible assets with uncertain
service life at the end of each year. If it is still uncertain after rechecking, it shall conduct an
impairment test on the balance sheet date.
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③ Amortization of intangible assets
For intangible assets with limited service life, the Company shall determine their service life
at the time of acquisition, and shall use the straight line method system to reasonably amortize
their service life, and the amortization amount shall be included in the profit and loss of the
current period according to the beneficial items. The specific amortization amount is the amount
after the cost is deducted from the estimated residual value. For fixed assets for which
depreciation provision is made, the depreciation rate will be determined after the accumulative
depreciation provision amount is deducted. The residual value of an intangible asset with limited
useful life is treated as zero, except where a third party undertakes to purchase the intangible asset
at the end of its useful life or to obtain expected residual value information based on the active
market, which is likely to exist at the end of its useful life.
Intangible assets with uncertain service life will not be amortized. At the end of each year,
the useful life of intangible assets with uncertain useful life is reviewed, and if there is evidence
that the useful life of intangible assets is limited, the useful life is estimated and the system is
reasonably amortized within the expected useful life.
(2) Scope of R&D expenditures and related accounting treatment
Specific standard for distinguish between research and development stage
① The Company takes the information and related preparatory activities for further
development activities as the research stage, and the intangible assets expenditure in the research
stage is included in the current profit and loss period.
② The development activities carried out after the Company has completed the research
stage as the development stage.
Specific conditions for capitalization of expenditures in the development phase
Expenditures in the development phase can be recognized as intangible assets only when the
following conditions are met:
A. It is technically feasible to complete the intangible asset so that it can be used or sold;
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B. Have the intention to complete the intangible asset and use or sell it;
C. The way intangible assets generate economic benefits, including the ability to prove that
the products produced by the intangible assets exist in the market or the intangible assets
themselves exist in the market, and the intangible assets will be used internally, which can prove
their usefulness;
D. Have sufficient technical, financial and other resource support to complete the
development of the intangible asset, and have the ability to use or sell the intangible asset;
E. The expenditure attributable to the development stage of the intangible asset can be
reliably measured.
23. Assets impairment
The Group uses the cost mode to continue measuring the assets impairment to investment
real estate, fixed assets construction in progress, intangible assets and goodwill (except for the
inventories, investment real estate measured by the fair value mode, deferred income tax assets
and financial assets). The method is determined as follows:
The Company judges whether there is a sign of impairment to assets on the balance sheet day.
If such sign exists, the Company estimates the recoverable amount and conducts the impairment
test. Impairment test is conducted annually for goodwill generated by mergers and intangible
assets that have not reached the useful condition no matter whether the impairment sign exists.
The recoverable amount is determined by the higher of the net of fair value minus disposal
expense and the present value of the predicted future cash flow. The Company estimates the
recoverable amount on the individual asset item basis; whether it is hard to estimate the
recoverable amount on the individual asset item basis, determine the recoverable amount based on
the asset group that the assets belong to. The assets group is determined by whether the main cash
flow generated by the Group is independent from those generated by other assets or assets groups.
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When the recoverable amount of the assets or assets group is lower than its book value, the
Company writes down the book value to the recoverable amount, the write-down amount is
accounted into the current income account and the assets impairment provision is made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized
through reasonable measures since the purchase day to related asset groups; those cannot be
amortized to related assets groups are amortized to related combination of asset groups. The
related asset groups or combination of asset groups refer to those that can benefit from the
synergistic effect of mergers and must not exceed to the reporting range determined by the
Company.
When the impairment test is conducted, if there is sign of impairment to the asset group or
combination of asset groups related to goodwill, first perform impair test for asset group or
combination of asset groups without goodwill and calculate the recoverable amount and recognize
the related impairment loss. Then conduct impairment test on those with goodwill, compare the
book value with recoverable amount. If the recoverable amount is lower than the book value,
recognize the impairment loss of the goodwill.
Once recognized, the asset impairment loss cannot be written back in subsequent accounting
period.
24. Long-term amortizable expenses
The long-term deferred expenses shall be used to calculate the expenses that have occurred
but should be borne by the Company in the current and subsequent periods with a amortization
period of more than one year. The Company's long-term deferred expenses are amortized
averagely during the benefit period.
25. Contract liabilities
See 15. Contract assets in Chapter X, V. Important Accounting Policies and Accounting
Estimates for details.
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26. Staff remuneration
(1) Accounting of operational leasing
① Basic salary of employees (salary, bonus, allowance, subsidy)
In the accounting period for which the staff and workers provide services, the Company shall
confirm the actual short-term remuneration as liabilities and shall account for the current income
and loss, except as required or permitted by other accounting standards.
② Employee welfare
The employee benefits incurred by the Company shall be included in the current profit and
loss or related asset costs according to the actual amount incurred. Where the employee's benefit
is non-monetary, it shall be measured on the basis of fair value.
③ Social insurance premiums and housing accumulation funds such as health insurance
premiums, work injury premiums, birth insurance premiums, trade union funds and staff and
education funds
The Company pays the medical insurance premiums, work injury insurance premiums, birth
insurance premiums, etc. social insurance premiums and housing accumulation funds for the staff
and workers, as well as the union funds and the staff and workers education funds according to
the regulations, in the accounting period for which the staff and workers provide services, the
corresponding salary amount of the staff and workers, and confirms the corresponding liabilities,
which are included in the current profit and loss or related asset costs.
④ Short-term paid leave
The Company accumulates the salary of the employees who are absent from work with pay
when the employees provide service, thus increasing their future right of absence with pay. The
Company confirms the salary of the employee related to the absence of non-cumulative salary
during the actual absence accounting period.
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⑤ Short-term profit share program
If the profit-sharing plan meets the following conditions at the same time, the Company shall
confirm the salary payable to the staff and workers:
A. The legal or presumptive obligation of the enterprise to pay the remuneration of its
employees as a result of past matters;
B. The amount of employee compensation obligations due to the profit sharing plan can be
reliably estimated.
(2) Accounting of post-employment welfare
The Company's post-employment benefit plan is defined contribution plan. Defined
contribution plans include basic endowment insurance, unemployment insurance, etc. During the
accounting period when employees provide services for them, the Company shall recognize the
deposit amount calculated according to the defined deposit plan as liabilities and include it in the
current profits and losses or related asset costs.
(3) Accounting of dismiss welfare
If the Company provides termination benefits to employees, the employee compensation
liabilities arising from the termination benefits shall be recognized at the earliest of the following
two and shall be included in the current profit and loss:
① An enterprise may not unilaterally withdraw the resignation benefits provided for by the
dismissal plan or reduction proposal;
② When the enterprise recognizes the costs or expenses related to the reorganization
involving the payment of resignation benefits.
27. Anticipated liabilities
(1) Recognition standards of anticipated liabilities
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When responsibilities occurred in connection to contingent issues, and all of the following
conditions are satisfied, they are recognized as expectable liability in the balance sheet:
① This responsibility is a current responsibility undertaken by the Company;
② Execution of this responsibility may cause financial benefit outflow from the Company;
③ Amount of the liability can be reliably measured.
(2) Measurement of anticipated liabilities
Expected liabilities are initially measured at the best estimation on the expenses to exercise
the current responsibility, and with considerations to the relative risks, uncertainty, and periodic
value of currency. On each balance sheet date, review the book value of the estimated liabilities.
Where there is conclusive evidence that the book value does not reflect the current best estimate,
the book value is adjusted to the current best estimate.
28. Revenue
(1) General principles
Income is the total inflow of economic benefits formed in the daily activities of the Company,
which will lead to the increase of shareholders' equity and has nothing to do with the capital
invested by shareholders.
The Company has fulfilled the performance obligation in the contract, that is, the revenue is
recognized when the customer obtains the control right of relevant goods. To obtain the control
right of the relevant commodity means to be able to dominate the use of the commodity and
obtain almost all the economic benefits from it.
If there are two or more performance obligations in the contract, the Company will allocate
the transaction price to each single performance obligation according to the relative proportion of
the separate selling price of the goods or services promised by each single performance obligation
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on the start date of the contract, and measure the income according to the transaction price
allocated to each single performance obligation.
The transaction price refers to the amount of consideration that the Company is expected to
be entitled to receive due to the transfer of goods or services to customers, excluding the amount
collected on behalf of a third party. When determining the contract transaction price, if there is a
variable consideration, the Company shall determine the best estimate of the variable
consideration according to the expected value or the most likely amount, and include it in the
transaction price with the amount not exceeding the accumulated recognized income when the
relevant uncertainty is eliminated, which is most likely not to have a significant reversal. If there
is a significant financing component in the contract, the Company will determine the transaction
price according to the amount payable in cash when the customer obtains the control right of the
commodity. The difference between the transaction price and the contract consideration will be
amortised by the effective interest method during the contract period. If the interval between the
control right transfer and the customer's payment is less than one year, the Company will not
consider the financing component Points.
If one of the following conditions is met, the performance obligation shall be performed
within a certain period of time; otherwise, the performance obligation shall be performed at a
certain point of time:
① When the customer performs the contract in the Company, he obtains and consumes the
economic benefits brought by the Company's performance;
② Customers can control the goods under construction during the performance of the
contract;
③ The goods produced by the Company in the process of performance have irreplaceable
uses, and the Company has the right to collect money for the performance part that has been
completed so far during the whole contract period.
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For the performance obligations performed within a certain period of time, the Company
shall recognize the revenue according to the performance progress within that period, except that
the performance progress cannot be reasonably determined. The Company determines the
progress of performance for the provision of services on the basis of the input (or output) method.
When the progress of performance cannot be reasonably determined, if the cost incurred by the
Company is expected to be compensated, the revenue shall be recognized according to the amount
of cost incurred until the progress of performance can be reasonably determined.
For the performance obligation performed at a certain time point, the Company recognizes
the revenue at the time point when the customer obtains the control right of relevant goods. In
determining whether a customer has acquired control of goods or services, the Company will
consider the following signs:
① The Company has the right to receive payment for the goods or services, that is, the
customer has the obligation to pay for the goods;
② The Company has transferred the legal ownership of the goods to the customer, that is,
the customer has the legal ownership of the goods;
③ The Company has transferred the goods in kind to the customer, that is, the customer has
possessed the goods in kind;
④ The Company has transferred the main risks and rewards of the ownership of the goods
to the customer, that is, the customer has obtained the main risks and rewards of the ownership of
the goods;
⑤ The product has been accepted by the customer.
Sales return clause
For the sales with sales return clauses, when the customer obtains the control right of the
relevant goods, the Company shall recognize the revenue according to the amount of
consideration it is entitled to obtain due to the transfer of the goods to the customer, and recognize
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the amount expected to be returned due to the sales return as the estimated liability; at the same
time, the Company shall deduct the estimated cost of recovering the goods according to the book
value of the expected returned goods at the time of transfer( The balance after deducting the value
of the returned goods is recognized as an asset, that is, the cost of return receivable, which is
carried forward by deducting the net cost of the above assets according to the book value of the
transferred goods at the time of transfer. On each balance sheet date, the Company re estimates
the return of future sales and re measures the above assets and liabilities.
Warranty obligations
According to the contract and legal provisions, the Company provides quality assurance for
the goods sold and the projects constructed. For the guarantee quality assurance to ensure that the
goods sold meet the established standards, the Company conducts accounting treatment in
accordance with the accounting standards for Business Enterprises No. 13 - contingencies. For the
service quality assurance which provides a separate service in addition to guaranteeing that the
goods sold meet the established standards, the Company takes it as a single performance
obligation, allocates part of the transaction price to the service quality assurance according to the
relative proportion of the separate selling price of the goods and service quality assurance, and
recognizes the revenue when the customer obtains the service control right. When evaluating
whether the quality assurance provides a separate service in addition to assuring customers that
the goods sold meet the established standards, the Company considers whether the quality
assurance is a statutory requirement, the quality assurance period, and the nature of the
Company's commitment to perform the task.
Customer consideration payable
If there is consideration payable to the customer in the contract, unless the consideration is to
obtain other clearly distinguishable goods or services from the customer, the Company will offset
the transaction price with the consideration payable, and offset the current income at the later time
of confirming the relevant income or paying (or promising to pay) the customer's consideration.
Contractual rights not exercised by customers
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If the Company advances sales of goods or services to customers, the amount shall be
recognized as liabilities first, and then converted into income when relevant performance
obligations are fulfilled. When the Company does not need to return the advance payment and the
customer may give up all or part of the contract rights, if the Company expects to have the right to
obtain the amount related to the contract rights given up by the customer, the above amount shall
be recognized as income in proportion according to the mode of the customer exercising the
contract rights; otherwise, the Company only has the very low possibility of the customer
requiring to perform the remaining performance obligations The relevant balance of the above
liabilities is converted into income.
Contract change
When the construction contract between the Company and the customer is changed:
① If the contract change increases the clearly distinguishable construction service and
contract price, and the new contract price reflects the separate price of the new construction
service, the Company will treat the contract change as a separate contract for accounting;
② If the contract change does not belong to the above-mentioned situation (1), and there is a
clear distinction between the transferred construction service and the non transferred construction
service on the date of contract change, the Company will regard it as the termination of the
original contract, and at the same time, combine the non performance part of the original contract
and the contract change part into a new contract for accounting treatment;
③ If the contract change does not belong to the above situation (1), and there is no clear
distinction between the transferred construction services and the non transferred construction
services on the date of contract change, the Company will take the contract change part as an
integral part of the original contract for accounting treatment, and the resulting impact on the
recognized income will be adjusted to the current income on the date of contract change.
(2) The specific methods of revenue recognition of the Company are as follows:
Commodity sales contract
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The commodity sales contract between the company and the customer includes the
performance obligation of transferring curtain wall materials, screen door materials, electric
energy, etc., which belongs to the performance obligation at a certain time point.
Revenue from domestic sales of products is recognized at the time when the customer
obtains the right of control of the goods on the basis of comprehensive consideration of the
following factors: the Ccompany has delivered the products to the customer according to the
contract, the customer has accepted the goods, the payment for goods has been recovered or the
receipt has been obtained, and the relevant economic benefits are likely to flow in, the main risks
and rewards of the ownership of the goods have been transferred, the legal ownership has been
transferred;
The following conditions should be met for the recognition of export product revenue: the
Company has declared the product according to the contract, obtained the bill of lading, collected
the payment for goods or obtained the receipt certificate, and the relevant economic benefits are
likely to flow in, the main risks and rewards of the ownership of goods have been transferred, and
the legal ownership of goods has been transferred.
Service contract
The service contract between the Company and its customers includes the performance
obligations of metro platform screen door operation maintenance, curtain wall maintenance and
property services. As the Company's performance at the same time, the customers obtain and
consume the economic benefits brought by the Company's performance, the Company takes it as
the performance obligation within a certain period of time and allocates it equally during the
service provision period.
Engineering contract
The project contract between the Company and the customer includes the performance
obligations of curtain wall project and metro platform screen door project construction. As the
customer can control the goods under construction in the process of the Company's performance,
the Company takes them as the performance obligations within a certain period of time, and
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recognizes the income according to the performance progress, except that the performance
progress cannot be reasonably determined. The Company determines the performance schedule of
providing construction services according to the input method. The performance schedule shall be
determined according to the proportion of the actual contract cost to the estimated total contract
cost.
Real estate sales contract
The income of the Company's real estate development business is recognized when the control
of the property is transferred to the customer. The income is recognized when the customer
obtains the physical ownership or legal ownership of the completed property and the Company
has obtained the current right of collection and is likely to recover the consideration. When
confirming the contract transaction price, if the financing component is significant, the Company
will adjust the contract commitment consideration according to the financing component of the
contract.
(3) Adoption of different business models for the same type of business involving different
revenue recognition and measurement methods
There is no difference in revenue recognition due to the adoption of different accounting
policies for similar businesses.
29. Contract costs
Contract cost is divided into contract performance cost and contract acquisition cost.
The cost incurred by the Company in performing the contract shall be recognized as an asset
when the following conditions are met simultaneously:
① The cost is directly related to a current or expected contract, including direct labor, direct
materials, manufacturing expenses (or similar expenses), clearly borne by the customer, and other
costs incurred only due to the contract;
② This cost increases the Company's future resources for fulfilling its performance
obligations.
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③ The cost is expected to be recovered.
If the incremental cost incurred by the Company to obtain the contract is expected to be
recovered, it shall be recognized as an asset as the contract acquisition cost.
The assets related to the contract cost shall be amortised on the same basis as the income
from goods or services related to the assets; however, if the amortization period of the contract
acquisition cost is less than one year, the Company shall include it in the current profit and loss
when it occurs.
If the book value of the assets related to the contract cost is higher than the difference
between the following two items, the Company will make provision for impairment for the excess
part and recognize it as the loss of asset impairment, and further consider whether the estimated
liabilities related to the loss contract should be made:
① The residual consideration expected to be obtained due to the transfer of goods or
services related to the asset;
② The estimated cost to be incurred for the transfer of the relevant goods or services.
If the above provision for impairment of assets is subsequently reversed, the book value of
the asset after reversal shall not exceed the book value of the asset on the reversal date without
provision for impairment.
The contract performance cost recognized as an asset with an amortization period of no more
than one year or one normal business cycle at the time of initial recognition shall be listed in the
"inventory" item, and the amortization period of no more than one year or one normal business
cycle at the time of initial recognition shall be listed in the "other non current assets" item.
The contract acquisition cost recognized as an asset shall be listed in the item of "other
current assets" when the amortization period does not exceed one year or one normal business
cycle at the time of initial recognition, and listed in the item of "other non current assets" when
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the amortization period exceeds one year or one normal business cycle at the time of initial
recognition.
30. Government subsidy
(1) Government subsidy
Government subsidies are recognized when the following conditions are met:
① Requirements attached to government subsidies;
② The Company can receive government subsidies.
(2) Government subsidy
When a government subsidy is monetary capital, it is measured at the received or receivable
amount. None monetary capital are measured at fair value; if no reliable fair value available,
recognized at RMB1.
(3) Recognition of government subsidies
① Assets-related
Government subsidies related to assets are obtained by the Company to purchase, build or
formulate in other manners long-term assets; or subsidies related to benefits. If the asset-related
government subsidy is recognized as deferred gain, should be recorded in gain and loss in the
service life. Government subsidy measured at the nominal amount is accounted into current
income account. If the relevant assets are sold, transferred, scrapped or damaged before the end of
their useful life, the unallocated relevant deferred income balance shall be transferred to the profit
and loss of the current period of disposition of the assets.
Gain-related government subsidy should be accounted as follows:
The Company divides government subsidies into assets-related and earnings-related
government subsidies. Gain-related government subsidy should be accounted as follows:
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Subsidy that will be used to compensate related future costs or losses should be recognized
as deferred gain and recorded in the gain and loss of the current report and offset related cost;
Subsidy that is used to compensate existing cost or loss should be recorded in the gain and
loss of the current period or offset related cost.
For government subsidies that include both asset-related and income-related parts, separate
different parts for accounting treatment; It is difficult to distinguish between the overall
classification of government subsidies related to benefits.
Government subsidy related to routine operations should be recorded in other gains or offset
related cost. Government subsidy not related to routine operations should be recorded in non-
operating income or expense.
③ Policy preferential loan discount
The policy-based preferential loan obtained has interest subsidy. If the government allocates
the interest-subsidy funds to the lending bank, the loan amount actually received will be used as
the entry value of the loan, and the borrowing cost will be calculated based on the loan principal
and policy-based preferential interest rate.
If the government allocates the interest-bearing funds directly to the Group, discount interest
will offset the borrowing costs.
④ Government subsidy refund
When a confirmed government subsidy needs to be returned, the book value of the asset is
adjusted against the book value of the relevant asset at initial recognition. If there is a related
deferred income balance, the book balance of the related deferred income is written off and the
excess is credited to the current profit or loss; In other cases, it is directly included in the current
profit and loss.
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31. Differed income tax assets and differed income tax liabilities
The Company uses the temporary difference between the book value of the assets and
liabilities on the balance sheet day and the tax base and the liabilities method to recognize the
deferred income tax. 26. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets
For deductible temporary discrepancies, deductible losses and tax offsets that can be carried
forward for future years, the impact on income tax is calculated at the estimated income tax rate
for the transfer-back period and the impact is recognized as deferred income tax assets, provided
that the Company is likely to obtain future taxable income for deductible temporary discrepancies,
deductible losses and tax offsets.
At the same time, the impact on income tax of deductible temporary discrepancies resulting
from the initial recognition of assets or liabilities in transactions or matters with the following
characteristics is inconclusive as deferred income tax assets:
A. The transaction is not a business combination;
B. the transaction is not a merger and the transaction does not affect the accounting profit or
taxable proceeds;
In the event of temporary discrepancy of deductible investment related to subsidiaries, joint
ventures and joint ventures, and meeting the following two conditions, the amount of impact
(talent) on income tax shall be deemed as deferred income tax assets:
A. Temporary discrepancies are likely to be reversed in the foreseeable future;
B. In the future, it is likely to obtain taxable income that can be used to offset the deductible
temporary differences;
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On the balance sheet date, if there is conclusive evidence that sufficient taxable income is
likely to be obtained in the future to offset the deductible temporary differences, the deferred
income tax assets that have not been recognized in the previous period are recognized.
On the balance sheet day, the Company re-examines the book value of the deferred income
tax assets. If it is unlikely to have adequate taxable proceeds to reduce the benefits of the deferred
income tax assets, less the deferred income tax assets' book value. When there is adequate taxable
proceeds, the lessened amount will be reversed.
(2) Deferred income tax assets
All provisional differences in taxable income of the Company shall be measured on the basis
of the estimated income tax rate for the period of transfer-back and shall be recognized as
deferred income tax liabilities, except that:
At the same time, the impact on income tax of deductible temporary discrepancies resulting
the initial recognition of assets or liabilities in transactions or matters with the following
characteristics is inconclusive as deferred income tax Liabilities:
A. Initial recognition of goodwill;
B. Initial recognition of goodwill, or of assets or liabilities generated in transactions with the
following features: the transaction is not a merger and the transaction does not affect the
accounting profit or taxable proceeds;
② In the event of temporary discrepancy of deductible investment related to subsidiaries,
Joint venture joint ventures, and meeting the two conditions, the amount of impact (talent) on
income tax shall be deemed as deferred income tax assets:
A. The Company is able to control the time of temporary discrepancy transfers;
B. Temporary discrepancies are likely to be reversed in the foreseeable future;
(3) Deferred income tax assets
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(1) Deferred income tax liabilities or assets associated with enterprise consolidation
Temporary difference of taxable tax or deductible temporary difference generated by
enterprise merger under non-same control. When deferred income tax liability or deferred income
tax asset is recognized, related deferred income tax expense (or income) is usually adjusted as
recognized goodwill in enterprise merger.
② Amount of shares paid and accounted as owners' equity
Except for the adjustment goodwill generated by mergers or deferred income tax related to
transactions or events directly accounted into the owners' equity, income tax is accounted as
income tax expense into the current gain/loss account. The effects of temporary discrepancy on
income tax include the following: Other integrated benefits such as fair value change of financial
assets available for sale, retroactive adjustment of accounting policy changes or retroactive
restatement of accounting error correction discrepancy to adjust the initial retained income, and
mixed financial instruments including liabilities and equity.
③ Compensation for losses and tax deductions
A. Compensable losses and tax deductions from the Company's own operations
Deductible losses refer to the losses calculated and determined in accordance with the
provisions of the tax law that are allowed to be made up with the taxable income of subsequent
years. The uncovered losses (deductible losses) and tax deductions that can be carried forward in
accordance with the tax law are treated as deductible temporary differences. When it is expected
that sufficient taxable income is likely to be obtained in the future period when it is expected to be
available to make up for losses or tax deductions, the corresponding deferred income tax assets
are recognized within the limit of the taxable income that is likely to be obtained, while reducing
the current period Income tax expense in the income statement.
B. Compensable uncovered losses of the merged company due to business merger
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In a business combination, if the Company obtains the deductible temporary difference of the
purchased party and does not meet the deferred income tax asset recognition conditions on the
purchase date, it shall not be recognized. Within 12 months after the purchase date, if new or
further information is obtained indicating that the relevant conditions on the purchase date already
exist, and the economic benefits brought about by the temporary difference are expected to be
deducted on the purchase date, confirm the relevant delivery. Deferred income tax assets, while
reducing goodwill, if the goodwill is not enough to offset, the difference is recognized as the
current profit and loss; except for the above circumstances, the deferred tax assets related to the
business combination are recognized and included in the current profit and loss.
④Temporary difference caused by merger offset
If there is a temporary difference between the book value of assets and liabilities in the
consolidated balance sheet and the taxable basis of the taxpayer due to the offset of the unrealized
internal sales gain or loss, the deferred income tax asset or the deferred income tax liability is
confirmed in the consolidated balance sheet, and the income tax expense in the consolidated profit
statement is adjusted, with the exception of the deferred income tax related to the transaction or
event directly included in the owner's equity and the merger of the enterprise.
⑤ Share payment settled by equity
If the tax law provides for allowable pre-tax deduction of expenses related to share payment,
within the period for which the cost and expense are recognized in accordance with the
accounting standards, the Company shall calculate the tax basis and temporary discrepancy based
on the estimated pre-tax deduction amount at the end of the accounting period and confirm the
relevant deferred income tax if it meets the conditions for confirmation. Of these, the amount that
can be deducted before tax in the future exceeds the cost related to share payment recognized in
accordance with the accounting standards, and the excess income tax shall be directly included in
the owner's equity.
(4) Basis for presentation of deferred tax assets and deferred tax liabilities on a net
basis
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The deferred income tax assets and deferred income tax liabilities of the company are
presented as a net amount after offsetting when the following conditions are met simultaneously:
The Company has a legal right to offset current income tax assets and current income tax
liabilities on a net basis.
The deferred income tax assets and deferred income tax liabilities are related to income taxes
levied by the same tax authority on the same taxable entity, or are related to income taxes levied
by different tax authorities but the significant deferred income tax assets and deferred income tax
liabilities will be settled on a net basis for current income taxes or simultaneous acquisition of
assets and settlement of liabilities within each future period in which the related taxable entity
intends to settle the current income tax assets and liabilities on a net basis.
32. Leasing
(1) Identification of lease
On the commencement date of the contract, the company evaluates whether the contract is a
lease or includes a lease. If one party in the contract transfers the right to control the use of one or
more identified assets within a certain period in exchange for consideration, the contract is a lease
or includes a lease. In order to determine whether the contract transfers the right to control the use
of the identified assets within a certain period, the company evaluates whether the customers in the
contract have the right to obtain almost all the economic benefits arising from the use of the
identified assets during the use period, and have the right to dominate the use of the identified assets
during the use period.
(2) Separate identification of lease
If the contract includes multiple separate leases at the same time, the company will split the
contract and conduct accounting treatment for each separate lease. If the following conditions are
met at the same time, the right to use the identified asset constitutes a separate lease in the contract:
① the lessee can profit from using the asset alone or together with other easily available resources;
② The asset is not highly dependent or highly related to other assets in the contract.
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(3) Accounting treatment method of the Company as lessee
On the beginning date of the lease term, the Company recognizes the lease with a lease term of
no more than 12 months and excluding the purchase option as a short-term lease; When a single
leased asset is a brand-new asset, the lease with lower value is recognized as a low value asset lease.
If the Company sublets or expects to sublet the leased assets, the original lease is not recognized as
a low value asset lease.
For all short-term leases and low value asset leases, the Company will record the lease
payment amount into the relevant asset cost or current profit and loss according to the straight-line
method (or other systematic and reasonable methods) in each period of the lease term.
In addition to the above short-term leases and low value asset leases with simplified treatment,
the Company recognizes the right to use assets and lease liabilities for the lease on the beginning
date of the lease term.
① Use right assets
The term "right to use assets" refers to the right of the lessee to use the leased assets during the
lease term.
At the beginning of the lease term, the right of use assets are initially measured at cost. This
cost includes:
The initial measurement amount of lease liabilities;
For the lease payment paid on or before the beginning of the lease term, if there is lease
incentive, the relevant amount of lease incentive enjoyed shall be deducted;
Initial direct expenses incurred by the lessee;
The estimated cost incurred by the lessee for dismantling and removing the leased assets,
restoring the site where the leased assets are located or restoring the leased assets to the
state agreed in the lease terms. The Company recognizes and measures the cost in
accordance with the recognition standards and measurement methods of estimated
liabilities. See 27. Estimated liabilities in Chapter X, V. important accounting policies and
accounting estimates for details. If the above costs are incurred for the production of
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inventories, they will be included in the cost of inventories.
Depreciation of right of use assets is accrued by using the straight-line method. If it can be
reasonably determined that the ownership of the leased asset will be obtained at the expiration of
the lease term, the depreciation rate shall be determined according to the asset category of the right
to use and the estimated net residual value rate within the expected remaining service life of the
leased asset; If it is impossible to reasonably determine that the ownership of the leased asset will
be obtained at the expiration of the lease term, the depreciation rate shall be determined according
to the asset category of the right of use within the shorter of the lease term and the remaining
service life of the leased asset.
② Lease liabilities
The lease liabilities are initially measured Company shall according to the present value of the
unpaid lease payments at the beginning of the lease term. The lease payment includes the following
five items:
Fixed payment amount and substantial fixed payment amount. If there is lease incentive,
the relevant amount of lease incentive shall be deducted;
Variable lease payments depending on index or ratio;
The exercise price of the purchase option, provided that the lessee reasonably determines
that the option will be exercised;
The amount to be paid for exercising the option to terminate the lease, provided that the
lease term reflects that the lessee will exercise the option to terminate the lease;
The amount expected to be paid according to the residual value of the guarantee provided
by the lessee.
When calculating the present value of lease payments, the implicit interest rate of the lease is
used as the discount rate. If the implicit interest rate of the lease cannot be determined, the
incremental borrowing interest rate of the company is used as the discount rate. The difference
between the lease payment amount and its present value is regarded as unrecognized financing
expenses, and the interest expenses are recognized according to the discount rate of the present
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value of the lease payment amount during each period of the lease term and included in the current
profit and loss. The amount of variable lease payments not included in the measurement of lease
liabilities shall be included in the current profit and loss when actually incurred.
After the beginning date of the lease term, when the actual fixed payment amount changes, the
expected payable amount of the guaranteed residual value changes, the index or ratio used to
determine the lease payment amount changes, the evaluation results or actual exercise of the
purchase option, renewal option or termination option changes, the Company remeasures the lease
liability according to the present value of the changed lease payment amount, And adjust the book
value of the right to use assets accordingly.
(4) Accounting treatment method of the Company as lessor
On the lease commencement date, the Company classifies leases that have substantially
transferred almost all the risks and rewards related to the ownership of the leased assets as financial
leases, and all other leases are operating leases.
① Operating lease
During each period of the lease term, the Company recognizes the lease receipts as rental
income according to the straight-line method (or other systematic and reasonable methods), and the
initial direct expenses incurred are capitalized, amortized on the same basis as the recognition of
rental income, and included in the current profit and loss by stages. The variable lease payments
obtained by the Company related to operating leases that are not included in the lease receipts are
included in the current profits and losses when actually incurred.
② Finance lease
On the lease beginning date, the Company recognizes the financial lease receivables according
to the net amount of the lease investment (the sum of the unsecured residual value and the present
value of the lease receipts not received on the lease beginning date discounted according to the lease
embedded interest rate), and terminates the recognition of the financial lease assets. During each
period of the lease term, the Company calculates and recognizes the interest income according to
the interest rate embedded in the lease.
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The amount of variable lease payments obtained by the Company that are not included in the
measurement of net lease investment shall be included in the current profit and loss when actually
incurred.
(5) Accounting treatment of lease change
① Change of lease as a separate lease
If the lease changes and meets the following conditions at the same time, the Company will
treat the lease change as a separate lease for accounting: a. the lease change expands the lease scope
by increasing the use right of one or more leased assets; B. The increased consideration is
equivalent to the amount adjusted according to the conditions of the contract at the separate price
for most of the expansion of the lease scope.
② The lease change is not treated as a separate lease
A. The Company as lessee
On the effective date of the lease change, the Company reconfirmed the lease term and
discounted the changed lease payment at the revised discount rate to re-measure the lease liability.
When calculating the present value of the lease payment after the change, the implicit interest rate
of the lease during the remaining lease period shall be used as the discount rate; If it is impossible to
determine the implicit interest rate of the lease for the remaining lease period, the incremental loan
interest rate on the effective date of the lease change shall be used as the discount rate.
The impact of the above lease liability adjustment shall be accounted for according to the
following circumstances:
If the lease scope is reduced or the lease term is shortened due to the lease change, the
book value of the right to use assets shall be reduced, and the relevant gains or losses of
partial or complete termination of the lease shall be included in the current profits and
losses;
For other lease changes, the book value of the right to use assets shall be adjusted
accordingly.
The Company as leasor
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If the operating lease is changed, the Company will treat it as a new lease for accounting from
the effective date of the change, and the amount of lease receipts received in advance or receivable
related to the lease before the change is regarded as the amount of new lease receipts.
If the change of financial lease is not accounted for as a separate lease, the Company will deal
with the changed lease under the following circumstances: if the change of lease takes effect on the
lease commencement date and the lease will be classified as an operating lease, the Company will
account for it as a new lease from the effective date of lease change, and take the net lease
investment before the effective date of lease change as the book value of leased assets; If the lease
change takes effect on the lease commencement date, the lease will be classified as a financial lease,
and the Company will conduct accounting treatment in accordance with the provisions on
modifying or renegotiating the contract.
(6) Sale and lease-back
The Company assesses and determines whether the asset transfer in the sale and leaseback
transaction is a sale in accordance with the provisions of 28. Income in Chapter X, V, Important
accounting policies and accounting estimates.
① The Company as seller (lessee)
If the asset transfer in the sale and leaseback transaction does not belong to sales, the Company
will continue to recognize the transferred assets, recognize a financial liability equal to the transfer
income, and conduct accounting treatment for the financial liability in accordance with 10。
Financial instruments in Chapter X, V, Important accounting policies and accounting estimates. If
the asset transfer belongs to sales, the Company measures the right to use assets formed by sale and
leaseback according to the part of the book value of the original assets related to the right to use
obtained by leaseback, and only recognizes the relevant gains or losses on the rights transferred to
the lessor.
② The Company as buyer (lessor)
If the asset transfer in the sale and leaseback transaction does not belong to sales, the company
does not recognize the transferred asset, but recognizes a financial asset equal to the transfer income,
and carries out accounting treatment on the financial asset in accordance with 10. Financial
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instruments in Chapter X, V. Important accounting policies and accounting estimates. If the asset
transfer belongs to sales, the Company shall conduct accounting treatment for asset purchase and
asset lease in accordance with other applicable accounting standards for business enterprises.
33. Other significant accounting policies and estimates
(1) Accounting of hedging
(1.1) Classification of inventories
The Company divides its hedging strategies into fair value hedges, cash flow hedges, and net
investment hedges.
① Fair value hedge. It refers to hedging activities conducted to mitigate the risk of changes
in the fair value of recognized assets or liabilities, unrecognized firm commitments, or
components of the aforementioned items. The fair value changes are caused by specific risks that
will impact the Company's profit or other comprehensive income.
① Cash flow hedging refers to the hedging of cash flow risk. The change in cash flow is
derived from specific risks associated with recognized assets or liabilities, expected transactions
that are likely to occur, or with respect to the components of the above-mentioned project and will
affect the profits and losses of the enterprise.
③ Net investment hedge for overseas operations refers to hedging activities conducted to
mitigate the foreign exchange risk exposure of the net investment in overseas operations. The
hedged risk in the net investment hedge is the translation difference between the functional
currency of the overseas operations and the reporting currency of the parent company.
(1.2) Hedging tools and hedged projects
Hedging means a financial instrument designated by the Company for the purpose of
hedging, whose fair value or cash flow variation is expected to offset the fair value or cash flow
variation of the hedged item, including:
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① Financial liabilities measured at fair value with variations accounted into current income
account Check-out options can only be used as a hedging tool if the option is hedged, including
those embedded in a hybrid contract. Derivatives embedded in a hybrid contract but not split
cannot be used as separate hedging tools.
② Non-derivative financial assets or non-derivative financial liabilities that are measured at
fair value and whose changes are included in the current profit and loss, but designated as fair
value and whose changes are included in the current profit and loss, and their own credit risk
changes caused by changes in fair value except for financial liabilities included in other
comprehensive income.
Own equity instruments are not financial assets or financial liabilities and cannot be used as
hedging instruments.
A hedged item refers to an item that exposes the Company to the risk of changes in fair value
or cash flow and is designated as the hedged object and can be reliably measured. The Company
designates the following individual projects, project portfolios or their components as hedged
projects:
① Confirmed assets or liabilities.
② Confirmed commitments that have not yet been confirmed. Confirmed commitment
refers to a legally binding agreement to exchange a specific amount of resources at an agreed
price on a specific date or period in the future.
③ Expected transactions that are likely to occur. Anticipated transactions refer to
transactions that have not yet been committed but are expected to occur.
④ Net investment in overseas operations.
The above-mentioned project components refer to the parts that are less than the overall fair
value or cash flow changes of the project. The Company designates the following project
components or their combinations as hedged items:
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① The part of the change in fair value or cash flow (risk component) that is only caused by
one or more specific risks in the overall fair value or cash flow changes of the project. According
to the assessment in a specific market environment, the risk component should be able to be
individually identified and reliably measured. The risk component also includes the part where the
fair value or cash flow of the hedged item changes only above or below a specific price or other
variables.
② One or more selected contractual cash flows.
③ The component of the nominal amount of the project, that is, the specific part of the
whole amount or quantity of the project, may be a certain proportion of the whole project, or may
be a certain level of the whole project. If a certain level includes early repayment rights and the
fair value of the early repayment rights is affected by changes in the risk of the hedge, the level
shall not be designated as the hedged item of the fair value hedge, but in the measurement of the
hedged item except when the fair value has included the influence of the prepayment right.
(1. 3) Evaluation of hedging relationship
When the hedging relationship is initially specified, the Group officially specifies the related
hedging relationships with official documents recording the hedging relationships, risk
management targets and hedging strategies. This document sets out the hedging tools, hedged
items, the nature of hedged risks, and the Company's assessment of hedged effectiveness.
Hedging means a financial instrument designated by the Company for the purpose of hedging,
whose fair value or cash flow variation is offset the fair value or cash flow variation of the hedged
item, including: Such hedges are continuously evaluated on and after the initial specified date to
meet the requirements for hedging validity.
If the hedging instrument has expired, been sold, the contract is terminated or exercised (but
the extension or replacement as part of the hedging strategy is not treated as expired or contract
termination), or the risk management objective changes, resulting in hedging The relationship no
longer meets the risk management objectives, or the economic relationship between the hedged
item and the hedging instrument no longer exists, or the impact of credit risk begins to dominate
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in the value changes caused by the economic relationship between the hedged item and the
hedging instrument, or when the hedge no longer meets the other conditions of the hedge
accounting method, the Company terminates the use of hedge accounting.
If the hedging relationship no longer meets the requirements for hedging effectiveness due to
the hedging ratio, but the risk management objective of the designated hedging relationship has
not changed, the Company shall rebalance the hedging relationship.
(1. 4) Revenue the of revenue recognition and measurement
If the conditions for applying hedge accounting method are met, it shall be handled
according to the following methods:
① Fair value hedging
Gains or losses arising from hedging instruments are recognized in the current period's
income statement. If the hedging is conducted for specified non-derivative equity investments (or
components thereof) measured at fair value with changes in fair value recognized in other
comprehensive income, gains or losses from the hedging instruments are recognized in other
comprehensive income. Gains or losses arising from the hedged items due to the hedging risk
exposure are recognized in the income statement. At the same time, the carrying amount of the
designated hedged items that are not measured at fair value is adjusted. If the hedged item is a
specified non-derivative equity investment (or component thereof) measured at fair value with
changes in fair value recognized in other comprehensive income, gains or losses resulting from
the hedging risk exposure are recognized in other comprehensive income, and the carrying
amount of the hedged item has already been measured at fair value and does not require
adjustment.
Regarding fair value hedges related to financial instruments (or components thereof)
measured at amortized cost, any adjustments made to the carrying amount of the hedged item are
amortized using the effective interest rate recalculated from the date of the commencement of
amortization and recognized in the income statement. The amortization date for adjustments
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should begin from the adjustment date and should not be later than the point at which hedging
gains and losses are adjusted upon termination of the hedged item. For hedged items that are
financial assets (or components thereof) measured at fair value with changes in fair value
recognized in other comprehensive income, the accumulated hedging gains or losses should be
amortized in the same manner and recognized in the income statement. However, the carrying
amount of the financial assets (or components thereof) should not be adjusted.
For hedged items that are unrecognized firm commitments (or components thereof), the
cumulative fair value changes caused by the hedging risk after the hedging relationship is
designated should be recognized as an asset or liability. The related gains or losses should be
recognized in the income statement. When fulfilling a firm commitment and acquiring an asset or
assuming a liability, the initial recognized amount of the asset or liability should be adjusted to
include the cumulative fair value changes of the designated hedged item that have been
recognized.
③ Cash flow hedging
The part of hedging tool gains or losses that is valid for hedging is recognized as other
comprehensive income as a cash flow hedging reserve, and the part that is invalid for hedging
(that is, other gains or losses after deducting other comprehensive income), are counted Into the
current profit and loss. The amount of cash flow hedging reserve is determined according to the
lower of the absolute amounts of the following two items: ①accumulated gains or losses of
hedging instruments since the hedging. The amount in the effective arbitrage is recognized by the
accumulative gains or losses from the starting of arbitrage and accumulative changes to the
current value of future forecast cash flows from the start of arbitrage.
If the expected transaction of the hedged asset is subsequently recognized as a non-financial
asset or non-financial liability, or if the expected transaction of the non-financial asset or non-
financial liability forms a defined commitment to the applicable fair value hedge accounting, the
amount of the cash flow hedge reserve originally recognized in the other consolidated income is
transferred out to account for the initial recognized amount of the asset or liability. For the
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remaining cash flow hedges, during the same period when the expected cash flow to be hedged
affects the profit and loss, if the expected sales occur, the cash flow hedge reserve recognized in
other comprehensive income is transferred out and included in the current profit and loss.
③ Foreign operation net investment hedging
For hedging of foreign operation net investments, the portion of gains or losses from the
hedging instruments that qualify as effective hedges is directly recognized in other comprehensive
income. The portion of gains or losses from the hedging instruments that do not qualify as
effective hedges is recognized in the income statement. Upon disposal of the foreign operation,
the previously recognized gains or losses from the hedging instruments reflected in other
comprehensive income are reclassified to the income statement.
(2) Repurchase of the Company's shares
① In the event of a reduction in the Company's share capital as approved by legal procedure,
the Company shall reduce the share capital by the total amount of the written-off shares, adjust
the owner's equity by the difference between the price paid by the purchased stocks (including
transaction costs) and the total amount of the written-off shares, offset the capital reserve (share
capital premium), surplus reserve and undistributed profits in turn; A portion of a capital reserve
(share capital premium) that is less than the total face value and less than the total face value.
② The total expenditure of the repurchase shares of the Company, which is managed as an
inventory share before they are cancelled or transferred, is converted to the cost of the inventory
shares.
③ Increase in the capital reserve (capital premium) at the time of transfer of an inventory
unit, the portion of the transfer income above the cost of the inventory unit; Lower than the
inventory stock cost, the capital reserve (share capital premium), surplus reserve, undistributed
profits in turn.
(3) Measurement of Fair Value
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Fair value refers to the amount of asset exchange or liabilities settlement by both transaction
parties familiar with the situation in a fair deal on a voluntary basis.
The Company measures the fair value of related assets or liabilities at the prices in the main
market. If there is no major market, the Company measures the fair value of the relevant assets or
liabilities at the most favorable market prices. The Group uses assumptions that market participants
use to maximize their economic benefits when pricing the asset or liability.
The main market refers to the market with the highest transaction volume and activity of the
related assets or liabilities. The most favorable market means the market that can sell the related
assets at the highest amount or transfer the related liabilities at the lowest amount after considering
the transaction cost and transportation cost.
For financial assets or liabilities in an active market, The Company determines their fair value
based on quotations in the active market. If there is no active market, the Company uses evaluation
techniques to determine the fair value.
For the measurement of non-financial assets at fair value, the ability of market participants to
use the assets for optimal purposes to generate economic benefits, or the ability to sell the assets to
other market participants that can be used for optimal purposes to generate economic benefits.
① Evaluation techniques
The Company adopts valuation techniques that are applicable in the current period and are
supported by sufficient data and other information. The valuation techniques used mainly include
market method, income method and cost method. The Company uses a method consistent with one
or more of the valuation techniques to measure fair value. If multiple valuation techniques are used
to measure fair value, the reasonableness of each valuation result shall be considered, and the fair
value shall be selected as the most representative of fair value under the current circumstances. The
amount of value is regarded as fair value.
The The Company equipment are applicable in the current circumstances and have sufficient
available data and other information to support the use of the relevant observable input values
prioritized. Unobservable input values are used only when the observable input value cannot be
obtained or is not feasible. Observable input values are input values that can be obtained from
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market data. The Group uses assumptions that market participants use to maximize their economic
benefits when pricing the asset or liability. Non-observable input values are input values that cannot
be obtained from market data. The input value is obtained based on the best information available
on assumptions used by market participants in pricing the relevant asset or liability.
②Fair value hierarchy
This company divides the input value used in fair value measurement into three levels, and
first uses the first level input value, then uses the second level input value, and finally uses the third
level input value. First level: quotation of same assets or liabilities in an active market (unadjusted)
The second level input value is a directly or indirectly observable input value of the asset or liability
in addition to the first level input value. The input value of the third level is the unobservable input
value of the related asset or liability.
(4) Significant accounting judgment and estimate
The Company continuously reviews significant accounting judgment and estimate adopted
for the reasonable forecast of future events based on its historical experience and other factors.
Significant accounting judgment and assumptions that may lead to major adjustment of the book
value of assets and liabilities in the next accounting year are listed as follows:
Classification of financial assets
The major judgements involved in the classification of financial assets include the analysis
of business model and contract cash flow characteristics.
The company determines the business mode of managing financial assets at the level of
financial asset portfolio, taking into account such factors as how to evaluate and report financial
asset performance to key managers, the risks that affect financial asset performance and how to
manage it, and how to obtain remuneration for related business managers.
When the company assesses whether the contractual cash flow of financial assets is
consistent with the basic borrowing arrangement, there are the following main judgments:
whether the principal may change due to early repayment and other reasons during the duration of
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the period or the amount of change; whether the interest Including the time value of money, credit
risk, other basic borrowing risks, and consideration of costs and profits. For example, does the
amount paid in advance reflect only the unpaid principal and the interest based on the unpaid
principal, as well as the reasonable compensation paid for early termination of the contract.
Measurement of expected credit losses of accounts receivable
The Company calculates the expected credit loss of accounts receivable through the risk
exposure of accounts receivable default and the expected credit loss rate, and determines the
expected credit loss rate based on the default probability and the default loss rate. When
determining the expected credit loss rate, the Company uses internal historical credit loss
experience and other data, combined with current conditions and forward-looking information to
adjust the historical data. When considering forward-looking information, the indicators used by
the Company include the risks of economic downturn, changes in the external market
environment, technological environment, and customer conditions. The Company regularly
monitors and reviews assumptions related to the calculation of expected credit losses.
Deferred income tax assets
If there is adequate taxable profit to deduct the loss, the deferred income tax assets should be
recognized by all the unused tax loss. This requires the management to make a lot of judgment to
forecast the time and amount of future taxable profit and determine the amount of the deferred tax
assets based on the taxation strategy.
Income recognition
The Company's revenue from providing curtain wall construction and metro platform screen
door installation services is recognized over a period of time. The recognition of the income and
profit of such engineering installation services depends on the Company's estimation of the
contract results and performance progress. If the actual amount of total revenue and total cost is
higher or lower than the estimated value of the management, it will affect the amount of revenue
and profit recognition of the Company in the future.
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Engineering contract
The management shall make relevant judgment to confirm the income and expenses of
project contracting business according to the performance progress. If losses are expected to occur
in the project contract, such losses shall be recognized as current expenses. The management of
the Company estimates the possible losses according to the budget of the project contract. The
Company determines the transaction price according to the terms of the contract and in
combination with previous customary practices, and considers the influence of variable
consideration, major financing components in the contract and other factors. During the
performance of the contract, the Company continuously reviews the estimated total contract
revenue and the estimated total contract cost. When the initial estimate changes, such as contract
changes, claims and awards, the estimated total contract revenue and the estimated total contract
cost are revised. When the estimated total contract cost exceeds the total contract revenue, the
main business cost and estimated liabilities shall be recognized according to the loss contract to
be executed.
Estimate of fair value
The Company uses fair value to measure investment real estate and needs to estimate the fair
value of investment real estate at least quarterly. This requires the management to reasonably
estimate the fair value of the investment real estate with the help of valuation experts.
Development cost
For property that has been handed over with income recognized, but whose public facilities
have not been constructed or not been completed, the management will estimate the development
cost for the part that has not been started according to the budget to reflect the operation result of
the property sales.
34. Major changes in accounting policies and estimates
1. Changes in important accounting policies
Applicable □ Inapplicable
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Annual Report 2023 of China Fangda Group Co., Ltd.
In RMB
Statement item
Affected
Account policy changes and reasons materially
amount
affected
Implementation of ASBE Interpretation No. 16, "Accounting for Deferred Income Taxes
Related to Assets and Liabilities Arising from a Single Transaction to Which the Initial
Recognition Exemption Does Not Apply"
On November 30, 2022, the Ministry of Finance ("MOF") issued ASBE Interpretation No.
16 ("ASBE Interpretation No. 16") ("ASBE Interpretation No. 31"), of which "Accounting No No
for Deferred Income Taxes on Assets and Liabilities Arising from Individual Transactions to
which the Exemption from Initial Recognition Does Not Apply" has become effective as of
January 1, 2023. The Company implemented this provision of Interpretation No.16 on
January 1, 2023. The implementation of this provision did not have any significant impact
on the Company's financial position and results of operations.
(2) Changes in major accounting estimates
□ Applicable Inapplicable
(3) Implementation of new accounting standards adjustment for the first time starting from 2023, and implementation of
financial statement related items at the beginning of the year for the first time
□ Applicable Inapplicable
VI. Taxation
1. Major taxes and tax rates
Tax Tax basis Tax rate (%)
VAT Taxable income 1, 3, 5, 6, 9, and 13
City maintenance and construction tax Taxable turnover 1, 5, 7
Education surtax Taxable turnover 3
Local education surtax Taxable turnover 2
Enterprise income tax Taxable income See the following table
Tax rates applicable for different tax payers
Tax payer Income tax rate
The Company 25%
Shenzhen Fangda Jianke Co., Ltd. (hereinafter Fangda Jianke) 15%
Fangda Zhiyuan Technology Co., Ltd. (hereinafter Fangda Zhiyuan) 15%
Fangda New Material (Jiangxi) Co., Ltd. (hereinafter Fangda Jiangxi New
15%
Material)
Chengdu Fangda Construction Technology Co., Ltd. (hereinafter Fangda Chengdu
15%
Technology)
Dongguan Fangda New Material Co., Ltd. (hereinafter Fangda Dongguan New
25%
Material)
Shenzhen Fangda Property Development Co., Ltd. (hereinafter Fangda Property
25%
Development)
Shenzhen Fangda New Energy Co., Ltd. (hereinafter Fangda New Energy) 25%
Shenzhen Fangda Property Development Co., Ltd. (hereinafter Fangda Property 25%
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Annual Report 2023 of China Fangda Group Co., Ltd.
Development)
Jiangxi Fangda Property Development Co., Ltd. (hereinafter Fangda Jiangxi
25%
Property Development)
Pingxiang Fangda Luxin New Energy Co., Ltd. (hereinafter Fangda Luxin New
25%
Energy)
Nanchang Xinjian Fangda New Energy Co., Ltd. (hereinafter Fangda Xinjian New
25%
Energy)
Dongguan Fangda New Energy Co., Ltd. (hereinafter Fangda Dongguan New
25%
Energy)
Shenzhen QIanhai Kechuangyuan Software Co., Lt.d (hereinafter Kechuangyuan
25%
Software)
Fangda Zhiyuan Technology (Hong Kong) Co., Ltd, (Fangda Zhiyuan Hong
16.50%
Kong)
Fangda Zhiyuan Technology (Wuhan) Co., Ltd, (Fangda Wuhan Zhiyuan) 25%
Fangda Zhiyuan Technology (Nanchang) Co., Ltd, (Fangda Nanchang Zhiyuan) 25%
Fangda Zhiyuan Railway Transportation Equipment (Dongguan) Co., Ltd.
25%
(hereinafter referred to as Fangda Zhiyuan Dongguan)
General Rail Technology Private Limited 17%
Shihui International Holding Co., Ltd. (hereinafter Fangda Shihui International) 16.50%
Shenzhen Hongjun Investment Co., Ltd. (hereinafter Fangda Hongjun Investment) 25%
Fangda Australia Pty Ltd (hereinafter Fangda Australia) 30%
Shanghai Fangda Zhijian Technology Co., Ltd. (hereinafter referred to as Fangda
15%
Shanghai Zhijian company)
Shenzhen Fangda Yunzhi Technology Co., Ltd. (hereinafter Fangda Yunzhi) 25%
Shanghai Fangda Jianzhi Technology Co., Ltd. (hereinafter Fangda Shanghai
25%
Jianzhi)
Shenzhen Zhongrong Litai Investment Co. Ltd. (Zhongrong Litai) 25%
Chengdu Fangda Curtain Wall Technology Co., Ltd. (hereinafter Fangda Chengdu
25%
Curtain Wall)
Fangda Southeast Asia Co., Ltd. (hereinafter Fangda Southeast Asia) 20%
Shenzhen Xunfu Investment Co., Ltd. (hereinafter referred to as Fangda Xunfu
25%
Investment)
Shenzhen Lifu Investment Co., Ltd. (hereinafter referred to as Fangda Lifu
25%
Investment)
Shenzhen Fangda Investment Partnership (Limited Partnership) (hereinafter
Inapplicable
referred to as Fangda Investment)
Fangda Jianke (Hong Kong) Co., Ltd. (hereinafter Fangda Jianke Hong Kong) 16.50%
Shenzhen Fangda Yunzhu Technology Co., Ltd. (hereinafter Fangda Yunzhu) 15%
Shenzhen Yunzhu Testing Technology Co., Ltd. (Hereinafter Fangda Yunzhu
25%
Testing)
Jiangxi Fangda Intelligent Manufacturing Technology Co., Ltd. (hereinafter
25%
referred to as Fangda Intelligent Manufacturing Company)
Shenzhen Fangda Jianchuang Technology Co., Ltd. (hereinafter Fangda
25%
Jianchuang)
2. Tax preference
(1) On December 23, 2021, the subsidiary Fangda Jianke obtained the certificate of high-tech
enterprise jointly issued by Shenzhen Science and Technology Innovation Commission, Shenzhen
Finance Bureau, State Administration of Taxation and Shenzhen Taxation Bureau. The certificate
number is GR202144200527. Within three years after obtaining the qualification of high-tech
enterprise (from 2021 to 2023), the income tax will be levied at 15%.
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Annual Report 2023 of China Fangda Group Co., Ltd.
(2) On December 23, 2021, the subsidiary Fangda Zhiyuan Technology Co., Ltd. obtained
the certificate of high tech enterprise jointly issued by Shenzhen Science and Technology
Innovation Commission, Shenzhen Finance Bureau, State Administration of Taxation and
Shenzhen Taxation Bureau. The certificate number is GR202144205924. Within three years after
obtaining the qualification of high tech enterprise (from 2021 to 2023), the income tax will be
levied at 15%.
(3) On November 3, 2021, the subsidiary Fangda Jiangxi New Material Co., Ltd. obtained
the certificate of high tech enterprise jointly issued by Jiangxi Provincial Department of Science
and Technology, Jiangxi Provincial Department of Finance, State Administration of Taxation and
Jiangxi Provincial Bureau of Taxation. The certificate number is GR202136000174. Within three
years after obtaining the qualification of high tech enterprise (2021-2023), the income tax will
continue to be levied at 15%.
(4) On October 16, 2023, our subsidiary, Fangda Chengdu Technology Company, obtained
the "High-tech Enterprise Certificate" jointly issued by the Science and Technology Department
of Sichuan Province, the Finance Department of Sichuan Province, and the State Taxation Bureau
of Sichuan Province. The certificate number is GR202351000927. For the next three years (2023
to 2025) following the qualification as a high-tech enterprise, the income tax will continue to be
levied at a rate of 15%.
(5) The subsidiary Kechuangyuan Software is an enterprise located in Qianhai Shenzhen
Hong Kong Modern Service Industry Cooperation Zone. Its main business meets the conditions
of Preferential Catalogue of Enterprise Income Tax in Qianhai Shenzhen Hong Kong Modern
Service Industry Cooperation Zone (2021), and the income tax is levied at 15% from January 1,
2021 to December 31, 2021.
(9) On November 15, 2023, the subsidiary Fangda Shanghai Zhijian obtained the certificate
GR202331002267 of high tech enterprise jointly issued by Shanghai Science and Technology
Commission, Shanghai Finance Bureau and Shanghai Taxation Bureau. Within three years (from
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Annual Report 2023 of China Fangda Group Co., Ltd.
2023 to 2025) after obtaining the qualification of high tech enterprise, the income tax will
continue to be charged at 15%.
(7) On December 11, 2021, the subsidiary Fangda Yunzhu Co., Ltd. obtained the certificate
of high tech enterprise jointly issued by Shenzhen Science and Technology Innovation
Commission, Shenzhen Finance Bureau, State Administration of Taxation and Shenzhen Taxation
Bureau. The certificate number is GR202344205791. Within three years after obtaining the
qualification of high tech enterprise (from 2023 to 2025), the income tax will be levied at 15%.
(8) According to the Announcement of the Ministry of Finance and the State Administration
of Taxation on Further Implementing Income Tax Preferential Policies for Small and Micro
Enterprises (Announcement No. 13 of 2022) and the Announcement of the Ministry of Finance
and the State Administration of Taxation on Income Tax Preferential Policies for Small and Micro
Enterprises and Individual Industrial and Commercial Households (Announcement No. 6 of 2023),
some companies belong to small and micro profit enterprises in 2023, Their income shall be
subject to corporate income tax in accordance with the provisions of the aforementioned
documents.
VII. Notes to the consolidated financial statements
1. Monetary capital
In RMB
Item Closing balance Opening balance
Inventory cash: 752.40 149.81
Bank deposits 787,363,734.05 809,288,523.64
Other monetary capital 637,786,629.79 429,465,543.05
Total 1,425,151,116.24 1,238,754,216.50
Including: total amount deposited in
45,201,676.97 49,596,440.24
overseas
Others:
(1) The restricted funds used in the end-of-period balance of bank deposits amount to
RMB21,926,945.64, with RMB21,629,405.31 from the labor security account and migrant
workers' salary account deposits, and RMB297,540.33 from fixed deposit interest. The restricted
funds used in the end-of-period balance of other monetary funds amount to RMB623,563,052.18,
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Annual Report 2023 of China Fangda Group Co., Ltd.
mainly consisting of bill deposit margin, phased guarantee deposit, letter of guarantee deposit, etc.
In the preparation of the cash flow statement, the above-mentioned deposits and other restricted
deposits are not used as cash and cash equivalents.
(2) In addition, there are no other funds in the monetary funds at the end of the period that have
restrictions on use and potential recovery risks due to mortgages, pledges or freezing.
2. Derivative financial assets
In RMB
Item Closing balance Opening balance
Forward foreign exchange contract 173,737.06 789,205.34
Total 173,737.06 789,205.34
3. Notes receivable
(1) Classification of notes receivable
In RMB
Item Closing balance Opening balance
Bank acceptance 21,487,899.17 18,434,258.87
Commercial acceptance 25,884,982.10 111,994,295.62
Total 47,372,881.27 130,428,554.49
(2) Disclosure by bad debt accrual method
In RMB
Closing balance Opening balance
Remaining book Remaining book
Bad debt provision Bad debt provision
Type value Book value Book
Proporti Provisio value Proporti Provisio value
Amount Amount Amount Amount
on n rate on n rate
Notes
receivab
le with
47,778,3 405,473. 47,372,8 132,708, 2,280,16 130,428,
provisio 100.00% 0.85% 100.00% 1.72%
54.93 66 81.27 717.05 2.56 554.49
n for bad
debts by
portfolio
Includin
g:
Commer
cial 26,290,4 405,473. 25,884,9 114,274, 2,280,16 111,994,
55.03% 1.54% 86.11% 2.00%
acceptan 55.76 66 82.10 458.18 2.56 295.62
ce
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Annual Report 2023 of China Fangda Group Co., Ltd.
Bank
21,487,8 21,487,8 18,434,2 18,434,2
acceptan 44.97% 13.89%
99.17 99.17 58.87 58.87
ce
47,778,3 405,473. 47,372,8 132,708, 2,280,16 130,428,
Total 100.00% 0.85% 100.00% 1.72%
54.93 66 81.27 717.05 2.56 554.49
Provision for bad debts by combination: trade acceptance
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Commercial acceptance 26,290,455.76 405,473.66 1.54%
Total 26,290,455.76 405,473.66
Provision for bad debts by combination: bank acceptance
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Bank acceptance 21,487,899.17 0.00 0.00%
Total 21,487,899.17 0.00
If the provision for bad debts on accounts receivable is being made based on the expected credit loss general model:
□ Applicable Inapplicable
(3) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
Change in the period
Type Opening balance Written-back Closing balance
Provision Canceled Others
or recovered
Commercial
2,280,162.56 -1,874,688.90 405,473.66
acceptance
Total 2,280,162.56 -1,874,688.90 405,473.66
Including significant recovery or reversal:
□ Applicable Inapplicable
(4) The Group has no endorsed or discounted immature receivable notes at the end of the period.
In RMB
Item De-recognized amount Not de-recognized amount
Bank acceptance 19,487,899.17
Commercial acceptance 8,450,000.00
Total 27,937,899.17
4. Account receivable
(1) Account age
In RMB
202
Annual Report 2023 of China Fangda Group Co., Ltd.
Age Closing balance of book value Opening balance of book value
Within 1 year (inclusive) 480,886,398.43 648,121,516.33
1-2 years 202,348,687.37 135,225,634.55
2-3 years 158,881,321.32 49,806,209.96
Over 3 years 335,427,049.97 224,706,979.53
3-4 years 134,723,171.92 54,194,564.87
4-5 years 50,830,831.78 58,235,655.84
Over 5 years 149,873,046.27 112,276,758.82
Total 1,177,543,457.09 1,057,860,340.37
The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the Guidelines for the
Self-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
Significant individual amounts of accounts receivable in the curtain wall and materials industry that have exceeded three years in
age
Balance of accounts
Balance of provision for bad Whether there is a
Customer receivable of over 3 years Reason of the age
debts (RMB) risk of recovery
(RMB)
Customer 1 72,553,486.88 17,328,905.08 Customer credit status Yes
deteriorates
Customer 2 54,873,223.21 54,873,223.21 Customer credit status Yes
deteriorates
Customer 3 28,415,073.84 28,415,073.84 Customer credit status Yes
deteriorates
Customer 4 17,507,892.47 5,637,572.02 Customer credit status Yes
deteriorates
Customer 5 17,374,148.42 17,374,148.42 Customer credit status Yes
deteriorates
(2) Disclosure by bad debt accrual method
In RMB
Closing balance Opening balance
Remaining book Remaining book
Bad debt provision Bad debt provision
Type value Book value Book
Proporti Provisio value Proporti Provisio value
Amount Amount Amount Amount
on n rate on n rate
Account
receivab
le for
which
80,430,3 74,382,6 6,047,64 89,501,8 83,454,2 6,047,64
bad debt 6.83% 92.48% 8.46% 93.24%
39.27 98.73 0.54 75.22 34.68 0.54
provisio
n is
made by
group
Includin
g:
Custome 54,873,2 54,873,2 54,873,2 54,873,2
4.67% 100.00% 0.00 5.19% 100.00% 0.00
r1 23.21 23.21 23.21 23.21
Custome 13,461,8 13,461,8 13,461,8 13,461,8
1.14% 100.00% 0.00 1.27% 100.00% 0.00
r2 34.96 34.96 34.96 34.96
Custome 7,096,42 0.60% 3,548,21 50.00% 3,548,21 7,096,42 0.67% 3,548,21 50.00% 3,548,21
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Annual Report 2023 of China Fangda Group Co., Ltd.
r3 1.00 0.50 0.50 1.00 0.50 0.50
Custome 4,998,86 2,499,43 2,499,43 4,998,86 2,499,43 2,499,43
0.42% 50.00% 0.47% 50.00%
r4 0.10 0.06 0.04 0.10 0.06 0.04
Custome 9,071,53 9,071,53
0.86% 100.00%
r5 5.95 5.95
Account
receivab
le for
which
1,097,11 191,673, 905,439, 968,358, 142,113, 826,244,
bad debt 93.17% 17.47% 91.54% 14.68%
3,117.82 844.17 273.65 465.15 757.52 707.63
provisio
n is
made by
group
Includin
g:
Portfolio
1:
Engineer
881,971, 181,121, 700,850, 714,451, 128,787, 585,664,
ing 74.90% 20.54% 67.54% 18.03%
973.34 184.71 788.63 919.44 757.87 161.57
operatio
ns
section
Portfolio
2: Real
estate 144,374, 8,293,56 136,081, 167,560, 7,893,60 159,666,
12.26% 5.74% 15.84% 4.71%
business 822.98 6.86 256.12 235.16 5.97 629.19
payment
s
Portfolio
3: Other 70,766,3 2,259,09 68,507,2 86,346,3 5,432,39 80,913,9
6.01% 3.19% 8.16% 6.29%
business 21.50 2.60 28.90 10.55 3.68 16.87
models
1,177,54 266,056, 911,486, 1,057,86 225,567, 832,292,
Total 100.00% 22.59% 100.00% 21.32%
3,457.09 542.90 914.19 0,340.37 992.20 348.17
Provision for bad debts by combination: Portfolio 1: Engineering business
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Less than 1 year 293,137,304.50 5,745,491.13 1.96%
1-2 years 153,658,675.42 8,697,081.03 5.66%
2-3 years 154,960,615.90 19,772,974.58 12.76%
3-4 years 131,925,551.40 26,068,488.96 19.76%
4-5 years 48,298,165.23 20,845,488.12 43.16%
Over 5 years 99,991,660.89 99,991,660.89 100.00%
Total 881,971,973.34 181,121,184.71
Group recognition basis:
See 10. Financial Tools in Chapter X, V, Important Accounting Policies and Accounting Estimates for the recognition criteria and
instructions for withdrawing bad debt reserves by portfolio
Bad debt provision by portfolio: portfolio 2: real estate business funds
In RMB
204
Annual Report 2023 of China Fangda Group Co., Ltd.
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Less than 1 year 73,582,665.92 735,826.66 1.00%
1-2 years 30,609,499.61 1,530,474.98 5.00%
2-3 years 1,333.98 66.70 5.00%
3-4 years 53,645.28 8,046.79 15.00%
4-5 years
Over 5 years 40,127,678.19 6,019,151.73 15.00%
Total 144,374,822.98 8,293,566.86
Provision for bad debts by combination: portfolio 3: Others business
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Less than 1 year 45,107,020.58 329,281.25 0.73%
1-2 years 18,804,861.60 394,902.10 2.10%
2-3 years 3,486,725.13 293,582.25 8.42%
3-4 years 2,743,975.24 679,957.07 24.78%
4-5 years 460,968.35 398,599.33 86.47%
Over 5 years 162,770.60 162,770.60 100.00%
Total 70,766,321.50 2,259,092.60
If the provision for bad debts on accounts receivable is being made based on the expected credit loss general model:
□ Applicable Inapplicable
(3) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
Change in the period
Type Opening balance Written-back or Closing balance
Provision Canceled Others
recovered
Separate bad
83,454,234.68 9,071,535.95 74,382,698.73
debt provision
Provision for
bad debts by 142,113,757.52 49,905,717.15 345,630.50 191,673,844.17
combination
Total 225,567,992.20 49,905,717.15 9,071,535.95 345,630.50 266,056,542.90
Including significant recovery or reversal:
In RMB
Basis for determining the original bad
Written-back or
Entity Reason Method debt provision percentage and its
recovered amount
reasonableness
The customer belongs to a serious
default enterprise and its
After applying for bankruptcy
creditworthiness has seriously
liquidation, the customer shall
Bank transfer deteriorated. The management of the
Customer 5 9,071,535.95 have priority to receive
recovery Company expects that the amount will
compensation and be
be difficult to be recovered after
recovered by bank transfer
obtaining evidence and verification,
and has made a provision for bad
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Annual Report 2023 of China Fangda Group Co., Ltd.
debts at 100% of the full amount.
Total 9,071,535.95
(4) Written-off account receivable during the period
In RMB
Item Amount
Account receivable written off 345,630.50
(5) Accounts receivable and contract assets with the top-5 ending balances, grouped by party owed
In RMB
Percentage of Closing balance of
total ending provision for bad
Closing balance Closing balance of
Closing balance balance of debts on accounts
Entity of accounts accounts receivable
of contract assets accounts receivable and
receivable and contract assets
receivable and impairment of
contract assets contract assets
No.1 113,529,244.60 9,903,379.39 123,432,623.99 3.15% 24,692,172.75
No.2 23,700,237.65 73,152,350.94 96,852,588.59 2.47% 1,898,310.74
No.3 14,542,463.83 69,978,389.42 84,520,853.25 2.15% 8,187,781.07
No.4 4,628,200.00 72,648,861.61 77,277,061.61 1.97% 2,072,020.89
No.5 490,016.39 66,593,528.47 67,083,544.86 1.71% 3,251,420.39
Total 156,890,162.47 292,276,509.83 449,166,672.30 11.45% 40,101,705.84
5. Contract assets
(1) Contract assets
In RMB
Closing balance Opening balance
Item Remaining Bad debt Remaining Bad debt
Book value Book value
book value provision book value provision
Completed and
unsettled
project funds 2,536,843,592. 2,357,777,551. 2,176,000,625. 2,002,607,254.
179,066,040.85 173,393,371.22
that fail to meet 06 21 48 26
the collection
conditions
Quality
guarantee
deposit that
157,921,009.28 13,409,302.47 144,511,706.81 238,597,873.77 25,009,664.48 213,588,209.29
fails to meet the
collection
conditions
Sales funds
with
51,338,008.75 436,594.78 50,901,413.97 42,541,809.75 365,427.72 42,176,382.03
conditional
collection right
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Annual Report 2023 of China Fangda Group Co., Ltd.
Less: Contract
assets shown in
69,887,873.01 5,127,003.43 64,760,869.58 105,183,978.15 5,672,791.00 99,511,187.15
other non-
current assets
2,676,214,737. 2,488,429,802. 2,351,956,330. 2,158,860,658.
Total 187,784,934.67 193,095,672.42
08 41 85 43
(2) The amount and reason for the significant change in the book value during the reporting period
In RMB
Item Change Reason
This is mainly due to the unsettled project funds with conditional
Completed and unsettled
355,170,296.95 collection rights arising from the revenue recognized in the project
project funds
contract this year
Mainly attributable to the decrease in warranty deposits for which
Warranty
-69,076,502.48 collection conditions have not been met
Less: Contract assets
shown in other non- Mainly due to lower outstanding warranties on completed projects
current assets -34,750,317.57
Total 320,844,112.04 ——
(3) Disclosure by bad debt accrual method
In RMB
Closing balance Opening balance
Remaining book Remaining book
Bad debt provision Bad debt provision
Type value Book value Book
Proporti Provisio value Proporti Provisio value
Amount Amount Amount Amount
on n rate on n rate
Separate
bad debt 16,288,5 9,033,24 7,255,32 11,901,4 6,839,66 5,061,74
0.61% 55.46% 0.51% 57.47%
provisio 76.53 7.20 9.33 14.39 6.13 8.26
n
Includin
g:
Custome 1,777,91 1,777,91 1,777,91 1,777,91
0.07% 100.00% 0.08% 100.00% 0.00
r1 7.87 7.87 7.87 7.87
Custome 14,510,6 7,255,32 7,255,32 10,123,4 5,061,74 5,061,74
0.54% 50.00% 0.43% 50.00%
r2 58.66 9.33 9.33 96.52 8.26 8.26
Provisio
n for bad
2,659,92 178,751, 2,481,17 2,340,05 186,256, 2,153,79
debts by 99.39% 6.72% 99.49% 7.96%
6,160.55 687.47 4,473.08 4,916.46 006.29 8,910.17
combina
tion
Includin
g:
Combin
ation 1:
sales 51,338,0 436,594. 50,901,4 42,541,8 365,427. 42,176,3
1.92% 0.85% 1.81% 0.86%
payment 08.75 78 13.97 09.75 72 82.03
with
conditio
207
Annual Report 2023 of China Fangda Group Co., Ltd.
nal
collectio
n right
Portfolio
2:
Complet
ed and
unsettled
project 2,519,64 169,724, 2,349,91 2,163,48 166,553, 1,996,93
94.15% 6.74% 91.99% 7.70%
not 3,302.99 313.35 8,989.64 5,788.17 705.09 2,083.08
meeting
collectio
n
conditio
ns
Portfolio
3:
Quality
guarante
e deposit
88,944,8 8,590,77 80,354,0 134,027, 19,336,8 114,690,
not 3.32% 9.66% 5.70% 14.43%
48.81 9.34 69.47 318.54 73.48 445.06
meeting
collectio
n
conditio
ns
2,676,21 187,784, 2,488,42 2,351,95 193,095, 2,158,86
Total 100.00% 7.02% 100.00% 8.21%
4,737.08 934.67 9,802.41 6,330.85 672.42 0,658.43
Provision for bad debts by portfolio: 1 Sales funds with conditional collection right
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Combination 1: sales payment with
51,338,008.75 436,594.78 0.85%
conditional collection right
Total 51,338,008.75 436,594.78
Group recognition basis:
See 10. Financial Tools in Chapter X, V, Important Accounting Policies and Accounting Estimates for the recognition criteria and
instructions for withdrawing bad debt reserves by portfolio
Provision for bad debts by portfolio: 2 Completed and unsettled project funds that fail to meet the collection conditions
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Portfolio 2: Completed and unsettled project not
2,519,643,302.99 169,724,313.35 6.74%
meeting collection conditions
Total 2,519,643,302.99 169,724,313.35
Provision for bad debts by portfolio: 3 Quality guarantee deposit that fails to meet the collection conditions
In RMB
Company Name Closing balance
208
Annual Report 2023 of China Fangda Group Co., Ltd.
Remaining book value Bad debt provision Provision rate
Portfolio 3: Quality guarantee deposit not
88,944,848.81 8,590,779.34 9.66%
meeting collection conditions
Total 88,944,848.81 8,590,779.34
Provision for bad debts based on general model of expected credit losses
□ Applicable Inapplicable
(4) Bad debt provision made, returned or recovered in the period
In RMB
Recovered or reversed Written off in the
Item Provision Reason
during the period current period
Separate bad debt provision 2,193,581.07
Provision for bad debts by
-7,504,318.82
combination
Total -5,310,737.75 ——
6. Receivable financing
(1) Presentation of receivables financing classification
In RMB
Item Closing balance Opening balance
Notes receivable 6,979,428.14 1,338,202.01
Total 6,979,428.14 1,338,202.01
(2) Disclosure by bad debt accrual method
In RMB
Closing balance Opening balance
Remaining book Remaining book
Bad debt provision Bad debt provision
Type value Book value Book
Proporti Provisio value Proporti Provisio value
Amount Amount Amount Amount
on n rate on n rate
Provisio
n for bad
6,979,42 6,979,42 1,338,20 1,338,20
debts by 100.00% 0.00 0.00% 100.00% 0.00 0.00%
8.14 8.14 2.01 2.01
combina
tion
Includin
g:
Bank
6,979,42 6,979,42 1,338,20 1,338,20
acceptan 100.00% 0.00 0.00% 100.00% 0.00 0.00%
8.14 8.14 2.01 2.01
ce
6,979,42 6,979,42 1,338,20 1,338,20
Total 100.00% 0.00 0.00% 100.00% 0.00 0.00%
8.14 8.14 2.01 2.01
Provision for bad debts by combination:
In RMB
209
Annual Report 2023 of China Fangda Group Co., Ltd.
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Bank acceptance 6,979,428.14 0.00 0.00%
Total 6,979,428.14 0.00
Group recognition basis:
See 10. Financial Tools in Chapter X, V, Important Accounting Policies and Accounting Estimates for the recognition criteria and
instructions for withdrawing bad debt reserves by portfolio
7. Other receivables
In RMB
Item Closing balance Opening balance
Other receivables 145,113,323.33 155,379,024.22
Total 145,113,323.33 155,379,024.22
(1) Other receivables
1) Other receivables are disclosed by nature
In RMB
By nature Closing balance of book value Opening balance of book value
Deposit and pledge paid 96,041,429.79 99,789,014.58
Construction borrowing and advanced
41,180,355.37 33,008,395.75
payment
Staff borrowing and petty cash 2,515,436.58 1,439,503.90
VAT refund receivable 798,918.77 1,946,422.08
Debt by Luo Huichi 11,242,291.48
Others 11,974,398.52 30,122,981.20
Total 152,510,539.03 177,548,608.99
(2) Account age
In RMB
Age Closing balance of book value Opening balance of book value
Within 1 year (inclusive) 30,123,678.94 23,108,291.98
1-2 years 4,793,018.03 6,830,367.09
2-3 years 5,310,261.72 22,325,214.95
Over 3 years 112,283,580.34 125,284,734.97
3-4 years 9,787,862.62 18,001,035.18
4-5 years 7,701,603.22 70,858,183.77
Over 5 years 94,794,114.50 36,425,516.02
Total 152,510,539.03 177,548,608.99
The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the Guidelines for the
Self-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
210
Annual Report 2023 of China Fangda Group Co., Ltd.
Significant individual amounts of other accounts receivable in the curtain wall and materials industry that have exceeded three
years in age
Balance of other receivables Balance of provision for bad Whether there is a
Customer Reason of the age
older than three years (RMB) debts (RMB) risk of recovery
Customer 1 1,970,381.89 1,970,381.89 Customer credit status Yes
deteriorates
(3) Disclosure by bad debt accrual method
Applicable □ Inapplicable
In RMB
Closing balance Opening balance
Remaining book Remaining book
Bad debt provision Bad debt provision
Type value Book value Book
Proporti Provisio value Proporti Provisio value
Amount Amount Amount Amount
on n rate on n rate
Separate
bad debt 29,994,1 15,026,9 14,967,1
0.00 0.00% 0.00 0.00 16.89% 50.10%
provisio 14.05 57.59 56.46
n
Includin
g:
Luo 11,242,2 11,242,2
0.00 0.00% 0.00 0.00 6.33% 100.00% 0.00
Huichi 91.48 91.48
Shenyan
42,877.0 42,877.0
g 0.00 0.00% 0.00 0.00 0.02% 100.00% 0.00
0 0
Fangda
Shenzhe
n
Rijiashe 18,708,9 3,741,78 14,967,1
0.00 0.00% 0.00 0.00 10.54% 20.00%
ng 45.57 9.11 56.46
Trading
Co., Ltd
Provisio
n for bad
152,510, 7,397,21 145,113, 147,554, 7,142,62 140,411,
debts by 100.00% 4.85% 83.11% 4.84%
539.03 5.70 323.33 494.94 7.18 867.76
combina
tion
Includin
g:
Portfolio
143,789, 2,143,50 141,645, 138,670, 2,063,97 136,606,
1: First 94.28% 1.49% 78.10% 1.49%
155.16 6.61 648.55 714.93 1.54 743.39
stage
Portfolio
2: 3,574,88 107,207. 3,467,67 3,922,80 117,684. 3,805,12
2.34% 3.00% 2.21% 3.00%
Second 2.60 82 4.78 8.63 26 4.37
stage
Portfolio
5,146,50 5,146,50 4,960,97 4,960,97
3: Third 3.38% 100.00% 2.79% 100.00% 0.00
1.27 1.27 1.38 1.38
stage
152,510, 7,397,21 145,113, 177,548, 22,169,5 155,379,
Total 100.00% 4.85% 100.00% 12.49%
539.03 5.70 323.33 608.99 84.77 024.22
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Annual Report 2023 of China Fangda Group Co., Ltd.
Provision for bad debts by combination:
Portfolio 1: First stage
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Portfolio 1: First stage 143,789,155.16 2,143,506.61 1.49%
Total 143,789,155.16 2,143,506.61
Description of the basis for determining the portfolio: Provision for bad debts is made on the basis of the general model of
expected credit losses.
Portfolio 2: Second stage
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Portfolio 2: Second stage 3,574,882.60 107,207.82 3.00%
Total 3,574,882.60 107,207.82
Portfolio 3: Third stage
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Portfolio 3: Third stage 5,146,501.27 5,146,501.27 100.00%
Total 5,146,501.27 5,146,501.27
Provision for bad debts based on general model of expected credit losses
In RMB
First stage Second stage Third stage
Bad debt provision Expected credit Expected credit loss for Expected credit loss for Total
losses in the next 12 the entire duration (no the entire duration (credit
months credit impairment) impairment has occurred)
Balance on January 1,
2,063,971.54 117,684.26 19,987,928.97 22,169,584.77
2023
Balance on January 1,
2023 in the current period
-- transferred to the
0.00
second stage
-- transferred to the third
0.00
stage
-- transferred back to
0.00
second stage
-- transferred back to first
0.00
stage
Provision 79,438.15 -10,476.44 185,219.33 254,181.04
Transferred back in the
4,156,665.11 4,156,665.11
current period
Written off in the current
10,992,291.48 10,992,291.48
period
Canceled in the current
0.00
period
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Annual Report 2023 of China Fangda Group Co., Ltd.
Other change 96.92 122,309.56 122,406.48
Balance on December 31,
2,143,506.61 107,207.82 5,146,501.27 7,397,215.70
2023
Changes in book balances with significant changes in the current period
Applicable □ Inapplicable
(See 4 below for details.) Provisions for bad debts made, recovered or reversed during the period.
4) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
Change in the period
Type Opening balance Written-back or Closing balance
Provision Write-off Others
recovered
Separate bad
debt 15,026,957.59 4,156,665.11 10,992,291.48 121,999.00
provision
Provision for
bad debts by 7,142,627.18 254,181.04 407.48 7,397,215.70
combination
Total 22,169,584.77 254,181.04 4,156,665.11 10,992,291.48 122,406.48 7,397,215.70
Including significant recovery or reversal:
In RMB
Basis for determining the
Written-back or
original bad debt provision
Entity recovered Reason Method
percentage and its
amount
reasonableness
According to the
Due to the severe
second-instance court
deterioration of the
Repayment shall be judgment, the
customer's credit status and
executed in repayment shall be
Shenzhen Rijiasheng Trading repeated failure to repay on
3,741,789.11 accordance with executed by deducting
Co., Ltd time, a specific provision for
the second-instance from the partial
bad debts has been
court judgment. payment of the
calculated at 20% in the
purchase price made
previous period.
by the counterparty.
Total 3,741,789.11
5) Other receivable written off in the current period
In RMB
Item Amount
Luo Huichi 10,992,291.48
Including significant other receivable:
In RMB
213
Annual Report 2023 of China Fangda Group Co., Ltd.
Writing-off
Entity Nature Amount Reason Related transaction
procedure
Impossible enforcement of
Approved by the
Debt by Luo property, with minimal
Luo Huichi 10,992,291.48 senior No
Huichi possibility of subsequent
management
recovery
Total 10,992,291.48
6) Balance of top 5 other receivables at the end of the period
In RMB
Balance of bad
debt provision at
Entity By nature Closing balance Age Percentage (%)
the end of the
period
Less than 1
6,000,000.00
Margin and year
Shenzhen Yikang Real Estate Co.
current 62,675.83 3-4 years 49.87% 1,133,333.87
Ltd.
account 2,000,000.00 4-5 years
68,000,000.00 Over 5 years
Bangshen Electronics (Shenzhen)
Deposit 20,000,000.00 Over 5 years 13.11% 298,000.00
Co., Ltd.
Shenzhen Henggang Dakang Co.,
Deposit 8,000,000.00 Over 5 years 5.25% 119,200.00
Ltd.
Ganshang Joint Investment Others 3,791,089.25 4-5 years 2.49% 56,487.23
Xin Song Others 1,970,381.89 Over 5 years 1.29% 1,970,381.89
Total 109,824,146.97 72.01% 3,577,402.99
8. Prepayment
(1) Account ages of prepayments
In RMB
Closing balance Opening balance
Age
Amount Proportion Amount Proportion
Less than 1 year 29,398,144.01 86.53% 14,930,557.32 72.37%
1-2 years 1,713,380.35 5.04% 2,913,056.11 14.12%
2-3 years 648,638.59 1.91% 582,237.19 2.82%
Over 3 years 2,216,406.41 6.52% 2,205,799.97 10.69%
Total 33,976,569.36 20,631,650.59
At the end of the period, there are no important prepayments exceeding one year in age.
(2) Balance of top 5 prepayments at the end of the period
The total of top5 prepayments in terms of the prepaid entities in the period is RMB12,930,367.61,
accounting for 38.06% of the total prepayments at the end of the period.
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9. Inventories
Whether the Company needs to comply with disclosure requirements of the real estate industry.
No
(1) Classification of inventories
In RMB
Closing balance Opening balance
Provisio Provisio
n for n for
inventor inventor
y y
deprecia deprecia
tion or tion or
Item Remaining book contract Remaining book contract
Book value Book value
value perform value perform
ance ance
cost cost
impairm impairm
ent ent
provisio provisio
n n
Raw materials 131,800,215.01 131,800,215.01 124,041,162.65 124,041,162.65
Product in
120,647,582.06 120,647,582.06 95,231,082.82 95,231,082.82
process
Finished goods
11,240,201.57 11,240,201.57 8,937,351.29 8,937,351.29
in stock
Contract
performance 90,470,830.76 90,470,830.76 88,165,638.94 88,165,638.94
costs
Goods
23,270,292.17 23,270,292.17 1,675,486.58 1,675,486.58
delivered
Development
224,969,147.17 224,969,147.17 219,112,637.71 219,112,637.71
cost
Development
134,821,091.47 134,821,091.47 150,695,868.79 150,695,868.79
products
Low price
171,286.80 171,286.80 193,880.28 193,880.28
consumable
OEM materials 15,096,929.98 15,096,929.98 22,479,288.26 22,479,288.26
Materials in
3,136,909.52 3,136,909.52
transit
Total 755,624,486.51 755,624,486.51 710,532,397.32 710,532,397.32
(2) Balance at the end of the period includes capitalization of borrowing expense
As at December 31, 2023, the amount of the capitalization of borrowing costs in the balance of the end-of-
period inventory was RMB5,535,986.70.
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Annual Report 2023 of China Fangda Group Co., Ltd.
(3) Explanation of the current amortization amount of contract performance cost
The current amortization amount of contract performance costs is included in operating costs.
10. Non-current assets due in 1 year
In RMB
Item Closing balance Opening balance
Fixed deposit certificate and interest 327,120,273.54
Total 327,120,273.54
11. Other current assets
In RMB
Item Closing balance Opening balance
Reclassification of VAT debit balance 230,260,579.29 174,264,248.29
Overpayment and prepayment of income
2,852,830.41 3,997,524.27
tax
Other prepaid taxes 3,836,971.59 3,348,706.84
Payment to be collected on behalf of
3,003,841.89 12,015,367.57
suppliers
Subsidiary IPO intermediary fee 2,064,871.00
Deferred discount expenses and others 5,291,245.63
Pending development products 8,447,099.62
Total 248,401,322.80 200,981,963.60
12. Investment in other equity tools
In RMB
Accumul
Gains
ated
recogniz Reason for
Losses gains Accumulated Dividen
ed in measureme
recognized in recognize losses d
other nt at fair
other d in other recognized in income
compreh value with
Closing Opening comprehensi comprehe other recogni
Project name ensive variations
balance balance ve income nsive comprehensive zed in
income accounted
during the income at income at the the
during into current
current the end end of the current
the income
period of the current period period
current account
current
period
period
Unlisted
equity 11,968,973.8 11,968,973.8
28,562,575.67
instrument 6 6
investment
11,968,973.8 11,968,973.8
Total 28,562,575.67
6 6
Sub-disclosure of non-tradable equity instrument investment in the current period
In RMB
Dividend Amount of Reason for Reason for
Project name Total gain Total loss
recognized in other measurement at transfer of other
216
Annual Report 2023 of China Fangda Group Co., Ltd.
the period comprehensive fair value with miscellaneous
income variations into income
transferred to accounted into
retained current income
earnings account
Shenyang
28,562,575.67
Fangda
13. Long-term share equity investment
In RMB
Change (+,-)
Invest
ment Balanc
Beginn
gain e of
ing Other
and Cash impair
Openi balanc miscell
Investe Increas Decrea loss divide Impair Closin ment
ng e of aneous Other
d ed sed recogn nd or ment g book provisi
book impair incom equity Others
entity invest invest ized profit provisi value on at
value ment e change
ment ment using annou on the end
provisi adjust
the nced of the
ons ment
equity period
metho
d
1. Joint venture
2. Associate
Gansh
ang
2,385, 16,569 2,402,
Joint 0.00
495.90 .82 065.72
Invest
ment
Jiangxi
Busine
ss
Innova
tive 52,583 - 52,354
Proper ,546.2 0.00 228,59 ,951.6
ty 4 4.56 8
Joint
Stock
Co.,
Ltd.
54,969 - 54,757
Subtot
,042.1 212,02 ,017.4
al
4 4.74 0
54,969 - 54,757
Total ,042.1 212,02 ,017.4
4 4.74 0
The recoverable amount is determined as the net amount after deducting the disposal costs from the fair value.
□ Applicable Inapplicable
The recoverable amount is determined based on the present value of estimated future cash flows.
□ Applicable Inapplicable
217
Annual Report 2023 of China Fangda Group Co., Ltd.
14. Other non-current financial assets
In RMB
Item Closing balance Opening balance
Financial assets measured at fair value
with variations accounted into current 7,455,617.17 7,507,434.68
income account
Total 7,455,617.17 7,507,434.68
15. Investment real estates
(1) Investment real estate measured at costs
Applicable □ Inapplicable
Item Houses & buildings Total
I. Book value
1. Opening balance 17,388,824.39 17,388,824.39
2. Increase in this period
3. Decrease in this period
4. Closing balance 17,388,824.39 17,388,824.39
II. Accumulative depreciation and amortization
1. Opening balance 7,702,419.40 7,702,419.40
2. Increase in this period 449,408.04 449,408.04
(1) Provision or amortization 449,408.04 449,408.04
3. Decrease in this period
4. Closing balance 8,151,827.44 8,151,827.44
III. Impairment provision
1. Opening balance
2. Increase in this period
3. Decrease in this period
4. Closing balance
IV. Book value
1. Closing book value 9,236,996.95 9,236,996.95
2. Opening book value 9,686,404.99 9,686,404.99
(2) Investment real estate measured at fair value
Applicable □ Inapplicable
In RMB
Item Houses & buildings Total
I. Opening balance 5,750,831,172.12 5,750,831,172.12
II. Change in this period
Other increases 26,469,297.95 26,469,297.95
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Annual Report 2023 of China Fangda Group Co., Ltd.
Less: other transfer-out 1,245,597.50 1,245,597.50
Change in fair value 28,482,701.26 28,482,701.26
III. Closing balance 5,747,572,171.31 5,747,572,171.31
(3) Investment real estate without ownership certificate
In RMB
Item Book value Reason
11 units at Lanzhou Railway - City Relevant mapping and acceptance
13,037,841.00
Dawn procedures are underway
Others:
① The main basis for determining the fair value of investment properties is the "Real Estate Valuation
Report" issued by Shenzhen Guoyu Assets Evaluation Real Estate Land Valuation Consultants Co., Ltd, with
the reference numbers "Shen Guoyu Pingzi [2024]01005-1", "Shen Guoyu Pingzi [2024]01005-2", "Shen
Guoyu Pingzi [2024]01004-1", "Shen Guoyu Pingzi [2024]01004-2", "Shen Guoyu Pingzi [2024]01004-3",
"Shen Guoyu Pingzi [2024]01004-4", "Shen Guoyu Pingzi [2024]01004-5", "Shen Guoyu Pingzi [2024]01004-
6", and "Shen Guoyu Pingzi [2024]01003".
② A portion of the fair value of Fangda Town's real estate, amounting to RMB1,943,287,098.56, has been
mortgaged to China Construction Bank Shenzhen Huaqiaocheng Branch as collateral for a loan. The loan has
not yet reached its maturity and the mortgage has not been released.
③ The increase in other items during the current period is due to the receipt of debt settlement properties by
subsidiary companies, Fangda Jianke Co., Ltd., and Zhiyuan Technology Co., Ltd.
④ Other transfers out during the period represent a decrease of RMB1,245,597.50 in the Company's
original provisional estimate due to settlement adjustments.
16. Fixed assets
In RMB
Item Closing balance Opening balance
Fixed assets 620,828,178.38 646,812,853.36
Total 620,828,178.38 646,812,853.36
(1) Fixed assets
In RMB
Houses & Mechanical Transportation Electronics and PV power
Item Total
buildings equipment facilities other devices plants
I. Original book
value:
1. Opening 607,215,899.93 130,812,618.16 20,276,104.91 51,941,275.99 129,596,434.84 939,842,333.83
219
Annual Report 2023 of China Fangda Group Co., Ltd.
balance
2. Increase in
97,460.60 3,982,693.91 752,071.69 1,516,205.29 6,348,431.49
this period
(1) Purchase 3,982,693.91 747,803.88 1,343,572.04 6,074,069.83
2. Others 97,460.60 4,267.81 172,633.25 274,361.66
3. Decrease in
2,731,580.04 1,615,469.05 471,840.00 845,442.92 5,664,332.01
this period
(1) Disposal or
1,615,469.05 471,840.00 841,559.42 2,928,868.47
retirement
2. Others 2,731,580.04 3,883.50 2,735,463.54
4. Closing
604,581,780.49 133,179,843.02 20,556,336.60 52,612,038.36 129,596,434.84 940,526,433.31
balance
II.
Accumulative
depreciation
1. Opening
112,024,116.79 93,123,314.47 14,710,157.32 32,421,186.05 40,654,236.34 292,933,010.97
balance
2. Increase in
15,246,782.27 4,016,601.32 1,046,060.14 2,732,373.92 6,148,440.12 29,190,257.77
this period
(1) Provision 15,246,782.27 4,016,601.32 1,043,286.68 2,731,781.57 6,148,440.12 29,186,891.96
(2) Other
2,773.46 592.35 3,365.81
increases
3. Decrease in
1,385,109.27 423,214.20 713,159.84 2,521,483.31
this period
(1) Disposal or
1,385,109.27 423,214.20 713,159.84 2,521,483.31
retirement
4. Closing
127,270,899.06 95,754,806.52 15,333,003.26 34,440,400.13 46,802,676.46 319,601,785.43
balance
III. Impairment
provision
1. Opening
79,843.20 16,626.30 96,469.50
balance
2. Increase in
this period
3. Decrease in
this period
4. Closing
79,843.20 16,626.30 96,469.50
balance
IV. Book value
1. Closing book
477,310,881.43 37,345,193.30 5,223,333.34 18,155,011.93 82,793,758.38 620,828,178.38
value
2. Opening
495,191,783.14 37,609,460.49 5,565,947.59 19,503,463.64 88,942,198.50 646,812,853.36
book value
(2) Fixed assets without ownership certificate
In RMB
Item Book value Reason
Yuehai Office Building C 502 112,420.05 Historical reasons
220
Annual Report 2023 of China Fangda Group Co., Ltd.
Others:
a. As of December 31, 2023, the net value of RMB43,108,073.24 of the Company's buildings and
structures had been mortgaged to China Construction Bank Shenzhen Overseas Chinese Town Branch for loan.
b. The decrease of RMB2,731,580.04 in other of buildings and structures in the change of the current
period was due to the settlement adjustment of the original provisional valuation amount.
17. Construction in process
In RMB
Item Closing balance Opening balance
Construction in process 109,414,347.33
Total 109,414,347.33
(1) Construction in progress
In RMB
Closing balance Opening balance
Item Impairme Impairme
Remaining book Remaining Book
nt Book value nt
value book value value
provision provision
Fangda (Ganzhou)
109,181,428.63 109,181,428.63
Headquarters Base
Fangda Building
monitoring system 232,918.70 232,918.70
remodeling
Total 109,414,347.33 109,414,347.33
(2) Changes in major construction in process in this period
In RMB
Propor
Includi
Amou tion of
ng:
nt accum Accum
Other capital Interes
Openi Increas transfe Closin ulative ulative
decrea Project ized t
Project ng e in r-in to g engine capital Capital
Budget se in progre interes capital
name balanc this fixed balanc ering ized source
this ss t for ization
e period assets e invest interes
period the rate
in this ment t
current
period in the
period
budget
Own
Fangd
funds
a Constr
and
(Ganz 331,54 109,18 109,18 uction
32.93 loans
hou) 0,000. 1,428. 1,428. in
% from
Headq 00 63 63 proces
financi
uarters s
al
Base
institut
221
Annual Report 2023 of China Fangda Group Co., Ltd.
ions
331,54 109,18 109,18
Total 0,000. 1,428. 1,428.
00 63 63
(3) Provision for impairment of construction in progress during the current period
As of December 31, 2023, there was no indication of impairment for construction in progress.
(4) Impairment testing of construction in progress
□ Applicable Inapplicable
18. Use right assets
(1) Right-to-use assets
In RMB
Item Houses & buildings Transportation facilities Total
I. Book value
1. Opening balance 37,907,485.94 1,319,251.12 39,226,737.06
2. Increase in this period 16,553,518.03 1,348,069.46 17,901,587.49
3. Decrease in this
14,666,514.94 707,871.75 15,374,386.69
period
4. Closing balance 39,794,489.03 1,959,448.83 41,753,937.86
II. Accumulative depreciation
1. Opening balance 18,558,917.17 1,218,126.49 19,777,043.66
2. Increase in this period 13,813,234.84 663,675.47 14,476,910.31
(1) Provision 13,813,234.84 663,675.47 14,476,910.31
3. Decrease in this
12,568,973.94 707,871.75 13,276,845.69
period
(1) Disposal 12,568,973.94 707,871.75 13,276,845.69
4. Closing balance 19,803,178.07 1,173,930.21 20,977,108.28
III. Impairment provision
1. Opening balance
2. Increase in this period
3. Decrease in this
period
4. Closing balance
IV. Book value
1. Closing book value 19,991,310.96 785,518.62 20,776,829.58
2. Opening book value 19,348,568.77 101,124.63 19,449,693.40
(2) Impairment testing of right-of-use assets
□ Applicable Inapplicable
222
Annual Report 2023 of China Fangda Group Co., Ltd.
As of December 31, 2023, there was no indication of impairment of the Company's right-of-use assets.
19. Intangible assets
(1) Intangible assets
In RMB
Trademarks, patents
Item Land using right Software Total
and know-how
I. Book value
1. Opening balance 80,404,737.13 9,013,772.69 23,529,100.66 112,947,610.48
2. Increase in this period 72,510,099.75 3,600.00 417,297.77 72,930,997.52
(1) Purchase 72,510,099.75 3,600.00 417,297.77 72,930,997.52
3. Decrease in this period 710,172.55 710,172.55
(1) Disposal 710,172.55 710,172.55
4. Closing balance 152,914,836.88 9,017,372.69 23,236,225.88 185,168,435.45
II. Accumulative
amortization
1. Opening balance 19,666,143.94 8,799,771.79 11,802,250.49 40,268,166.22
2. Increase in this period 3,414,577.87 119,253.74 2,001,091.86 5,534,923.47
(1) Provision 3,414,577.87 119,253.74 2,001,091.86 5,534,923.47
3. Decrease in this period 707,864.12 707,864.12
(1) Disposal 707,864.12 707,864.12
4. Closing balance 23,080,721.81 8,919,025.53 13,095,478.23 45,095,225.57
III. Impairment provision
1. Opening balance
2. Increase in this period
3. Decrease in this period
4. Closing balance
IV. Book value
1. Closing book value 129,834,115.07 98,347.16 10,140,747.65 140,073,209.88
2. Opening book value 60,738,593.19 214,000.90 11,726,850.17 72,679,444.26
(2) Failure to obtain the land use right certificates
At the end of the period, the Company had no land use right without the property right certificate.
(3) Impairment test of intangible assets
□ Applicable Inapplicable
20. Long-term amortizable expenses
In RMB
Item Opening Increase in this Amortized Other Closing
223
Annual Report 2023 of China Fangda Group Co., Ltd.
balance period amount in this decrease balance
period
Xuanfeng Chayuan village and
Zhuyuan village land transfer 972,425.54 56,101.56 916,323.98
compensation
Membership fee 704,999.96 20,000.00 210,000.04 514,999.92
Plant ground reconstruction
232,431.71 87,162.00 145,269.71
project
High voltage network access fee
487,104.91 307,645.32 179,459.59
of East China base
Sporadic decoration and
3,915,832.11 896,418.85 1,796,257.18 3,015,993.78
renovation costs of Fangda Town
Sporadic decoration and
renovation costs of Fangda 1,069,259.56 7,899.13 377,947.07 15,198.15 684,013.47
Center
Others 2,362,607.22 271,119.47 1,340,473.10 1,293,253.59
Total 9,744,661.01 1,195,437.45 4,175,586.27 15,198.15 6,749,314.04
21. Differed income tax assets and differed income tax liabilities
(1) Non-deducted deferred income tax assets
In RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Assets impairment
301,423,517.61 56,628,793.35 295,671,508.97 54,047,399.06
provision
Unrealized profit of
281,819,399.92 55,869,584.56 281,819,399.92 55,869,584.56
internal transactions
Deductible loss 130,536,168.91 31,566,961.10 160,102,622.27 32,419,194.27
Credit impairment
273,785,349.40 42,172,039.47 249,948,173.84 39,913,829.96
provision
Unrealizable gross
111,802,930.49 27,117,416.46 112,847,972.30 27,307,162.73
profit
Anticipated liabilities 4,842,411.47 726,361.72 3,372,553.84 505,883.08
Deferred earning 3,922,402.14 744,121.83 3,610,875.25 558,241.49
Change in fair value 9,127,633.52 1,369,145.03 5,433,747.37 815,062.11
Lease liabilities 20,573,028.70 4,335,420.74 18,648,903.61 3,200,064.19
Accrued and unpaid
16,543,205.26 4,135,801.32 20,133,488.43 5,033,372.11
land tax
Reserved expense 36,216,407.02 5,434,461.06 22,640,219.20 3,396,032.88
Total 1,190,592,454.44 230,100,106.64 1,174,229,465.00 223,065,826.44
(2) Non-deducted deferred income tax liabilities
In RMB
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Change in fair value 4,161,500,052.20 1,040,357,639.32 4,188,015,507.12 1,046,924,956.27
224
Annual Report 2023 of China Fangda Group Co., Ltd.
Acquire premium to form
1,535,605.47 383,901.37 1,535,605.47 383,901.37
inventory
Use right assets 20,776,829.58 4,110,042.13 19,449,693.40 3,004,849.56
Estimated gross margin
when Fangda Town records
29,608,338.87 7,402,084.72 38,783,686.70 9,695,921.68
income, but does not reach
the taxable income level
Rental income 28,537,396.58 7,134,349.15 32,671,966.71 8,167,991.68
Total 4,241,958,222.70 1,059,388,016.69 4,280,456,459.40 1,068,177,620.56
(3) Net deferred income tax assets or liabilities listed
In RMB
Offset balance of Deferred income tax Offset balance of
Deferred income tax
deferred income tax assets and liabilities at deferred income tax
Item assets and liabilities at
assets or liabilities after the beginning of the assets or liabilities after
the end of the period
offsetting period offsetting
Deferred income tax
47,241,557.57 182,858,549.07 3,004,849.56 220,060,976.88
assets
Deferred income tax
47,241,557.57 1,012,146,459.12 3,004,849.56 1,065,172,771.00
liabilities
(4) Details of unrecognized deferred income tax assets
In RMB
Item Closing balance Opening balance
Deductible temporary difference 462,778.59 146,089.64
Deductible loss 17,530,215.40 16,177,447.74
Total 17,992,993.99 16,323,537.38
(5) Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RMB
Year Closing amount Opening amount Remarks
2023 4,575,983.46
2024 1,276,235.76 1,276,235.76
2025 213,129.83 213,129.83
2026 2,355,213.17 2,355,213.17
2027 3,698,098.44 7,756,885.52
The deductible losses are mainly from Hong Kong companies,
2028 and later 9,987,538.20 and according to Hong Kong tax policy, the deductible losses
can be used in perpetuity.
Total 17,530,215.40 16,177,447.74
22. Other non-current assets
In RMB
Closing balance Opening balance
Item Remaining Impairment Remaining Impairment
Book value Book value
book value provision book value provision
225
Annual Report 2023 of China Fangda Group Co., Ltd.
Contract assets 69,887,873.01 5,127,003.43 64,760,869.58 105,183,978.15 5,709,693.38 99,474,284.77
Prepaid house
and equipment 20,034,901.32 0.00 20,034,901.32 73,077,190.00 0.00 73,077,190.00
amount
Certificate of
0.00 0.00 0.00 316,929,580.18 0.00 316,929,580.18
deposit
Others 2,004,000.00 0.00 2,004,000.00 2,005,361.70 0.00 2,005,361.70
Total 91,926,774.33 5,127,003.43 86,799,770.90 497,196,110.03 5,709,693.38 491,486,416.65
23. Assets with restricted ownership or use rights
In RMB
Closing balance Beginning of the period
Item Remaining Type of Restricted Remaining Type of Restricted
Book value Book value
book value restriction situation book value restriction situation
For pledge For pledge
Monetary 645,489,99 645,489,99 or Various 455,076,28 455,076,28 or Various
capital 7.82 7.82 restricted deposits 7.44 7.44 restricted deposits
use use
Bills Bills
For For
endorsed or endorsed or
Notes 27,937,899. 27,843,496. endorseme 24,546,342. 24,546,342. endorseme
discounted discounted
receivable 17 17 nt or 15 15 nt or
but not yet but not yet
discounting discounting
due due
Account 39,392,140. 38,094,032. Loan by 43,233,010. 42,800,680. Loan by
For pledge For pledge
receivable 71 45 pledge 91 80 pledge
Non-
current 327,120,27 327,120,27 Loan by
For pledge
assets due 3.54 3.54 pledge
in 1 year
Other non-
316,929,58 316,929,58 Loan by
current For pledge
0.18 0.18 pledge
assets
Fixed 45,915,995. 43,108,073. Used as Loan by 45,918,731. 44,751,777. Used as Loan by
assets 84 24 collateral pledge 66 53 collateral pledge
Investment 1,943,287,0 1,943,287,0 Used as Loan by 3,293,733,4 3,293,733,4 Used as Loan by
real estate 98.56 98.56 collateral pledge 74.51 74.51 collateral pledge
100% stake 100% stake
in Fangda in Fangda
Property Property
Equity 200,000,00 200,000,00 200,000,00 200,000,00
For pledge Developme For pledge Developme
pledge 0.00 0.00 0.00 0.00
nt held by nt held by
the the
Company Company
3,229,143,4 3,224,942,9 4,379,437,4 4,377,838,1
Total
05.64 71.78 26.85 42.61
226
Annual Report 2023 of China Fangda Group Co., Ltd.
24. Short-term borrowings
(1) Classification of short-term borrowings
In RMB
Item Closing balance Opening balance
Guarantee loan 711,492,580.56 120,136,861.08
Credit borrow 300,270,416.67 300,247,500.00
Guarantee and pledge loan 1,184,641,572.44 837,950,574.17
Other loans 11,650,469.54 59,903,587.53
Total 2,208,055,039.21 1,318,238,522.78
Notes to classification of short-term borrowings
Among the guaranteed loans at the end of the period, the amount of RMB671,657,386.11 was guaranteed
by the company for the subsidiary, Fangda Jianke Co., Ltd; The amount of RMB30,025,666.67 is guaranteed by
the company for the subsidiary Fangda Zhiyuan Technology Co., Ltd; The amount of RMB9,809,527.78 is
guaranteed by the company for its subsidiary Yunzhu Technology Co., Ltd. At the end of the period, an amount
of RMB40,000,000.00 is guaranteed and pledged by the Company and Shenzhen Hi-tech Investment &
Financing Guarantee Co., Ltd. to provide guarantee for the subsidiary Fangda Jianke Co., Ltd., with the pledge
of intellectual property rights "Unitized Curtain Wall". Additionally, an amount of RMB1,144,641,572.44 is
guaranteed by the Company for the subsidiary Fangda Jianke Co., Ltd., with the pledge of fixed deposits or
margin held by the subsidiary.
25. Derivative financial liabilities
In RMB
Item Closing balance Opening balance
Forward foreign exchange contract 293,400.00
Total 293,400.00
26. Notes payable
In RMB
Type Closing balance Opening balance
Commercial acceptance 8,781,696.46 44,531,921.12
Bank acceptance 860,105,250.33 690,358,287.44
Total 868,886,946.79 734,890,208.56
At the end of the period, the total amount of bills payable due and unpaid was RMB229,240.40, all of which were
commercial acceptance bills. As a result of the supplier's failure to apply for payment to the bank in time, the payment had been
fully paid as of the reporting date.
227
Annual Report 2023 of China Fangda Group Co., Ltd.
27. Account payable
(1) Account payable
In RMB
Item Closing balance Opening balance
Account repayable and engineering
1,374,752,105.25 1,259,574,096.29
repayable
Payable installation and implementation
481,683,031.93 394,228,364.88
fees
Construction payable 86,851,302.81 44,523,769.88
Others 29,007,342.28 19,710,144.73
Total 1,972,293,782.27 1,718,036,375.78
(2) Significant accounts payable older than one year or past due
In RMB
Item Closing balance Reason
Supplier 1 14,204,481.52 Not mature
Total 14,204,481.52
28. Other payables
In RMB
Item Closing balance Opening balance
Other payables 117,581,764.15 113,425,377.70
Total 117,581,764.15 113,425,377.70
(1) Other payables
1) Other payables presented by nature
In RMB
Item Closing balance Opening balance
Performance and quality deposit 40,096,446.17 44,484,884.33
Deposit 24,659,670.94 19,901,002.35
Reserved expense 4,785,143.40 5,871,887.95
Others 48,040,503.64 43,167,603.07
Total 117,581,764.15 113,425,377.70
(2) Significant other accounts payable older than 1 year or past due
In RMB
Item Closing balance Reason
Shenzhen Yikang Real Estate Co. Ltd. 26,102,009.60 Payment paid as agreed in the contract
Total 26,102,009.60
228
Annual Report 2023 of China Fangda Group Co., Ltd.
(3) Other payables summarized by the top five in terms of closing balance by counterparties
The aggregate amount of the top five other payables with closing balances summarized by counterparties owed during the
period was RMB37,686,295.81, accounting for 32.05% of the total closing balances.
29. Prepayment received
(1) Prepayment received
In RMB
Item Closing balance Opening balance
Rent received in advance 1,432,885.03 1,439,653.84
Total 1,432,885.03 1,439,653.84
30. Contract liabilities
In RMB
Item Closing balance Opening balance
Project funds collected in advance 175,345,246.29 194,354,649.37
Material loan 1,261,218.35 12,114,464.00
Real estate sales payment 21,432,889.85 586,105.50
Others 124,854.98 938,452.68
Total 198,164,209.47 207,993,671.55
31. Employees' wage payable
(1) Employees' wage payable
In RMB
Item Opening balance Increase Decrease Closing balance
1. Short-term remuneration 66,789,434.45 445,164,261.99 438,396,029.25 73,557,667.19
2. Retirement pension program-
314,429.46 23,759,758.56 23,692,792.01 381,396.01
defined contribution plan
3. Dismiss compensation 47,000.00 1,225,484.46 1,148,435.40 124,049.06
Total 67,150,863.91 470,149,505.01 463,237,256.66 74,063,112.26
(2) Short-term remuneration
In RMB
Item Opening balance Increase Decrease Closing balance
1. Wage, bonus, allowance and
64,995,965.84 408,207,155.09 401,194,606.09 72,008,514.84
subsidies
2. Employee welfare 475,904.12 13,692,656.00 13,846,881.96 321,678.16
3. Social insurance 332,303.60 11,682,525.07 11,872,326.57 142,502.10
Including: medical insurance 279,363.18 8,293,844.73 8,455,123.93 118,083.98
Labor injury insurance 6,383.71 840,926.36 841,775.68 5,534.39
Breeding insurance 46,556.71 1,081,849.98 1,109,522.96 18,883.73
229
Annual Report 2023 of China Fangda Group Co., Ltd.
Medical insurance 217,304.00 217,304.00
Unemployment insurance 1,248,600.00 1,248,600.00
4. Housing fund 105,608.96 10,092,056.42 10,054,662.05 143,003.33
5. Labor union budget and staff
544,359.10 1,425,434.45 1,427,552.58 542,240.97
education fund
6. Short-term paid leave 335,292.83 64,434.96 399,727.79
Total 66,789,434.45 445,164,261.99 438,396,029.25 73,557,667.19
(3) Defined contribution plan
In RMB
Item Opening balance Increase Decrease Closing balance
1. Basic pension 306,672.38 22,952,547.52 22,885,406.73 373,813.17
2. Unemployment insurance 7,757.08 807,211.04 807,385.28 7,582.84
Total 314,429.46 23,759,758.56 23,692,792.01 381,396.01
32. Taxes payable
In RMB
Item Closing balance Opening balance
VAT 5,063,851.12 14,657,864.98
Enterprise income tax 13,798,160.21 28,092,096.58
Personal income tax 1,750,380.58 1,663,123.30
City maintenance and construction tax 636,181.87 1,651,960.05
Land using tax 608,959.21 256,490.15
Property tax 2,656,539.62 1,072,014.83
Education surtax 273,885.15 805,376.76
Local education surtax 182,589.47 397,447.79
Consumption service tax 10,359.29 680,127.01
Land VAT 16,543,205.26 36,201,588.58
Others 850,956.77 349,241.06
Total 42,375,068.55 85,827,331.09
33. Non-current liabilities due within 1 year
In RMB
Item Closing balance Opening balance
Long-term loans due within 1 year 914,958.90 72,037,200.00
Long-term payables due within 1 year 49,323,018.90
Lease liabilities due within one year 13,897,158.66 11,741,447.06
Total 64,135,136.46 83,778,647.06
34. Other current liabilities
In RMB
Item Closing balance Opening balance
Unterminated notes receivable 27,937,899.17 20,093,677.84
230
Annual Report 2023 of China Fangda Group Co., Ltd.
Substituted money on VAT 25,586,755.88 28,039,520.65
Total 53,524,655.05 48,133,198.49
35. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
Item Closing balance Opening balance
Guarantee and mortgage 444,204,672.22
Guarantee, mortgage and pledge loan 660,914,958.90 891,332,527.78
Less: Long-term loans due within 1 year 914,958.90 72,037,200.00
Total 660,000,000.00 1,263,500,000.00
Notes to classification of long-term borrowings:
(1) The pledges in the above guarantees, mortgages and pledges of borrowings are pledges of the
Company's 100% equity interest in its subsidiary, Fangda Real Estate, which is directly and indirectly held by
the Company, and the rent receivables from its self-owned rental properties in Fangda Town.
(2) The interest rate range for long-term borrowings is 3% to 6%.
36. Lease liabilities
In RMB
Item Closing balance Opening balance
Lease payments 23,255,219.85 19,363,493.20
Less: unrecognized financing expenses 2,682,191.15 714,589.59
Less: lease liabilities due within one year 13,897,158.66 11,741,447.06
Total 6,675,870.04 6,907,456.55
37. Long-term payables
In RMB
Item Closing balance Opening balance
Long-term payable 48,400,000.00 197,640,219.18
Total 48,400,000.00 197,640,219.18
(1) Long term accounts payable listed by nature
In RMB
Item Closing balance Opening balance
Equity repurchase payment 48,400,000.00 197,640,219.18
38. Anticipated liabilities
In RMB
Item Closing balance Opening balance Reason
Loss contract to be executed 193,502.52 264,031.97
231
Annual Report 2023 of China Fangda Group Co., Ltd.
Maintenance fee 4,648,908.95 3,108,521.87 Product quality warranty
Total 4,842,411.47 3,372,553.84
39. Deferred earning
In RMB
Item Opening balance Increase Decrease Closing balance Reason
Government See the following
8,999,880.44 550,000.00 571,201.72 8,978,678.72
subsidy table
Total 8,999,880.44 550,000.00 571,201.72 8,978,678.72 --
Items involving government subsidies:
Other misc.
December 31, Amount of Related to
Item gains recorded December 31, 2023
2022 new subsidy assets/earning
in this period
Railway transport screen door
controlling system and
20,940.89 17,482.62 3,458.27 Assets-related
information transmission
technology
Major investment project prize
from Industry and Trade
1,452,381.50 57,142.80 1,395,238.70 Assets-related
Development Division of
Dongguan Finance Bureau
Distributed PV power
generation project subsidy
sponsored by Dongguan 318,750.29 24,999.96 293,750.33 Assets-related
Reform and Development
Commission
Subsidized land transfer 166,101.95 3,725.64 162,376.31 Assets-related
Special subsidy for industrial
transformation, upgrading and 686,666.61 550,000.00 85,978.30 1,150,688.31 Assets-related
development
Enterprise informationization
subsidy project of Shenzhen
324,000.00 48,000.00 276,000.00 Assets-related
Small and Medium Enterprise
Service Agency
National Industry
Revitalization and Technology 5,070,254.90 307,728.60 4,762,526.30 Assets-related
Renovation Project fund
Subsidy for new plant 960,784.30 26,143.80 934,640.50 Assets-related
Total 8,999,880.44 550,000.00 571,201.72 8,978,678.72
40. Capital share
In RMB
Change (+,-)
Opening balance Issued new Bonus Transferred Closing balance
Others Subtotal
shares shares from reserves
Total of
1,073,874,227.00 1,073,874,227.00
capital shares
41. Capital reserve
In RMB
232
Annual Report 2023 of China Fangda Group Co., Ltd.
Item Opening balance Increase Decrease Closing balance
Capital premium (share capital
10,005,491.05 10,005,491.05
premium)
Other capital reserves 1,454,097.35 1,454,097.35
Total 11,459,588.40 11,459,588.40
42. Other miscellaneous income
In RMB
Amount occurred in the current period
Less: Less:
amount amount
written into written into After-tax
After-tax
Opening other gains other gains amount Closing
Item Amount Less: amount
balance and and attributed balance
before Income tax attributed
transferred transferred to minority
income tax expenses to the
into into shareholder
parent
gain/loss in gain/loss in s
previous previous
terms terms
I. Other
comprehen
sive
income that
- - - - -
will not be
16,224,478. 11,968,973. 2,992,243.4 8,976,730.4 25,201,209.
subsequentl
87 86 6 0 27
y
reclassified
into profit
and loss
Fair
value
- - - - -
change of
16,224,478. 11,968,973. 2,992,243.4 8,976,730.4 25,201,209.
investment
87 86 6 0 27
in other
equity tools
2. Other
misc.
incomes
that will be 48,211,195. 48,323,080.
73,909.20 -48,310.24 111,884.40 10,335.04
re- 66 06
classified
into gain
and loss
Cash flow
- -
hedge 448,562.20 -48,310.24 3,925.54 170,878.62
322,068.28 277,683.58
reserve
Translation
difference
-
of foreign 395,977.48 389,567.98 6,409.50 236,706.94
152,861.04
exchange
statement
Investment 47,915,494. 47,915,494.
233
Annual Report 2023 of China Fangda Group Co., Ltd.
real estate 50 50
measured
at fair
value
Other - - -
31,986,716. 23,121,870.
miscellane 11,895,064. 3,040,553.7 8,864,846.0 10,335.04
79 79
ous income 66 0 0
43. Surplus reserves
In RMB
Item Opening balance Increase Decrease Closing balance
Statutory surplus
79,324,940.43 79,324,940.43
reserves
Total 79,324,940.43 79,324,940.43
44. Retained profit
In RMB
Item Current period Last period
Adjustment on retained profit of previous
4,553,295,402.30 4,324,055,259.33
period
Retained profit adjusted at beginning of year 4,553,295,402.30 4,324,055,259.33
Plus: Net profit attributable to owners of the
272,758,249.50 282,933,854.32
parent
Common share dividend payable 53,693,711.35 53,693,711.35
Closing retained profit 4,772,359,940.45 4,553,295,402.30
45. Operational revenue and costs
In RMB
Amount occurred in the current period Occurred in previous period
Item
Income Cost Income Cost
Main business 4,118,334,153.38 3,381,962,336.08 3,664,169,293.83 2,880,210,673.00
Other businesses 173,870,562.63 22,680,137.25 182,806,654.61 37,543,294.52
Total 4,292,204,716.01 3,404,642,473.33 3,846,975,948.44 2,917,753,967.52
Is the lower of the net profit before and after deducting the non recurring profit and loss negative
□ Yes No
Breakdown of operating revenues and operating costs:
In RMB
Segment 1- Segment 2 - rail Segment 3- Segment 4- Segment 5-
Contra Total
curtain wall transit division Real estate New energy Others
ct
classifi Operat Operat Operat Operat Operat Operat
Turnov Turnov Turnov Turnov Turnov Turnov
cation ing ing ing ing ing ing
er er er er er er
cost cost cost cost cost cost
By 3,477, 2,935, 558,42 405,54 222,26 55,252 19,389 8,139, 14,921 26,289 4,292, 3,404,
busine 209,98 675,94 1,443. 8,804. 2,890. ,159.9 ,107.6 275.89 ,292.0 .08 204,71 642,47
234
Annual Report 2023 of China Fangda Group Co., Ltd.
ss type 2.02 4.04 33 42 97 0 3 6 6.01 3.33
Includi
ng:
Curtai
n wall
3,477, 2,935, 3,477, 2,935,
system
209,98 675,94 209,98 675,94
and
2.02 4.04 2.02 4.04
materi
als
Subwa
y
558,42 405,54 558,42 405,54
screen
1,443. 8,804. 1,443. 8,804.
door
33 42 33 42
and
service
Real
estate
rental
and
222,26 55,252 222,26 55,252
sales
2,890. ,159.9 2,890. ,159.9
and
97 0 97 0
propert
y
service
s
PV
power
19,389 19,389
genera 8,139, 8,139,
,107.6 ,107.6
tion 275.89 275.89
3 3
produc
ts
14,921 14,921
26,289 26,289
Others ,292.0 ,292.0
.08 .08
6 6
By
operati 3,477, 2,935, 558,42 405,54 222,26 55,252 19,389 14,921 4,292, 3,404,
8,139, 26,289
ng 209,98 675,94 1,443. 8,804. 2,890. ,159.9 ,107.6 ,292.0 204,71 642,47
275.89 .08
region 2.02 4.04 33 42 97 0 3 6 6.01 3.33
Includi
ng:
In 3,355, 2,855, 274,60 216,35 222,26 55,252 19,389 14,921 3,886, 3,135,
8,139, 26,289
China 040,06 690,38 3,521. 4,518. 2,890. ,159.9 ,107.6 ,292.0 216,87 462,63
275.89 .08
6.60 8.16 70 18 97 0 3 6 8.96 1.21
Out of 122,16 79,985 283,81 189,19 405,98 269,17
China 9,915. ,555.8 7,921. 4,286. 7,837. 9,842.
42 8 63 24 05 12
(1) The information of operating revenue broken down by revenue recognition time is as follows:
Item 2023 2022
Revenue recognized at a
422,284,637.84 402,720,318.63
certain point in time
Revenue recognized over
3,869,920,078.17 3,444,255,629.81
a period of time
235
Annual Report 2023 of China Fangda Group Co., Ltd.
Total 4,292,204,716.01 3,846,975,948.44
(2) Performance obligation
For curtain wall materials, real estate and other commodity sales transactions, the Company completes the
performance obligations when the customer obtains the control of the relevant commodities; for providing
building curtain wall, Metro screen door design, production and installation and other service transactions, the
Company confirms the completed performance obligations according to the performance progress during the
whole service period. The contract price of the Company is usually due within one year, and there is no
significant financing component.
(3) Information related to remaining performance obligations
As of December 31, 2023, the Company's remaining contractual obligations are mainly related to the
Company's engineering contracts, and the remaining contractual obligations are expected to be recognized as
revenue according to the performance progress in the future performance period of the corresponding
engineering contracts.
The amount of revenue corresponding to the performance obligations that have been signed, but not yet
performed or not yet performed at the end of the reporting period is RMB8,613,273,704.81, of which
RMB4,021,283,886.15 yuan is expected to be recognized in 2024, and RMB2,992,505,324.28 is expected to be
recognized in 2025, RMB1,599,484,494.38 is expected to be recognized in 2026 and beyond.
46. Taxes and surcharges
In RMB
Item Amount occurred in the current period Occurred in previous period
City maintenance and construction tax 7,636,023.14 7,679,241.19
Education surtax 5,578,210.15 5,585,461.79
Property tax 19,326,390.99 12,837,232.82
Land using tax 1,939,918.65 1,365,653.05
Stamp tax 4,994,254.63 2,237,929.20
Land VAT 792,772.36 37,137,187.96
Others 86,827.30 110,732.47
Total 40,354,397.22 66,953,438.48
47. Management expense
In RMB
Item Amount occurred in the current period Occurred in previous period
Labor costs 114,574,462.83 111,950,198.78
Maintenance costs 169,712.22 286,605.47
Agencies 14,255,903.98 8,669,931.10
Depreciation and amortization 15,223,179.96 14,008,652.97
Office expense 5,653,172.50 3,458,124.24
Entertainment expense 6,244,445.47 5,239,230.46
Rental 2,693,465.85 2,162,427.23
Lawsuit 2,349,777.80 812,611.39
Travel expense 3,709,314.11 1,856,940.17
Property management fee 910,548.22 1,298,685.56
236
Annual Report 2023 of China Fangda Group Co., Ltd.
Water and electricity 765,449.98 850,541.99
Material consumption 226,667.84 431,080.40
Others 7,898,655.05 6,113,309.07
Total 174,674,755.81 157,138,338.83
48. Sales expense
In RMB
Item Amount occurred in the current period Occurred in previous period
Labor costs 28,836,318.58 27,481,424.15
Sales agency fee 1,614,681.20 7,583,116.62
Entertainment expense 6,830,220.67 4,254,479.42
Travel expense 3,382,495.03 1,280,007.65
Advertisement and promotion fee 2,171,392.31 2,044,298.44
Rental 232,462.72 325,598.09
Depreciation and amortization 780,990.05 708,646.17
Office costs 650,584.73 704,950.67
Material consumption 1,260,859.63 456,870.79
Warranty expense 7,479,549.47 6,721,123.19
Others 5,249,160.37 3,409,647.82
Total 58,488,714.76 54,970,163.01
49. R&D cost
In RMB
Item Amount occurred in the current period Occurred in previous period
Labor costs 103,430,062.05 87,517,101.66
Material costs 55,562,482.97 54,424,197.58
Agencies 8,698,692.37 9,786,533.05
Depreciation costs 2,081,830.87 1,475,184.54
Amortization of intangible assets 1,024,410.27 1,084,611.53
Travel expense 703,972.61 413,442.72
Rental 501,204.01 1,302.17
Others 8,068,146.10 7,110,539.77
Total 180,070,801.25 161,812,913.02
50. Financial expense
In RMB
Item Amount occurred in the current period Occurred in previous period
Interest expense 87,186,232.75 100,581,343.99
Including: interest expense of lease
873,165.18 1,188,864.62
liabilities
Less: discount government subsidies -131,680.00 308,700.00
Less: Interest income 29,144,115.88 23,892,574.84
Net interest expenditure 58,173,796.87 76,380,069.15
Exchange net loss -8,640,174.72 -6,670,099.09
Discount expense 18,204,015.63 23,001,819.09
Commission charges and others 5,089,307.07 3,990,006.19
Total 72,826,944.85 96,701,795.34
237
Annual Report 2023 of China Fangda Group Co., Ltd.
51. Other gains
In RMB
Amount occurred in the current
Source Occurred in previous period
period
Government subsidies related to deferred income (related
571,201.72 566,645.16
to assets)
Government subsidies directly included in current profits
12,331,106.46 13,047,310.70
and losses (related to income)
Other items related to daily activities and included in other
4,211,100.08 295,628.71
income
Total 17,113,408.26 13,909,584.57
52. Income from fair value fluctuation
In RMB
Source of income from fluctuation of fair
Amount occurred in the current period Occurred in previous period
value
Investment real estate measured at fair
-28,482,701.26 -10,095,973.89
value
Other non-current financial assets -51,817.51 -17,973.56
Total -28,534,518.77 -10,113,947.45
53. Investment income
In RMB
Amount occurred in the current
Item Occurred in previous period
period
Gains from long-term equity investment measured by
-212,024.74 -249,904.00
equity
Investment income of trading financial assets during the
-50,000.00 87,532.09
holding period
Investment income from disposal of trading financial
611,295.00 4,596,589.23
assets
Financial assets derecognised as a result of amortized
-4,656,380.30 -3,778,070.96
cost
Income from derecognition of other financial assets
-255,024.54 -150,858.55
measured at fair value
Interest income from external financial assistance 5,680,666.66
Total -4,562,134.58 6,185,954.47
54. Credit impairment loss
In RMB
Item Amount occurred in the current period Occurred in previous period
Bad debt loss of notes receivable 1,874,688.90 304,547.33
Bad debt loss of account receivable -40,828,905.43 -34,761,191.07
Bad debt loss of other receivables 3,902,552.21 -179,081.17
238
Annual Report 2023 of China Fangda Group Co., Ltd.
Total -35,051,664.32 -34,635,724.91
55. Assets impairment loss
In RMB
Item Amount occurred in the current period Occurred in previous period
Contract asset impairment loss 6,020,287.93 -35,575,418.55
Total 6,020,287.93 -35,575,418.55
56. Assets disposal gains
In RMB
Amount occurred in the current
Source Occurred in previous period
period
Disposition not classified as possession of fixed assets
to be sold, construction in progress, productive 58,292.27 -1,421,880.09
biological assets and intangible assets
Including: Fixed assets 58,292.27 -1,430,901.99
Intangible assets 9,021.90
Disposal of use right assets 323,279.85
Total 381,572.12 -1,421,880.09
57. Non-business income
In RMB
Amount occurred in the Amount accounted into the
Item Occurred in previous period
current period current accidental gain/loss
Penalty income 159,340.58 315,404.30 159,340.58
Compensation received 1,906,958.87 576,478.89 1,906,958.87
Others 572,991.76 511,504.70 572,991.76
Total 2,639,291.21 1,403,387.89 2,639,291.21
58. Non-business expenses
In RMB
Amount occurred in the Amount accounted into the
Item Occurred in previous period
current period current accidental gain/loss
Donation 356,897.00 3,173,265.20 356,897.00
Loss from retirement os
143,132.97 279,036.49 143,132.97
damaged non-current assets
Penalty and overdue fine 653,180.55 282,440.37 653,180.55
Others 223,265.91 433,216.03 223,265.91
Total 1,376,476.43 4,167,958.09 1,376,476.43
59. Income tax expenses
(1) Details about income tax expense
In RMB
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Annual Report 2023 of China Fangda Group Co., Ltd.
Item Amount occurred in the current period Occurred in previous period
Income tax expenses in this period 53,600,826.25 47,007,994.88
Deferred income tax expenses -12,783,330.37 -5,933,164.84
Total 40,817,495.88 41,074,830.04
(2) Adjustment process of accounting profit and income tax expense
In RMB
Item Amount occurred in the current period
Total profit 317,776,394.21
Income tax expenses calculated based on the legal (or applicable) tax rates 79,444,098.55
Impacts of different tax rates applicable for some subsidiaries -20,500,109.26
Impacts of income tax before adjustment 8,567,271.66
Impacts of non-deductible cost, expense and loss 2,835,390.14
Deductible temporary difference and deductible loss of unrecognized deferred
759,786.07
income tax assets
Additional deduction of R&D expense -26,204,288.42
Profit and loss of associates and joint ventures calculated using the equity method 53,006.18
Effect of tax rate change on deferred income tax -4,137,659.04
Income tax expenses 40,817,495.88
60. Other miscellaneous income
See Note 42 Other comprehensive income in this section for details.
61. Notes to the cash flow statement
(1) Cash inflow related to operation
Other cash received from business operations
In RMB
Item Amount occurred in the current period Occurred in previous period
Interest income 15,162,422.54 10,526,773.48
Subsidy income 9,796,358.90 8,523,267.80
Retrieving of bidding deposits 40,653,182.62 41,910,159.36
Other operating accounts 40,774,700.30 8,832,476.97
Total 106,386,664.36 69,792,677.61
Other cash paid for business operations
In RMB
Item Amount occurred in the current period Occurred in previous period
Oocket expenses 140,382,530.54 129,019,737.46
Bidding deposit paid 30,514,126.58 41,669,236.99
Other trades 38,434,058.15 31,243,643.80
Net draft deposit net paid 58,931,587.09 16,983,599.71
Total 268,262,302.36 218,916,217.96
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Annual Report 2023 of China Fangda Group Co., Ltd.
(2) Cash related to investment activities
Other cash paid for investment
In RMB
Item Amount occurred in the current period Occurred in previous period
Investment commission 50,000.00 49,940.00
Total 50,000.00 49,940.00
(3) Cash related to financing
Other cash paid related to financing activities
In RMB
Item Amount occurred in the current period Occurred in previous period
Financing fee 1,910,251.87 1,661,150.00
Principal and interest of lease liabilities 16,510,621.53 13,317,433.68
Loan deposit 142,460,000.00 42,780,000.00
Payment for repurchase of equity interest
113,473,388.12
in Fangda Zhiyuan
Subsidiary IPO expenses 2,064,871.00
Total 274,354,261.52 59,823,454.68
Changes in liabilities arising from financing activities
Applicable □ Inapplicable
In RMB
Increase Decrease
Item Opening balance Non- Closing balance
Non-cash
Change in cash Change in cash cash
change
change
Short-term 2,876,228,738.
1,318,238,522.78 181,231,162.95 2,167,643,385.16 2,208,055,039.21
loans 64
Long-term
borrowings
(including
1,335,537,200.00 914,958.90 675,537,200.00 660,914,958.90
portion due
within one
year)
Lease
liabilities
(including
18,648,903.61 18,434,746.62 16,510,621.53 20,573,028.70
portion due
within one
year)
Long-term
accounts
payable
(including 197,640,219.18 13,556,187.84 113,473,388.12 97,723,018.90
portion due
within one
year)
2,876,228,738.
Total 2,870,064,845.57 214,137,056.31 2,973,164,594.81 2,987,266,045.71
64
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Annual Report 2023 of China Fangda Group Co., Ltd.
(4) Explanation of cash flows presented on a net basis
Basis for adopting net
Item Relevant factual information Financial impact
presentation
Net margin paid on bills of Corresponding deposits for bills
exchange, etc. of exchange are presented on a Quick turnaround and short
None
Net deposits received such as net basis according to changes in maturity
bills of exchange their balances
(5) Significant activities and financial effects that do not involve current cash receipts and disbursements
but affect the enterprise's financial position or may affect the enterprise's cash flows in the future
No
62. Supplementary data of cash flow statement
(1) Supplementary data of cash flow statement
In RMB
Amount of the Current Amount of the
Supplementary information
Term Previous Term
1. Net profit adjusted to cash flow related to business operations
Net profit 276,958,898.33 286,154,500.04
Plus: Asset impairment provision 29,031,376.39 70,211,143.46
Fixed asset depreciation, gas and petrol depreciation, production
29,636,300.00 30,069,792.08
goods depreciation
Depreciation of right to use assets 14,476,910.31 13,157,906.36
Amortization of intangible assets 5,534,923.47 4,445,952.55
Amortization of long-term amortizable expenses 4,175,586.27 3,689,196.23
Loss from disposal of fixed assets, intangible assets, and other
-381,572.12 1,421,880.09
long-term assets ("-" for gains)
Loss from fixed asset discard ("-" for gains) 143,132.97 279,036.49
Loss from fair value fluctuation ("-" for gains) 28,534,518.77 10,113,947.45
Financial expenses ("-" for gains) 95,144,503.65 91,838,168.41
Investment losses ("-" for gains) -349,270.27 -10,114,883.98
Decrease of deferred income tax asset ("-" for increase) 40,194,671.27 -5,937,243.88
Increase of deferred income tax asset ("-" for increase) -52,978,001.64 -1,459,087.80
Decrease of inventory ("-" for increase) -45,092,089.19 22,748,527.66
Decrease of operational receivable items ("-" for increase) -372,906,407.75 -578,812,306.16
Increase of operational receivable items ("-" for decrease) 306,550,308.71 300,388,703.00
Others -58,931,587.09 -16,983,599.70
Cash flow generated by business operations, net 299,742,202.08 221,211,632.30
2. Major investment and financing activities with no cash involved
Debt transferred to assets
Convertible corporate bonds due within one year
Fixed assets under finance leases
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3. Net change in cash and cash equivalents:
Balance of cash at period end 779,661,118.42 783,677,929.06
Less: Initial balance of cash 783,677,929.06 892,251,071.59
Add: Ending balance of cash equivalents
Less: Ending balance of cash equivalents
Net increase in cash and cash equivalents -4,016,810.64 -108,573,142.53
(2) Composition of cash and cash equivalents
In RMB
Item Closing balance Opening balance
I. Cash 779,661,118.42 783,677,929.06
Including: Cash in stock 752.40 149.81
Bank savings can be used at any time 765,436,788.41 776,383,701.29
Other monetary capital can be used at any
14,223,577.61 7,294,077.96
time
III. Balance of cash and cash equivalents at end
779,661,118.42 783,677,929.06
of term
(3) Monetary funds other than cash and cash equivalents
In RMB
Reasons for not being cash
Item Amount of the Current Term Amount of the Previous Term
and cash equivalents
Various types of deposits 645,489,997.82 455,076,287.44 Use restricted
Total 645,489,997.82 455,076,287.44
63. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
Closing foreign currency
Item Exchange rate Closing RMB balance
balance
Monetary capital 67,488,379.65
Including: USD 4,221,085.77 7.0827 29,896,698.48
Euro 0.01 7.8592 0.08
HK Dollar 20,183,567.79 0.9062 18,290,742.81
INR 62,944,686.96 0.0852 5,362,887.33
Vietnamese currency 1,964,100,342.00 0.0003 573,654.98
SGD 589,251.95 5.3772 3,168,525.58
AUD 2,102,935.07 4.8484 10,195,870.39
Account receivable 17,308,909.84
Including: USD 1,235,178.77 7.0827 8,748,400.67
HK Dollar 1,546,500.00 0.9062 1,401,469.23
AUD 1,385,643.13 4.8484 6,718,152.15
INR 5,174,739.28 0.0852 440,887.79
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Annual Report 2023 of China Fangda Group Co., Ltd.
Contract assets 117,167,793.36
Including: USD 11,327,281.90 7.0827 80,227,739.48
INR 52,905,721.65 0.0852 4,507,567.48
Euro 1,542,539.03 7.8592 12,123,122.75
HK Dollar 19,767,589.46 0.9062 17,913,784.92
AUD 494,096.76 4.8484 2,395,578.73
Other receivables 1,660,404.35
Including: USD 109,175.69 7.0827 773,258.66
HK Dollar 681,955.79 0.9062 618,001.98
INR 1,278,741.62 0.0852 108,948.79
SGD 4,295.03 5.3772 23,095.26
AUD 28,277.30 4.8484 137,099.66
Account payable 15,023,597.10
Including: USD 1,246,480.91 7.0827 8,828,450.35
HK Dollar 3,952,209.37 0.9062 3,581,571.17
INR 18,961,855.57 0.0852 1,615,550.09
AUD 205,846.36 4.8484 998,025.49
Other payables 529,240.03
Including: USD 58,666.76 7.0827 415,519.06
HK Dollar 124,955.10 0.9062 113,236.81
AUD 99.86 4.8484 484.16
(2) The note of overseas operating entities should include the main operation places, book keeping
currencies and selection basis. Where the book keeping currency is changed, the reason should also be
explained.
□ Applicable Inapplicable
64. Leasing
(1) The Company is the leasee
Applicable □ Inapplicable
Variable lease payments not included in the measurement of the lease liability
□ Applicable Inapplicable
Lease costs for short-term leases or low-value assets with simplified treatment
Applicable □ Inapplicable
Current gains and losses and cash flows related to leases
Item 2023
Short term lease expenses with simplified treatment included in current profit and
39,555,576.27
loss
Lease expenses of low value assets with simplified treatment included in current
127,709.22
profit and loss (except short-term lease)
Interest expense on lease liabilities 873,165.18
Total cash outflow related to leasing 51,107,361.66
Involvement in sale-and-leaseback transactions: None.
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Annual Report 2023 of China Fangda Group Co., Ltd.
(2) The Company as lessor
Operating leases as lessor
Applicable □ Inapplicable
In RMB
Including: Income related to variable lease payments not
Item Rental income
included in lease receipts
Rental income 149,634,705.05 519,447.79
Total 149,634,705.05 519,447.79
Financing leases as lessor
□ Applicable Inapplicable
Undiscounted lease receipts for each of the next five years
Applicable □ Inapplicable
In RMB
Annual undiscounted lease receipts
Item
Closing amount Opening amount
First year 132,605,879.94 143,507,004.38
Second year 115,552,250.91 99,878,509.89
Third year 94,134,268.43 82,828,241.30
Fourth year 59,112,763.63 36,864,929.12
Fifth year 39,342,690.51 37,649,426.06
Total undiscounted lease receipts after
90,429,704.69 125,099,040.43
five years
VIII. R&D expenses
In RMB
Item Amount occurred in the current period Occurred in previous period
Labor costs 103,430,062.05 87,517,101.66
Material costs 55,562,482.97 54,424,197.58
Agencies 8,698,692.37 9,786,533.05
Depreciation costs 2,081,830.87 1,475,184.54
Amortization of intangible assets 1,024,410.27 1,084,611.53
Travel expense 703,972.61 413,442.72
Rental 501,204.01 1,302.17
Others 8,068,146.10 7,110,539.77
Total 180,070,801.25 161,812,913.02
Including: Expensed R&D expenditure 180,070,801.25 161,812,913.02
IX. Change to Consolidation Scope
1. Change to the consolidation scope for other reasons
Description of changes in the scope of consolidation due to other reasons (e.g., newly established
subsidiaries, liquidation of subsidiaries, etc.) and their related circumstances: The Company has added one new
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Annual Report 2023 of China Fangda Group Co., Ltd.
wholly-owned subsidiary by way of establishment during the current period: Shenzhen Fangda Jianchuang
Technology Co. Ltd.
X. Equity in Other Entities
1. Interests in subsidiaries
(1) Group Composition
In RMB
Registered Place of Registered Shareholding percentage Obtaining
Company Business
capital business address Direct Indirect method
Shihui
International 21,248,100.0 Virgin Virgin
Investment 100.00% Incorporation
Holding Co., 0 Islands Islands
Ltd.
Shenzhen
Hongjun 100,000,000.
Shenzhen Shenzhen Investment 98.00% 2.00% Incorporation
Investment 00
Co., Ltd.
Shenzhen
Project
Fangda
investment
Investment 237,700,000.
Shenzhen Shenzhen and 99.00% 0.52% Incorporation
Partnership 00
investment
(Limited
consultancy
Partnership)
Prodution
Jiangxi and sales of
Fangda new-type
Intelligent 100,000,000. materialsm
Ganzhou Ganzhou 99.00% 1.00% Incorporation
Manufacturin 00 composite
g Technology materials and
Co., Ltd. production of
curtain walls
Designing,
Shenzhen manufacturin
Fangda 600,000,000. g, and
Shenzhen Shenzhen 98.66% 1.34% Incorporation
Jianke Group 00 installation
Co., Ltd. of curtain
walls
Dongguan Installation
Fangda New 272,800,000. and sales of
Dongguan Dongguan 100.00% Incorporation
Material Co., 00 building
Ltd. curtain walls
Chengda Trusted
Fangda processing of
50,000,000.0
Construction Chengdu Chengdu building 100.00% Incorporation
0
Technology curtain wall
Co., Ltd. materials
Designing,
Fangda manufacturin
14,545,200.0
Australia Australia Australia g, and 100.00% Incorporation
0
Co., Ltd. installation
of curtain
246
Annual Report 2023 of China Fangda Group Co., Ltd.
walls
Designing,
Fangda manufacturin
Southeast g, and
3,000,000.00 Vietnam Vietnam 100.00% Incorporation
Asia Co., installation
Ltd. of curtain
walls
Shanghai Intelligent
Fangda technology,
100,000,000.
Zhijian Shanghai Shanghai new energy, 30.00% 70.00% Incorporation
00
Technology automated
Co., Ltd technology
Design, sale
Fangda
and
Jianke Hong
36,594.00 Hong Kong Hong Kong installation 100.00% Incorporation
Kong Co.,
of building
Ltd.
curtain wall
Construction
technology,
intelligent
technology,
Shanghai
automation
Fangda
50,000,000.0 technology,
Jianzhi Shanghai Shanghai 100.00% Incorporation
0 design,
Technology
production
Co., Ltd.
and
installation
of building
curtain walls
Chengda Building
Fangda decoration
50,000,000.0
Curtain Wall Chengdu Chengdu and other 100.00% Incorporation
0
Technology construction
Co., Ltd. industry
Shenzhen
Production
Fangda
50,000,000.0 and sales of
Jianchuang Shenzhen Shenzhen 100.00% Incorporation
0 building
Technology
curtain walls
Co., Ltd.
Shenzhen Design and
Fangda New 100,000,000. construction
Shenzhen Shenzhen 99.00% 1.00% Incorporation
Energy Co., 00 of PV power
Ltd. plants
Pingxiang
Design and
Fangda
10,000,000.0 construction
Luxin New Pingxiang Pingxiang 100.00% Incorporation
0 of PV power
Energy Co.,
plants
Ltd.
Nanchang
Design and
Xinjian
10,000,000.0 construction
Fangda New Nanchang Nanchang 100.00% Incorporation
0 of PV power
Energy Co.,
plants
Ltd.
Dongguan Design and
Fangda New 10,000,000.0 construction
Dongguan Dongguan 100.00% Incorporation
Energy Co., 0 of PV power
Ltd. plants
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Annual Report 2023 of China Fangda Group Co., Ltd.
Project
Shenzhen
investment
Xunfu
100,000.00 Shenzhen Shenzhen and 100.00% Incorporation
Investment
investment
Co., Ltd
consultancy
Project
Shenzhen
investment
Lifu
1,000,000.00 Shenzhen Shenzhen and 52.00% Incorporation
Investment
investment
Co., Ltd
consultancy
Production,
Fangda processing
Zhichuang 105,000,000. and
Shenzhen Shenzhen 94.04% Incorporation
Technology 00 installation
Co., Ltd. of subway
screen doors
Shenzhen
Qianhai 94.04%
Software
Kechuangyu 5,000,000.00 Shenzhen Shenzhen Incorporation
development
an Software
Co., Ltd.
Fangda
Zhiyuan 94.04%
Metro screen
Technology 8,435.80 Hong Kong Hong Kong Incorporation
door
(Hong Kong)
Co., Ltd.
Production,
Fangda
processing 94.04%
Zhiyuan
10,000,000.0 and
Technology Wuhan Wuhan Incorporation
0 installation
(Wuhan) Co.,
of subway
Ltd.
screen doors
Fangda
Production,
Zhiyuan 94.04%
processing
Railway
and
Transportatio 1,000,000.00 Dongguan Dongguan Incorporation
installation
n Equipment
of subway
(Dongguan)
screen doors
Co.
Production,
Fangda
processing 94.04%
Zhiyuan
and
Technology 1,000,000.00 Nanchang Nanchang Incorporation
installation
(Nanchang)
of subway
Co., Ltd.
screen doors
Production,
General processing
Railway and
47,880.30 Singapore Singapore 94.04% Incorporation
Technology installation
Ltd. of subway
screen doors
Shenzhen
Fangda Real estate
200,000,000.
Property Shenzhen Shenzhen development 99.00% 1.00% Incorporation
00
Development and operation
Co., Ltd.
Shenzhen 10,000,000.0 Shenzhen Shenzhen Property 100.00% Incorporation
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Annual Report 2023 of China Fangda Group Co., Ltd.
Fangda 0 management
Property
Management
Co., Ltd.
Fangda
(Jiangxi) Real estate
100,000,000.
Property Nanchang Nanchang development 100.00% Incorporation
00
Development and operation
Co., Ltd.
Technology
development
and sales;
Shenzhen Invest in
Fangda industry;
50,000,000.0
Yunzhi Shenzhen Shenzhen Operation 100.00% Incorporation
0
Technology management
Co., Ltd. of science
and
technology
park
Shenzhen
Zhongrong
121,000,000. Business
Litai Shenzhen Shenzhen 55.00% Purchase
00 service
Investment
Co., Ltd.
Prodution
and sales of
Fangda New new-type
Materials 99,328,800.0 materialsm
Nanchang Nanchang 75.00% 25.00% Incorporation
(Jiangxi) Co., 0 composite
Ltd. materials and
production of
curtain walls
Inspection,
technical
service and
Shenzhen Consolidatio
consultation
Fangda n of entities
10,000,000.0 of building
Yunzhu Shenzhen Shenzhen 100.00% under
0 safety and
Technology common
building
Co., Ltd. control
energy
saving
system
Inspection,
technical
service and
Shenzhen Consolidatio
consultation
Yunzhu n of entities
of building
Testing 5,000,000.00 Shenzhen Shenzhen 100.00% under
safety and
Technology common
building
Co., Ltd. control
energy
saving
system
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Annual Report 2023 of China Fangda Group Co., Ltd.
(2) Major non wholly-owned subsidiaries
In RMB
Profit and loss Dividend to be Interest balance of
Shareholding of
Company attributed to minority distributed to minority minority shareholders
minority shareholders
shareholders shareholders in the end of the period
Zhongrong Litai 45.00% -55,097.66 48,299,427.58
Fangda Zhiyuan
5.96% 4,256,280.05 25,134,721.34
Technology
(3) Financial highlights of major non wholly owned subsidiaries
In RMB
Closing balance Opening balance
Compa Curren Non- Curren Non-
Non- Total Total Non- Total Total
ny Curren t current Curren t current
current of liabiliti current of liabiliti
t assets liabiliti liabiliti t assets liabiliti liabiliti
assets assets es assets assets es
es es es es
Zhong 209,63 209,92 102,40 102,59 208,73 209,10 101,34 101,65
285,10 190,33 371,74 305,18
rong 7,980. 3,087. 0,696. 1,026. 7,205. 8,953. 9,268. 4,452.
6.81 0.21 7.97 4.09
Litai 81 62 16 37 21 18 59 68
Fangd
a
772,72 147,60 920,33 484,98 13,696 498,67 770,73 135,42 906,16 540,84 15,118 555,96
Zhiyua
5,686. 7,926. 3,612. 2,075. ,876.2 8,951. 9,460. 3,070. 2,531. 8,850. ,392.7 7,242.
n
09 78 87 34 1 55 72 69 41 07 1 78
Techn
ology
In RMB
Amount occurred in the current period Occurred in previous period
Company Total of Business Total of Business
Turnover Net profit misc. operation Turnover Net profit misc. operation
incomes cash flows incomes cash flows
Zhongrong - - - -
110,091.72 90,964.60 110,091.74 56,529.04
Litai 122,439.25 122,439.25 122,756.30 122,756.30
Fangda - -
558,421,44 71,424,880. 71,598,313. 564,551,74 53,861,759. 54,601,158.
Zhiyuan 5,772,922.8 14,231,720.
3.33 42 27 9.10 06 86
Technology 2 29
2. Interests in joint ventures or associates
(1) Financial summary of insignificant joint ventures and associates
In RMB
Closing balance/amount occurred in this Opening balance/amount occurred in
period previous period
Associate:
Total book value of investment 54,757,017.40 54,969,042.14
Total shareholding
Net profit -212,024.74 -249,904.00
--Total of misc. incomes -212,024.74 -249,904.00
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Annual Report 2023 of China Fangda Group Co., Ltd.
XI. Government Subsidies
1. Governmental subsidy recognized as receivable at the end of the report period
Applicable □ Inapplicable
Closing balance of accounts receivable: RMB798,918.77.
Reasons for not receiving the estimated amount of government grants at the expected point in time
□ Applicable Inapplicable
2. Liabilities involving government subsidies
Applicable □ Inapplicable
In RMB
Other misc. gains
Accounting Amount of new Assets/earning-
Opening balance recorded in this Closing balance
item subsidy related
period
Deferred
8,999,880.44 550,000.00 571,201.72 8,978,678.72 Assets-related
earning
Total 8,999,880.44 550,000.00 571,201.72 8,978,678.72
3. Government subsidies accounted into current profit or loss.
Applicable □ Inapplicable
In RMB
Accounting item Amount occurred in the current period Occurred in previous period
Other gains 12,902,308.18 13,613,955.86
Financial expenses -131,680.00 308,700.00
Total 12,770,628.18 13,922,655.86
XII. Risks of Financial Tools
1. Types of risks arising from financial instruments
The risks associated with the financial instruments of the Company arise from the various financial assets
and liabilities recognized by the Company in the course of its operations, including credit risks, liquidity risks
and market risks.
The management objectives and policies of various risks related to financial instruments are governed by
the management of the Company. The operating management is responsible for daily risk management through
functional departments (for example, the Company's credit management department reviews the Company's
credit sales on a case-by-case basis). The internal audit department of the Company conducts daily supervision
of the implementation of the Company's risk management policies and procedures, and reports relevant findings
to the Company's audit committee in a timely manner.
The overall goal of the Company's risk management is to formulate risk management policies that
minimize the risks associated with various financial instruments without excessively affecting the Company's
competitiveness and resilience.
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Annual Report 2023 of China Fangda Group Co., Ltd.
(1) Credit risk
Credit risk is caused by the failure of one party of a financial instrument in performing its obligations,
causing the risk of financial loss for the other party. The credit risk of the Company mainly comes from
monetary capital, notes receivable, accounts receivable, other receivables, receivables financing, contract assets,
etc. The credit risk of these financial assets comes from the default of the counterparties, and the maximum risk
exposure is equal to the book amount of these instruments.
The Company's money and funds are mainly deposited in the commercial banks and other financial
institutions. The Company believes that these commercial banks have higher reputation and asset status and
have lower credit risk.
For notes receivable, accounts receivable, other receivables, receivables financing and contract assets, the
Company sets relevant policies to control credit risk exposure. The Group set the credit line and term for
debtors according to their financial status, external rating, and possibility of getting third-party guarantee, credit
record and other factors. The Group regularly monitors debtors' credit record. For those with poor credit record,
the Group will send written payment reminders, shorten or cancel credit term to lower the general credit risk.
① Significant increases in credit risk
The credit risk of the financial instrument has not increased significantly since the initial confirmation. In
determining whether the credit risk has increased significantly since the initial recognition, the Company
considers reasonable and evidenced information, including forward-looking information, that can be obtained
without unnecessary additional costs or effort. The Company determines the relative risk of default risk of the
financial instrument by comparing the risk of default of the financial instrument on the balance sheet date with
the risk of default on the initial recognition date to assess the credit risk of the financial instrument from initial
recognition.
When one or more of the following quantitative and qualitative criteria are triggered, the Company
believes that the credit risk of financial instruments has increased significantly: the quantitative criteria are
mainly the probability of default in the remaining life of the reporting date increased by more than a certain
proportion compared with the initial recognition; the qualitative criteria are the major adverse changes in the
operation or financial situation of the major debtors, the early warning of customer list, etc.
② Definition of assets where credit impairment has occurred
In order to determine whether or not credit impairment occurs, the standard adopted by our company is
consistent with the credit risk management target for related financial instruments, and quantitative and
qualitative indicators are considered.
Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor,
such as payment of interest or default or overdue of principal; (B) The concession that the debtor would not
make under any other circumstances for economic or contractual considerations relating to the financial
difficulties of the debtor; The debtor is likely to be bankrupt or undertake other financial restructuring; The
financial difficulties of the issuer or debtor lead to the disappearance of the active market for the financial asset;
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To purchase or generate a financial asset at a substantial discount, which reflects the fact that a credit loss has
occurred.
Credit impairment in financial assets may be caused by a combination of multiple events, not necessarily
by events that can be identified separately.
③ Expected credit loss measurement
Depending on whether there is a significant increase in credit risk and whether a credit impairment has
occurred, the Company prepares different assets for a 12-month or full expected credit loss. The key parameters
of expected credit loss measurement include default probability, default loss rate and default risk exposure.
Taking into account the quantitative analysis and forward-looking information of historical statistics (such as
counterparty ratings, guaranty methods, collateral categories, repayment methods, etc.), the Company
establishes the default probability, default loss rate and default risk exposure model.
Definition:
The probability of default refers to the possibility that the debtor will not be able to fulfill its obligation to
pay in the next 12 months or throughout the remaining period.
Breach Loss Rate means the extent of loss expected by the Company for breach risk exposure. Depending
on the type of counterparty, the manner and priority of recourse, and the different collateral, the default loss rate
is also different. The default loss rate is the percentage of the risk exposure loss at the time of the default,
calculated on the basis of the next 12 months or the entire lifetime.
Exposure to default is the amount payable to the Company at the time of default in the next 12 months or
throughout the remaining life. Prospective information credit risks significantly increased and expected credit
losses were calculated. Through the analysis of historical data, the Company has identified the key economic
indexes that affect the credit risk of each business type and the expected credit loss.
The largest credit risk facing the Group is the book value of each financial asset on the balance sheet. The
Group makes no guarantee that may cause the Group credit risks.
Among the accounts receivable of the Company, the accounts receivable of the top five customers account
for 23.89% of the total accounts receivable of the Company (comparison period: 26.41%); among the other
accounts receivable of the Company, the accounts receivable of the top five companies account for 72.01% of
the total accounts receivable of the Company (comparison period: 72.10%).
(2) Liquidity risk
Liquidity risk is the risk of capital shortage when the Group needs to pay cash or settled with other
financial assets. The Company is responsible for the cash management of its subsidiaries, including short-term
investments in cash surpluses and loans to meet projected cash requirements. The Company's policy is to
regularly monitor short and long-term liquidity requirements and compliance with borrowing agreements to
ensure adequate cash reserves and readily available securities.
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As of December 31, 2023, the maturity of the Company's financial liabilities is as follows:
December 31, 2023
Item
Less than 1 year Within 1-3 years Over 3 years Total
Short-term loans 220,805.50 - - 220,805.50
Notes payable 86,888.69 - - 86,888.69
Account payable 195,524.32 1,415.80 289.26 197,229.38
Other payables 5,168.51 1,010.36 5,579.31 11,758.18
Non-current liabilities due in 1
6,413.51 - - 6,413.51
year
Other current liabilities 5,352.47 - - 5,352.47
Long-term loans - 30,000.00 36,000.00 66,000.00
Lease liabilities - 578.60 88.99 667.59
Long-term payable - 4,840.00 - 4,840.00
Total 520,153.00 37,844.76 41,957.56 599,955.32
(Continued)
December 31, 2022
Item
Less than 1 year Within 1-3 years Over 3 years Total
Short-term loans 131,823.85 - - 131,823.85
Derivative financial liabilities 29.34 - - 29.34
Notes payable 73,489.02 - - 73,489.02
Account payable 168,254.83 3,119.05 429.76 171,803.64
Other payables 7,228.45 1,099.12 3,014.97 11,342.54
Non-current liabilities due in 1
8,377.86 - - 8,377.86
year
Other current liabilities 4,813.32 - - 4,813.32
Long-term loans - 63,146.28 63,203.72 126,350.00
Lease liabilities - 681.92 8.83 690.75
Long-term payable - 19,764.02 - 19,764.02
Total 394,016.67 87,810.39 66,657.28 548,484.34
(3) Market risk
① Credit risks
The exchange rate risk of the Company mainly comes from the assets and liabilities of the Company and
its subsidiaries in foreign currency not denominated in its functional currency. Except for the use of Hong Kong
dollars, United States dollars, Australian dollars, Vietnamese dong, euro, Indian rupees or Singapore currencies
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Annual Report 2023 of China Fangda Group Co., Ltd.
by its subsidiaries established in and outside the Hong Kong Special Administrative Region, other major
businesses of the Company shall be denominated in Renminbi.
As of December 31, 2023, the foreign currency financial assets and foreign currency financial liabilities of
the Company at the end of the period are listed in the description of foreign currency monetary items in Note 63.
The Company pays close attention to the impact of exchange rate changes on the Company's exchange
rate risk. The Company continuously monitors the scale of foreign currency transactions and foreign currency
assets and liabilities to minimize foreign exchange risks. To this end, the Company may avoid foreign exchange
risks by signing forward foreign exchange contracts or currency swap contracts.
② Exchange rate risk
The Group's interest rate risk mainly arises from long-term interest-bearing debts such as long-term bank
loans. Financial liabilities with floating interest rate cause cash flow interest rate risk for the Group. Financial
liabilities with fixed interest rate cause fair value interest rate risk for the Group. The Group decides the
proportion between fixed interest rate and floating interest rate according to the market environment and
regularly reviews and monitors the combination of fixed and floating interest rate instruments.
The Finance Department at the Company's head office monitors the level of the Group's interest rates on
an ongoing basis. The rising interest rate will increase the cost of the new interest-bearing debt and the interest
expenditure on interest-bearing debt which has not yet been paid by the Company at the floating rate, and will
have a significant adverse effect on the Company's financial performance. Management will make adjustments
in time according to the latest market conditions.
As of December 31, 2023, if the loan interest rate calculated by floating interest rate increases or
decreases by 50 basis points while other risk variables remain unchanged, the net profit of the Company in the
current year will decrease or increase by RMB3.6 million (December 31, 2022: RMB6,125,600).
2. Hedging
(1) The Company conducts hedging business for risk management.
Applicable □ Inapplicable
Economic
Effective The impact of the
Corresponding risk Qualitative and relationships
achievement of corresponding
management quantitative between hedged
Item expected risk hedging activities
strategies and information about items and related
management on the risk
objectives the hedged risk hedging
objectives exposure
instruments
Utilizing the The Company uses The underlying The Company has Buy or sell
hedging function aluminum futures variables are formulated corresponding
of futures tools, to hedge standard aluminum relevant internal aluminum futures
Aluminum futures
the Company aluminum-related prices, and the management contracts to hedge
hedging
carries out raw materials in values of hedged systems for its the risk exposure
aluminum futures the expected items and hedging aluminum futures existing in the spot
hedging business procurement instruments hedging and business side.
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Annual Report 2023 of China Fangda Group Co., Ltd.
to reasonably business. The change in opposite forward foreign
avoid the risks Company adopts directions due to exchange trading
brought about by the strategy of facing the same business, and
fluctuations in the dynamic hedging hedged risks, and continuously
prices of relevant of commodity there is a evaluates the
raw materials to its price risk relationship of effectiveness of
operations, to exposure, and mutual hedging of hedging to ensure
enhance the adjusts the position risks. that the hedging
Company's overall of futures contracts relationship is
ability to withstand according to the effective in the
risks and to expected designated
strengthen the procurement accounting period,
robustness of its exposure. and that the risks
operating of fluctuations in
activities. raw material
purchasing prices
and exchange rate
fluctuations of
foreign-currency
receivables are
controlled within a
reasonable range,
so as to enhance
the Company's
risk-resistance
ability and
increase the
robustness of its
operating
activities.
The Company has
formulated
Utilizing the
relevant internal
hedging and
management
protection function
systems for its
of forward foreign
The Company uses aluminum futures
exchange
forward foreign hedging and
contracts, the The underlying
exchange contracts forward foreign
Company carries variables are all
to hedge expected exchange trading
out the business of foreign currency
receivables. The business, and
hedging foreign exchange rates.
Company adopts continuously Buy or sell
currency The exchange rates
the strategy of evaluates the corresponding
receivables in of the hedged item
dynamic hedging effectiveness of forward foreign
Forward foreign order to reasonably and the hedging
of exchange rate hedging to ensure exchange contracts
exchange contract avoid the risks instrument change
risk exposure and that the hedging to hedge the risk
value preservation brought by in opposite
adjusts the position relationship is exposure of
exchange rate directions due to
of foreign effective in the foreign currency
fluctuations to its exposure to the
exchange contracts designated receivables.
operations, same hedged risk,
according to the accounting period,
enhance the and there is a
expected foreign and that the risks
Company's overall relationship of risk
currency of fluctuations in
ability to withstand hedging.
receivables raw material
risks, and
exposure. purchasing prices
strengthen the
and exchange rate
soundness of its
fluctuations of
operating
foreign-currency
activities.
receivables are
controlled within a
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Annual Report 2023 of China Fangda Group Co., Ltd.
reasonable range,
so as to enhance
the Company's
risk-resistance
ability and
increase the
robustness of its
operating
activities.
(2) The Company conducts eligible hedging operations and applies hedge accounting.
In RMB
Cumulative fair value
Carrying value
hedge adjustments to
associated with Hedge effectiveness
hedged items included Impact of hedge accounting related to
Item hedged items and and sources of hedge
in the carrying value the Company's financial statements
hedging ineffectiveness
of the hedged item
instruments
recognized
Types of hedge risk
Relevance of hedged
Cost of principal operations: RMB-
Price risk Inapplicable items to hedging
1,677,050.00.
instruments
Derivative financial assets:
Relevance of hedged RMB173,737.06, Other
Exchange rate
173,737.06 Inapplicable items to hedging comprehensive income:
risk
instruments RMB170,878.62, Investment income:
RMB611,295.00.
Type
Derivative financial assets:
RMB173,737.06, other
Relevance of hedged
Cash flow comprehensive income:
173,737.06 Inapplicable items to hedging
hedging RMB170,878.62, cost of principal
instruments
operations: RMB-1,677,050.00,
investment income: RMB611,295.00.
(3) The Company conducts hedging business for risk management and expects to achieve its risk management objectives
but does not apply hedge accounting.
□ Applicable Inapplicable
3. Financial Assets
(1) Classification of transfer methods
Applicable □ Inapplicable
In RMB
Amount of
Way of Nature of financial assets
financial assets Derecognition Basis for judging derecognition
transfer transferred
transferred
Endorsem Outstanding promissory 27,937,899.17 Not Promissory notes used for discounting or
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Annual Report 2023 of China Fangda Group Co., Ltd.
ent notes in notes receivable derecognized endorsement are accepted by banks or
enterprises with low credit ratings,
discounting or endorsement does not affect
recourse, and the credit risk and deferred
payment risk associated with the notes
remain untransferred
Bankers' acceptances used for discounting
Outstanding bankers' or endorsement are accepted by banks with
Endorsem
acceptances in receivables 6,906,528.87 Derecognition high credit ratings and the credit risk and
ent
financing deferred payment risk associated with the
instruments are low
Outstanding receivables in
Factoring 161,206,709.26 Derecognition Non-recourse factoring
receivables financing
Total 196,051,137.30
(2) Financial assets derecognized due to transfers
Applicable □ Inapplicable
In RMB
Transfer method of Amount of financial Gain or loss related to
Item
financial assets assets derecognized the de-recognition
Outstanding bankers' acceptances in receivables
Endorsement 6,906,528.87
financing
Account receivable Factoring 161,206,709.26 -4,656,380.30
Total 168,113,238.13 -4,656,380.30
(3) Transfer of financial assets with continuing involvement in assets
□ Applicable Inapplicable
XIII. Fair Value
1. Closing fair value of assets and liabilities measured at fair value
In RMB
Closing fair value
Item First level fair
Second level fair value Third level fair value Total
value
1. Continuous fair value
-- -- -- --
measurement
(I) Transactional financial
173,737.06 173,737.06
assets
1. Financial assets measured
at fair value with variations
173,737.06 173,737.06
accounted into current
income account
(1) Derivative financial assets 173,737.06 173,737.06
(2) Receivable financing 6,979,428.14 6,979,428.14
(3) Investment real estate 5,747,572,171.31 5,747,572,171.31
1. Leased building 5,747,572,171.31 5,747,572,171.31
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Annual Report 2023 of China Fangda Group Co., Ltd.
(4) Other non-current
7,455,617.17 7,455,617.17
financial assets
Total assets measured at fair
7,153,165.20 5,755,027,788.48 5,762,180,953.68
value continuously
2. Discontinuous fair value
-- -- -- --
measurement
2. Recognition basis of market value of continuous and discontinuous items measured at first level fair
value
The Group determines the fair value using quotation in an active market for financial instruments traded in
an active market;
3. Valuation technique and qualitative and quantitative information for key parameters of continuous
and discontinuous second level fair value items
For derivative financial assets and derivative financial liabilities with fair value of forward exchange
contracts, the fair value is determined based on the market value of expected earnings at the balance sheet date.
Receivables financed at fair value through other comprehensive income are notes receivable, for which
the fair value is determined based on the book value due to the short remaining maturity.
4. Valuation technique and qualitative and quantitative information for key parameters of continuous
and discontinuous third level fair value items
Investment properties measured at fair value are appraised using the comparative and income approaches.
Comparison method: It selects a certain number of comparable examples, compares them with the valuation
object and processes the comparable instance transaction prices according to the difference to obtain the value
or price of the valuation object. The income approach is a method of predicting the future earnings of the object
of valuation, and using the rate of compensation or capitalization rate, income multiplier to convert the future
earnings into value to get the value or price of the object of valuation.
5. Switch between different levels, switch reason and switching time policy
The Company takes the occurrence date of the events leading to the transition between levels as the time
point to confirm the transition between levels. In the period, there is no switch in the financial assets measured
at fair value between the first and second level or transfer in or out of the third level.
6. Fair value of financial assets and liabilities not measured at fair value
Financial assets and liabilities measured at amortized cost include: monetary capital, bills receivable,
accounts receivable, other receivables, short-term borrowings, notes payable, accounts payables, other payables,
and long-term payables.
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Annual Report 2023 of China Fangda Group Co., Ltd.
XIV. Related Parties and Transactions
1. Parent of the Company
Register Share of the Voting power of
Parent ed Business Registered capital parent co. in the the parent
address Company company
Shenzhen Banglin Technologies Shenzhe Industrial
RMB30 million 11.11% 11.11%
Development Co., Ltd. n investment
Hong Industrial
Shengjiu Investment Ltd. HKD1 million 10.25% 10.25%
Kong investment
Particulars about the parent of the Company:
① All of the investors of Shenzhen Banglin Technology Development Co., Ltd., the holding shareholder of the Company, are
natural persons. Among them, Chairman Xiong Jianming is holding 85％ shares, and Mr. Xiong Xi is holding 15% of the shares.
② Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. are
acting in concert.
The final controller of the Company is Xiong Jianming.
2. Subsidiaries of the Company
For details of subsidiaries of the enterprise, please refer to Note X of this chapter, rights and interests in other entities.
3. Joint ventures and associates
There are no important joint ventures and associates in this year.
Information about other joint ventures or associates with related transactions in this period or with balance generated by related
transactions in previous period:
Joint venture or associate Relationship with the Company
Ganshang Joint Investment Affiliates of the Company
4. Other associates
Other related parties Relationship with the Company
Jiangxi Business Innovative Property Joint Stock Co., Ltd. Affiliates of the Company
Gong Qing Cheng Shi Li He Investment Management Affiliated relationship with Shenzhen Banglin Technology
Partnership Enterprise (limited partner) Development Co., Ltd.
Shenyang Fangda Subsidiary in liquidation
Shenzhen Yikang Real Estate Co. Ltd. Controlled subsidiaries
Shenzhen Qijian Technology Co., Ltd. (Qijian Technology) Common actual controller
Director, manager and secretary of the Board Key management
5. Related transactions
(1) Related transactions for purchase and sale of goods, provision and acceptance of services
Sales of goods and services
In RMB
Affiliated party Related transaction Amount occurred in the Occurred in previous period
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Annual Report 2023 of China Fangda Group Co., Ltd.
current period
Property service and sales of
Qijian Technology 181,132.08 244,632.39
goods
(2) Related leasing
The Company is the leasor:
In RMB
Rental recognized in the Rental recognized in the
Name of the leasee Category of asset for lease
period period
Qijian Technology Houses & buildings 868,571.40 868,571.40
(3) Related guarantees
The Company is the guarantor:
In RMB10,000
Amount Completed or
Beneficiary party Start date Due date
guaranteed not
Three years after the expiration
Fangda Jianke 24,000.00 March 9, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Yunzhu 800.00 August 19, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Jianke 86,000.00 November 24, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Zhiyuan 20,000.00 October 19, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Zhiyuan 18,000.00 March 22, 2023 Yes
date of debt performance
Three years after the expiration
Fangda Jianke 4,000.00 September 8, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Jianke 30,000.00 October 19, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Property 47,000.00 December 16, 2020 Yes
date of debt performance
Three years after the expiration
Fangda New Material 8,500.00 September 6, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Jianke 30,000.00 September 20, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Jianke 48,000.00 December 15, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Jianke 20,000.00 August 10, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Jianke 50,000.00 September 20, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Zhiyuan 15,000.00 November 1, 2022 Yes
date of debt performance
Three years after the expiration
Fangda New Material 10,000.00 April 20, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Zhijian 7,000.00 June 1, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Zhiyuan 40,000.00 July 4, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Zhiyuan 15,000.00 March 9, 2022 Yes
date of debt performance
Three years after the expiration
Fangda Yunzhu 600.00 May 10, 2022 Yes
date of debt performance
Total amount of guarantee
473,900.00
fulfilled
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Annual Report 2023 of China Fangda Group Co., Ltd.
Three years after the expiration
Fangda Jianke 93,000.00 December 28, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 39,000.00 December 9, 2022 No
date of debt performance
Three years after the expiration
Fangda New Material 10,000.00 April 18, 2023 No
date of debt performance
Three years after the expiration
Fangda Yunzhu 1,000.00 March 30, 2023 No
date of debt performance
Three years after the expiration
Fangda New Material 8,500.00 November 2, 2023 No
date of debt performance
Three years after the expiration
Fangda Zhiyuan 10,000.00 September 25, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 15,000.00 May 23, 2022 No
date of debt performance
Three years after the expiration
Fangda Zhijian 7,000.00 May 15, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 48,000.00 December 15, 2023 No
date of debt performance
Three years after the expiration
Fangda Zhiyuan 10,000.00 December 21, 2023 No
date of debt performance
Three years after the expiration
Fangda Zhiyuan 18,000.00 December 15, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 11,400.00 August 16, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 50,000.00 September 28, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 30,000.00 September 25, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 30,000.00 October 20, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 4,000.00 May 15, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 20,000.00 October 9, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 60,000.00 January 21, 2023 No
date of debt performance
Three years after the expiration
Fangda Zhiyuan 36,000.00 June 20, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 24,000.00 May 5, 2023 No
date of debt performance
Three years after the expiration
Fangda Zhiyuan 15,000.00 May 5, 2023 No
date of debt performance
Three years after the expiration
Fangda Zhiyuan 20,000.00 October 7, 2023 No
date of debt performance
Three years after the expiration
Fangda Zhiyuan 15,000.00 September 25, 2023 No
date of debt performance
Three years after the expiration
Fangda Zhiyuan 10,000.00 May 23, 2022 No
date of debt performance
Three years after the expiration
Fangda Zhiyuan 15,550.00 November 21, 2023 No
date of debt performance
Three years after the expiration
Fangda Yunzhu 600.00 May 11, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 20,000.00 March 31, 2023 No
date of debt performance
Three years after the expiration
Fangda Property 135,000.00 February 25, 2020 No
date of debt performance
Three years after the expiration
Fangda Jianke 30,000.00 December 21, 2023 No
date of debt performance
Three years after the expiration
Fangda Jianke 20,000.00 November 2, 2023 No
date of debt performance
Total amount of guarantee
806,050.00
being performed
Note to related guarantees
The above-mentioned guarantees are all associated guarantees within interested entities of the Company.
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Annual Report 2023 of China Fangda Group Co., Ltd.
(4) Remuneration of key management
In RMB
Item Amount occurred in the current period Occurred in previous period
Remuneration of directors, supervisors
11,142,160.44 9,495,306.69
and senior management
6. Receivable and payables due with related parties
(1) Receivable interest
In RMB
Closing balance Opening balance
Project name Affiliated party Remaining book Remaining book
Bad debt provision Bad debt provision
value value
Account
Qijian Technology 4,763.36 47.63 4,708.76 47.09
receivable
Other receivables Shenyang Fangda 42,877.00 42,877.00
Ganshang Joint
Other receivables 3,791,089.25 56,487.23 3,791,089.25 56,487.23
Investment
Shenzhen Yikang
Other receivables 76,062,675.83 1,133,333.87 70,062,675.83 1,043,933.87
Real Estate Co. Ltd.
(2) Receivable interest
In RMB
Opening balance of book
Project name Affiliated party Closing balance of book value
value
Shenzhen Yikang Real Estate
Other payables 26,102,009.60 25,305,047.71
Co. Ltd.
Other payables Qijian Technology 400.00 400.00
Other payables Ganshang Joint Investment 3,355.36
XV. Commitment and Contingent Events
1. Major commitments
On November 6, 2017, Fangda Real Estate Co., Ltd., a subsidiary of the Company, and Bangshen
Electronics (Shenzhen) Co., Ltd. signed the "Joint Development Agreement on Fangda Bangshen Industrial
Park (Temporary Name) Urban Renewal Project", and the two parties agreed to develop cooperatively. In order
to develop urban renewing projects such as a "renovation project", Fangda Real Estate provided Party A with
property compensation through renovating and renovating the property allocation terms agreed upon by both
parties, and obtained independent development rights of the project. As of December 31, 2023, Fangda Real
Estate has paid a deposit of RMB20 million and a transitional compensation of RMB3 million.
(2) In July 2018 ,the Company's subsidiary Fangda Real Estate Co. Ltd. (Party A) signed a contract with
Shenzhen Yikang Real Estate Co. Ltd. (Party B1) and Shenzhen Qianhai Zhongzheng Dingfeng No. 6
Investment Enterprise (Limited Partnership) (Party B2), "Shenzhen Henggang Dakang Village Project
Cooperation Agreement". Party B agrees to transfer the entire equity of the project company it holds and the
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Annual Report 2023 of China Fangda Group Co., Ltd.
entire development interest of the project to Party A. Party A shall pay Party B a total of RMB600 million for
the cooperation price. As of December 31, 2023, Fangda Property has paid Party B and the project company
RMB50 million of security deposit, RMB20 million of service fee, RMB61,937,200 of equity transfer and
RMB79,362,900 of other related payments.
In May 2021, the subsidiaries Fangda Jianke, Fangda Jiangxi New Material and CITIC Securities
Investment Co., Ltd., Shenzhen Hi Tech Investment Venture Capital Co., Ltd., Shenzhen Qianhai Pengchen
Investment Partnership (limited partnership), Gongqingcheng Longrun Spring Investment Partnership (limited
partnership), Shenzhen Jiayuan Capital Management Co., Ltd and Gongqingcheng Huasheng Botai Investment
Partnership (limited partnership) (hereinafter referred to as the "Transferee") signed equity transfer agreements
to transfer 10.9375% of the total equity of Fangda Zhiyuan Technology, with the transfer amount of RMB 175
million. The agreement also stipulates that if Fangda Zhiyuan Technology fails to start and complete the
qualified listing before May 31, 2025, the transferee has the right to require Fangda Jianke and Fangda Jiangxi
New Material to repurchase or transfer all or part of the equity of Fangda Zhiyuan Technology held by the
transferee. On November 21, 2023, with the approval of the Company's board of directors, the spin off of its
controlling shareholder, Fangda Zhiyuan, for listing on the Growth Enterprise Market was terminated and the
relevant listing application documents were withdrawn. As of the date of this report, the subsidiary, Fanda
Jianke, has completed the repurchase of the 10.9375% equity of Fangda Zhiyuan Technology held by the
transferee. The share transfer agreements and their supplementary agreements between the subsidiary and the
transferee have all been terminated.
The Company has no other commitments that should be disclosed by December 31, 2023.
2. Contingencies
Significant contingencies on the balance sheet date:
(1) Contingent liabilities formed by material lawsuit or arbitration, and their influences on the financial
position
① On June 19, 2019, Langfang Aomei Jiye Real Estate Development Co., Ltd. filed a lawsuit against
Fangda Jianke in the People's Court of Langfang Development Zone, demanding compensation of
RMB19,721,315.00, and filed an application for appraisal of quality, repair cost and uncompleted project cost;
Fangda Jianke filed a counterclaim on September 11, 2019, demanding payment of RMB13,939,863.27, and put
forward the application for completed project cost appraisal. As of the date of this report, the case is still under
trial.
② In March 2022, Xiangheng Real Estate (Jinan) Co., Ltd. filed an arbitration with the Jinan Arbitration
Commission, requesting Fangda Jianke to bear the deduction, maintenance, rectification and rework costs of
RMB8,956,563.81 and lawyer's fees of RMB350,000.00 caused by the quality problems of the supply and
installation of aluminum alloy doors and windows, louvers and curtain walls of Jinan Kerry comprehensive
development project (phase I and II); In April 2022, Fangda Construction Technology Co., Ltd. filed an anti
arbitration application, requiring Xiangheng Real Estate (Jinan) Co., Ltd. to pay a total of RMB18,062,462.28
for the project funds and project expenses. As of the date of this report, the two cases are under joint trial.
③ In September 2022, Fangda Jianke Co., Ltd. filed a lawsuit to the People's Court of Longhua District,
requiring Longguang Engineering Construction Co., Ltd. to pay the total principal and interest of the project
funds of Longguang Jiuzuan Project Plot 05 and Plot 09 to Fangda Construction Technology Co., Ltd., totaling
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Annual Report 2023 of China Fangda Group Co., Ltd.
RMB33,197,543.00. As of the date of this report, the first-instance judgment has been rendered in the case of
the Jiuzuan 05 plot project. The judgment ruled that Longguang Company shall pay engineering fees of
RMB7,709,679.55, warranty money of RMB6,033,911.38, and corresponding interest to Fangda Jianke
Company. Longguang Company shall also enjoy priority right to be compensated from the sale and auction
proceeds of the curtain wall production and installation project of this project. In the case of the Jiuzuan 09 plot
project, the first-instance judgment ruled that Longguang Company shall pay engineering fees of
RMB9,166,924.08, warranty money of RMB4,875,762.96, and corresponding interest to Fangda Jianke
Company. Longguang Company shall also enjoy priority right to be compensated from the sale and auction
proceeds of the curtain wall production and installation project of this project. Both cases are currently under
second-instance trial as both parties have filed appeals.
④ In May 2023, Fangda Jianke Company filed a lawsuit with the People's Court of Panyu District,
Guangzhou, demanding that Guangzhou Jiayu Investment Co., Ltd. pay Fangda Jianke Company the principal
and interest of the Panyu Hanxi Project payment of RMB26,225,970.09, and assert the priority right to receive
the construction project price. As of the disclosure date of this report, the first-instance court has ruled that
Guangzhou Jiayu Investment Co., Ltd. shall pay Fangda Jianke engineering fees of RMB22,684,505.49 and an
acceptance price difference of RMB1,351,795.12. Fangda Jianke has filed an appeal against the unsupported
part of the first-instance judgment.
In August 2023, Fangda Jianke filed a lawsuit against Lanzhou Xinhe Real Estate Co., Ltd. with the
Chengguan District People's Court of Lanzhou. Fangda Jianke requested that Lanzhou Xinhe Real Estate Co.,
Ltd. pay a principal amount of RMB5,374,850.03, along with interest, as construction fees for the Lanzhou
Donghu project. Fangda Jianke also claimed priority right to be compensated from the construction project
payment. In September 2023, Lanzhou Xinhe Real Estate Co., Ltd. filed a counterclaim, requesting Fangda
Jianke to pay a liquidated damages for delay in completion of RMB5,670,000.00. As of the disclosure date of
this report, the court has filed and accepted the case, and is awaiting a hearing.
⑥ In November 2023, Fangda Jianke filed a lawsuit with the People's Court of Bao'an District, Shenzhen,
demanding that Shenzhen Zhongyi Fuhua Co., Ltd. pay a total of RMB8,657,880.49 in principal and interest for
the Zhongyi Smart Building project and claim the priority right to receive the project price. As of the disclosure
date of this report, the case has been heard in court and is awaiting judgment.
⑦ In November 2023, Fangda Jianke filed a lawsuit with the People's Court of Honggutan District,
Nanchang City, demanding that Jiangxi Huilian Real Estate Co., Ltd. and Jiangxi Boneng Industrial Group Co.,
Ltd. pay a total of RMB45,309,399.07 for the construction cost and interest of the Nanchang Commercial Union
Center project, and claim the priority right to receive the project price. As of the disclosure date of this report,
the court has filed a case for acceptance and held a trial, awaiting judgment.
⑧ In December 2023, Fangda Jianke filed a lawsuit with the People's Court of Yantian District,
Shenzhen, demanding that Shenzhen Chuangshihe Industrial Co., Ltd. pay Fangda Jianke the principal amount
of the Hejing Tongchuang project project payment of RMB12,018,518.24 and overdue interest, and claim the
priority right to recover the construction project price. As of the date of this report, the case has entered the
stage of pre-litigation mediation and is now on file.
(2) Pending major lawsuits
① In September 2022, Fangda Real Estate Co., Ltd. filed a lawsuit to the People's Court of Nanshan
District, Shenzhen, requiring Shenzhen Hongtao Group Co., Ltd. to pay the total principal and interest of
Fangda Real Estate Co., Ltd. to Fangda Real Estate Co., Ltd. for the purchase of building 3 # in Fangda City,
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Annual Report 2023 of China Fangda Group Co., Ltd.
amounting to RMB56,527,427.01, and Hongtao Company's counterclaim party, Dada Real Estate Co., Ltd.,
requested to cancel the signed Supplementary Agreement on Real Estate Sales and pay the liquidated damages
of RMB44,046,859.04 for overdue certificate processing. The court has issued a first instance judgment, ruling
that Hongtao Company shall pay Fangda Real Estate Company the purchase price of RMB40,127,678.19 and
overdue payment interest (temporarily calculated as RMB8,418,135.54 until June 30, 2022). The subsequent
interest shall be calculated based on RMB40,127,678.19 and continue to be calculated until the actual payment
date according to the loan market quotation interest rate standard published by the National Interbank Funding
Center. Reject all counterclaim requests from Hongtao Company. Both parties later filed an appeal. As of the
disclosure date of this report, the second instance judgment has been issued and the original judgment has been
upheld. Currently, the case has entered the execution stage.
② In September 2022, Fangda Real Estate filed a lawsuit with the People's Court of Nanshan District,
Shenzhen City, requesting the court to order the cancellation of the Shenzhen Real Estate Sales Contract (Cash
Sale) signed by Fangda Real Estate and Shenzhen Rijiasheng Trading Co., Ltd., and order Rijiasheng to pay the
bank mortgage loan compensation of RMB18,796,489.12 and interest of RMB3,800,495.61 to Fangda Real
Estate, and the liquidated damages for contract cancellation of RMB3,428,313.10, occupation fee Please refund
the overdue fee. In September 2022, Rijiasheng filed a lawsuit to the People's Court of Nanshan District,
Shenzhen, requesting Fangda Real Estate to perform the obligation of handling the certificate and bear the
liquidated damages for overdue handling of the certificate. The provisional amount of RMB3,669,046.43 is
actually calculated until the certificate is completed. In 2023, the court issued first instance judgment: in the
case of Fangda Real Estate v. Rijiasheng, the judgment supports the termination of the contract and the payment
of bank mortgage loan repayment of RMB18,708,945.57 and interest of RMB3,790,999.98 yuan, as well as the
payment of contract termination penalty of RMB1,714,156.55 and the occupancy and use fee of the house; The
judgment in the case of Rijiasheng v. Fangda Real Estate rejects all litigation claims. Afterwards, both parties
filed appeals, and as of the disclosure date of this report, the second instance judgment of Fangda Real Estate
Company v. Rijiasheng has been issued, upholding the original judgment. Fangda Real Estate has applied to the
court for compulsory execution, and the case has entered the execution stage.
③ In April 2023, Fangda Jianke filed a lawsuit with the Guangzhou Intermediate People's Court,
demanding the termination of the construction contract signed with Guangzhou Kaidar Investment Co., Ltd. for
the Kaidar Hub International Plaza project, and requiring Guangzhou Kaidar Investment Co., Ltd. to pay the
principal amount of the project payment of RMB113,529,244.60 and interest to Fangda Jianke, and claiming the
priority right to receive compensation for the construction project price. As of the date of this report, the court
has issued a first instance judgment, stating that Kedar is required to pay the principal amount of the project
payment of RMB113，529，244.60 and corresponding interest to Fangda Jianke, and has the priority right to
be compensated for the discount or auction price of the project curtain wall. Currently, the case has entered the
execution stage.
④ In October 2022, Fangda Jianke filed an application for arbitration with the Guiyang Arbitration
Commission, requiring Zhongtian Urban Investment Group Guiyang International Financial Center Co., Ltd. to
pay Fangda Jianke Co., Ltd. a total of RMB10,818,847.31 of the principal and interest of the curtain wall
project of Building 7 and Building 9 in the first phase of Guiyang International Financial Center Business
District. As of the date of this report, the arbitral tribunal has issued a judgment, stating that Tiancheng
Investment Company shall pay a principal amount of RMB7,667,681.8 and corresponding interest to Fangda
Jianke Co., Ltd. for the curtain wall engineering projects of Building 7 and Building 9. Due to the application
for bankruptcy reorganization of the parent company of Zhongtian Urban Investment, Fangda Jianke has
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declared ordinary debt and obtained confirmation from the administrator, and is awaiting further distribution of
debt.
⑤ In June 2023, Fangda Jianke filed a lawsuit with the People's Court of Shapingba District, Chongqing,
demanding that Chongqing Longhu Jingnan Real Estate Development Co., Ltd. pay Fangda Jianke the principal
amount of RMB9,754,668.59 and overdue interest for the Chongqing Longhu Shapingba project, and claim the
priority right to receive compensation for the construction project price. As of the disclosure date of this report,
both parties have reached a settlement and a mediation agreement has been issued by the court. Longhu
Company has not fulfilled the mediation agreement, and Fangda Jianke is preparing an application for
compulsory execution.
(3) Contingent liabilities formed by providing of guarantee to other companies' debts and their influences
on financial situation
By December 31, 2023, the Company has provided loan guarantees for the following entities:
Name of guaranteed Amount
Guarantee Term Remarks
entity (RMB10,000)
Guarantee and
Fangda Property mortgage 66,000.00 2020/3/13-2030/03/12
guarantee
Fangda Jianke Guarantee 4,000.00 2023/02/27-2024/02/27
Fangda Jianke Guarantee 5,000.00 2023/03/17-2024/03/17
Guarantee and
Fangda Jianke mortgage 4,000.00 2023/05/22-2024/05/16
guarantee
Fangda Jianke Guarantee 20,000.00 2023/08/04-2024/08/04
Fangda Jianke Guarantee 3,000.00 2023/08/23-2024/02/23
Fangda Yunzhu Guarantee 980.00 2022/05/18-2024/05/17
Fangda Jianke Guarantee 5,000.00 2023/05/26-2024/05/25
Fangda Zhiyuan
Guarantee 1,000.00 2023/09/20-2024/09/19
Technology
Fangda Zhiyuan
Guarantee 2,000.00 2023/10/16-2024/10/16
Technology
Total 110,980.00
Note 1: Contingent liabilities caused by guarantees provided for other entities are all related
guarantees between interested entities in the Company.
Notes 2: The Company's property business provides periodic mortgage guarantee for property purchasers.
The term of the periodic guarantee lasts from the effectiveness of guarantee contracts to the completion of
mortgage registration and transfer of housing ownership certificates to banks. As of December 31, 2023, the
Company has undertaken the above phased guarantee amount of RMB10,657,900.
(4) Other contingent liabilities and their influences
As of December 31, 2023, the Company has no significant contingencies that need to be disclosed.
3. Others
Status of non-revocation of company as at December 31, 2023:
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Guarantee balance Credit line used
Currency Deposit (RMB)
(original currency) (RMB)
CNY 906,801,003.70 2,944,675.43 903,856,328.27
INR 78,069,149.78 46,099.32 6,601,176.51
HKD 15,349,982.00 15,000,000.00
USD 5,115,637.53 1,455,170.95 34,777,354.99
SGD 9,634,430.00 51,420,879.80
AUD 400,000.00 1,939,360.00
EUR 4,074,964.01 32,025,957.14
Total 19,445,945.70 1,030,621,056.71
XVI. Post-balance-sheet Events
1. Profit distribution
The Company held the 7th meeting of 10th of Board of Directors on March 29, 2024 to
vote for the proposal of dividend distribution for year 2023. According to the resolution
Profit distribution of the 7th meeting of the 10th Board of Directors, the Company plans to distribute cash
plan dividends of RMB0.80 (including tax) per 10 shares to all shareholders based on the
total capital stock of 1,073,874,227 shares on December 31, 2023, totaling
RMB85,909,938.16. No dividend share or capitalization share was issued in the year.
2. Notes to other issues in post balance sheet period
The Company has no other issues in post balance sheet period that need to be disclosed on March 29,
2024 (report date approved by the Board of Directors).
XVII. Other material events
1. Segment information
(1) Recognition basis and accounting policy for segment report
The Group divides its businesses into five reporting segments. The reporting segments are
determined based on financial information required by routine internal management. The Group's
management regularly review the operating results of the reporting segments to determine
resource distribution and evaluate their performance.
The reporting segments are:
① Curtain wall division: production and sales of curtain wall materials, design, production
and installation of building curtain walls, curtain wall testing and maintenance services;
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Annual Report 2023 of China Fangda Group Co., Ltd.
② Rail transit branch: assembly and processing of subway screen doors, screen door
detection and maintenance services;
(3) Real estate segment: development and operating of real estate on land of which land use
right is legally obtained by the Company; property management;
(4) New energy segment: photovoltaic power generation, photovoltaic power plant sales,
photovoltaic equipment R & D, installation, and sales, and photovoltaic power plant engineering
design and installation
(5) Others
The segment report information is disclosed based on the accounting policies and
measurement standards used by the segments when reporting to the management. The policies
and standards should be consistent with those used in preparing the financial statement.
(2) Financial information
In RMB
Offset
Item Curtain wall Rail transport Real estate New energy Others between Total
segments
3,482,103,05 558,421,443. 230,104,601. 20,200,575.7 24,683,056.1 23,308,013.9 4,292,204,71
Turnover
3.34 33 37 8 8 9 6.01
Including:
external 3,477,209,98 558,421,443. 222,262,890. 19,389,107.6 14,921,292.0 4,292,204,71
transaction 2.02 33 97 3 6 6.01
income
Inter-
segment 23,308,013.9
4,893,071.32 7,841,710.40 811,468.15 9,761,764.12
transaction 9
income
Including:
major 3,449,053,41 557,935,244. 96,383,443.1 20,200,575.7 4,118,334,15
5,238,520.40
business 0.55 31 4 8 3.38
turnover
Operating 2,937,547,13 408,821,592. 55,778,641.5 3,404,642,47
8,139,275.89 26,289.08 5,670,463.57
cost 8.00 38 5 3.33
Including:
2,923,493,20 408,821,592. 47,178,723.7 3,381,962,33
major 8,139,275.89 5,670,463.57
7.68 38 0 6.08
business cost
-
Operation 356,505,631. 66,897,059.4 110,258,413. 25,596,591.8 571,048,663.
386,336.58 11,404,630.2
cost 40 7 71 9 25
0
Operating 188,050,283. 82,702,791.4 64,067,546.1 11,674,963.3 29,042,180.6 316,513,579.
-939,824.79
profit/(loss) 94 8 1 1 2 43
6,917,532,96 920,333,612. 6,195,269,97 148,509,100. 3,754,244,98 4,559,538,79 13,376,351,8
Total assets
6.35 87 9.20 60 8.00 0.16 56.86
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Annual Report 2023 of China Fangda Group Co., Ltd.
Total 4,845,270,21 498,678,951. 3,404,409,30 24,086,072.7 1,464,598,41 2,895,486,93 7,341,556,01
liabilities 4.47 55 4.62 4 2.21 7.00 8.59
(3) Others
Regional information on operating revenues:
Item 2023 2022
In China 3,886,216,878.96 3,563,436,690.09
Out of China 405,987,837.05 283,539,258.35
Total 4,292,204,716.01 3,846,975,948.44
XVIII. Notes to Financial Statements of the Parent
1. Account receivable
(1) Account age
In RMB
Age Closing balance of book value Opening balance of book value
Within 1 year (inclusive) 416,495.45 321,399.65
2-3 years 359,129.89
Over 3 years 359,129.89
3-4 years 359,129.89
Total 775,625.34 680,529.54
(2) Disclosure by bad debt accrual method
In RMB
Closing balance Opening balance
Remaining book Remaining book
Bad debt provision Bad debt provision
Type value Book value Book
Proporti Provisio value Proporti Provisio value
Amount Amount Amount Amount
on n rate on n rate
Account
receivab
le for
which
775,625. 92,032.8 683,592. 680,529. 32,584.9 647,944.
bad debt 100.00% 11.87% 100.00% 4.79%
34 1 53 54 6 58
provisio
n is
made by
group
Includin
g:
Portfolio
775,625. 92,032.8 683,592. 680,529. 32,584.9 647,944.
3. 100.00% 11.87% 100.00% 4.79%
34 1 53 54 6 58
Others
Total 775,625. 100.00% 92,032.8 11.87% 683,592. 680,529. 100.00% 32,584.9 4.79% 647,944.
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34 1 53 54 6 58
Provision for bad debts by combination:
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Portfolio 3. Others 775,625.34 92,032.81 11.87%
Group recognition basis:
See 10. Financial Tools in Chapter X, V, Important Accounting Policies and Accounting Estimates for the
recognition criteria and instructions for withdrawing bad debt reserves by portfolio
If the provision for bad debts on accounts receivable is being made based on the expected credit loss general model:
□ Applicable Inapplicable
(3) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
Change in the period
Opening
Type Written-back Closing balance
balance Provision Canceled Others
or recovered
Portfolio 3. Others 32,584.96 59,447.85 92,032.81
Total 32,584.96 59,447.85 92,032.81
(5) Accounts receivable and contract assets with the top-5 ending balances, grouped by party owed
In RMB
Closing
Closing Percentage of total Closing balance of provision
Closing balance of balance of
balance of ending balance of for bad debts on accounts
Entity accounts accounts
contract accounts receivable receivable and impairment
receivable receivable and
assets and contract assets of contract assets
contract assets
Top five summary 763,431.68 98.43% 91,943.79
Total 763,431.68 98.43% 91,943.79
2. Other receivables
In RMB
Item Closing balance Opening balance
Other receivables 1,684,718,397.92 1,046,500,428.02
Total 1,684,718,397.92 1,046,500,428.02
(1) Other receivables
1) Other receivables are disclosed by nature
In RMB
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Annual Report 2023 of China Fangda Group Co., Ltd.
By nature Closing balance of book value Opening balance of book value
Deposit 80,000.00 150,699.54
Debt by Luo Huichi 11,242,291.48
Others 57,199.41 396,561.98
Accounts between related parties within
1,684,583,242.78 1,046,003,558.83
the scope of consolidation
Total 1,684,720,442.19 1,057,793,111.83
(2) Account age
In RMB
Age Closing balance of book value Opening balance of book value
Within 1 year (inclusive) 692,784,064.86 97,579,475.19
1-2 years 92,578,310.00 697,897,404.79
2-3 years 694,397,404.79 250,960,363.83
Over 3 years 204,960,662.54 11,355,868.02
3-4 years 204,960,662.54
Over 5 years 11,355,868.02
Total 1,684,720,442.19 1,057,793,111.83
(3) Disclosure by bad debt accrual method
In RMB
Closing balance Opening balance
Remaining book Remaining book
Bad debt provision Bad debt provision
Type value Book value Book
Proporti Provisio value Proporti Provisio value
Amount Amount Amount Amount
on n rate on n rate
Separate
bad debt 11,285,1 11,285,1
1.07% 100.00% 0.00
provisio 68.48 68.48
n
Includin
g:
Luo 11,242,2 11,242,2
1.06% 100.00% 0.00
Huichi 91.48 91.48
Shenyan
42,877.0 42,877.0
g 0.00% 100.00% 0.00
0 0
Fangda
Provisio
n for bad
1,684,72 1,684,71 1,046,50 1,046,50
debts by 100.00% 2,044.27 0.00% 98.93% 7,515.33 0.00%
0,442.19 8,397.92 7,943.35 0,428.02
combina
tion
Includin
g:
Portfolio
137,199. 135,155. 504,384. 496,869.
1: First 0.01% 2,044.27 1.49% 0.05% 7,515.33 1.49%
41 14 52 19
stage
Portfolio 1,684,58 99.99% 0.00 0.00% 1,684,58 1,046,00 98.89% 0.00 0.00% 1,046,00
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Annual Report 2023 of China Fangda Group Co., Ltd.
4: 3,242.78 3,242.78 3,558.83 3,558.83
related
party
funds
within
the
scope of
consolid
ation
1,684,72 1,684,71 1,057,79 11,292,6 1,046,50
Total 100.00% 2,044.27 0.00% 100.00% 1.07%
0,442.19 8,397.92 3,111.83 83.81 0,428.02
Provision for bad debts by combination:
Portfolio 1: First stage
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Portfolio 1: First stage 137,199.41 2,044.27 1.49%
Total 137,199.41 2,044.27
Description of the basis for determining the portfolio: Provision for bad debts is made on the basis of the general model of
expected credit losses.
Provision for bad debts by portfolio: Portfolio 4: Amounts from related parties within the scope of consolidation
In RMB
Closing balance
Company Name
Remaining book value Bad debt provision Provision rate
Portfolio 4: related party funds within
1,684,583,242.78 0.00 0.00%
the scope of consolidation
Total 1,684,583,242.78 0.00
A description of the basis for determining this combination is provided in Section X, V. Significant Accounting Policies and
Accounting Estimates in 10, Financial Instruments.
Provision for bad debts based on general model of expected credit losses
In RMB
First stage Second stage Third stage
Expected credit loss for
Bad debt provision Expected credit Expected credit loss for Total
the entire duration
losses in the next the entire duration (no
(credit impairment has
12 months credit impairment)
occurred)
Balance on January 1, 2023 7,515.33 0.00 11,285,168.48 11,292,683.81
Balance on January 1, 2023 in
the current period
-- transferred to the second
0.00 0.00 0.00 0.00
stage
-- transferred to the third stage 0.00 0.00 0.00 0.00
-- transferred back to second
0.00 0.00 0.00 0.00
stage
-- transferred back to first stage 0.00 0.00 0.00 0.00
Provision 0.00 0.00 0.00 0.00
Transferred back in the current
5,471.06 0.00 414,876.00 420,347.06
period
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Annual Report 2023 of China Fangda Group Co., Ltd.
Written off in the current
0.00 0.00 0.00 0.00
period
Canceled in the current period 0.00 0.00 10,992,291.48 10,992,291.48
Other change 0.00 0.00 121,999.00 121,999.00
Balance on December 31, 2023 2,044.27 0.00 0.00 2,044.27
Changes in book balances with significant changes in the current period
Applicable □ Inapplicable
(See 5 below for details) Other receivables actually written off during the period.
4) Bad debt provision made, returned or recovered in the period
Bad debt provision made in the period:
In RMB
Change in the period
Closing
Type Opening balance Provisio Written-back or
Write-off Others balance
n recovered
Other receivables and
11,292,683.81 420,347.06 10,992,291.48 121,999.00 2,044.27
bad debt provision
Total 11,292,683.81 420,347.06 10,992,291.48 121,999.00 2,044.27
5) Other receivable written off in the current period
In RMB
Item Amount
Other receivable written off 10,992,291.48
Including significant other receivable:
In RMB
Writing-off
Entity Nature Amount Reason Related transaction
procedure
Impossible enforcement of
Approved by the
Debt by Luo property, with minimal
Luo Huichi 10,992,291.48 senior No
Huichi possibility of subsequent
management
recovery
Total 10,992,291.48
6) Balance of top 5 other receivables at the end of the period
In RMB
Balance of
bad debt
provision
Entity By nature Closing balance Age Percentage (%)
at the end
of the
period
Less than 1
Shenzhen Fangda Related party funds 675,039,980.00
year
Property Development within the scope of 86.66% 0.00
72,577,980.00 1-2 years
Co., Ltd. consolidation
538,000,000.00 2-3 years
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Annual Report 2023 of China Fangda Group Co., Ltd.
174,420,869.45 3-4 years
Less than 1
Fangda (Jiangxi) Related party funds 17,500,000.00
year
Property Development within the scope of 11.51% 0.00
20,000,000.00 1-2 years
Co., Ltd. consolidation
156,397,404.79 2-3 years
Related party funds
Shihui International
within the scope of 30,459,793.09 3-4 years 1.81% 0.00
Holding Co., Ltd.
consolidation
Related party funds
Fangda Zhichuang Less than 1
within the scope of 149,721.00 0.01% 0.00
Technology Co., Ltd. year
consolidation
Shenzhen Hotel Venezia
Deposit 80,000.00 3-4 years 0.00% 1,192.00
Indigo
Total 1,684,625,748.33 99.99% 1,192.00
3. Long-term share equity investment
In RMB
Closing balance Opening balance
Impair Impair
Item Remaining book ment Remaining book ment
Book value Book value
value provis value provis
ion ion
Investment in
1,526,831,253.00 1,526,831,253.00 1,457,331,253.00 1,457,331,253.00
subsidiaries
Total 1,526,831,253.00 1,526,831,253.00 1,457,331,253.00 1,457,331,253.00
(1) Investment in subsidiaries
In RMB
Beginning Change (+,-) Balance of
balance of Decre impairment
Invested Opening book Impairme Closing
impairme Increased ased provision at
entity value nt Others book value
nt investment invest the end of
provisions provision the period
ment
Fangda 751,950,00
751,950,000.00
Jianke 0.00
Fangda
Jiangxi 74,496,600.
74,496,600.00
New 00
Material
Fangda 198,000,00
198,000,000.00
Property 0.00
Shihui
Internation 61,653.00 61,653.00
al
Fangda
99,000,000.
New 99,000,000.00
00
Energy
Fangda
98,000,000.
Hongjun 98,000,000.00
00
Investment
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Annual Report 2023 of China Fangda Group Co., Ltd.
Fangda 235,323,00
235,323,000.00
Investment 0.00
Fangda
Intelligent 70,000,000.
500,000.00 69,500,000.00
Manufactur 00
ing
1,526,831,2
Total 1,457,331,253.00 69,500,000.00
53.00
4. Operational revenue and costs
In RMB
Amount occurred in the current period Occurred in previous period
Item
Income Cost Income Cost
Other businesses 24,692,199.04 26,289.08 28,268,463.91 207,701.70
Total 24,692,199.04 26,289.08 28,268,463.91 207,701.70
Breakdown of operating revenues and operating costs:
In RMB
Division 1 Total
Contract classification
Turnover Operating cost Turnover Operating cost
Business type
Including: Other
24,692,199.04 26,289.08 24,692,199.04 26,289.08
businesses
Total 24,692,199.04 26,289.08 24,692,199.04 26,289.08
The amount of revenue corresponding to the performance obligations that have been signed, but not yet performed or not yet
performed at the end of the reporting period is RMB31,977,992.02, of which RMB11,433,716.66 is expected to be recognized in
2024, and RMB6,935,758.83 is expected to be recognized in 2025, RMB13,608,516.53 is expected to be recognized in 2026 and
beyond.
5. Investment income
In RMB
Item Amount occurred in the current period Occurred in previous period
Investment income from disposal of
566,025.88
trading financial assets
Total 566,025.88
XIX. Supplementary Materials
1. Detailed accidental gain/loss
Applicable □ Inapplicable
In RMB
Item Amount Notes
Gain/loss of non-current assets 381,572.12
Government grants recognized in the current period's profit or loss (except for government
8,781,578.52
grants that are closely related to the Company's normal business operations, in line with
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Annual Report 2023 of China Fangda Group Co., Ltd.
national policies and in accordance with defined criteria, and have a continuous impact on
the Company's profit or loss)
Gains and losses from changes in the fair value of financial assets and liabilities held by
non-financial corporations and gains and losses from the disposal of financial assets and
509,477.49
liabilities, except for effective hedging operations related to the Company's normal
business operations
Capital using expense charged to non-financial enterprises and accounted into the current
3,790,999.98
income account
Write-back of impairment provision of receivables for which impairment test is performed
13,228,201.06
individually
Gain/loss from change of fair value of investment property measured at fair value in
-28,482,701.26
follow-up measurement
Other non-business income and expenditures other than the above 1,262,814.78
Less: Influenced amount of income tax -1,262,507.89
Influenced amount of minority shareholders' equity (after-tax) 114,273.95
Total 620,176.63 --
Other gain/loss items satisfying the definition of non-recurring gain/loss account:
□ Applicable Inapplicable
The Company has no other gain/loss items satisfying the definition of non-recurring gain/loss account
Circumstance that should be defined as recurrent profit and loss to Explanation Announcement of Information Disclosure No. 1 -
Non-recurring gain/loss
□ Applicable Inapplicable
2. Net income on asset ratio and earning per share
Earning per share
Weighted average net Basic earnings Diluted Earnings
Profit of the report period
income/asset ratio per share per share
(yuan/share) (yuan/share)
Net profit attributable to common shareholders of the
4.67% 0.25 0.25
Company
Net profit attributable to the common owners of the PLC
4.66% 0.25 0.25
after deducting of non-recurring gains/losses
3. Differences in accounting data under domestic and foreign accounting standards
(1) Differences in net profits and assets in financial statements disclosed according to the international
and Chinese account standards
□ Applicable Inapplicable
(2) Differences in net profits and assets in financial statements disclosed according to the international
and Chinese account standards
□ Applicable Inapplicable
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Annual Report 2023 of China Fangda Group Co., Ltd.
(3) Differences in financial data using domestic and foreign accounting standards, the overseas institution
name should be specified if the difference in data audited by an overseas auditor is adjusted
No
China Fangda Group Co., Ltd.
Legal representative: Xiong Jianming
April 2, 2024
278
